G.R. No. 157043 February 2, 2007 6.
2, 2007 6. The father, Diosdado Gallamaso, from the time [Giovanni] was born and up to the present,
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
TRINIDAD R.A. CAPOTE, Respondent.
DECISION
CORONA, J.:
This petition for review on certiorari1 seeks to set aside the Court of Appeals (CA) decision2
dated January 13, 2003 in CA-G.R. CV No. 66128, which affirmed the decision of the Regional
Trial Court (RTC), Branch 23 of San Juan, Southern Leyte dated September 14, 1999 granting
a petition for change of name.
Respondent Trinidad R. A. Capote filed a petition for change of name of her ward from Giovanni
N. Gallamaso to Giovanni Nadores on September 9, 1998. In Special Proceeding No. R-481,3
Capote as Giovanni’s guardian ad litem averred:
xxx xxx xxx
1. [Respondent] is a Filipino citizen, of legal age, married, while minor GIOVANNI N.
GALLAMASO, is also a Filipino citizen, sixteen (16) years old and both are residents of San
Juan, Southern Leyte where they can be served with summons and other court processes;
2. [Respondent] was appointed guardian [ad litem] of minor Giovanni N. Gallamaso by virtue of
a court order in Special [Proc.] No. R-459, dated [August 18, 1998] xxx xxx authorizing her to
file in court a petition for change of name of said minor in accordance with the desire of his
mother [who is residing and working abroad];
3. Both [respondent] and minor have permanently resided in San Juan, Southern Leyte,
Philippines for more than fifteen (15) years prior to the filing of this instant petition, the former
since 1970 while the latter since his birth [in 1982];
4. The minor was left under the care of [respondent] since he was yet nine (9) years old up to
the present;
5. Minor GIOVANNI N. GALLAMASO is the illegitimate natural child of Corazon P. Nadores and
Diosdado Gallamaso. [He] was born on July 9, 1982 [,] prior to the effectivity of the New Family
Code and as such, his mother used the surname of the natural father despite the absence of
marriage between them; and [Giovanni] has been known by that name since birth [as per his
birth certificate registered at the Local Civil Register of San Juan, Southern Leyte];
failed to take up his responsibilities [to him] on matters of financial, physical, emotional and
spiritual concerns. [Giovanni’s pleas] for attention along that line [fell] on deaf ears xxx xxx xxx;
7. [Giovanni] is now fully aware of how he stands with his father and he desires to have his
surname changed to that of his mother’s surname;
8. [Giovanni’s] mother might eventually petition [him] to join her in the United States and [his]
continued use of the surname Gallamaso, the surname of his natural father, may complicate
[his] status as natural child; and
9. The change of name [from] GIOVANNI N. GALLAMASO to GIOVANNI NADORES will be for
the benefit of the minor.
xxx xxx xxx4
Respondent prayed for an order directing the local civil registrar to effect the change of name
on Giovanni’s birth certificate. Having found respondent’s petition sufficient in form and
substance, the trial court gave due course to the petition.5 Publication of the petition in a
newspaper of general circulation in the province of Southern Leyte once a week for three
consecutive weeks was likewise ordered.6 The trial court also directed that the local civil
registrar be notified and that the Office of the Solicitor General (OSG) be sent a copy of the
petition and order.7
Since there was no opposition to the petition, respondent moved for leave of court to present
her evidence ex parte before a court-appointed commissioner. The OSG, acting through the
Provincial Prosecutor, did not object; hence, the lower court granted the motion.
After the reception of evidence, the trial court rendered a decision ordering the change of name
from Giovanni N. Gallamaso to Giovanni Nadores.8
From this decision, petitioner Republic of the Philippines, through the OSG, filed an appeal with
a lone assignment of error: the court a quo erred in granting the petition in a summary
proceeding.
Ruling that the proceedings were sufficiently adversarial in nature as required, the CA affirmed
the RTC decision ordering the change of name.9
In this petition, the Republic contends that the CA erred in affirming the trial court’s decision
which granted the petition for change of name despite the non-joinder of indispensable
parties.10 Petitioner cites Republic of the Philippines v. Labrador11 and claims that the
purported parents and all other persons who may be adversely affected by the child’s change
of name should have been made respondents to make the proceeding adversarial.12
We deny the petition.
"The subject of rights must have a fixed symbol for individualization which serves to distinguish
him from all others; this symbol is his name."13 Understandably, therefore, no person can
change his name or surname without judicial authority.14 This is a reasonable requirement for
those seeking such change because a person’s name necessarily affects his identity, interests
and interactions. The State must be involved in the process and decision to change the name
of any of its citizens.
The Rules of Court provides the requirements and procedure for change of name. Here, the
appropriate remedy is covered by Rule 103,15 a separate and distinct proceeding from Rule
108 on mere cancellation and correction of entries in the civil registry (usually dealing only with
innocuous or clerical errors thereon).16
The issue of non-joinder of alleged indispensable parties in the action before the court a quo is
intertwined with the nature of the proceedings there. The point is whether the proceedings were
sufficiently adversarial.
Summary proceedings do not extensively address the issues of a case since the reason for their
conduct is expediency. This, according to petitioner, is not sufficient to deal with substantial or
contentious issues allegedly resulting from a change of name, meaning, legitimacy as well as
successional rights.17 Such issues are ventilated only in adversarial proceedings wherein all
interested parties are impleaded and due process is observed.18
When Giovanni was born in 1982 (prior to the enactment and effectivity of the Family Code of
the Philippines),19 the pertinent provision of the Civil Code then as regards his use of a
surname, read:
Art. 366. A natural child acknowledged by both parents shall principally use the surname of the
father. If recognized by only one of the parents, a natural child shall employ the surname of the
recognizing parent. (emphasis ours)
Based on this provision, Giovanni should have carried his mother’s surname from birth. The
records do not reveal any act or intention on the part of Giovanni’s putative father to actually
recognize him. Meanwhile, according to the Family Code which repealed, among others, Article
366 of the Civil Code:
Art. 176. Illegitimate children shall use the surname and shall be under the parental authority of
their mother, and shall be entitled to support in conformity with this Code. xxx xxx xxx (emphasis
ours)
Our ruling in the recent case of In Re: Petition for Change of Name and/or
Correction/Cancellation of Entry in Civil Registry of Julian Lin Carulasan Wang20 is
enlightening:
Our laws on the use of surnames state that legitimate and legitimated children shall principally
use the surname of the father. The Family Code gives legitimate children the right to bear the
surnames of the father and the mother, while illegitimate children shall use the surname of their
mother, unless their father recognizes their filiation, in which case they may bear the father’s
surname.
Applying these laws, an illegitimate child whose filiation is not recognized by the father bears
only a given name and his mother’ surname, and does not have a middle name. The name of
the unrecognized illegitimate child therefore identifies him as such. It is only when the illegitimate
child is legitimated by the subsequent marriage of his parents or acknowledged by the father in
a public document or private handwritten instrument that he bears both his mother’s surname
as his middle name and his father’s surname as his surname, reflecting his status as a
legitimated child or an acknowledged child.1awphi1.net21
The foregoing discussion establishes the significant connection of a person’s name to his
identity, his status in relation to his parents and his successional rights as a legitimate or
illegitimate child. For sure, these matters should not be taken lightly as to deprive those who
may, in any way, be affected by the right to present evidence in favor of or against such change.
The law and facts obtaining here favor Giovanni’s petition. Giovanni availed of the proper
remedy, a petition for change of name under Rule 103 of the Rules of Court, and complied with
all the procedural requirements. After hearing, the trial court found (and the appellate court
affirmed) that the evidence presented during the hearing of Giovanni’s petition sufficiently
established that, under Art. 176 of the Civil Code, Giovanni is entitled to change his name as he
was never recognized by his father while his mother has always recognized him as her child. A
change of name will erase the impression that he was ever recognized by his father. It is also
to his best interest as it will facilitate his mother’s intended petition to have him join her in the
United States. This Court will not stand in the way of the reunification of mother and son.
Moreover, it is noteworthy that the cases cited by petitioner22 in support of its position deal with
cancellation or correction of entries in the civil registry, a proceeding separate and distinct from
the special proceedings for change of name. Those cases deal with the application and
interpretation of Rule 108 of the Rules of Court while this case was correctly filed under Rule
103. Thus, the cases cited by petitioner are irrelevant and have no bearing on respondent’s
case. While the OSG is correct in its stance that the proceedings for change of name should be
adversarial, the OSG cannot void the proceedings in the trial court on account of its own failure
to participate therein. As the CA correctly ruled:
The OSG is correct in stating that a petition for change of name must be heard in an adversarial
proceeding. Unlike petitions for the cancellation or correction of clerical errors in entries in the
civil registry under Rule 108 of the Rules of Court, a petition for change of name under Rule 103
cannot be decided through a summary proceeding. There is no doubt that this petition does not
fall under Rule 108 for it is not alleged that the entry in the civil registry suffers from clerical or
typographical errors. The relief sought clearly goes beyond correcting erroneous entries in the
civil registry, although by granting the petition, the result is the same in that a corresponding
change in the entry is also required to reflect the change in name. In this regard, [appellee]
Capote complied with the requirement for an adversarial proceeding by posting in a newspaper
of general circulation notice of the filing of the petition. The lower court also furnished the OSG
a copy thereof. Despite the notice, no one came forward to oppose the petition including the
OSG. The fact that no one opposed the petition did not deprive the court of its jurisdiction to
hear the same nor does it make the proceeding less adversarial in nature. The lower court is
still expected to exercise its judgment to determine whether the petition is meritorious or not and
not merely accept as true the arguments propounded. Considering that the OSG neither
opposed the petition nor the motion to present its evidence ex parte when it had the opportunity
to do so, it cannot now complain that the proceedings in the lower court were not adversarial
enough.23 (emphasis supplied)
A proceeding is adversarial where the party seeking relief has given legal warning to the other
party and afforded the latter an opportunity to contest it.24 Respondent gave notice of the
petition through publication as required by the rules.25 With this, all interested parties were
deemed notified and the whole world considered bound by the judgment therein. In addition,
the trial court gave due notice to the OSG by serving a copy of the petition on it. Thus, all the
requirements to make a proceeding adversarial were satisfied when all interested parties,
including petitioner as represented by the OSG, were afforded the opportunity to contest the
petition.
WHEREFORE, the petition is hereby DENIED and the January 13, 2003 decision of the Court
of Appeals in CA-G.R. CV No. 66128 AFFIRMED.
SO ORDERED.
G.R. No. L-27520 January 21, 1987
GLOBE WIRELESS LTD., petitioner,
vs.
PUBLIC SERVICE COMMISSION and ANTONIO B. ARNAIZ, respondents.
RESOLUTION
G.R. No. 27520 [Globe Wireless Ltd., vs. Public Service Commission and Antonio B. Arnaiz].
— Challenged in this petition for certiorari is the jurisdiction of the defunct Public Service
Commission [PSC] under Section 21 of Commonwealth Act No. 146, as amended, to discipline
and impose a fine upon petitioner, Globe Wireless, Ltd., a duly organized Philippines corporation
engaged in ;international telecommunication business under a franchise granted by Public Acts
Nos. 3495, 3692 and 4150 as amended by Republic Act No. 4630.
A message addressed to Maria Diaz, Monte Esquina 30, Madrid, Spain, filed by private
respondent Antonio B. Arnaiz with the telegraph office of the Bureau of Telecommunications in
Dumaguete City was transmitted to the Bureau of Telecommunications in Manila. It was
forwarded to petitioner Globe Wireless Ltd. for transmission to Madrid. Petitioner sent the
message to the American Cable and Radio Corporation in New York, which, in turn, transmitted
the same to the Empresa Nacional de Telecommunicaciones in Madrid. The latter, however,
mislaid said message, resulting in its non-delivery to the addressee.
After being informed of said fact, private respondent Arnaiz, sent to then Public Service
Commissioner Enrique Medina an unverified letter-complaint relating the incident. The
complaint was docketed as PSC Case No. 65-39-OC and petitioner was required to answer the
same. Petitioner, in its answer, questioned PSC's jurisdiction over the subject matter of the
letter-complaint, even as it denied liability for the non-delivery of the message to the addressee.
Hearing ensued, after which the PSC issued an order finding petitioner "responsible for the
inadequate and unsatisfactory service complained of, in violation of the Public Service Act" and
ordering it "to pay a fine of TWO HUNDRED [P200.00] PESOS under Sec. 21 of Com. Act 146,
as amended." petitioner was likewise required to refund the sum of P19.14 to the remitter of the
undelivered message. [Annex "C", petition, . 23, Rollo].
Its motion for reconsideration having been denied, petitioner instituted the instant petition.
We find for petitioner.
Verily, Section 13 of Commonwealth Act No. 146, as amended otherwise known as the Public
Service Act, vested in the Public Service Commission jurisdiction, supervision and control over
all Public services and their franchises, equipment and other properties. However, Section 5 of
Republic Act No. 4630, the legislative franchise under which petitioner was operating, limited
respondent Commission's jurisdiction over petitioner only to the rate which petitioner may
charge the Public. Thus,
Sec. 5. The Public Service Commission is hereby given jurisdiction over the grantee only with
respect to the rates which the grantee may charge the public subject to international
commitments made or adhered to by the Republic of the Philippines. (Emphasis supplied.)
The act complained of consisted in petitioner having allegedly failed to deliver the telegraphic
message of private respondent to the addressee in Madrid, Spain. Obviously, such imputed
negligence had nothing whatsoever to do with the subject matter of the very limited jurisdiction
of the Commission over petitioner.
Moreover, under Section 21 of C.A. No. 146, as amended, the Commission was empowered to
impose an administrative fine in cases of violation of or failure by a Public service to comply with
the terms and conditions of any certificate or any orders, decisions or regulations of the
Commission. petitioner operated under a legislative franchise, so there were no terms nor
conditions of any certificate issued by the Commission to violate. Neither was there any order,
decision or regulation from the Commission applicable to petitioner that the latter had allegedly
violated, disobeyed, defied or disregarded.
Too basic in administrative law to need citation of jurisprudence is the rule that the jurisdiction
and powers of administrative agencies, like respondent Commission, are limited to those
expressly granted or necessarily implied from those granted in the legislation creating such
body; and any order without or beyond such jurisdiction is void and ineffective. The order under
consideration belonged to this category.
ACCORDINGLY, the instant petition is hereby granted and the order of respondent Public
Service Commission in PSC Case No. 65-39-OC is set aside for being null and void.
[G.R. NO. 142601 : October 23, 2006]
NATIONAL HOUSING AUTHORITY, Petitioner, v. COMMISSION ON THE SETTLEMENT OF
LAND PROBLEMS, MUNICIPALITY OF SAN JOSE DEL MONTE, BULACAN, SPS. ANGEL
and ROSARIO CRUZ, RUFINO LAAN, RUFINO LAAN SANTOS, ANDRES NEPOMUCENO,
SPS. ALBERTO and HERMINIA HAGOS, LEON GUILALAS, SPS. OSCAR and HAYDEE
BADILLO, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a Petition for Review on Certiorari1 assailing the Decision2 of the Court of Appeals
dated November 16, 1999 and Resolution dated March 13, 2000 in CA-G.R. SP No. 54495,
entitled "NATIONAL HOUSING AUTHORITY, petitioner, v., The Hon. Rufino V. Mijares, in his
capacity as Commissioner, Commission on the Settlement of Land Problems (COSLAP),
Municipality of San Jose Del Monte, Bulacan, represented by Hon. Eduardo V. Roquero, in his
capacity as Municipal Mayor of San Jose del Monte, Bulacan, JOSEPH ELMER S. GUEVARRA,
Sheriff IV of the Ex-Officio Sheriff, Malolos, Bulacan, SPS. ANGEL A. CRUZ and ROSARIO C.
CRUZ, RUFINO LAAN, RUFINA LAAN SANTOS, ANDRES NEPOMUCENO, SPS. ALBERTO
HAGOS and HERMINIA HAGOS, LEON GUILALAS, SPS. OSCAR R. BADILLO and HAYDEE
M. BADILLO, and LEONCIO LAAN, respondents."
The undisputed facts are:
Since 1968, there has been an existing boundary dispute between the Municipality of San Jose
del Monte, Bulacan (one of herein respondents) and the City of Caloocan. In order to resolve
the long-challenged conflict, the Sangguniang Bayan of San Jose del Monte passed and
approved Resolution No. 20-02-943 on February 10, 1994. This resolution recognizes the
official boundary of respondent municipality and the City of Caloocan, described as follows:
ON JOINT MOTION of all members present;
RESOLVED, as it is hereby resolved to recognize the official boundary of the Municipality of
San Jose del Monte, Bulacan and the City of Caloocan, Metro Manila as the true and correct
line marking between the two Local Government Units as shown by the attached certified true
copy of the geographic position and plain grid coordinates of Caloocan, Rizal per CAD-267
specifically from MBM (Municipal Boundary Monument) 22 to MBM 33;
xxx
On August 8, 1995, another Resolution4 was passed by the Sangguniang Bayan of San Jose
del Monte recognizing the geographic position and plane coordinates of Tala Estate, Caloocan
City contained in BM No. 11-24 as the "lot lines" delineating the boundary between the
Municipality of San Jose del Monte and Caloocan City. This prompted the Department of
Environment and Natural Resources (DENR), Region III to conduct a relocation survey.
On September 15, 1995, the survey team submitted a Comprehensive Report,5 some excerpts
of which provide:
ISSUES, PROBLEMS AND ANALYSIS
1. The geographic positions of MBM Nos. 22 to 33, Cad 267, Caloocan Cadastre was the basis
for the establishment of the true and correct boundary between the municipality and Caloocan
City. However, during the dialogue with concerned government agencies on May 12, 1995, the
municipality of San Jose del Monte, Bulacan, emphasized that the boundary between the two
local government units is the imaginary straight line between two boundary monuments, starting
from MBM Nos. 22 to 33.
2. The FNSP-G surveying team plotted/drafted in a topographic map all pertinent records
affecting boundary disputes of the two locality, such as the geographic positions and
coordinates of MBM Nos. 22 to 33 Cad 267 Caloocan Cadastre, BM Nos. 11 to 23 of Tala Estate
lot lines. Tala Estate lot lines were plotted approximately by scale, because there were no
records on its geographic coordinates and incomplete cadastral maps. The findings are the
following:
a) The plotted positions of MBM Nos. 23 to 30, 32 and 33 Cad 267 Caloocan Cadastre are
almost identical or equivalent to BM Nos. 12 to 16, 18 to 20, 22 and 23 of Tala Estate.
b) The lot lines of Tala Estate traverses thru Marilao River.
c) The northern portion of the lot lines of Parcels 1, 2 and 3 SWO-41615 Tala Estate indicated
that it traverses thru Marilao River.
3. In Municipal Resolution No. 06-08-95 dated August 8, 1995, it is requested that the
geographic positions of BM Nos. 11 to 24, Tala Estate shall be recognized as the official lots
lines which delineates the boundaries of San Jose del Monte, Bulacan and Caloocan City.
Moreover, the resolution is opposed to the delineation of Marilao River as the boundary of two
localities, as embodied in SWO-41615.
4. If the lot lines of Parcels 1, 2 and 3, SWO-41615 will be the basis for the boundaries of the
two LGUs, Marilao River will be the natural boundary between the two LGUs; if BM 11 to 24,
Tala Estate shall be the basis for the boundaries, some northern portions of Parcels 1, 2 and 3,
SWO-41615, portions of Bankers Village and Pangarap Village belongs to the Municipality of
San Jose del Monte, Bulacan."
The Comprehensive Report states that the San Jose del Monte Sangguniang Bayan
Resolutions contradict the delineation embodied in SWO-41615 of the Tala Estate, a 598-
hectare property allotted by the government mainly for housing and resettlement site under the
administration of the National Housing Authority (NHA), pursuant to Presidential Proclamation
No. 843 issued by then President Ferdinand E. Marcos on April 26, 1971.
Unsatisfied with the report of the DENR, respondent municipality filed a complaint with the
Commission on Settlement of Land Problems (COSLAP),6 against petitioner NHA. Several
residents of San Jose del Monte, namely: spouses Angel and Rosario Cruz, Rufino Laan, Rufina
Laan Santos, Andres Nepomuceno, spouses Alberto and Herminia Hagos, Leon Guilalas,
spouses Oscar and Haydee Badillo, and Leoncio Laan (herein private respondents) joined the
municipality as complainants in the said case. They alleged that their properties are within the
Municipality of San Jose del Monte; that Presidential Proclamation No. 843 does not cover their
properties; and that the NHA's Bagong Silang Resettlement Project encroaches on their
landholdings. They prayed that the NHA be ordered to award them damages. Incidentally, the
City of Caloocan was not impleaded as a party in their complaint.
On June 22, 1998, the COSLAP rendered its Resolution ruling that the correct boundary
between respondents San Jose del Monte and Caloocan City is that specified in the twin
Resolutions of the Sangguniang Bayan of said respondents. The COSLAP likewise held that all
other issues, such as those raised by respondents, are mere incidents of such ruling. In effect,
the COSLAP ruled that the land covered by the NHA project, being within the Municipality of
San Jose del Monte, encroaches upon respondents' properties.
On January 14, 1999, petitioner NHA, upon invitation of the Bureau of Local Government
Supervision of the Department of Interior and Local Government (Bureau), attended a meeting
held on January 26, 1999 between the local officials of respondent municipality and Caloocan
City. The purpose of the meeting was to provide an avenue for the discussion of the territorial
boundary between the two local government units. During the meeting, petitioner NHA posed
strong opposition to the COSLAP Resolution, contending that the latter has no jurisdiction over
the boundary dispute. Subsequently, the Bureau directed the parties to submit their respective
position papers within 30 days.
Instead of submitting a position paper, respondent municipality filed with the COSLAP a motion
for execution of its Resolution dated June 22, 1998. On May 17, 1999, the COSLAP granted
the motion and issued a writ of execution.
Petitioner NHA then filed with the Court of Appeals a petition for certiorari alleging that in issuing
the June 22, 1998 Resolution and the writ of execution, COSLAP acted without jurisdiction.
On November 16, 1999, the Appellate Court dismissed the petition for having been filed out of
time and for petitioner's failure to avail of the remedy of appeal.
Petitioner then filed a motion for reconsideration but it was denied.
Hence, this Petition for Review on Certiorari .
At the threshold, let it be stated that a judgment issued by a quasi-judicial body without
jurisdiction is void. It can never become final and executory, hence, an appeal is out of the
question.7
The main issue for our resolution is whether the COSLAP has jurisdiction over the boundary
dispute between respondent municipality and Caloocan City.
COSLAP was created by Executive Order No. 561 issued on September 21, 1979 by then
President Ferdinand E. Marcos. The Commission is an administrative body established as a
means of providing a mechanism for the expeditious settlement of land problems to avoid social
unrest. Its objective is to settle land conflicts among small settlers, landowners and members of
cultural minorities.
The powers and functions of the COSLAP are laid down in Section 3 of Executive Order No.
561, thus:
Sec. 3. Powers and Functions. - The Commission shall have the following powers and functions:
xxx
2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any
land problem or dispute referred to the Commission: Provided, That the Commission may, in
the following cases, assume jurisdiction and resolve land problems or disputes which are critical
and explosive in nature considering, for instance, the large number of parties involved, the
presence or emergence of social tension or unrest, or other similar critical situations requiring
immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber
concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivisions of lands of the public domain;
andcralawlibrary
(e) Other similar land problems of grave urgency and magnitude.
xxx
Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and as such could
wield only such as are specifically granted to them by the enabling statutes.8 In acting on a land
dispute, the COSLAP may either assume jurisdiction if the matter falls under paragraph 2(a) to
(e) or refer the matter to an agency having appropriate jurisdiction.
There is no provision in Executive Order No. 561 that COSLAP has jurisdiction over boundary
dispute between two local government units. Under Republic Act No. 7160 or the Local
Government Code, the respective legislative councils of the contending local government units
have jurisdiction over their boundary disputes. Sections 118 and 119 provide:
Section 118. Jurisdictional Responsibility for Settlement of Boundary Dispute.
xxx
(d) Boundary disputes involving a component city or municipality on the one hand and a highly
urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred
for settlement to the respective sanggunians of the parties.
(e) In the event the Sanggunian fails to effect an amicable settlement within sixty (60) days from
the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter,
the dispute shall be formally tried by the Sanggunian concerned which shall decide the issue
within sixty (60) days from the date of the certification referred to above.
Section 119. Appeal. - Within the time and manner prescribed by the Rules of Court, any party
may elevate the decision of the Sanggunian concerned to the proper Regional Trial Court having
jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one
(1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute
shall be maintained and continued for all legal purposes.
Rule III implementing the above provisions states:
Rule III
SETTLEMENT OF BOUNDARY DISPUTES
Art. 15. Definition and Policy. - There is boundary dispute when a portion or the whole of the
territorial area of an LGU is claimed by two or more LGUs. Boundary disputes between or among
LGUs shall, as much as possible, be settled amicably.
Art. 16. Jurisdictional Responsibility. - Boundary disputes shall be referred for settlement to the
following:
(a) Sangguniang Panlungsod or Sangguniang Bayan for disputes involving two (2) or more
barangays in the same city or municipality, as the case may be;
(b) Sangguniang panlalawigan for those involving two (2) or more municipalities within the same
province;
(c) Jointly, to the sanggunians of provinces concerned, for those involving component cities or
municipalities of different provinces; or
(d) Jointly, to the respective sanggunians, for those involving a component city or municipality
and a highly urbanized city or two (2) or more highly-urbanized cities. x x x
Thus, instead of assuming jurisdiction over the case, the COSLAP should have referred
respondents' complaint to the Sangguniang Panglungsod of Caloocan City and the
Sangguniang Bayan of San Jose del Monte. Their decision may be appealed to the proper
Regional Trial Court.
Consequently, we rule that the COSLAP does not have jurisdiction over the boundary dispute
between San Jose del Monte and Caloocan City. We have consistently ruled that a judgment
for want of jurisdiction is no judgment at all. It cannot be the source of any right or the creator of
any obligation. All acts performed pursuant to it and all claims emanating from it have no legal
effect. Hence, it can never become final and any writ of execution based on it is void.9 Such
nullity is correctable only by certiorari .10 And certiorari cannot be dismissed for timeliness
inasmuch as a void judgment never acquires finality and any action to declare its nullity does
not prescribe.11 Having no legal effect, the situation is the same as it would be as if there was
no judgment at all. It leaves the parties in the position they were in before the trial.12
Clearly, the Court of Appeals erred in disposing NHA's petition for certiorari . It should have
dismissed the petition, not on the grounds that it was filed late and that certiorari is not a
substitute for a lost appeal, but solely on the ground that the COSLAP has no jurisdiction over
the subject boundary dispute.

WHEREFORE, we GRANT the petition. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 54495 are SET ASIDE.
SO ORDERED.
Puno, J., Chairperson, Corona, Azcuna, and Garcia, JJ., concur.
G.R. No. 122363. April 29, 2003
VICTOR G. VALENCIA, Petitioner, v. COURT OF APPEALS, HON. TEOFISTO T.
GUINGONA, JR., as Executive Secretary, HON. ERNESTO GARILAO, Secretary of
Agrarian Reform, CRISOSTOMO M. CORPIN, Regional Director, DAR Region VII, SANTOS
GARGAYA, JULIANO MAGDAYAO, CRESCENCIANO FRIAS, FEDERICO JARE,
ROSENDO LOBRESCO, ERNESTO LOBRESCO, FELICIANO LOBRESCO, CATALINO
MANTAC, VICTORIANO MONTE-FALCON, FRANCISCO OBANG, AMBROSIO
SEMILLANO, ROGELIO TAMAYO and EDILBERTO LOBRESCO, Respondents.
DECISION
BELLOSILLO, J.:
THE tenancy crisis in the Philippines is not just of recent vintage. History is replete with
instances where tenant-farmers, relegated to a life of perpetual bondage, have rushed onto the
battlefield with hopes of freedom from imminent thralldom, aptly described by Professor Harold
J. Laski as the normal life of the poor - their perpetual fear of the morrow, their haunting sense
of impending disaster, their fitful search for beauty that perpetually eludes them.
Every administration that took over the reins of government saw the gravity of this problem.
Thus, each offered to the tenant-tillers its own version of the appropriate legislation for their
emancipation.
The Agricultural Tenancy Act of 1954 (R. A. No. 1199), the initial attempt of President
Magsaysay at agrarian reform, was conceived as a remedial legislation to uplift the social and
economic status of tenants. It was insinuated in the legislative deliberations that several
provisions therein operated to deprive the landowner of his right to contract and his right to
property without due process of law. But, it was also argued, this involved societal values and
the agricultural tenancy act was meant to remedy an existing social evil. Hence, all tenancy laws
that followed thereafter were crafted along this line. This case is now being scrutinized and
tested against the bedrock of legal and equitable safeguards to achieve a truly successful and
balanced agrarian reform initiative.
For more than a quarter of a century petitioner Victor G. Valencia, a government retiree, sought
justice through administrative and judicial channels to regain possession of his two (2) parcels
of land which he claims to have been unjustly withheld from him by persons claiming to be
tenants with the ostensible complicity of government officials implementing the agrarian reform
program. In the meantime his appeal for fairness and justice was denied him through procedural
infirmities. We are now asked to probe into his lonely plight with a reminder that it is our solemn
duty to dispense equal justice to the rich and the poor.
We have repeatedly stressed that social justice - or any justice for that matter - is for the
deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in
case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the Constitution
fittingly extends its sympathy and compassion. But never is it justified to give preference to the
poor simply because they are poor, or reject the rich simply because they are rich, for justice
must always be served for the poor and the rich alike according to the mandate of the law.[1
The property in dispute involves two (2) parcels of land situated at Barangay Linothangan,
Canlaon City, Negros Oriental, covered by TCT No. H-T-137 with an area of 23.7279 hectares,
and by Homestead Application No. HA-231601 with Final Proof and Tax Declaration No. 0515
with an area of 6.4397 hectares.
On 7 May 1957 Victor G. Valencia acquired the first parcel covered by TCT No. H-T-137 from
a certain Bonifacio Supnet. The only tenant of the property at that time was a certain Digoy
Besario who was succeeded by his son Jesus Besario. On 2 July 1961 Valencia and Jesus
Besario terminated their landlord-tenant relationship through a public instrument voluntarily
executed by them, thus reverting the actual physical possession of the property to petitioner
Valencia.
On 22 October 1962 Valencia entered into a ten (10)-year civil law lease agreement over his
two (2) parcels of land with a certain Glicerio Henson. Before the ten (10)-year lease expired,
apparently without objection from Henson, Valencia leased the property for five (5) years to Fr.
Andres Flores under a civil law lease concept beginning 21 August 1970 or until 30 June 1975
after which the lease was cancelled and inscribed as Entry No. 1578 in TCT No. H-T-137. The
lease agreement between Valencia and Fr. Flores was subject to a prohibition against
subleasing or encumbering the land without Valencias written consent. This was admitted by
the parties as reflected in the DAR Investigation Report and Recommendations.2 The
prohibition against subleasing or encumbering of the land apparently included the prohibition
against installing a leasehold tenant thereon. Incidentally, it may be mentioned that in the prior
lease agreement with Henson no such prohibition was stipulated.
During the period of his lease, Henson instituted Crescenciano Frias and Marciano Frias to work
on the property, although only Crescenciano Frias apparently remained in the land while
Marciano Frias must have abandoned his cause if any, as he was not impleaded in this case;
neither did he appear on record to have been issued a CLT in his name.
During the lease of Fr. Andres Flores, he designated Francisco Obang (as overseer), Rogelio
Tamayo, Federico Jare, Feliciano Lobresco, Melchor Moncada, Rosendo Lobresco, Victoriano B. TCT No. HT-137
Montefalcon, Santos Gargaya, Catalino Mantac, Herodita Semillano, Ernesto Lobresco,
Natividad Lobresco and Alfredo Demerin, along with Crescenciano and Marciano Frias, to 3. Crescenciano Frias 0-071164 0115 0.8890 ha.
cultivate the land. These farmhands shared their produce with Fr. Flores. Subsequently,
Francisco Obang, Santos Gargaya, Crescenciano Frias, Federico Jare, Rosendo Lobresco, 4. Federico Jare a) 0-71171 0120 0.4600 ha.
Juliano Magdayao, Ernesto Lobresco, Feliciano Lobresco, Catalino Mantac, Victoriano
Montefalcon, Ambrosio Semillano, Rogelio Tamayo and Edilberto Lobresco, became recipients b) 0-71172 0121 0.2500 ha.
of CLTs and are collectively referred to herein as private respondents.
5. Rosendo Lobresco a) 0-071189 0135 0.2335 ha.
When the lease agreement between Valencia and Fr. Flores expired on 30 June 1975, Valencia
demanded that private respondents vacate the premises. Instead of complying with the demand, b) 0-071182 0129 1.0325 ha.
they refused and continued cultivating the land despite the demand for them to vacate. Valencia
wanted to regain possession of his property so he could work it by administration, having in fact 6. Ernesto Lobresco a) 0-071185 0132 0.8900 ha.
appointed Bernie Bautista as overseer until petitioner could retire from the government service.
b) 0-71187 0133 0.8400 ha.
In his initial step in his long and agonizing journey, Valencia filed a letter of protest with the
Minister of Agrarian Reform to take back the actual possession of his property that was subject 7. Feliciano Lobresco 0-071188 0134 0.3400 ha.
of the civil law lease agreement. On 20 March 1976 his letter was referred to the DAR Regional
Office in Cebu City. 8. Catalino Mantac 0-071162 0113 0.0425 ha.

Meanwhile, without the knowledge much less consent of Valencia, private respondents applied 9. Victoriano Montefalcon 0-071190 0136 0.1800 ha.
for Certificates of Land Transfer (CLTs) under the Operation Land Transfer (OLT) Program
pursuant to Presidential Decree No. 27 claiming they were bona fide tenants of the property. 10. Francisco Obang 0-071168 0118 1.200 has.

On 10 December 1985, while the investigation was being conducted by the DAR pursuant to 11. Ambrosio Semillano a) 0-071165 0116 0.0340 ha.
petitioners letter of protest of 20 March 1976, but before it could be terminated, the DAR issued
the questioned CLTs to private respondents. The DAR Team Office in Canlaon City pursuant to b) 0-071176 0125 0.1135 ha.
the Operation Land Transfer Program under Pres. Decree No. 27 and Letter of Instruction No.
474 identified the following persons as farmer-beneficiaries:3cräläwvirtualibräry c) 0-071177 0126 0.0340 ha.

NAME CLT NO. LOT NO. AREA (hectares) 12. Rogelio Tamayo 0-071194 0139 0.3400 ha

A. TAX DEC. No. 0515 13. Edilberto Lobresco 0-071173 0122 1.2040 has.

1. Santos Gargaya 0-071160 0111 0.3300 ha. Total Area 10.1055 has

2. Juliano Magdayao a) 0-071161 0122 0.3350 ha. In view of the issuance of CLTs to private respondents, petitioner Valencia filed a second letter
of protest and requested an investigation and subsequent cancellation of the CLTs.
b) 0-071163 0114 0.2550 ha.
In February 1988 petitioner Valencia and Catalino Mantac, one of private respondents, entered
c) 0-071166 0117 0.4825 ha. into a leasehold contract undertaking to have a profit-sharing agreement. No other respondent
entered into any agreement or tenancy contract, whether written or verbal, with Valencia,
d) 0-071175 0124 0.3140 ha. Henson or Fr. Flores.

