PCGG vs.

Pena, 159 SCRA 556

FACTS:

This is a case about the Presidential Commission on Good Government, created through E.O. 1,
charging it with the task of assisting the President in regard to the recovery of all ill-gotten wealth
accumulated by the Marcoses, including the power to issue freeze orders or sequestration of all
business enterprises owned by them upon showing of a prima facie case.

March 25, 1986 – PCGG issued an order freezing the assets, effects, documents and records of two
export garment manufacturing firms: American Inter-fashion Corporation and De Soleil Apparel
Manufacturing Corporation. June 27, 1986 – PCGG designated the OIC, Saludo, and Yeung Chun Ho as
authorized signatories to effect deposits and withdrawals of the funds of the two corporations. Sept. 4,
1986 – PCGG designated Yim Kam Shing as co-signatory, in the absence of Yeung Chun Ho and
Marcelo de Guzman, in the absence of Saludo. Feb. 3, 1987 – Saludo, in a memorandum, revoked the
authorizations previously issued upon finding that Mr. Yim Kam Shing was a Hong Kong Chinese
national staying in the country on a mere tourist visa. The PCGG Commissioner approved the
memorandum. Shortly, thereafter, Saludo withdrew funds from Metrobank against the accounts of the
two corporations for payment of the salaries of the stuff.

Yeung Chung Kam, Yeung Chun Ho and Archie Chan instituted through Yim Kam Shing an action for
damages with prayer for a writ of preliminary injunction against the said bank, PCGG, the
Commissioner and OIC Saludo with the RTC, questiong the aforesaid revocation of the authorization
as signatory previously granted to Yim Kam Shing. RTC issued TRO.

PCGG filed a motion to dismiss with opposition to Yim’s prayer for a writ of preliminary injunction on
the ground that the trial court has no jurisdiction over the Commission or over the subject of the case.
RTC judge denied PCGG’s motion to dismiss and granted Yim’s prayer for a writ of preliminary
injunction.

Hence this petition.

ISSUE:

 Whether or not the RTC has jurisdiction over the PCGG

HELD:

The Supreme Court held that RTC and the CA for that matter have no jurisdiction over the PCGG in
the exercise of its powers under the applicable Executive Orders and Art. XVIII, sec. 26 of the
Constitution and therefore may not interfere with and restrain or set aside the orders and actions of
the Commission. Under section 2 of the President's Executive Order No. 14 issued on May 7, 1986, all
cases of the Commission regarding "the Funds, Moneys, Assets, and Properties Illegally Acquired or
Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close
Relatives, Subordinates, Business Associates, Dummies, Agents, or Nominees" 1 whether civil or
criminal, are lodged within the "exclusive and original jurisdiction of the Sandiganbayan" 2 and all
incidents arising from, incidental to, or related to, such cases necessarily fall likewise under the
Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by
the Supreme Court.

Powers of the PCGG

E.O. 1 – created PCGG, charging it to assist the President in the recovery of all ill-gotten wealth
accumulated by the Marcoses, including sequestration and provisional takeover of all
business enterprises owned by them as well as conduct investigations, require submission of evidence
by subpoena, administer oaths, punish for contempt. Freedom Constitution (Proc. No. 3) – mandated
the President to “…recover ill-gotten properties amassed by the leaders and supporters of the previous
regime….”

Quasi-Judicial Function

As can be readily seen, PCGG exercises quasi-judicial functions. In the exercise of quasi-judicial
functions, theCommission is a co-equal body with regional trial courts and “co-equal bodies have no
power to control the other.” However, although under B.P. 129, the CA has exclusive appellate
jurisdiction over all final judgment…of regional trial courts and quasi-judicial bodies, E.O. 14
specifically provides in section 2 that "The Presidential Commission on Good Government shall file all
such cases, whether civil or criminal, with the Sandiganbayan which shall have exclusive and original
jurisdiction thereof." Necessarily, those who wish to question or challenge the Commission's acts or
orders in such cases must seek recourse in the same court, the Sandiganbayan, which is vested with
exclusive and original jurisdiction. The Sandiganbayan's decisions and final orders are in turn subject
to review on certiorari exclusively by this Court.

