forth the area desired to be included in such village or authorizing the territory
1. PELAEZ vs AUDITOR GENERA of a town, containing a given area and population, to be incorporated as a
15 SCRA 569
Delegation to Administrative Agencies
FACTS: During the period from September 4 to October 29, 1964 the
President of the Philippines, purporting to act pursuant to Section 68 of the
Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124
and 126 to 129; creating thirty-three (33) municipalities enumerated in the
margin. Soon after the date last mentioned, or on November 10, 1964
petitioner Emmanuel Pelaez, as Vice President of the Philippines and as
taxpayer, instituted the present special civil action, for a writ of prohibition
with preliminary injunction, against the Auditor General, to restrain him, as
well as his representatives and agents, from passing in audit any expenditure
of public funds in implementation of said executive orders and/or any
disbursement by said municipalities.
Petitioner alleges that said executive orders are null and void, upon the ground
that said Section 68 has been impliedly repealed by Republic Act No. 2370
and constitutes an undue delegation of legislative power.
Said Section 68 of the Revised Administrative Code empowers the President
of the Philippines by executive order to define the boundary, or boundaries, of
any province, subprovince, municipality, [township] municipal district, or
other political subdivision, and increase or diminish the territory comprised
therein, may divide any province into one or more subprovinces, separate any
political division other than a province, into such portions as may be required,
merge any of such subdivisions or portions with another, name any new
subdivision so created, and may change the seat of government within any
subdivision to such place therein as the public welfare may require.
ISSUE: Whether or not the provision in question constitute an undue
delegation of legislative power
RULING: Yes. The authority to create municipal corporations is essentially
legislative in nature. As the Supreme Court of Washington has put it
"municipal corporations are purely the creatures of statutes." It is obvious,
however, that, whereas the power to fix such common boundary, in order to
avoid or settle conflicts of jurisdiction between adjoining municipalities, may
partake of an administrative nature — involving, as it does, the adoption of
means and ways to carry into effect the law creating said municipalities — the
authority to create municipal corporations is essentially legislative in nature.
Although Congress may delegate to another branch of the Government the
power to fill in the details in the execution, enforcement or administration of a
law, it is essential, to forestall a violation of the principle of separation of
powers, that said law: (a) be complete in itself — it must set forth therein the
policy to be executed, carried out or implemented by the delegate and (b) fix a
standard — the limits of which are sufficiently determinate or determinable —
to which the delegate must conform in the performance of his functions.
Indeed, without a statutory declaration of policy, the delegate would in effect,
make or formulate such policy, which is the essence of every law; and,
without the aforementioned standard, there would be no means to determine,
with reasonable certainty, whether the delegate has acted within or beyond the
scope of his authority. Hence, he could thereby delegate upon himself the
power, not only to make the law, but, also — and this is worse — to unmake
it, by adopting measures inconsistent with the end sought to be attained by the
Act of Congress, thus nullifying the principle of separation of powers and the
system of checks and balances, and, consequently, undermining the very
foundation of our Republican system.
Section 68 of the Revised Administrative Code does not meet these well
settled requirements for a valid delegation of the power to fix the details in the
enforcement of a law. It does not enunciate any policy to be carried out or
implemented by the President. Neither does it give a standard sufficiently
precise to avoid the evil effects above referred to. In this connection, we do
not overlook the fact that, under the last clause of the first sentence of Section
68, the President:
... may change the seat of the government within any subdivision to such place
therein as the public welfare may require.
It is apparent, however, from the language of this clause, that the phrase "as
the public welfare may require" qualified, not the clauses preceding the one
just quoted, but only the place to which the seat of the government may be
transferred. At any rate, the conclusion would be the same, insofar as the case
at bar is concerned, even if we assumed that the phrase "as the public welfare
may require," in said Section 68, qualifies all other clauses thereof. In Section
68, as above indicated, the creation of municipalities, is not an administrative
function, but one which is essentially and eminently legislative in character.
The question of whether or not "public interest" demands the exercise of such
power is not one of fact. it is "purely a legislative question ".
For this reason, courts of justice have annulled, as constituting undue
delegation of legislative powers, state laws granting the judicial department,
the power to determine whether certain territories should be annexed to a
particular municipality or vesting in a Commission the right to determine the
plan and frame of government of proposed villages and what functions shall
be exercised by the same, although the powers and functions of the village are
specifically limited by statute or conferring upon courts the authority to
declare a given town or village incorporated, and designate its metes and
bounds, upon petition of a majority of the taxable inhabitants thereof, setting
town, on certain steps being taken by the inhabitants thereof and on certain
determination by a court and subsequent vote of the inhabitants in favor
thereof, insofar as the court is allowed to determine whether the lands
embraced in the petition "ought justly" to be included in the village, and
whether the interest of the inhabitants will be promoted by such incorporation,
and to enlarge and diminish the boundaries of the proposed village "as justice
may require" or creating a Municipal Board of Control which shall determine
whether or not the laying out, construction or operation of a toll road is in the
"public interest" and whether the requirements of the law had been complied
with, in which case the board shall enter an order creating a municipal
corporation and fixing the name of the same.