On 6 and 8 July 1988 an administrative investigation was conducted by the DAR Hearing Officer,
Atty. Vilmo Ampong. This was done more than twelve (12) years after the initial letter of protest
was filed on 20 March 1976. After an on-site investigation and inspection of the Valencia
property, Atty. Ampong, in his Investigation Report and Recommendations dated 7 December
1988 found that: (a) Bernie Bautista, without any authority from protestant Valencia, obtained
and/or received shares of the palay produced every harvest from private respondents starting
1975 to 1983 with his wife Hazel issuing the corresponding receipts; (b) Since the time Bautista
and spouse obtained and/or received the owner's shares of the produce from private
respondents not a single cavan nor its equivalent in cash was turned over or remitted to
Valencia; (c) Private respondents stopped giving the landowner's shares to Bautista and his
wife when they already refused to issue receipts, and so from then on private respondents
appropriated to themselves all the landowner's shares; (d) While enjoying the possession,
cultivation and utilization of the two (2) parcels of land, some of the private respondents sublet
their farmholdings for financial considerations and turned them over to the sublessees for
specified periods;4 (e) The DAR Team Office in Canlaon City had the landholding included in
the Final Survey of 1983 notwithstanding Valencias pending protest contesting the issuance of
the CLTs;5 and, (f) Sometime in February 1988 Valencia and Catalino Mantac entered into a
leasehold contract over a 0.0425 hectare of the 23.7279 hectares covered by TCT No. H-T-
137.6cräläwvirtualibräry
Atty. Vilmo Ampong also found that the right of private respondents to the land ceased upon the
termination of the lease contracts, except as regards respondent Catalino Mantac with whom
petitioner Valencia entered into a tenancy agreement. Atty. Ampong further confirmed that
Valencia did not receive anything from private respondents as consideration for tilling his land.
Consequently, Atty. Ampong recommended that the CLTs issued to private respondents be
cancelled and the final survey conducted on the landholding of Valencia set aside.
On 24 August 1989 the DAR Regional Office in Cebu City, in DARRO Adm. Case No. VII-117-
89, notwithstanding the Investigation Report and Recommendations of its DAR Team Office,
dismissed Valencia's protest and held that private respondents had the right to continue on the
land until otherwise ordered by the court.7 Valencia moved for reconsideration but on 12 July
1991 the motion was denied.
This setback of Valencia prompted him to appeal to the Office of the President under authority
of DAR Memo. Circ. No. 3, series of 1994, arguing that the Secretary of Agrarian Reform8 erred
in considering private respondents as tenants and in not recognizing petitioners right of retention
under R. A. No. 6657 otherwise known as The Comprehensive Agrarian Reform Law.
On 8 October 1993 Executive Secretary Teofisto Guingona, Jr., by authority of the President,
affirmed the order of the DAR of 12 July 1991 subject to the modification that the area acquired
by petitioner Valencia as homestead be excluded from the coverage of P. D. No. 27.
Valencia then brought his case to the Court of Appeals contending that the Executive Secretary
erred in recognizing private respondents as tenants and disallowing him and his seven (7)
compulsory heirs from exercising their right of retention under R. A. No. 6657. However, in a
decision promulgated on 27 July 1995 the Court of Appeals dismissed the case on a technical
ground, i.e., that his appeal was filed out of time.9 The appellate court ruled that petitioner
should have filed with it a petition for review within fifteen (15) days from receipt of the order of
the DAR Secretary pursuant to Sec. 54 of R. A. No. 6657 and Supreme Court Adm. Circ. No.
1-95, instead of elevating the case to the Office of the President pursuant to DAR Memo. Circ.
No. 3, series of 1994. Hence, according to the Court of Appeals, the petition of Valencia was
filed out of time.
On 22 September 1995 petitioners motion for reconsideration was denied. In its Resolution the
Court of Appeals, citing Shell Philippines, Inc. v. Central Bank,10 held that in case of
discrepancy between the basic law and a rule or regulation issued to implement the law, the
basic law prevails because the rule or regulation cannot go beyond the terms and provisions of
the basic law.11 Thus, DAR Memo. Circ. No. 3, series of 1994, according to the Court of
Appeals, cannot be considered valid and effective since it runs counter to Sec. 54 of R. A. No.
6657 which provides for an appeal from any decision, order, award or ruling by the DAR to the
Court of Appeals.12 Likewise, the appellate court held that the doctrine of exhaustion of
administrative remedies does not apply in the present case where the respondent is a
Department Secretary whose acts, as alter ego of the President, bear the implied approval of
the latter.13cräläwvirtualibräry
Valencia filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking
to reverse and set aside the Decision of the Court of Appeals in CA-G.R. SP No. 32669 dated
27 July 1995 as well as its Resolution denying his Motion for Reconsideration of 22 September
1995.
Petitioner contends that DAR Memo. Circ. No. 3, series of 1994, is valid not being contrary to
law and jurisprudence, and should be accorded respect being the Agrarian Reform Secretarys
construction of the law that his Department administers and implements.
Public respondents, on the other hand, aver that Secs. 15 and 20 of Book VII of E. O. No. 292
which are cited as the legal bases of DAR Memo. Circ. No. 3 refer to the procedure for
administrative appeals from an agency to the Department Head which in this case is the DAR
through its Secretary. They argue that there is no provision for appeal to the Office of the
President since in the administrative structure the Secretary of Agrarian Reform is the alter ego
of the President. They contend that Sec. 23 of Book VII cites the finality of the decision of the
appellate agency without providing for a further appeal, and that Sec. 25 provides for judicial
review from an agency decision, as they point to Sec. 54 of R. A. No. 665714 and SC Adm.
Circ. No. 1-95.15cräläwvirtualibräry
We agree with petitioner. Interpreting and harmonizing laws with laws is the best method of
interpretation. Interpretare et concordare leges legibus est optimus interpretandi modus.16 This
manner of construction would provide a complete, consistent and intelligible system to secure
the rights of all persons affected by different legislative and quasi-legislative acts. Where two
(2) rules on the same subject, or on related subjects, are apparently in conflict with each other,
they are to be reconciled by construction, so far as may be, on any fair and reasonable
hypothesis. Validity and legal effect should therefore be given to both, if this can be done without
destroying the evident intent and meaning of the later act. Every statute should receive such a
construction as will harmonize it with the pre-existing body of laws.
Harmonizing DAR Memo. Circ. No. 3, series of 1994, with SC Adm. Circ. No. 1-95 and Sec. 54
of R. A. No. 6657 would be consistent with promoting the ends of substantial justice for all
parties seeking the protective mantle of the law. To reconcile and harmonize them, due
consideration must be given to the purpose for which each was promulgated. The purpose of
DAR Memo. Circ. No. 3, series of 1994, is to provide a mode of appeal for matters not falling
within the jurisdictional ambit of the Department of Agrarian Reform Adjudication Board
(DARAB) under R. A. No. 6657 and correct technical errors of the administrative agency. In
such exceptional cases, the Department Secretary has established a mode of appeal from the
Department of Agrarian Reform to the Office of the President as a plain, speedy, adequate and
inexpensive remedy in the ordinary course of law. This would enable the Office of the President,
through the Executive Secretary, to review technical matters within the expertise of the
administrative machinery before judicial review can be resorted to by way of an appeal to the
Court of Appeals under Rule 43 of the 1997 Rules on Civil Procedure.
On the other hand, the purpose of SC Adm. Circ. No. 1-95, now embodied in Rule 43 of the
1997 Rules of Civil Procedure, is to invoke the constitutional power of judicial review over quasi-
judicial agencies, such as the Department of Agrarian Reform under R. A. No. 6657 and the
Office of the President in other cases by providing for an appeal to the Court of Appeals. Section
54 of R. A. No. 6657 is consistent with SC Adm. Circ. No. 1-95 and Rule 43 in that it establishes
a mode of appeal from the DARAB to the Court of Appeals.
In Angara v. Electoral Commission this Court upheld the promulgation of the rules of procedure
of the Commission since they were necessary to the proper exercise of its express power to
hear and decide election contests involving members of the legislature, although not specifically
granted by the Constitution or statute.17 We ruled18 -
x x x the creation of the Electoral Commission carried with it ex necesitate rei the power
regulative in character to limit the time within which protests intrusted to its cognizance should
be filed. It is a settled rule of construction that where a general power is conferred or duty
enjoined, every particular power necessary for the exercise of the one or the performance of
the other is also conferred (Cooley, Constitutional Limitations, 8th ed., Vol. I, pp. 138, 139). In
the absence of any further constitutional provision relating to the procedure to be followed in
filing protests before the Electoral Commission, therefore, the incidental power to promulgate
such rules necessary for the proper exercise of its exclusive power x x x must be deemed by
necessary implication to have been lodged also in the Electoral Commission (emphasis
supplied).
Thus, the power of the Department Secretary to promulgate internal rules of administrative
procedure is lodged in him by necessary implication as part of his express power to promulgate
rules and regulations necessary to carry out department objectives, policies, functions, plans,
programs and projects.19cräläwvirtualibräry
Is an appeal to the Office of the President from the Department Secretary pursuant to DAR
Memo. Circ. No. 3, series of 1994, proper under the doctrine of exhaustion of administrative
remedies?
Petitioner contends that an appeal to the Office of the President from the Secretary of Agrarian
Reform is proper under the doctrine of exhaustion of administrative remedies. On the other
hand, it is the contention of public respondent, the Office of the Solicitor General, that an
exception to this well-settled principle is the doctrine of qualified political agency. Where the
respondent is a Department Secretary, whose acts as an alter ego of the President bear the
implied or assumed approval of the latter, unless the President actually disapproves them,
administrative remedies have already been exhausted. Recourse to the court may be made at
that point, according to private respondents, a view that was sustained by the Court of Appeals.
In this case, the appellate court ruled that the appeal before it was filed beyond the reglementary
period as petitioner appealed to the Office of the President, and not to the Court of Appeals,
where it should have been brought. In Tan v. Director of Forestry this Court ruled that even if
the respondent was a Department Secretary, an appeal to the President was proper where the
law expressly provided for exhaustion.20cräläwvirtualibräry
As a valid exercise of the Secretarys rule-making power to issue internal rules of procedure,
DAR Memo. Circ. No. 3, series of 1994, expressly provides for an appeal to the Office of the
President. Thus, petitioner Valencia filed on 24 November 1993 a timely appeal by way of a
petition for review under Rule 43 to the Court of Appeals from the decision of the Office of the
President, which was received on 11 November 1993, well within the fifteen (15)-day
reglementary period.
An administrative decision must first be appealed to administrative superiors up to the highest
level before it may be elevated to a court of justice for review. The power of judicial review may
therefore be exercised only if an appeal is first made by the highest administrative body in the
hierarchy of the executive branch of government.
In Calo v. Fuertes this Court held that an administrative appeal to the President was the final
step in the administrative process and thus a condition precedent to a judicial appeal.21 Hence,
an appeal to the Office of the President from the decision of the Department Secretary in an
administrative case is the last step that an aggrieved party should take in the administrative
hierarchy, as it is a plain, speedy and adequate remedy available to the petitioner.
Indeed, certain procedural technicalities have beclouded this case from the outset such that the
substantive issue regarding the true nature of the relationship between petitioner and private
respondents was not addressed by the Court of Appeals, hence, the raison dtre of the case. It
must necessarily be discussed if this Court were to resolve with finality the protracted conflict
that has lasted over twenty-five (25) years. We are resolving the question at this point to bring
this case once and for all to a just, fair and equitable conclusion. Where there are clear errors
of law this Court must exercise its constitutional power of judicial review to correct such errors.
The substantive issue to be resolved may be expressed in this manner: Can a contract of civil
law lease prohibit a civil law lessee from employing a tenant on the land subject matter of the
lease agreement? Otherwise stated, can petitioners civil law lessee, Fr. Flores, install tenants
on the subject premises without express authority to do so under Art. 1649 of the Civil Code,
more so when the lessee is expressly prohibited from doing so, as in the instant case?
Contrary to the impression of private respondents, Sec. 6 of R. A. No. 3844, as amended, does
not automatically authorize a civil law lessee to employ a tenant without the consent of the
landowner. The lessee must be so specifically authorized. For the right to hire a tenant is
basically a personal right of a landowner, except as may be provided by law. But certainly
nowhere in Sec. 6 does it say that a civil law lessee of a landholding is automatically authorized
to install a tenant thereon. A different interpretation would create a perverse and absurd situation
where a person who wants to be a tenant, and taking advantage of this perceived ambiguity in
the law, asks a third person to become a civil law lessee of the landowner. Incredibly, this tenant
would technically have a better right over the property than the landowner himself. This tenant
would then gain security of tenure, and eventually become owner of the land by operation of
law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law
lease agreement in good faith only to realize later on that he can no longer regain possession
of his property due to the installation of a tenant by the civil law lessee.
On the other hand, under the express provision of Art. 1649 of the Civil Code, the lessee cannot
assign the lease without the consent of the lessor, unless there is a stipulation to the contrary.
In the case before us, not only is there no stipulation to the contrary; the lessee is expressly
prohibited from subleasing or encumbering the land, which includes installing a leasehold tenant
thereon since the right to do so is an attribute of ownership. Plainly stated therefore, a contract
of civil law lease can prohibit a civil law lessee from employing a tenant on the land subject
matter of the lease agreement. An extensive and correct discussion of the statutory
interpretation of Sec. 6 of R. A. No. 3844, as amended, is provided by the minority view in
Bernas v. Court of Appeals.22cräläwvirtualibräry
When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who
furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor,
and the person who personally cultivates the same, it assumes that there is already an existing
agricultural leasehold relation, i.e., a tenant or agricultural lessee already works the land. The
epigraph of Sec. 6 merely states who are Parties to Agricultural Leasehold Relations, which
assumes that there is already a leasehold tenant on the land; not until then. This is precisely
what we are still asked to determine in the instant proceedings.
To better understand Sec. 6, let us refer to its precursor, Sec. 8 of R. A. No. 1199, as
amended.23 Again, Sec. 8 of R. A. No. 1199 assumes the existence of a tenancy relation. As
its epigraph suggests, it is a Limitation of Relation, and the purpose is merely to limit the tenancy
to the person who furnishes the land, either as owner, lessee, usufructuary, or legal possessor,
and to the person who actually works the land himself with the aid of labor available from within
his immediate farm household. Once the tenancy relation is established, the parties to that
relation are limited to the persons therein stated. Obviously, inherent in the right of landholders
to install a tenant is their authority to do so; otherwise, without such authority, civil law lessees
as landholders cannot install a tenant on the landholding. Neither Sec. 6 of R. A. No. 3844 nor
Sec. 8 of R. A. No. 1199 automatically authorizes the persons named therein to employ a tenant
on the landholding.
According to Mr. Justice Guillermo S. Santos and CAR Executive Judge Artemio C. Macalino,
respected authorities on agrarian reform, the reason for Sec. 6 of R. A. No. 3844 and Sec. 8 of
R. A. No. 1199 in limiting the relationship to the lessee and the lessor is to discourage
absenteeism on the part of the lessor and the custom of co-tenancy under which the tenant
(lessee) employs another to do the farm work for him, although it is he with whom the landholder
(lessor) deals directly. Thus, under this practice, the one who actually works the land gets the
short end of the bargain, for the nominal or capitalist lessee hugs for himself a major portion of
the harvest.24 This breeds exploitation, discontent and confusion x x x x The kasugpong,
kasapi, or katulong also works at the pleasure of the nominal tenant.25 When the new law,
therefore, limited tenancy relation to the landholder and the person who actually works the land
himself with the aid of labor available from within his immediate farm household, it eliminated
the nominal tenant or middleman from the picture.26cräläwvirtualibräry
Another noted authority on land reform, Dean Jeremias U. Montemayor,27 explains the
rationale for Sec. 8 of R. A. No. 1199, the precursor of Sec. 6 of R. A. No. 3844:
Since the law establishes a special relationship in tenancy with important consequences, it
properly pinpoints the persons to whom said relationship shall apply. The spirit of the law is to
prevent both landholder absenteeism and tenant absenteeism. Thus, it would seem that the
discretionary powers and important duties of the landholder, like the choice of crop or seed,
cannot be left to the will or capacity of an agent or overseer, just as the cultivation of the land
cannot be entrusted by the tenant to some other people. Tenancy relationship has been held to
be of a personal character.28cräläwvirtualibräry
Section 6 as already stated simply enumerates who are the parties to an existing contract of
agricultural tenancy, which presupposes that a tenancy already exists. It does not state that
those who furnish the landholding, i.e., either as owner, civil law lessee, usufructuary, or legal
possessor, are automatically authorized to employ a tenant on the landholding. The reason is
obvious. The civil lease agreement may be restrictive. Even the owner himself may not be free
to install a tenant, as when his ownership or possession is encumbered or is subject to a lien or
condition that he should not employ a tenant thereon. This contemplates a situation where the
property may be intended for some other specific purpose allowed by law, such as, its
conversion into an industrial estate or a residential subdivision.
Under Lastimoza v. Blanco,29 private respondents in that case could not be lawful tenants of
the landowner for the reason that the civil law lessees, after failing to return the landholding to
the landowner, already became deforciants. A deforciant cannot install a lawful tenant who is
entitled to security of tenure.
Attention may be invited to settled jurisprudence that the existence of an agricultural leasehold
relationship is not terminated by changes of ownership in case of sale, or transfer of legal
possession as in lease.30 This, again, assumes that tenancy already exists. In the case at bar,
no such relationship was ever created between the civil law lessees and private respondents,
and subsequently, between Valencia and private respondents except Catalino Mantac. With
respect to the lease agreement between Valencia and Fr. Flores, the lessee did not have any
authority to sublease Valencias property due to the prohibition in their lease agreement. It is
likewise in clear and unambiguous terms that the lease agreement was only for a limited
duration with no extension.31cräläwvirtualibräry
In Ponce v. Guevarra32 and Joya v. Pareja33 the agricultural leasehold relations were
preserved because the legal possessors therein were clearly clothed with legal authority or
capacity to install tenants. But even assuming that they were not so authorized as in the Ponce
case where the civil law lessee was expressly barred from installing a tenant under their contract
of lease, the subsequent actions of the landowners in extending the lifetime of the lease, or in
negotiating for better terms with the tenants, placed the landowners in estoppel to contest the
agricultural leasehold relations. Consequently, the tenants in those cases may be categorized
as tenants de jure enjoying tenurial security guaranteed by the Agricultural Tenancy Law, now
by the Agricultural Land Reform Code, as amended. This is not the case before us.
It must be noted that Valencia never extended the term of the civil law lease, nor did he negotiate
with respondents for better terms upon the expiration of the lease. He wanted precisely to
recover possession of the property upon the expiration of the contract on 30 June 1975, except
from Mantac with whom he already entered into a tenancy contract as herein before stated.
Valencia appointed an overseer to prepare for his eventual takeover and to cultivate the property
through labor administration after his long years in the government service. Verily, the intention
of Valencia after the expiration of the lease contract was for him to cultivate the land by
administration, or by himself, and not to surrender possession, much less ownership, to the
private respondents.
There may be apprehensions that should Sec. 6 of R. A. No. 3844 be construed as not to vest
the civil law lessee or legal possessor with automatic authority to install tenants, it would in effect
open the floodgates to their ejectment on the mere pretext that the civil law lessee or legal
possessor was not so authorized by the landowner.
This is more imagined than real. In the very recent case of Ganzon v. Court of Appeals, decided
30 July 2002, this Court resolved the issue of whether the private respondents should be
considered agricultural tenants of the petitioner.34 The Court ruled that the respondents were
not instituted as agricultural lessees but as civil law lessees of the land. This was evident from
the contract of lease executed by the parties. The respondents were neither impliedly instituted
as tenants nor designated as agricultural lessees by reason alone of the acquiescence by
petitioner to the continued possession of the property.
The Department of Agrarian Reform in Ganzon made the factual determination that the
agreement entered into between Florisco Banhaw (one of the respondents) and Carolina L.
Ganzon (petitioner) was a civil law lease. However, there was no evidence to prove that the
other defendants in that case allegedly instituted as tenants were sharing or paying rentals to
Florisco Banhaw or to the landowner. The DAR held that mere allegation without the
corresponding receipts would not sufficiently establish a tenancy relationship especially since
there was an express prohibition in the civil law lease contract from subleasing the subject land
to any other person.35cräläwvirtualibräry
From the foregoing discussion, it is reasonable to conclude that a civil law lessee cannot
automatically institute tenants on the property under to Sec. 6 of R. A. No. 3844. The correct
view that must necessarily be adopted is that the civil law lessee, although a legal possessor,
may not install tenants on the property unless expressly authorized by the lessor. And if a
prohibition exists or is stipulated in the contract of lease the occupants of the property are merely
civil law sublessees whose rights terminate upon the expiration of the civil law lease agreement.
In the present case, the Decision of the Secretary of Agrarian Reform, as modified by the Office
of the President through the Executive Secretary, held that private respondents were deemed
leasehold tenants. They anchored their proposition on Sec. 6 of R. A. No. 3844, as amended,
otherwise known as The Agricultural Land Reform Code, which states that since the civil law
lessees had a valid contract with Valencia, the sublessees were automatically deemed his
tenants by operation of law.
This conclusion espoused by the Secretary of Agrarian Reform is arbitrary and unfounded. The
following essential requisites must concur in order to establish a tenancy relationship:36 (a) the
parties being landowner and tenant; (b) the subject matter is agricultural land; (c) there is
consent by the landowner; (d) the purpose is agricultural production; (e) there is personal
cultivation by the tenant; and, (f) there is sharing of harvests between the parties. An allegation
that an agricultural tenant tilled the land in question does not make the case an agrarian
dispute.37 Claims that one is a tenant do not automatically give rise to security of tenure. The
elements of tenancy must first be proved in order to entitle the claimant to security of
tenure.38cräläwvirtualibräry
A tenancy relationship cannot be presumed. There must be evidence to prove this allegation.
Hence, a perusal of the records and documents is in order to determine whether there is
substantial evidence to prove the allegation that a tenancy relationship does exist between
petitioner and private respondents.
The principal factor in determining whether a tenancy relationship exists is intent. Tenancy is
not a purely factual relationship dependent on what the alleged tenant does upon the land. It is
also a legal relationship. The intent of the parties, the understanding when the farmer is installed,
and their written agreements, provided these are complied with and are not contrary to law, are
even more important. 39cräläwvirtualibräry
In Caballes v. DAR40 the Court held that all these requisites must concur in order to create a
tenancy relationship. The absence of one does not make an occupant or a cultivator thereof or
a planter thereon a de jure tenant. This is so because unless a person has established his status
as a de jure tenant he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws.41cräläwvirtualibräry
The security of tenure guaranteed by our tenancy laws may be invoked only by tenants de jure,
not by those who are not true and lawful tenants.42cräläwvirtualibräry
In Berenguer, Jr. v. Court of Appeals this Court ruled that the respondents self-serving
statements regarding their tenancy relations could not establish the claimed relationship.43 The
fact alone of working on anothers landholding does not raise a presumption of the existence of
agricultural tenancy.44 Substantial evidence does not only entail the presence of a mere scintilla
of evidence in order that the fact of sharing can be established; there must be concrete evidence
on record adequate enough to prove the element of sharing.45 Bejasa v. Court of Appeals
similarly ruled that to prove sharing of harvests, a receipt or any other evidence must be
presented as self-serving statements are deemed inadequate.46cräläwvirtualibräry
In the present case, it is not disputed that the relationship between Valencia and Henson, and
subsequently, Valencia and Fr. Flores, partook of a civil law lease. Henson and later Fr. Flores
were not instituted as agricultural lessees but as civil law lessees. As a finding of fact, the
Secretary of Agrarian Reform held that a written civil law lease contract between Valencia and
Fr. Flores was on file which contained in clear and precise terms the stipulation prohibiting the
subleasing or encumbering of his parcels of land without the written consent of Valencia.47 The
Secretary even went as far as stating for the record that such stipulation barring the subletting
of the property was violated by Fr. Flores when he subleased the subject parcels of land to
private respondents.48cräläwvirtualibräry
The findings of fact by the DAR Hearing Officer, Atty. Ampong, in his Investigation Report and
Recommendations dated 7 December 1988 concerning the admission by private respondents
that they never turned over the rentals or harvests to Valencia and, instead, to his overseer who
was not authorized to receive any payments, must be deemed conclusive.49cräläwvirtualibräry
As to the civil law lease between Valencia and Fr. Flores, the prohibition against subletting the
property without the written consent of Valencia must be upheld. Thus, there is no tenurial
security for private respondents designated by the civil law lessee, except for the oft-mentioned
Catalino Mantac.
Furthermore, it must be noted that private respondents Ernesto Lobresco and Francisco Obang
sublet the land to third persons. Even assuming arguendo then that they were tenants, although
installed without authority, the act of subletting to third persons extinguished the agricultural
leasehold relations of Ernesto Lobresco and Francisco Obang as it constituted an abandonment
of the landholding due to absence of personal cultivation.
Since private respondents with the exception of Catalino Mantac cannot be deemed tenants in
contemplation of law, they are therefore not entitled to Certificates of Land Transfer (CLTs)
under the Operation Land Transfer (OLT) Program pursuant to Pres. Decree No. 27 and L.O.I.
No. 474. All other persons found in the land in question are considered unlawful occupants of
the property unless otherwise authorized by the landowner to possess the same in a lawful
capacity.
Even as we uphold time and again the existence and validity of implied agricultural tenancy
agreements, we encourage the forging of written documents to prevent ambiguity as to the
terms set by both parties and for them to express their intent in clear language. This would
minimize and even prevent the shotgun approach to tenancy relations imposed by some officials
of the Government without complying with the essential requisites of tenancy as provided by
law. Agreements must be entered freely and voluntarily by the parties concerned without the
influence of third parties, much less the Government, making representations for either side. An
express tenancy agreement would facilitate the aims of the agricultural tenancy laws and
promote social justice for both landowner and tenant.
With respect to the retention limits of land ownership by Valencia and his direct descendants,
the Comprehensive Agrarian Reform Law allows landowners whose lands have been covered
by Pres. Decree No. 27 to keep the area originally retained by them provided the original
homestead grantees who still own the original homestead at the time of the approval of Rep.
Act No. 6657 shall retain the same areas as long as they continue to cultivate the homestead.50
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner, as a general rule.51 However, the factual determination of whether Valencia
and his direct descendants have complied with Sec. 6 of Rep. Act No. 6657 should be
addressed by the Department of Agrarian Reform. Ascertaining if petitioner and his direct
descendants are within the seven (7)-hectare retention limit provided by Pres. Decree No. 27
requires the technical expertise of the administrative agency concerned.
It is appalling to note that it took over twelve (12) years for the Agrarian Reform Team 202 of
the Canlaon City Office of the DAR to act on a simple matter calling for a preliminary
determination of tenancy status, in spite of a telegram sent on 30 March 1976 by the Secretary
of Agrarian Reform directing the Team Leader of A.R.T. 202 to investigate and submit a report
on the landholding of petitioner Valencia.52 This is truly a travesty of great magnitude and a
clear-cut case of undue delay and administrative injustice, for the rights of the landowner must
equally be protected just as passionately as the rights of the tenant-tiller, especially so that in
the meantime he has been deprived of the actual possession of his property which he
envisioned to cultivate himself after retiring from the government service; worse, he was not
paid his landholders shares in the harvests, and there is no telling when, if ever, he will ever be
paid by private respondents who claim to be his tenants.
Executive or administrative justice must always be dispensed with an even hand, regardless of
a persons economic station in life.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-
G.R. SP No. 32669 dated 27 July 1995 and its Resolution dated 22 September 1995 denying
the Motion for Reconsideration are REVERSED and SET ASIDE, and a new one is entered as
follows:
1. The area acquired by petitioner Victor G. Valencia under his Homestead Application No. HA-
231601 with Final Proof and Tax Declaration No. 0515 is EXCLUDED from the coverage of
Pres. Decree No. 27, hence, must be retained by him;
2. The Certificates of Land Transfer (CLTs) issued to private respondents Santos Gargaya (CLT
No. 0-071160), Juliano Magdayao (CLTs Nos. 0-071161, 0-071163, 0-071166 & 0-071175),
Crescenciano Frias (CLT No. 0-071164), Federico Jare (CLTs Nos. 0-071171 & 0-071172),
Rosendo Lobresco (CLTs Nos. 0-071189 & 0-071182), Ernesto Lobresco (CLTs Nos. 0-071185
& 0-071187), Feliciano Lobresco (CLT No. 0-071188), Victoriano Montefalcon (CLT No. 0-
071190), Francisco Obang (CLT No. 0-071168), Ambrosio Semillano (CLTs Nos. 0-071165, 0-
071176 & 0-071177), Rogelio Tamayo (CLT No. 0-071194) and Edilberto Lobresco (CLT No.
0-071173) are CANCELLED and NULLIFIED for having been issued without factual and legal
basis;
3. The agricultural leasehold of respondent Catalino Mantac (CLT No. 0-071162) covering an
area of 0.0425 hectare subject of tenancy agreement with petitioner Victor G. Valencia is
maintained and respected;
4. All unlawful occupants of the property under TCT No. H-T-137 and Homestead Application
No. HA-231601 with Final Proof, and Tax Declaration No. 0515 including but not limited to the
private respondents mentioned in par. 2 hereof are ORDERED to IMMEDIATELY VACATE and
RETURN peacefully to the lawful owner, petitioner Victor G. Valencia, the parcels of land
respectively possessed or occupied by them.
No pronouncement as to costs.
SO ORDERED.
Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.
[G.R. NO. 158244 : August 9, 2005]
ERNESTO PONCE AND MANUEL C. BALIGNASAY, Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION (SECOND DIVISION), INNODATA PHILIPPINES CORP.,
INNODATA PROCESSING CORP. (INNODATA CORPORATION) and TODD SOLOMON,
Respondent.
DECISION
CHICO-NAZARIO, J.:
Petitioners impugn in the instant Petition for Review the Decision1 and the Resolution, dated 14
November 2002 and 12 May 2003, respectively, of the Court of Appeals in CA-G.R. SP No.
69811, affirming the judgment of the National Labor Relations Commission (NLRC) which
reversed the Decision of the Labor Arbiter, and found petitioners to have committed willful
neglect of duties as a result of their absences, but awarded financial assistance to petitioners
in the amount of one-half (1/2) month salary for every year of service.
The factual antecedents were synthesized by the Court of Appeals in its decision.
Innodata Philippines Corporation (Innodata) is a corporation engaged in the business of data
processing wherein raw data supplied by its clients are fed into computers to process the same
into data suitable for computer use, while Todd Solomon is its President. Innodata offered,
among other services, encoding, typesetting, indexing, and abstracting data. Data encoding
includes pre-encoding, encoding, editing, proofreading and scanning. All job orders or projects
of Innodata come from its foreign clientele. In order to assure continuous flow of job
orders/projects, it is essential for the company to guarantee its clients that it could faithfully fulfill
its commitments within the agreed period and with attention to quality.2
All throughout its years of operations, Innodata has been continually beset with the perennial
problem of incurring delays in accomplishing its data processing projects. To solve its quandary,
Innodata engaged additional manpower, in the process incurring additional cost in the form of
overtime pay to ensure that the job orders and projects would be finished promptly. But the work
backlog persisted prompting the company to investigate and commission a study as to the
cause of the crisis. The study revealed that the problem was attributable to the habitual tardiness
and absenteeism of its employees. As a result, Innodata revised its policy on tardiness and
absenteeism and came out with the Revised 1998 Absenteeism and Tardiness Policy (1998
Revised Policy), which took effect on 01 January 1998.3
The 1998 Revised Policy lessened the number of allowable absences and tardiness in a month
and increased the penalties imposed upon the employees for such. For that reason, the union
and employees of Innodata challenged the same through its Grievance Machinery under the
National Conciliation and Mediation Board. After exhausting the remedies available in the
existing Grievance Machinery, the Innodata Employees Association and respondent Innodata
agreed on 18 May 1998, to submit the issue to voluntary arbitration as gleaned from the parties'
Submission Agreement.4
Pending resolution by the Voluntary Arbitrator of the issue on the validity of the 1998 Revised
Policy, Innodata terminated the services of petitioner Ernesto Ponce on 03 August 1998.5
On 21 August 1998, the Voluntary Arbitrator declared the 1998 Revised Policy as null and void
for lack of consultation with the employees prior to its adoption and for being diminutive of the
vested rights of the employees inasmuch as it reduced the number of unexcused absences in
a month that an employee can avail of without sanction.6 On this date, Manuel Balignasay's
services were also terminated for absenteeism, under the 1998 Revised Policy. The Court of
Appeals, however, reversed the ruling of the Voluntary Arbitrator and affirmed the validity of the
1998 Revised Policy on the ground that it was a valid exercise of management prerogative. On
appeal, this Court affirmed with finality the Court of Appeals' decision on 27 June 2001.7
Both petitioners Ponce and Balignasay filed a complaint for illegal dismissal against Innodata
protesting that they were dismissed by the latter sans just cause and in violation of their right to
security of tenure.8 According to petitioners, their dismissal was illegal considering that the 1998
Revised Policy under which their dismissal from employment was based was, at that time, still
subject of voluntary arbitration and which in fact was later nullified by Voluntary Arbitrator
Francisco Sobreviñas in his Decision dated 21 August 1998. Finally, petitioners bemoaned
that the 1998 Revised Policy is unreasonable and that the penalty of dismissal is too harsh a
penalty, not commensurate to the supposed offense of a few days' absences.9
In contrast, Innodata argued in its Reply that the 1998 Revised Policy on absenteeism was a
valid exercise of management prerogative and necessary to its self-preservation. On petitioners'
dismissal, Innodata unfalteringly asserted that petitioners were guilty of serious misconduct,
willful disobedience to the lawful order of their employer, violation of the rules and regulations
of the company and gross neglect of duty. And pursuant to Article 282 of the Labor Code,10 as
amended, the termination from employment of Ponce and Balignasay was based on just
causes.11
On 29 December 1999, Labor Arbiter Jovencio Mayor, Jr., rendered a decision favoring the
petitioners. In the arbiter's rationale, the dismissal of petitioners was illegal because the 1998
Revised Policy under which their dismissal from employment was founded was, at that time, still
subject of voluntary arbitration as agreed upon by the Innodata Employees Association and
Innodata. This being the case, the Labor Arbiter was of the view that the implementation of said
1998 Revised Policy should have been suspended until the Voluntary Arbitrator shall have ruled
on the validity thereof.
The Labor Arbiter thus ordered the reinstatement of petitioners with full back wages, the
dispositive portion of which reads as follows:
WHEREFORE, in view of all the foregoing, respondents are hereby ordered to reinstate
complainants to their former positions without loss of seniority rights and other privileges and
benefits with full back wages computed from the time of their illegal dismissal up to their actual
reinstatement which up to this promulgation already amounted to, to wit:
ERNESTO PONCE Php. 122,184.44
MANUEL BALIGNASAY 112,060.00
----------------------
Php 234,244.48
plus attorney's fees in the amount of TWENTY-THREE THOUSAND FOUR HUNDRED
TWENTY-FOUR (Php23, 424.44) PESOS AND 44/100.12
In a Decision13 dated 28 September 2001, the Second Division of the NLRC reversed the
arbiter's decision and held that petitioners were validly terminated for having exceeded the
maximum allowable absences as provided in the 1998 Revised Policy, the legality of which was
upheld by the Supreme Court. The NLRC found that despite being apprised of the
implementation of the 1998 Revised Policy effective 01 January 1998, each of the petitioners
still incurred a total of 35 unexcused absences for the year 1998 prior to their removal in August
of that year. Nonetheless, as an act of justice following case precedents, they were awarded
financial assistance equivalent to one-half (1/2) month's salary for every year of service. The
NLRC disposed as follows:
Wherefore, premises considered, the assailed Decision dated 29 December 1999, is hereby
REVERSED and SET ASIDE and a new one entered DISMISSING the instant case for lack of
merit. However, respondents are hereby ordered to pay complainants financial assistance in
the amount of one-half month pay for every year of service.14
Both parties moved to reconsider the NLRC Decision. It appears, however, that the NLRC had,
for reasons unknown, overlooked the motion for reconsideration15 filed by petitioners and
received by the NLRC on 17 October 2001 because, on 20 November 2001, the NLRC denied
only the motion for reconsideration filed by Innodata, without any mention as to that of
petitioners. The Resolution reads:
After due consideration of the Motion for Reconsideration filed by respondent on October 22,
2001, from the Decision of September 28, 2001, the Commission (Second Division) resolved to
deny the same for lack of merit. [Emphasis supplied.]16
Within the reglementary period to file an appeal, Innodata proceeded to file a Petition for
Certiorari with the Court of Appeals. In their Comment to Innodata's Petition for Certioraribefore
the Court of Appeals, however, petitioners argued that the petition was prematurely filed as their
motion for reconsideration was still pending with the NLRC. Petitioners reiterated that they were
illegally dismissed and prayed for the dismissal of the petition and for other equitable reliefs.17
The Court of Appeals did not dwell on the prematurity issue and proceeded to rule on the merits
of the petition. On 14 November 2002, the appellate court affirmed the decision of the NLRC,
disposing as follows -
WHEREFORE, in view of the foregoing, the instant Petition for Certiorari is hereby DISMISSED
for lack of merit, and the decision of the NLRC dated September 28, 2001 is AFFIRMED.18
Petitioners moved for reconsideration but it was denied in the Resolution19 dated 12 May 2003.
Hence, this appeal via a Petition for Review where petitioners assign the following single error
to the Court of Appeals, viz:
the honorable court of appeals erred in affirming the assailed decision of the nlrc while there is
still a pending motion for reconsideration before the national labor relations commission. The
decision of November 14, 2002 is null and void.20
The lone issue before the Court thus focuses on whether or not the Court of Appeals can take
cognizance of the Petition for Certiorarifiled by Innodata assailing solely the portion of the
NLRC's Decision awarding financial assistance to the petitioners while the latter's motion for
reconsideration of the NLRC Decision remained unresolved by the said Commission.
Petitioners decry the Court of Appeals' rendition of the Decision despite the fact that the NLRC
had yet to rule on their motion for reconsideration. For this reason, they bellyache that the Court
of Appeals lacked the jurisdiction to review the NLRC Decision which had not yet attained
finality, thus, the petition filed by Innodata before the Court of Appeals was vulnerable to
dismissal for being prematurely filed. Given the foregoing premises, petitioners pray that this
Court set aside the assailed Decision and Resolution of the Court of Appeals and a new
judgment be entered remanding the case to the NLRC and ordering the said Commission to
resolve the petitioners' motion for reconsideration which petitioners say had been pending for
almost two years at the time of filing of this petition.21
A contrario, in its Comment, the Office of the Solicitor General (OSG), in behalf of Innodata,
grouses that petitioners have waived their motion for reconsideration with the NLRC when they
actively participated in the proceedings before the Court of Appeals and when they raised the
issue of the legality of the dismissal in the same forum. The Court of Appeals, therefore, correctly
assumed jurisdiction over the Petition for Certiorari filed by Innodata, says the OSG.22
In its memorandum,23 Innodata is of the same mind as the OSG and entreats this Court to
dismiss the present petition for utter want of merit.
Much as we commiserate with the plight of the working class in general, the arguments raised
by petitioners in their six-page petition are, to our mind, simply vacuous and lacking in
persuasive force.
Preliminarily, we take this occasion to strike a chord that in a Petition for Review on Certiorari,
our jurisdiction, as set forth in Rule 45, Section 1, of the 1997 Rules of Court, is limited to
"questions of law which must be distinctly set forth," to wit:
Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a judgment
or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court
or other courts whenever authorized by law, may file with the Supreme Court a verified Petition
for Review on Certiorari . The petition shall raise only questions of law which must be distinctly
set forth. [Italics supplied]
In the case at bar, petitioners having specifically raised a single procedural issue on the alleged
prematurity of the Court of Appeals' Decision, we shall limit our discussion to this lone
assignment of error.
We agree in the stand of the OSG that the Court of Appeals correctly assumed jurisdiction over
the Petition for Certiorari filed by Innodata notwithstanding the pendency of the petitioners'
motion for reconsideration before the NLRC. As intoned by the OSG, note that instead of moving
for the dismissal of the petition filed by Innodata before the Court of Appeals in this case,
petitioners, in their Comment to said petition, did not limit their arguments to the alleged
prematurity of said petition, but rather zealously argued the illegality of their dismissal as well.
Likewise, petitioners in their prayer to their Comment sought not only the dismissal of the said
petition but other reliefs too. Patently, petitioners had of their own accord submitted the entire
case to the jurisdiction of the Court of Appeals, which jurisdiction they cannot now conveniently
assail as estoppel had already set in.24
As has been held in M. Ramirez Industries v. The Hon. Secretary of Labor and Employment:
[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent
and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.
. . . [I]t was further said that the question whether the court had jurisdiction either of the subject-
matter of the action or of the parties is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason that such a
practice can not be tolerated obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of
the court. . . And in Littleton v. Burges, 16 Wyo, 58, the Court said that it is not right for a party
who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an
affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.25

We hasten to add that at the time Innodata filed the Petition for Certiorari with the Court of
Appeals, the NLRC had already denied its motion for reconsideration. As such, it is reasonable
for Innodata to believe that with the denial of its motion for reconsideration by the NLRC, its
business with said Commission is finished and the next logical move is to appeal in due time
the NLRC's Decision to the Court of Appeals.
Then, too, implicit to the denial of Innodata's motion for reconsideration is the obvious fact that
the NLRC preserved in toto its 28 September 2001 Decision which held petitioners to have been
validly dismissed, but with award of financial assistance to them. Indeed, the NLRC need not
state the obvious that nothing, not even petitioners' motion for reconsideration, had changed
the NLRC's mind as to the course of its 28 September 2001 Decision.
In other words, although the 20 November 2001 Resolution of the NLRC tackled solely
Innodata's motion for reconsideration questioning the award of financial assistance to
petitioners, common sense and logic dictate that such a denial carries the effect of denying
petitioners' motion for reconsideration as well for how can the NLRC, on one hand, preserve in
its 20 November 2001 resolution its ruling that petitioners were legally dismissed (although
awarded with financial assistance) and, on another hand, hold that they were not, if it grants
petitioners' motion for reconsideration?chanroblesvirtualawlibrary
In fine, ours is not a perfect system of procedural rules as it does not encompass deviations
such as the NLRC's oversight in the case at bar. But what is missing in the rules may be found
in the general principles of logic, justice and equity.26
As a postscript, the NLRC's Second Division had resolved the pending motion for
reconsideration of the petitioners in its Resolution27 dated 12 August 2004 possibly after the
NLRC was apprised of its oversight when it was made a respondent in the case at bar. With this
belated development, petitioners' prayer28 for this Court to order the NLRC to resolve their
pending motion for reconsideration has, in point of fact, become a vapid entreaty.
WHEREFORE, the present petition is hereby DENIED. Accordingly, the Decision and the
Resolution, dated 14 November 2002 and 12 May 2003, respectively, of the Court of Appeals
are hereby AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
[G.R. NO. 157856 : September 27, 2007]
CONCEPCION C. ANILLO of Barangay San Nicolas (formerly Molino), Bacoor, Cavite
Petitioner, v. COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS represented by
Commissioner ERNESTO A. CARDIÑO; OIC-Associate Commissioner NOEL
GALAROSA, DEMETRIO T. VILLANUEVA, JR., Sheriff IV of the Regional Trial Court,
Fourth Judicial Region, Bacoor, Cavite; Provincial Director, PNP, Province of Cavite;
National Police Task Force on Professional Squatters and Squatting Syndicates, Hon.
Mayor JESSIE B. Promulgated: CASTILLO of the Municipality of Bacoor, Cavite; Hon.
Barangay Chairman GAUDENCIO PAREDES; GREENVALLEY HOMEOWNER'S
ASSOCIATION INC.; and SOUTHRICH ACRES, INC. Respondents.
DECISION
TINGA, J.:
This is a special civil action under Rule 65 for certiorari, prohibition and mandamus with
application for a writ of preliminary injunction and restraining order, praying for the nullification
of the Resolution1 dated 30 July 2001, including the writ of execution2 and demolition3 in
connection therewith, for having been issued by the Commission on the Settlement of Land
Problems (COSLAP) with grave abuse of discretion amounting to lack or in excess of
jurisdiction.
The instant controversy stemmed from a letter4 dated 29 May 2001 of Jessie B. Castillo,
Municipal Mayor of Bacoor, Cavite, to COSLAP Commissioner Ernesto A. Cardiño, seeking
immediate assistance in the settlement of a land dispute brewing in Green Valley Subdivision,
San Nicolas, Bacoor, Cavite. The letter averred that squatters, claiming to have bought portions
of the subdivision land from the estate of the late Don Hermogenes Rodriguez, had invaded the
subdivision and turned vacant lots therein into a squatter colony. A certain Henry Rodriguez had
been purportedly representing the estate and claiming ownership over a big portion of the
Municipality of Bacoor including the subdivision land by virtue of a Spanish title, and selling
small lots to clueless victims. Armed security guards were allegedly preventing registered
owners and legitimate residents of the subdivision from entering their own property and exacting
money from them in exchange for the peaceful occupation thereof. The complaint was docketed
as COSLAP Case No. 2001-05-46.
Acting on the complaint, COSLAP directed the parties to participate in a series of mediation
conferences. On 29 June 2001, Atty. Larry Pernito appeared on behalf of the Estate of
Rodriguez. He questioned the jurisdiction of COSLAP and argued that the matter had already
been settled in the intestate proceedings for the settlement of the Estate of Rodriguez. The
representatives of Green Valley Homeowners Association, Inc. and Southrich Acres, Inc.,
registered owners of lots within the subdivision, prayed that their Torrens titles be respected. At
the next conference, only complainants appeared. COSLAP directed the parties to submit
position papers, but only complainants complied.

On 30 July 2001, COSLAP issued a Resolution5 in COSLAP Case No. 2001-05-46, the
dispositive portion of which reads:
Accordingly, this Commission rules in favor of complainants and against respondents. This body
upholds the contention of complainants that any person desiring to contest their titles must do
so in a proper proceeding in accordance with law and not thru force, intimidation and acts of
harassment. This Commission further rules that respondents and all persons claiming rights
over the subject properties are hereby ordered to vacate the premises and return possession
thereof to complainants. Finally, this Commission resolves to order respondents to cease and
desist from:
A. Deploying of armed security guards;
B. Constructing of fences and putting of signboards in the area; and
C. Collecting fees from persons for "rights" to occupy said lots and selling lots to innocent
purchasers.
SO ORDERED.6
COSLAP affirmed its jurisdiction over the land dispute on the ground that the dispute would fall
under the all-inclusive proviso of Paragraph 2, Section 3 of Executive Order No. 561,7 which
created the commission.
Upon motion, COSLAP issued a Writ of Execution8 on 23 October 2001, directing the Sheriff of
the Regional Trial Court (RTC) of Bacoor, with the assistance of the Cavite Provincial Director
of the Philippine National Police, to implement its Resolution dated 30 July 2001. Edwin A. San
Miguel, Sheriff IV of the RTC-Bacoor, filed a Sheriff's Report stating that he served copies of
the writ and a ten-day notice to vacate9 to the squatters but the latter refused to leave and
remove the structures.
On 21 January 2002, a Rule 47 petition, docketed as CA-G.R. SP No. 68640, was filed with the
Court of Appeals by a certain Eduardo Cabesa Abear and 106 others included as petitioners.
Named respondents in said petition, which sought to nullify the COSLAP Resolution dated 30
July 2001, were Green Valley Homeowners Association, Inc., South Rich Acres Inc. and
COSLAP.
On 4 February 2002, the Court of Appeals issued a Resolution10 in the said case, denying the
petition on grounds of improper remedy and lack of jurisdiction.
Because the writ of execution was returned unsatisfied and in view of the finality of the Court of
Appeals' resolution, COSLAP issued a Writ of Demolition11 on 29 January 2003 directing Sheriff
San Miguel to remove the structures and improvements illegally constructed within Green
Valley.
On 21 April 2003, through a caretaker, petitioner received the notice to vacate issued by Sheriff
San Miguel. Petitioner Concepcion C. Anillo, identifying herself as the owner of Lot No. 5825 of
the Imus Estate measuring approximately 553,853 square meters, immediately wrote COSLAP,
requesting, among others, for copy of the Resolution dated 30 July 2001, the writ of execution
and the writ of demolition.12
On 30 April 2003, petitioner filed the instant petition13 for certiorari, prohibition and mandamus,
with a prayer for the issuance of a temporary restraining order and a writ of preliminary
injunction. Named respondents are the COSLAP, represented by Commissioners Ernesto A.
Cardiño and Noel Galarosa, the Sheriff of the RTC of Bacoor, the PNP Provincial Director of
Cavite, the National Police Task Force on Professional Squatters and Squatting Syndicates,
Bacoor Mayor Jessie B. Castillo, Barangay Chairman Gaudencio Paredes, Green Valley
Homeowners Association, Inc. and South Rich Acres Inc.
The instant petition is anchored on the following arguments:
A. PUBLIC RESPONDENT COSLAP, REPRESENTED BY COMMISSIONER ERNESTO A.
CARDIÑO AND OIC-ASSOCIATE COMMISSIONER NOEL A. GALAROSA, HAS NO
JURISDICTION OVER COSLAP CASE NO. 2001-05-46 AND THE RESOLUTION DATED
JULY 30, 2001 WAS ISSUED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR IN [sic] EXCESS OF JURISDICTION AND EXTRINSIC FRAUD.
B. PETITIONER WERE [sic] DENIED OF DUE PROCESS OF LAW AND SHE WAS NEVER
MADE PARTY TO COSLAP CASE NO. 2001-05-46 AND WAS NOT GIVEN THE
OPPORTUNITY TO BE HEARD TO REFUTE AND CHALLENGE THE ALLEGATIONS
STIPULATED IN THE COMPLAINT.
C. PETITIONER, HER TENANTS AND CARETAKERS ARE IN ACTUAL PHYSICAL
POSSESSION OF THE SUBJECT PROPERTIES UNDER A VALID CLAIM OF OWNERSHIP
OF THE LAND BY VIRTUE OF A DEED OF SALE EXECUTED BY THE ESTATE OF
HERMOGENES AND ANTONIO RODRIGUEZ IN FAVOR OF PETITIONER DULY
APPROVED BY THE HONORABLE COURT OF PROBATE JURISDICTION.14
In a Resolution15 dated 15 May 2003, the Court granted the prayer for a temporary restraining
order conditioned upon the posting of a bond and enjoined COSLAP from enforcing the
Resolution dated 30 July 2001, the writ of execution as well as the writ of demolition. The Court
also directed respondents to file their comment or opposition to the application for a writ of
preliminary injunction on 29 September 2003.16 On even date, the temporary restraining order
was issued.17
At the outset, it is necessary to stress that a direct recourse to this Court is highly improper for
it violates the established policy of strict observance of the judicial hierarchy of courts.18 While
we have concurrent jurisdiction with the RTCs and the Court of Appeals to issue writs of
certiorari, this concurrence is not to be taken as an unrestrained freedom of choice as to which
court the application for the writ will be directed. There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals and should also serve as a general
determinant of the appropriate forum for petitions for the extraordinary writs.19 This Court is a
court of last resort and must so remain if it is to satisfactorily perform the functions assigned to
it by the Constitution and immemorial tradition.20 A direct invocation of the Supreme Court's
original jurisdiction to issue these extraordinary writs is allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. Petitioner failed to
show that such special and important reasons obtain in this case.21
In Sy v. Commission on Settlement of Land Problems22 and subsequently in Republic of the
Philippines v. Damayan ng Purok 14, Inc.,23 the Court expressly ruled that orders, decisions or
resolutions of COSLAP cannot be brought directly to this Court, whether on appeal or on
certiorari . The Court stated, thus:
It is readily apparent that appeals from the COSLAP may not be brought directly before us in
view of Rule 45, Section 1. Likewise, if a petition for certiorari under Rule 65 is the prescribed
remedy, the Court of Appeals cannot be bypassed without running afoul of the doctrine of judicial
hierarchy. In this connection, it cannot be doubted that the COSLAP is among those quasi-
judicial agencies exercising quasi-judicial functions. No convincing reason exists why appeals
from the COSLAP should be treated differently from other quasi-judicial agencies whose orders,
resolutions or decisions are directly appealable to the Court of Appeals under Rule 43 of the
1997 Rules of Civil Procedure. Moreover, the enumeration of the agencies therein mentioned
is not exclusive. In that sense, Section 3(2) of E.O. No. 561 declaring that the COSLAP's orders,
resolutions or decision are appealable exclusively to this Court is erroneous in the light of
Section 1, Rule 45 and Section 1, Rule 43 of the 1997 Rules of Civil Procedure, x x x x24
Petitioner insists that COSLAP did not acquire jurisdiction over her person because she was
not made party to the case before the said commission.
The records belie petitioner's claim.
Even before COSLAP conducted the series of mediation conferences, it sent through registered
mail notices to persons, including herein petitioner, claiming ownership rights derived from the
Estate of Rodriguez, directing them to appear at the mediation conference. At the first scheduled
mediation conference, a certain Atty. Larry Pernito appeared on behalf of the Estate of
Rodriguez, questioning the jurisdiction of COSLAP. He was the same counsel who represented
the petitioners in CA-G.R. SP No. 68640 who eventually sought, albeit unsuccessfully, the
nullification of the COSLAP resolution being assailed in the instant petition. COSLAP likewise
gave both parties the opportunity to present their claims when it directed them to submit their
respective position papers. Respondents therein and Atty. Pernito, however, failed to appear in
subsequent proceedings or to submit any position paper.
Petitioner cannot disavow and in fact does not even disown the authority of Atty. Pernito to
represent the Estate of Rodriguez or deny knowledge that said lawyer was representing the
Estate of Rodriguez. The records show that in the various notarized documents purportedly
authorizing their holders to occupy portions of the disputed property, petitioner was a signatory
therein as one of the witnesses whereas Atty. Pernito, described therein as "Chief Legal
Counsel of the Rodriguez Estate," attested to the execution. These documents were executed
between January and October 2001, or exactly during the pendency of the COSLAP
proceedings. Petitioner's claim that she was totally uninformed about the proceedings before
the COSLAP is not worthy of belief. On the contrary, petitioner is deemed constructively notified
of the said proceedings.
In administrative proceedings, procedural due process has been recognized to include the
following: (1) the right to actual or constructive notice of the institution of proceedings which may
affect a respondent's legal rights; (2) a real opportunity to be heard personally or with the
assistance of counsel, to present witnesses and evidence in one's favor, and to defend one's
rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person
charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a
finding by said tribunal which is supported by substantial evidence submitted for consideration
during the hearing or contained in the records or made known to the parties affected.25
Another formidable stumbling block to a finding of grave abuse of discretion on the part of
COSLAP is the principle of res judicata or bar by prior judgment. Res judicata means a matter
adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment. The
doctrine of res judicata provides that a final judgment on the merits rendered by a court of
competent jurisdiction is conclusive as to the rights of the parties and their privies and
constitutes an absolute bar to subsequent actions involving the same claim, demand, or cause
of action.26 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The Court of Appeals' resolution in CA-G.R. SP No. 68640 amounts to res judicata in this case.
The petition in CA-G.R. SP No. 68640 also sought the annulment of COSLAP Case No. 2001-
05-46, the same proceedings being assailed in this petition by parties claiming ownership rights
derived from the Estate of Rodriguez. Under the doctrine of res judicata, the dismissal of said
petition effectively foreclosed the right of petitioner or any person claiming ownership rights
under the Estate of Rodriguez to institute a subsequent action to nullify the proceedings in
COSLAP Case No. 2001-05-46.
All told, the procedural lapses of the instant petition cannot be ignored. The doctrines of judicial
hierarchy and res judicata are not meaningless procedural rules because they are grounded on
fundamental considerations of public policy and sound practice. Procedural rules are not to be
belittled or dismissed simply because their non-observance may have resulted in prejudice to a
party's substantive rights. Like all rules, they are required to be followed except only for the most
persuasive of reasons when they may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying with the procedure
prescribed.27 Procedural law has its own rationale in the orderly administration of justice,
namely, to ensure the effective enforcement of substantive rights by providing for a system that
obviates arbitrariness, caprice, despotism or whimsicality in the settlement of disputes.28
It bears emphasis that the special civil action for certiorari is a limited form of review and is a
remedy of last recourse. The Court has often reminded members of the bench and bar that this
extraordinary action lies only where there is no appeal nor plain, speedy and adequate remedy
in the ordinary course of law.29
It is no longer necessary to resolve the question of jurisdiction of COSLAP.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order dated 29
September 2003 issued by the Court is LIFTED. Costs against petitioner.
SO ORDERED.
G.R. No. L-46496 February 27, 1940
ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC.,
respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of
Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
LAUREL, J.:
The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-
entitled case has filed a motion for reconsideration and moves that, for the reasons stated in his
motion, we reconsider the following legal conclusions of the majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que
no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada
vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la localidad o
cunado se termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya
colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por
haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u
obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus
osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a
readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable
de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un
determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos por
terminacion del contrato en virtud del paro.
The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the
judgement rendered by the majority of this Court and the remanding of the case to the Court of
Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles
in ANG TIBAY making it necessary for him to temporarily lay off the members of the National
Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs
and the Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to
systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the
Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed
delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture
of this bond despite the breach of his CONTRACT with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548,
petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and
elective representation are highly essential and indispensable. (Sections 2 and 5,
Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made applicable in
interpreting and applying the salutary provisions of a modern labor legislation of American origin
where the industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against
the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents that even with the
exercise of due diligence they could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching importance and effect that
their admission would necessarily mean the modification and reversal of the judgment rendered
herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the
respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to the motion
for a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not
necessary to pass upon the motion for reconsideration of the Solicitor-General. We shall
proceed to dispose of the motion for new trial of the respondent labor union. Before doing this,
however, we deem it necessary, in the interest of orderly procedure in cases of this nature, in
interest of orderly procedure in cases of this nature, to make several observations regarding the
nature of the powers of the Court of Industrial Relations and emphasize certain guiding
principles which should be observed in the trial of cases brought before it. We have re-examined
the entire record of the proceedings had before the Court of Industrial Relations in this case,
and we have found no substantial evidence that the exclusion of the 89 laborers here was due
to their union affiliation or activity. The whole transcript taken contains what transpired during
the hearing and is more of a record of contradictory and conflicting statements of opposing
counsel, with sporadic conclusion drawn to suit their own views. It is evident that these
statements and expressions of views of counsel have no evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically stated in the
law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the
integrated judicial system of the nation. It is not intended to be a mere receptive organ of the
Government. Unlike a court of justice which is essentially passive, acting only when its
jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the
function of the Court of Industrial Relations, as will appear from perusal of its organic law, is
more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in
the determination of disputes between employers and employees but its functions in the
determination of disputes between employers and employees but its functions are far more
comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle any question, matter controversy or dispute arising between,
and/or affecting employers and employees or laborers, and regulate the relations between them,
subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It
shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any
industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from
differences as regards wages, shares or compensation, hours of labor or conditions of tenancy
or employment, between landlords and tenants or farm-laborers, provided that the number of
employees, laborers or tenants of farm-laborers involved exceeds thirty, and such industrial or
agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the
parties to the controversy and certified by the Secretary of labor as existing and proper to be by
the Secretary of Labor as existing and proper to be dealth with by the Court for the sake of
public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such
hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it
shall investigate and study all industries established in a designated locality, with a view to
determinating the necessity and fairness of fixing and adopting for such industry or locality a
minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by
the "inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may appeal to
voluntary arbitration in the settlement of industrial disputes; may employ mediation or
conciliation for that purpose, or recur to the more effective system of official investigation and
compulsory arbitration in order to determine specific controversies between labor and capital
industry and in agriculture. There is in reality here a mingling of executive and judicial functions,
which is a departure from the rigid doctrine of the separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated
September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al.,
G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court
of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act
requires it to "act according to justice and equity and substantial merits of the case, without
regard to technicalities or legal forms and shall not be bound by any technicalities or legal forms
and shall not be bound by any technical rules of legal evidence but may inform its mind in such
manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall
not be restricted to the specific relief claimed or demands made by the parties to the industrial
or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling the
dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.) And in the
light of this legislative policy, appeals to this Court have been especially regulated by the rules
recently promulgated by the rules recently promulgated by this Court to carry into the effect the
avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be
said to be free from the rigidity of certain procedural requirements does not mean that it can, in
justifiable cases before it, entirely ignore or disregard the fundamental and essential
requirements of due process in trials and investigations of an administrative character. There
are primary rights which must be respected even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party interested
or affected to present his own case and submit evidence in support thereof. In the language of
Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty
and property of the citizen shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence
presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed.
1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce
evidence, without the corresponding duty on the part of the board to consider it, is vain. Such
right is conspicuously futile if the person or persons to whom the evidence is presented can
thrust it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support it is a
nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates
from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both
a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs.
Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor
Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant
evidence as a reasonable mind accept as adequate to support a conclusion." (Appalachian
Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor
Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co.
v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the
rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious
purpose of this and similar provisions is to free administrative boards from the compulsion of
technical rules so that the mere admission of matter which would be deemed incompetent inn
judicial proceedings would not invalidate the administrative order. (Interstate Commerce
Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce
Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed.
431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this
assurance of a desirable flexibility in administrative procedure does not go far as to justify orders
without a basis in evidence having rational probative force. Mere uncorroborated hearsay or
rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor
Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining
the administrative tribunal to the evidence disclosed to the parties, can the latter be protected
in their right to know and meet the case against them. It should not, however, detract from their
duty actively to see that the law is enforced, and for that purpose, to use the authorized legal
methods of securing evidence and informing itself of facts material and relevant to the
controversy. Boards of inquiry may be appointed for the purpose of investigating and
determining the facts in any given case, but their report and decision are only advisory. (Section
9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or
agricultural dispute or any matter under its consideration or advisement to a local board of
inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the
Philippines for investigation, report and recommendation, and may delegate to such board or
public official such powers and functions as the said Court of Industrial Relations may deem
necessary, but such delegation shall not affect the exercise of the Court itself of any of its
powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the volume of work is such that it
is literally Relations personally to decide all controversies coming before them. In the United
States the difficulty is solved with the enactment of statutory authority authorizing examiners or
other subordinates to render final decision, with the right to appeal to board or commission, but
in our case there is no such statutory authority.
(7) The Court of Industrial Relations should, in all controversial questions, render its decision in
such a manner that the parties to the proceeding can know the various issues involved, and the
reasons for the decision rendered. The performance of this duty is inseparable from the authority
conferred upon it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that, except
as to the alleged agreement between the Ang Tibay and the National Worker's Brotherhood
(appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which
to predicate, in a national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for the by
respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed
by Toribio Teodoro was but a scheme adopted to systematically discharged all the members of
the National Labor Union Inc., from work" and this avernment is desired to be proved by the
petitioner with the "records of the Bureau of Customs and the Books of Accounts of native
dealers in leather"; that "the National Workers Brotherhood Union of Ang Tibay is a company or
employer union dominated by Toribio Teodoro, the existence and functions of which are illegal."
Petitioner further alleges under oath that the exhibits attached to the petition to prove his
substantial avernments" are so inaccessible to the respondents that even within the exercise of
due diligence they could not be expected to have obtained them and offered as evidence in the
Court of Industrial Relations", and that the documents attached to the petition "are of such far
reaching importance and effect that their admission would necessarily mean the modification
and reversal of the judgment rendered herein." We have considered the reply of Ang Tibay and
its arguments against the petition. By and large, after considerable discussions, we have come
to the conclusion that the interest of justice would be better served if the movant is given
opportunity to present at the hearing the documents referred to in his motion and such other
evidence as may be relevant to the main issue involved. The legislation which created the Court
of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue
involved is not entirely attributable to the parties adversely affected by the result. Accordingly,
the motion for a new trial should be and the same is hereby granted, and the entire record of
this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen
the case, receive all such evidence as may be relevant and otherwise proceed in accordance
with the requirements set forth hereinabove. So ordered.
Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.
G.R. No. L-56591 January 17, 1983
MA. LOURDES T. CRUZ and RIZAL COMMERCIAL BANKING CORPORATION
EMPLOYEES ASSOCIATION, petitioners,
vs.
THE HON. MINISTER OF LABOR AND EMPLOYMENT and RIZAL COMMERCIAL
BANKING CORPORATION, respondents.
Lamberto C. Nanquil for petitioners.
Siguion, Reyna, Montecillo & Ongsiako for private respondent.
DE CASTRO, J.:
On November 21, 1979, respondent bank Rizal Commercial Banking Corporation (RCBC) filed
an application for clearance to terminate the services of its remittance clerk, Ma. Lourdes Cruz,
for gross negligence which was opposed by the latter by filing a complaint for illegal dismissal.
On February 11, 1980, the Regional Director resolved the case by lifting petitioners preventive
suspension and directing the bank to reinstate her with full back-wages. In support of his order,
the Director held that the record is bereft of any substantial proof tending to show that Lourdes
Cruz has committed act of gross negligence as imputed to her.
From the aforementioned order, RCBC appeal on the ground of abuse discretion on the part of
the Director who issued the same. Specifically, the bank terminated the services of petitioner
Cruz for the following reasons:
1. Some l98 foreign checks received by the bank for the period from February to July 1979 were
found missing and verified to have been brought by petitioner to her house:
2. On September 2, 1979, sixteen additional checks received by the bank in August, 1979 were
found inside petitioner's drawer; and
3. She concealed her failure to transmit the checks to respondent s correspondent bank abroad.
The Director's order was modified by Minister Ople in his order of March 10, 1981 by setting
aside the award of back-wage ruling that although petitioner violated certain rules of the bank,
the degree of her offense does not warrant her outright dismissal from the service, and that it is
more attuned to the compassionate approach of administering labor disputes to have her
reinstated as a second opportunity to make good in her job. Further, the Minister pointed out
that petitioner admitted having committed the said infractions when she was first investigated
by the bank authorities, and she reiterated such admission in her complaint and opposition; but
this time she claimed to have acted upon orders of her superior officer, although she did not
elaborate how she was led to commit the infraction; and that the denial of backwages will serve
as a penalty for her infractions and is intended to as a fitting lesson and reminder for her future
conduct in office.
Petitioner now assails the order of the Minister of labor and claims that respondent bank utterly
failed to adduce any evidence to support its accusation except the unsubstantial findings of a
committee which investigated the matter without giving her an opportunity to be heard. She
likewise asserts that the bank filed an appeal without furnishing her with a copy of such appeal
thus deprived her of the chance to refute the allegations therein; and that contrary to the
statement of the Minister of Labor in his questioned order, she never made any admission of
the negligence imputed to her, for she was not even summoned during the investigation.
Her assertion that she was not given the chance to be heard is belied by the records of the
case. The minutes 1 of the investigation showed that the gross negligence imputed to her as
remittance clerk was substantiated. Thus —
Q. How long does it take you to prepare a transmittal?
A. First, the checks have to be microfilmed, then stamped before the transmittal form is
prepared.
Q. On the average?
A. Depending on the volume of checks, thirty minutes.
Q. If you could have been working 30 minutes a day, you should have updated your work?
A. Yes.
Q. Since February, did you tell any officer of the branch about these pending items?
A. No.
Q. Did you not think that these officers could have helped you about your problem?
A. No.