Primary Administrative Jurisdiction and Exhaustion of Administrative  Remedies

The Court recently had occasion to stress once more, in G.R. No. 82218, Reyes vs. Caneba March 17,
1988, that "(T)he thrust of the related doctrines of primary administrative jurisdiction and exhaustion
of administrative remedies is that courts must allow administrative agencies to carry out their
functions and discharge their responsibilities within the specialized areas of their respective
competence. Acts of an administrative agency must not casually be overturned by a court, and a court
should as a rule not substitute its judgment for that of the administrative agency acting within the
perimeters of its own competence." Applying these fundamental doctrines to the case at bar, the
questions and disputes raised by respondents seeking to controvert the Commission's finding of prima
facie basis for the issuance of its sequestration orders as well as the interjection of the claims of the
predecessor of American Inter-fashion and De SoleilCorporations, viz. Glorious Sun Phil., headed by
Nemesis Co are all questions that are within the primary administrative jurisdiction of
the Commission that cannot be prematurely brought up to clog the court dockets without first
resorting to the exhaustion of the prescribed administrative remedies. The administrative procedure
and remedies for contesting orders of sequestration issued by the Commission are provided for in its
rules and regulations. Thus, the person against whom a writ of sequestration is directed may request
the lifting thereof, in writing; after due hearing or motu proprio for good cause shown,
the Commission may lift the writ unconditionally or subject to such conditions as it may deem
necessary, taking into consideration the evidence and the circumstances of the case. The resolution of
the Commission is appealable to the President of the Philippines. The Commission conducts a hearing,
after due notice to the parties concerned to ascertain whether any particular asset, property or
enterprise constitutes ill-gotten wealth. TheCommission's order of sequestration is not final, at the
proper time, the question of ownership of the sequestered properties shall be exclusively determined
in the Sandiganbayan, whose own decisions in turn are subject to review exclusively by the Supreme
Court.

It should be emphasized here, as again stressed by the Court in the recent case of Republic, et al. vs.
De los Angeles, et al., G.R. No. L-30240, March 25, 1988, that "it is well-recognized principle that
purely administrative and discretionary function may not be interfered with by the courts. In general,
courts have no supervising power over the proceedings and actions of the administrative departments
of government. This is generally true with respect to acts involving the exercise of judgment or
discretion, and findings of fact. There should be no thought of disregarding the traditional line
separating judicial and administrative competence, the former being entrusted with the determination
of legal questions and the latter being limited as a result of its expertise to the ascertainment of the
decisive facts." This is specially true in sequestration cases affected by the Commission for the
recovery of the nation' s plundered wealth that may affect the nation's very survival, in the light of the
constitutional mandate that such sequestration or freeze orders "shall be issued only upon showing of
a prima facie case" 17 and the settled principle that findings by administrative or quasi-judicial
agencies like the Commission are entitled to the greatest respect and are practically binding and
conclusive, like the factual findings of the trial and appellate courts, save where they are patently
arbitrary or capricious or are not supported by substantial evidence.
 United Residents of Dominican Hills vs. Commission on Settlement of Land Problems, 353 SCRA 782

“Quasi-judicial function” is a term which applies to the actions, discretion, etc. of public administrative
officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold
hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion
of a judicial nature. However, it does not depart from its basic nature as an administrative agency,
albeit one that exercises quasi-judicial functions. Still, administrative agencies are not considered
courts; they are neither part of the judicial system nor are they deemed judicial tribunals.

FACTS:

Some 800 public school teachers undertook “mass concerted actions” to protest the alleged failure of
public authorities to act upon their grievances. The “mass actions” consisted in staying away from
their classes, converging at the Liwasang Bonifacio, gathering in peacable assemblies, etc. The
Secretary of Education served them with an order to return to work within 24 hours or face dismissal.
For failure to heed the return-to-work order, eight teachers at the Ramon Magsaysay High School
were administratively charged, preventively suspended for 90 days pursuant to sec. 41, P.D. 807 and
temporarily replaced. An investigation committee was consequently formed to hear the charges.