Q. Did you recognize the importance of sending out these checks?
A. I was trying to mail them actually. Only, the transmittals are not signed yet. I was afraid to tell
the officer that there are many checks accumulated in me — kept pending. ...
Q. Before you acquired the microfilming machine in the branch, these checks are sent to H.O.
for microfilming?
A. I sent them to H.O. through out Settling Clerk. I receive them the following day at 9:00 a.m.
Q. Why did you not have these subject checks microfilmed?
A. These checks are not, yet stamped. Once they are microfilmed, they will be mailed.
Q. Do you prepare the transmittal before microfilming?
A. Yes
Q. Why did you not do it?
A. (No answer)
Q. Did you realize the necessity of stamping the checks?
A. So that these checks cannot be negotiated further.
Q. A check not stamped once lost, can be a direct loss to the Bank, So, why did you not rubber
stamp the check?
A. (No answer)
Q. Once you receive the check for deposit or encashment, they should be rubber stamped.
A. Once I receive checks. I bring them immediately to Mr. Evangelista or Rolly Santiago prior to
stamping.
Q. Once it is approved?
A. I post them to the ledger.
xxx xxx xxx
Q The rubbert stamping is very simple and the microfilming was not done by you and the checks
come back to you the following day. These procedures are very simple and we don't see any
point why you failed to do this simple step of rubber stamping, Can you give us any explanation
on this?
A (No answer)
Q Based on these procedures during your period, could your officers have known what was
going on even without your specifically telling them so?
A Actually in my job, I don't think they will know there are pending checks in me unless there
will be an audit.
Petitioner's claim that she was denied due process is likewise without basis. She was given the
chance to explain and exonerate herself of the charges during the investigation. It was
incumbent upon her to prove her innocence but she failed to do so. Her allegation in her
complaint that she acted only in obedience to her superior's order is an obvious after thought
which should not be given credence. She failed to adduce an iota of evidence to support her
allegation.
The Court is convinced that petitioner's guilt was substantially established. Nevertheless, We
agree with respondent Minister's order of reinstating petitioner without backwages instead of
dismissal which may be too drastic. Denial of backwages would sufficiently penalize her for her
infractions. The bank officials acted in good faith. They should be exempt from the burden of
paying backwages. The good faith of the employer, when clear under the circumstances, may
preclude or diminish recovery of backwages. 2 Only employees discriminatorily dismissed are
entitled to backpay. 3 Petitioner's act is, unquestionably inimical to the interest of the bank. No
one can begrudge the bank for reacting thereto the way it did to protect its holdings. It had only
to be tempered as the Minister of Labor judiciously did,
WHEREFORE, the petition for certiorari is hereby dismissed. Without costs.
SO ORDERED.
Makasiar, Aquino, Concepcion Jr., and Guerrero, JJ., concur.
Escolin, J, I reserve my vote.
G.R. No. 81805 May 31, 1988
VAR-ORIENT SHIPPING CO., INC. and COMNINOS BROS., petitioners,
vs.
TOMAS D. ACHACOSO, in his capacity as Administrator of Philippine Overseas
Employment Administration (POEA), EDGAR T. BUNYOG, VEDASTO NAVARRO,
EUGENIO CAPALAD, RAUL T IS, ANTONIO TANIOAN, CELESTINO CASON, DANILO
MANELA & ROBERTO GENESIS, respondents.
Viray, Aseron & Associates for petitioners.
The Solicitor General for public respondent.
GRIÑO-AQUINO, J.:
Imputing grave abuse of discretion to the public respondent, the petitioners ask that the public
respondent's decision dated September 9,1987 in POEA CASE No. (M) 86-11-1080 entitled
"VAR-ORIENT SHIPPING CO., INC. and COMNINOS BROS. vs. EDUARDO H. ARSOLON,
ET AL.," be annulled for having been rendered without due process of law, and that the writ of
execution issued by the POEA Administrator be set aside for being premature because the
decision is not yet final and executory as no copy of it had been received by petitioner's counsel.
A temporary restraining order was issued by this Court to enjoin the execution of the decision
complained of pending the determination of the merits of the petition.
The petitioners filed a complaint with the Workers' Assistance and Adjudication Office,
Philippine Overseas Employment Administration (POEA) against the private respondents Edgar
T. Bunyog, Vedasto Navarro, Eugenio Capalad, Raul Tumasis, Antonio Tanioan, Celestino
Cason, Danilo Manela and Roberto Genesis, crew members of the MPV "Silver Reefer," for
having allegedly violated their Contracts of Employment with the petitioners which supposedly
resulted in damages arising from the interdiction of the vessel by the International Transport
Workers' Federation (ITF) at Kiel Canal, Germany, in March 1986.
After joinder of the issues, the case was heard on March 4, 1987 where the parties agreed to
submit their respective position papers and thereafter the case would be submitted for decision.
Only the private respondents submitted a position paper.
On the basis of the pleadings and memoranda (Annexes A, B, Code. D, E & F) the public
respondent rendered a decision on September 9,1987 (Annex G), the dispositive part of which
reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering as follows:
1. Dismiss of the instant case with a reprimand and warning respondents Vedasto Navarro,
Eugenio Capalad, Raul Tumasis, Antonio Tanioan, Celestino Cason, Danilo Manela and
Roberto Genesis, against the commission of the same or similar offense otherwise it shall be
dealt with more severe penalty;
2. Exclusion of Ricardo Llanes from this case;
3. Reprimanding complainant Var-Orient Shipping Co. for failure to comply with its obligations
pursuant to POEA rules and regulations and warning against committing the same or a similar
offense otherwise it shall be dealt with more severely;
4. That the case insofar as respondents Eduardo H. ArsoIon, Apolinario dela Cruz, Levy
Montero and Danilo N. de la Cruz are concerned, be archived, while their names shall be
included in the POEA watchlist until they shall have voluntarily submitted themselves to the
jurisdiction of this office;
5. Payment by the complainants jointly and severally, unto Vedasto Navarro, Eugenio Capalad,
Raul Tumasis, Antonio Tanioan, Celestino Cason, Danilo Manela and Roberto Genesis the
amount of Pl,550.59 each, representing deductions from allotments, plus Pl,000.00 as and for
attorney's fees; and
6. Payment by the complainants jointly and severally unto respondent Edgar T. Bunyog the
amount of US$4,680.00 or its peso equivalent at the time of payment representing his salaries
for the unserved portion of his employment contract plus P4,000.00 as and for attorney's fees.
to be tendered thru this Office, ten (10) days from receipt of this decision.
A copy of the decision was sent by registered mail and delivered by the postman to the
petitioners' counsel, then Attorney Francisco B. Figura, at his address on the 4th Floor, TRC
Building, Sen. Gil Puyat Avenue, Makati, Metro Manila, through the receptionist, Marlyn Aquino,
on the groundfloor of said building on September 21, 1987. According to Attorney Figura, he did
not receive the envelope containing the decision (p. 66, Rollo).<äre||anº•1àw>
Petitioners allegedly learned about the decision only when the writ of execution was served on
them on November 20,1987 by NLRC Deputy Sheriff Rene Masilungan and Attorney Wilfredo
Ong. On November 23,1987, petitioners, through new counsel, Atty. Quentin Aseron, Jr., filed
an 'urgent Motion to Recall Writ of Execution' on the ground that the decision had not been
received by the petitioners, hence, it was not yet final and executory.
On January 19, 1988, the public respondent denied the motion. In due time, this petition was
filed wherein the petitioners allege that:
(1) they were denied due process of law because the respondent Administrator resolved the
case without any formal hearing;

(2) the respondent Administrator gravely abused his discretion in denying petition petitioners'
right to appeal, and
(3) in awarding to the private respondent's damages which are not only excessive building
unfounded.
The petition is not meritorious.
The petitioners' allegation that the issuance of the writ of execution was premature because the
decision had not been received by their counsel is unconvincing, Atty. Figura's affidavit on the
matter is self-serving. Petitioners failed to submit an affidavit of the receptionist Marlyn Aquino
explaining what she did with the decision which she received for Atty. Figura. Under the
circumstances, the respondent Administrator's ruling that the decision had been properly served
on petitioners' counsel and that it is now final and unappealable, should be sustained.
Equally unmeritorious is the petitioners 'allegation that they were denied due process because
the decision was rendered without a formal hearing. The essence of due process is simply an
opportunity to be heard (Bermejo vs. Banjos, 31 SCRA 764), or, as applied to administrative
proceedings, an opportunity to explain one's side (Tajonera vs. Lamaroza, 110 SCRA 438; Gas
Corporation of the Phil. vs. Hon. Inciong, 93 SCRA 653; Cebu Institute of Technology vs.
Minister of Labor, 113 SCRA 257), or an opportunity to seek a reconsideration of the action or
ruling complained of (Dormitorio vs. Fernandez, 72 SCRA 388).
The fact is that at the hearing of the case on March 4,1987, it was agreed by the parties that
they would file their respective memoranda and thereafter consider the case submitted for
decision (Annex 7 of Bunyog's Comment). This procedure is authorized by law to expedite the
settlement of labor disputes. However, only the private respondents submitted memoranda. The
petitioners did not. On June 10, 1987, the respondents filed a motion to resolve (Annex 7,
Bunyog's Comment). The petitioners' counsel did not oppose either the "Motion to Resolve" or
the respondents "Motion for Execution of Decision" dated October 19, 1987 (Annex 10), both of
which were furnished them through counsel. If it were true, as they now contend, that they had
been denied due process in the form of a formal hearing, they should have opposed both
motions.
Furthermore, the petition for review does not allege that the petitioners are in possession of
evidence, other than those which they had attached to their pleadings, which if produced would
have altered the outcome of the case.
The Administrator did not abuse his discretion in ordering the petitioners to pay respondent
Edgar Bunyog's salaries for the unserved portion of his contract plus attorney's fees, in view of
the Administrator's finding that Bunyog did not sign the letter of the other defendants to ITF,
hence, 'he is deemed not to have committed any offense or act to warrant his dismissal."
WHEREFORE, the petition for certiorari is denied for lack of merit. The temporary restraining
order which We issued is hereby set aside.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.
[G.R. No. 141149. July 5, 2002.]
SEBASTIAN GARCIA, Petitioner, v. JUANITO A. PAJARO and THE CITY OF DAGUPAN,
Respondents.
DECISION
PANGANIBAN, J.:
The city treasurer of Dagupan has the authority to institute disciplinary actions against
subordinate officers or employees. The essence of due process in an administrative proceeding
is the opportunity to explain one’s side, whether written or verbal. The constitutional mandate is
satisfied when a petitioner complaining about an action or a ruling is granted an opportunity to
seek reconsideration.
Statement of the Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the June 17,
1999 Decision 1 and the December 14, 1999 Resolution 2 of the Court of Appeals 3 (CA) in CA-
G.R. SP No. 48285. The decretal portion of the Decision reads as follows:chanrob1es virtua1
1aw 1ibrary
"WHEREFORE, finding no reversible error in the appealed decision, [this Court hereby affirms
it] in toto. No costs." 4
The assailed Resolution denied petitioner’s Motion for Reconsideration.
The affirmed Decision of the Regional Trial Court (RTC) of Dagupan City (Branch 40), disposed
as follows:jgc:chanrobles.com.ph
"WHEREFORE, this case is hereby DISMISSED, without costs." 5
The Facts

The factual antecedents of the case, as summarized by the RTC and adopted by the CA, are
reproduced as follows:jgc:chanrobles.com.ph
"Evidence for the petitioner tends to show that petitioner SEBASTIAN GARCIA, 61, married,
employee at the City Treasurer’s Office, Dagupan City and resident of Lucao, Dagupan City,
has been employee thereat since June 15, 1974 as Revenue Collector appointed to that position
by then City Mayor Cipriano Manaois. He was ordered suspended by City Treasurer Juanito
Pajaro from June 1, 1990 to March 15, 1992 and directed the withholding of his salary because
of the Formal Charge filed against him. He resumed work on March 16, 1992 as Local Treasury
Officer III. When he was suspended, his position was Local Treasury Officer and Revenue
Officer with a salary of P6,800.00 a month. When he resumed work, his salary was already
P7,615.00 monthly. From June 1, 1990 up to March 15, 1992, he had been reporting for work
because he did not honor the suspension order as the City Treasurer acted as the complainant,
investigator and judge and there was no complaint against him from the Office of the City Mayor.
He did not believe in the Order; he did not submit himself for investigation. He was not paid his
salary because of the suspension order which caused his sleepless nights, his two (2) children
stopped schooling, he has to beg from his relatives. He has a wife with four (4) children in
college, one in Commerce, another taking up Dentistry. During the 1990 earthquake, there was
calamity loan granted to employees but he could not avail of it because the City Treasurer would
not approve the loan. He is asking P1,000,000.00 for his mental anguish and sufferings. From
July to October, 1987 the City Treasurer refused to give him his COLA, differential, cash gift,
salary and mid-year bonus amounting to P6,800.00 up to the present. His salary now is
P13,715.00 as Treasury Officer III. Contrary to the charges of the City Treasurer, he has been
doing his duties and obligations; that for the acts of charging him in the Department of Finance
and for charging him for neglect of duties, he felt deeply hurt and is asking P250,000.00 for that;
his agreement with his counsel is P25% of what will be awarded to him.chanrob1es virtua1 1aw
1ibrary
"Petitioner’s documentary evidence consists of the following:chanrob1es virtual 1aw library
Exhibit ‘A’, Order of Preventive Suspension dated June 1, 1990;
Exhibit ‘B’, Memorandum addressed to the disbursing Officer dated June 1, 1990;
Exhibit ‘C’, Formal Charge;
Exhibit ‘D’, Subpoena issued by respondent Pajaro;
Exhibit ‘E’, Communication dated June 1, 1990 to Regional Director, Bureau of Local
Government, Department of Finance by the City Treasurer;
Exhibit ‘F’, Answer by Respondent.
"Evidence for Respondent PAJARO tends to show that
"JUANITO PAJARO, 65, married, City Treasurer of Dagupan City, first served in concurrent
capacity and OIC on December 4, 1981 and was regularly appointed as City Treasurer on
January 2, 1986 up to the present. Petitioner Sebastian Garcia is at present the Local Treasury
Officer III but way back in 1990 he was Senior Revenue Collector whose immediate superior
was the late Mr. Viray, the Chief of the Local Taxes, then the Assistant City Treasurer, and the
City Treasurer himself. Petitioner has been rating Unsatisfactory in his performance for several
semesters which is the reason a [Formal] Charge was filed against petitioner received by him
on June 1, 1990, 10:00 a.m. and, as a matter of procedure, if the charge is a major offense, by
civil service laws, he was preventively suspended for ninety (90) days, also duly received by Mr.
Garcia on June 4, 1990 at 2:00 p.m. Then an investigation was scheduled and a subpoena was
issued to Mr. Garcia to appear and testify on August 15, 1990 duly received by him on August
1, 1990, 8:55. Again Mr. Garcia did not Answer and refused to honor the subpoena to submit
himself for investigation. So he proceeded with ex-parte investigation and gathered and
submitted testimonies to support the allegations in the Formal Charge then submitted the result
of their findings to the Department of Finance for decision. A Decision was promulgated by the
Department of Finance on August 1, 1991. The matter of preventive suspension of Mr. Garcia
was submitted to the Regional Director, Bureau of Local Government Finance which was
‘favorably approved’ by the Regional Director. This case stemmed from the application of the
petitioner for the position of supervising revenue collector and he was duly appointed. The same
appointment was opposed by Mrs. Evangeline Estrada and by a resolution of the Civil Service
Commission, the appointment of Mrs. Evangeline Estrada was duly confirmed. Mrs. Estrada
was recommended first and she was issued an appointment by the City Mayor and was
submitted to the CSC. It was contested by Mr. Gracie. The first ruling of the CSC was adverse
to Mrs. Estrada and she requested for reconsideration. In the meantime, Mr. Garcia was able
to get an appointment from the same City Mayor but it was not approved. The CSC reconsidered
the request of Mrs. Estrada favorably as shown by Resolution 91-359 dated March 14, 1991.
That position was affected by the reorganization and it was changed to Local Treasury
Operations Officer III now occupied by Mrs. Estrada. Despite the fact that he was always
u[p]held by the CSC and the Department of Finance, this case based on unfounded allegations
was filed against him, he is confirming his counterclaim against the petitioner with 25%
attorney’s fees and P1,000.00 per appearance. Petitioner’s charge that his benefits were unduly
withheld from him is not true because the law states when you are charged and preventively
suspended, the salary could not be collected. As a matter of fact, the petitioner was not
acquitted; there was additional penalty. He was penalized with a suspension of six (6) months
without pay so he could not by any means collect his salary. On the other hand, he was the one
being harassed (sic) by the petitioner; it has affected his performance and efficiency in the office,
including sleepless nights. In explaining the entries in the Performance [A]ppraisal Report, he
said that the forms were given to the personnel to rate themselves and then the final rating goes
to the supervisor. The personnel gave themselves excellent ratings but the basis of their record
is the true assessment made by the supervisor. In this case, the petitioner should have protested
when he received his copy but he did not. During the period of his preventive suspension, of
course, the petitioner did not receive his salary. He is not aware of the petitioner’s allegation
that he reported for work during the period of his preventive suspension, but that his co-
employees testified that petitioner timed-in at 8:00 a.m. and 1:00 p.m. but did not make ‘time-
outs’.
"The respondent City of Dagupan adopted the evidence of respondent Treasurer Pajaro.
"At the pre-trial conference, the parties agreed to limit the litigation on the following
issues:chanrob1es virtual 1aw library
1) whether or not petitioner is entitled to right of action against the respondents; and
2) who is entitled to damages." 6 (Citations omitted.)
Ruling of the Court of Appeals
Affirming the RTC Decision, the CA held that private respondent was vested with legal power
and authority to institute disciplinary action against subordinate officers and employees.
7chanrob1es virtua1 1aw 1ibrary
The appellate court further held that the requisites of administrative due process had been fully
observed by Respondent Pajaro while investigating petitioner. But despite being informed of the
charges against him and being given the opportunity to be heard in a formal investigation,
petitioner chose not to answer those charges. 8
Hence, this Petition. 9
Issues
In his Memorandum, petitioner raises the following issues for the Court’s
consideration:jgc:chanrobles.com.ph
"First: Who has the power to remove, suspend or discipline the petitioner as a local employee,
appointed by the City Mayor, the latter o[r] the City Treasurer?
"Second: Is the filing of the formal charge by the [private respondent] with himself valid?
"Third: Is the suspension of the petitioner by virtue of the formal charge valid?
"Fourth: Who is liable for the unpaid salaries and benefits of the petitioner?
"Fifth: Is the respondent personally liable for the damages suffered by the petitioner?" 10
Simply stated, the issues boil down to two:chanrob1es virtual 1aw library
1. Whether the city treasurer of Dagupan can discipline petitioner
2. Whether petitioner’s right to due process was violated
This Court’s Ruling
The Petition is not meritorious.
First Issue:chanrob1es virtual 1aw library
Disciplinary Authority of the City Treasurer
Petitioner claims that the officer empowered to institute disciplinary proceedings against him is
the city mayor of Dagupan — not the city treasurer. He further asserts that under Section 78 of
the Local Government Code of 1983, 11 the city treasurer does not have the power to discipline
him.
We are not persuaded.
At the outset, it should be pointed out that under the old and the present Local Government
Codes, appointive officers and employees of local government units are covered by the Civil
Service Law; and such rules, regulations and other issuances duly promulgated pursuant
thereto, 12 unless otherwise specified. Moreover, the investigation and the adjudication of
administrative complaints against appointive local officials and employees, as well as their
suspension and removal, shall be in accordance with the Civil Service Law and rules and other
pertinent laws. 13
The Administrative Code of 1987, 14 — specifically Book V on the civil service — is the primary
law governing appointive officials and employees in the government. 15 This Code enumerates
the grounds for disciplining them. 16 They may be removed or dismissed summarily" (1) [w]hen
the charge is serious and the evidence of guilt is strong; (2) [w]hen the respondent is a recidivist
. . .; and (3) [w]hen the respondent is notoriously undesirable." 17 Technical rules of procedure
and evidence are not strictly applied; due process in the administrative context cannot be fully
equated with that in the strict judicial sense. 18chanrob1es virtua1 1aw 1ibrary
The power to discipline is specifically granted by Section 47 of the Administrative Code of 1987
19 to heads of departments, agencies and instrumentalities, provinces and cities. 20 On the
other hand, the power to commence administrative proceedings against a subordinate officer
or employee is granted by Section 34 of the Omnibus Rules Implementing Book V of the said
Administrative Code 21 to the secretary of a department, the head of office of equivalent rank,
the head of a local government unit, the chief of an agency, the regional director or a person
with a sworn written complaint.
Further, the city treasurer may institute, motu proprio, disciplinary proceedings against a
subordinate officer or employee. Local Administrative Regulations (LAR) No. 2-85, 22 which
was issued by the Ministry of Finance on March 27, 1985, authorized the minister (now
secretary) of finance, the regional director, and head of a local treasury or an assessment office
to start administrative disciplinary action against officers or employees subordinate to them. The
pertinent portions of LAR 2-85 are reproduced hereunder:jgc:chanrobles.com.ph
"RULE I — INSTITUTION OF ADMINISTRATIVE DISCIPLINARY ACTIONS
"Sec. 1. How commenced. — Administrative disciplinary action may be commenced against a
subordinate officer or employee by the Minister of Finance, Regional Directors or heads of the
local treasury or assessment offices at their own instance (motu proprio) or upon sworn written
complaint by any other person.
"In the case of a complaint filed by any other person, the complainant shall submit sworn
statements covering his testimony and those of his witnesses together with his documentary
evidence.
x x x
"RULE IV — HEARING
"Sec. 1. Officer authorized to conduct hearings. — The investigation shall be conducted by the
Minister of Finance or the Director for Local Government Finance or his/her assistants or
regional director or head of office concerned or the duly designated representatives of said
officials. The duly designated representatives shall make the necessary report and
recommendation to the chief of office, regional director or this Ministry, as the case may be. The
investigation shall be held not earlier than five (5) days not later than ten (10) days from date of
receipt of respondent’s answer by the disciplining authority and shall be finished within thirty
(30) days from commencement of the hearing, unless the period is extended or continuance
allowed in meritorious cases." 23
In the case at bar, the city treasurer is the proper disciplining authority referred to in Section 47
of the Administrative Code of 1987. 24 The term "agency" refers to any of the various units of
the government including a department, a bureau, an office, an instrumentality, a government-
owned or controlled corporation, or a local government or a distinct unit therein. 25 Respondent
Pajaro, as the city treasurer, was the head of the Office of the Treasurer; while petitioner, a
senior revenue collector, was an officer under him. Thus, the city treasurer is the proper
disciplining authority who could investigate petitioner and issue a preventive suspension order
against him. 26
Petitioner’s contention that it is only the city mayor who may discipline him 27 is not persuasive.
Section 455 (b-1-x) 28 of the 1991 Local Government Code states that the city mayor "may
cause to be instituted administrative or judicial proceedings against any official or employee of
the city." This rule is not incongruent with the provisions of the 1987 Administrative Code, which
authorizes the heads of agencies to discipline subordinate employees. 29 Likewise, the old
Local Government Code does not vest in city mayors the sole power to discipline and to institute
criminal or administrative actions against any officers or employees under their jurisdiction. 30
In fact, there is no provision under the present Local Government Code expressly rescinding
the authority of the Department of Finance to exercise disciplinary authority over its employees.
31 By the same token, there is nothing that prohibits the city treasurer from filing a complaint
against petitioner. 32
As a corollary, the power to discipline evidently includes the power to investigate. 33 In Hagad
v. Gozo-Dadole, 34 we explained the rationale for preventive suspension as
follows:jgc:chanrobles.com.ph
". . . Be that, as it may, we have heretofore held that, not being in the nature of a penalty, a
preventive suspension can be decreed on an official under investigation after charges are
brought and even before the charges are heard. Naturally, such a preventive suspension would
occur prior to any finding of guilt or innocence." 35chanrob1es virtua1 1aw 1ibrary
". . . Suspension is a preliminary step in an administrative investigation. If after such
investigation, the charges are established and the person investigated is found guilty of acts
warranting his removal, then he is removed or dismissed. This is the penalty. There is, therefore,
nothing improper in suspending an officer pending his investigation and before the charges
against him are heard and be given opportunity to prove his innocence." 36
In the present case, Respondent Pajaro was authorized to issue the assailed Preventive
Suspension Order against petitioner, because the latter was charged with gross neglect of duty,
refusal to perform official duties and functions, and insubordination 37 — grounds that allowed
the issuance of such Order, as provided by Section 51 of the 1987 Administrative Code. 38
Clearly, the city treasurer acted within the scope of his power when he commenced the
investigation and issued the assailed Order. 39
Second Issue:chanrob1es virtual 1aw library
Due Process
Petitioner argues that his right to due process was violated, because he was not heard during
the administrative proceedings. 40 We are not convinced.
In an administrative proceeding, the essence of due process is simply the opportunity to explain
one’s side. 41 Such process requires notice and an opportunity to be heard before judgment is
rendered. 42 One may be heard, not solely by verbal presentation in an oral argument, but also
— and perhaps even many times more creditably and practicably — through pleadings. 43 So
long as the parties are given the opportunity to explain their side, the requirements of due
process are satisfactorily complied with. 44 Moreover, this constitutional mandate is deemed
satisfied if a person is granted an opportunity to seek reconsideration of an action or a ruling.
45
In the case at bar, the administrative proceedings were conducted in accordance with the
procedure 46 set out in the 1987 Administrative Code and other pertinent laws. First, petitioner
was furnished a copy of the May 30, 1990 formal charge 47 against him. Second, Respondent
Pajaro requested the approval of the Order of Preventive Suspension 48 in his June 1, 1990
letter 49 addressed to the Bureau of Local Government Finance regional director, who approved
the Order in the First Indorsement 50 dated June 4, 1990.
Third, a subpoena 51 dated July 31, 1990 was issued to petitioner ordering him to testify during
an investigation on August 15, 1990. However, he admittedly 52 refused to attend the
investigation; thus, it was conducted ex parte. Fourth, the Department of Finance affirmed
Respondent Pajaro’s findings in its August 1, 1991 Decision, 53 the dispositive portion of which
reads as follows:jgc:chanrobles.com.ph
"PREMISES CONSIDERED, [petitioner] is hereby found guilty of Inefficiency in the
Performance of Official Duty and is hereby meted the penalty of six (6) months suspension from
Office without pay to take effect upon receipt of this Decision, pursuant to Memorandum Circular
No. 30, series of 1989 of the Civil Service Commission, with a stern warning that a repetition of
the same or similar acts in the future shall be dealt with more severely." 54
We need only to reiterate that parties who choose not to avail themselves of the opportunity to
answer charges against them cannot complain of a denial of due process. 55 Petitioner’s refusal
to attend the scheduled hearings, despite due notice, was at his own peril. 56 He therefore
cannot validly claim that his right to due process was violated. 57
As to petitioner’s claim for damages, the extant rule is that a public officer shall not be liable by
way of moral and exemplary damages for acts done in the performance of official duties, unless
there is a clear showing of bad faith, malice or gross negligence. 58 There was no such showing
in the present case.chanrob1es virtua1 1aw 1ibrary
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs
against petitioner.
SO ORDERED.
Puno, Sandoval-Gutierrez and Carpio, JJ., concur.
G.R. No. L-58292 July 23, 1987
ADAMSON & ADAMSON, INC., petitioner,
vs.
HON. AUGUSTO M. AMORES, JOHNSON & JOHNSON [PHILIPPINES], INC. and the
BOARD OF INVESTMENTS, respondents.
FERNAN, J.:
In this petition for certiorari, one of two competing manufacturers of hygienic and other related
products claims that it was denied its right to procedural due process by the Board of
Investments.
Since its organization on April 5, 1954, Adamson & Adamson, Inc. [hereinafter referred to as
Adamson] has been actually engaged in the "manufacture, sale and exportation of absorbent
cotton wool products, surgical dressings, bandages, medicinal, pharmaceutical products,
chemicals, chemical products, sanitary towels and other articles and commodities.1 Similarly,
Johnson & Johnson [Philippines], Inc. [Johnson for short] was organized on February 17, 1956
"to manufacture, import, export, buy, sell or otherwise acquire and deal in and with, either at
wholesale or retail, pharmaceutical drugs, toiletry, hygiene products and related products of
every kind, and chemical compositions of all kinds and uses."2
As it was not yet a Philippine national as defined by the Investment Incentives Act [Republic Act
No. 5186], Adamson applied for certificates of authority from the Board of Investments [BOI] in
compliance with Section 4 of the Foreign Investment Act [Republic Act No. 5455]. According to
Adamson, said certificates were necessary to enable it "to expand its business activities to areas
which while within its aforealleged primary purpose, Adamson was neither actually
manufacturing nor marketing as at the effectivity of the aforesaid two laws." ...3 After the
publications and postings of notices regarding said applications, Johnson registered its
opposition thereto. On May 28, 1973 and on November 7, 1974, the BOI granted Adamson said
certificates of authority which it held on to until it became a Philippine national on January 6,
1979.4
On the other hand, Johnson has remained a foreign corporation. Sometime in 1979, after it had
acquired new machineries, Johnson commenced the manufacture and marketing of disposable
diapers. During the first quarter of 1980, it manufactured sanitary feminine tampons and
absorbent cotton.
Alleging that Johnson should not be allowed to expand its business activities "to areas in which
it was not licensed and in which it was not actually engaged as at the effectivity of Rep. Act Nos.
5186 and 5455 without first obtaining from the Board of Investments the corresponding
certificates of authority after prior publication and posting of notices;" that Johnson's expanded
field of business and economic activities was then being adequately exploited by Philippine
nationals and therefore, such expansion would not contribute to a "sound and balanced
development of the national economy on a self-sustaining basis;" and that Johnson's expanded
activities would cause Adamson not only irreparable injury but also injustice, on March 17, 1980,
Adamson filed in the BOI a petition praying that therein respondent Johnson be "ordered not
only to forthwith stop and desist in the manufacture, distribution, and sale of its aforealleged
expanded product lines but also to recall from the market all said products being distributed for
sale and that after proper investigation and hearing to make the same permanent."5
The BOI, through its Vice-Chairman and Managing Head, Edgardo L. Tordesillas, required
Johnson to answer the petition. Upon motion of Johnson, the BOI granted it an extension of
time to file its answer. Thereafter, Adamson filed an urgent motion reiterating its prayer for the
issuance of a stop and desist order.
On May 8, 1980, Director Justiniano Y. Ascaño of the BOI's Project Administration and Legal
Department, set the petition for hearing in a letter which reads thus:
Please be informed that the Petition filed by Adamson & Adamson, Inc. praying that the Board
of Investments issue an immediate order to respondent Johnson & Johnson Philippines, Inc. to
stop and desist from manufacturing, distributing and selling disposable diapers, sanitary
feminine tampons and absorbent cotton has been set for hearing on May 14, 1980 at the PALD
Conference Room at 2:30 P.M. 6
On May 9, 1980, Johnson filed its answer to the petition alleging that it did not have to secure
from the BOI a certificate of authority for the manufacture, distribution and sale of disposable
diapers, sanitary tampons and absorbent cotton because said business activities were but a
continuation of its principal business activity; that assuming that it had expanded or developed
its principal business activity, such expansion or development was in the same line of business
that it was actually and lawfully engaged in prior to the effectivity of Republic Act No. 5455; that
the products complained of were within the category of the products the manufacture,
importation or sale of which it had disclosed to the BOI prior to the effectivity of the aforesaid
law; and that assuming that there were modifications in the form and quality of said products,
such were mere improvements and/or development of the same line of products which needed
no prior authorization from the BOI.7
The May 14, 1980 hearing was held as scheduled and per its minutes the following transpired
therein:
NOTES ON THE HEARING ON THE PETITION OF ADAMSON & ADAMSON AGAINST
JOHNSON & JOHNSON CONDUCTED ON 14 MA Y 1980 A T THE BOI BOARD ROOM
Present:
Director J. Y. Ascaño - Legal Department
Div. Chief, E.O. Arrobio - Foreign Business
Div. Arturo C. del Rosario -do-
Oscar C. Pacquing -do-
Jaime Torres - Chemical Industries Dept.
Matilde Domingo -do-
Atty. J. R. Blanco - Counsel, Adamson & Adamson
Mr. Lucas Adamson - Pres., Adamson & Adamson
Atty. Esguerra - Blanco Law Office
Atty. E. de los Angeles - Counsel, Johnson & Johnson
Mr. de Leon - Johnson's Representative
Mr. Robles -do-
Mr Natividad -do-
The Chairman made the opening statement that the proceedings was for the purpose of hearing
the Petition filed by Adamson against Johnson and to hear arguments and receive evidences
from the parties in order to resolve the case expeditiously.
The Chairman re-stated the main issue raised on the petition, that Johnson & Johnson allegedly
expanded into another line of business without securing prior authority from the Board of
Investments as provided under the law and the rules because Respondent is not actually and
lawfully engaged in the manufacture of the products [disposable diapers, sanitary feminine
tampons and absorbent cotton] and that a stop and desist order be issued by the Board against
Respondent. The Chairman then requested both parties to give their views and evidences so
that on the basis of which, the Board can act immediately on the Petition.
Counsel for the Petitioner, Atty. Blanco expounded on his views on the merits of the Petition
and upon summing up the justifications for the prayer in the Petition, cited the letter of Minister
Ongpin as Head of the Iron and Steel Authority to Goodyear Steel Pipe Corporation, directing it
to cease operations on its activities which were not authorized by the ISA, that BOI a
government instrumentality has the power and authority to issue a stop and desist order.
Thereafter, the Chairman asked counsel for the Respondent, Atty. de los Angeles, if
Respondent added equipment in the manufacture of diapers in 1979; if these were imported
and the value thereof, to which Counsel answered that there were new equipment introduced
and imported valued at US$4 Million and that the required authority from the Central Bank was
secured. Counsel also stated that there was an investment made in the amount of US$l Million
generated by borrowings.
Counsel for Respondent also stated that the composition of diaper is similar to that of the
sanitary napkins which Respondent has been producing since 1971 which is made of rayon and
cotton, that the product is an improvement of the product to meet the policy of the Board.
Mr. Natividad, one of the representatives of Johnson & Johnson likewise stated that Respondent
has installed equipment to produce sanitary tampons way back in 1968 but were actually
completed in 1972. However, marketing thereof was not pursued for strictly business marketing
reasons. Production of Johnson's cottonette [soft puff], on the other hand, was discontinued
after 2 years from 1967 but Johnson's buds have been introduced since 1968. In the production
of diapers, Mr. Natividad informed the Committee that surplus profits of the corporation was put
in and therefore not considered as fresh capital.
At this juncture, Mr. Adamson discussed three types of tampons and inquired how Johnson &
Johnson can install machines to produce tampons [OB] type in 1968 when the product was
introduced by Karl Heinz only in 1973.
In this connection, Mr. Natividad stated that their mother company has been producing tampons
but it was not the OB type but of another type, however, construction is the same, as can be
supported by documents.
On the Chairman's acknowledgment, Counsel for Petitioner, Atty. Blanco presented three
issues to the Committee.
1] Johnson & Johnson allegedly manufactured, distributed and marketed disposable cotton
diapers in 1979 which it is not actually and lawfully engaged in as of the effectivity of R.A. 5455;
2] Johnson & Johnson manufactured, distributed and marketed likewise tampons and absorbent
cotton in the early 1980 without prior authority from the Board; and
3] Can Johnson & Johnson resurrect the production of products which it has abandoned in
1974? That in its report it failed to consider the phrase 'in which they were actually and lawfully
engaged in provided in the law.
Mr. Robles, representative of Respondent Johnson & Johnson, in answer to the above
manifestations of Atty. Blanco, stated that they did not omit consideration of Sec. 3, Rule IV of
the Rules of R.A. 5455 and that the activities contained in their Form 7 is a matter of
generalization. Mr. Robles explained that Johnson & Johnson's expansion is in the same line of
business for which no authority is required from the Board as it has been engaged prior to 1968
in the manufacture and marketing of pharmaceutical drugs, hygienic products, toiletries and
which activities they were engaged in as to date. He further explained that if Johnson see [sic]
that the markets are good, there is no reason for Johnson to make an expansion but only to
improve its products for the benefit of the consumers.
Mr. Robles further stated that under the law, they have the right to engage in business as long
as they do not violate any provision of law.
The Chairman, then emphasized to the parties that the issues have been cleared and the facts
gathered from the hearing shall be useful and that there being no other matters to be discussed,
he asked the parties to submit their respective memorandum within fifteen [15] days from the
date of the hearing.
On this point, Atty. Blanco informed the Chairman that he cannot produce his memo within said
period but he will submit it later, which the Chairman granted
The meeting was adjourned at 3:30 p.m.
Certified correct:
[Sgd.]
MARILOU P. OCAMPO
NOTED:
[Sgd.]
LETICIA VIÑA-IBAY
Acting Division Head. 8
The parties thereafter expounded on their arguments in said hearing thru the following
pleadings: Johnson's memorandum, Adamson's reply memorandum, the former's rejoinder
memorandum, and the latter's surrejoinder.9
Impatient over what it considered a delay in the resolution of its prayer for a preliminary stop
and desist order, Adamson filed a motion dated August 19, 1980 praying that "hearings be
forthwith scheduled for the reception of evidence on the merits of petitioner's petition's prayer
for a permanent stop and desist order, as well as the parties notified thereof and furnished with
a copy of the transcript of stenographic notes and/or excerpts of the preliminary hearing on 14th
May 1980 and the rules of this Honorable Commission's procedures for hearings on the
merits."10 Johnson opposed the motion and Adamson filed a rejoinder thereto.
Director Ascaño denied said motion for lack of merit in his order of October 16, 1980. The order
noted that during the May 14, 1980 hearing, both parties were afforded every opportunity to fully
discuss the facts and the issues involved and that after Adamson had filed its motion of August
19, 1980, another hearing was conducted on September 5, 1980. It stated that there was no
compelling reason to hold another hearing considering that the parties had discussed
extensively the facts and expounded in a scholarly manner the legal provisions involved in their
respective memoranda, and that another hearing would be inconsistent with Adamson's plea
for an early disposition of the petition and the BOI's objectives and policies on the matter.11
On October 21, 1980, the BOI sent Adamson the following letter:
Gentlemen:
Please be informed of the Board decision dismissing the Petition filed by Adamson & Adamson,
Inc. against Johnson & Johnson [Phils.], Inc. praying that the Board of Investments issue a stop
and desist order against the latter from continuing in the manufacture and marketing of
disposable diapers, sanitary feminine tampons and absorbent cotton. The Board finds that the
said activities constitute expansion in the same line of business in which Johnson & Johnson
[Phils.], Inc. was actually and lawfully engaged in as of the effectivity of Republic Act No. 5455
and the same were financed by internally generated funds, hence do not need prior BOI
approval.
Please be guided accordingly.
Very truly yours,
[Sgd.]
LILIA R. BAUTISTA
Governor. 12
Dismayed by the turn of events against it, on November 20, 1980 Adamson filed in the Court of
First Instance of Manila a petition seeking judicial relief from the BOI decision pursuant to
Section 8 of Republic Act No. 5455 [Civil Case No. 136282]. Contending that the BOI's letter-
decision dismissing its petition was based merely on the oral arguments of the parties at the
May 14, 1980 hearing, Adamson averred that its right to be heard and to present evidence on
the merits of its prayer for a permanent stop and desist order was violated. It argued that as
Johnson continued to engage in its expanded business activities in violation of Republic Act No.
5455 to the detriment of Philippine nationals who were adequately exploiting Johnson's
expanded business activities, it was entitled to exemplary and moral damages. It prayed that
the BOI's letter decision be set aside and that a writ of preliminary injunction and/or restraining
order be issued enjoining Johnson from engaging in its expanded business activities.13
The lower court gave due course to the petition, issued a temporary restraining order and set a
hearing on the prayer for a writ of preliminary injunction.
On December 19, 1980, after the said hearing was conducted, the lower court issued an order
denying Adamson's prayer for a preliminary injunction and dissolved the temporary restraining
order it had issued.14 The lower court saw no extreme urgency for the issuance of a preliminary
injunction and held that to grant said writ would prejudge the case in favor of Adamson
considering that the status quo or the last actual peaceable uncontested status prior to the filing
of the petition in the BOI was that Johnson was manufacturing and/or marketing absorbent
cotton, sanitary tampons and disposable diapers.
Citing Section 4, Rule IV of the Rules and Regulations to Implement Republic Act No. 5455, the
lower court ruled that Johnson did not have to obtain BOI prior authorization to engage in the
questioned business activities because on September 30, 1968 [when the said law took effect],
Johnson was actually engaged in the manufacture and/or marketing of absorbent cotton,
sanitary tampons and disposable diapers and therefore its alleged expanded business activities
were in the same line of business it was engaged in prior to the aforesaid date. The lower court
stressed that fact was best shown in Johnson's report to the BOI wherein it listed absorbent
cotton, sanitary tampons and disposable diapers under the respective product groups of cotton
products, hygiene products and non-woven fabrics.
Anent Adamson's claims that the May 14, 1980 hearing at the BOI was only on the issue of
whether or not a temporary desist order should be issued and that it was denied its right to
present its evidence on the merits of the petition, the lower court found that Adamson's right to
due process was respected in the aforesaid hearing. It noted that Johnson even presented
witnesses who were cross-examined by Adamson's counsel. It added that the question of
whether or not Adamson was deprived of its day in court was immaterial to the issue of whether
or not it was entitled to a writ of preliminary injunction as Adamson had failed to establish its
right to said writ and that said right was violated.
Adamson's motion for reconsideration of the lower court's order was duly opposed by Johnson.
When said motion was heard, the issue of whether or not Adamson may introduce new evidence
in support of its motion, arose. After the parties had submitted their respective memoranda, the
lower court allowed the introduction of new evidence.
Adamson then filed a request for subpoena. The pertinent portions of said request state:
Please forthwith issue subpoena duces tecum to the following persons commanding them to
appear before this Honorable Court at the hearing on Thursday 4th June 1981 at 1:30 p.m. with
the following documents and to there and then give testimony in connection thereto:
Names:
1. Atty. Lilia R. Bautista, herself Governor
2. Atty. Justiniano Y. Ascaño himself Director, Project Adm. & Legal Dept.
Common Address:
BOARD OF INVESTMENTS
Industry & Investments Bldg.
385 Buendia Avenue Extension
Makati, Metro Manila
Common Documents:
1. BOI's entire file on the 1980 case of Adamson & Adamson, Inc. vs. Johnson & Johnson
[Phils.], Inc.
2. BOI's entire file on Adamson & Adamson, Inc.
3. BOI's entire file on Johnson & Johnson [Phils.], Inc.
4. BOI's written rules of procedure in litigious proceedings before BOI. 15
As said request was granted by the lower court, Johnson moved to quash the subpoena on the
grounds, among other things, that it was improper and oppressive to require Director Ascaño
and Governor Bautista to testify and explain their decision of October 21, 1980 and the
proceedings relative thereto; that said officials were not the custodians of BOI records; and that
the documents sought to be produced had no relevance to the issues raised in the motion for
reconsideration.
The BOI joined Johnson in objecting to the request for subpoena and adopted as its own
Johnson's motion to quash. Adamson opposed said motion.
On August 18, 1981, the lower court issued the following order:
Considering the contentions and arguments respectively invoked by the parties through
counsel, the Court finds the Motion to Quash subpoena meritorious. In so far as the request for
subpoena concerns Governor Lilia R. Bautista and Atty. Justiniano Y. Ascaño the Court finds
that the testimony of the two BOI officials does not appear to be relevant and indispensable in
the light of the allegations in the opposition of the petitioner that these BOI officers would be
asked merely on the procedure that was followed in the questioned hearing of 14 May 1980 and
since the proceedings that transpired would appear in the record of the BOI case entitled
Adamson & Adamson, Inc., petitioner, versus Johnson & Johnson [Philippines], Inc.,
respondent.
With respect to the BOI files of the petitioner and private respondent Johnson & Johnson, the
petitioner concedes that trade and industrial secrets will be excluded from examination.
However, the petitioner did not specify which files it sought to be brought before the Court. If
the request of petitioner refers to the record of said BOI case only, the Court agrees with the
petitioner that the said record may be presented in Court at the trial of the present case,
provided, however, that the documents which the BOI considers confidential for being trade and
industrial secrets be excluded. But the request for the production of the record of said BOI case
could not be entertained for the present, because it was erroneously addressed to Governor
Bautista and Atty. Ascaño who are not the custodians of said records.
PREMISES CONSIDERED, the Request for subpoena filed by the petitioner is hereby denied.
SO ORDERED. 16
Thereafter, Adamson filed the instant petition for certiorari with a prayer for the issuance of a
preliminary injunction.
Alleging that the May 14, 1980 hearing was held only for the purpose of determining whether
an immediate stop and desist order should be issued considering that no issues had as yet
been joined as the notice for the hearing was sent to the parties a day before Johnson filed its
answer, Adamson claims that in acting on the merits of the petition, the BOI violated its right to
procedural due process. Specifically, Adamson contends that its "cardinal primary rights" were
violated in the BOI proceedings because: [a] the May 14, 1980 hearing being merely on the
issuance of an immediate stop and desist order and not on the merits of the petition, it was "not
given an opportunity to fully present its case and to adduce evidence to establish its right to the
issuance of a permanent stop and desist order against Johnson"; [b] the decision of the BOI
Board of Governors was not supported by substantial evidence as no documentary and
testimonial evidence were presented under oath; and [c] said decision was based on the views
and findings of Director Ascaño and not on the Board of Governors' independent consideration
of the law and the facts of the controversy because the members of said board were not present
and no stenographic notes were taken during the hearing.17
According to Adamson, the lower court acted with grave abuse of discretion amounting to lack
of jurisdiction in relying on said void BOI decision and in issuing the order of August 18, 1981
which sustained the motion to quash subpoena thereby preventing it from establishing the
irregular BOI proceeding and exercising its right to examine the entire BOI records of both
companies.18 Adamson comes to this Court raising the following issues:
a. Can a Court of First Instance for the purpose of denying a verified petition for preliminary
injunction adopt a decision of an administrative agency rendered in violation of a party's
constitutional right to procedural due process?
b. Is a party entitled to establish by testimonial and documentary evidence the fact of such denial
of due process? 19
Although the instant petition was filed before the lower court could resolve petitioner's motion
for reconsideration of the order denying its prayer for a preliminary injunction and, therefore,
strictly speaking, it was prematurely filed, We opt to rule on the issues raised herein to facilitate
the final disposition of the case in the lower court [See Philippine Global Communications, Inc.
vs. Relova, G.R. No. 52819, October 2, 1980, 100 SCRA 254,260].
While administrative tribunals exercising quasi-judicial powers are free from the rigidity of certain
procedural requirements they are bound by law and practice to observe the fundamental and
essential requirements of due process in justiciable cases presented before them.20 However,
the standard of due process that must be met in administrative tribunals allows a certain latitude
as long as the element of fairness is not ignored.21 Hence, there is no denial of due process
where records show that hearings were held with prior notice to adverse parties.22 But even in
the absence of previous notice, there is no denial of procedural due process as long as the
parties are given the opportunity to be heard.23
Based on the foregoing, We rule that petitioner was not deprived of its right to procedural due
process in the BOI. In the first place, it was notified of the May 14, 1980 hearing. The notice
specified that the hearing was on the petition although it also stated therein with particularity,
petitioner's prayer for a stop and desist order. Necessarily, it is immaterial that said notice was
sent before Johnson filed its answer to the petition and there was yet no joinder of issues
considering that the proceeding was before an administrative tribunal where technicalities that
should be observed in a regular court may be dispensed with.
Secondly, during the hearing, petitioner was given the opportunity to present its case, including
its prayer for a stop and desist order. As clearly enunciated in the minutes of the hearing which
We have painstakingly studied and set forth herein to determine if any irregularity attended the
questioned BOI proceeding, it was conducted for the purpose of hearing the arguments and
receiving evidence of the parties "to resolve the case expeditiously." Having been given the
opportunity to put forth its case, petitioner has only itself, or, better still, its counsel and officers
who were present therein, to blame for its failure to do so.24
Petitioner's right to procedural due process was not violated when the hearing was conducted
before a director of the BOI and not before the members of the board themselves who decided
the case. The requirements of a fair hearing do not mandate that the actual taking of testimony
or the presentation of evidence be before the same officer who will make the decision on the
case.25 1avvphi1
Neither does the absence of stenographers during the hearing affect petitioner's right to due
process. Section 16 of Republic Act No. 5186, which provides for the powers and duties of the
BOI, does not specify that said board is a board of record. The first paragraph of said section
merely mentions minutes" in connection with proceedings of the board. Therefore, the absence
of a transcript of stenographic notes taken during the BOI hearing cannot be claimed to have
deprived petitioner of due process of law.26
Petitioner's suspicion that something aberrant surrounded the drafting of the minutes of the May
14, 1980 hearing because it received a copy thereof five months later is unfounded as it is
unsupported by evidence. The delayed delivery of the minutes to the petitioner does not at all
alter the fact that a hearing was conducted on the petition in the BOI and petitioner was given
the opportunity to present its side of the controversy.
It should be noted that said hearing was not the only venue for the ventilation of petitioner's
arguments. Aside from the September 5, 1980 hearing, the parties also submitted their
respective memoranda. They were, therefore, afforded ample opportunity to assert their
arguments in both the petition and the prayer for a stop and desist order.
The BOI decision having been arrived at with due regard for the parties' right to procedural due
process, petitioner's contention that the lower court abused its discretion in relying on said BOI
decision when it denied petitioner's prayer for a writ of preliminary injunction and granted
Johnson's motion to quash subpoena, does not merit further consideration. Suffice it to state
that whatever objections petitioner may have on the validity and correctness of the BOI decision
may be threshed out in the lower court.
WHEREFORE, the petition for certiorari is hereby dismissed and the lower court is ordered to
expedite the disposition of Civil Case No. 136282 for judicial relief. Costs against petitioner.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
G.R. No. 114683 January 18, 2000
JESUS C. OCAMPO, petitioner,
vs.
OFFICE OF THE OMBUDSMAN and MAXIMO ECLIPSE, respondents.
BUENA, J.:
This petition for certiorari seeks to nullify the Resolutions of the Ombudsman in OMB-Adm-0-
92-0020 dated November 18, 19931 and February 28, 19942 which dismissed petitioner from
the service, with forfeiture of benefits and special perpetual disqualification to hold office in the
government or any government-owned or controlled corporation, and which denied the motion
for reconsideration thereof, respectively.
The facts are as follows:
Petitioner is the Training Coordinator of NIACONSULT, INC., a subsidiary of the National
Irrigation Administration.
On March 21, 1988, K.N. Paudel of the Agricultural Development Bank of Nepal (ADBN) Mote
a letter to NIACONSULT requesting a training proposal on small-scale community irrigation
development.3
On November 17, 1988, petitioner as the training coordinator of the NIACONSULT, sent a letter-
proposal requested by ABDN.4 Another letter was sent by petitioner on January 31, 1989 to Dr.
Peiter Roeloffs of ADBN confirming the availability of NIACONSULT to conduct the training
program and formally requesting advance payment of thirty (30%) percent of the training fee5
in the amount of US $9,600.00 or P204,960.00.
NIACONSULT conducted the training program for six Nepalese Junior Engineers from February
6 to March 7, 1989.6 ADBN, thru its representative, Deutsche Gesselschaft Technische
Zusummenarbeit (GTZ) Gmbh Technical Cooperation of the Federal Republic of Germany paid
to the petitioner the agreed training fee in two installments of P61,488.00 and P143, 472.00.7
On April 1, 1991, NIACONSULT, through its president, Wilfredo S. Tiongco, wrote a letter to
petitioner demanding the turn-over of the total training fee paid by ADBN which petitioner
personally received.8 Despite receipt of the letter, petitioner failed to remit the said amount
prompting NIACONSULT through its president, Maximino Eclipse, to file an administrative case
before respondent OMBUDSMAN for serious misconduct and/or fraud or willful breach of trust.9
Finding enough basis to proceed with the administrative case, the Administrative Adjudication
Bureau of the respondent OMBUDSMAN, on February 17, 1992, issued an order10 requiring
petitioner to file his counter-affidavit within ten (10) days from receipt with a caveat that failure
to file the same would be deemed a waiver of his right to present evidence. Despite notice,
petitioner failed to comply with the said order.
A year later, or on March 17, 1993, respondent OMBUDSMAN issued another order11 giving
petitioner another chance to file his counter-affidavit and controverting evidence. Again,
petitioner failed. Thus, on April 14, 1993, private respondent was required to appear before the
OMBUDSMAN to present evidence to support its complaint.12
Thereafter, on November 18, 1993, respondent OMBUDSMAN issued the assailed Resolution,
the decretal portion of which reads:
Withal, for such dishonesty, untrustworthiness, and conduct prejudicial to the service as
established by overwhelming evidences, it is respectfully recommended that respondent Jesus
C. Ocampo be discharged from the service, with forfeiture of benefits and special perpetual
disqualification to hold office in the government or any government-owned or controlled
corporation; without prejudice to any civil action NIACONSULT, Inc., may institute to recover
the amount so retained by the respondent.
SO ORDERED.13
On February 16, 1994 petitioner moved for reconsideration and to re-open the case claiming
that he was denied due process in that the administrative case was resolved on the basis of the
complainant's evidences, without affording him the opportunity to file a counter-affidavit and to
present his evidence. Petitioner likewise contends that he was not given access to the records
of the subject transaction vital to his defense and in the preparation of his counter-affidavit
despite his verbal requests to the graft investigator.14
The respondent OMBUDSMAN denied the motion on February 28, 1994.15
Aggrieved, petitioner filed the instant petition basically reiterating his arguments in his motion
for reconsideration.
We gave due course to the petition and required the parties to submit their respective
memoranda.
While the case is pending, petitioner filed a Manifestation on May 24, 199716 stating that the
criminal complaint for estafa and falsification filed against him based on the same facts or
incidents which gave rise to the administrative case, was dismissed by the Regional Trial Court
on February 24, 1997. With the dismissal of the criminal case, petitioner manifests that the
administrative case can no longer stand on its own and therefore should be dismissed.17
Such manifestation is not well taken.
The dismissal of the criminal case will not foreclose administrative action filed against petitioner
or give him a clean bill of health in all respects. The Regional Trial Court, in dismissing the
criminal complaint, was simply saying that the prosecution was unable to prove the guilt of
petitioner beyond reasonable doubt, a condition sine qua non for conviction. The lack or
absence of proof beyond reasonable doubt does not mean an absence of any evidence
whatsoever for there is another class of evidence which, though insufficient to establish guilt
beyond reasonable doubt, is adequate in civil cases; this is preponderance of evidence. Then
too, there is the "substantial evidence" rule in administrative proceedings which merely requires
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.18 Thus, considering the difference in the quantum of evidence, as well as the
procedure followed and the sanctions imposed in criminal and administrative proceedings, the
findings and conclusions in one should not necessarily be binding on the other.19
Going now to the crux of the controversy, petitioner asserts that he was denied the opportunity
to be heard.
The essence of due process is an opportunity to be heard. One may be heard, not solely by
verbal presentation but also, and perhaps even many times more creditably and practicable
than oral argument, through pleadings. In administrative proceedings, moreover, technical rules
of procedure and evidence are not strictly applied; administrative due process cannot be fully
equated to due process in its strict judicial sense.20
Petitioner has been amply accorded the opportunity to be heard. He was required to answer the
complaint against him. In fact, petitioner was given considerable length of time to submit his
counter-affidavit. It took more than one year from February 17, 1992 before petitioner was
considered to have waived his right to file his counter-affidavit and the formal presentation of
the complainant's evidence was set. The March 17, 1993 order was issued to give the petitioner
a last chance to present his defense, despite the private respondent's objections. But petitioner
failed to comply with the second order.1âwphi1.nêt
Thus, petitioner's failure to present evidence is solely of his own making and cannot escape his
own remissness by passing the blame on the graft investigator. While the respondent
OMBUDSMAN has shown forbearance, petitioner has not displayed corresponding vigilance.
He therefore cannot validly claim that his right to due process was violated. We need only to
reiterate that a party who chooses not to avail of the opportunity to answer the charges cannot
complain of a denial of due process.21
Petitioner's claim that he was not given any notice of the order declaring him to have waived his
right to file his counter-affidavit and of allowing the private respondent to present evidence ex-
parte is unmeritorious.
The orders of respondent OMBUDSMAN requiring petitioner to submit his counter-affidavit and
which was admittedly received by the latter explicitly contain a warning that if no counter-affidavit
was filed within the given period, a waiver would be considered and the administrative
proceedings shall continue according to the rules. Thus, respondent OMBUDSMAN need not
issue another order notifying petitioner that he has waived his right to file a counter-affidavit. In
the same way, petitioner need not be notified of the ex-parte hearing for the reception of private
respondent's evidence. As such, he could not have been expected to appear at the ex-parte
hearing.
With regard to the petitioner's claim that he made requests for the production of the documents
alleged to be material to his defense, the record is bereft of any proof of such requests. If it were
true that the graft investigator did not act on such requests, petitioner should have filed the
proper motion before the respondent OMBUDSMAN for the production of the documents or to
compel the respondent complainant to produce whatever record necessary for his defense.
Petitioner did not. It was only after the respondent OMBUDSMAN issued the assailed resolution
of November 18, 1993 that he bewailed the alleged failure of respondent's graft investigator to
require the production of the records of the subject transaction.
The record of this case indisputably shows that petitioner is guilty of dishonesty and conduct
prejudicial to the government when he failed to remit the payment of the training program
conducted by NIACONSULT. The evidence presented sufficiently established that petitioner
received the payments of ADBN through its representative, GTZ, Philippines the amount of US
$9,600.00 and that he failed to account this and remit the same to the corporation. All these
acts constitute dishonesty and untrustworthiness.
WHEREFORE, the petition is hereby DENIED for lack of merit. The assailed Resolutions of the
respondent OMBUDSMAN are hereby AFFIRMED.
SO ORDERED.
Bellosillo, Mendoza, Quisumbing and De Leon, Jr., JJ., concur.
G.R. No. 154243 December 22, 2007
DEPUTY DIRECTOR GENERAL ROBERTO LASTIMOSO, ACTING CHIEF PHILIPPINE
NATIONAL POLICE (PNP), DIRECTORATE FOR PERSONNEL AND RECORDS
MANAGEMENT (DPRM), INSPECTOR GENERAL, P/CHIEF SUPT. RAMSEY OCAMPO and
P/SUPT. ELMER REJANO, petitioners,
vs.
P/SENIOR INSPECTOR JOSE J. ASAYO, respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before the Court is respondent’s Motion for Reconsideration of the Decision promulgated on
March 6, 2007. In said Decision, the Court granted the petition, holding that the Philippine
National Police (PNP) Chief had jurisdiction to take cognizance of the civilian complaint against
respondent and that the latter was accorded due process during the summary hearing.
Respondent argues that the decision should be reconsidered for the following reasons:
1. The summary proceeding was null and void because no hearing was conducted; and
2. The evidence presented at the summary hearing does not prove that respondent is guilty of
the charges against him.
Respondent insists that the summary hearing officer did not conduct any hearing at all but only
relied on the affidavits and pleadings submitted to him, without propounding further questions
to complainant's witnesses, or calling in other witnesses such as PO2 Villarama. It should,
however, be borne in mind that the fact that there was no full-blown trial before the summary
hearing officer does not invalidate said proceedings. In Samalio v. Court of Appeals,1 the Court
reiterated the time-honored principle that:
Due process in an administrative context does not require trial-type proceedings similar to those
in courts of justice. Where opportunity to be heard either through oral arguments or through
pleadings is accorded, there is no denial of procedural due process. A formal or trial-type
hearing is not at all times and in all instances essential. The requirements are satisfied where
the parties are afforded fair and reasonable opportunity to explain their side of the controversy
at hand. The standard of due process that must be met in administrative tribunals allows a
certain degree of latitude as long as fairness is not ignored. In other words, it is not legally
objectionable for being violative of due process for an administrative agency to resolve a case
based solely on position papers, affidavits or documentary evidence submitted by the parties
as affidavits of witnesses may take the place of their direct testimony.2 (Emphasis supplied)
The first issue presented by respondent must, therefore, be struck down.
To resolve the second issue, respondent would have the Court re-calibrate the weight of
evidence presented before the summary hearing officer, arguing that said evidence is
insufficient to prove respondent's guilt of the charges against him.
However, it must be emphasized that the action commenced by respondent before the Regional
Trial Court is one for certiorari under Rule 65 of the Rules of Court and as held in People v.
Court of Appeals,3 where the issue or question involved affects the wisdom or legal soundness
of the decision – not the jurisdiction of the court to render said decision – the same is beyond
the province of a special civil action for certiorari.
Yet, respondent-movant's arguments and the fact that the administrative case against
respondent was filed way back in 1997, convinced the Court to suspend the rules of procedure.
The general rule is that the filing of a petition for certiorari does not toll the running of the period
to appeal.4
However, Section 1, Rule 1 of the Rules of Court provides that the Rules shall be liberally
construed in order to promote their objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. In Ginete v. Court of Appeals5 and Sanchez v. Court
of Appeals,6 the Court saw it proper to suspend rules of procedure in order to promote
substantial justice where matters of life, liberty, honor or property, among other instances, are
at stake.
The present case clearly involves the honor of a police officer who has rendered years of service
to the country.
In addition, it is also understandable why respondent immediately resorted to the remedy of
certiorari instead of pursuing his motion for reconsideration of the PNP Chief’s decision as an
appeal before the National Appellate Board (NAB). It was quite easy to get confused as to which
body had jurisdiction over his case. The complaint filed against respondent could fall under both
Sections 41 and 42 of Republic Act (R.A.) No. 6975 or the Department of the Interior and Local
Government Act of 1990. Section 41 states that citizens' complaints should be brought before
the People's Law Enforcement Board (PLEB), while Section 42 states that it is the PNP Chief
who has authority to immediately remove or dismiss a PNP member who is guilty of conduct
unbecoming a police officer.
It was only in Quiambao v. Court of Appeals,7 promulgated in 2005 or after respondent had
already filed the petition for certiorari with the trial court, when the Court resolved the issue of
which body has jurisdiction over cases that fall under both Sections 41 and 42 of R.A. No. 6975.
The Court held that the PLEB and the PNP Chief and regional directors have concurrent
jurisdiction over administrative cases filed against members of the PNP which may warrant
dismissal from service, but once a complaint is filed with the PNP Chief or regional directors,
said authorities shall acquire exclusive original jurisdiction over the case.
With the foregoing peculiar circumstances in this case, respondent should not be deprived of
the opportunity to fully ventilate his arguments against the factual findings of the PNP Chief. He
may file an appeal before the NAB, pursuant to Section 45, R.A. No. 6925. It is a settled
jurisprudence that in administrative proceedings, technical rules of procedure and evidence are
not strictly applied.8 In Land Bank of the Philippines v. Celada,9 the Court stressed thus:
After all, technical rules of procedure are not ends in themselves but are primarily devised to
help in the proper and expedient dispensation of justice. In appropriate cases, therefore, the
rules may be construed liberally in order to meet and advance the cause of substantial justice.10
Thus, the opportunity to pursue an appeal before the NAB should be deemed available to
respondent in the higher interest of substantial justice.
WHEREFORE, respondent's Motion for Reconsideration is partly GRANTED. The Decision of
the Court dated March 6, 2007 is MODIFIED such that respondent is hereby allowed to file his
appeal with the National Appellate Board within ten (10) days from finality of herein Resolution.
SO ORDERED.
Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.
[G.R. NO. 154110 : November 23, 2007]
FELIZARDO B. SARAPAT, AMELITA DURIAN and FERMIN G. CASTILLO, Petitioners, v.
SYLVIA SALANGA and LIWAYWAY SILAPAN, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision1 dated January 29, 2002 of the Court of Appeals (CA) in CA-G.R. SP
No. 63688 which denied petitioners' Petition for Certiorari and the CA Resolution2 dated June
27, 2002 which denied petitioners' Motion for Reconsideration.
The factual background of the case is as follows:
Felizardo B. Sarapat, Amelita Durian and Fermin G. Castillo (petitioners) are President,
Treasurer and Director, respectively, of the Philippine Veterans Bank Employees Union-
National Union of Bank Employees (PVBEU-NUBE). Sylvia Salanga and Liwayway Silapan
(respondents) are members of PVBEU-NUBE.
Sometime in 1985, the Philippine Veterans Bank (PVB) went bankrupt and was placed under
receivership/liquidation by the Central Bank. As a result, the services of PVB employees were
terminated. When PVB re-opened in 1992, the PVB employees were not re-hired. Thus,
PVBEU-NUBE filed a notice of strike and cases of unfair labor practice against PVB before the
National Labor Relations Commission (NLRC) .
On January 26, 1996, PVB and PVBEU-NUBE entered into a Compromise Agreement for the with the NLRC, as well as receipt of a check from PVB or PVBEU-NUBE representing the 5%
amicable settlement of all their cases and claims then pending with the NLRC and other special assessment fee referred to in the Compromise Agreement.
tribunals. The total financial settlement granted to PVBEU-NUBE amounted to P35,000,000.00,
10% thereof as attorney's fees, and 5% thereof as special assessment fee to be deducted from On the other hand, petitioner Sarapat stated that the litigation expenses incurred by PVBEU-
the settlement amount of each member to defray the expenses incurred by the union in the NUBE was not limited to the NLRC but included the Supreme Court, the Office of the Secretary
prosecution of the labor cases. of Labor and Employment, and the NCR Arbitration Branch of the NLRC. He requested a period
of 20 days or until May 8, 2000 within which to submit the necessary documents to support the
On April 10, 1996, respondents, in their behalf and in behalf of 43 other PVBEU-NUBE alleged litigation expenses.
members, filed with the Department of Labor and Employment-National Capital Region (DOLE-
NCR) a petition3 requesting an audit of the finances of the PVBEU-NUBE. Specifically, the On May 9, 2000, petitioners filed their Compliance,8 attaching a Statement of Receipts and
request requires a separate and full accounting of the P600,000.00 representing the special Disbursements for the period June 15, 1985 to December 31, 1999, indicating the following
assessment fee of 5% of the first installment of P12,000,000.00 of the Compromise disbursements:
Agreement.4
Representation and entertainment P1,282,750.00
Pre-audit conferences were called. However, despite notices and directives served upon Gasoline Expense 110,756.75
petitioners for them to appear and submit pertinent documents for the audit, they failed to do Membership dues - NUBE 160,000.00
so. Legal Fees 883,720.00
Christmas Gifts 50,750.25
On April 23, 1999, DOLE-NCR Regional Director Maximo B. Lim issued an Order5 directing Office supplies 19,665.35
petitioners to open the union books of account to the respondents and to hold a general Advertisement 20,000.00
membership meeting to explain the financial status of the union to the members. Research Expenses 10,000.00
Telegrams and Postage 7,546.65
Petitioners filed an appeal with the Bureau of Labor Relations (BLR) questioning the Order Notarial and other fees 5,000.00
calling for the conduct of a general membership meeting.6 Transcript/clerical fees 5,000.00
Filing/appeal fees 10,000.00
On September 22, 1999, the parties were summoned to a conference by the BLR. At said Miscellaneous expenses (streamers) 15,000.00
conference, the parties agreed that the case be limited to the audit and accounting of all litigation Total P2,580,189.00
expenses incurred by the union, upon which the 5% special assessment fee was based. They On October 5, 2000, the BLR issued a Resolution9 declaring the Statement of Receipts and
also admitted that the conduct of a general membership meeting of 529 members was no longer Disbursements as insufficient to prove the actual litigation expenses incurred in the prosecution
feasible because of the dissolution of the union and the termination of the members' of labor cases or to justify the 5% special assessment fee since no official receipts,
employment in PVB. disbursement vouchers, checks, acknowledgment receipts and such other documents which
would show actual disbursement of funds and the purpose thereof were submitted.
On March 17, 2000, the BLR issued an Order7 taking cognizance of the requested audit and
accounting of the litigation expenses incurred by the union in the prosecution of its labor cases, Thus, the BLR held petitioners solidarily liable to restitute to the PVBEU-NUBE members the
considering that a general membership meeting was no longer feasible. Since petitioners did total amount of P1,409,946.00, representing the P1,399,246.00 partial remittance of the 5%
not submit any documents to the Regional Office in support of the alleged litigation expenses check-off for the special assessment fee and P10,700.00 personal donations and contributions
despite repeated summons made upon them, the BLR gave them a final chance to submit such from PVBEU-NUBE members. It also directed PVB to refrain from deducting anymore 5%
documents. The BLR also required PVBEU-NUBE to comment on the petition since special assessment fee from any of the other members' settlement amount under the
P1,372,953.00, part of the P12,000,000.00 special assessment fee, was allegedly remitted to Compromise Agreement in view of petitioners' failure to justify the purpose of such deduction.
PVBEU-NUBE.
Petitioners filed a Motion for Reconsideration10 but the BLR denied the same in a Resolution11
On April 25, 2000, the parties and PVBEU-NUBE were summoned to appear before the BLR. dated December 26, 2000.
At said conference, Jose P. Umali, representing PVBEU-NUBE, denied participation in the
preparation and execution of the Compromise Agreement relative to the PVBEU-NUBE cases
On March 12, 2001, petitioners filed a Petition for Certiorari12 with the CA ascribing grave abuse
of discretion to the BLR.
On January 29, 2002, the CA rendered a Decision13 dismissing the petition. It held that
petitioners failed to prove that the BLR acted in a capricious, whimsical, arbitrary or despotic
manner in the exercise of its judgment, since all the issues raised by petitioners were judiciously
addressed by the BLR after due consideration of the submissions of the parties.
Petitioners filed a Motion for Reconsideration14 but the CA denied it in a Resolution15 dated
June 27, 2002.
Hence, the present petition anchored on the following grounds:
A. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT
PETITIONERS WERE NOT DENIED DUE PROCESS OF LAW.16
B. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN NOT RESOLVING THE MAIN
ISSUE BROUGHT BEFORE IT, THAT THE BLR ACTED WITHOUT JURISDICTION.17
C. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN NOT RULING ON THE
ISSUE OF WHETHER OR NOT THE BLR ACTED IN EXCESS OF JURISDICTION IN ISSUING
THE RESOLUTION OF 05 OCTOBER 2000 SINCE IT PASSED UPON ISSUES NOT
BROUGHT TO IT ON APPEAL.18
D. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN IGNORING THE ISSUE OF
WHETHER OR NOT RESPONDENT BLR ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN DENYING THE VALIDITY OF
RESPONDENTS-APPELLANTS' ACCOUNTING.19
E. THE COURT OF APPEALS COMMITTED GRAVE ERROR IN IGNORING THE ISSUE
RAISED OF WHETHER RESPONDENT BLR ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN ORDERING RESTITUTION.20
In a Resolution21 dated July 19, 2006, the Court required the parties to submit memoranda but
only respondents complied therewith.
Petitioners submit that they were denied due process of law since the BLR ruled motu proprio
on the propriety of the litigation expenses and ordered restitution without holding a hearing to
ask petitioners to explain the accounting or to produce the books of account and receipts of the
union; that the appeal before the BLR involved only the Order of the DOLE-NCR Regional
Director calling for a general membership meeting; that the propriety of the litigation expenses
claimed by petitioners and restitution were not issues on appeal; that a statement of expenses
duly attested to by a certified public accountant is competent and valid evidence to prove
expenses; that restitution was improper since the 5% special assessment fee became property
of the union upon approval of the union members of the Compromise Agreement.
Respondents, on the other hand, aver that the BLR did not lose jurisdiction to pass upon the
propriety of the litigation expenses when petitioners submitted its alleged accounting; that
petitioners were not denied due process since they were given all the opportunities to present
the required documents but they failed to do so; that as the real owners of the union funds are
the union members, it was just proper for the restitution of the same to the members.
The petition is bereft of merit for the following reasons.
Firstly, petitioners cannot maintain that they were denied due process. Well-settled is the rule
that the essence of due process is simply an opportunity to be heard, or, as applied to
administrative proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of.22 Not all cases require a trial-type hearing.
The requirement of due process in labor cases is satisfied when the parties are given the
opportunity to submit their position papers to which they are supposed to attach all the
supporting documents or documentary evidence that would prove their respective claims.23
Thus, in Samalio v. Court of Appeals,24 the Court held:
Due process in an administrative context does not require trial-type proceedings similar to those
in courts of justice. Where opportunity to be heard either through oral arguments or through
pleadings is accorded, there is no denial of procedural due process. A formal or trial-type
hearing is not at all times and in all instances essential. The requirements are satisfied where
the parties are afforded fair and reasonable opportunity to explain their side of the controversy
at hand. The standard of due process that must be met in administrative tribunals allows a
certain degree of latitude as long as fairness is not ignored. In other words, it is not legally
objectionable for being violative of due process for an administrative agency to resolve a case
based solely on position papers, affidavits or documentary evidence submitted by the parties
as affidavits of witnesses may take the place of their direct testimony.25
In the present case, since the inception of the case before the DOLE-NCR, petitioners were
given every opportunity to present their side and submit the union books of accounts and other
needed documents to justify the litigation expenses incurred in the prosecution of the labor
cases upon which the 5% special assessment fee was based. They failed to do so, even when
they requested time, on several occasions, to submit the necessary documents. Besides, when
petitioners filed a motion for reconsideration assailing the act of the BLR in ruling on the propriety
of the litigation expenses, such action satisfied the requirement of due process. As the Court
has consistently held, where the parties were given the opportunity to seek a reconsideration of
the action or ruling complained of, they cannot claim denial of due process of law.26
Secondly, petitioners are estopped from assailing the jurisdiction of the BLR to rule on the
propriety of the litigation expenses. Nary a howl of protest or shout of defiance spewed forth
from petitioners' lips when the BLR took cognizance of the case and directed them to submit
documents in support of the alleged litigation expenses.ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ
Petitioners filed a Compliance with the BLR's directive without raising an objection.
Thirdly, the BLR is clothed with ample authority to rule, motu proprio, on the propriety of the
litigation expenses. The authority of the BLR is found in Article 226 of the Labor Code of the
Philippines, which reads:
Art. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and the Labor Relations
Divisions in the regional offices of the Department of Labor shall have original and exclusive
authority to act, at their own initiative or upon request of either or both parties, on all inter-union
and intra-union conflicts, x x x. (emphasis supplied)
As held by the Court in La Tondeña Workers Union v. Secretary of Labor, intra-union conflicts
such as examinations of accounts are under the jurisdiction of the BLR.27
Fourthly, even though the issue initially raised on appeal was limited to the Order of the DOLE-
NCR Regional Director to hold a general membership meeting, since the petitioners admitted
during the BLR conference on September 22, 1999 that such meeting was no longer feasible,
the BLR was justified in taking cognizance of the case to resolve the issue of the propriety of
the litigation expenses upon which the 5% special assessment fee was based. Considering that
petitioners admitted on appeal that the case was limited to the audit and accounting of the
litigation expenses incurred, such matter was open to evaluation.
Indeed, hearings and resolutions of labor disputes are not governed by the strict and technical
rules of evidence and procedure observed in the regular courts of law. Technical rules of
procedure are not applicable in labor cases, but may apply only by analogy or in a suppletory
character, for instance, when there is a need to attain substantial justice and an expeditious,
practical and convenient solution to a labor problem.28 The BLR was therefore empowered to
rule on the same to avoid further delay of the case. Clearly, consideration of the issue became
necessary to arrive at a just decision and complete resolution of the case.
Fifthly, no grave abuse of discretion can be ascribed to the BLR in denying petitioners'
Statement of Receipts and Disbursements as proof of litigation expenses incurred since
petitioners failed to submit supporting receipts and other documents. Truly, the BLR could only
give credence to actual expenses supported by receipts and which appear to have been
genuinely expended in connection with the labor cases. The expenses must be actually proven
with a reasonable degree of certainty, premised upon competent proof or the best evidence
obtainable.29 It cannot be based simply on mere allegation without any tangible proof, such as
receipts or other documentary proofs to support such claim.
Besides, it is absurd to consider expenses for representation and entertainment, membership
dues to PVBEU-NUBE, Christmas gifts, advertisements and streamers as litigation expenses.
As the BLR aptly stated, the 5% special assessment fee was not intended to form a general
fund for the union, but for expenses incurred in the prosecution of the labor cases. Petitioners'
failure to substantiate their claim of actual litigation expenses incurred in the prosecution of labor
cases, by not presenting in evidence the actual receipts of such expenses and the relevance
thereof, did not help their cause.
Lastly, the order for restitution was proper since the petitioners failed to prove the justification
for the deduction of the 5% special assessment fee from the members' settlement amount.
Restitution is defined as the "act of making good or giving an equivalent for any loss, damage
or injury; and indemnification.30 The Compromise Agreement was entered into, not to benefit
the union, but to settle the claims and for the welfare of the union members.
In fine, the CA did not commit any error in upholding the Resolution of the BLR disallowing the
5% special assessment fee for petitioners' failure to support the alleged litigation expenses upon
which the 5% special assessment fee was based.
WHEREFORE, the instant petition is DENIED. The Decision dated January 29, 2002 and
Resolution dated June 27, 2002 of the Court of Appeals (CA) in CA-G.R. SP No. 63688 are
AFFIRMED. Costs against petitioners.
SO ORDERED.
CARLOS R. SAUNAR, Petitioner, v. EXECUTIVE SECRETARY EDUARDO R. ERMITA AND
CONSTANCIA P. DE GUZMAN, CHAIRPERSON OF THE PRESIDENTIAL ANTI-GRAFT
COMMISSION, Respondents.
DECISION
MARTIRES, J.:
This petition for review on certiorari seeks to reverse and set aside the 20 October 2008
Decision1 and the 17 February 2009 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP
No. 100157 which affirmed the 19 January 2007 decision3 of the Office of the President (OP)
dismissing petitioner Carlos R. Saunar (Saunar) from government service.
THE FACTS
Saunar was a former Regional Director of the National Bureau of Investigation (NBI), which he
joined as an agent in 1988. Through the years, he rose from the ranks and eventually became
the Chief of the Anti-Graft Division. During his time as chief of the said division, Saunar
conducted an official investigation regarding the alleged corruption relative to the tobacco excise
taxes and involving then Governor Luis "Chavit" Singson, former President Joseph E. Estrada
(President Estrada), and former Senator Jinggoy Estrada. President Estrada's assailed
involvement in the tobacco excise tax issue became one of the predicate crimes included in his
indictment for plunder.4
In Special Order No. 40035 dated 27 August 2004, Saunar was reassigned as regional director
for Western Mindanao based in Zamboanga City. During his stint as such, he received a
subpoena ad testificandum from the Sandiganbayan requiring him to testify in the plunder case
against President Estrada. After securing approval from his immediate supervisor Filomeno
Bautista (Bautista), Deputy Director for Regional Operation Services (DDROS), Saunar
appeared before the Sandiganbayan on several hearing dates, the last being on 27 October
2004.6
On 29 October 2004, then NBI Director Reynaldo Wycoco (Wycoco) issued Special Order No.
0050337 informing Saunar that he was relieved from his duties as regional director for Western
Mindanao and was ordered to report to the DDROS for further instructions. Pursuant thereto,
he reported to Bautista on the first week of November 2004. Bautista informed Saunar that an
investigation was being conducted over his testimony before the Sandiganbayan and that he
should just wait for the developments in the investigation. In the meantime, Bautista did not
assign him any duty and told him to be available at any time whenever he would be needed. He
made himself accessible by staying in establishments near the NBI. In addition, he also attended
court hearings whenever required.8
On 6 October 2006, Saunar received an order from the Presidential Anti-Graft Commission
(PAGC) requiring him to answer the allegations against him in the PAGC Formal Charge dated
3 October 2006. The charge was based on a letter, dated 19 August 2005, from Wycoco
recommending an immediate appropriate action against Saunar for his failure to report for work
since 24 March 2005, without approved leave of absence for four (4) months.9
On 23 October 2006, Saunar was reassigned as regional director of the Bicol Regional Office.
On 29 January 2007, he received a copy of the OP decision dismissing him from service.
The OP Decision
In its 19 January 2007 decision, the OP found Saunar guilty of Gross Neglect of Duty and of
violating Section 3(e) of Republic Act (R.A.) No. 3019, and dismissed him from service. It pointed
out that Saunar failed to report for work for more than a year which he himself admitted when
he explained that he did not report for work because he had not been assigned any specific
duty or responsibility. The OP highlighted that he was clearly instructed to report to the DDROS
but he did not do so. It added that it would have been more prudent for Saunar to have reported
for work even if no duty was specifically assigned to him, for the precise reason that he may at
any time be tasked with responsibilities. The OP, however, absolved Saunar from allegedly
keeping government property during the time he did not report for work, noting that he was able
to account for all the items attributed to him. The dispositive portion reads:
WHEREFORE, premises considered, and as recommended by PAGC, Atty. Carlos R. Saunar,
Regional Director, NBI, for Gross Neglect of Duty under Section 22(b), Rule XIV of the Omnibus
Rules Implementing Book V of EO 292 in relation to Section 4(A) of RA 6713 and for violation
of Section 3(e) of RA 3019, is hereby DISMISSED from government service with cancellation
of eligibility, forfeiture of leave credits and retirement benefits, and disqualification for re-
employment in the government service.10
Saunar moved for reconsideration but it was denied by the OP in its 12 June 2007 resolution.11
Undeterred, he appealed before the CA.
The CA Ruling
In its assailed 20 October 2008 decision, the CA affirmed in toto the OP decision. The appellate
court ruled that Saunar was not deprived of due process because he was informed of the
charges against him and was given the opportunity to defend himself. It expounded that the
absence of formal hearings in administrative proceedings is not anathema to due process.
On the other hand, the CA agreed that Saunar was guilty of Gross Neglect of Duty as manifested
by his being on Absence Without Leave (AWOL) for a long period of time. The appellate court
disregarded Saunar's explanation that he stayed in establishments nearby and that he had
attended court hearings from time to time. In addition, the CA found that Saunar violated Section
3(e) of R.A. No. 3019 because public interest was prejudiced when he continued to receive his
salary in spite of his unjustified absences. Thus, it ruled:
WHEREFORE, in view of the foregoing premises, the petition for review filed in this case is
hereby DENIED and, consequently, DISMISSED for lack of merit, and the assailed Decision of
the Executive Secretary Eduardo R. Ermita dated January 19, 2007 is hereby AFFIRMED in
toto.12
Saunar moved for reconsideration but it was denied by the CA in its assailed 17 February 2009
resolution.
Hence, this appeal raising the following:
ISSUES
I
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT
PETITIONER WAS NOT DENIED DUE PROCESS AND THAT RESPONDENTS DID NOT
VIOLATE PETITIONER'S RIGHT TO SECURITY OF TENURE AS GUARANTEED IN THE
CONSTITUTION; AND

II
WHETHER THE HONORABLE COURT OF APPEAELS GRAVELY ERRED AND GRAVELY
ABUSED ITS DISCRETION IN UPHOLDING THE FINDINGS OF RESPONDENTS THAT
PETITIONER COMMITTED GROSS NEGLECT OF DUTY, HAD ABANDONED HIS POST
AND WENT ON AWOL FOR HIS ALLEGED FAILURE TO REPORT FOR WORK FROM
MARCH 24, 2005 TO MAY 2006.13
THE COURT'S RULING
The petition is meritorious.
Administrative due process
revisited
Saunar bewails that he was deprived of due process, pointing out that no real hearing was ever
conducted considering that the clarificatory conference conducted by the PAGC was a sham.
In addition, he asserts that he was not notified of the charges against him because he was only
made aware of the allegations after the PAGC had formally charged him. Further, Saunar
highlights the delay between the time PAGC received Wycoco's letter-complaint and when he
received the formal charge from the PAGC.
Section 1, Article III of the Constitution is similar with the Fifth and Fourteenth Amendment of
the American Constitution in that it guarantees that no one shall be deprived of life, liberty or
property without due process of law. While the words used in our Constitution slightly differ from
the American Constitution, the guarantee of due process is used in the same sense and has
the same force and effect.14 Thus, while decisions on due process of American courts are not
controlling in our jurisdiction, they may serve as guideposts in the analysis of due process as
applied in our legal system.
In American jurisprudence, the due process requirement entails the opportunity to be heard at
a meaningful time and in a meaningful manner.15 Likewise, it was characterized with fluidity in
that it negates any concept of inflexible procedures universally applicable to every imaginable
situation.16
In Goldberg v. Kelly (Goldberg),17 the United States (U.S.) Supreme Court ruled that due
process requires the opportunity for welfare recipients to confront the witnesses against them
at a pre-termination hearing before welfare benefits are terminated, to wit:
The opportunity to be heard must be tailored to the capacities and circumstances of those who
are to be heard. It is not enough that a welfare recipient may present his position to the decision
maker in writing or second hand through his caseworker. x x x Moreover, written submissions
do not afford the flexibility of oral presentations; they do not permit the recipient to mold his
argument to the issues the decision maker appears to regard as important. Particularly where
credibility and veracity are at issue, as they must be in many termination proceedings, written
submissions are wholly unsatisfactory basis for decision.
In Goldberg, the U.S. Supreme Court went on to highlight the importance of confronting the
witnesses presented against the claimant, viz:
In almost every setting where important decisions turn on questions of fact, due process
requires an opportunity to confront and cross-examine adverse witnesses. x x x What we said
in Greene v McElroy, 360 US 474, 496-497, 3 Led 2d 1377, 1390, 1391, 79 S Ct 1400 (1959),
is particularly pertinent here:
Certain principles have remained relatively immutable in our jurisprudence. One of these is that
where governmental action seriously injures an individual, and the reasonableness of the action
depends on fact findings the evidence used to prove the Government's case must be disclosed
to the individual so that he has an opportunity to show that it is untrue. While this is important in
the case of documentary evidence, it is even more important where the evidence consists of
the testimony of individuals whose memory might be faulty or who, in fact, might be perjurers or
persons motivated by malice, vindictiveness, intolerance, prejudice or jealousy. We have
formalized these protections in the requirements of confrontation and cross-examination. They
have ancient roots. They find expression in the Sixth Amendment . . . This Court has be zealous
to protect these rights from erosion. It has spoken out not only in criminal cases, but also in all
types of cases where administrative actions were under scrutiny.
Welfare recipients must therefore be given an opportunity to confront and cross-examine the
witnesses relied on by the department.18
In subsequent decisions, the U.S. Supreme Court clarified that a lack of formal hearing in the
administrative level does not violate procedural due process. In Arnett v. Kennedy (Arnett),19 a
case involving the dismissal of a non-probationary federal employee, the US Supreme Court
ruled that a trial-type hearing before an impartial hearing officer was not necessary before the
employee could be removed from office because the hearing afforded by administrative appeal
procedures after the actual dismissal is a sufficient requirement of the Due Process Clause.
In Mathews v. Eldridge (Mathews),20 the U.S. Supreme Court explained that an evidentiary
hearing prior to termination of disability benefits is not indispensable, to wit:
Only in Goldberg has the Court held that due process requires an evidentiary hearing prior to a
temporary deprivation. It was emphasized there that welfare assistance is given to persons on
the very margin of subsistence:
The crucial factor in this context x x x is that termination of aid pending resolution of a
controversy over eligibility may deprive an eligible recipient of the very means by which to live
while he waits.

Eligibility for disability benefits, in contrast, is not based upon financial need. x x x
xxxx
All that is necessary is that the procedures be tailored, in light of the decision to be made, to the
"capacities and circumstances of those who are to be heard to insure that they are given a
meaningful opportunity to present their case. In assessing what process is due in this case,
substantial weight must be given to the good-faith judgments of the individuals charged by
Congress with the administration of social welfare programs that the procedures they have
provided assure fair consideration of the entitlement claims of individuals. This is especially so
where, as here, the prescribed procedures not only provide the claimant with an effective
process for asserting his claim prior to any administrative action, but also assure a right to an
evidentiary hearing, as well as to subsequent judicial review, before the denial of his claim
becomes final.21
It is true that in both Arnett and Mathews, the U.S. Supreme Court ruled that due process. was
not violated due to the lack of a formal hearing before the employee was dismissed and welfare
benefits were cancelled in the respective cases. Nevertheless, in both cases it was recognized
that the aggrieved party had the opportunity for a hearing to settle factual or evidentiary disputes
in subsequent procedures. In our legal system, however, the opportunity for a hearing after the
administrative level may not arise as the reception of evidence or the conduct of hearings are
discretionary on the part of the appellate courts.
In our jurisdiction, the constitutional guarantee of due process is also not limited to an exact
definition.22 It is flexible in that it depends on the circumstances and varies with the subject
matter and the necessities of the situation.23
In the landmark case of Ang Tibay v. The Court of Industrial Relations,24 the Court eruditely
expounded on the concept of due process in administrative proceedings, to wit:
The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity
of certain procedural requirements does not mean that it can, in justiciable cases coming before
it, entirely ignore or disregard the fundamental and essential requirements of due process in
trials and investigations of an administrative character. There are cardinal primary rights which
must be respected even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party interested
or affected to present his own case and submit evidence in support thereof. In the language of
Chief Justice Hughes, in Morgan v. U. S., 304 U. S. 1, 58 S. Ct. 773, 999, 82 Law. ed 1129, "the
liberty and property of the citizen shall be protected by the rudimentary requirements of fair
play."
(2) Not only must the party be given an opportunity to present his case and to adduce evidence
tending to establish the rights which he asserts but the tribunal must consider the evidence
presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 Law. ed.
1288.) In the language of this Court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce
evidence, without the corresponding duty on the part of the board to consider it, is vain. Such
right is conspicuously futile if the person or persons to whom the evidence is presented can
thrust it aside without notice or consideration."
(3) While the duty to deliberate does not impose the obligation to decide right, it does imply a
necessity which cannot be disregarded, namely, that of having something to support its
decision. A decision with absolutely nothing to support it is a nullity, a place when directly
attached." (Edwards vs. McCoy, supra.) This principle emanate from the more fundamental
principle that the genius of constitutional government is contrary to the vesting of unlimited
power anywhere. Law is both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs.
Agustin, G. R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia & Maryland Coach Co. v. National Labor
Relations Board, 301 U. S. 142, 147, 57 S. Ct. 648, 650, 81 Law ed 965.) "Substantial evidence
is more than a mere scintilla It means such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion." (Appalachian Electric Power v. National Labor Relations
Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir.,
97 F. 2d 13, 15; Ballston-stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F.
2d 758, 760.) ... The statute provides that 'the rules of evidence prevailing in courts of law and
equity shall not be controlling.' The obvious purpose of this and similar provisions is to free
administrative boards from the compulsion of technical rules so that the mere admission of
matter which would be deemed incompetent in judicial proceedings would not invalidate the
administrative order. (Interstate Commerce Commission v. Baird, 194 U. S. 25, 44, 24 S. Ct.
563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville & Nashville R. Co.,
227 U. S. 88, 93, 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene & Southern Ry.
Co., 265 U. S. 274, 288, 44 S. Ct. 565, 569, 68 Law. ed. lola; Tagg Bros. & Moorhead v. United
States, 280 U. S. 420, 442, 50 S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a
desirable flexibility in administrative procedure does not go so far as to justify orders without a
basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does
not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations
Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U. S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining
the administrative tribunal to the evidence disclosed to the parties, can the latter be protected
in their right to know and meet the case against them. It should not, however, detract from their
duty actively to see that the law is enforced, and for that purpose, to use the authorized legal
methods of securing evidence and informing itself of facts material and relevant to the
controversy. Boards of inquiry may be appointed for the purpose of investigating and
determining the facts in any given case, but their report and decision are only advisory. (Section
9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or
agricultural dispute of any matter under its consideration or advisement to a local board of
inquiry, a provincial fiscal, a justice of the peace or any public official in any part of the
Philippines for investigation, report and recommendation, and may delegate to such board or
public official such powers and functions as the said Court of Industrial Relations may deem
necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers
(Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the volume of work is such that it
is literally impossible for the titular heads of the Court of Industrial Relations personally to decide
all controversies coming before them. In the United States the difficulty is solved with the
enactment of statutory authority authorizing examiners or other subordinates to render final
decision, with right to appeal to board or commission, but in our case there is no such statutory
authority.
(7) The Court of Industrial Relations should, in all controversial questions, render its decision in
such a manner that the parties to the proceeding can know the various issues involved, and the
reasons for the decisions rendered. The performance of this duty is inseparable from the
authority conferred upon it.25 (emphases supplied)
From the pronouncements of the Court in Ang Tibay, the fluid concept of administrative due
process continued to progress. In In Re: De Borja and Flores,26 the Court ruled that there was
no denial of due process when the Public Service Commission cancelled the certificate of Jose
de Borja to operate an ice plant without prior notice or hearing because a hearing was conducted
after the applicant filed a motion for reconsideration. In Manila Trading Supply Co. v. Philippine
Labor Union,27 the Court ruled that due process was observed even if the report of the
investigating officer was not set for hearing before the Court of Industrial Relations because
during the investigation stage, the parties were given the opportunity to cross-examine and
present their side to the case. It is noteworthy that in both cases due process was observed
because the parties were given the chance for a hearing where they could confront the
witnesses against them.
In Gas Corporation of the Phils. v. Minister Inciong,28 the Court explained that there is no denial
of due process when a party is afforded the right to cross-examine the witnesses but fails to
exercise the same, to wit:
The vigor with which counsel for petitioner pressed the claim that there was a denial of
procedural due process is inversely proportional to the merit of this certiorari and prohibition suit
as is quite evident from the Comment of the office of the Solicitor General. It is undoubted that
the due process mandate must be satisfied by an administrative tribunal or agency. So it was
announced by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations.
That is still good law. It follows, therefore, that if procedural due process were in fact denied,
then this petition must prosper. It is equally well-settled, however, that the standard of due
process that must be met in proceedings before administrative tribunals allows a certain latitude
as long as the element of fairness is not ignored. So the following recent cases have uniformly
held: Maglasang v. Ople, Nation Multi Service Labor Union v. Agcaoili, Jacqueline Industries v.
National Labor Relations Commission, Philippine Association of Free Labor Unions v. Bureau
of Labor Relations, Philippine Labor Alliance Council v. Bureau of Labor Relations, and
Montemayor v. Araneta University Foundation. From the Comment of the office of the Solicitor
General, it is quite clear that no imputation of arbitrariness can be justified. The opportunity to
present its side of the case was given both parties to the controversy. If, for reasons best known
to itself, petitioner did not avail of its right to do so, then it has only itself to blame. No
constitutional infirmity could then be imputed to the proceeding before the labor arbiter.29
(emphasis supplied)
Again, there was no denial of due process in the above-mentioned case because the parties
were ultimately given the chance to confront the witnesses against them. It just so happened
that therein petitioner failed to promptly avail of the same.
In Arboleda v. National Labor Relations Commission (Arboleda),30 the Court expounded that
administrative due process does not necessarily connote full adversarial proceedings, to wit:
The requirement of notice and hearing in termination cases does not connote full adversarial
proceedings as elucidated in numerous cases decided by this Court. Actual adversarial
proceedings become necessary only for clarification or when there is a need to propound
searching questions to witnesses who give vague testimonies. This is a procedural right which
the employee must ask for since it is not an inherent right, and summary proceedings may be
conducted thereon.31 (emphasis supplied)
Thus, while the Court in Arboleda recognized that the lack of a formal hearing does not
necessarily transgress the due process guarantee, it did not however regard the formal hearing
as a mere superfluity. It continued that it is a procedural right that may be invoked by the party.
It is true that in subsequent cases,32 the Court reiterated that a formal hearing is not obligatory
in administrative proceedings because the due process requirement is satisfied if the parties
are given the opportunity to explain their respective sides through position papers or pleadings.
Nonetheless, the idea that a formal hearing is not indispensable should not be hastily thrown
around by administrative bodies.
A closer perusal of past jurisprudence shows that the Court did not intend to trivialize the
conduct of a formal hearing but merely afforded latitude to administrative bodies especially in
cases where a party fails to invoke the right to hearing or is given the opportunity but opts not
to avail of it. In the landmark case of Ang Tibay, the Court explained that administrative bodies
are free from a strict application of technical rules of procedure and are given sufficient leeway.
In the said case, however, nothing was said that the freedom included the setting aside of a
hearing but merely to allow matters which would ordinarily be incompetent or inadmissible in
the usual judicial proceedings.
In fact, the seminal words of Ang Tibay manifest a desire for administrative bodies to exhaust
all possible means to ensure that the decision rendered be based on the accurate appreciation
of facts. The Court reminded that administrative bodies have the active duty to use the
authorized legal methods of securing evidence and informing itself of facts material and relevant
to the controversy. As such, it would be more in keeping with administrative due process that
the conduct of a hearing be the general rule rather than the exception.
The observance of a formal hearing in administrative tribunal or bodies other than judicial is not
novel. In Perez v. Philippine Telegraph and Telephone Company,33 the Court opined that in
illegal dismissal cases, a formal hearing or conference becomes mandatory when requested by
the employee in writing, or substantial evidentiary disputes exists, or a company rule or practice
requires it, or when similar circumstances justify it.
In Joson v. Executive Secretary Torres (Joson),34 the Court ruled that the respondent was
denied due process after he was deprived of the right to a formal investigation with the
opportunity to face the witnesses against him, to wit:
The rejection of petitioner's right to a formal investigation denied him procedural due process.
Section 5 of A.O. No. 23 provides that at the preliminary conference, the Investigating Authority
shall summon the parties to consider whether they desire a formal investigation. This provision
does not give the Investigating Authority the discretion to determine whether a formal
investigation would be conducted. The records show that petitioner filed a motion for formal
investigation. As respondent, he is accorded several rights under the law, to wit:
xxxx
Petitioner's right to a formal investigation was not satisfied when the complaint against him was
decided on the basis of position papers. There is nothing in the Local Government Code and its
Implementing Rules and Regulations nor in A.O. No. 23 that provide that administrative cases
against elective local officials can be decided on the basis of position papers. A.O. No. 23 states
that the Investigating Authority may require the parties to submit their respective memoranda
but this is only after formal investigation and hearing. A.O. No. 23 does not authorize the
Investigating Authority to dispense with a hearing especially in cases involving allegations of
fact which are not only in contrast but contradictory to each other. These contradictions are best
settled by allowing the examination and cross-examination of witnesses. Position papers are
often-times prepared with the assistance of lawyers and their artful preparation can make the
discovery of truth difficult. The jurisprudence cited by the DILG in its order denying petitioner's
motion for a formal investigation applies to appointive officials and employees. Administrative
disciplinary proceedings against elective government officials are not exactly similar to those
against appointive officials. In fact, the provisions that apply to elective local officials are
separate and distinct from appointive government officers and employees. This can be gleaned
from the Local Government Code itself.35 (emphases and underlining supplied)
Thus, administrative bodies should not simply brush aside the conduct of formal hearings and
claim that due process was observed by merely relying on position papers and/or affidavits.
Besides, the Court in Joson recognized the inherent limitations of relying on position papers
alone as the veracity of its contents cannot be readily ascertained. Through the examination
and cross-examination of witnesses, administrative bodies would be in a better position to ferret
out the truth and in turn, render a more accurate decision.
In any case, the PAGC violated Saunar's right to due process because it failed to observe
fairness in handling the case against him. Its unfairness and unreasonableness is readily
apparent with its disregard of its own rules of procedure.
The procedure to be observed in cases of clarificatory hearings is set forth under the PAGC
rules of procedure. Rule III, Section 3 of its 2002 New Rules of Procedure states:
SECTION 3. Action After Respondent's Response.— If, upon evaluation of the documents
submitted by both parties, it should appear either that the charge or charges have been
satisfactorily traversed by the respondent in his Counter-Affidavit/verified Answer, or that the
Counter-Affidavit/verified Answer does not tender a genuine issue, the Commissioner assigned
shall forthwith, or after a clarificatory hearing to ascertain the authenticity and/or significance of
the relevant documents, submit for adoption by the Commission the appropriate
recommendation to the President.
The Commissioner assigned may, at his sole discretion, set a hearing to propound clarificatory
questions to the parties or their witnesses if he or she believes that there are matters which
need to be inquired into personally by him or her. In said hearing, the parties shall be afforded
the opportunity to be present but without the right to examine or cross-examine. If they so desire,
they may submit written questions to the Commissioner assigned who may propound such
questions to the parties or witnesses concerned. Thereafter, the parties be required, to file with
the Commission, within an inextendible period of five (5) days and serve on the adverse party
his verified Position Paper. (emphasis and underlining supplied)
On the other hand, the 2008 Rules of Procedure amended the said provision to read as follows:
SECTION 7. Clarificatory Hearings and Position Papers. - After the filing of the Answer, the
Commission may, at its discretion, conduct Clarificatory Hearings, in which case, subpoenas
may be issued for the purpose. Should a Clarificatory Hearing be conducted, all parties relevant
to the case shall be notified at least five (5) days before the date thereof. Failure of a party to
appear at the hearing is not necessarily a cause for the dismissal of the complaint. A party who
appears may be allowed to present evidence, even in the absence of the adverse party who
was duly notified of the hearing.
During a Clarificatory Hearing, the Commission or the Hearing Officer, as the case may be, shall
ask clarificatory questions to further elicit facts or information. The parties shall be afforded the
opportunity to be present and shall be allowed the assistance of counsel, but without the right
to examine or cross-examine the party/witness being questioned. The parties may be allowed
to raise clarificatory questions and elicit answers from the opposing party/witness, which shall
be coursed through the Commission or the Hearing Officer, as the case may be, for
determination of whether or not the proposed questions are necessary and relevant. In such
cases, the Commission or the Hearing Officer, as the case may be, shall ask the question in
such manner and phrasing as may be deemed appropriate. (emphasis and underlining supplied)
xxxx
Under the PAGC rules of procedure, it is crystal clear that the conduct of clarificatory hearings
is discretionary. Nevertheless, in the event that it finds the necessity to conduct one, there are
rules to be followed. One, the parties are to be notified of the clarificatory hearings. Two, the
parties shall be afforded the opportunity to be present in the hearings without the right to
examine witnesses. They, however, may ask questions and elicit answers from the opposing
party coursed through the PAGC.
To reiterate, due process is a malleable concept anchored on fairness and equity. The due
process requirement before administrative bodies are not as strict compared to judicial tribunals
in that it suffices that a party is given a reasonable opportunity to be heard. Nevertheless, such
"reasonable opportunity" should not be confined to the mere submission of position papers
and/or affidavits and the parties must be given the opportunity to examine the witnesses against
them. The right to a hearing is a right which may be invoked by the parties to thresh out
substantial factual issues. It becomes even more imperative when the rules itself of the
administrative body provides for one. While the absence of a formal hearing does not
necessarily result in the deprivation of due process, it should be acceptable only when the party
does not invoke the said right or waives the same.
The Court finds that Saunar was not treated fairly in the proceedings before the PAGC. He was
deprived of the opportunity to appear in all clarificatory hearings since he was not notified of the
clarificatory hearing attended by an NBI official. Saunar was thus denied the chance to propound
questions through the PAGC against the opposing parties, when the rules of the PAGC itself
granted Saunar the right to be present during clarificatory hearings and the chance to ask
questions against the opposing party.
Even assuming that Saunar was not deprived of due process, we still find merit in reversing his
dismissal from the government service.
Gross neglect of duty negated
by intent of the government
employee concerned
It is true that the dropping from the rolls as a result of AWOL is not disciplinary in nature and
does not result in the forfeiture of benefits or disqualification from re-employment in the
government.36 Nevertheless, being on AWOL may constitute other administrative offenses,
which may result in the dismissal of the erring employees and a forfeiture of retirement
benefits.37 In the case at bar, Saunar was charged with the administrative offense of gross
neglect of duty in view of his prolonged absence from work.
The OP found Saunar guilty of Gross Neglect of Duty and of violating Section 3(e) of R.A. No.
3019 because he was on AWOL from March 2005 to May 2006. He, however, bewails that from
the time we was directed to report to the DDROS, he was never assigned a particular duty or
responsibility. As such, Saunar argues that he cannot be guilty of gross neglect of duty because
there was no "duty" to speak of. In addition, he assails that he had made himself readily available
because he stayed in establishments near the NBI.
Gross Neglect of Duty, as an administrative offense, has been jurisprudentially defined. It refers
to negligence characterized by the glaring want of care; by acting or omitting to act in a situation
where there is a duty to act, not inadvertently, but willfully and intentionally; or by acting with a
conscious indifference to consequences with respect to other persons who may be affected.38
When Saunar was relieved as regional director of Western Mindanao and was ordered to report
to the DDROS, he was obligated to report to the said office. He, however, was not assigned any
specific task or duty and was merely advised to make himself readily available. Saunar often
stayed in establishments near the NBI because he was also not provided a specific station or
office. The same, nonetheless, does not establish that he willfully and intentionally neglected
his duties especially since every time he was required to attend court hearings through special
orders issued by the NBI, he would do so. Clearly, Saunar never manifested any intention to
neglect or abandon his duties as an NBI official as he remained compliant with the lawful orders
given to him. In addition, when he received the order reassigning him as the regional director
for the NBI Bicol Office, he also obeyed the same. Saunar's continued compliance with the
special orders given to him by his superiors to attend court hearings negate the charge of gross
neglect of duty as it evinces a desire to fulfil the duties and responsibilities specifically assigned
to him.
The Office of the Solicitor General (OSG), however, argues that Saunar's attendance at several
court hearings pursuant to special orders does not exculpate him from the charge of gross
neglect of duty. As highlighted by the OSG, the certificate of appearances Saunar presented
account only for fourteen (14) days.39
Notwithstanding, Saunar's conduct neither constitutes a violation of Section 3(e) of R.A. No.
3019. In order to be liable for violating the said provision, the following elements must concur:
(a) the accused must be a public officer discharging administrative, judicial or official functions;
(b) he must have acted with manifest partiality, evident bad faith or inexcusable negligence; and
(c) that his action caused any undue injury to any party, including the government, or giving any
private party unwarranted benefits, advantage or preference in the discharge of his functions.40
As discussed above, Saunar's action was not tantamount to inexcusable or gross negligence
considering that there was no intention to abandon his duty as an NBI officer.
Illegally dismissed government
employees entitled to full back
wages and retirement benefits
On 11 August 2014, Saunar reached the compulsory age of retirement from government
service.41 In view of Saunar's retirement, reinstatement to his previous position had become
impossible. Thus, the only recourse left is to grant monetary benefits to which illegally dismissed
government employees are entitled.
In Campol v. Balao-as,42 the Court extensively expounded the rationale behind the grant of full
back wages to illegally dismissed employees, to wit:
An employee of the civil service who is invalidly dismissed is entitled to the payment of
backwages. While this right is not disputed, there have been variations in our jurisprudence as
to the proper fixing of the amount of backwages that should be awarded in these cases. We
take this opportunity to clarify the doctrine on this matter.
Ginson and Regis also involved the question of the proper fixing of backwages. Both cases
awarded backwages but limited it to a period of five years. Ginson does not provide for an
exhaustive explanation for this five-year cap. Regis, on the other hand, cites Cristobal v.
Melchor, Balquidra v. CFI of Capiz, Branch II, 32 Laganapan v. Asedillo, Antiporda v. Ticao, and
San Luis v. Court of Appeals, in support of its ruling. We note that these cases also do not
clearly explain why there must be a cap for the award of backwages, with the exception of
Cristobal. In Cristobal, a 1977 case, we held that the award of backwages should be for a fixed
period of five years, applying by analogy the then prevailing doctrine in labor law involving
employees who suffered unfair labor practice. We highlight that this rule has been rendered
obsolete by virtue of Republic Act No. 6175 which amended the Labor Code. Under the Labor
Code, employees illegally dismissed are entitled to the payment of backwages from the time his
or her compensation was withheld up to the time of his or her actual reinstatement.
In 2005, our jurisprudence on backwages for illegally dismissed employees of the civil service
veered away from the ruling in Cristobal.
Thus, in Civil Service Commission v. Gentallan, we categorically declared—
An illegally dismissed government employee who is later ordered reinstated is entitled to
backwages and other monetary benefits from the time of her illegal dismissal up to her
reinstatement. This is only fair and just because an employee who is reinstated after having
been illegally dismissed is considered as not having left her office and should be given the
corresponding compensation at the time of her reinstatement.
We repeated this ruling in the 2005 case Batangas State University v. Bonifacio, in the 2007
case Romagos v. Metro Cebu Water District, and in the 2010 case Civil Service Commission v.
Magnaye, Jr.
Thus, the Decision, in refusing to award backwages from Campol's dismissal until his actual
reinstatement, must be reversed. There is no legal nor jurisprudential basis for this ruling. An
employee of the civil service who is ordered reinstated is also entitled to the full payment of his
or her backwages during the entire period of time that he or she was wrongfully prevented from
performing the duties of his or her position and from enjoying its benefits. This is necessarily so
because, in the eyes of the law, the employee never truly left the office. Fixing the backwages
to five years or to the period of time until the employee found a new employment is not a full
recompense for the damage done by the illegal dismissal of an employee. Worse, it effectively
punishes an employee for being dismissed without his or her fault. In cases like this, the twin
award of reinstatement and payment of full backwages are dictated by the constitutional
mandate to protect civil service employees' right to security of tenure. Anything less than this
falls short of the justice due to government employees unfairly removed from office. This is the
prevailing doctrine and should be applied in Campol's case.
This entitlement to full backwages also means that there is no need to deduct Campol's earnings
from his employment with PAO from the award. The right to receive full backwages means
exactly this — that it corresponds to Campol's salary at the time of his dismissal until his
reinstatement. Any income he may have obtained during the litigation of the case shall not be
deducted from this amount. This is consistent with our ruling that an employee illegally
dismissed has the right to live and to find employment elsewhere during the pendency of the
case. At the same time, an employer who illegally dismisses an employee has the obligation to
pay him or her what he or she should have received had the illegal act not be done. It is an
employer's price or penalty for illegally dismissing an employee.
xxxx
We rule that employees in the civil service should be accorded this same right. It is only by
imposing this rule that we will be able to uphold the constitutional right to security of tenure with
full force and effect. Through this, those who possess the power to dismiss employees in the
civil service will be reminded to be more circumspect in exercising their authority as a breach of
an employee's right to security of tenure will lead to the full application of law and jurisprudence
to ensure that the employee is reinstated and paid complete backwages. (emphasis supplied)
As it stands, Saunar should have been entitled to full back wages from the time he was illegally
dismissed until his reinstatement. In view of his retirement, however, reinstatement is no longer
feasible. As such, the back wages should be computed from the time of his illegal dismissal up
to his compulsory retirement.43 In addition, Saunar is entitled to receive the retirement benefits
he should have received if he were not illegally dismissed.
WHEREFORE, the petition is GRANTED. The 20 October 2008 Decision of the Court of
Appeals in CA-G.R. SP No. 100157 is REVERSED and SET ASIDE. Petitioner Carlos R.
Saunar is entitled to full back wages from the time of his illegal dismissal until his retirement and
to receive his retirement benefits.
SO ORDERED.
Velasco, Jr., (Chairperson), Leonen, and Gesmundo, JJ., concur.
Bersamin, J., on official leave.
G.R. No. 111933 July 23, 1997
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. NATIONAL LABOR
RELATIONS COMMISSION and LETTIE P. CORPUZ, Respondent.
ROMERO, J.:
This petition for certiorari pleads for the revocation of the November 16, 1992, decision of the
National Labor Relations Commission (NLRC), affirming in toto the resolution of Labor Arbiter
Jose G. De Vera dated February 28, 1991, as well as its resolution dated August 20, 1993,
denying petitioner's motion for reconsideration for lack of merit.
Private respondent Lettie Corpuz was employed as traffic operator at the Manila International
Traffic Division (MITD) by the Philippine Long Distance Telephone Company (PLDT) for ten
years and nine months, from September 19, 1978, until her dismissal on June 17, 1989. Her
primary task was to facilitate requests for incoming and outgoing international calls through the
use of a digital switchboard.
Sometime in December 1987, PLDT's rank-and-file employees and telephone operators went
on strike, prompting the supervisors of the MITD to discharge the former's duties to prevent a
total shutdown of its business operations. "While in the course of their emergency assignments,
two supervisors almost simultaneously received two different requests for overseas calls bound
for different Middle East countries and both callers reported the same calling number (98-68-
16)." 1 The tone verifications having yielded negative results, the callers were advised to hang
up their telephones to enable the supervisors to effect an alternative verification system by
calling the same number again. As in the first instance, the number remained unverified.
Investigating the seemingly anomalous incident, the matter was reported to the Quality Control
Inspection Department (QCID) which revealed that the subject number was temporarily
disconnected on June 10, 1987, and permanently on September 24, 1987. It also showed that
439 overseas calls were made through the same number between May and November 1987.
On account of such disclosure, the microfiches containing the completed calls through
telephone number 98-68-16 were ordered to be re-run. It yielded the following results: (1) 235
telephone operators handled the 439 calls placed through the supposedly disconnected
number; (2) respondent handled 56 or 12.8% of the total calls, while the other operators had an
average of only 1.8% calls each; (3) respondent completed one call on May 23, 1987 and
effected 34 calls after the disconnection, 24 of which were completed through tone verification
while the other 10 calls were done without the requisite tone verification or call-back procedure,
and 21 other calls were cancelled; (4) of the 21 cancelled calls handled by respondent, one
bared a BU report (party unavailable) but fetched a long OCD (operator call duration) of 13
minutes and 21 seconds while another call registered a BB report (called party, busy) but with
an OCD of 22 minutes and 34 seconds, both considered unusually protracted by respondent for
holding a connection; and (5) respondent made several personal calls to telephone numbers
96-50-72, 99-92-82 and 97-25-68, the latter being her home phone number.
Premised on the above findings, on July 26, 1988, MITD Manager Erlinda Kabigting directed
respondent to explain her alleged infraction, that is, facilitating 34 calls using the disconnected
number.
Instead of tendering the required explanation, respondent requested a formal investigation to
allow her to confront the witnesses and rebut the proofs that may be brought against her. On
grounds of serious misconduct and breach of trust, the Legal Department recommended her
dismissal. In a letter dated June 16, 1989, respondent was terminated from employment
effective the following day.
In a complaint for illegal dismissal filed by respondent against petitioner, Labor Arbiter Jose G.
De Vera rendered a decision, the dispositive portion of which reads thus:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
ordering the respondent company to reinstated the complaint to her former position with all the
rights, benefits and privileges thereto appertaining including seniority plus backwages which as
of February 28, 1991 already amounted to P103,381.50 (P5,043.00 mo. x. 20.5 mos.). Further,
the respondent company is ordered to pay complainant attorney's fees equivalent to ten percent
(10%) of such backwages that the latter may recover in this suit.
SO ORDERED. 2
On appeal, said decision was affirmed by the NLRC on November 16, 1992. Its motion for
reconsideration having been denied on August 20, 1993, petitioner filed the instant petition for
certiorari.
The instant petition must be dismissed. Petitioner failed to adduce any substantial argument
that would warrant a reversal of the questioned decision.
Time and again, this Court has reminded employers that while the power to dismiss is a normal
prerogative of the employer, the same is not without limitations. 3 The right of an employer to
freely discharge his employees is subject to regulation by the State, basically through the
exercise of its police power. This is so because the preservation of the lives citizens is a basic
duty of the State, an obligation more vital than the preservation of corporate profits. 4
Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of the
439 calls coming from telephone number 98-68-16 and received numerous requests for
overseas calls virtually from the same calling number, which could not have been a mere
coincidence but most likely was a pre-arranged undertaking in connivance with certain
subscribers.
The records show, however, that the subject phone calls were neither unusual nor coincidental
as other operators shared similar experiences. A certain Eric Maramba declared that it is not
impossible for an operator to receive continuous calls from the same telephone number. He
testified that at one time, he was a witness to several calls consistently effected from 9:30 p.m.
to 5:30 a.m. The calls having passed the verification tone system, the incident was undoubtedly
alarming enough but there was no way that he or his co-operators could explain the same.
This Court agrees with the labor arbiter when he stated that the more frequent handling by the
respondent of overseas calls from the same calling number than other operators does not give
rise to the conclusion that, indeed, respondent was a party to such anomalous transaction.
As regards petitioner's claim that no call can be filed through a disconnected line, a certain Ms.
Bautista averred getting the same subject number after going through the standard verification
procedures. She added that this complexity extends even to other disconnected telephone lines.
Equally important is the fact that on February 7, 1989, or about two years after it was
permanently disconnected, "telephone number 98-68-16 was used in calling an international
number, 561-6800, that lasted for 46 minutes." 5 Telephone operator number 448 seems to
have been spared from any administrative sanction considering that this lapse has aggravated
the persistent problem concerning telephone number 98-68-16.
Thus, Labor Arbiter de Vera correctly ruled:
It need not be emphasized here that there were lapses in certain operational aspects of the
respondent company which made the irregularity possible, for indeed there exists a mystery
about the serviceability of the subject telephone line. That there were personnel of the
respondent company involved who could have restored what was earlier disconnected
permanently appears certain. Nonetheless, exacting the ultimate blame upon the respondent
(complainant) in the absence of concrete inculpatory proofs of her complexity (sic) to an
anomaly if there be one, cannot be justified. 6
This Court will not sanction a dismissal premised on mere conjectures and suspicions. To be a
valid ground for respondent's dismissal, the evidence must be substantial and not arbitrary and
must be founded on clearly established facts sufficient to warrant his separation from work. 7
It should be borne in mind that in termination cases, the employer bears the burden of proving
that the dismissal is for just cause failing which would mean that the dismissal is not justified
and the employee is entitled to reinstatement. 8 The essence of due process in administrative
proceedings is the opportunity to explain one's side or a chance to seek reconsideration of the
action or ruling complained of. 9 The twin requirements of notice and hearing constitute the
essential elements of due process. This simply means that the employer shall afford the worker
ample opportunity to be heard and to defend himself with the assistance of his representative,
if he so desires. Ample opportunity connotes every kind of assistance that management must
accord the employee to enable him to prepare adequately for his defense including legal
representation. 10 In the instant case, the petitioner failed to convincingly establish valid bases
on the alleged serious misconduct and loss of trust and confidence.
In carrying out and interpreting the Labor Code's provisions and its implementing regulations,
the workingman's welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to tile liberal and compassionate spirit of the law as
provided for in Article 4 of the Labor Code, as amended, which states that ''all doubts in the
implementation and interpretation of the provisions of the Labor Code including its implementing
rules and regulations shall be resolved in favor of labor, 11 as well as the Constitutional mandate
that the State shall afford full protection to labor and promote full employment opportunities for
all. Likewise, it shall guarantee the rights of all workers to security of tenure. Such constitutional
right should not be denied on mere speculation of any unclear and nebulous basis. 12
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision
dated November 16, 1992 is AFFIRMED. Costs against petitioner Philippine Long Distance
Telephone Co.
SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur.
Torres, Jr., J., is on leave.
G.R. No. 169391 October 10, 2012
GO, and Minor EMERSON CHESTER KIM B. GO, Petitioners,
vs.
COLEGIO DE SAN JUAN DE LETRAN, REV. FR. EDWIN LAO, REV. FR. JOSE RHOMMEL
HERNANDEZ, ALBERT ROSARDA and MA. TERESA SURATOS, Respondents.
DECISION
BRION, J.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated May 27,
2005 and the resolution3 dated August 18, 2005 of the Court of Appeals (CA) in CA-G.R. CV
No. 80349. The CA decision reversed and set aside the decision4 of the Regional Trial Court
(RTC') of Caloocan City, Branch 131, awarding civil damages to the petitioners. The CA
resolution denied the petitioners' subsequent motion for reconsideration.
The petitioners claim that respondents Colegio de San Juan de Letran (Letran), Rev. Fr. Edwin
Lao, Rev. Fr. Jose Rhommel Hernandez, Mr. Albert Rosarda and Ma. Teresa Suratos should
be held liable for moral, exemplary, and actual damages for unlawfully dismissing petitioner
Emerson Chester Kim B. Go (Kim) from the rolls of the high school department of Letran. The
respondents claim that they lawfully suspended Kim for violating the school’s rule against
fraternity membership.
Factual Background
In October 2001, Mr. George Isleta, the Head of Letran’s Auxiliary Services Department,
received information that certain fraternities were recruiting new members among Letran’s high
school students. He also received a list of the students allegedly involved. School authorities
started an investigation, including the conduct of medical examinations on the students whose
names were on the list. On November 20, 2002, Dr. Emmanuel Asuncion, the school physician,
reported that six (6) students bore injuries, probable signs of blunt trauma of more than two
weeks, on the posterior portions of their thighs.5 Mr. Rosarda, the Assistant Prefect for
Discipline, conferred with the students and asked for their explanations in writing.
Four (4) students, namely: Raphael Jay Fulgencio, Nicolai Lacson, Carlos Parilla, and Isaac
Gumba, admitted that they were neophytes of the Tau Gamma Fraternity and were present in
a hazing rite held on October 3, 2001 in the house of one Dulce in Tondo, Manila. They also
identified the senior members of the fraternity present at their hazing. These included Kim, then
a fourth year high school student.
In the meantime, Gerardo Manipon, Letran’s security officer, prepared an incident report6 that
the Tau Gamma Fraternity had violated its covenant with Letran by recruiting members from its
high school department. Manipol had spoken to one of the fraternity neophytes and obtained a
list of eighteen (18) members of the fraternity currently enrolled at the high school department.
Kim’s name was also in the list.
At the Parents-Teachers Conference held on November 23, 2001, Mr. Rosarda informed Kim’s
mother, petitioner Mrs. Angelita Go (Mrs. Go), that students had positively identified Kim as a
fraternity member. Mrs. Go expressed disbelief as her son was supposedly under his parents’
constant supervision.
Mr. Rosarda thereafter spoke to Kim and asked him to explain his side. Kim responded through
a written statement dated December 19, 2001; he denied that he was a fraternity member. He
stated that at that time, he was at Dulce’s house to pick up a gift, and did not attend the hazing
of Rafael, Nicolai, Carlos, and Isaac.
On the same day, Mr. Rosarda requested Kim’s parents (by notice) to attend a conference on
January 8, 2002 to address the issue of Kim’s fraternity membership.7 Both Mrs. Go and
petitioner Mr. Eugene Go (Mr. Go) did not attend the conference.
In time, the respondents found that twenty-nine (29) of their students, including Kim, were
fraternity members. The respondents found substantial basis in the neophytes’ statements that
Kim was a senior fraternity member. Based on their disciplinary rules, the Father Prefect for
Discipline (respondent Rev. Fr. Jose Rhommel Hernandez) recommended the fraternity
members’ dismissal from the high school department rolls; incidentally, this sanction was stated
in a January 10, 2002 letter to Mr. and Mrs. Go.8 After a meeting with the Rector’s Council,9
however, respondent Fr. Edwin Lao, Father Rector and President of Letran, rejected the
recommendation to allow the fourth year students to graduate from Letran. Students who were
not in their fourth year were allowed to finish the current school year but were barred from
subsequent enrollment in Letran.
Mr. Rosarda conveyed to Mrs. Go and Kim, in their conference on January 15, 2002, the
decision to suspend Kim from January 16, 2002 to February 18, 2002.10 Incidentally, Mr. Go
did not attend this conference.11
On even date, Mrs. Go submitted a request for the deferment of Kim’s suspension to January
21, 200212 so that he could take a previously scheduled examination.13 The request was
granted.14
On January 22, 2002, the respondents conferred with the parents of the sanctioned fourth year
students to discuss the extension classes the students would take (as arranged by the
respondents) as make-up for classes missed during their suspension. These extension classes
would enable the students to meet all academic requirements for graduation from high school
by the summer of 2002. The respondents also proposed that the students and their parents sign
a pro-forma agreement to signify their conformity with their suspension. Mr. and Mrs. Go refused
to sign.15 They also refused to accept the respondents’ finding that Kim was a fraternity
member. They likewise insisted that due process had not been observed.
On January 28, 2002, the petitioners filed a complaint16 for damages before the RTC of
Caloocan City claiming that the respondents17 had unlawfully dismissed Kim.18 Mr. and Mrs.
Go also sought compensation for the "business opportunity losses" they suffered while
personally attending to Kim’s disciplinary case.
The Ruling of the RTC
Mrs. Go19 and Mr. Go20 testified for the petitioners at the trial. Mr. Rosarda,21 Fr.
Hernandez,22 and Fr. Lao23 testified for the respondents.