When their motion for suspension was denied by the Investigating Committee, said teachers staged a
walkout signifying their intent to boycott the entire proceedings. Eventually, Secretary Carino decreed
dismissal from service of Esber and the suspension for 9 months of Babaran, Budoy and del Castillo.
In the meantime, a case was filed with RTC, raising the issue of violation of the right of the striking
teachers’ to due process of law. The case was eventually elevated to SC. Also in the meantime, the
respondent teachers submitted sworn statements to Commission on Human Rights to complain that
while they were participating in peaceful mass actions, they suddenly learned of their replacement as
teachers, allegedly without notice and consequently for reasons completely unknown to them.

While the case was pending with CHR, SC promulgated its resolution over the cases filed with it
earlier, upholding the Sec. Carino’s act of issuing the return-to-work orders. Despite this, CHR
continued hearing its case and held that the “striking teachers” “were denied due process of law;…
they should not have been replaced without a chance to reply to the administrative charges;” there
had been violation of their civil and political rights which the Commission is empowered to
investigate.”

ISSUE:

 Whether or not CHR has jurisdiction to try and hear the issues involved

HELD:

The threshold question is whether or not the Commission on Human Rights has the power under the
Constitution to do so; whether or not, like a court of justice, 19 or even a quasi-judicial agency, it has
jurisdiction or adjudicatory powers over, or the power to try and decide, or hear and determine,
certain specific type of cases, like alleged human rights violations involving civil or political rights.

The Court declares the Commission on Human Rights to have no such power; and that it was not
meant by the fundamental law to be another court or quasi-judicial agency in this country, or
duplicate much less take over the functions of the latter.

The most that may be conceded to the Commission in the way of adjudicative power is that it may
investigate, i.e., receive evidence and make findings of fact as regards claimed human rights
violations involving civil and political rights. But fact finding is not adjudication, and cannot be likened
to the judicial function of a court of justice, or even a quasi-judicial agency or official. The function of
receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function,
properly speaking. To be considered such, the faculty of receiving evidence and making factual
conclusions in a controversy must be accompanied by the authority of applying the law to those
factual conclusions to the end that the controversy may be decided or determined authoritatively,
finally and definitively, subject to such appeals or modes of review as may be provided by law. This
function, to repeat, the Commission does not have.

Power to Investigate

The Constitution clearly and categorically grants to the Commission the power to investigate all forms
of human rights violations involving civil and political rights. It can exercise that power on its own
initiative or on complaint of any person. It may exercise that power pursuant to such rules of
procedure as it may adopt and, in cases of violations of said rules, cite for contempt in accordance
with the Rules of Court. In the course of any investigation conducted by it or under its authority, it
may grant immunity from prosecution to any person whose testimony or whose possession of
documents or other evidence is necessary or convenient to determine the truth. It may also request
the assistance of any department, bureau, office, or agency in the performance of its functions, in the
conduct of its investigation or in extending such remedy as may be required by its findings. But it
cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial
bodies do. To investigate is not to adjudicate or adjudge. Whether in the popular or the technical
sense, these terms have well understood and quite distinct meanings.

“Investigate” vs. “Adjudicate”

"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into,
research on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire
into systematically. "to search or inquire into: . . . to subject to an official probe . . .: to conduct an
official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain
information. Nowhere included or intimated is the notion of settling, deciding or resolving a
controversy involved in the facts inquired into by application of the law to the facts established by the
inquiry.

The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient
inquiry or observation. To trace or track; to search into; to examine and inquire into with care and
accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to
inquire; to make an investigation," "investigation" being in turn describe as "(a)n administrative
function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; . . .
an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter
or matters."

"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide,

determine, resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and
duties of the parties to a court case) on the merits of issues raised: . . . to pass judgment on: settle
judicially: . . . act as judge." And "adjudge" means "to decide or rule upon as a judge or with judicial
or quasi-judicial powers: . . . to award or grant judicially in a case of controversy . . . ."

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine
finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially,
to decide, settle or decree, or to sentence or condemn. . . . Implies a judicial determination of a fact,
and the entry of a judgment."

Hence it is that the Commission on Human Rights, having merely the power "to investigate," cannot
and should not "try and resolve on the merits" (adjudicate) the matters involved in Striking Teachers
HRC Case No. 90-775, as it has announced it means to do; and it cannot do so even if there be a
claim that in the administrative disciplinary proceedings against the teachers in question, initiated and
conducted by the DECS, their human rights, or civil or political rights had been transgressed. More
particularly, the Commission has no power to "resolve on the merits" the question of (a) whether or
not the mass concerted actions engaged in by the teachers constitute and are prohibited or otherwise
restricted by law; (b) whether or not the act of carrying on and taking part in those actions, and the
failure of the teachers to discontinue those actions, and return to their classes despite the order to this
effect by the Secretary of Education, constitute infractions of relevant rules and regulations warranting
administrative disciplinary sanctions, or are justified by the grievances complained of by them; and (c)
what where the particular acts done by each individual teacher and what sanctions, if any, may
properly be imposed for said acts or omissions.

Who has Power to Adjudicate?

These are matters within the original jurisdiction of the Sec. of Education, being within the scope of
the disciplinary powers granted to him under the Civil Service Law, and also, within the appellate
jurisdiction of the CSC.

Manner of Appeal

Now, it is quite obvious that whether or not the conclusions reached by the Secretary of Education in
disciplinary cases are correct and are adequately based on substantial evidence; whether or not the
proceedings themselves are void or defective in not having accorded the respondents due process;
and whether or not the Secretary of Education had in truth committed "human rights violations
involving civil and political rights," are matters which may be passed upon and determined through a
motion for reconsideration addressed to the Secretary Education himself, and in the event of an
adverse verdict, may be reviewed by the Civil Service Commission and eventually the Supreme Court.

“Quasi-judicial power” distinguished from “judicial power” and “quasi-legislative power”

Philippine Consumers Foundation, Inc. vs. Secretary of Education Culture and Sports, 153 SCRA 622

QUASI-LEGISLATIVE v. QUASI-JUDICIAL:

When the rules and/or rates laid down by an administrative agency are meant to apply to all
enterprises of a given kind throughout the country, they may partake of a legislative character. Where
the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact,
then its function is quasi-judicial in character.

Requirements for Valid Exercise

(1) Jurisdiction

Q: How is jurisdiction determined?

A: Jurisdiction is conferred by law and by the Constitution. Thus, in order to determine who has
jurisdiction to take cognizance of a case, one only needs to look at the law whether or not it confers
jurisdiction on the body.

Q: How do you resolve a conflict of jurisdiction between a quasi-judicial body and the court?
A: First, determine what the controversy is all about. Is the plaintiff questioning whether an
administrative body has a certain power? Or is he questioning how said power was exercised? In the
first, the particular law creating the body must be considered in order to determine whether or not the
administrative body has authority. If the law has been entrusted to that body for its implementation
and such law vests authority in said body, then it has jurisdiction. Upon the other hand, if the case
puts in issue, not whether the body has authority, but the questionable manner it is exercised, then
the courts have jurisdiction to determine whether or not in the exercise of such powers rights and
obligations have been impaired.

Globe Wireless Ltd vs. Public Service Commission, 147 SCRA 269

Too basic in administrative law to need citation of jurisprudence is the rule that the jurisdiction and
powers of administrative agencies 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.

Syquia vs. Board of Power and Water Works, 74 SCRA 212

FACTS:

Ruiz, Enriquez and Moses filed 3 separate complaints with Board of Power and Waterworks charging
Syquia as administrator of the South Syquia Apartments with the offense of selling electricity without
permit or franchise and alleging that Syquia billed them for their electricity consumption in excess of
the Meralco rates.