The RTC24 held that the respondents had failed to observe "the basic requirement of due
process" and that their evidence was "utterly insufficient" to prove that Kim was a fraternity
member.25 It also declared that Letran had no authority to dismiss students for their fraternity
membership. Accordingly, it awarded the petitioners moral and exemplary damages. The trial
court also held that Mr. Go was entitled to actual damages after finding that he had neglected
his manufacturing business when he personally attended to his son’s disciplinary case. The
dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, the Court renders judgment in favor of plaintiffs-
spouses Eugene C. Go and Angelita B. Go, together with their minor son Emerson Chester Kim
B. Go, as against defendants Colegio De San Juan De Letran, Fr. Edwin Lao, Fr. Jose Rhommel
Hernandez, Albert Rosarda and Ma. Teresa Suratos, and they are hereby ordered the following:
1. To pay plaintiff Eugene C. Go the amount of ₱ 2,854,000.00 as actual damages;
2. To pay each plaintiff, Eugene C. Go and Angelita B. Go, the amount of ₱ 2,000,000.00 for
each defendant, or a total amount of ₱ 20,000,000.00 as moral damages; and ₱ 1,000,000.00
for each defendant, or a total amount of ₱ 10,000,000.00 as exemplary damages, or a grand
total of ₱ 30,000,000.00, to be paid solidarily by all liable defendants, plus prevailing legal
interest thereon from the date of filing until the same is fully paid;
3. To pay plaintiffs 20% of the total amount awarded, as attorney’s fees, to be paid solidarily by
all liable defendants; and
4. The cost of suit.26
The Ruling of the CA
On appeal, the CA reversed and set aside the RTC decision. It held, among others, that the
petitioners were not denied due process as the petitioners had been given ample opportunity to
be heard in Kim’s disciplinary case. The CA also found that there was no bad faith, malice,
fraud, nor any improper and willful motive or conduct on the part of the respondents to justify
the award of damages. Accordingly, it dismissed the petitioners’ complaint in Civil Case No. C-
19938 for lack of merit.
The petitioners moved for the reconsideration of the decision, but the CA denied the motion for
lack of merit;27 hence, the present petition for review on certiorari.
The Issue
Based on the petition’s assigned errors,28 the issue for our resolution is whether the CA had
erred in setting aside the decision of the RTC in Civil Case No. C-19938.
The Court’s Ruling
We deny the petition and affirm the CA decision.
Preliminarily, we note that the disciplinary sanction the respondents imposed on Kim was
actually a suspension and not a "dismissal" as the petitioners insist in their complaint. We agree
with the CA that the petitioners were well aware of this fact, as Mrs. Go’s letter specifically
requested that Kim’s suspension be deferred. That this request was granted and that Kim was
allowed to take the examination further support the conclusion that Kim had not been dismissed.
Further, the RTC’s statement that Letran, a private school, possesses no authority to impose a
dismissal, or any disciplinary action for that matter, on students who violate its policy against
fraternity membership must be corrected. The RTC reasoned out that Order No. 20, series of
1991, of the then Department of Education, Culture, and Sports (DECS Order No. 20, s.
1991),29 which the respondents cite as legal basis for Letran’s policy, only covered public high
schools and not private high schools such as Letran.
We disagree with the RTC’s reasoning because it is a restrictive interpretation of DECS Order
No. 20, s. 1991. True, the fourth paragraph of the order states:
4. EFFECTIVE UPON RECEIPT OF THIS ORDER, FRATERNITIES AND SORORITIES ARE
PROHIBITED IN PUBLIC ELEMENTARY AND SECONDARY SCHOOLS. PENALTY FOR
NON-COMPLIANCE IS EXPULSION OF PUPILS/STUDENTS.
This paragraph seems to limit the scope of the order’s prohibition to public elementary and
secondary schools. However, in ascertaining the meaning of DECS Order No. 20, s. 1991, the
entire order must be taken as a whole.30 It should be read, not in isolated parts, but with
reference to every other part and every word and phrase in connection with its context.31
Even a cursory perusal of the rest of DECS Order No. 20, s. 1991 reveals the education
department’s clear intent to apply the prohibition against fraternity membership for all
elementary and high school students, regardless of their school of enrollment.
The order’s title, "Prohibition of Fraternities and Sororities in Elementary and Secondary
Schools," serves to clarify whatever ambiguity may arise from its fourth paragraph.32 It is a
straightforward title. It directs the prohibition to elementary and secondary schools in general,
and does not distinguish between private and public schools. We also look at the order’s second
paragraph, whereby the department faults an earlier regulation, Department Order No. 6, series
of 1954, for failing to ban fraternities and sororities in public and private secondary schools. With
the second paragraph, it is clear that the education department sought to remedy the earlier
order’s failing by way of DECS Order No. 20, s. 1991.
Finally, we note that the order is addressed to the heads of private schools, colleges, and
universities, and not just to the public school authorities.

For this Court to sustain the RTC’s restrictive interpretation and accordingly limit the prohibition
in DECS Order No. 20, s. 1991 to students enrolled in public schools would be to impede the
very purpose of the order.33 In United Harbor Pilots’ Association of the Philippines, Inc. v.
Association of International Shipping Lines, Inc., where the Court construed an executive
order,34 we also stated that statutes are to be given such construction as would advance the
object, suppress the mischief, and secure the benefits the statute intended. There is no reason
why this principle cannot apply to the construction of DECS Order No. 20, s. 1991.
Incidentally, the penalty for non-compliance with DECS Order No. 20, s. 1991, is expulsion, a
severe form of disciplinary penalty consisting of excluding a student from admission to any
public or private school in the country. It requires the approval of the education secretary before
it can be imposed.35 In contrast, the penalty prescribed by the rules of Letran for fraternity
membership among their high school students is dismissal, which is limited to the exclusion of
an erring student from the rolls of the school.
Even assuming arguendo that the education department had not issued such prohibition, private
schools still have the authority to promulgate and enforce a similar prohibition pursuant to their
right to establish disciplinary rules and regulations.36 This right has been recognized in the
Manual of Regulations for Private Schools, which has the character of law.37 Section 78 of the
1992 Manual of Regulations of Regulations for Private Schools, in particular and with relevance
to this case, provides:
Section 78. Authority to Promulgate Disciplinary Rules. Every private school shall have the right
to promulgate reasonable norms, rules and regulations it may deem necessary and consistent
with the provisions of this Manual for the maintenance of good school discipline and class
attendance. Such rules and regulations shall be effective as of promulgation and notification to
students in an appropriate school issuance or publication.
The right to establish disciplinary rules is consistent with the mandate in the Constitution38 for
schools to teach discipline;39 in fact, schools have the duty to develop discipline in students.40
Corollarily, the Court has always recognized the right of schools to impose disciplinary sanctions
on students who violate disciplinary rules.41 The penalty for violations includes dismissal or
exclusion from re-enrollment.
We find Letran’s rule prohibiting its high school students from joining fraternities to be a
reasonable regulation, not only because of the reasons stated in DECS Order No. 20, s. 1991,42
but also because of the adult-oriented activities often associated with fraternities. Expectedly,
most, if not all, of its high school students are minors. Besides, Letran’s penalty for violation of
the rule is clearly stated in its enrollment contracts and in the Students Handbooks43 it
distributes at the start of every school year.44
In this case, the petitioners were notified of both rule and penalty through Kim’s enrollment
contract for school year 2001 to 2002.45 Notably, the penalty provided for fraternity membership
is "summary dismissal." We also note that Mrs. Go signified her conformé to these terms with
her signature in the contract.46 No reason, therefore, exist to justify the trial court’s position that
respondent Letran cannot lawfully dismiss violating students, such as Kim.
On the issue of due process, the petitioners insist that the question be resolved under the
guidelines for administrative due process in Ang Tibay v. Court of Industrial Relations.47 They
argue that the respondents violated due process (a) by not conducting a formal inquiry into the
charge against Kim; (b) by not giving them any written notice of the charge; and (c) by not
providing them with the opportunity to cross-examine the neophytes who had positively
identified Kim as a senior member of their fraternity. The petitioners also fault the respondents
for not showing them the neophytes’ written statements, which they claim to be unverified,
unsworn, and hearsay.
These arguments deserve scant attention.
In Ateneo de Manila University v. Capulong,48 the Court held that Guzman v. National
University,49 not Ang Tibay, is the authority on the procedural rights of students in disciplinary
cases. In Guzman, we laid down the minimum standards in the imposition of disciplinary
sanctions in academic institutions, as follows:
It bears stressing that due process in disciplinary cases involving students does not entail
proceedings and hearings similar to those prescribed for actions and proceedings in courts of
justice. The proceedings in student discipline cases may be summary; and crossexamination is
not, contrary to petitioners’ view, an essential part thereof. There are withal minimum standards
which must be met to satisfy the demands of procedural due process; and these are, that (1)
the students must be informed in writing of the nature and cause of any accusation against
them; (2) they shall have the right to answer the charges against them, with the assistance of
counsel, if desired; (3) they shall be informed of the evidence against them; (4) they shall have
the right to adduce evidence in their own behalf; and (5) the evidence must be duly considered
by the investigating committee or official designated by the school authorities to hear and decide
the case.50
These standards render the petitioners’ arguments totally without merit.
In De La Salle University, Inc. v. Court of Appeals,51 where we affirmed the petitioning
university’s right to exclude students from the rolls of their respective schools52 for their
involvement in a fraternity mauling incident, we rejected the argument that there is a denial of
due process when students are not allowed to cross-examine the witnesses against them in
school disciplinary proceedings. We reject the same argument in this case.
We are likewise not moved by the petitioners’ argument that they were not given the opportunity
to examine the neophytes’ written statements and the security officer’s incident report.53 These
documents are admissible in school disciplinary proceedings, and may amount to substantial
evidence to support a decision in these proceedings. In Ateneo de Manila University v.
Capulong,54 where the private respondents were students dismissed from their law school after
participating in hazing activities, we held:
Respondent students may not use the argument that since they were not accorded the
opportunity to see and examine the written statements which became the basis of petitioners’
February 14, 1991 order, they were denied procedural due process. Granting that they were
denied such opportunity, the same may not be said to detract from the observance of due
process, for disciplinary cases involving students need not necessarily include the right to cross
examination. [Emphasis ours.]55
Since disciplinary proceedings may be summary, the insistence that a "formal inquiry" on the
accusation against Kim should have been conducted lacks legal basis. It has no factual basis
as well. While the petitioners state that Mr. and Mrs. Go were "never given an opportunity to
assist Kim,"56 the records show that the respondents gave them two (2) notices, dated
December 19, 2001 and January 8, 2002, for conferences on January 8, 2002 and January 15,
2002.57 The notices clearly state: "Dear Mr./Mrs. Go, We would like to seek your help in
correcting Kim’s problem on: Discipline & Conduct Offense: Membership in Fraternity."58 Thus,
the respondents had given them ample opportunity to assist their son in his disciplinary case.
The records also show that, without any explanation, both parents failed to attend the January
8, 2002 conference while Mr. Go did not bother to go to the January 15, 2002 conference.
"Where a party was afforded an opportunity to participate in the proceedings but failed to do so,
he cannot [thereafter] complain of deprivation of due process."59
Through the notices, the respondents duly informed the petitioners in writing that Kim had a
disciplinary charge for fraternity membership. At the earlier November 23, 2001 Parents-
Teachers Conference, Mr. Rosarda also informed Mrs. Go that the charge stemmed from the
fraternity neophytes’ positive identification of Kim as a member; thus the petitioners fully knew
of the nature of the evidence that stood against Kim.
The petitioners nevertheless argue that the respondents defectively observed the written notice
rule because they had requested, and received, Kim’s written explanation at a time when the
respondents had not yet issued the written notice of the accusation against him. The records
indicate that while Kim’s denial and the first notice were both dated December 19, 2001, Kim
had not yet received the notice at the time he made the requested written explanation.
We see no merit in this argument as the petitioners apparently hew to an erroneous view of
administrative due process. Jurisprudence has clarified that administrative due process cannot
be fully equated with due process in the strict judicial sense.60 The very nature of due process
negates any concept of inflexible procedures universally applicable to every imaginable
situation.61 Thus, we are hard pressed to believe that Kim’s denial of his fraternity membership
before formal notice was given worked against his interest in the disciplinary case. What matters
for due process purpose is notice of what is to be explained, not the form in which the notice is
given.
The raison d’etre of the written notice rule is to inform the student of the disciplinary charge
against him and to enable him to suitably prepare a defense. The records show that as early as
November 23, 2001, it was already made plain to the petitioners that the subject matter of the
case against Kim was his alleged fraternity membership. Thus, by the time Mr. Rosarda spoke
to Kim and asked for his written explanation in December 2001, Kim has had enough time to
prepare his response to this plain charge. We also note that the information in the notice the
respondents subsequently sent is no different from the information that they had earlier
conveyed, albeit orally, to the petitioners: the simple unadorned statement that Kim stood
accused of fraternity membership. Given these circumstances, we are not convinced that Kim’s
right to explain his side as exercised in his written denial had been violated or diminished. The
essence of due process, it bears repeating, is simply the opportunity to be heard.62
And Kim had been heard. His written explanation was received, indeed even solicited, by the
respondents.1âwphi1 Thus, he cannot claim that he was denied the right to adduce evidence
in his behalf. In fact, the petitioners were given further opportunity to produce additional
evidence with the January 8, 2002 conference that they did not attend. We are also satisfied
that the respondents had considered all the pieces of evidence and found these to be
substantial. We note especially that the petitioners never imputed any motive on Kim’s co-
students that would justify the claim that they uttered falsehood against him.
In Licup v. San Carlos University,63 the Court held that when a student commits a serious
breach of discipline or fails to maintain the required academic standard, he forfeits his
contractual right, and the court should not review the discretion of university authorities.64 In
San Sebastian College v. Court of Appeals, et al.,65 we held that only when there is marked
arbitrariness should the court interfere with the academic judgment of the school faculty and the
proper authorities.66 In this case, we find that the respondents observed due process in Kim’s
disciplinary case, consistent with our pronouncements in Guzman. No reason exists why the
above principles in these cited cases cannot apply to this case. The respondents’ decision that
Kim had violated a disciplinary rule and should be sanctioned must be respected.
As a final point, the CA correctly held that there were no further bases to hold the respondents
liable for moral or exemplary damages. Our study of the records confirms that the respondents
did not act with bad faith, malice, fraud, or improper or willful motive or conduct in disciplining
Kim. Moreover, we find no basis for the award of actual damages. The petitioners claim, and
the RTC agreed,67 that the respondents are liable for the business opportunity losses the
petitioners incurred after their clients had cancelled their purchases in their plastic-
manufacturing business. To prove the claim, Mr. Go testified that he neglected his business
affairs because he had his attention on Kim's unlawful dismissal, and that his clients had
subsequently cancelled their purchase orders when he could not confirm them.68 His testimony
on the reason for the clients' cancellation, however, is obviously hearsay and remains
speculative. The respondents' liability for actual damages cannot be based on speculation.
For these reasons, we find no reversible error Ill the assailed ('A decision, and accordingly,
DENY the present petition.
WHEREFORE, premises considered, we hereby AFFIRM the decision dated May 271 2005 of
the Court of Appeals in CA-G.R. CV No. 80349.
Costs against the petitioners.
SO ORDERED.
G.R. No. 140079 March 31, 2005
AUGUSTO R. SAMALIO, Petitioner,
vs.
COURT OF APPEALS, CIVIL SERVICE COMMISSION, DEPARTMENT OF JUSTICE and
BUREAU OF IMMIGRATION, respondents.
DECISION
CORONA, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the
May 24, 1999 decision,1 as well as the September 1, 1999 resolution, of the Court of Appeals
(CA) in CA-G.R. SP No. 48723 which in turn affirmed the November 26, 1997 resolution of the
Civil Service Commission (CSC). The aforementioned CSC resolution upheld the August 30,
1996 1st Indorsement of then Justice Secretary Teofisto T. Guingona confirming the penalty of
dismissal from service imposed by the Bureau of Immigration upon petitioner on the ground of
dishonesty, oppression, misconduct and conduct grossly prejudicial to the best interest of the
service in connection with his act of extorting money from Ms. Weng Sai Qin, a foreign national.
The facts, as found by the CA and adopted by petitioner himself, are as follows:
Petitioner Augusto R. Samalio was formerly an Intelligence Officer of the Bureau of Immigration
and Deportation.
In Resolution No. 0-93-0224 dated February 4, 1993, the City Prosecutor’s office of Pasay City
recommended that petitioner Samalio be prosecuted for the crimes of Robbery and Violation of
Section 46 of the Immigration Law before the Sandiganbayan under the following facts:
"x x x that on 2 February 1993, Ms. Weng Sai Qin arrived at the NAIA from Saipan. While waiting
for her turn at the arrival immigration counter, her passport was examined by Immigration Officer
Juliet Pajarillaga. Noting that Ms. Weng, a Chinese, was holding a Uruguayan passport, Ms.
Pajarillaga suspected that the former’s passport was fake. Ms. Weng was taken out of the queue
and brought to Respondent who was the duty intelligence officer. Ms. Weng, who could only
speak in Chinese, asked respondent by sign language that she wanted to meet a friend who
was waiting at the NAIA arrival area. Respondent approved the request and accompanied Ms.
Weng to the arrival area. Thereafter, Respondent, with Ms. Weng and her male friend in tow,
returned to the immigration area. While inside the office of Respondent, Ms. Weng asked that
her passport be returned. Sensing a demand for money in exchange for her passport, Ms. Weng
flashed $500.00 in front of Respondent. The money was grabbed by Respondent. Shortly, her
passport was returned ans [sic] she was allowed to leave. When Ms. Weng checked her
passport later, she discovered that it did not bear an immigration arrival stamp. Thereafter, Ms.
Weng complained against Respondent."
In a later Indorsement communication dated February 9, 1993 to the Bureau of Immigration and
Deportation (BID), former NAIA General Manager Gen. Guillermo G. Cunanan enclosed a copy
of the aforesaid City Prosecutor’s Resolution. Reacting, then BID Commissioner, Zafiro L.
Respicio, issued Personnel Order No. 93-179-93 commencing an administrative case against
petitioner Augusto R. Samalio for Violation of CSMC No. 46, Rule 2, Section 1, for dishonesty,
oppression, misconduct, disgraceful and immoral conduct, inefficiency and incompetence in the
performance of official duties, violation of reasonable office rules and regulations and conduct
prejudicial to the best interest of the service, requiring petitioner to submit his answer to the
charges together with supporting statements and documents, and whether or not he elects a
formal investigation if his answer is not considered satisfactory. In the same Personnel Order,
Samalio was preventively suspended for a period of ninety (90) days as the charge sheet
against him involves dishonesty, oppression and misconduct. Forthwith, petitioner attempted
the lifting of his preventive suspension. It was struck down.
Later on, petitioner submitted an answer denying the charges and expressly electing a formal
investigation if such answer be not found to be satisfactory. Attached thereto are the affidavits
of his witnesses Rodrigo C. Pedrealba, Dante Aquino, Florencio B. Austria and Winston C.
Vitan. The answer was found to be unsatisfactory so the case was set for formal hearing before
the Board of Discipline of BID.
The case suffered several postponed hearings due to the requests and non-availability of the
parties but mostly due to the absence of complainant’s witnesses until on September 7, 1993,
respondent was allowed to file a motion to dismiss with the Special Prosecutor designated given
time to comment thereon. When the dismissal motion was filed, assigned Special Prosecutor
Edmund F. Macaraig interposed no objection thereto. Notwithstanding, the case was not
dismissed and instead, the Special Prosecutor was given five (5) days to inform the Board
whether or not he intends to present additional witnesses.
On December 16, 1993, the DID Commissioner issued Personnel Order No. 93-428
reorganizing the Board of Discipline and this case was assigned to a new Board presided by
Atty. Kalaw. Subpoenas were again sent and hearings were scheduled several times before the
new Board until on February 6, 1995, Special Prosecutor assigned, Edmund F. Macaraig,
moved that Samalio’s Motion to Dismiss be denied and that the case be considered submitted
for resolution based on the records. On February 16, 1995, the hearing officer denied Samalio’s
Motion to Dismiss but granted his Comment/Manifestation explaining his absence during the
February 6, 1995 hearing and requesting that the case be set anew on February 22, 1995.
Finally, on July 25, 1996, BID Acting Commissioner Ramon J. Liwag, issued the decision finding
Augusto R. Samalio guilty of the charges and was ordered dismissed from service.
In the 1st Indorsement dated August 30, 1996, former Justice Secretary Teofisto T. Guingona,
Jr. confirmed the penalty of dismissal from service of Augusto R. Samalio. Soon after, the Motion
for Reconsideration was denied in a Resolution dated June 2, 1997.
Guingona’s decision was appealed to the Civil Service Commission which issued Resolution
No. 974501 dated November 26, 1997 dismissing the appeal for lack of merit and affirming the
decisions of Acting Commissioner Liwag and Secretary Guingona. Similarly, the attempt for a
reconsideration was likewise dismissed in Civil Service Resolution No. 981925.
In the meantime, on June 13, 1994, during the pendency of the instant administrative case,
Augusto R. Samalio was convicted (in Sandiganbayan Criminal Case No. 18679) of the crime
of Robbery, as defined in Articles 293 and 294, paragraph 5 of the Revised Penal Code and
was sentenced to suffer indeterminate penalty of Four (4) Months and One (1) Day of Arresto
Mayor to Four (4) Years, Two (2) Months and Eleven (11) Days of Prision Correccional and to
indemnify complainant Weng Sai Qin the amount of US $500.00 and to pay the costs. Samalio
did not appeal the conviction and instead applied for and was granted probation by the
Sandiganbayan for two (2) years in an Order dated December 12, 1994.2 (Citations omitted)
Petitioner assailed before the CA, in a petition for review, the correctness and validity of CSC
Resolution Nos. 974501 and 981925. The CA, however, dismissed the petition for review and
subsequently denied the motion for reconsideration.
Petitioner now comes before us to challenge the CA decision dismissing his petition for review
as well as the resolution denying his motion for reconsideration. Petitioner claims he was not
accorded due process and the CA failed to consider the proper effects of his discharge under
probation.
In support of his contention that he was deprived of due process, petitioner alleges that no
witness or evidence was presented against him, that the CA erred in the interpretation of Section
47, Rule 130 of the Rules of Court and that there was no hearing conducted on his case.
Petitioner’s contention is without merit.
The CSC decision and resolution which upheld the resolution of the Secretary of Justice
confirming the decision of the Commissioner of the BID are supported by substantial evidence.
The CSC, as well as the Secretary of Justice and the Commissioner of the BID, decided the
case on the basis of the pleadings and papers submitted by the parties, and relied on the records
of the proceedings taken. In particular, the decision was based on the criminal complaint filed
by Weng Sai Qin against petitioner before the City Prosecutor’s Office of Pasay City, as well as
Resolution No. 0-93-0224 dated February 4, 1993 of the same office recommending the
prosecution of petitioner at the Sandiganbayan for the crimes of robbery and violation of Section
46 of the Immigration Law.
The CSC, as well as the Secretary of Justice, also took cognizance of the testimony of Weng
Sai Qin in Sandiganbayan Criminal Case No. 18679 and the fact of petitioner’s conviction in
that case. Thus, there was ample evidence which satisfied the burden of proof required in
administrative proceedings – substantial evidence or that quantum of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion3 ― to support the decision
of the CSC.
The CSC and the Secretary of Justice did not err in applying Section 47, Rule 130 of the Revised
Rules of Court, otherwise known as the "rule on former testimony," in deciding petitioner’s
administrative case. The provisions of the Rules of Court may be applied suppletorily to the
rules of procedure of administrative bodies exercising quasi-judicial powers, unless otherwise
provided by law or the rules of procedure of the administrative agency concerned. The Rules of
Court, which are meant to secure to every litigant the adjective phase of due process of law,
may be applied to proceedings before an administrative body with quasi-judicial powers in the
absence of different and valid statutory or administrative provisions prescribing the ground rules
for the investigation, hearing and adjudication of cases before it.4
For Section 47, Rule 130 to apply, the following requisites must be satisfied: (a) the witness is
dead or unable to testify; (b) his testimony or deposition was given in a former case or
proceeding, judicial or administrative, between the same parties or those representing the same
interests; (c) the former case involved the same subject as that in the present case, although
on different causes of action; (d) the issue testified to by the witness in the former trial is the
same issue involved in the present case and (e) the adverse party had an opportunity to cross-
examine the witness in the former case.5
In this case, Weng Sai Qin was unable to testify in the administrative proceedings before the
BID because she left the country on February 6, 1993,6 or even before the administrative
complaint against petitioner was instituted. Petitioner does not deny that the testimony of Weng
Sai Qin was given in Sandiganbayan Criminal Case No. 18679, a case which sprang from the
information filed pursuant to Resolution No. 0-93-0224 dated February 4, 1993 of the City
Prosecutor’s Office of Pasay City, the very same resolution used by Commissioner Respicio as
basis for filing the administrative complaint. Hence, the issue testified to by Weng Sai Qin in
Sandiganbayan Criminal Case No. 18679 was the same issue in the administrative case, that
is, whether petitioner extorted money from Weng Sai Qin. Petitioner also had the opportunity to
face and cross-examine his accuser Weng Sai Qin, and to defend and vindicate his cause
before the Sandiganbayan. Clearly, all the requisites for the proper application of the rule on
former testimony, as embodied in Section 47, Rule 130, were satisfied. Thus, the CSC and the
Secretary of Justice committed no error when they applied it and took cognizance of the former
testimony of Weng Sai Qin in Sandiganbayan Criminal Case No. 18679 where petitioner was
convicted.
Petitioner contends that the CA, as well as the CSC and the Secretary of Justice, should not
have applied Section 47, Rule 130 because there was failure to lay the basis or predicate for
the rule. The argument is specious and deserves scant consideration. The records of this case
reveal that even in the early stages of the proceedings before the Board of Discipline of the BID,
Weng Sai Qin’s departure from the country and consequent inability to testify in the proceedings
had already been disclosed to the parties.7
Further, administrative bodies are not bound by the technical niceties of law and procedure and
the rules obtaining in courts of law.8 Administrative tribunals exercising quasi-judicial powers
are unfettered by the rigidity of certain procedural requirements, subject to the observance of
fundamental and essential requirements of due process in justiciable cases presented before
them.9 In administrative proceedings, technical rules of procedure and evidence are not strictly
applied and administrative due process cannot be fully equated with due process in its strict
judicial sense.10
The Uniform Rules of Procedure in the Conduct of Administrative Investigations in the CSC11
which were applicable to petitioner’s case provided that administrative investigations shall be
conducted without necessarily adhering to technical rules applicable in judicial proceedings.12
The Uniform Rules further provided that evidence having materiality and relevance to the
administrative case shall be accepted.13 Not only was petitioner’s objection to the application
of Section 47, Rule 130 a technicality that could be disregarded; the testimony of Weng Sai Qin
in Sandiganbayan Criminal Case No. 18679 was also material and relevant to the administrative
case. Hence, the CSC was correct in applying Section 47, Rule 130 when it took cognizance of
the former testimony of Weng Sai Qin in the aforementioned criminal case.
Petitioner’s assertion that there was no hearing (that he was deprived of the opportunity to be
heard) is likewise without merit. Apparently, petitioner’s concept of the opportunity to be heard
is the opportunity to ventilate one’s side in a formal hearing where he can have a face-to-face
confrontation with the complainant. However, it is well-settled that, in administrative cases, the
requirement of notice and hearing does not connote full adversarial proceedings.14
Due process in an administrative context does not require trial-type proceedings similar to those
in courts of justice. Where opportunity to be heard either through oral arguments or through
pleadings is accorded, there is no denial of procedural due process.15 A formal or trial-type
hearing is not at all times and in all instances essential. The requirements are satisfied where
the parties are afforded fair and reasonable opportunity to explain their side of the controversy
at hand.16 The standard of due process that must be met in administrative tribunals allows a
certain degree of latitude as long as fairness is not ignored.17 In other words, it is not legally
objectionable for being violative of due process for an administrative agency to resolve a case
based solely on position papers, afidavits or documentary evidence submitted by the parties as
affidavits of witnesses may take the place of their direct testimony.18
In this case, petitioner was heard through the various pleadings which he filed with the Board of
Discipline of the BID when he filed his answer19 and two motions to dismiss,20 as well as other
motions and papers. He was also able to participate in all stages of the administrative
proceeding. He was able to elevate his case to the Secretary of Justice and, subsequently, to
the CSC by way of appeal.
We have consistently held that the essence of due process is simply the opportunity to be heard
or, as applied to administrative proceedings, the opportunity to explain one’s side or the
opportunity to seek a reconsideration of the action or ruling complained of.21 And any seeming
defect in its observance is cured by the filing of a motion for reconsideration.22 Denial of due
process cannot be successfully invoked by a party who has had the opportunity to be heard on
his motion for reconsideration.23
Petitioner himself admits that he filed a motion for reconsideration24 of the decision of the BID
which was confirmed by the Secretary of Justice. He also admits that he filed a motion for
reconsideration25 with the CSC. Hence, by his own admission, petitioner’s protestations that
he had been deprived of due process must necessarily fail.
Petitioner claims that when the Sandiganbayan approved his probation in the criminal case, it
restored him to all civil rights lost or suspended as a result of his conviction, including the right
to remain in government service. Petitioner cites the case of Baclayon v. Mutia, et al.26 where
the grant of probation suspended the imposition not only of the principal penalties but of the
accessory penalties as well.
Petitioner’s contention is misplaced.
First, the Baclayon case is not in point. In that case, no administrative complaint was instituted
against the public officer, a public school teacher, during the pendency of the criminal case
against her and even after her conviction. There being no administrative case instituted against
the public officer and no administrative liability having been imposed, there was no
administrative sanction that could have been suspended by the grant of probation.
Second, dismissal is not an accessory penalty either of prision correccional 27 or arresto
mayor,28 the range of penalty imposed upon petitioner in Sandiganbayan Criminal Case No.
18679. Hence, even assuming arguendo that petitioner’s contention was correct, the grant of
probation could not have resulted in the suspension of an accessory penalty like dismissal that
does not even exist.
Third, "to suspend" means "to stop temporarily; to discontinue" 29 or "to cause to be intermitted
or interrupted."30 The records of this case show that petitioner was granted probation in an
order dated December 12, 199231 of the Second Division of the Sandiganbayan. He was
dismissed from the service in the decision dated July 25, 199632 of the BID Commissioner.
Since the grant of probation was granted long before the administrative case was decided, the
probation could not have possibly suspended the imposition of the penalty of dismissal from the
service in the administrative case since there was no administrative penalty that could have
been interrupted by the probation at the time it was granted. Indeed, petitioner’s discharge on
probation could not have restored or reinstated him to his employment in government service
since he had not been yet been dismissed therefrom at the time of his discharge.
Finally, even if dismissal had been one of the accessory penalties of the principal penalty
imposed upon petitioner in the criminal case, and even if the administrative case had been
decided earlier than the criminal case, still the imposition of the penalty of dismissal could not
have been suspended by the grant of probation. As petitioner himself contends, the criminal
action is separate and distinct from the administrative case. And, if only for that reason, so is
administrative liability separate and distinct from penal liability.33 Hence, probation affects only
the criminal aspect of the case,34 not its administrative dimension.
WHEREFORE, the petition is hereby DEnIed. The assailed decision of the Court of Appeals in
CA-G.R. SP No. 48723 dated May 24, 1999, affirming the decision and resolution of the Civil
Service Commission is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and
Garcia, JJ., concur.
[G.R. NO. 166051 : April 8, 2008]
SOLID HOMES, INC., Petitioner, v. EVELINA LASERNA and GLORIA CAJIPE, represented
by PROCESO F. CRUZ, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure seeking to annul, reverse and set aside (1) the Decision1 dated 21 July 2004 of the
Court of Appeals in CA-G.R. SP No. 82153, which denied and dismissed the Petition filed before
it by the petitioner for lack of merit; and (2) the Resolution2 dated 10 November 2004 of the
same court, which denied the petitioner's Motion for Reconsideration.
The factual antecedents of this case are as follows:
On 1 April 1977, respondents Evelina Laserna and Gloria Cajipe, represented by their attorney-
in-fact, Proceso F. Cruz, as buyers, entered into a Contract to Sell3 with petitioner Solid Homes,
Inc. (SHI), a corporation engaged in the development and sale of subdivision lots, as seller. The
subject of the said Contract to Sell was a parcel of land located at Lot 3, Block I, Phase II, Loyola
Grand Villas, Quezon City, with a total area of 600 square meters, more or less. The total
contract price agreed upon by the parties for the said parcel of land was P172,260.00, to be
paid in the following manner: (1) the P33,060.00 down payment should be paid upon the signing
of the contract; and (2) the remaining balance of P166,421.884 was payable for a period of three
years at a monthly installment of P4,622.83 beginning 1 April 1977. The respondents made the
down payment and several monthly installments. When the respondents had allegedly paid 90%
of the purchase price, they demanded the execution and delivery of the Deed of Sale and the
Transfer Certificate of Title (TCT) of the subject property upon the final payment of the balance.
But the petitioner did not comply with the demands of the respondents.
The respondents whereupon filed against the petitioner a Complaint for Delivery of Title and
Execution of Deed of Sale with Damages, dated 28 June 1990, before the Housing and Land
Use Regulatory Board (HLURB). The same was docketed as HLURB Case No. REM-073090-
4511. In their Complaint, respondents alleged that as their outstanding balance was only
P5,928.18, they were already demanding the execution and delivery of the Deed of Sale and
the TCT of the subject property upon final payment of the said amount. The petitioner filed a
Motion to Admit Answer,5 together with its Answer6 dated 17 September 1990, asserting that
the respondents have no cause of action against it because the respondents failed to show that
they had complied with their obligations under the Contract to Sell, since the respondents had
not yet paid in full the total purchase price of the subject property. In view of the said non-
payment, the petitioner considered the Contract to Sell abandoned by the respondents and
rescinded in accordance with the provisions of the same contract.
On 7 October 1992, HLURB Arbiter Gerardo L. Dean rendered a Decision7 denying
respondents' prayer for the issuance of the Deed of Sale and the delivery of the TCT. He,
however, directed the petitioner to execute and deliver the aforesaid Deed of Sale and TCT the
moment that the purchase price is fully settled by the respondents. Further, he ordered the
petitioner to cease and desist from charging and/or collecting fees from the respondents other
than those authorized by Presidential Decree (P.D.) No. 9578 and similar statutes.9
Feeling aggrieved, the petitioner appealed10 the aforesaid Decision to the HLURB Board of
Commissioners. The case was then docketed as HLURB Case No. REM-A-1298.
On 10 August 1994, the HLURB Board of Commissioners rendered a Decision,11 modifying the
7 October 1992 Decision of HLURB Arbiter Dean. The decretal portion of the Board's Decision
reads:
WHEREFORE, in view of the foregoing, the [D]ecision of [HLURB] Arbiter Gerardo Dean dated
07 October 1992 is hereby MODIFIED to read as follows:
1. [Herein respondent]12 is hereby directed to pay the balance of P11,585.41 within the (sic)
thirty (30) days from finality of this [D]ecision.
2. [Herein petitioner] is hereby directed to execute the necessary deed of sale and deliver the
TCT over the subject property immediately upon full payment.
3. [Petitioner] is hereby directed to cease and desist from charging and/or collecting fees other
than those authorized by P.D. 957 and other related laws.13 (Emphasis supplied).
Petitioner remained unsatisfied with the Decision of the HLURB Board of Commissioners, thus,
it appealed the same before the Office of the President, wherein it was docketed as O.P. Case
No. 5919.
After evaluating the established facts and pieces of evidence on record, the Office of the
President rendered a Decision14 dated 10 June 2003, affirming in toto the 10 August 1994
Decision of the HLURB Board of Commissioners. In rendering its Decision, the Office of the
President merely adopted by reference the findings of fact and conclusions of law contained in
the Decision of the HLURB Board of Commissioners.
Resultantly, petitioner moved for the reconsideration15 of the 10 June 2003 Decision of the
Office of the President. However, in an Order16 dated 9 December 2003, the Office of the
President denied the same.
The petitioner thereafter elevated its case to the Court of Appeals by way of Petition for Review
under Rule 4317 of the 1997 Revised Rules of Civil Procedure, docketed as CA-G.R. SP No.
82153, raising the following issues, to wit: (1) the Honorable Office of the President seriously
erred in merely adopting by reference the findings and conclusions of the HLURB Board of
Commissioners in arriving at the questioned [D]ecision; and (2) the Honorable Office of the
President seriously erred in not dismissing the complaint for lack of cause of action.18
On 21 July 2004, the appellate court rendered a Decision denying due course and dismissing
the petitioner's Petition for Review for lack of merit, thus affirming the Decision of the Office of
the President dated 10 June 2003, viz:
WHEREFORE, in view of the foregoing, the instant [P]etition is hereby DENIED DUE COURSE
and DISMISSED for lack of merit.19 (Emphasis supplied).
Petitioner moved for reconsideration of the aforesaid Decision but, it was denied by the Court
of Appeals in a Resolution dated 10 November 2004.
Hence, this Petition.
Petitioner raises the following issues for this Court's resolution:
I. WHETHER OR NOT THE [HONORABLE] COURT OF APPEALS SERIOUSLY ERRED IN
HOLDING THAT THE DECISION OF THE OFFICE OF THE PRESIDENT, WHICH MERELY
ADOPTS BY REFERENCE THE FINDINGS AND CONCLUSIONS OF THE BOARD OF
COMMISSIONERS OF THE [HLURB], IS IN ACCORDANCE WITH THE MANDATE OF THE
CONSTITUTION THAT THE DECISION SHOULD BE BASED ON THE FINDINGS OF FACTS
AND LAW TO ARRIVE AT A DECISION; AND
II. WHETHER OR NOT THE [HONORABLE] COURT OF APPEALS SERIOUSLY ERRED IN
NOT REVERSING THE DECISION OF THE OFFICE OF THE PRESIDENT CONSIDERING
THAT THE COMPLAINT OF THE RESPONDENTS LACKS CAUSE OF ACTION.20
In its Memorandum,21 the petitioner alleges that the Decision of the Office of the President, as
affirmed by the Court of Appeals, which merely adopted by reference the Decision of the HLURB
Board of Commissioners, without a recitation of the facts and law on which it was based, runs
afoul of the mandate of Section 14, Article VIII of the 1987 Philippine Constitution which provides
that: "No decision shall be rendered by any court without expressing therein clearly and distinctly
the facts and law on which it is based." The Office of the President, being a government agency,
should have adhered to this principle.
Petitioner further avers that a full exposition of the facts and the law upon which a decision was
based goes to the very essence of due process as it is intended to inform the parties of the
factual and legal considerations employed to support a decision. The same was not complied
with by the Office of the President when it rendered its one-page Decision dated 10 June 2003.
Without a complete statement in the judgment of the facts proven, it is not possible to pass upon
and determine the issues in the case, inasmuch as when the facts are not supported by
evidence, it is impossible to administer justice to apply the law to the points argued, or to uphold
the rights of the litigant who has the law on his side.
Lastly, petitioner argues that the Complaint filed against it by the respondents stated no cause
of action because the respondents have not yet paid in full the purchase price of the subject
property. The right of action of the respondents to file a case with the HLURB would only accrue
once they have fulfilled their obligation to pay the balance of the purchase price for the subject
property. Hence, the respondents' Complaint against the petitioner should have been dismissed
outright by the HLURB for being prematurely filed and for lack of cause of action.
The Petition is unmeritorious.
The constitutional mandate that, "no decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is based,"22 does not preclude
the validity of "memorandum decisions," which adopt by reference the findings of fact and
conclusions of law contained in the decisions of inferior tribunals.23 In fact, in Yao v. Court of
Appeals,24 this Court has sanctioned the use of "memorandum decisions," a specie of
succinctly written decisions by appellate courts in accordance with the provisions of Section
40,25 B.P. Blg. 129, as amended,26 on the grounds of expediency, practicality, convenience
and docket status of our courts. This Court likewise declared that "memorandum decisions"
comply with the constitutional mandate.27
This Court found in Romero v. Court of Appeals28 that the Court of Appeals substantially
complied with its constitutional duty when it adopted in its Decision the findings and disposition
of the Court of Agrarian Relations in this wise:
"We have, therefore, carefully reviewed the evidence and made a re-assessment of the same,
and We are persuaded, nay compelled, to affirm the correctness of the trial court's factual
findings and the soundness of its conclusion. For judicial convenience and expediency,
therefore, We hereby adopt, by way of reference, the findings of facts and conclusions of the
court a quo spread in its decision, as integral part of this Our decision." (Underscoring
supplied)cralawlibrary
In Francisco v. Permskul,29 this Court similarly held that the following memorandum decision
of the Regional Trial Court (RTC) of Makati City did not transgress the requirements of Section
14, Article VIII of the 1997 Philippine Constitution:
"MEMORANDUM DECISION
After a careful perusal, evaluation and study of the records of this case, this Court hereby adopts
by reference the findings of fact and conclusions of law contained in the decision of the
Metropolitan Trial Court of Makati, Metro Manila, Branch 63 and finds that there is no cogent
reason to disturb the same.
"WHEREFORE, judgment appealed from is hereby affirmed in toto." (Underscoring supplied.)
Hence, incorporation by reference is allowed if only to avoid the cumbersome reproduction of
the decision of the lower courts, or portions thereof, in the decision of the higher court.30
However, also in Permskul,31 this Court laid down the conditions for the validity of
memorandum decisions, to wit:
The memorandum decision, to be valid, cannot incorporate the findings of fact and the
conclusions of law of the lower court only by remote reference, which is to say that the
challenged decision is not easily and immediately available to the person reading the
memorandum decision. For the incorporation by reference to be allowed, it must provide for
direct access to the facts and the law being adopted, which must be contained in a statement
attached to the said decision. In other words, the memorandum decision authorized under
Section 40 of B.P. Blg. 129 should actually embody the findings of fact and conclusions of law
of the lower court in an annex attached to and made an indispensable part of the decision.
It is expected that this requirement will allay the suspicion that no study was made of the
decision of the lower court and that its decision was merely affirmed without a proper
examination of the facts and the law on which it is based. The proximity at least of the annexed
statement should suggest that such an examination has been undertaken. It is, of course, also
understood that the decision being adopted should, to begin with, comply with Article VIII,
Section 14 as no amount of incorporation or adoption will rectify its violation.
The Court finds necessary to emphasize that the memorandum decision should be sparingly
used lest it become an addictive excuse for judicial sloth. It is an additional condition for the
validity that this kind of decision may be resorted to only in cases where the facts are in the
main accepted by both parties and easily determinable by the judge and there are no doctrinal
complications involved that will require an extended discussion of the laws involved. The
memorandum decision may be employed in simple litigations only, such as ordinary collection
cases, where the appeal is obviously groundless and deserves no more than the time needed
to dismiss it.
xxx
Henceforth, all memorandum decisions shall comply with the requirements herein set forth both
as to the form prescribed and the occasions when they may be rendered. Any deviation will
summon the strict enforcement of Article VIII, Section 14 of the Constitution and strike down the
flawed judgment as a lawless disobedience.32
In the case at bar, we quote verbatim the Decision dated 10 June 2003 of the Office of the
President which adopted by reference the Decision dated 10 August 1994 of the HLURB Board
of Commissioners:
This resolves the appeal filed by [herein petitioner] Solid Homes, Inc. from the [D]ecision of the
[HLURB] dated [10 August 1994].
After a careful study and thorough evaluation of the records of the case, this Office is convinced
by the findings of the HLURB, thus we find no cogent reason to depart from the assailed
[D]ecision. Therefore, we hereby adopt by reference the findings of fact and conclusions of law
contained in the aforesaid [D]ecision, copy of which is hereto attached as "Annex A."
WHEREFORE, premises considered, judgment appealed from is hereby AFFIRMED in toto.33
(Emphasis supplied).
It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply to decisions
rendered in administrative proceedings, as in the case a bar. Said section applies only to
decisions rendered in judicial proceedings. In fact, Article VIII is titled "Judiciary," and all of its
provisions have particular concern only with respect to the judicial branch of government.
Certainly, it would be error to hold or even imply that decisions of executive departments or
administrative agencies are oblige to meet the requirements under Section 14, Article VIII.
The rights of parties in administrative proceedings are not violated as long as the constitutional
requirement of due process has been satisfied.34 In the landmark case of Ang Tibay v. CIR, we
laid down the cardinal rights of parties in administrative proceedings, as follows:
1) The right to a hearing, which includes the right to present one's case and submit evidence in
support thereof.
2) The tribunal must consider the evidence presented.
3) The decision must have something to support itself.
4) The evidence must be substantial.
5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected.
6) The tribunal or body or any of its judges must act on its or his own independent consideration
of the law and facts of the controversy and not simply accept the views of a subordinate in
arriving at a decision.
7) The board or body should, in all controversial question, render its decision in such a manner
that the parties to the proceeding can know the various issues involved, and the reason for the
decision rendered.35
As can be seen above, among these rights are "the decision must be rendered on the evidence
presented at the hearing, or at least contained in the record and disclosed to the parties
affected;" and that the decision be rendered "in such a manner that the parties to the
proceedings can know the various issues involved, and the reasons for the decisions rendered."
Note that there is no requirement in Ang Tibay that the decision must express clearly and
distinctly the facts and the law on which it is based. For as long as the administrative decision
is grounded on evidence, and expressed in a manner that sufficiently informs the parties of the
factual and legal bases of the decision, the due process requirement is satisfied.
At bar, the Office of the President apparently considered the Decision of HLURB as correct and
sufficient, and said so in its own Decision. The brevity of the assailed Decision was not the
product of willing concealment of its factual and legal bases. Such bases, the assailed Decision
noted, were already contained in the HLURB decision, and the parties adversely affected need
only refer to the HLURB Decision in order to be able to interpose an informed appeal or action
for certiorari under Rule 65.
However, it bears observation that while decisions of the Office of the President need not comply
with the constitutional requirement imposed on courts under Section 14, Article VIII of the
Constitution, the Rules of Court may still find application, although suppletory only in character
and apply only whenever practicable and convenient. There is no mandate that requires the
application of the Rules of Court in administrative proceedings.
Even assuming arguendo that the constitutional provision invoked by petitioner applies in the
instant case, the decision of the OP satisfied the standards set forth in the case of Permskul.
Firstly, the Decision of the Office of the President readily made available to the parties a copy
of the Decision of the HLURB Board of Commissioners, which it adopted and affirmed in toto,
because it was attached as an annex to its Decision.
Secondly, the findings of fact and conclusions of law of the HLURB Board of Commissioners
have been embodied in the Decision of the Office of the President and made an indispensable
part thereof. With the attachment of a copy of the Decision of the HLURB Board of
Commissioners to the Decision of the Office of the President, the parties reading the latter can
also directly access the factual and legal findings adopted from the former. As the Court of
Appeals ratiocinated in its Decision dated 21 July 2004, "the facts narrated and the laws
concluded in the Decision of the HLURB Board of Commissioners should be considered as
written in the Decision of the Office of the President. It was still easy for the parties to determine
the facts and the laws on which the decision were based. Moreover, through the attached
decision, the parties could still identify the issues that could be appealed to the proper
tribunal."36
Thirdly, it was categorically stated in the Decision of the Office of the President that it conducted
a careful study and thorough evaluation of the records of the present case and it was fully
convinced as regards the findings of the HLURB Board of Commissioners.
And lastly, the facts of the present case were not contested by the parties and it can be easily
determined by the hearing officer or tribunal. Even the respondents admitted that, indeed, the
total purchase price for the subject property has not yet been fully settled and the outstanding
balance is yet to be paid by them. In addition, this case is a simple action for specific
performance with damages, thus, there are neither doctrinal complications involved in this case
that will require an extended discussion of the laws involved.
Accordingly, based on close scrutiny of the Decision of the Office of the President, this Court
rules that the said Decision of the Office of the President fully complied with both administrative
due process and Section 14, Article VIII of the 1987 Philippine Constitution.
The Office of the President did not violate petitioner's right to due process when it rendered its
one-page Decision. In the case at bar, it is safe to conclude that all the parties, including
petitioner, were well-informed as to how the Decision of the Office of the President was arrived
at, as well as the facts, the laws and the issues involved therein because the Office of the
President attached to and made an integral part of its Decision the Decision of the HLURB
Board of Commissioners, which it adopted by reference. If it were otherwise, the petitioner would
not have been able to lodge an appeal before the Court of Appeals and make a presentation of
its arguments before said court without knowing the facts and the issues involved in its case.
This Court also quotes with approval the following declaration of the Court of Appeals in its
Decision on the alleged violation of petitioner's right to due process:
The contention of the [herein] petitioner that the said [D]ecision runs afoul to the Constitutional
provision on due process cannot be given credence. The case already had gone through the
Offices of the HLURB Arbiter and the Board of Commissioners where petitioner was given the
opportunity to be heard and present its evidence, before the case reached the Office of the
President which rendered the assailed [D]ecision after a thorough evaluation of the evidence
presented. What is important is that the parties were given the opportunity to be heard before
the [D]ecision was rendered. To nullify the assailed [D]ecision would in effect be a violation of
the Constitution because it would deny the parties of the right to speedy disposition of cases.37
Petitioner's assertion that respondents' complaint filed with the HLURB lacked a cause of action
deserves scant consideration.
Section 7 of the 1987 HLURB Rules of Procedure states that:
Section 7. Dismissal of the Complaint or Opposition. - The Housing and Land Use Arbiter (HLA)
to whom a complaint or opposition is assigned may immediately dismiss the same for lack of
jurisdiction or cause of action. (Emphasis supplied).
It is noticeable that the afore-quoted provision of the 1987 HLURB Rules of Procedure used the
word "may" instead of "shall," meaning, that the dismissal of a complaint or opposition filed
before the HLURB Arbiter on the ground of lack of jurisdiction or cause of action is simply
permissive and not directive. The HLURB Arbiter has the discretion of whether to dismiss
immediately the complaint or opposition filed before him for lack of jurisdiction or cause of action,
or to still proceed with the hearing of the case for presentation of evidence. HLURB Arbiter Dean
in his Decision explained thus:
This Office is well aware of instances when complainants/petitioners fail, through excusable
negligence, to incorporate every pertinent allegations (sic) necessary to constitute a cause of
action. We will not hesitate to go outside of the complaint/petition and consider other available
evidences if the same is necessary to a judicious, speedy, and inexpensive settlement of the
issues laid before us or when there are reasons to believe that the [com]plaints are meritorious.
"Administrative rules should be construed liberally in order to PROMOTE THEIR OBJECT AND
ASSIST THE PARTIES IN OBTAINING A JUST, SPEEDY AND INEXPENSIVE
DETERMINATION OF THEIR RESPECTIVE CLAIMS AND DEFENSES" (Mangubat v. de
Castro, 163 SCRA 608).38 (Emphasis supplied).
Given the fact that the respondents have not yet paid in full the purchase price of the subject
property so they have yet no right to demand the execution and delivery of the Deed of Sale
and the TCT, nevertheless, it was still within the HLURB Arbiter's discretion to proceed hearing
the respondents' complaint in pursuit of a judicious, speedy and inexpensive determination of
the parties' claims and defenses.
Furthermore, the Court of Appeals already sufficiently addressed the issue of lack of cause of
action in its Decision, viz:
The Offices below, instead of dismissing the complaint because of the clear showing that there
was no full payment of the purchase price, decided to try the case and render judgment on the
basis of the evidence presented. The complaint of the respondents does not totally lack cause
of action because of their right against the cancellation of the contract to sell and the forfeiture
of their payments due to non-payment of their monthly amortization.
xxxx
The HLURB Arbiter in his [D]ecision, stated that it is undisputed that the contract price is not yet
fully paid. This was affirmed by the HLURB Board of Commissioners and the Office of the
President. No less than the respondents admitted such fact when they contended that they are
willing to pay their unpaid balance. Without full payment, the respondents have no right to
compel the petitioner to execute the Deed of Sale and deliver the title to the property. xxx. crvll
xxxx
Lastly, notwithstanding such failure to pay the monthly amortization, the petitioner cannot
consider the contract as cancelled and the payments made as forfeited.
Section 24, PD 957 provides:
"Section 24. Failure to pay installments. - The rights of the buyer in the event of his failure to
pay the installments due for reasons other than the failure of the owner or developer to develop
the project shall be governed by Republic Act No. 6552. x x x."
Section 4, RA 6552 or the Realty Installment Buyer Protection Act provides:
"Section 4. In case where less than two years of installments were paid, the seller shall give the
buyer a grace period of not less than sixty days from the date the installment became due. If
the buyer fails to pay the installments due at the expiration of the grace period, the seller may
cancel the contract after thirty days from receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial act."
It is therefore clear from the above provisions that the petitioner cannot consider the [C]ontract
to [S]ell as cancelled. The requirements above should still be complied with.39 (Emphasis
supplied).
Hence, during the hearing conducted by HLURB Arbiter Dean, it became apparent that
respondents' cause of action against petitioner is not limited to the non-execution and non-
delivery by petitioner of the Deed of Sale and TCT of the subject property, which is dependent
on their full payment of the purchase price thereof; but also the wrongful rescission by the
petitioner of the Contract to Sell. By virtue thereof, there is ample basis for HLURB Arbiter Dean
not to dismiss respondents' complaint against petitioner and continue hearing and resolving the
case.
As a final point. Based on the records of this case, respondents have tendered payment in the
amount of P11,584.41,40 representing the balance of the purchase price of the subject property,
as determined in the 10 August 1994 Decision of the HLURB Board of Commissioners, and
affirmed by both the Office of the President and the Court of Appeals. However, the petitioner,
without any justifiable reason, refused to accept the same. In Ramos v. Sarao,41 this Court held
that tender of payment is the manifestation by debtors of their desire to comply with or to pay
their obligation. If the creditor refuses the tender of payment without just cause, the debtors are
discharged from the obligation by the consignation of the sum due. Consignation is made by
depositing the proper amount with the judicial authority, before whom the tender of payment
and the announcement of the consignation shall be proved. All interested parties are to be
notified of the consignation. Compliance with these requisites is mandatory.42 In the case at
bar, after the petitioner refused to accept the tender of payment made by the respondents, the
latter failed to make any consignation of the sum due. Consequently, there was no valid tender
of payment and the respondents are not yet discharged from the obligation to pay the
outstanding balance of the purchase price of the subject property.
Since petitioner did not rescind the Contract to Sell it executed with the respondents by a notarial
act, the said Contract still stands. Both parties must comply with their obligations under the said
Contract. As ruled by the HLURB Board of Commissioners, and affirmed by the Office of the
President and the Court of Appeals, the respondents must first pay the balance of the purchase
price of the subject property, after which, the petitioner must execute and deliver the necessary
Deed of Sale and TCT of said property.
WHEREFORE, premises considered, the instant Petition is hereby DENIED. Costs against the
petitioner.
SO ORDERED.
Austria-Martinez, Acting Chairperson, Tinga*, Nachura, Reyes, JJ., concur.
G.R. No. L-80160 June 26, 1989
GOVERNOR FELICISIMO T. SAN LUIS, THE SANGGUNIANG PANLALAWIGAN,
PROVINCIAL ENGINEER JUANITO C. RODIL AND PROVINCIAL TREASURER AMADEO
C. ROMEY, ALL OF LAGUNA, petitioners,
vs.
COURT OF APPEALS AND MARIANO L. BERROYA, JR., respondents.
Dakila F. Castro & Associates for petitioners.
Cecilio C. Villanueva for Gov. San Luis.
Felicisimo T. San Luis for himself and in behalf of his co- petitioners.
Renato B. Vasquez for private respondent.
CORTES, J.:
The instant petition for certiorari and mandamus and/or appeal by certiorari assails the appellate
court's ruling that mandamus lies to compel the reinstatement of a quarry superintendent in the
provincial government of Laguna who was initially detailed or transferred to another office, then
suspended, and finally dismissed following his expose of certain anomalies and irregularities
committed by government employees in the province.
The background facts, as narrated by the respondent Court of Appeals are:
Records show that at all pertinent times, petitioner-appellant (private respondent herein) had
been the quarry superintendent in the Province of Laguna since his appointment as such on
May 31, 1959. In April and May of 1973, petitioner-appellant denounced graft and corrupt
practices by employees of the provincial government of Laguna. Thereafter, the development
of events may be briefly encapsulated as follows:
a. On July 20, l973, herein respondent-appellee provincial governor (one of the petitioners
herein) issued Office Order No. 72 transferring Berroya to the office of the Provincial Engineer.
An amended office order invoked LOI 14-B for said transfer.
b. Berroya challenged said transfer, and on October 25, 1973, the Civil Service Commission
ruled the same violative of Section 32, RA 2260, and ordered that Berroya be reverted to his
regular position of quarry superintendent.
c. On December 12, 1973, instead of complying with the CSC directive that Berroya be reverted
to his regular position, herein respondent-appellee provincial governor suspended Berroya for
alleged gross discourtesy, inefficiency and insubordination. On that basis, reconsideration of
the CSC directive that Berroya be reverted to the position of quarry superintendent was sought
as academic (sic).
d. On February 26, 1974 the Civil Service Commission reiterated its October 25, 1973 directive
for the immediate reversion of Berroya to his former position, and ruled the one-year suspension
illegal.
e. Respondent-appellee provincial governor appealed to the Office of the President from the
CSC rulings alluded to.
f. On May 29, 1974, there issued OP Decision 954, Series of 1974 reversing the CSC rulings
without prejudice to the decision of the Local Review Board [which had in fact already sustained
the one-year suspension under date of May 6, 1974].
g. On petitioner-appellant's motion for reconsideration, the Office of the President rendered OP
Decision 1834, Series of 1976, dated May 19, 1976, setting aside OP Decision 954, declaring
the one-year suspension improper, and ordering payment of back salaries to Berroya.
h. Respondent-appellant moved for reconsideration of OP Decision 1834 on June 14, 1976.
The said motion for reconsideration was denied on November 6, 1978.
i. In the interim, respondent-appellant provincial governor issued an Order of April 27, 1977
dismissing Berroya for alleged neglect of duty, frequent unauthorized absences, conduct
prejudicial to the best interest of duty and abandonment of office, which order of dismissal was
appealed by Berroya to the Civil Service Commission on May 12, 1977.
j. On January 23, 1979, the Civil Service Commission resolved said appeal by declaring the
dismissal unjustified, exonerating Berroya of charges, and directing his reinstatement as quarry
superintendent.
k. On February l4, 1979, respondent-appellee provincial governor sought relief from the CSC
decision of January 23, 1979 declaring Berroya's dismissal unjustified.
1. On October 15, 1979, the CSC Merit System Board denied said motion for reconsideration in
its Resolution No. 567.
m. Thereafter, respondent-appellee provincial governor moved anew to set aside O.P. Decision
1834, Series of 1976-the first motion for reconsideration of which had been denied on November
6, 1978. (ref. #h, supra). The Office of the President dismissed said motion on March 27, 1981.
Petitioner-appellant's formal demand for reinstatement to the position of quarry superintendent
having been disdained despite the factual antecedents aforestated, he filed, [on May 27, 1980]
the antecedent Civil Case No. SC-1834 for mandamus to compel his reversion to the position
of quarry superintendent at the Oogong Quarry, with back salaries for the entire period of his
suspension and dismissal (exclusive of leaves of absence with pay), and prayed for moral and
exemplary damages, attorney's fees and expenses of suit.
Respondents-appellees moved to dismiss said petition for mandamus, as amended, and
opposed the therein application for preliminary injunctive relief for immediate reinstatement.
In an Order of December 1, 1980, the trial court denied the application for preliminary injunctive
relief "until after the parties shall have adduced evidence, pro and con the grant of injunctive
relief", and similarly deferred its resolution on the motion to dismiss "for lack of merit for the
present ... until after the trial."
On December 15, 1980, respondents-appellees answered the petition for mandamus and
prayed that judgment be rendered-
1. Dismissing the Complaint and denying the prayer for Preliminary Injunction;
2. Declaring petitioner to have been legally separated or dismissed from the government
service;
3. Order petitioner to pay each of them the sum of P 200,000.00 by way of moral damages; P
100,000.00 as exemplary damages and P 10,000.00 as attorney's fees plus P 300.00 each per
court appearance; other litigation expenses which may be incurred as may be proved in due
course; and to pay the costs of suit [Rollo, pp. 35-37].
During the pendency of the civil case for mandamus, on April 9, 1981 petitioner provincial
governor filed a petition for relief from O.P. Decision 1834 with the Office of the President. This
was denied on November 27, 1984 on the ground that only one motion for reconsideration of
O.P. Decision 1834 was allowed, the petition for relief being the third such motion filed by
petitioner.
On May 17, 1985, after trial, the court a quo rendered its decision finding the transfer of
petitioner- appellant from his position of quarry superintendent to the office of the Provincial
Engineer sufficiently warranted. Furthermore, his one-year suspension was found to be proper
under LOI 14-B and unassailable upon affirmation by the Local Review Board. His summary
dismissal was likewise found to be a justified exercise of the authority granted under LOI 14-B.
The trial Court further decided "that none of the respondents should be held personally liable in
their private capacity to the petitioner because their actuations are not at all tainted with malice
and bad faith" [Rollo, p. 38].
However, although the trial court upheld the validity of Berroya's dismissal, it nevertheless
ordered his reinstatement to an equivalent position as a matter of equity. Hence, the dispositive
portion of its decision reads as follows:
WHEREFORE, judgment is hereby rendered:
1. Ordering respondents to reinstate petitioner to any position equivalent to that of a quarry
superintendent which has been abolished in the present plantilla of the provincial government
of Laguna as reorganized pursuant to PD 1136 without diminution in rank and salary;
2. Ordering respondents to pay the back salary of petitioner from April 26, 1977 to September
1, 1977 only and appropriating funds therefor, as soon as this decision becomes final;
3. Dismissing all claims and counterclaims of both parties for other damages including attorney's
fees [Rollo, p. 35].
On June 6, 1985, herein private respondent Berroya appealed from the decision of the Regional
Trial Court dated May 17, 1985. The appeal was resolved by the respondent Court of Appeals
in his favor in a decision which was promulgated on April 30, 1987, the decretal portion of which
states:
WHEREFORE, the present appeal is accordingly resolved as follows:
(a) Petitioner-appellant is ordered to be reinstated to the position of quarry superintendent of
the Oogong Quarry in Laguna or to the position which said office may now be called pursuant
to the reorganization of the plantilla of the Provincial Government of Laguna under PD 1136,
without diminution in rank and salary;
(b) Respondents-appellees are ordered to pay the back salary of petitioner-appellant
corresponding to the period of suspension and of illegal dismissal from the service, exclusive of
that corresponding to leaves of absences with pay;
(c) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant
the sum of P 50,000.00 as and for moral damages;
(d) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant
the further sum of P 20,000.00 as and for attorney's fees, plus costs and expenses of suit.
The decision of May 17, 1985, in Civil Case No. SC-1748 is accordingly set aside forthwith.
With costs against respondents-appellees.
SO ORDERED. [Rollo, p. 43.]
Petitioners moved to reconsider the decision of the appellate court but their motion was denied.
Hence, the instant petition docketed as G.R. No. 80160, which is "both or alternatively an
original action for certiorari and mandamus and an appeal by certiorari" [See Rollo, p. 1, et seq.]
Another petition for review of the Court of Appeals' decision was filed with this Court on October
8, 1987 docketed as G.R. No. 79985 by the same petitioners. However, in a resolution dated
November 16, 1987, the Court noted the manifestation/motion filed by petitioners stating, among
other things, that the petition docketed as G.R. No. 79985 be considered withdrawn and the
petition dated October 16, 1987 which was filed on October 19, 1987 and docketed as G.R. No.
80160 be considered as the main and real petition [Rollo, p. 50].
Accordingly, the parties were required to submit their respective pleadings in G.R. No. 80160.
The petition in G.R. No. 80160 contains the following assignment of errors:
First
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AS WELL AS
EXCEEDED ITS JURISDICTION IN DENYING PETITIONERS' MOTION FOR
RECONSIDERATION BY MEANS OF A MERE MINUTE RESOLUTION, STATING NO LEGAL
BASIS THEREFOR, IN GROSS VIOLATION OF THE CONSTITUTION'S EXPRESS
MANDATE AND WHEN IT STATED AND HELD IN SAID RESOLUTION "THAT NO NEW
REASON HAS BEEN ADDUCED [IN SAID MOTION] TO JUSTIFY A REVERSAL OR
MODIFICATION OF [ITS] FINDINGS AND CONCLUSIONS".
Second
THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL
AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE RESPONDENT MARIANO L.
BERROYA, JR. DOES NOT FALL UNDER THE CATEGORY OF "NOTORIOUSLY
UNDESIRABLE" AND THAT THE "APPLICABILITY OF LOI 14-B TO RESPONDENT
BERROYA IS OPEN TO QUESTION AS HE WAS NEVER ASKED TO RESIGN AS BEING
NOTORIOUSLY UNDESIRABLE".
Third
THE RESPONDENT COURT BLATANTLY ERRED AND GRAVELY ABUSED ITS
DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE
"RECALL" OF THE DISMISSAL ORDER IS ITSELF ATTENDED BY A TOUCH OF MYSTERY,
MENTIONED ONLY IN THE TESTIMONY OF PETITIONER PROVINCIAL GOVERNOR,
UNFORTIFIED BY ANY WRITING THEREOF, AND NOT ADVERTED TO IN THE DECEMBER
15, 1980 ANSWER FILED IN THE ANTECEDENT mandamus ACTION, AND IN NOT FINDING
THAT RESPONDENT BERROYA COMMITTED ABANDONMENT OF OFFICE.
Fourth
THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL
AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE DECISION OF THE LOCAL
BOARD OF REVIEW UNDER LOI 14-B MAY BE REVIEWED UNDER THE CONSTITUTIONAL
PREROGATIVE OF THE PRESIDENT TO SUPERVISE LOCAL GOVERNMENT UNITS,
WHICH INCLUDES THE AUTHORITY TO REVIEW, MODIFY OR REVERSE DECISION
INVOLVING SUSPENSION OF LOCAL OFFICIALS AND EMPLOYEES.