In her answer, Syquia questioned the jurisdiction of the Board, saying that she is not engaged in the
sale of electric power but merely passes to the apartment tenants as the end-users their legitimate
electric current bills in accordance with their lease contracts.

ISSUE:

 Whether or not the Board has jurisdiction

HELD:

Respondent board as a regulatory board manifestly exceeded its jurisdiction in taking cognizance of
and adjudicating the complaints filed by respondents against petitioner.

Respondent board acquired no jurisdiction over petitioner's contractual relations with respondents-
complainants as her tenants, since petitioner is not engaged in a public service nor in the sale of
electricity without permit or franchise.

Respondents' complaints against being charged the additional cost of electricity for common facilities
used by the tenants (in addition to those registered in their respective apartment meters) give rise to
a question that is purely civil in character that is to be adjudged under the applicable provisions of the
Civil Code (not the Public Service Act) and not by the respondent regulatory board which has no
jurisdiction but by the regular courts of general jurisdiction.

Respondent board in resolving the complaints against petitioner and requiring her to absorb the
additional rising costs of electricity consumed for the common areas and elevator service even at a
resultant loss of P15,000.00 a year arrogated the judicial function. Its orders were beyond its
jurisdiction and must be set aside as null and void.

Marino, Jr. vs. Gamilla, G.R. No. 132400, Jan. 31, 2005

HOW JURISDICTION IS DETERMINED:

Jurisdiction over a subject matter is conferred by law and determined by the allegations in the
complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all
or some of the claims asserted therein.

LIMITED JURISDICTION OF AGENCIES:

Administrative agencies are tribunals of limited jurisdiction and as such, can exercise only those
powers which are specifically granted to them by their enabling statutes. Consequently, matters over
which they are not granted authority are beyond their competence. While the trend is towards vesting
administrative bodies with the power to adjudicate matters coming under their particular
specialization, to ensure a more knowledgeable solution of the problems submitted to them, this
should not deprive the courts of justice their power to decide ordinary cases in accordance with the
general laws that do not require any particular expertise or training to interpret and apply.

(2) Due Process

Q: What is meant by “opportunity to be heard?”

A: It is the essence of due process. Due process in administrative proceedings includes the
opportunity to be heard OR the opportunity to explain one’s side OR the opportunity to seek
reconsideration UNLESS administrative rules on proceeding do not allow such motion for
reconsideration. Thus, “an opportunity to be heard” does not require physical presence; for as long as
the party is provided a remedy with which he can appeal his case or seek relief from an adverse
judgment, then due process is complied with.

Utto vs. COMELEC, 375 SCRA 523

In administrative proceedings, the essence of due process is simply an opportunity to be heard, or an

opportunity to explain one’s side or opportunity to seek a reconsideration of the action or ruling
complained of.

Rivera vs. Civil Service Commission, 240 SCRA 43

MUST NOT ONLY BE IMPARTIAL BUT MUST ALSO APPEAR IMPARTIAL:

In order that the review of the decision of a subordinate officer might not turn out to be a face, then
reviewing officer must perforce be other than the officer whose decision is under review; otherwise,
there could be no different view or there would be no real review of the case. The decision of the
reviewing officer would be a biased view; inevitably, it would be the same view since being human, he
would not admit that he was mistaken in his first view of the case.

Exceptions to requirements of notice and hearing

1. Summary abatement of nuisance per se

2. Preventive suspension
3. Padlocking of filthy restaurants, theaters, etc.
4. Cancellation of passport of accused
5. Summary distraint and levy
6. Grant of provisional authority

Related Powers

1. Power to promulgate own Rules of Procedures

2. Subpoena Power
3. Contempt Power

Q: Does an administrative agency have the power to issue subpoena or hold a person in
contempt for failure to comply with its order?
A:  It depends on whether or not the particular administrative agency has the authority to take
testimony or evidence under the law it is entrusted to implement. Under the Revised Administrative
Code, an agency that has been vested with the authority to take testimony or evidence likewise has
the power to subpoena witnesses and require them to submit documents under a subpoena duces
tecum. When a witness disregards its orders, the administrative body may also apply for a contempt
of court with the court of first instance which has jurisdiction over the case, provided that such body
has the burden of proof in showing that it has authority to take testimony or evidence.