Fifth
THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL
AS EXCEEDED ITS JURISDICTION IN CONCLUDING IN RATHER STRONG LANGUAGE
THAT THE "ABOLITION OF THE POSITION OF QUARRY SUPERINTENDENT FROM THE
PLANTILLA OF THE PROVINCIAL GOVERNMENT OF LAGUNA MUST BE VIEWED WITH
(sic) ABERRATION AND AN ANOMALY, IN THE LIGHT OF UNCONTROVERTED SHOWING
THAT QUARRY OPERATIONS AT THE SAME SITE CONTINUE TO DATE, AS WOULD
MILITATE AGAINST ATTENDANCE OF GOOD FAITH IN THE ABOLITION OF SAID OFFICE."
Sixth
THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL
AS EXCEEDED ITS JURISDICTION IN ORDERING THE PAYMENT OF PRIVATE
RESPONDENTS BACK SALARIES FOR THE PERIOD OF HIS SUSPENSION AS WELL AS
DISMISSAL UNTIL REINSTATEMENT AS QUARRY SUPERINTENDENT, AND IN
AWARDING MORAL DAMAGES IN THE SUM OF P50,000.00 AND ATTORNEY'S FEES IN
THE SUM OF P20,000.00 IN FAVOR OF THE PRIVATE RESPONDENT BERROYA, AND IN
HOLDING ALL THE PETITIONERS HEREIN SOLIDARILY LIABLE FOR THE PAYMENT OF
AFORESAID BACK SALARIES AND DAMAGES [Rollo, pp. 13-14].
The first error assigned in the instant petition is not well taken. A thorough perusal of the assailed
resolution of the respondent CA denying petitioners' motion for reconsideration reveals clearly
its legal basis. Thus, its resolution stating that
Considering that the motion for reconsideration of the decision promulgated on April 30, 1987
filed by respondent-appellee merely reiterates the grounds and arguments already discussed,
thoroughly analyzed and passed upon by this Court; and that no new reason has been adduced
to justify a reversal or modification of the findings and conclusion of this Court.
WHEREFORE, the motion for reconsideration is DENIED for lack of merit [Rollo, p. 45;
Emphasis supplied].
constitutes sufficient compliance with the constitutional mandate that no motion for
reconsideration of a decision of the court shall be denied without stating the legal basis therefor
(1987 Constitution, Art. VIII, Sec. 14, par. 2).
The resolution of the remaining assigned errors hinges on a determination of the effect of the
decisions rendered in favor of Berroya by two administrative agencies.
A. It is worth noting that the issue of legality of the order of suspension by petitioner Governor
dated December 12, 1973 had already been passed upon in a decision of the Office of the
President (O.P. Decision No. 1834) dated May 19, 1976 reversing its earlier ruling in O.P.
Decision No. 954 dated May 29, 1974. The Office of the President categorically ruled as follows:
xxx xxx xxx
It is not disputed that the Governor, in issuing his Order of Suspension, was exercising an
authority legally endowed upon (sic) him by LOI 14-B, but it must not be an unbridled exercise
of such authority....
A review of the records discloses that the only act of the governor which was sustained by the
Local Review Board was his imposing the suspension on Berroya for alleged discourtesy. This
Office is prone to adopt a contrary stand on the matter taking into consideration the
circumstances leading to the writing of the so-called "dishonest' statements of the petitioner. It
is unfortunate that the Local Review Board took it as an infraction of the Civil Service Rules and
Regulations. It must be observed that the said statements were made in the course of a pending
case before the Civil Service Commission, and in defense of the position of the petitioner.
Although the said statements, by themselves, may be considered as lacking in refinement, still
this fact alone does not justify the drastic action taken against the petitioner in this case. . . .
In view of the foregoing, this Office rules that the suspension order was unjustified. Considering
that respondent Berroya has already served the suspension order and that his suspension was
not proper, it is hereby ordered that he be entitled to the payment of his back salaries
corresponding to the period of his suspension [Folder of Exhibits, Vol. 1, pp. 102-103].
From this decision of the Office of the President, petitioner Governor filed a petition for
reconsideration dated June 14, 1976 which was denied for lack of merit in a resolution of the
Office of the President dated November 6, 1978 [Folder of Exhibits, Vol. 1, p. 170]. On July 3,
1979, petitioner governor filed a second petition to reconsider O.P. Decision No. 1834 on the
main ground that the disputed decision is null and void ab initio allegedly because Berroya filed
his motion for reconsideration of O.P. Decision No. 954 only on July 15, 1975 or after a lapse
of one year and forty seven (47) days from the date when the said decision was rendered. The
Office of the President denied such petition in a resolution dated March 27, 1981 [Folder of
Exhibits, Vol. 1, p. 210] on the strength of Executive Order No. 19, Series of 1966 which
empowers said office to act upon petitions for reconsideration, even if filed late, in exceptionally
meritorious cases. Said Office further pointed out that upon review of the records of the case, it
was shown that Berroya's motion for reconsideration was filed on July 15, 1974 and not on July
15, 1975 as erroneously indicated in O.P. Decision No. 1834 [Folder of Exhibits, Vol. 1, p. 213].
From the foregoing, it can be seen that OP Decision No. 1834 had already attained finality upon
denial of the first motion for reconsideration in view of the clear provisions of the applicable law
at the time. Executive Order No. 19, Series of 1966, which provides:
xxx xxx xxx
5. Petitions for reconsideration filed after the lapse of the aforesaid period (fifteen days from
receipt of the decision) shall not be entertained unless the Office of the President, for
exceptionally meritorious causes, decides to act thereon, provided that only one petition for
reconsideration by any party shall be allowed [Emphasis supplied.]
Accordingly, the filing of the second petition for reconsideration could not have stayed the finality
of the aforesaid decision.
In a last ditch attempt to assail the validity of O.P. Decision No. 1834, a petition for relief was
filed by herein petitioners on April 9, 1981, during the pendency of the mandamus case. This
petition was finally denied in a resolution of the office dated November 27, 1984.
B. On the other hand, the validity of Berroya's dismissal was already passed upon by the Merit
Systems Board of the Civil Service Commission in MSB Case No. 40. In a decision promulgated
on January 23, 1979, the Merit Systems Board held as follows:
After carefully perusing the records of this case, this board is convinced that there is no strong
evidence of guilt against Berroya. In fact, there is not even sufficient evidence to maintain the
charges against him. Hence, the same does not fall within the scope of Section 40, Presidential
Decree No. 807.
The record does not show that Berroya is notoriously undesirable. On the contrary, his
performance ratings from the period ending December 31, 1969 to the period ending June 30,
1973 are all very satisfactory.
Such being the case, he is not notoriously undesirable under the standard laid down by the
President, to wit: "the test of being notoriously undesirable is two-fold: whether it is common
knowledge or generally known as universally believed to be true or manifest to the world that
petitioner committed the acts imputed against him, and whether he had contracted the habit for
any of the enumerated misdemeanors". The same are not present in the case of Berroya. On
the contrary he should be given recognition for his efforts in exposing the irregularities allegedly
committed by some authorities of the Laguna Provincial Government which led to the filing of
criminal as well as administrative cases against such officials.
Foregoing premises considered, this Board finds the order of dismissal dated April 27, 1977,
without justifiable basis. Wherefore, the Board hereby exonerates Engr. Mariano Berroya, Jr. of
the charges against him. Consequently, it is hereby directed that he be reinstated to his position
as Quarry Superintendent of Laguna immediately, [Folder of Exhibits, Vol. 1, pp. 175-176].
The motion for reconsideration from this decision was denied in a resolution of the Board dated
October 15, 1979. This decision was therefore already final when Berroya instituted suit in 1980
to compel petitioner to reinstate him to his former position and to pay his back salaries.
Since the decisions of both the Civil Service Commission and the Office of the President had
long become final and executory, the same can no longer be reviewed by the courts. It is well-
established in our jurisprudence that the decisions and orders of administrative agencies,
rendered pursuant to their quasi-judicial authority, have upon their finality, the force and binding
effect of a final judgment within the purview of the doctrine of resjudicata [Brillantes v. Castro,
99 Phil. 497 (1956), Ipekdjian Merchadising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430,
September 30, 1963, 9 SCRA 72.] The rule of res judicata which forbids the reopening of a
matter once judicially determined by competent authority applies as well to the judicial and
quasi-judicial acts of public, executive or administrative officers and boards acting within their
jurisdiction as to the judgments of courts having general judicial powers [Brillantes v. Castro,
supra at 503].
Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to
the judgments of what are ordinarily known as courts, but it extends to all bodies upon whom
judicial powers had been conferred. Hence, whenever any board, tribunal or person is by law
vested with authority to judicially determine a question, like the Merit Systems Board of the Civil
Service Commission and the Office of the President, for instance, such determination, when it
has become final, is as conclusive between the same parties litigating for the same cause as
though the adjudication had been made by a court of general jurisdiction [Ipekdjian
Merchandising Co., Inc. v. Court of Tax Appeals, supra at 76].
Furthermore, the trial court's act of reviewing and setting aside the findings of the two
administrative bodies was in gross disregard of the basic legal precept that accords finality to
administrative findings of facts.
The general rule, under the principles of administrative law in force in this jurisdiction, is that
decisions of administrative officers shall not be disturbed by the courts, except when the former
have acted without or in excess of their jurisdiction, or with grave abuse of discretion. Findings
of administrative officials and agencies who have acquired expertise because their jurisdiction
is confined to specific matters are generally accorded not only respect but at times even finality
if such findings are supported by substantial] evidence. . . . [Lianga Bay Logging Co., Inc. v.
Lopez Enage, G.R. No. L-30637, July 16, 1987,152 SCRA 80].
Finally, the Court cannot ignore the undisputed fact that the decisions rendered by the Office of
the President and the Merit Systems Board had attained finality without petitioners having taken
any timely legal recourse to have the said decisions reviewed by the courts. On the other hand,
Berroya, in order to enforce his right to reinstatement and to back salaries pursuant to these
final and executory administrative rulings, instituted a suit for mandamus to compel petitioners
to comply with the directives issued by the two administrative agencies.
Since private respondent Berroya had established his clear legal right to reinstatement and back
salaries under the aforementioned final and executory administrative decisions, it became a
clear ministerial duty on the part of the authorities concerned to comply with the orders contained
in said decisions [Tanala v. Legaspi, G.R. No. L-22537, March 31, 1965,13 SCRA 566 at 574-
575].
The established rule is that a writ of mandamus lies to enforce a ministerial duty or "the
performance of an act which the law specifically enjoins as a duty resulting from office, trust or
station" [Section 3, Rule 65 of the Revised Rules of Court; Lianto v. Mohamad Ali Dimaporo, et
al., G.R. No. L-21905, March 31, 1966, 16 SCRA 599]. In this case, the appropriate
administrative agencies having determined with finality that Berroya's suspension and dismissal
were without just cause, his reinstatement becomes a plain ministerial duty of the petitioner
Provincial Governor, a duty whose performance may be controlled and enjoined by mandamus
[Ynchausit and Co. v. Wright, 47 Phil. 866 (1925); Tee and Co. v. Wright, 53 Phil. 194 (1929);
Gementiza v. Court of Appeals, G.R. Nos. L-41717-33, April 12, 1982,113 SCRA 477;
Laganapan v. Asedillo, G.R. No. L-28353, September 30, 1987, 154 SCRA 377].
Thus, this Tribunal upholds the appellate court's judgment for the reinstatement of respondent
Berroya and payment of his back salaries corresponding to the period of suspension and of
illegal dismissal from service, exclusive of that corresponding to leaves of absences with pay.
However, as respondent Berroya can no longer be reinstated because he has already reached
the compulsory retirement age of sixty five years on December 7, 1986,** he should be paid his
back salaries [Salcedo v. Court of Appeals, G.R. No. L-40846, January 31, 1978, 81 SCRA 408]
and also all the retirement and leave privileges that are due him as a retiring employee in
accordance with law [Tanala v. Legaspi, supra at 576].
According to settled jurisprudence, Berroya, as an illegally terminated civil service employee is
entitled to back salaries limited only to a maximum period of five years Laganapan v. Asedillo,
supra; Balquidra v. CFI of Capiz, Branch II, G.R. No. L-40490, October 28, 1977, 80 SCRA 123;
Salcedo v. Court of Appeals, supra, Gementiza v. Court of Appeals, supra].
That petitioners Provincial Governor, Provincial Treasurer and Provincial Engineer of Laguna,
the Sangguniang Panlalawigan of Laguna and the Province of Laguna, formally impleaded
herein,'** are liable for back salaries in case of illegal termination of a civil service employee
finds support in earlier decisions of this Court [Balquidra v. Court of First Instance of Capiz,
Branch II, supra; Gementiza v. Court of Appeals, supra; Rama v. Court of Appeals, G.R. Nos.
L-44484, 1,44842, L-44894, L-44591, March 16, 1987,148 SCRA 496; Laganapan v. Asedillo,
supra].
However, the petitioners Juanito Rodil and Amado Romey must be held liable only in their official
capacities as Provincial Engineer and Provincial Treasurer, respectively since they had been
expressly sued by Berroya as such [Petition for mandamus with Preliminary Injunction, Record,
Vol. 1, p. 1, et seq.; Gray v. De Vera, G.R. No. L-23966, May 22, 1969, 28 SCRA 268].
The same does not hold true for petitioner provincial governor who was found by the appellate
court to have acted in bad faith as manifested by his contumacious refusal to comply with the
decisions of the two administrative agencies, thus prompting respondent Berroya to secure an
indorsement from the Minister of Local Government and Community Development dated
November 15, 1979 for his reinstatement [Annex "Y-9", Folder of Exhibits, Vol. 1, p. 207]. The
Minister's directive having been ignored, Berroya was compelled to bring an action for
mandamus.
Where, as in this case, the provincial governor obstinately refused to reinstate the petitioner, in
defiance of the orders of the Office of the President and the Ministry of Local Government and
in palpable disregard of the opinion of the Civil Service Commission, the appellate court's finding
of bad faith cannot be faulted and accordingly, will not be disturbed by this Tribunal Enciso v.
Remo, G.R. No. L-23670, September 30, 1969, 29 SCRA 580.] This is in line with our previous
ruling in Remo v. Palacio [107 Phil. 803 (1960)] that
xxx xxx xxx
(i)t having been clearly shown by evidence, that respondent, Deogracias Remo, in his capacity
as Mayor of Goa, refused to reinstate the petitioner to his former position in the police force of
Goa, despite the orders of Malacanang to do so (Exhs. G and I), and inspite of the opinion of
the Secretary of Finance (Exh. H), the respondent Mayor of Goa, willfully acted in bad faith, and
therefore, he, as Mayor of Goa, should pay for damages caused to the petitioner, Angel Enciso.
[At pp. 807-808.]
It is well-settled that when a public officer goes beyond the scope of his duty, particularly when
acting tortiously, he is not entitled to protection on account of his office, but is liable for his acts
like any private individual [Palma v. Graciano, 99 Phil. 72 (1956)].
Thus, in Mendoza v. De Leon [33 Phil. 508 (1916)], it was held:
Nor are officers or agents of the Government charged with the performance of governmental
duties which are in their nature legislative or quasi-judicial liable for the consequences of their
official acts, unless it be shown that they act wilfully and maliciously and with the express
purpose of inflicting injury upon the plaintiff [at 513; Emphasis supplied].
Accordingly, applying the principle that a public officer, by virtue of his office alone, is not
immune from damages in his personal capacity arising from illegal acts done in bad faith
[Tabuena v. Court of Appeals, G.R. No. L-16290, October 31, 1961, 3 SCRA 413; Correa v.
Court of First Instance of Bulacan, G. R. No. L-46096, July 30, 1979, 92 SCRA 312], the Court
holds that petitioner Felicisimo T. San Luis, the Provincial Governor of Laguna who has been
sued both in his official and private capacities, must be held personally liable to Berroya for the
consequences of his illegal and wrongful acts.
In this regard, the Court sustains the appellate court's finding that petitioner San Luis must be
held liable to Berroya for moral damages since justice demands that the latter be recompensed
for the mental suffering and hardship he went through in order to vindicate his right, apart from
the back salaries legally due him [Rama v. Court of Appeals, supra at p. 5061]. The appellate
court was clearly warranted in awarding moral damages in favor of respondent Berroya because
of the obstinacy of petitioner Governor who arbitrarily and without legal justification refused
Berroya's reinstatement in defiance of directives of the administrative agencies with final
authority on the matter. We agree with the appellate court that the sum of P 50,000.00 for moral
damages is a reasonable award considering the mental anguish and serious anxiety suffered
by Berroya as a result of the wrongful acts of petitioner Governor in refusing to reinstate him.
Finally, as correctly adjudged by respondent court, petitioner San Luis must likewise answer to
Berroya for attorney's fees plus costs and expenses of suit, which have been fixed by said court
at P 20,000.00, in view of the wrongful refusal of petitioner provincial governor to afford Berroya
his plainly valid and just claim for reinstatement and back salaries [Rollo, p. 42].
WHEREFORE, the assailed decision of the appellate court is hereby MODIFIED as follows: (1)
the petitioners, in their official capacities, are ordered to pay private respondent Berroya, his
back salaries for a maximum period of five years; (2) since the reinstatement of Berroya can no
longer be ordered by reason of his having reached the retirement age, he should instead be
paid all the retirement benefits to which he is entitled under the law; and (3) petitioner Felicisimo
T. San Luis, in his personal capacity, is further ordered to pay Berroya the sum of P 50,000.00
as and for moral damages, the sum of P 20,000.00 as and for attorney's fees plus costs and
other expenses of suit. This decision shall be IMMEDIATELY EXECUTORY.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
[G.R. No. 57475. September 14, 1992.]
REPUBLIC OF THE PHILIPPINES represented by the DIRECTOR OF LANDS, Petitioner,
v. RUFO NERI, JUSTO CHARMEN, AGAPITO GORNOT, PATERNO MADANLO, ADRIAN
ARCHIE and GUILLERMINA VDA. DE MITRE, Respondents.
The Solicitor General for Petitioner.
Victor A. Clapano for respondent’s Neri, Et. Al.
Jose P. Arro and Antonio P. Fortuno for respondent G. Mitre.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; DOCTRINE OF RES JUDICATA; APPLIED TO
DECISIONS AND ORDERS OF ADMINISTRATIVE AGENCIES; RULE THEREON. — The
Court held in Ysmael, Jr. & Co., Inc. v. Deputy Executive Secretary: "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."cralaw virtua1aw library
2. ID.; ID.; ID.; CANNOT BE ASSERTED FOR THE FIRST TIME ON APPEAL; CASE AT BAR.
— While the Solicitor General raised the issue of res judicata in the Court of Appeals also with
regard to the said administrative decisions, the fact that he raised it only on appeal remains.
This fact militates against the case of the petitioner because if the doctrine of res judicata is not
set up seasonably as a defense or ground of objection, it is deemed waived; it cannot be
asserted for the first time on appeal. Perhaps, this is the reason why the petitioner, through the
Solicitor General, does not directly invoke the said doctrine in the instant petition for review on
certiorari. Instead, the Solicitor General euphemistically questions the authority of the cadastral
court to "review" the final and executory decisions of the administrative officials concerned.
4. ID.; ID.; ID.; JURISDICTION OVER THE SUBJECT MATTER AS A REQUISITE THEREOF;
NOT PRESENT IN CASE AT BAR. — Res judicata also may not apply with respect to the
decision of the Office of the President finding that the transaction between Lamorena and
Caburian was an equitable mortgage, but for another reason. The decision was solely based on
the appeal of Lamorena but unfortunately, the issue raised therein, i.e., the nature of the contract
between Caburian and the Lamorenas, was a judicial one, over which the Executive Branch has
no jurisdiction [Republic v. Alagad, G.R. No. 66807, January 26, 1989, 169 SCRA 455.] The
instant cadastral proceeding, therefore, cannot be barred by the final and executory decision of
the Office of the President in the absence of a requisite in the applicability of the doctrine of res
judicata: the Office of the President had no jurisdiction over the subject matter of the appeal.
[The requisites of res judicata are the following: (a) the presence of a final former judgment; (b)
the former judgment was rendered by a court having jurisdiction over the subject matter and the
parties; (c) the former judgment is a judgment on the merits; and (d) there is between the first
and the second actions, identity of parties, of subject matter, and of cause of action (Heirs of
the late Santiago Maningo v. Intermediate Appellate Court, G.R. Nos. 73559-62, March 26,
1990, 183 SCRA 691).
4. ID.; REGIONAL TRIAL COURT; SCOPE OF POWER OVER LAND REGISTRATION CASE.
— P.D. No. 1529, the Property Registration Decree, has eliminated the distinction between the
general jurisdiction vested in the regional trial court and the limited jurisdiction formerly
conferred upon it when acting merely as a cadastral court. Thus, the court may resolve issues
other than those strictly pertaining to land registration in cases (1) where the parties mutually
agreed or have acquiesced in submitting controversial issues for determination; (2) where they
have been given full opportunity to present their evidence; and (3) where the court has
considered the evidence the evidence already of record and is convinced that the same is
sufficient for rendering a decision upon such controversial issues. Consequently, under the third
circumstance, the court below could have properly determined the nature of the document
executed by Caburian and the Lamorenas if only to avoid multiplicity of suits.
5. ADMINISTRATIVE LAW; PRESIDENT; POWER TO DISPOSE LAND OF PUBLIC DOMAIN;
RULE. — To enable it to obtain legal authority on its continued use of the two-hectare land as
a school site, the Municipality of Mati should take the necessary steps outlined by law. Under
Sec. 69 of the Public Land Act, the President of the Philippines may execute contracts in favor
of any province, municipality of branch or subdivision of the government needing any portion of
the land of the public domain open to concession for educational, charitable or other similar
purposes in the form of donation, sale, lease, exchange or any other form. Hence, the municipal
government of Mati would do well to take the necessary appropriate action towards legally
retaining the two-hectare area as a school site.
DECISION
ROMERO, J.:
This is a petition for review on certiorari 1 which seeks to annul and set aside the June 30, 1980
decision of the Court of Appeals 2 affirming the August 19, 1974 decision of then Court of First
Instance of Davao 3 adjudicating to private respondents the portions of the land in controversy
for which they had laid claims, and ordering the survey of said portions and thereafter, the
issuance of original certificates of title in their names on the basis of said survey.chanrobles law
library : red
The land in question is located in Mati, Davao and has a total area of 815,320 square meters.
It was allegedly bought by Encarnacion Lamorena between 1920 and 1921 from Bonifacio
Baldomera (or Palmera) and Lucas Lamonte. In 1938, Lamorena filed in the Court of First
Instance of Davao "Expediente No. 291, G.L.R.O. No. 53114," a petition for registration of the
said 81-hectare land which had been surveyed under Psu-46022, subdivided and designated
as Lots Nos. 1772-A, 1772-B, 1772-C, 1768, 2816, 1775, 1770-A, 1770-B and 2680, Cad. 286.
On October 20, 1938, Lamorena and one Mariano Lamorena, who appears to be the former’s
brother, executed a "deed of sale with right to repurchase" the same tract of land within one
year from November 8, 1938 in consideration of the amount of P4,112.00 in favor of Baldomera
G. Caburian. 4 The parties stipulated in the contract that if the vendors should fail to exercise
the right to repurchase, such right would be forfeited and the contract, without executing another
document therefore, would be considered as an absolute sale and the vendor would abandon
and vacate the premises. The parties also agreed that the vendor would pay the vendee an
"annual rental" of P150.00 "payable on or before November, 8, 1939."cralaw virtua1aw library
On February 19, 1940, Lamorena filed in "Expediente No. 291" a petition praying for the
dismissal of her application for registration and for a declaration that the land subject of the
petition or application for registration is part of the public domain. Consequently, on March 8,
1940, the court rendered a decision declaring the area applied for as public land; recognized
Lamorena as the owner and possessor of all the improvements thereon, and recommended that
she be given preference by the Director of Lands in the acquisition of the said land in accordance
with law ("see recomiendo al Director de Terrenos que conceda preferencia a dicha solicitante
en la acquisicion de dicho terreno, de acuerdo con las disposiciones de las ley [sic] vigente
sobre el particular"). 5
Sometime in 1946, Caburian, exercising her alleged acquired right of ownership over the land,
demanded from Neri and the others working on the land, the share of the Lamorenas in its
produce. Some complied with the demand but the rest who refused to do so, were ordered by
Caburian to vacate the premises. Hence, on August 25, 1947, Justo Charmen, Adriano Archi
(Archie or Arche). Paterno Madanlo, Fernando Mansilagan, Gervacio Valenteros, Agapito
Gurnot (Gornot), Federico Vargas, Heirs of Francisco Magundag and Gabriel Palmera,
represented by Leopoldo Lopez, petitioned the President to intervene in their behalf in the
controversy. The Bureau of Lands thereafter investigated the matter. It was found out that the
said alleged tenants desired to acquire the land through homestead applications, Caburian by
sales application and the Lamorenas by free patent applications. The Lamorenas had included
two sisters, Carmen and Gloria, as claimant-applicants just so they could comply with the law
limiting each free patent applicant to a maximum of 24 hectares.chanrobles law library
In the decisions all dated October 23, 1951, then Director of Lands Jose P. Dans dismissed the
claim of the homestead applicants on the basis of his finding that they were either tenants of
the Lamorenas or mere intruders. 6 On the other hand, in B.L. Conflict No. 58 (N), the Director
of Lands considered the homestead application of Rufo Neri and rejected the free patent
applications of the Lamorenas on the ground that "Baldomera Caburian has been subrogated
to the ownership of the improvements existing on the land described in Psu-46022 and to
whatever rights the respondents Lamorenas have acquired to the land in question." 7 The
dispositive portion of the decision of the Director of Lands, also dated October 23, 1951,
states:jgc:chanrobles.com.ph
"IN THE LIGHT OF ALL THE FOREGOING, this Office is of the opinion, and so decides, that
the claims of Rufo Neri to the portion which is outside of his Homestead Application No. 183913
(E-99319) should be, as hereby it is dismissed. The Free Patent Applications (all new) of
Encarnacion, Mariano, Carmen and Gloria all surnamed Lamorena, are hereby rejected.
It appearing that Lot No. 1773 of 0.602 hectares is part of the Municipal Road and Lot No. 1770-
B of 4.000 hectares is needed for a school site, those lots shall be excluded from the land in
dispute.
There being no sales application of Baldomera G. Caburian in the records of this office, she
shall file within sixty (60) days from the date hereof, another sales application to cover Lots Nos.
1768, 1770-A. 1772-A, 1772-B. 1772-C, 2680, and 2816, Mati Cadastre No. 286, in accordance
with the sketch reproduced at the back hereof, and the application shall be given due course.
SO ORDERED."cralaw virtua1aw library
The homestead applicants and the Lamorenas appealed to the Secretary of Agriculture and
Natural Resources. On July 23, 1952 then Secretary Fernando Lopez dismissed the appeal of
the homestead applicants in view of their failure to file memorandum in support of their appeal.
8 It was on May 3, 1954 that the appeals of Rufo Neri and the Lamorenas were resolved by
then Undersecretary of Agriculture and Natural Resources Jaime Ferrer. 9 The decision
emphasized the fact that since Caburian did not question the decision of the Director of Lands
excluding from her sales application the municipal road and the school, said portion of the
decision had become final and executory.
The same decision, quoting the pertinent terms and conditions of the contract between
Encarnacion and Mariano Lamorena and Caburian and noting the facts that the Lamorenas
"failed to redeem the land in question as well as the improvements thereon in accordance with
the terms of the contract" and that the land had been declared part of the public domain in the
1940 decision in G.L.R.O. No. 53114, ruled that the conveyance made by the Lamorenas in
favor of Caburian "should be considered as a transfer only of their possessory right and the
improvements thereon." The decision also held that the contract between the Lamorenas and
Caburian was one of sale with right to repurchase and not an equitable mortgage. Accordingly,
the appeals were dismissed.chanrobles.com:cralaw:red
The Lamorenas elevated the case to the Office of the President on the sole issue of whether
the contract between then and Caburian was a deed of sale with right to repurchase or an
equitable mortgage. In his decision of January 10, 1958, then Executive Secretary Juan A. Pajo,
acting on the strength of the opinion of the Secretary of Justice, deemed the contract as one of
equitable mortgage and therefore reversed the decision appealed from. 10 He directed that "the
application of the appellants should be given due course and free patents granted then if they
qualify therefore" but "without prejudice to whatever action may be instituted in court by the
appellee against the appellants with regard to their contract."cralaw virtua1aw library
The decision of the Office of the President having become final and executory, on June 10,
1959, Director of Lands Zoilo Castrillo ordered its execution. He specifically directed the District
Land Officer of Davao City "to repair to the premises and enforce the aforementioned decision
of the President, by ordering Baldomera G. Caburian, her tenants, relatives and all those acting
in her behalf to vacate the land in question and placing Encarnacion, Mariano, Carmen and
Gloria, all surnamed Lamorena in possession of their respective portions." 11
It turned out, however, that Caburian had filed a notion for the reconsideration of the decision
of the Office of the President but in its "decision" of May 31, 1961, said Office denied it. The
records likewise show that earlier, or on August 5, 1959, Caburian had filed in the Court of First
Instance of Manila a petition for certiorari seeking the "review" of the decision of the Office of
the President. 12 She obtained a writ of preliminary injunction enjoining the execution of said
decision but upon Lamorena’s filing a bond, the injunction was dissolved. On May 4, 1961, the
court dismissed the petition. Notwithstanding the finality of said decision, Caburian remained in
possession of the land. Hence, on July 31, 1961, Acting Director of Lands Nicanor G. Jorge
issued an order of execution reiterating the earlier order of execution of Director of Lands
Castrillo.
Undaunted, Caburian (now represented by her heir and special administratrix Guillermina
Garcia Vda. de Mitre) elevated the case to the Court of Appeals. 13 In the decision of January
12, 1973, 14 said appellate court resolved the issue of whether or not the Office of the President
abused its discretion in requesting the Secretary of Justice for an opinion on the nature of the
contract between Caburian and the Lamorenas when, according to Caburian, said Office
"should have based its decision upon deceit, misrepresentations and bad faith committed by"
the Lamorenas "who allegedly misrepresented the true facts of the case." Finding Mrs. Mitre’s
allegation as baseless, the Court of Appeals affirmed the judgment appealed from.
Meanwhile, in 1954, the Director of Lands, in behalf of the Republic of the Philippines, filed in
the Municipal Court of Mati a petition for registration of a tract of land covering 12,485.8245
hectares designated as Mati Cadastre No. 286. Docketed as Cadastral Case No. N-16, the
petition was pursuant to Sec. 1855 of the Revised Administrative Code in relation to Sec. 53 of
the Public Land Act (Commonwealth Act No. 141). The petition alleged that "no voluntary
applications for the registration of the said parcels of land have been filed under the provisions
of Chapter VIII of Commonwealth Act No. 141, nor under the provisions of the Land Registration
Law, and that the title thereto is uncertain and open to question." 15 From 1959 to 1960, the
following claimants filed their cadastral answers: Baldomera Caburian (3 answers), Gloria
Lamorena (3 answers), Paterno Madanlo (3 answers), Justo Charmen, Rufo Neri, Adriano
Arche, Agapito Gornot, the Municipal Government of Mati and Encarnacion Lamorena (3
answers).chanrobles law library : red
On March 1, 1963, the Solicitor General, appearing for the Director of Lands filed a manifestation
16 stating that by virtue of the decision of March 8, 1940 of the Court of First Instance of Davao
declaring 81 hectares of the land in question as part of the public domain, the case had become
res judicata; that Civil Case No. 630 for recovery of possession of the same tract of land which
was filed by Caburian against Rufo Neri, Et. Al. in the Municipal Court of Mati had been
dismissed on the ground that the subject matter of the action is public land; that, having filed
public land applications and protests against the applications of others, the claimants were "now
estopped from claiming the land as their private properties because by their acts, they have
recognized the land in question as public agricultural land" ; that the "findings of facts of the
Land Department under the principle of separation of powers shall not be disturbed by courts of
law where there is no showing that there was grave abuse in the exercise of discretion" and
therefore the administrative finding that Rufo Neri, Et. Al. are tenants should not be disturbed,
and that the Office of the President having resolved the legal issue of the nature of the contract
between the Lamorenas and Caburian, the latter had lost all rights to and claims of private
ownership over the land in question. The Solicitor General prayed for the dismissal of the claims
of Baldomera G. Caburian, Rufo Neri, Justo Charmen, Adriano Arche, Paterno Madanlo,
Francisco Magundag or his heirs, Federico Vargas, Gabriel Palmera of his heirs, Pedro
Racoma, Fernando Mansilagan and Agapito Gornot, as well as the claims of Encarnacion
Lamorena "insofar as their claims to the land are private ownership."cralaw virtua1aw library
In their answer to said manifestation, claimants Rufo Neri Justo Charmen, Agapito Gurnot,
Paterno Madanlo and Adriano Arche disputed the Solicitor General’s contention that res judicata
was applicable in their case in view of the fact that they were not parties to the case decided in
1940. Asserting that they were allegedly forced to enter into a contract of tenancy by Mariano
Lamorena, a Philippine Constabulary Lieutenant, they denied that they were ever tenants as
some of them had been occupying the land as early as 1915 and planting it to coconuts and
root crops without sharing the harvests with anyone. They prayed that the court should
"maintained jurisdiction in the judicial confirmation of (their) imperfect titled." 17
On May 10, 1963, the court dismissed the claims of Baldomera Caburian, Rufo Neri, Justo
Charmen, Adriano Arche, Paterno Madanlo, Francisco Magundag or his heirs, Federico Vargas,
Gabriel Palmera or his heirs, Pedro Racoma, Fernando Mansilagan and Agapito Gurnot as well
as that of Encarnacion Lamorena as prayed for by the Solicitor General in his manifestation. the
court held that if none of the claimants in a cadastral proceeding can prove that he is entitled to
his claim, and the land had been declared public land, the judgment of the Court declaring the
land public constitutes res judicata. 18
Claimants Rufo Neri, Justo Charmen, Adriano Arche, Paterno Madanlo and Agapito Gurnot
moved for the reconsideration of said order but upon the opposition of the Lamorenas, the court
struck out the motion from the records.
On January 28, 1964, the Solicitor General filed a motion for the issuance of a writ of
possession. Said motion was objected to by Rufo Neri, Et. Al. on the grounds that the March 8,
1940 decision was rendered without any trial on the merits and that under Sec. 6 of the Public
Land Act, only the President, upon the recommendation of the Secretary of Agriculture and
Natural Resources, can classify lands of the public domain and declare them as open for
disposition. Asserting that they had been in open and continuous possession of the land since
1923, Rufo Neri, Et. Al. argued that they were qualified to acquire public lands suitable for
agricultural purposes through homestead, sale, lease or confirmation of an imperfect titled.
Moreover, the same claimants contended that under Evangelista v. Director of Lands, 19 the
declaration in a cadastral case that certain lands are public is not a final decree of confirmation
and registration within the meaning of Sec. 38 of the Land Registration Act and that a writ of
possession may only be granted after the finality of a decree of registration adjudicating title to
a successful applicant. 20
Rufo Neri, Et. Al. also filed a motion to set aside the order dismissing their claims. Reiterating
that only the President and not the courts may declare any portion of land as part of the public
domain, they asserted that the March 8, 1940 decision was null and void for lack of jurisdiction.
21
Finding the motion to set aside the order dismissing the claims of Rufo Neri, Et. Al. to be wanting
in merit, on February 17, 1964, the court issued the writ of possession prayed for by the Solicitor
General. 22 Upon the latter’s motion, the court modified the order of February 17, 1964 by
specifying in the order of April 13, 1964 that the District Land Officer should take possession of
Lot Nos. 713, 1772-A, 1772-B, 1772-C, 1768, 1775, 1770-A, 1770-B, 2816, and 2685 of Cad.
286, Mati, Davao. 23
Alleging that she had not been notified of the orders of May 10, 1963 and April 13, 1964,
Guillermina Garcia Vda. de Mitre, representing the deceased Baldomera Caburian, 24 filed a
motion for the reconsideration said orders. She averred that since the said orders were merely
based on the manifestation and motion of the Solicitor General, the court treated the said
pleading as a motion to dismiss. However, she added that a motion to dismiss is not applicable
in cadastral and registration proceedings which demand that all the parties thereto should be
properly notified and heard. She asserted that since she was not a party in the case which led
to the decision of march 8, 1940, she cannot be bound thereby. She contended that given the
chance, she could prove her claim over the land under Republic Act Nos. 1942 and 931 as
amended by Republic Act No. 2061.25cralaw:red
In answer to Mrs. Mitre’s motion for reconsideration, the Solicitor General contended that the
records contain proofs that she had been notified of the proceedings which led to the issuance
of the writ of possession; that his manifestation, to which were attached several public
documents, should not be considered as a mere motion to dismiss but as a "continuation of the
hearing of the case, particularly with respect to the issue (of) whether or not the land in question,
in a previous proceedings (sic), had already been declared a public land" ; that Caburian has
no right or interest in the land because by filing Sales Application No. V-6937, she was estopped
from claiming that she had been in possession thereof for more the thirty years; that the decision
of March 8, 1940, a land registration proceeding which is a proceeding in rem, is binding upon
the whole world including Caburian, who, as vendee of the land, is estopped from claiming any
right other than that which came from the vendor; that the issuance of the writ of possession
was in order since the Government of the Philippines, through the Director of Lands, is the
owner of all lands of the public domain in the absence of proof that the land in question is of
private ownership, and the motion for reconsideration of Mitre should be treated as a petition
for relief from judgment under Rule 38. 26
Mrs. Mitre filed a reply to said answer of the Solicitor General reiterating her claim that she had
not been given her day in court in regard to the issuance of the writ of possession. Thereafter,
she filed a motion to recall or set aside the orders of February 17, 1964 and April 13, 1964. Mrs.
Mitre alleged that said orders had been brought before the Court of Appeals under CA-G.R. No.
34100-R on a petition for certiorari and that on August 8, 1964 said appellate court set aside
said orders and directed the lower court to proceed with the hearing of the cadastral case. 27
Inspite of said decision, the Sheriff of Davao allegedly kept on "molesting" Mrs. Mitre and her
overseer by trying to take possession of the premises and taking the harvests therefrom.
On May 17, 1965, the court issued an order reconsidering its "order of dismissal of February 8,
1965" (sic) and set the case for hearing. 28
Meanwhile, it appears that Rufo Neri, Justo Charmen, Adriano Arche, Agapito Gurnot and
Paterno Madanlo filed with the Court of Appeals a petition to prohibit Judge Manases Reyes
from recognizing the representation of Lamorena, Caburian and the Municipality of Mati during
the trial on the merits of Cadastral Case No. 16. On December 31, 1965, the Court of Appeals
rendered a decision dismissing the petition for prohibition on the strength of two reasons. 29
First, the same court’s decision in CA-G.R. No. 34100-R "completely wiped out and rendered
inexistent the order annex B (issued on May 10, 1964 declaring the lots as public land and
dismissing the claims of Rufo Neri, Et Al., Caburian and Lamorena), and in fact directed the
lower court to hear the cadastral case after the requirements therefore had been complied with."
Second, the respondents (meaning, Lamorena, Caburian and the Municipality of Mati) are "real
parties in interest in the cadastral case and their participation therein is necessary for the
complete determination or settlement of the case once and for all."cralaw virtua1aw library
In due course, the court below issued a decree dated August 19, 1974. 30 Placing more
probative weight on the evidence presented by herein private respondents, the court found that
the tenancy relationship alleged by both Lamorena and Caburian was never enforced; that
Lamorena possessed no more than eight hectares of the land in question 31 and said area is
not even being claimed by the alleged tenants; that Neri, Et Al., have been in continuous, open,
adverse and notorious possession of the areas they are claiming except in 1947 when
Caburian’s encargado tried to collect shares from the, and that because Lamorena failed to
repurchase the land she sold to Caburian, the latter became its owner but only with respect to
what Lamorena could sell to her. The dispositive portion of the decree
reads:jgc:chanrobles.com.ph
"IN VIEW OF THE FOREGOING, judgment is hereby rendered:chanrob1es virtual 1aw library
1. Adjudicating to the following actual occupants the portions with the areas subject of their
respective claims as established by the proofs of record, to wit:chanrob1es virtual 1aw library
(a) To Juliana Gornot her occupation of three (3) hectares;
(b) To Rufo Neri, his occupation of twenty-four (24) hectares;
(c) To Paterno Madanlo the area occupied by him consisting of three contiguous lots with an
area of nineteen and one-half hectares (19 1/2);
(d) To Justo Charmen, his occupation with an area of fifteen (15) hectares;
(e) To Adriano Arche his occupation of ten (10) hectares;
(f) To Guillermina Vda. de Mitre the area of eight (8) hectares; and
(g) To the Municipality of Mati, Davao Oriental, the area of two (2) hectares actually utilized as
school site and the cadastral road —
2. Ordering the survey of the different portions above adjudicated and awarded, the expenses
of the survey to be borne by them pro rata; and
3. Ordering the issuance of original certificates of title in their respective favor on the basis of
the survey directed in the next preceding paragraph."cralaw virtua1aw library
From that decision, Encarnacion Lamorena and the Republic of the Philippines represented by
the Director of Lands appealed to the Court of Appeals. On June 30, 1981, said appellate court
affirmed the decision of the lower court. Hence, the Director of Lands interposed the instant
petition for review on certiorari questioning the power and authority of the cadastral court to: (a)
review and pass upon the administrative decisions rendered by the Director of Lands which, as
affirmed by the Secretary of Agriculture and Natural Resources, had long become final and
executory; (b) review the decision of the Office of the President finding the transaction between
Lamorena and Caburian to be an equitable mortgage; (c) adjudicate portions of the land in favor
of the respondents inasmuch as they had been found by the Director of Lands to be mere
tenants of either Lamorena or Caburian, and (d) adjudicate portions of the land to the
Municipality of mati as prescription over public land used for public purpose does not rung
against the State and public lands used or devoted to public use cannot be registered under the
Cadastral Act nor under the Public Land Act except by executive proclamation.chanrobles.com
: virtual law library
The first three question raised by the petitioner boil down to the basic issue of the applicability
of the doctrine of res judicata in this case. There is not doubt as to the finality of the decisions
of the Director of Lands as affirmed by the Secretary of Natural Resources by the dismissal of
the appeal of the herein private respondents (except Guillermina Vda. de Mitre) because only
the Lamorenas elevated the case to the Office of the President. Undoubtedly, too, the said
administrative officers had jurisdiction over the subject matter and the parties and that the
decisions on private respondents’ free patent and homestead applications were on the merit.
With regard, therefore, to said private respondents, they appear to be bound by the decisions
of said administrative officers for, as the Court held in Ysmael, Jr. & Co., Inc. v. Deputy Executive
Secretary: 32
"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."cralaw virtua1aw library
However, in the instant petition, the Solicitor General invokes res judicata with respect to the
final and executory administrative decisions of the Executive branch. The Solicitor General is
not putting in issue the applicability of said principle with respect to the March 8, 1940 decision
of the Court of First Instance of Davao which he did in the cadastral proceeding below through
his manifestation of March 1, 1963. While the Solicitor General raised the issue of res judicata
in the Court of Appeals also with regard to the said administrative decisions, 33 the fact that he
raised it only on appeal remains. This fact militates against the case of the petitioner because if
the doctrine of res judicata is not set up seasonably as a defense or ground of objection, it is
deemed waived; it cannot be asserted for the first time on appeal. 34 Perhaps, this is the reason
why the petitioner, through the Solicitor General, does not directly invoke the said doctrine in
the instant petition for review on certiorari. Instead, the Solicitor General euphemistically
questions the authority of the cadastral court to "review" the final and executory decisions of the
administrative officials concerned.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
Res judicata also may not apply with respect to the decision of the Office of the President finding
that the transaction between Lamorena and Caburian was an equitable mortgage, but for
another reason. The decision was solely based on the appeal of Lamorena but unfortunately,
the issue raised therein, i.e., the nature of the contract between Caburian and the Lamorenas,
was a judicial one, over which the Executive Branch has no jurisdiction. 35 The instant cadastral
proceeding, therefore, cannot be barred by the final and executory decision of the Office of the
President in the absence of a requisite in the applicability of the doctrine of res judicata: the
Office of the President had no jurisdiction over the subject matter of the appeal. 36 Thus, the
court below could have confronted directly the issue of whether or not the contract between the
Lamorenas and Caburian was one of pacto de retro sale or an equitable mortgage, for it is within
a cadastral court’s power to determine the nature of said document to avoid multiplicity of suits.
Instead of doing so, however, the court skirted the issue and focused on the facts that Lamorena
actually occupied and could have sold only eight hectares of the land and that Lamorena cleverly
filed the 1940 land registration proceeding only to have it dismissed later upon her own
manifestation that the land is public so that she could file a free patent application therefor.
The inapplicability of the doctrine of res judicata in effect allowed the courts below the discretion
to pass upon the issue of whether or not the private respondents herein, including Mrs. Mitre
and her predecessor-in-interest, are bona fide possessors of the portions of land they are
claiming. Although the power and authority of a cadastral court are circumscribed by law, it
correctly passed upon said issue.
Parenthetically, P.D. No. 1529, the Property Registration Decree, has eliminated the distinction
between the general jurisdiction vested in the regional trial court and the limited jurisdiction
formerly conferred upon it when acting merely as a cadastral court. Thus, the court may resolve
issues other than those strictly pertaining to land registration in cases (1) where the parties
mutually agreed or have acquiesced in submitting controversial issues for determination; (2)
where they have been given full opportunity to present their evidence; and (3) where the court
has considered the evidence the evidence already of record and is convinced that the same is
sufficient for rendering a decision upon such controversial issues. 37 Consequently, under the
third circumstance, the court below could have properly determined the nature of the document
executed by Caburian and the Lamorenas if only to avoid multiplicity of suits.
In any case, the lower court correctly adjudicated to the private respondents the portions of the
land subject of their claims. With regard to Mrs. Mitre, the lower court did not err in adjudicating
to her only eight hectares, the actual area possessed and occupied by the Lamorenas through
a tenant and, which is the area over which the latter could legally transfer their rights. Inasmuch
as Baldomera Caburian believed that she was buying eighty-one hectares from the Lamorenas,
her effort, as well as that of her successor-in-interest, in exhausting all remedies, judicial and
administrative, is understandable. Sadly for her, a sizeable portion of the subject of the sale did
not belong to the vendors.chanroblesvirtualawlibrary
The petitioner correctly objected to the legality of the adjudication of two hectares of the land in
favor of the Municipality of Mati. The finding of cadastral court that Paterno Madanlo "conceded"
or "donated" 38 the two hectares to the municipality does not justify its adjudication to the latter.
Madanlo could not have legally donated a portion of the land the ownership of which was not
yet vested in him. 39 Apparently, such adjudication was based on the municipality’s long,
continuous and adverse possession of the area which it used as a school site. Under Art. 1108
of the Civil Code, however, prescription, both acquisitive and extinctive, does not run against
the State and its subdivisions.
To enable it to obtain legal authority on its continued use of the two-hectare land as a school
site, the Municipality of Mati should take the necessary steps outlined by law. Under Sec. 69 of
the Public Land Act, the President of the Philippines may execute contracts in favor of any
province, municipality of branch or subdivision of the government needing any portion of the
land of the public domain open to concession for educational, charitable or other similar
purposes in the form of donation, sale, lease, exchange or any other form. 40 Hence, the
municipal government of Mati would do well to take the necessary appropriate action towards
legally retaining the two-hectare area as a school site.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED subject to the modification
that the adjudication of the two-hectare land in favor of the Municipality of Mati be nullified.
Instead, said municipality should be directed to take the necessary steps to attain legal title over
the said area for educational purposes. No costs.chanrobles.com.ph : virtual law library
SO ORDERED.
Bidin, Davide, Jr. and Melo, JJ., concur.
Gutierrez, Jr., J., is on leave.
G.R. No. 159876 June 26, 2007 Records yield the following facts:

DINO A. CRUCILLO, Petitioner, On March 13, 1996, Atty. Orlando L. Salvador, then PCGG Consultant of the Presidential Ad
vs. Hoc Committee on Behest Loans (the Behest Loan Committee, for short), filed with the OOMB
OFFICE OF THE OMBUDSMAN and the PRESIDENTIAL COMMISSION ON GOOD a Sworn Statement8 therein stating that, sometime in March 1979, PAFICO applied for – and
GOVERNMENT, Respondents. later secured approval from the DBP under Board Resolution (B/R) 2826, s. of 1979 – foreign
currency loans (the subject loan, hereinafter). At the then prevailing exchange rate of US$1:
x----------------------------------------------x Php 7.50, the total peso equivalent of the loan was Php 151,999,995.00. As alleged in the sworn
statement, forming part of the accommodation package was the investment the DBP had to put
G.R. No. 159877 June 26, 2007 up in PAFICO preferred shares in the amount of Php 40 Million to cover part of PAFICO’s pre-
operating expenses and the working capital requirements. In all then, the approved loan was,
JOSE R. TENGCO, JR., Petitioner, per Atty. Salvador, in the aggregate amount of Php 191,999,995.00 (₱151,999,995.00 +
vs. ₱40,000,000.00 = ₱191,999,995.00).9 The Sworn Statement further alleged as follows:
HON. SIMEON V. MARCELO in his capacity as the OMBUDSMAN and the PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, Respondents. c. The original loan was secured as follows (Annex 4, Evidence 11)

DECISION 1. Existing Assets

GARCIA, J.: xxx

In these consolidated petitions for certiorari under Rule 65 of the Rules of Court, with prayer for Total existing assets ₱1,405,325
injunctive relief, petitioners Dino A. Crucillo (Crucillo, for short) and Jose R. Tengco, Jr.1
(Tengco, for short) seek the annulment and setting aside of the Order/Resolution2 dated March 2. Assets to be acquired
10, 2003 of the Office of the Ombudsman (OOMB)3 in OMB Case No. 0-96-0794, as reiterated
in a Resolution4 of July 21, 2003, finding probable cause to proceed against both petitioners for xxx xxx xxx
violation of Section 3(e) and (g)5 of Republic Act (R.A.) No. 3019, as amended, otherwise known
as the Anti-Graft and Corrupt Practices Act. Total assets to be acquired ₱ 194,068,991

The instant case turns on the charge filed by the respondent Presidential Commission on Good Grand Total ₱ 195,474,316
Government (PCGG) against the then board members/officers of both Phil-Asia Food Industries
Corporation (PAFICO) and the Development Bank of the Philippines (DBP) for corrupt practices % Loan Value
arising from the alleged "behest" loan DBP extended to PAFICO to finance the latter’s soybeans
processing plant project. Memorandum Circular (MC) No. 61,6 series of 1992, lists several 80%
criteria to show the earmarks of a "behest loan." Among these are: (1) the loan was under
collateralized; (2) the borrowing entity was undercapitalized; (3) endorsement by high d) PAFICO’s paid up capital as of March 14, 1979
government officials; and 4) unusual speed in releasing the loan proceeds.
(Annex 4, Evidence 14) - - - - - - - - - - - - ₱4.5 million
At times material to this case, petitioner Crucillo was the Manager of the DBP’s Agricultural
Projects Department I (APD I). Petitioner Tengco, on the other hand, sat as member of DBP’s 5. Said evidence show that the loan was without sufficient collateral whereby DBP had to put-
Board of Governors. DBP’s charter7 at that time empowered the bank "to grant loans to [and] up equity in the amount of ₱40 million to cover the collateral deficiency … and PAFICO itself
to purchase preferred redeemable shares of stock of any agricultural and/or industrial had no sufficient capital to be entitled of the loan (sic), paid-up capital amounts to ₱4.5 million
enterprises . . . to finance their fixed and operating capital requirements. All . . . loans shall be only.
granted only under such terms, conditions and restrictions as the bank shall determine."
6. PAFICO obtained additional concessions and/or benefits … and was approved by the DBP
Board under B/R 1809 … such as:
a) The deletion of [PAFICO board members] … Antonio Tan, Miguel Gonzales and Federico
Ballon as signatories of the loan …;
b) The exclusion of Messrs. Benedicto and Sabido as co-obligors;
c) xxx xxx xxx
xxx xxx xxx. (Emphasis and words in brackets added).
The Sworn Statement, docketed as OMB Case No. 0-96-0794, charged the following individuals
from DBP, namely: Rafael A. Sison, Jose V. de Ocampo, Tengco, Recio M. Garcia and Crucillo;
and the then members of the PAFICO Board, to wit: Roberto A. Benedicto (now deceased), and
four others, with violation of Section 3(e) and (g) of R.A. No. 3019.
Some time after the filing of the Sworn Statement, the following events transpired:
1. In a Resolution10 of April 20, 1999, as approved by then Ombudsman (Omb.) Aniano
Desierto, Graft Investigation Officer (GIO ) Fe Q. Palmiano-Salvador of the Evaluation and
Preliminary Investigation Bureau (EPIB) dismissed the case on the ground that the subject loan,
being a developmental loan and sufficiently collateralized, is not behest.
2. After the PCGG’s motion for reconsideration was denied, the case was referred to GIO
Evangeline Grafil who, in her review-report, recommended giving due course to the PCGG’s
motion for reconsideration. GIO Grafil, however, recommended that those involved be charged
only with violation of Sec. 3(e) R.A. No. 3019. 11
Special Prosecution Officer (SPO) Victorio Tabanguil disagreed with GIO Grafil’s
recommendation and concurred with GIO Salvador’s resolution. 12
3. Owing to the conflicting positions taken by the reviewing officials, then Omb. Desierto referred
the case to the Office of the Legal Affairs (OLA) for another review.
On February 19, 2001, the OLA recommended - and Omb. Desierto approved - the indictment
of Tengco, Crucillo, et al. for violation of Sec. 3(e) of R.A. No. 3019. 13
4. On March 23, 2001, an information14 was filed with the Sandiganbayan against the
petitioners and eight (8) others. The inculpatory statements in the information read:
That during the period from December 7, 1979 to June 8, 1982, …, accused RAFAEL A. SISON,
JOSE V. DE OCAMPO, JOSE R. TENGCO and RECIO M. GARCIA, all public officers, being
the Board Members of the … (DBP) and DINO A. CRUCILLO, also a public officer, being then
the Manager of the DBP, while in the performance of their official and administrative functions
as such, taking advantage of the same, conspiring together and mutually helping with accused
ROBERTO A. BENEDICTO, ROBERTO M. SABIDO, [et al.], private individuals and officials of
the … (PAFICO), a private corporation engaged primarily in "Soybean Processing", with evident
bad faith and manifest partiality, did then and there willfully, unlawfully and criminally give
unwarranted benefit, advantage, or preference to PAFICO by facilitating and granting a loan to
the said PAFICO in the total sum ₱207,159,148.42 …, despite the fact that at the time of the
grant thereof, PAFICO had no adequate collateral to offer and was also undercapitalized, thus
causing undue injury to the government in the aforestated amount of the loan.
CONTRARY TO LAW. (Emphasis and words in brackets added)
5. On May 4, 2001, the Sandiganbayan Fifth Division, to which the case, docketed as Crim.
Case No. 26539, was raffled, ordered the OOMB to conduct a preliminary investigation insofar
as the petitioners and accused Rafael Sison were concerned, they not having been accorded
the benefit of a preliminary investigation.
Following the submission by those concerned of their counter-affidavits and countervailing
evidence, the EPIB, through GIO Myrna A. Corral, via a Resolution15 dated June 3, 2002,
recommended the dismissal of this case on the ground of res judicata, disposing as follows:
WHEREFORE, in view of the foregoing, it is hereby recommended that the charges against
respondents Rafael A. Sison, Jose V. De Ocampo … Jose R. Tengco, [et al.] for violation of
Section 3(e) and (g) of [R.A.] No. 3019 be DISMISSED, the same having been previously
resolved with finality on May 18, 1992 by this Office in TBP No. 87-02383 entitled DBP v. Phil-
Asia Food Industries Corporation (PAFICO).
SO RESOLVED (Words in bracket and emphasis added.)
On July 5, 2002, Omb. Desierto approved GIO Corral’s recommendation. In time, the PCGG
filed a Motion for Reconsideration, followed by a Supplement to Motion for Reconsideration,16
upon the ground that TBP Case No. 87-02388 is different from the present case.
Then came the appointment of respondent Simeon V. Marcelo as Ombudsman.
On March 10, 2003, Omb. Marcelo, acting on the PCGG’s motion to reconsider GIO Corral’s
resolution, issued the herein assailed Order/Resolution,17 disposing as follows:
IN VIEW OF THE FOREGOING, the … said Motion for Reconsideration dated 23 July 2002
filed by the [PCGG] is hereby PARTIALLY GRANTED. As against respondents Rafael A. Sison,
Jose R. Tengco and Dino A. Crucillo, this Office finds probable cause for violation of Section 3
(e) and (g) of [R.A.] No. 3019 and hence, there is no justification for the withdrawal of the
Information against them in Crim. Case No. 26539. As to respondents Miguel V. Gonzales,
Antonio L. Tan and Federico B. Ballon, …, the instant criminal case against them is dismissed.
The Office of the Special Prosecutor is hereby ordered to cause the amendment of the
Information for the exclusion of respondents Miguel V. Gonzales, Antonio L. Tan and Federico
B. Ballon from Criminal Case No. 26539.
SO ORDERED. (Emphasis in the original; Words in brackets added.)
The petitioners’ motion for reconsideration was denied in a resolution18 of July 21, 2003.
Hence, these consolidated petitions. In a Resolution19 of January 26, 2004 in G.R. No. 159876,
the Court issued a Temporary Restraining Order enjoining the Sandiganbayan from proceeding
with the hearing of Criminal Case No. 26539 (OMB Case No. 0-96-0794).
It is the petitioners’ common contention that the instant case is barred by res judicata, petitioner
Tengco submitting, in addition, that his liability, if there be any, was extinguished by the
compromise agreement entered into by and between the Republic of the Philippines (RP),
through the PCGG, and Benedicto wherein the latter ceded the PAFICO complex to the PCGG
which then sold it to the General Milling Corporation, through the Asset Privatization Trust, for
Php 330 million.20 This sale, petitioner Tengco would claim, argues against the idea of the
government incurring damages or placed at a disadvantage as a consequence to the alleged
behest loan grant.
The other grounds petitioner Tengco advanced for the allowance of his petition are as follows:
4. THE MANIFESTLY ERRONEOUS FINDINGS OF RESPONDENT OMBUDSMAN THAT
THE ₱40M EXTENDED TO PAFICO WAS ALLEGEDLY A "LOAN" AND NOT EQUITY
INVESTMENT; THAT THE EQUITY ARRANGEMENT WAS ALLEGEDLY "A MERE
SUBTERFUGE TO ‘DRESS UP’ THE VALUE OF PAFICO’S COLLATERALS"; OR
ALLEGEDLY "TO FRAUDULENTLY SHOW THAT PAFICO HAD MORE THAN ENOUGH
COLLATERAL TO SECURE ITS OBLIGATIONS" AND THAT THE LOANS ARE "UNDER-
COLLATERALIZED" ARE COMPLETELY NOT JUSTIFIED AS THEY ARE SQUARELY
NEGATED AND CATEGORICALLY DISPROVED BY EVIDENCE.
5. THE FINDINGS OF RESPONDENT OMBUDSMAN THAT PAFICO WAS UNDER-
CAPITALIZED AND THAT "THE P40 MILLION EQUITY INFUSION BY DBP WAS USED TO
INCREASE THE ₱70 MILLION CAPITAL REQUIREMENT OF PAFICO" ARE ALSO
SQUARELY NEGATED AND CATEGORICALLY DISPROVED BY THE RECORDS; AGAIN
RESPONDENT OMBUDSMAN COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING
CONCLUSIONS THAT ARE COMPLETELY BASELESS AND DIRECTLY DISPROVED BY
THE EVIDENCE.
The issues in the instant petitions can be summed up into whether respondent OOMB, through
then Omb. Marcelo, committed grave abuse of discretion amounting to lack of jurisdiction when
it issued the assailed resolutions which would pave the way for the continued prosecution of the
petitioners.
To the petitioners, respondent OOMB gravely abused its discretion in coming up with the
assailed resolutions. For, in so doing, it veritably reversed its own resolutions previously
rendered by then Omb. Conrado Vasquez and then Omb. Desierto who, between them, thrice
dismissed the same complaint for alleged violation of Sec. 3(e) and (g) of R.A. No. 3019 lodged
against the herein petitioners and the PAFICO group impleaded as respondents in OMB Case
No. 0-96-0794 and as accused in Criminal Case No. 26539.
In particular relation to the invocation of the res judicata principle and the RP-Benedicto
compromise agreement, three (3) factual premises need at the outset to be established or
underscored.
First, the OOMB had indeed previously passed upon the issue of whether the subject loan
partakes of a behest loan accommodation. The OOMB, particularly during the watch of Omb.
Vasquez, had dismissed with finality a case involving the same subject matter and parties.
The case adverted to is TBP Case No. 87-0238821 (also denominated as TBP Case No. 87-
02383 in certain documents and pleadings), a suit instituted by the "post Edsa I" DBP
management against PAFICO involving what the former considered to be a "behest" loan
approved by its former board in favor of PAFICO. In its Complaint22 in TBP Case No. 87-02388,
DBP prayed, in gist, that appropriate civil and/or criminal proceedings be instituted against all
those involved in the grant of the subject loan.23
In the Resolution24 of October 4, 1991 and approved in July 1992, Omb. Vasquez (the Vasquez
Resolution) dismissed TBP Case No. 87-02388.
Second, via a Resolution25 of June 3, 2002, as approved by Omb. Desierto under date July 5,
2002, the EPIB dismissed OMB Case No. 0-96-0794. As is noted, the June 3, 2002 Resolution
referred to and in fact reproduced in its entirety the Vasquez Resolution in TBP Case No. 87-
02388.
Thereafter, on the basis of the EPIB Resolution, OOMB Prosecutor Jesus A. Michael filed in
Criminal Case No. 26539 a Motion to Withdraw Information.
It is this EPIB Resolution of which respondent PCGG sought reconsideration. The PCGG’s
motion for reconsideration, in turn, was what the OOMB, this time under Omb. Marcelo, granted
via the assailed Order/Resolution of March 10, 2003.
Third, in Republic v. Benedicto,26 involving, among other things, the subject PAFICO loan, the
Court declared as valid the RP-Benedicto Compromise Agreement executed on November 3,
1990 and which the Sandiganbayan approved in its Civil Case No. 0034. Pursuant thereto,
Benedicto and his group-controlled corporations assigned or transferred all their rights and
interests over PAFICO, among other corporate assets.27 As trade off, the RP/PCGG, inter alia,
extended absolute immunity to Benedicto, members of his family, and officers/employees of the
listed corporations, such that there would be no criminal investigation or prosecution for acts or
omissions prior to February 25, 1986 that may be alleged to have violated penal laws including
R.A. No. 3019, in relation to the acquisition of the assets under the agreement.
It is the petitioners’ threshold posture that the dismissal of TBP Case No. 87-02388 and the
initial dismissal of OMB Case No. 0-96-0794, which was rooted on the dismissal of TBP Case
No. 87-02388, bar the continued prosecution of OMB Case No. 0-96-0794 against them.
Respondent OOMB, represented by the Office of the Special Prosecutor (OSP), counters that
the dismissal of TBP Case No. 87-02388 cannot plausibly be set up, pursuant to the res judicata
principle, as basis for dismissing OMB Case No. 0-96-0794. As argued, the resolutions involved
were not, for one, rendered by the courts. For another, there is no identity of parties in the two
cases, TBP Case No. 87-02388 being a suit filed by DBP against PAFICO, whereas the
Committee on Behest Loan is the complainant in OMB Case No. 0-96-0794. Pressing the point
on identity, respondent OOMB alleged that the petitioners were neither named respondents in
TBP Case No. 87-02388 nor did they have interests similar with that of the bank. As further
alleged, the cause of action in OMB Case No. 0-96-0794 pivots on the issue of whether the loan
extended by DBP to PAFICO falls under the category of a behest loan which, if so, would render
the herein petitioners liable under R.A. No. 3019 for giving unwarranted benefits to PAFICO to
the prejudice of the Government. TBP Case No. 87-02388, on the other hand, touched on the
favored treatment given by the DBP to PAFICO.
We are inclined to grant the petitions.
The Court does not ordinarily interfere with the Ombudsman’s finding and call on the existence
of a probable cause.28 Practical consideration as well as respect for the Constitution and R.A.
No. 677029 which have endowed the OOMB with a wide latitude of investigatory and
prosecutory prerogatives virtually free from legislative, executive or judicial intervention are the
moving reasons for this rule.30
This rule of non-interference is, however, far from absolute. Case law has it that the Court will
intervene upon proof of commission of grave abuse of discretion by the Ombudsman.31 In other
words, the Court is not precluded from reviewing the Ombudsman’s action when there is grave
abuse of discretion, in which case the certiorari jurisdiction of the Court may exceptionally be
invoked pursuant to Section 1, Article VIII of the Constitution.32 Accordingly, where grave abuse
of discretion taints the Ombudsman’s finding as to the existence of probable cause, the
aggrieved party may file a petition for certiorari under Rule 65.33 In Cabahug v. People,34 the
Court, citing Brocka v. Enrile,35 enumerated the circumstances where the courts may interfere
with the investigatory power of fiscals and the Ombudsman and thus stay or altogether restrain
criminal prosecutions. Among these are:
(a) To afford protection to the constitutional rights of the accused;
(b) When necessary for the orderly administration of justice or to avoid oppression or multiplicity
of actions;
(c) When double jeopardy is clearly apparent;
(d) Where it is a case of persecution rather than prosecution;
(e) Where there is clearly no prima facie case against the accused and a motion to quash on
that ground has been denied; and
(f) When manifest bad faith accompanies the filing of the criminal charge.
The issue here is whether the petitioners may validly invoke any or a mix of the foregoing
exceptions.
There is more to the arguments on res judicata that calls for the Court’s exercise of its authority
to restrain the prosecution of the petitioners. As things stand, the OOMB no less had determined
that no prima facie case against herein petitioners obtains which would warrant their
prosecution. As can be readily observed, the averments in the Sworn Statement36 of Atty.
Salvador indisputably relate to the same PAFICO loan already resolved with finality in the
Resolution in TBP Case No. 87-02388.
Significantly, during the proceedings after the filing of the Sworn Statement, the OOMB
struggled on the matter of the existence of a prima facie case to justify the filing of an anti-graft
case against the petitioners and their alleged co-conspirators. To be precise, the OOMB did flip-
flopping acts on its findings and conclusion respecting the behest nature of the subject loan and,
with it, the propriety of filing an anti-graft law violation against the petitioners, et al. And there
can hardly be any dispute that respondent OOMB, thru Omb. Marcelo, ignored previous
dismissals of a similar case involving the same transaction and practically the same
personalities.
As may be recalled, GIO Fe Salvador, in her Resolution of April 20, 1999, dismissed on the
merits OMB Case No. 0-96-0794 and later denied the PCGG’s motion for reconsideration. GIO
Grafil, however, would find the PCGG’s motion deserving of merit. But SPO Tabanguil, on
review, disagreed with GIO Grafil’s disposition, finding as he did GIO Salvador’s ruling correct.
When the Sandiganbayan, following the filing of the Information, referred the case back to the
Ombudsman for the requisite preliminary investigation insofar as the petitioners were
concerned, GIO Myrna A. Corral, after due proceedings, recommended the dismissal of OMB
Case No. 0-96-0794. Omb. Desierto concurred with the Corral recommendation and accordingly
dismissed the case.
There is no dispute that both TBP Case No. 87-02388 and OMB Case No. 0-96-0794 involve
the very same loan transaction granted by DBP to PAFICO. And it bears reiterating that the
Vasquez Resolution in TBP Case No. 87-02388 answered in the negative the question of
whether the subject loan is a behest loan. Not only that. The same Vasquez Resolution
categorically declared that the loan transaction was not entered into with manifest partiality or
evident bad faith so as to make out a charge for violation of Section 3(e) of R.A. No. 3019.
The May 1992 Vasquez Resolution was doubtless a final dismissal on the merits of TBP Case
No. 87-02388. As it were, no motion for reconsideration of the same resolution was taken, nor
was it challenged before, let alone reversed by, the proper authority. By the terms of the
dismissal, the criminal prosecution of the members of the DBP Board of Governors as well as
the incorporators of PAFICO was effectively enjoined, thus:
This case involves one of the so-called behest loans granted by complainant [DBP] in favor of
… PAFICO.
xxx xxx xxx
In this regard, there can be no basis for indicting the individual members of the [DBP] Board of
Governors who acted collectively on the aforesaid resolutions principally because there is no
reason to assume that they acted to favor PAFICO or any of its directors or stockholders. In
case the [DBP] suffered undue injury through the non-payment by PAFICO of its loans or the
insufficiency of the collaterals that it presented, responsibility therefor cannot be pinned on them
because as previously stated, they did not perform any act of manifest partiality or evident bad
faith. Thus, prosecution under [R.A.] No. 3019 is untenable.
xxx xxx xxx (Emphasis and words in bracket added.)
Not to be overlooked is the fact that Omb. Desierto, when he approved the dismissal of OMB
Case No. 0-96-0794 pursuant to a resolution dated June 3, 2002, took into account the
involvement of the same subject loan, same bank transactions, and virtually the same parties
as those in TBP Case No. 87-02388. The following excerpts from the said June 3, 2002
resolution37 cannot be any clearer:
After going over the different claims and contentions of respondents Sison [et al.] . . ., we find
the third defense averred by the other respondents to be very significant to be overlooked,
particularly the previous Ombudsman’s [Vasquez’s] findings supporting the dismissal of the
charges against the respondents in TBP No. 87-02383 (sic). This issue was only brought into
light when the respondents were given a chance to ventilate their defenses in this preliminary
investigation. Records show that an Information for violation of Section 3 (e) of R.A. No. 3019
was filed with the Sandiganbayan by this Office against the herein respondents without the
benefit of preliminary investigation, a procedural lapse ….
A perusal of the records of this Office in TBP No. 87-02383 (sic) shows that said case involves
the same parties and the same cause of action over the same bank transactions as the case
now before us. Though it appears therefrom that the complainant is the [DBP], it is the same
case now filed before us by the Fact Finding Committee on Behest Loans (FFCBL). The case
before us now is based on the technical report of the Technical Working Group of the different
government financing institutions, one of the members of which is the [DBP].
Records show that TBP No. 87-02383 (sic) was filed in 1987 while the [Behest Loan Committee]
was only organized in October 1992 …. For this considerable length of time, we cannot fault the
[Behest Loan Committee] for failing to notice that this case involving foreign currency loan
availed of from the DBP by … (PAFICO) had already been resolved and dismissed by the Office
of the Special Prosecutor, the Office then principally tasked to conduct the preliminary
investigation on the anti-graft cases filed before it. As borne by the records, it was no less than
Ombudsman Aniano A. Desierto himself, who was then yet a Special Prosecutor, who
concurred with the findings and recommendation of Special Prosecutor Teresita V. Diaz-Baldos
and which resolution was subsequently approved to be dismissed by the then Ombudsman
Conrado M. Vasquez …. On review, this resolution was also upheld by [SPO] … Reynaldo
Mendoza in his Memorandum dated 18 May 1992 and approved with finality by OMB Vasquez
(p. 661, Records).
xxx a party cannot by varying the form of action or adopting a different method of presenting his
case, escape the operation of the principle that one and the same causes of action shall not
twice be litigated between the same parties and their privies.
WHEREFORE, in view of the foregoing, it is hereby recommended that the charges against
respondents … violation of Section 3 (e) and (g) of [R.A.] No. 3019 be DISMISSED, the same
having been previously resolved with finality on May 18, 1992 by this Office in TBP No. 87-
02383 (sic) entitled "DBP vs. Phil-Asia Food Industries Corporation (PAFICO).38 (Emphasis
and words in brackets added.)
In a bid to bar the application of the res judicata39 rule, respondent OOMB invokes the absence
of the element of identity of parties, its point being that neither of the herein petitioners is a party
in TBP Case No. 87-02388.
The Court disagrees.
Absolute identity of parties is not a condition sine qua non for res judicata to apply; substantial
identity of parties would suffice. Privity or a shared identity of interest between a party in the first
case and the party in the second case, as here, is sufficient to invoke the coverage of the
principle.40
It cannot seriously be disputed that, during the period material, the petitioners, being then
officers of the DBP who had key participation in the processing or approval of the subject
PAFICO loan, had a community of interest in the parties in TBP Case No. 87-02388. They are
in a real sense privy to DBP and PAFICO respecting the subject loan transaction.
As it were, the DBP prayed in TBP Case No. 87-02388 that the "appropriate civil and/or criminal
case/s be filed against those who may appear liable [in the grant of the behest loan]." Doubtless,
the Complaint sought not only the criminal prosecution of erring PAFICO officers, but all those
who may be liable for anti-graft, inclusive of the loan evaluating/approving DBP officials. To our
mind, then, respondent Ombudsman committed grave abuse of discretion by denying both
petitioners the benefits of res judicata because they were not parties specifically named in TBP
Case No. 87-02388.
Res judicata, according to Black, "refers to the rule that a final judgment rendered by a court of
competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies
and, as to them, constitutes an absolute bar to a subsequent action involving the same demand
or cause of action."41 Res judicata is, in fine, a rule of preclusion to the end that facts or issues
settled by final judgment should not be tried anew.42 It has two aspects: 1) the effect of a
judgment as a bar to the prosecution of a second action upon the same claim, demand or cause
of action; this is designated as "bar by former judgment"; and 2) precludes the relitigation of a
particular fact or issues in another action between the same parties on a different claim or cause
of action. This is the rule on "conclusiveness of judgment."43
Respondent OOMB also urges the rejection of the rule on res judicata owing not only to the fact
that the resolution in the first case, i.e., TBP Case No. 87-02388, is not the result of a court
proceedings, but because the causes of action between TBP Case No. 87-02388 and OMB
Case No. 0-96-0794 differ. And anent the second instance, respondent OOMB adds, there is a
difference since the "DBP directors/officers are commonly charged as conspirators, a cause of
action and prosecution theory that did not obtain in the previous case of TBP No. 02388,"44
TBP Case No. 87-02388, respondent OOMB states, focused on the highly favored treatment
given to PAFICO.
The Court is not convinced.
The suggestion that decisions or orders of the Ombudsman and other quasi-judicial bodies
cannot attain the force of res judicata is simply specious. For, as jurisprudence teaches, public
policy demands that, even at the risk of occasional errors, judgments of courts as well as
administrative decisions should become final at some definite time fixed by law and that parties
should not be permitted to litigate the same issues over again.45 This is the raison d’etre upon
which the doctrine of res judicata rests.46 The rule of non quieta movere prescribes that what
was already terminated should not be disturbed or altered at every step. And as we articulated
in Macailing v. Andrada,47 citing a host of cases, the rule which forbids the reopening of a
matter once judicially determined by competent authority "applies as well to the judicial and
quasi-judicial acts of public, executive, or administrative officers and boards acting within their
jurisdiction."
On the matter of identity of causes of action, the Court holds that there is such identity between
TBP Case No. 87-02388 and the instant case, which is the grant of the alleged behest loan. For
perspective, however, a slightly different reasons are given in both cases for characterizing the
subject loan as behest. The alleged "special treatment" given to PAFICO and the "questionable
viability" of its soy beans processing projects are the reasons given in the first case, whereas
reference to "under collateralization" and "under capitalization" is mentioned in the present case.
But then, the application of the res judicata doctrine cannot be evaded by merely varying the
form of the action or engaging a different method of presenting the issue.48 Legal theories do
not operate to constitute a cause of action; new legal theories do not amount to a new cause of
action so as to defeat the application of the principle of res judicata.49
At any rate, assuming arguendo the dissimilarity in the causes of action or the prosecution
theory insisted upon, the second concept of res judicata, the principle of conclusiveness of
judgment, would still preclude the relitigation of the behest loan issue in another action between
the same parties based on a different claim or cause of action. As explained by the Court -
xxx where a right, question or fact is distinctly put in issue and directly determined by a court …
in a first case, between the same parties or their privies, the former adjudication of that fact,
right or question is binding on the parties or their privies in a second suit irrespective of whether
the causes of action are the same. xxx50
It bears to reiterate that the question of whether or not the subject loan partakes of a behest
loan had since 1992 been passed upon by in the Vasquez Resolution in TBP Case No. 87-
02388. And without equivocation, it said that it is not. To be sure, then Omb. Vasquez did not
arrive at his conclusion haphazardly. His resolution speaks for itself:51
Going over the evidence submitted by the complainant [DBP], we note that the application for
the loan, which was made by [the] President of PAFICO, appears to be complete and regular in
that it outlined the loan portfolio needed and the principal features of the project such as its
principal objectives, the nature of the business, [etc]....
It appears that the loan application was subsequently evaluated by the [APD] I and then
submitted for review as regards the IBRD requirement to the Executive Officer of IPD-1. Even
in the case of [B/Rs] 2826, 3849, 863 and 097, it appears that the proper studies and
recommendations were conducted by the departments concerned before they were taken up in
the respective meetings of the Board of Governors. Thus, whatever the Board of Governors
approved was based on evaluation previously undertaken by the technical staff of complainant
bank.
In this regard, xxx there is no reason to assume that [the individual members of the Board of
Governors] acted to favor PAFICO or any of its directors or stockholders. xxx they did not
perform any act or manifest partiality or evident bad faith. Thus prosecution under [R.A.] Act No.
3019 is untenable.
It cannot likewise be said that they succumbed to any pressure because in the entire length and
breadth of the records of the case, there is nothing to betray either an indorsement from then
President Marcos or any request for his intercession made by any of the directors of PAFICO
which motivated the Board of Governors to act favorably on PAFICO’s loan applications. (Words
in brackets added.)

The final Vasquez pronouncement, as subsequently adopted by Omb. Desierto,
notwithstanding, then OMB Marcelo insisted on the behest nature of the loan on the basis of
the capitalization and collateralization criteria set forth in MC No. 61.52 Taking off from where
Omb. Marcelo left off, the OSP, for respondent OOMB, presently argues that the subject loan
is "behest" since PAFICO incurred the same when it was undercapitalized, having a paid-up
capital of only Php 4.5 million and that the Php 192 Million loan was not adequately secured.
Going over the pleadings and the documents pertaining to the subject loan, respondent OOMB’s
behest loan theory and the premises holding it together do not commend themselves for
concurrence. While PAFICO’s paid-up capital indeed only stood at Php 4.5 Million at the time it
contracted the loan, records indubitably show that one of the loan approval conditions, as
recommended by the APD I,53 was the increase during the loan implementation of PAFICO
paid-up common equity to at least Php 65 Million and that the 70:30 debt/equity ratio is
maintained at all times - meaning that the maximum amount of loan possible was 70% of the
project cost and that the minimum counterpart from the borrower is 30% of the project. Both
conditions were approved by the DBP Board of Governors and incorporated in the approving
B/R 2826 and in compliance therewith, PAFICO in fact hiked its paid-up capital to the required
level.54
If slow-tracking of actual release is an argument against the behest nature of the subject loan,
it may be stated also at this juncture that, as posited by petitioner Crucillo without denial from
either of the respondents, there were 41 releases – averaging less than Php 4 Million per release
– that took 27 months to complete.55 DPB B/R 1212, s. of 1979,56 provides for a release period
of 18 months from the date of the first release, while B/R 2826 exacts that all loan releases shall
be in accordance with verified project development and shall be covered by the loan value of all
assets securing the loan.57
Anent the subject loan being allegedly under collateralized, respondent OOMB arrived at this
postulate because the PCGG treated the Php 40 Million infused by DBP as preferred shares as
part of the loan amount to plug the alleged collateral deficiency of PAFICO. To respondent
OOMB, the infusion has the earmark of a loan for PAFICO promised a 16% annual yield, adding
that the conspirators resorted to the equity investment scheme as "a mere subterfuge to ‘dress
up’ the value of [PAFICO’s] collaterals (by lowering the amount of the loan) or fraudulently show
that PAFICO has more than enough collaterals to secure the obligation."
We are not persuaded.
The approving board resolution, i.e., B/R 2826, speaks only of a Php 152 Million loan and at
that level was fully collateralized as the security put up had, as indicated in the Sworn Statement,
a total value of Php 195.47 Million.58 As against the Php 152 Million loan, the figure Php 195.47
Million represents a collateral ratio of 77.7% which is within the 80% threshold adopted by the
bank and surely consistent with its lending policy. Under Res. No. 116, s. of 1974, - the DBP
Guidelines for Agricultural Lending - under the heading: LOANABLE VALUES "[F]ixed assets
and real estate properties shall have a maximum loan value of 85%."59
Contrary to what respondent OOMB insists, the preferred share of Php 40 Million was not a
loan, but an equity investment which the DBP, under its charter,60 is authorized to make. As an
investment, no collateral is needed therefor. Preferred shares take a multiplicity of forms. There
are preferred shares with priority over some other class or classes of shareholding as to
dividends or distribution of assets.61 Preferred shares as to dividends may be cumulative.
Payment of dividends of preferred shares depends on the ability and willingness by the board
of directors on the bases of performance, profits and availability of funds. The DBP preferred
share investment was governed by the PAFICO-DBP Memorandum of Agreement, which set
out preferred shares features, such as, but not limited to, par value, dividends voting rights,
redemption, and convertibility.62 Definitely, these particulars are not peculiar to, and are not
found in, ordinary loans.
The 16% annual yield guarantee for the Php 40 Million infusion of DBP does not necessarily
make the transaction one of loan that makes such guarantee payable regardless of profits from
operations, as respondent OOMB held. The guaranteed yield – contextually a cumulative
dividend63 - becomes payable only when there are unrestricted retained earnings whence
dividends shall be derived, as provided under Section 4364 of the Corporation Code. Without
unrestricted retained earnings or surplus profits, the 16% yield, even if guaranteed, cannot be
paid without violating the law. Hence, it is incorrect for respondent OOMB to consider the
guaranteed yield as an obligation or indebtedness of PAFICO that arises regardless of the
financial performance of PAFICO.
Given PAFICO’s eventual failed venture, the subject loan grant may well be considered, in
hindsight, as an unsound business proposition. Yet, the respondent OOMB has not pointed out
to circumstances indicating that either of the herein petitioners, in whatever role they played in
the transaction in question, perverted their respective offices or deviated from pre-set DBP’s
lending policy, practice or rules for some consideration less than honest. What at bottom the
bank had agreed to does not appear to be a scandalously one-sided loan accommodation in
favor of PAFICO or grossly and manifestly disadvantageous to the DBP. The term "manifest" in
the context of Section 3(g) of R.A. No. 3019 penalizing the act of entering, in behalf of the
government, into any contract or transaction manifestly and grossly disadvantageous to the
same, denotes something evident to the senses, obvious, or notorious, while "gross" means
glaring, reprehensible, flagrant or shocking.65 A collateralized loan transaction payable in 7 to
12 years, in semi-annual amortization basis, and bearing the usual interest with provisions for
penalty in case of default cannot be categorized as grossly and manifestly disadvantageous to
DBP.
PAFICO’s inability to pay its loan obligation in the regular course of business, if that be the case,
was a risk that the DBP had to contend with. Indeed, it would be regrettable if every government
bank officer is put in a state of indecision for fear he would be called to task every time the
bank’s client defaults in the payment of his loan obligations. To be sure, neither Atty. Salvador’s
"Sworn Statement" nor respondent OOMB’s impugned Order/Resolution mentioned about
misuse of the loan proceeds as the cause for PAFICO’s failure to pay.
Given the above perspective, the imputation of criminal design to either petitioner, acting
individually or in concert with other parties to cause undue injury to the government by giving
unwarranted benefits to PAFICO ought to be rejected In this regard, we note that the Information
against the petitioners, et al., specified manifest partiality and evident bad faith as the modalities
in the commission of the offense, i.e., violation of Section 3(e) of R.A. No. 3019, the elements
of which are as follows: a) the accused is a public officer or a private person charged in
conspiracy with the former; b) the public officer commits the prohibited acts during the
performance of his or her official duties or in relation to his or her public functions; c) that he or
she causes undue injury to any party, whether the government or a private party; d) such undue
injury is caused by giving unwarranted benefits, advantage or preference to such parties; and,
e) that the public officer has acted with manifest partiality, evident bad faith or gross inexcusable
neglect.
An examination of the information as well as the assailed Order/Resolution confirms that the
charge against both petitioners stem from their having acted in conspiracy with the members of
the PAFICO and DBP board in the granting of the subject loan notwithstanding, as alleged, the
fact that the undercapitalized borrower had no adequate collateral to offer. Clearly then,
respondent OOMB tied up the petitioners’ criminal liability, either as individuals or conspirators,
for violation of Sec. 3(e) of R.A. No. 3019 with the behest character of the subject loan
accommodation.
In the instant case, there is no positive and direct evidence that the petitioners acted in
conspiracy with other implicated individuals. It is sheer speculation to ascribe corrupt intent and
conspiracy of wrongdoing on petitioner Tengco simply because he took part in the passage of
the resolution approving the subject loan. Petitioner Crucillo, on the other hand, did not even
have loan-approving authority. His role in the whole drama was to study/ evaluate the loan
application, present arguments for and against its approval and propose terms and conditions
since approval is the board’s decision. As we have consistently held, evidence of guilt must be
premised upon a more knowing, personal and deliberate participation of each individual who is
charged with others as part of a conspiracy.66 And if only to highlight the feebleness of the
conspiracy angle, no less than Omb. Marcelo ordered the exclusion from the information in
Criminal Case No. 26539 three (3) of the original ten (10) accused. Then, too, respondent PCGG
saw fit to grant Mr. Benedicto immunity from criminal prosecution for acts committed in relation
with the subject PAFICO loan.
At any rate, to make out a prima facie case for violation of Sec. 3(e) of R.A. No. 3019, proof of
evident bad faith or manifest partiality will have to be adduced. Evident bad faith connotes more
than a bad judgment; it implies a palpably dishonest purpose or some moral obliquity for some
perverse motive or ill will.67 Manifest partiality, on the other hand, denotes a notorious or plain
bent or predilection to favor one side rather than the other.68
Evident bad faith or manifest partiality cannot be deduced from the behest nature of a loan
transaction, if indeed that be the case, for good faith and regularity of a business transaction
are always presumed.
Before manifest partiality or evident bad faith may even be considered, the OOMB should have
had determined with certainty the facts indicative of manifest partiality or evident bad faith as
modalities of committing a transgression of the statute.69 Simply alleging one or both modes
would not suffice to establish probable cause, for it is well settled that allegation does not amount
to proof. The facts themselves must demonstrate evident bad faith, which, as earlier stated,
connotes a palpably fraudulent and dishonest purpose to do moral obliquity or conscious
wrongdoing for some perverse motive or ill-will. Parenthetically, not once did the assailed
Order/Resolution advert to the bad faith or manifest partiality of the petitioners, albeit reference
is made to their having extended "unwarranted concession to PAFICO."
To establish then a prima facie case against the petitioners for violation of Sec. 3(e) of R.A. No.
3019, it behooved the OOMB not only to convincingly show the matter of insufficient collateral
and undercapitalization since it anchors, in the first place, its case on the behest character of
the loan. It must also prove that evident bad faith or manifest partiality attended the loan grant,
such as, for instance, signing the loan documents with indecent haste, fully aware of the non-
viability of the project and the one-sidedness of the transaction such that recovery of the amount
lent would be unlikely. But, as it were, the PAFICO soybean processing project and its loan
application were the subject of a multi-aspect feasibility and comprehensive evaluation study.
The results of the study, embodied in the SUMMARY AND RECOMMENDATION70 prepared
by petitioner Crucillo passed from one review table to another before the report the DBP’s Board
finally acted on it. The summary-recommendation report detailed the pros and cons in the
consideration of the subject loan application, set out proposed terms and conditions calculated
to ensure profit for the bank or otherwise protect the bank’s interest. And for the most part, the
DBP Board accepted the proposals which, among other things, set out terms and conditions
calculated to ensure repayment of the loan including the submission by PAFICO of additional
assets necessary to cover the collateral deficiency. On the face of the agreement, the DBP
stood to earn income for the accommodation it gives in terms of 14% per annum interest with
the corresponding penalty it has imposed in case of late payments of amortization and arrears.
In PCGG v. Desierto,71 a case set against a similar backdrop, the Court left undisturbed the
ensuing disposition of the OMB which ruled out evident bad faith and rejected the theory of
criminal liability on the part of DBP officers where the terms and conditions of the DBP loan
guarantee were calculated to insure payment and profit, thus:
As regards the alleged violation of Section 3 (e) of RA 3019, the complainant did not give specific
details that would show the element of evident bad faith [or] manifest partiality ….xxx Granting
that the guarantee loan was under collateralized and the company undercapitalized, this does
not ipso facto make the named respondents liable for violation under Section 3(e) of R.A. No.
3019, or make their acts criminal. As earlier pointed out, the Alice Reyes Memorandum … had
set terms and conditions to insure repayment of the guarantee loan, including the submission
by [ borrower] PCFC of additional assets necessary to cover the collateral deficiency of
P17,725,000.00 xxx It was not a one-sided contract in favor of PCFC, DBP will also earn income
for the accommodation it gives in terms of interest rates with the corresponding penalties it has
imposed in case of late payments of amortizations and arrears. That although the PCFC failed
pay … this is one risk that the DBP has to face in this kind of financing business x x x. The
complainant did not mention anything about misuse of PCFC’s loan proceeds by a particular
person or group of persons for their personal benefit and not for the purpose it was intended
xxx. (Words in brackets and emphasis added)
In all, the Court holds that proceeding with the prosecution of the herein petitioners is
unwarranted. This is not only because the OOMB had once ascertained – and correctly at that,
that the subject loan does not fall under the category of a behest transaction. But over and
beyond this determination is the reality that the key element of evident bad faith or manifest
partiality does not obtain in this case to sustain a prima facie case for violation of Section 3(e)
of the anti-graft law or to form a sufficient belief as to the guilt of the accused therefor.72 Hence,
any further prosecution of the petitioners under the information thus filed would be oppressive
or a case of simple harassment. Accordingly, it is imperative that they be spared from the
anguish and trauma of having to go to trial on such a baseless information.
Upon the foregoing disquisitions, the Court need not delve on the beneficial effect, or the lack
of it, of the RP/PCGG - Benedicto compromise agreement, supra, on the herein petitioners,
even if PCGG, in OMB Case No. 0-96-0794, relied on the theory of alleged conspiracy between
the petitioners and the PAFICO officials.
IN VIEW WHEREOF, the instant petitions are GRANTED. The assailed Ombudsman Order
dated March 10, 2003 and Resolution dated July 21, 2003 in OMB Case No. 0-96-0794 are
REVERSED and SET ASIDE. The Temporary Restraining Order issued by the Court on January
26, 2004 enjoining the Sandiganbayan and the respondents Ombudsman and PCGG from
proceeding with the hearing of Criminal Case No. 26539 is hereby made PERMANENT and the
respondent Ombudsman is ORDERED to immediately file the necessary pleading for the
WITHDRAWAL of the Information in said Criminal Case No. 26539 against the herein
petitioners.
No costs.
SO ORDERED.
A.C. No. 5957. February 4, 2003
WINNIE C. LUCENTE and ALICIA G. DOMINGO, complainants, vs. ATTY. CLETO L.
EVANGELISTA, JR., respondent.
RESOLUTION
YNARES-SANTIAGO, J.:
In a sworn letter-complaint dated January 15, 1999 filed with the Integrated Bar of the
Philippines (IBP) Commission on Bar Discipline, Winnie C. Lucente and Alicia G. Domingo
charged Atty. Cleto L. Evangelista, Jr. with gross misconduct, deceit, malpractice and crimes
involving moral turpitude for falsification of public documents.
Complainants alleged that respondent is the son of the late Atty. Cleto Evangelista, who during
his lifetime notarized a Deed of Quitclaim executed on May 7, 1977 by Pedro, Juanito, Eufracia,
Cresencia, Consuelo, Maria, all surnamed Tan, and one Sabina Mascareas, in favor of
Asuncion T. Yared and Cynthia Yared Estudillo, involving Lot No. 5514 located in Salvacion,
Ormoc City; and a Deed of Absolute Sale executed on January 7, 1972 by Wenceslao
Magallanes and Apolonia Tan in favor of Salvador Estudillo and Cynthia Yared Estudillo,
involving Lot No. 1187-B located in Poblacion, Ormoc City. On January 30, 1990, respondent
Atty. Cleto L. Evangelista, Jr. issued certified true copies of the said instruments. On the basis
of the certified true copies of the subject deeds, the Register of Deeds of Ormoc City issued on
February 2, 1990 Transfer Certificate of Title No. 23889 in favor of Asuncion T. Yared.
Respondent filed a motion to dismiss the complaint interposing res adjudicata, arguing that the
allegations in the complaint raise the same issues as those in the criminal case for falsification
of public document filed against him before the Ormoc City Prosecution Office, docketed as I.S.
No. 98-178. He also asserted that Civil Case No. B-1250 filed by complainants, among others,
against Asuncion T. Yared, et al., which was pending before Regional Trial Court, Baybay,
Leyte, Branch 14, for declaration of nullity of the quitclaim and deed of absolute sale covering
TCT No. 23889, raised a prejudicial question in the disbarment proceeding.
Respondent also contended that one Carmen Solidor together with Francisco Aves came to
their law office, Evangelista Law Office in Ormoc City, Leyte, and asked him to certify true copies
of the subject deeds. He acceded to the request considering that the documents were notarized
by his late father as notary public. He alleged that he issued the assailed certification as a
partner of the law office.1cräläwvirtualibräry
After investigation, the IBP Board of Governors, on April 7, 2000, recommended the reprimand
of Atty. Cleto L. Evangelista with stern warning that a repetition of the same would be dealt with
more severely. The recommendation was noted by this Court in a Resolution dated July 19,
2000. Dissatisfied, complainants filed the instant petition for review under Rule 45 of the Rules
of Court.

In his Comment, respondent alleged that the petition failed to comply with Section 4, Rule 45,
Rules of Court considering that (a) the petition did not indicate the correct and true date when
petitioner received the IBP Board of Governors Resolution; (b) petitioners did not attach to the
petition certified true copy of said resolution; and (c) the certification against forum-shopping
was executed by only one of the petitioners.
Respondent claims that petitioner Alicia Domingo received the Resolution of IBP Board of
Governors on May 25, 2000. It appears, however, that, petitioners counsel received the same
Resolution on June 13, 2000. It is the receipt of counsel that the period to appeal is reckoned
for purposes of determining the last day for filing of the petition for review.2 Therefore,
petitioners timely filed this motion for extension of time to file petition for review on June 22,
2000, which was granted. Petitioners, however, failed to attach a certified true copy of the
assailed resolution. Moreover, only petitioner Winnie C. Lucente executed the certification
against forum shopping.
In A-One Feeds, Inc. v. Court of Appeals,3 we held:
Litigations should, as much as possible, be decided on the merits and not on technicality.
Dismissal of appeals purely on technical grounds is frowned upon, and the rules of procedure
ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not
override, substantial justice and thereby defeat their very aims. As has been the constant ruling
of this Court, every party litigant should be afforded the amplest opportunity for the proper and
just determination of his cause, free from the constraints of technicalities.4cräläwvirtualibräry
The Rules must be so interpreted and applied as to achieve, not defeat, substantial justice as
expeditiously as possible. Procedural rules should be liberally construed in order to promote
their object and assist the parties in obtaining just, speedy and inexpensive determination of
every action or proceeding. Where the rigid application of the rules would frustrate substantial
justice, or bar the vindication of a legitimate grievance, the courts are justified in exempting a
particular case from the operation of the rules.5cräläwvirtualibräry
The appeal is impressed with merit. Records disclose that Atty. Cleto L. Evangelista, Jr.
admitted having certified true copies of the Deed of Quitclaim executed on May 7, 1977 and the
Deed of Absolute Sale executed on January 7, 1972. His late father, Atty. Cleto P. Evangelista,
notarized the subject deeds.
Section 245 of the Administrative Code of 1917 reads:
Notarial Register. Every notary public shall keep a register to be known as the notarial register,
wherein record shall be made of all his official acts as notary; and he shall supply a certified
copy of such record, or any parts thereof, to any person applying for it and paying the legal fees
therefor. x x x.
Sections 246 and 247 of the same Code also require the notary public to forward his notarial
register to the Clerk of Court of the Court of First Instance (now Regional Trial Court) of the
province or city wherein he exercises his office for safekeeping.
By certifying true copies of the subject deeds, Atty. Cleto L. Evangelista, Jr. engaged in an
unlawful and deceitful conduct. He was not the notary public before whom said documents were
acknowledged and he was neither the custodian of the original copies thereof. The Records
Management and Archives Office, Manila, certified that there was no copy on file of the Deed
of Quitclaim notarized by respondents father.6 Rule 1.01 of Canon 1 of the Code of Professional
Responsibility and Section 27, Rule 138 of the Rules of Court is broad enough to cover any
form of misconduct of a lawyer in his professional and personal capacity.
In this connection, we have consistently held that notarization is not an empty, meaningless,
routinary act. It is invested with substantive public interest, such that only those who are qualified
or authorized may act as notaries public. The protection of that interest necessarily requires that
those not qualified or authorized to act must be prevented from imposing upon the public, the
courts, and the administrative offices in general.7 It must be underscored that the notarization
by a notary public converts a private document into a public document making that document
admissible in evidence without further proof of the authenticity thereof.8 For this reason, notaries
public must observe with utmost care the basic requirements in the performance of their
duties.9cräläwvirtualibräry
Contrary to respondents contentions, the complaint for disbarment does not suffer from serious
procedural defects that warrant its outright dismissal. Complainants did not engage in forum
shopping as defined in Administrative Circular No. 28-91 when they filed the instant case. Forum
shopping applies only to judicial cases or proceedings, not to disbarment proceedings.
Moreover, Civil Case No. B-1250 for declaration of nullity of the quitclaim and deed of absolute
sale covering TCT No. 23889 refers to the validity of the documents in question while the
disbarment case refers to respondents having certified true copies of said documents.
Neither does res adjudicata lie against the complainants. Similarly, the doctrine applies only to
judicial or quasi-judicial proceedings and not to the exercise of the Courts administrative
powers,10 as in this case. Neither can it be argued that the instant disbarment case has been
adjudicated in the criminal case for falsification of public documents. Respondent was
proceeded against as a private individual in said case. In the present disbarment action, Atty.
Cleto L. Evangelista, Jr. is sought to be disciplined as a lawyer under the Courts plenary
authority over members of the legal profession.
WHEREFORE, respondent Atty. Cleto L. Evangelista, Jr. is found guilty of gross misconduct.
Consequently, he is ordered SUSPENDED from the practice of law for six (6) months effective
immediately, with a warning that another infraction shall be dealt with more severely.
Let copies of this Resolution be furnished all courts of the land as well as the Integrated Bar of
the Philippines, the Office of the Bar Confidant and recorded in the personal files of respondent
himself.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio and Azcuna, JJ., concur.
[G.R. NO. 136492.February 13, 2004]
MAXIMA REALTY MANAGEMENT AND DEVELOPMENT CORPORATION, Petitioner, v.
PARKWAY REAL ESTATE DEVELOPMENT CORPORATION represented by LUZ
LOURDES FERNANDEZ and SEGOVIA DEVELOPMENT CORPORATION, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a Petition for Review on Certiorari assailing the December 9, 1998 Decision of the Court
of Appeals in CA-G.R. SP No. 418661 which affirmed in toto the June 2, 1998 Order of the
Office of the President in O.P. Case No. 56972 dismissing petitioners appeal for having been
filed out of time.
The subject of the controversy is Unit #702 of Heart Tower Condominium, covered by
Condominium Certificate of Title No. 12152 and located along Valero Street, Salcedo Village,
Makati City. Said unit was originally sold by Segovia Development Corporation (Segovia) to
Masahiko Morishita, who in turn sold and assigned all his rights thereto in favor of Parkway Real
Estate Development Corporation (Parkway) on October 16, 1989.3 ςrνll
Sometime in April 1990, Parkway and petitioner Maxima Realty Management and Development
Corporation (Maxima) entered into an agreement to buy and sell, on installment basis, Unit #702
in consideration of the amount of 3 Million Pesos.4 It was further agreed that failure to pay any
of the installments on their due dates shall entitle Parkway to forfeit the amounts paid by way of
liquidated damages.5 ςrνll
Maxima defaulted in the payment of the installments due but was granted several grace periods
until it has paid a total of P1,180,000.00, leaving a balance of P1,820,000.00.6 ςrνll
Meanwhile on May 10, 1990, Parkway, with the consent of Segovia, executed a Deed of
Assignment transferring all its rights in the condominium unit in favor of Maxima. This Deed was
intended to enable Maxima to obtain title in its name and use the same as security for
P1,820,000.00 loan with Rizal Commercial Banking Corporation (RCBC), which amount will be
used by Maxima to pay its obligation to Parkway. On the other hand, Segovia and Maxima
agreed to transfer title to the condominium unit directly in Maximas name subject to the condition
that the latter shall pay Segovia the amount of P58,114.00, representing transfer fee, utility
expenses, association dues and miscellaneous charges.7 ςrνll
On June 5, 1990, RCBC informed Parkway of the approval of Maximas P1,820,000.00 loan
subject to the submission of, among others, the Condominium Certificate of Title transferred in
the name of Maxima and the Certificate of Completion and turn over of unit.8 ςrνll
Maxima, however, failed to pay Segovia the amount of P58,114.00 for fees and charges. Thus,
Segovia did not transfer the title of the condominium unit to Maxima. Since Parkway was not
paid the balance of P1,820,000.00, it cancelled its agreement to buy and sell and Deed of
Assignment in favor of Maxima.9 ςrνll
On May 2, 1991, Maxima filed with the Office of Appeals, Adjudication and Legal Affairs of the
Housing and Land Use Regulatory Board (HLURB), a complaint10 for specific performance to
enforce the agreement to buy and sell Unit #702.
On December 17, 1992, the HLURB Arbiter sustained the nullification of the Deed of
Assignment and ordered Parkway to refund to Maxima the amount of P1,180,000.00. Segovia
was further ordered to issue the condominium certificate of title over Unit #702 in favor of
Parkway upon payment by the latter of the registration fees. The dispositive portion thereof,
reads:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Premises considered, judgment is hereby rendered
1.declaring the nullification of the Deed of Assignment between complainant Maxima and
Parkway;chanroblesvirtuallawlibrary
2.ordering respondent Parkway to refund to complainant Maxima the amount of One Million One
Hundred Eighty Thousand Pesos (P1,180,000.00);chanroblesvirtuallawlibrary
3.ordering respondent Segovia to issue the certificate of title in favor of Parkway upon payment
by the latter of only the registration fees.
No pronouncement as to costs.11 ςrνll
Both Maxima and Parkway appealed to the Board of Commissioners of the HLURB (Board). 12
During the pendency of the appeal, Maxima offered to pay the balance of P1,820,000.00, which
was accepted by Parkway. The Board then ordered Maxima to deliver said amount in the form
of managers check to Parkway; and directed Segovia to transfer title over the property to
Maxima.13 The latter, however, failed to make good its offer, which compelled Parkway to file
a Manifestation14 that the appeal be resolved.15 ςrνll
On March 14, 1994, the Board rendered judgment modifying the decision of the HLURB Arbiter
by forfeiting in favor of Parkway 50% of the total amount paid by Maxima and ordering Segovia
to pay Parkway the amount of P10,000.00 as attorneys fees. The decretal portion of the
decision, states:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
WHEREFORE, the decision of the Office of Appeals Adjudication and Legal affairs (OAALA)
dated December 17, 1992 is hereby affirmed with respect to the following:ςηαñrοblεš νιr†υαl
lαω lιbrαrÿ
1) Declaring the nullification of the Deed of Assignment between complainant and
Parkway;chanroblesvirtuallawlibrary
2) Ordering Respondent Segovia to immediately issue the certificate of title in favor of Parkway
upon payment by the latter of only the registration expenses. This order for delivery of title in
the name of Parkway is now final and immediately executory.
and is modified as follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
3) Declaring the forfeiture of 50% of the total payments made by the complainant to Parkway
by way of damages and penalty, and for Parkway to refund the remaining balance of the said
payments to the complainant within thirty (30) days from finality of this decision with legal interest
thereon thereafter, for each day said amount remain unpaid; andcralawlibrary
4) Ordering Segovia to pay Parkway the sum of P10,000.00 as and by way of attorneys fees.
IT IS SO ORDERED.16 ςrνll
On May 10, 1994, Maxima appealed17 to the Office of the President which dismissed the appeal
for having been filed out of time.18 ςrνll
Undaunted, Maxima filed a Petition for Review with the Court of Appeals. On October 1, 1998,
Segovia filed its Comment that as the original owner-developer of Unit #702, it had already
consummated the sale and transferred title of said property to Parkway.19 ςrνll
On December 9, 1998, the Court of Appeals affirmed in toto the Decision of the Office of the
President.
Hence, the instant petition on the sole issue of: Was petitioners appeal before the Office of the
President filed within the reglementary period?chanroblesvirtualawlibrary
In SGMC Realty Corporation v. Office of the President 20 it was settled that the period within
which to appeal the decision of the Board of Commissioners of HLURB to the Office of the
President is fifteen (15) days from receipt of the assailed decision, pursuant to Section 1521 of
Presidential Decree No. 957 (otherwise known as the Subdivision and Condominium Buyers
Protection Decree) and Section 222 of Presidential Decree No. 1344.23 The Court ruled that
the thirty (30) day period to appeal to the Office of the President from decisions of the Board as
provided in Section 27 of the 1994 HLURB Rules of Procedure,24 is not applicable, because
special laws providing for the remedy of appeal to the Office of the President, such as
Presidential Decree No. 597 and Presidential Decree No. 1344, must prevail over the HLURB
Rules of Procedure. Thus:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
[W]e find petitioners contention bereft of merit, because of its reliance on a literal reading of
cited rules without correlating them to current laws as well as presidential decrees on the matter.
Section 27 of the 1994 HLURB Rules of Procedure provides as follows:ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ
Section 27. Appeal to the Office of the President. Any party may, upon notice to the Board and
the other party, appeal the decision of the Board of Commissioners or its division to the Office
of the President within thirty (30) days from receipt thereof pursuant to and in accordance with
Administrative Order No. 18, of the Office of the President dated February 12, 1987. Decision
of the President shall be final subject only to review by the Supreme Court on certiorari or on
questions of law.
On the other hand, Administrative Order No. 18, series of 1987, issued by public respondent
reads:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Section 1. Unless otherwise governed by special laws, an appeal to the Office of the President
shall be taken within thirty (30) days from receipt by the aggrieved party of the
decision/resolution/order complained of or appealed from.
As pointed out by public respondent, the aforecited administrative order allows [the] 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. This is in line with the rule in
statutory construction that an administrative rule or regulation, in order to be valid, must not
contradict but conform to the provisions of the enabling law.
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. First, Section 15 of Presidential Decree No.
957 provides that the decisions of the National Housing Authority (NHA) shall become final and
executory after the lapse of fifteen (15) days from the date of receipt of the decision. Second,
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 [by virtue of E.O. No. 684 (7 February 1981) and E.O. No. 90 (17 December
1986)]. Thus, said presidential issuances providing for a reglementary period of appeal of fifteen
days apply in this case. Accordingly, the period of appeal of thirty (30) days set forth in Section
27 of HLURB 1994 Rules of Procedure no longer holds true for being in conflict with the
provisions of aforesaid presidential decrees. For it is axiomatic that administrative rules derive
their validity from the statute that they are intended to implement. Any rule which is not
consistent with [the] statute itself is null and void.
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.25 ςrνll
In the case at bar, Maxima had until May 4, 1994, the fifteenth day from receipt of the decision
of the Board on April 19, 1994,26 to appeal to the Office of the President. The appeal which was
filed on May 10, 1994 was clearly beyond the reglementary period.
WHEREFORE, in view of all the foregoing, the December 9, 1998 Decision of the Court of
Appeals in CA-G.R. SP No. 41866 which sustained the June 2, 1998 Order of the Office of the
President in O.P. Case No. 5697 is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Carpio andAzcuna, JJ., concur.
[G.R. NO. 161608 : August 9, 2005]
LEONCIO A. AMADORE, Petitioners, v. ALBERTO G. ROMULO, MANUEL B. GAITE, and
PRESIDENTIAL ANTI-GRAFT COMMISSION, Respondent.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, asking for
the declaration of nullity of (1) the Resolution1 of the Court of Appeals dated 19 June 2003
dismissing petitioner Leoncio A. Amadore's Petition for Review filed under Rule 43 of the Rules
of Court for having been filed out of time, and its Resolution2 dated 12 January 2004 denying
his motion for reconsideration; (2) the 12 November 2001 Decision of respondent Executive
Secretary Alberto G. Romulo dismissing petitioner from government service; and (3) the
Resolution dated 15 April 2003 and Order dated 29 May 2003 of respondent Manuel B. Gaite,
Acting Deputy Executive Secretary for Legal Affairs, denying petitioner's motion for
reconsideration and second motion for reconsideration, respectively.
The antecedents are as follows:
On 27 December 1996, petitioner Leoncio A. Amadore, Director of the Philippine Atmospheric,
Geophysical and Astronomical Services Administration (PAGASA), entered into a contract3 with
Inter-Technical Pacific Philippines, Inc. (INTERPAC) for the supply, delivery, installation, testing
and commissioning of S-Band Weather Surveillance Radar System and Other Related
Equipment for Baguio and Tanay Radar Stations amounting to P72,128,573.30. The contract
was approved by William G. Padolina, then Secretary of the Department of Science and
Technology (DOST).
On 14 January 1997, PAGASA paid INTERPAC the amount of P7,212,857.33 representing a
ten percent (10%) advance payment of the total contract price per Disbursement Voucher No.
9701036 signed by petitioner and Cipriano C. Ferraris, Deputy Director of PAGASA.4
On 13 August 1997, PAGASA paid INTERPAC the amount of P13,123,275.93 representing
thirty-five percent (35%) of the Baguio Radar System component contract price as evidenced
by Disbursement Voucher No. 97074640 signed by petitioner and Lilian G. Angeles, Deputy
Director of PAGASA.5
On 26 June 1998, the Presidential Commission Against Graft and Corruption (PCAGC) received
a copy of a letter-complaint6 from concerned employees of the DOST dated 15 June 1998
addressed to former President Joseph E. Estrada reporting the rampancy of graft and corruption
in the DOST. As a result, three (3) formal charges were filed by Restituto P. Ventura, Director,
Investigation Office, PCAGC, against Secretary William G. Padolina, Asst. Secretary Imelda D.
Rodriguez, Deputy Director Lilian G. Angeles, of the DOST, petitioner and PAGASA Deputy
Director Ferraris.7 The case was docketed as PCAGC-ADM-98-0494. Of the three charges,
only the charge of entering into a contract manifestly and grossly disadvantageous to the
government was hurled against petitioner, Deputy Director Ferraris and Deputy Director
Angeles.8 It was alleged that even without the actual delivery of the equipment to the project
site, there were advance payments made to INTERPAC totaling P20,336,133.26 or 28.9% of
the total contract price in violation of Section 88 of Presidential Decree (P.D.) No. 1445.9
Finding sufficient basis to commence an administrative investigation, Leorando M. Rivera,
PCAGC Commissioner, in an order dated 12 March 1999, directed petitioner, Deputy Director
Ferraris and Deputy Director Angeles to file their Counter-Affidavits/Verified Answers.10 On the
same day, PCAGC Chairman Eufemio C. Domingo referred the letter-complaint to Ombudsman
Aniano A. Desierto for appropriate action.11
Petitioner, Deputy Director Ferraris and Deputy Director Angeles filed a Joint Counter-Affidavit
on 5 April 1999.12 After hearing, the PCAGC issued a resolution dated 1 October 1999, finding
them guilty and recommended to President Joseph E. Estrada their dismissal from the
service.13 The resolution reads in part:
Sec. 88, P.D. 1445 provides that "except with the prior approval of the President (Prime Minister)
the government shall not be obliged to make an advance payment for services not yet rendered
or for supplies and materials not yet delivered under any contract therefore. No payment, partial
or final shall be made on any such contract except upon a certification by the head of the agency
concerned to the effect that the services or supplies and materials have been rendered or
delivered in accordance with the terms of the contract and have been duly inspected and
accepted.
The respondents in their counter-affidavit argue that the contract between PAGASA and
INTERPAC is an infrastructure project, hence, it falls within the purview of C14-1 of the
Implementing Rules and Regulation of Presidential Decree No. 1594 which allows an advance
payment to the contractor in an amount equal to fifteen percent (15%) of the total contract price,
thus:
...
They further argued that the payment of thirty-five [percent] (35%) for the Baguio Radar System
was made in accordance with Art. VI, Payment Schedule of the contract between PAGASA and
INTERPAC.
This Commission believes that the Radar System is an infrastructure project, as defined by
Executive Order No. 380 which is quoted, thus: infrastructure projects shall mean construction
of roads and bridges, railways, airports, seaports communication facilities, irrigation, flood
control and drainage, water supply and sewerage systems, shore protection, power facilities,
national building, school buildings, hospital building and other related construction projects that
form part of the government capital investment. Consequently, PAGASA is authorized to make
an advance payment but only up to fifteen (15%) percent of the total contract price.
However, the record of the case, and as testified by Atty. Lilian Angeles, deputy director,
discloses that the Baguio Radar System was delivered only on 5 September 1997, but PAGASA
paid the INTERPAC for the Baguio Radar System the amount of P7,212,857.33 and
P13,123,275.98 on January 14, 1997 and August 13, 1997, respectively, or equivalent to 28.9%
of the total price.
Clearly, the said payments constitute violations of Sec. 88, P.D. 1445 which provides that the
government shall not be obliged to make an advance payment for services not yet rendered or
for supplies and materials not yet delivered under any contract therefor.
The contention of the respondents that such advance payments were made in accordance with
Art. VI of the contract is without merit. The said provision runs counter with Sec. 88, P.D. 1445.
Settled is the rule that in case of conflict between a contract and the provision of law, the latter
prevails.14
In a decision dated 12 November 2001, Executive Secretary Alberto G. Romulo approved the
recommendation of the PCAGC15 and dismissed petitioner, Deputy Director Ferraris and
Deputy Director Angeles from government service.16 The dispositive portion of the decision
reads:
WHEREFORE, in view of the foregoing, and as recommended BY THE Presidential
Commission Against Graft and Corruption, now the Presidential Anti-Graft Commission
(PAGC), respondent Leoncio A. Amadore, Cipriano C. Ferraris and Lilian G. Angeles, Director
and Deputy Directors, respectively, of the Philippine Atmospheric, Geophysical and
Astronomical services Administration (PAGASA), Department of Science and Technology are
hereby DISMISSED from the government service.
Petitioner, Deputy Director Ferraris and Deputy Director Angeles filed a joint Motion for
Reconsideration17 dated 12 December 2001. In a resolution18 dated 15 April 2003, respondent
Manuel B. Gaite, Acting Deputy Executive Secretary for Legal Affairs, affirmed petitioner's
dismissal from government service. The complaint against Deputy Director Ferraris was
dismissed, while Deputy Director Angeles was suspended for six (6) months.
An Urgent Motion to Admit Second Motion for Reconsideration19 was filed by petitioner and
Deputy Director Angeles on the ground that they were unable to present documents (i.e., Bills
of Lading, Notice of Cargo Arrival dated 24 July 1997, Request for Storage dated 04 August
1997 and Delivery Receipt dated 07 August 1997) which, if admitted, would probably alter the
decision of the Office of the President. On the charge that the payments of P7,212,857.33 on
14 January 1997 and P13,123,275.93 on 13 August 1997 with an aggregate amount of P20,
336,133.26 equivalent to 28.90% of the total contract price are advance payments which
constitute a violation of Section 88 of P.D. No. 1445, petitioner and Deputy Director Angeles, in
their second motion for reconsideration20 dated 24 April 2003, explained that inasmuch as the
contract involved is categorized as an infrastructure project, what governs is P.D. No. 159421
and not P.D. No. 1445. They said that under P.D. No. 1594, an advance payment of fifteen
percent (15%) of the total contract price is allowed. They argued that since there was already a
delivery of the radar equipment on 07 August 1997 at the PAGASA-Diliman Office prior to the
second payment of P13,123,275.93 on 13 August 1997, there can be no violation of P.D. No.
1594. They added that the advance payment made by PAGASA in the amount of P7,212,857.33
or ten percent (10%) of the total contract price of P72,128,573.30 is lower than the 15% allowed
by law. By reason of such delivery, they maintain that the P13,123,275.93 is no longer an
advance payment but must be considered as a progress billing.
In an Order dated 29 May 2003, respondent Gaite denied with finality the second motion for
reconsideration.22
On 10 June 2003, petitioner appealed to the Court of Appeals via a Petition for Review .23

In a resolution promulgated on 19 June 2003, the Court of Appeals dismissed the petition
outright for having been filed out of time.24 The resolution reads in part:
We invite petitioner's attention to Sec. 4, Rule 43 which provides in part that:
Sec. 4. Period of appeal. - The appeal shall be taken within fifteen (15) days from notice of the
award, judgment, final order or resolution, or from the date of its last publication, if publication
is required by law for its effectivity, or of the denial or petitioner's motion for new trial or
reconsideration duly filed in accordance with the governing law of the court or agency a quo.
Only one (1) motion for reconsideration shall be allowed'
It is clear from the said proviso that the 15-day period to appeal is reckoned from notice of the
denial of motion for reconsideration. Considering that petitioner received a copy of the denial of
the motion for reconsideration on April 24, 2003, he had until May 9, 2003 to take an appeal.
Be it marked too that only one (1) motion for reconsideration is allowed under the said Rule and
Sec. 7 of AO No. 18, S. 1987, which provides:
Only one motion for reconsideration by any party shall be allowed and entertained, save in
exceptionally meritorious cases.
and considering further that a second motion for reconsideration is proscribed under Sec. 2,
Rule 52, idem., the filing of the second motion for reconsideration did not toll the running of the
period to appeal.
The petitioner wrongly reckoned the period to appeal from the notice of the denial of the second
motion for reconsideration. The present petition should have been filed on or before May 9,
2003, the expiry date of the period to appeal. Unfortunately, he filed it on June 10, 2003.
On 02 July 2003, petitioner filed a motion for reconsideration25 which the Court of Appeals
denied on 12 January 2004.26 Hence, this appeal by certiorari.
Petitioner raises the following issues:
(A) With all due respect, the dismissal of herein petitioner-Director Leoncio A. Amadore from
the government service is illegal, pursuant to the requirement of the Implementing Rules and
Regulations (I.R.R.) of Presidential Decree (P.D.) No. 1594;
(B) With all due respect, Section 7 of Administrative Order No. 18, Series of 1987, as cited by
Manuel B. Gaite in dismissing herein petitioner, was never violated and that the 2nd Motion for
Reconsideration should have been allowed as it constitutes meritorious case; andcralawlibrary
(C) With all due respect and by virtue thereof, the herein petitioner should be immediately
reinstated, as provided under the law and the Philippine Constitution, with all the benefits
guaranteed thereunder.
Quite apart from the above, it bears mentioning that on 30 December 2003, Orlando C.
Casimiro, Deputy Ombudsman for the Military, under authority of the Ombudsman, approved
the recommendation of Francisca A. Maullon-Serfino, Graft Investigator Officer I, Office of the
Ombudsman, as to the non-filing of an information for violation of Section 3(g), Republic Act No.
3019, as amended, against petitioner.27
On 09 February 2004, this Court required respondents to file comment on the petition.28 On 25
May 2004, the Solicitor General, representing the respondents, filed his Comment,29 raising
the following issues:
WHETHER RESPONDENTS ERRED IN DENYING PETITIONER'S SECOND MOTION FOR
RECONSIDERATION.
WHETHER THE PETITION BEFORE THE COURT OF APPEALS WAS FILED WITHIN THE
REGLEMENTARY PERIOD.
WHETHER PETITIONER MAY PROPERLY RAISE FACTUAL ISSUES IN THE PRESENT
PETITION.30
On 19 August 2004, petitioner filed a reply31 to the Solicitor General's Comment.
On 08 November 2004, the Court gave due course to the petition and required the parties to
submit their respective memoranda.32
Synthesized, the issues are narrowed down as follows:
(1) Was the appeal from the resolution of the Office of the President filed on time with the Court
of Appeals?chanroblesvirtualawlibrary
(2) Can petitioner raise factual issues before the Court?chanroblesvirtualawlibrary
(3) Did petitioner violate P.D. No. 1594?chanroblesvirtualawlibrary
On the first issue, petitioner appealed to the Court of Appeals after the Office of the President,
through respondent Gaite, denied his second motion for reconsideration. He received the denial
of his 2nd motion for reconsideration on 04 June 2003 and filed a Petition for Review with the
Court of Appeals on 10 June 2003. The latter dismissed the petition for having been filed out of
time. It reasoned out that under Section 4, Rule 43 and Section 2, Rule 52 of the Rules of Court,
and Section 7 of Administrative Order No. 18, Series of 1987, only one motion for
reconsideration is allowed. Thus, the filing of the second motion for reconsideration did not toll
the running of the period to appeal. The Court of Appeals explained that since only one motion
for reconsideration was allowed, and that petitioner received a copy of the denial of his motion
for reconsideration on 24 April 2003, he had until 9 May 2003 to file his appeal.
We find that petitioner filed his appeal with the Court of Appeals within the reglementary period.
Administrative Order No. 18, Series of 1987, prescribes the rules and regulations governing
appeals to the Office of the President of the Philippines. Sections 7 and 9 read as follows:
SEC. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise
provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a
copy thereof by the parties, unless a motion for reconsideration thereof is filed within such
period.
Only one motion for reconsideration by any one party shall be allowed and entertained, save in
exceptionally meritorious cases.
SEC. 9. The Rules of Court shall apply in a suppletory character whenever practicable.
It is clear from Section 7 of Administrative Order No. 18 that only one motion for reconsideration
is allowed to be filed from a decision, resolution or order of the Office of the President. A second
motion for reconsideration is allowed only in exceptionally meritorious cases. In the case of
petitioner, he, together with a co-respondent, filed a second motion for reconsideration claiming
he will be presenting evidence that he was not able to present during the hearings, which, if
admitted, will alter the decision.
The Court of Appeals relied heavily on Section 4, Rule 43 of the Rules of Court mandating that
only one motion for reconsideration shall be allowed. Under Administrative Order No. 18, a
second motion for reconsideration can be permitted in exceptionally meritorious cases. It does
not absolutely prohibit the filing of a second motion for reconsideration. In the case at bar,
petitioner filed a second motion for reconsideration believing that he will be exonerated if the
evidence he will be presenting will be accepted. He was of the opinion that his case is
exceptionally meritorious and is worthy of a second look via a second motion for
reconsideration.
It is the rules of the Office of the President (Administrative Order No. 18) which shall govern as
to how many motions for reconsideration of its decision/ resolution/order shall be allowed. In
this case, a second motion for reconsideration is allowed in exceptionally meritorious cases.
More importantly, Section 9 of its rules provides only for the suppletory application of the Rules
of Court. Inasmuch as Administrative Order No. 18 provides for the rule on motions for
reconsideration, Section 4, Rule 43 of the Rules of Court should find no application.
The Court of Appeals thus erred in dismissing outright the petition because it counted the period
to appeal from petitioner's notice of denial of the first motion for reconsideration. It should have
reckoned the period to appeal from petitioner's notice of denial of the second motion for
reconsideration.
Anent the second issue, petitioner asks the Court to consider certain newly discovered pieces
of evidence that are materially vital to the proper appreciation of the merit of the charge against
him. He asserts that the admission of these pieces of documentary evidence will show his
innocence of the charge.
These pieces of evidence as gathered from the record are: (1) Handwritten acknowledgment33
by the guard on duty on 07 August 1997 that two (2) container vans with trucks from INTERPAC
were received at PAGASA, Diliman, Quezon City, at 6:45 p.m.; (2) Notice34 of Cargo Arrival
dated 24 July 1997 addressed to INTERPAC showing that two (2) containers were to arrive in
Manila on 26 July 1997; (3) Bill of Lading No. LAXMNL-80149335 dated 07 July 1997 showing
a weather tracking system complete with accessories and parts were loaded in Los Angeles on
board Hongkong Express V.9W with PAGASA as consignee and with notice to INTERPAC; (4)
Letter36 dated 04 August 1997 from INTERPAC addressed to petitioner requesting for
temporary storage of radar equipment in PAGASA, Diliman, Quezon City, before shipping the
same to Sto. Tomas, Baguio City, in two to three weeks; and (5) Delivery Receipt No. 226437
dated 07 August 1997 showing two containers containing Meteorological Weather Tracking
Equipment Complete with Accessories and Parts were delivered in PAGASA, Diliman at 6:45
p.m. Same were submitted only with the filing of petitioner's second motion for reconsideration
before the Office of the President. Said exhibits were no longer considered by respondent Gaite
in denying the second motion for reconsideration.
Should these newly discovered pieces of evidence be considered notwithstanding the fact that
they were submitted only during the filing of petitioner's second motion for
reconsideration?chanroblesvirtualawlibrary
The requisites for newly discovered evidence are: (a) the evidence was discovered after trial;
(b) such evidence could not have been discovered and produced at the trial with reasonable
diligence; and (c) that it is material, not merely cumulative, corroborative or impeaching, and is
of such weight that, if admitted, will probably change the judgment.38
In the case at bar, the documentary exhibits cannot be considered as newly discovered
evidence inasmuch as the same could have been discovered and produced at the trial/hearing
held before the PCAGC in 1999. Petitioner cannot claim that he could not have discovered such
evidence, especially so when one of the documents (letter dated 4 August 1997) is addressed
to him. Nonetheless, in the interest of justice, we set aside technicalities in order to receive all
evidence from, and hear the side of, petitioner.
It is settled that rules of procedure are, as a matter of course, construed liberally in proceedings
before administrative bodies.39 Administrative bodies are not bound by the technical niceties of
law and procedure and the rules obtaining in the courts of law.40 Rules of procedure are not to
be applied in a very rigid and technical manner, as rules of procedure are used only to help
secure and not to override substantial justice.41
We now go to the last issue. Did petitioner violate P.D. No. 1594 when he approved the
payments of P7,212,857.33 on 14 January 1997 and P13,123,275.93 on 13 August 1997 to
INTERPAC?chanroblesvirtualawlibrary
At the outset, it must be stated that per inquiry of petitioner to the Department of Transportation
and Communications (DOTC), the contract for the supply, delivery, installation, testing and
commissioning of S-Band Weather Surveillance Radar System and Other Related Equipment
for Baguio and Tanay Radar Stations was categorized by Primitivo C. Cal, Undersecretary of
the DOTC, as an infrastructure project. As such, the law that governs the same is P.D. No.
1594.42 The Implementing Rules and Regulations thereof, more specifically CI 4 1, allows an
advance payment in an amount equal to fifteen percent (15%) of the total contract price. It reads:
1. The Government shall, upon a written request of the contractor which shall be submitted as
a contract document, make an advance payment to the contractor in an amount equal to fifteen
percent (15%) of the total contract price, to be made in lump sum or at the most two installments
according to a schedule specified in the Instructions to Bidders and other relevant Tender
Documents. (Underscoring supplied)ςrαlαωlιbrαrÿ
Petitioner contends that the second payment he approved in the amount of P13,123,275.93 on
13 August 1997 to INTERPAC is the subject matter of the administrative case filed against him.
He explained that since there was already a "delivery" of the Baguio Radar System made on 7
August 1997 at PAGASA, Diliman, Quezon City, prior to the second payment made on 13
August 1997, then the only advance payment made in the amount of P7,212,857.33 which is
equivalent to ten percent (10%) of the total contract price is well within the limit set by P.D. No.
1594 (15%). He claims that the second payment should be treated as a progress billing.
Before we could determine if the advance payment made by PAGASA exceeded fifteen percent
(15%) in violation of P.D. No. 1594, we must ascertain if there was, indeed, a "delivery" of the
Baguio Radar Sytem prior to the second payment. If there was no delivery, then the advance
payment made to INTERPAC will total P20,336,133.26 (P7,212,857.33 on 14 January 1997
plus P13,123,275.93 on 13 August 1997) or 28.9% of the total contract price of P72,128,573.30,
in violation of P.D. No. 1594. On the other hand, if there was delivery prior to the second
payment, then only the amount of P7,212,857.33 or ten percent (10%) of the contract price paid
on 14 January 1997 can be considered as an advance payment. The second payment of
P13,123,275.93 on 13 August 1997 will thus be considered a progress payment.
Was there a delivery made by INTERPAC on 7 August 1997 at PAGASA, Diliman, Quezon
City?chanroblesvirtualawlibrary
Petitioner maintains there was delivery as shown by the documentary exhibits43 he submitted
when he filed his 2nd motion for reconsideration before the Office of the President. He said that
two container vans with Meteorological Weather Tracking Equipment Complete with
Accessories and Parts were left at PAGASA, Diliman, Quezon City.
At first glance, it would appear that petitioner has a meritorious case. However, after a thorough
review of the record, we find that there was NO delivery made by INTERPAC on 7 August 1997.
The letter of Ghader Khazeni of INTERPAC which was addressed to petitioner requested only
for the temporary storage of radar equipment at PAGASA, Diliman, Quezon City. Nowhere in
said letter does it say that the same was already the delivery as agreed upon in the contract.
Article VII of the contract for the supply, delivery, installation, testing and commissioning of S-
Band Weather Surveillance Radar System and Other Related Equipment for Baguio and Tanay
Radar Stations provides for the delivery terms and conditions.44 Said article reads:
ARTICLE VII
DELIVERY TERMS AND CONDITIONS
Delivery stated herein is based upon the following:
A. That name plates will bear manufacturer's/suppliers standard information;
b. That all systems & sub-systems will be supported with technical manuals sufficient to operate,
maintain and repair the equipment furnished.
c. Installation, testing and commissioning of the equipment/system at the project site shall be
done in the presence of PAGASA technical personnel.
d. That all items furnished under this contract are CIF, Manila, Philippines. INTERPAC will
undertake the transportation of systems/equipment to the project sites and all risks in this
transport shall be assumed by INTERPAC.
e. That all infrastructure site preparations incidental to the installation of the weather radar
system such as access road, radar building repair and other related civil works shall be funded
and performed by PAGASA.
f. That all site preparations incidental to the installation such as antenna/radome base footing
preparation, cable trenches/trays and other related installations works shall be funded and
performed by INTERPAC.
g. That INTERPAC/EEC shall provide 4 copies of the Technical Manual of Operation for each
Doppler Weather Surveillance Radar System supplied. Specification sheets of manufacturer
(EEC) and vendor-supplier components shall also be provided.
It can be concluded from the article that delivery should be at the project sites - - Baguio and
Tanay. The office of PAGASA in Diliman, Quezon City, cannot be considered as a project site
since it served only as a temporary storage area for the radar equipment prior to its shipment to
the project site in Baguio City. In fact, the temporary storing of the radar equipment at PAGASA,
Diliman, Quezon City, was not even considered by Atty. Lilian Angeles, petitioner's co-
respondent in the administrative case, as an actual delivery because the latter testified that the
Baguio Radar System was delivered only on 5 September 1997 at Mt. Sto. Tomas Radar Station
in Baguio.45 She even admitted that the second payment (on 13 August 1997) was made ahead
of the actual delivery (on 05 September 1997).46
Petitioner's claim that there was a delivery made on 07 August 1997 at PAGASA, Diliman,
Quezon City, is clearly an afterthought in order to save his neck. There was literally a delivery
of radar equipment on 07 August 1997, but such delivery is not the one contemplated in the
contract entered into by PAGASA and INTERPAC.
There being no actual delivery on 07 August 1997, the payments made by PAGASA in the
amounts of P7,212,857.33 on 14 January 1997 and P13,123,275.93 on 13 August 1997 totaling
P20,336,133.26 are considered advance payments. The P20,336,133.26 is 28.9% of the total
contract price of P72,128,573.30. As P.D. No. 1594 allows only an advance payment in an
amount equal to fifteen percent (15%) of the total contract price, petitioner obviously violated
said law because he approved an advance payment of P20,336,133.26 which is way beyond
the limit set by the law.
Petitioner likewise contends that he did not violate Section 88 of P.D. No. 1445.47 Said section
reads:
SECTION 88. Prohibition against payment on government contracts. '(1) Except with the prior
approval of the President (Prime Minister) the government shall not be obliged to make an
advance payment for services not yet rendered or for supplies and materials not yet delivered
under any contract therefore. No payment, partial or final, shall be made on any such contract
except upon a certification by the head of the agency concerned to the effect that the services
or supplies and materials have been rendered or delivered in accordance with the terms of the
contract and have been duly inspected and accepted.
We find such contention to be untenable. Section 88 of P.D. No. 1445 is clear that no advance
payment shall be made for services not yet rendered or for supplies and materials not yet
delivered except with the approval of the President. In the case before us, there is no dispute
that petitioner approved on 14 January 1997, per Disbursement Voucher No. 9701036, an
advance payment in favor of INTERPAC in the amount of P7,212,857.33 representing ten
percent (10%) of the total contract price. There being no approval from the President to make
such advance payment, such approval by petitioner is a clear violation of P.D. No. 1445. Thus,
regardless of which law should govern the contract involved, whether it is P.D. No. 1594 or P.D.
No. 1445, petitioner acted in contravention thereof.
Finally, petitioner argues that he will be placed in double jeopardy if the administrative case
against him will not be dismissed because of the decision of the Ombudsman finding no
probable cause to indict him before the Sandiganbayan for violation of Section 3(g) of Rep. Act
No. 3019, as amended.
We are not convinced. As a general rule, the following requisites must be present for double
jeopardy to attach: (1) a valid indictment, (2) before a court of competent jurisdiction, (3) the
arraignment of the accused, (4) a valid plea entered by him, and (5) the acquittal or conviction
of the accused, or the dismissal or termination of the case against him without his express
consent.48
In the case before us, all the elements necessary to invoke double jeopardy are absent.
Moreover, the fact that the administrative case and the case filed before the Ombudsman are
based on the same subject matter is of no moment. It is a fundamental principle of administrative
law that the administrative case may generally proceed against a respondent independently of
a criminal action for the same act or omission and requires only a preponderance of evidence
to establish administrative guilt as against proof beyond reasonable doubt of the criminal
charge.49
WHEREFORE, the Petition for Review is hereby DENIED for lack of merit.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
[G.R. NO. 150274 : August 4, 2006]
IN THE MATTER TO DECLARE IN CONTEMPT OF COURT HON. SIMEON A.
DATUMANONG in the latter's capacity as Secretary of the Department of Public Works
and Highways. JIMMIE F. TEL-EQUEN, Petitioner,
DECISION
YNARES-SANTIAGO, J.:
Petitioner Jimmie F. Tel-Equen, District Engineer of Mountain Province, DPWH Cordillera
Administrative Region, filed this present petition to cite the former Secretary Simeon A.
Datumanong of the Department of Public Works and Highways (DPWH) in contempt of court
for issuing Memorandum Order dated October 5, 2001 dismissing him from the service.
The facts of the case are as follows:
The Ombudsman Task Force on Public Works and Highways filed with the Office of the
Ombudsman an administrative complaint for dishonesty, falsification of official documents,
grave misconduct, gross neglect of duty, violation of office rules and regulations, and conduct
prejudicial to the service against petitioner Tel-Equen and several others, relative to the
anomalous payment of P553,900.00 of the bailey bridge components owned by the government.
The case was docketed as OMB-ADM-0-91-0430.1
On March 28, 1994, the Administrative Adjudication Bureau of the Office of the Ombudsman
found respondents guilty of dishonesty, falsification of public documents, misconduct and
conduct prejudicial to the best interest of the service and ordered their dismissal from the service
with accessory penalties pursuant to Section 23 of Rule XIV, Book V of Executive Order No.
292, otherwise known as the Revised Administrative Code of 1987.2
After the denial of the motions for reconsideration, three petitions were filed before this Court
which were consolidated and referred to the Court of Appeals in light of the ruling in Fabian v.
Desierto 3 where appeals from decisions of the Office of the Ombudsman in administrative
cases should be referred to the appellate court under Rule 43 of the Rules of Court.4
On March 2, 2000, the Court of Appeals affirmed with modification the decision of the
Administrative Adjudication Bureau of the Office of the Ombudsman finding petitioner and two
co-accused guilty as charged and dismissed them from the service while the other two
respondents were exonerated from administrative liability for lack of evidence.5
Petitioner, together with his two co-accused, appealed from the decision of the Court of Appeals
which was docketed as G.R. No. 144694.6 Meanwhile, while appeal was still pending, Secretary
Datumanong issued the assailed Memorandum Order, 7 which reads:
October 5, 2001
MEMORANDUM TO:
Messrs:
JIMMIE F. TEL-EQUEN
District Engineer
RUDY P. ANTONIO
Chief, Construction Section
All of Mountain Province Engineering District
This Department
This is with reference to the Order of the Ombudsman dated December 11, 1995 in OMB ADM.
0-91-0430 entitled "OMB TASK FORCE ON DPWH v. JIMMIE F. TEL-EQUEN, ET AL." (Annex
"A"), affirming the March 28, 1994 Resolution (Annex "B") in the same case finding you guilty of
having committed acts of dishonesty, falsification of public documents, misconduct and conduct
prejudicial to the best interest of the service and recommending that you be DISMISSED from
the service together with its accessory penalties pursuant to Sec. 23, Rule XIV, Book V of
Executive Order No. 292.
The Order was affirmed by the Court of Appeals (Eight Division) in its Decision (Annex "C")
promulgated on March 02, 2000 in CA-G.R. SP No. 50324 entitled "ROMULO H. MABUNGA,
ET AL. v. THE OMBUDSMAND, ET AL."
Inasmuch as the Order dismissing you from the service is not a subject of any injunction or
restraining order from the Supreme Court, the same is immediately executory. Wherefore, you
are hereby ordered DROPPED/DISMISSED from the service effective upon receipt hereof.
(Sgd.) SIMEON A. DATUMANONG
Secretary
Hence, the instant petition to cite Secretary Datumanong in contempt of court.
Petitioner contends that in issuing the Memorandum Order despite knowledge of the pendency
of G.R. No. 144694, Secretary Datumanong committed a contumacious act, a gross and blatant
display of abuse of discretion and an unlawful interference with the proceedings before the
Court, thereby directly or indirectly impeding, obstructing and degrading the administration of
justice, and pre-empting the Court's sole right to make a decision in accord with the evidence
and law.8
Petition lacks merit.
The power to declare a person in contempt of court and in dealing with him accordingly is an
inherent power lodged in courts of justice, to be used as a means to protect and preserve the
dignity of the court, the solemnity of the proceedings therein, and the administration of justice
from callous misbehavior, offensive personalities, and contumacious refusal to comply with
court orders.9 This contempt power, however plenary it may seem, must be exercised
judiciously and sparingly with utmost self-restraint with the end in view of utilizing the same for
correction and preservation of the dignity of the court, not for retaliation or vindication.10 It
should not be availed of unless necessary in the interest of justice.11
After careful consideration of the facts and circumstances of the case, we find that the issuance
of the Memorandum Order by Secretary Datumanong was not a contumacious conduct tending,
directly or indirectly, to impede, obstruct or degrade the administration of justice. A conduct, to
be contumacious, implies willfulness, bad faith or with deliberate intent to cause injustice, which
is not so in the case at bar. If it were otherwise, petitioner should have been dismissed
immediately after the Administrative Adjudication Bureau of the Office of the Ombudsman
rendered its decision on March 28, 1994. It was only after the Court of Appeals rendered its
decision on March 2, 2000 affirming the dismissal that Secretary Datumanong issued the
memorandum and after ascertaining that no injunction or restraining order was issued by the
Court.
At most, it may be considered only an error of judgment or a result of confusion considering the
different rules regarding execution of decisions pending appeal.
Decisions of the Civil Service Commission under the Administrative Code of 1987 12 are
immediately executory even pending appeal because the pertinent laws 13 under which the
decisions were rendered mandate them to be so.14 Thus, "where the legislature has seen fit to
declare that the decision of the quasi-judicial agency is immediately final and executory pending
appeal, the law expressly so provides." 15 Otherwise, execution of decisions takes place only
when they become final and executory, like decisions rendered by the Office of the
Ombudsman.
Thus, in Lapid v. Court of Appeals, 16 the Court held:
Petitioner was administratively charged for misconduct under the provisions of R.A. 6770, the
Ombudsman Act of 1989. Section 27 of the said Act provides as follows:
"Section 27. Effectivity and Finality of Decisions. - All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman
must be filed within five (5) days after receipt of written notice and shall be entertained only on
the following grounds:
xxx
Findings of fact of the Office of the Ombudsman when supported by substantial evidence are
conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand,
suspension of not more than one month's salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten
(10) days from receipt of the written notice of the order, directive or decision or denial of the
motion for reconsideration in accordance with Rule 45 of the Rules of Court."
The Rules of Procedure of the Office of the Ombudsman likewise contain a similar provision.
Section 7, Rule III of the said Rules provides as follows:
"Sec. 7. Finality of Decision - where the respondent is absolved of the charge and in case of
conviction where the penalty imposed is public censure or reprimand, suspension of not more
than one month, or a fine not equivalent to one month salary, the decision shall be final and
unappealable. In all other cases, the decision shall become final after the expiration of ten (10)
days from receipt thereof by the respondent, unless a motion for reconsideration or petition for
certiorari, shall have been filed by him as prescribed in Section 27 of R.A. 6770."
It is clear from the above provisions that the punishment imposed upon petitioner, i.e.
suspension without pay for one year, is not among those listed as final and unappealable,
hence, immediately executory. Section 27 states that all provisionary orders of the Office of the
Ombudsman are immediately effective and executory; and that any order, directive or decision
of the said Office imposing the penalty of censure or reprimand or suspension of not more than
one month's salary is final and unappealable. As such the legal maxim "inclusio[n] unius est
exclusio alterius" finds application. The express mention of the things included excludes those
that are not included. The clear import of these statements taken together is that all other
decisions of the Office of the Ombudsman which impose penalties that are not enumerated in
the said Section 27 are not final, unappealable and immediately executory. An appeal timely
filed, such as the one filed in the instant case, will stay the immediate implementation of the
decision. This finds support in the Rules of Procedure issued by the Ombudsman itself which
states that "(I)n all other cases, the decision shall become final after the expiration of ten (10)
days from receipt thereof by the respondent, unless a motion for reconsideration or petition for
certiorari (should now be Petition for Review under Rule 43) shall have been filed by him as
prescribed in Section 27 of R.A. 6770."
xxx
A judgment becomes "final and executory" by operation of law. Section 27 of the Ombudsman
Act provides that any order, directive or decision of the Office of the Ombudsman imposing a
penalty of public censure or reprimand, or suspension of not more than one month's salary shall
be final and unappealable. In all other cases, the respondent therein has the right to appeal to
the Court of Appeals within ten (10) days from receipt of the written notice of the order, directive
or decision. In all these other cases therefore, the judgment imposed therein will become final
after the lapse of the reglementary period of appeal if no appeal is perfected or, an appeal
therefrom having been taken, the judgment in the appellate tribunal becomes final. It is this final
judgment which is then correctly categorized as a "final and executory judgment" in respect to
which execution shall issue as a matter of right. In other words, the fact that the Ombudsman
Act gives parties the right to appeal from its decisions should generally carry with it the stay of
these decisions pending appeal. Otherwise, the essential nature of these judgments as being
appealable would be rendered nugatory. (Emphasis supplied)cralawlibrary
Petitioner was charged administratively before the Office of the Ombudsman. Accordingly, the
provisions of the Ombudsman Act and its Rules of Procedure should apply in his case. It is a
principle in statutory construction that where there are two statutes that apply to a particular
case, that which was specially designed for the said case must prevail over the other.17
In fine, Secretary Datumanong cannot be held in contempt of court for issuing the Memorandum
Order in the absence of malice or wrongful conduct in issuing it. The remedy of the petitioner is
not to file a petition to cite him in contempt of court but to elevate the error to the higher court
for review and correction.
However, two events supervened since the filing of this petition that would support its dismissal.
First, on March 28, 2005, the Court in G.R. No. 144694 affirmed the decisions of the Court of
Appeals and Administrative Adjudication Bureau of the Office of the Ombudsman ordering
petitioner dismissed from the service for dishonesty, falsification of public documents,
misconduct, and conduct prejudicial to the best interest of the service. Second, Section 7, Rule
III of the Rules of Procedure of the Office of the Ombudsman was amended by Administrative
Order No. 17 18 wherein the pertinent provision on the execution of decisions pending appeal
is now essentially similar to Section 47 of the Uniform Rules on Administrative Cases in the Civil
Service and other related laws, thus:
In the case at bar, the Rules of Procedure of the Office of the Ombudsman are clearly procedural
and no vested right of the petitioner is violated as he is considered preventively suspended while
his case is on appeal. Moreover, in the event he wins on appeal, he shall be paid the salary and
such other emoluments that he did not receive by reason of the suspension or removal. Besides,
there is no such thing as a vested interest in an office, or even an absolute right to hold office.
Excepting constitutional offices which provide for special immunity as regards salary and tenure,
no one can be said to have any vested right in an office. 20
WHEREFORE, in view of the foregoing, the petition to cite former Secretary Simeon A.
Datumanong of the Department of Public Works and Highways in contempt of court for issuing
Memorandum Order dated October 5, 2001 dismissing petitioner Jimmie F. Tel-Equen from the
service is DISMISSED for lack of merit.
SO ORDERED.

Rule III

PROCEDURE IN ADMINISTRATIVE CASES

Section 7. Finality and execution of decision. - Where the respondent is absolved of the charge,
and in case of conviction where the penalty imposed is public censure or reprimand, suspension
of not more than one month, or a fine equivalent to one month salary, the decision shall be final,
executory and unappealable. In all other cases, the decision may be appealed to the Court of
Appeals on a verified Petition for Review under the requirements and conditions set forth in Rule
43 of the Rules of Court, within fifteen (15) days from receipt of the written Notice of the Decision
or Order denying the Motion for Reconsideration.

An appeal shall not stop the decision from being executory. In case the penalty is suspension
or removal and the respondent wins such appeal, he shall be considered as having been under
preventive suspension and shall be paid the salary and such other emoluments that he did not
receive by reason of the suspension or removal.

A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter
of course. The Office of the Ombudsman shall ensure that the decision shall be strictly enforced
and properly implemented. The refusal or failure by any officer without just cause to comply with
an order of the Office of the Ombudsman to remove, suspend, demote, fine, or censure shall
be a ground for disciplinary action against said officer.

Well-settled is the rule that procedural laws are construed to be applicable to actions pending
and undetermined at the time of their passage, and are deemed retroactive in that sense and
to that extent. As a general rule, the retroactive application of procedural laws cannot be
considered violative of any personal rights because no vested right may attach to nor arise
therefrom.19