Q: Does an administrative agency authorized to investigate likewise have the power to

issue subpoena and contempt? How do you reconcile this with the rule that administrative
agencies can exercise powers expressly provided in the law as well as all those that are
necessarily incidental in the exercise thereof?
A: It depends. It is true that administrative agencies can exercise powers expressly provided in the
law as well as all those necessarily implied in the exercise thereof. However, this rule admits of certain
limitations, such as when the administrative agency is only a sub-delegate, in which case, the agency
must never go beyond the limits of the function sub-delegated upon it by the authority vested by law.
Another limitation is where the liberty and property of persons are sought to be brought within the
operation of a power claimed to be impliedly granted by an act because it is necessary to its due
execution, the case must be clearly seen to be within those intended to be reached. In other words, in
order to determine whether the power to investigate includes the subpoena and contempt power, the
law or rule vesting such authority must be examined in order to determine the nature and character of
the delegation. If it is in the nature of subordinate delegation, then the general rule applies. But if it is
merely a sub-delegation of a function by the authority directly vested by law, then it is necessary that
the body must not exercise a power beyond that which has been sub-delegated. And finally, the
circumstances of the case must be taken in consideration, for where it involves the liberty and
property of persons there must be a clear showing that the case is within the scope of the authority
vested.

Quantum of Proof

Lameyra vs. Pangilinan, 322 SCRA 117

While it is settled doctrine that findings of fact of an administrative agency must be respected and this
Court should not be tasked to weigh once more the evidence submitted before the administrative
body, it is axiomatic that such findings of fact should be supported by substantial evidence.

PLDT vs. Tiamson, G.R. No. 164684-85, Nov. 11, 2005

FACTUAL FINDINGS BINDING UPON COURTS:

It is a settled rule that factual findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality.
Moreover, in a petition for review on certiorari under Rule 45, the Supreme Court reviews only errors
of law and not errors of facts. However, where there is divergence in the findings and conclusions of
the NLRC, on the one hand, from those of the Labor Arbiter and the Court of Appeals, on the other,
the Court is constrained to examine the evidence.

BURDEN OF PROOF:

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for
just and valid cause; failure to do so would necessarily mean that the dismissal was illegal. The
employer’s case succeeds or fails on the strength of its evidence and not on the weakness of the
employee’s defense. If doubt exists between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter. Moreover, the quantum of proof
required in determining the legality of an employee’s dismissal is only substantial evidence.
Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, even if other minds, equally reasonable,
might conceivably opine otherwise.

Enforcement and Execution

 Lapid vs. CA, 174 SCRA 258

Appeal will not stay the award, judgment, final order or resolution unless the law directs otherwise.

Res judicata in administrative decisions

Ocho vs. Calos, 345 SCRA 478

The doctrine of res judicata applies to both judicial and quasi-judicial proceedings. The doctrine
actually embraces two concepts: the first is “bar by prior judgment” and the second is “conclusiveness
of judgment.”

The second concept is explained thus: The general rule precluding the relitigation of material facts or
questions which were in issue and adjudicated in former action are commonly applied to all matters
essentially connected with the subject matter of litigation. Thus it extends to questions ‘necessarily
involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment,
although no specific finding may have been made in reference thereto, and although such matters
were directly referred to in the pleadings and were not actually or formally presented. Under this rule,
if the record of the former trial shows that the judgment could not have been rendered without
deciding the particular matter, it will be considered as having settled that matter as to all future
actions between the parties, and if a judgment necessarily presupposes certain premises, they are as
conclusive as the judgment itself. Reasons for the rule are that a judgment is an adjudication on all
the matters which are essential to support it, and that every proposition assumed or decided by the
court leading up to the final conclusion upon which such conclusion is based is as effectually passed
upon as the ultimate question which is solved.