To summarize and conclude upon this point: Sec. 3 of the Recovery Act is
without precedent. It supplies no standards for any trade, industry or activity.
It does not undertake to prescribe rules of conduct to be applied to particular
states of fact determined by appropriate administrative procedure. Instead of
prescribing rules of conduct, it authorizes the making of codes to prescribe
them. For that legislative undertaking, Sec. 3 sets up no standards, aside from
the statement of the general aims of rehabilitation, correction and expansion
described in Sec. 1. In view of the scope of that broad declaration, and of the
nature of the few restrictions that are imposed, the discretion of the President
in approving or prescribing codes, and thus enacting laws for the government
of trade and industry throughout the country, is virtually unfettered. We think
that the code making authority thus conferred is an unconstitutional delegation
of legislative power.
If the term "unfair competition" is so broad as to vest in the President a
discretion that is "virtually unfettered." and, consequently, tantamount to a
delegation of legislative power, it is obvious that "public welfare," which has
even a broader connotation, leads to the same result. In fact, if the validity of
the delegation of powers made in Section 68 were upheld, there would no
longer be any legal impediment to a statutory grant of authority to the
President to do anything which, in his opinion, may be required by public
welfare or public interest. Such grant of authority would be a virtual
abdication of the powers of Congress in favor of the Executive, and would
bring about a total collapse of the democratic system established by our
Constitution, which it is the special duty and privilege of this Court to uphold.
RATIO: Accordingly, in delegating powers to administrative bodies, the
legislature must ordinarily prescribe a policy, standard, or rule for their
guidance and must not vest them with an arbitrary and uncontrolled discretion
with regard thereto, and a statute which is deficient in this respect is invalid.
---
4. Republic vs. Hon. Migriño
G.R. No. 89483 / August 30, 1990
Facts:
This case puts in issue the authority of the Presidential
Commission on Good Government (PCGG) (which is created primarily to
investigate, the amassed ill-gotten wealth of President Marcos and his
subordinates) through the New Armed Forces of the Philippines Anti-Graft
Board (hereinafter referred to as the "Board"), to investigate and cause the
prosecution of petitioner, a retired military officer, for violation of Republic
Acts Nos. 3019 and 1379.
This case originated from the order of then PCGG Chairman Jovito
R. Salonga creating the New Armed Forces of the Philippines Anti-Graft
Board. The Board was created to "investigate the unexplained wealth and
corrupt practices of AFP personnel, both retired and in active service." The
order further stated, "The Board shall be primarily charged with the task of
investigating cases of alleged violations of the Anti-Graft and Corrupt
Practices Act (Republic Act No. 3019, as amended) and shall make the
necessary recommendations to appropriate government agencies and
instrumentalities with respect to the action to be taken thereon based on its
findings."
Acting on information received by the Board, Lt. Col. Troadio
Tecson (ret.) was required by the Board to submit his explanation/comment
together with supporting evidence due to his unexplained wealth. Private
respondent requested, and was granted, several postponements, but was
unable to produce his supporting evidence.
The Board proceeded with its investigation and submitted its
resolution recommending that private respondent be prosecuted and tried for
violation of RA No. 3019, as amended, and RA No. 1379, as amended. The
case was set for preliminary investigation by the PCGG. Private respondent
moved to dismiss the case arguing that the PCGG has no jurisdiction over his
person. The PCGG denied the motion to dismiss for lack of merit. Private
respondent moved for reconsideration but this was denied by the PCGG.
 Private respondent filed a petition for prohibition with preliminary
injunction with the Regional Trial Court in Pasig, Metro Manila and the case
was raffled to respondent judge’s court. Petitioner filed a motion to dismiss
and opposed the application for the issuance of a writ of preliminary
injunction on the principal ground that the Regional Trial Court had no
jurisdiction over the Board. respondent judge denied petitioner’s motion to
dismiss.
Issue:
Whether or not the PCGG or the Regional Trial Court has
Jurisdiction over the case.
Ruling:
Both of them have no jurisdiction over the case.
According to petitioners, the PCGG has the power to investigate
and cause the prosecution of private respondent because he is a "subordinate"
of former President Marcos. Undoubtedly, the alleged unlawful accumulation
of wealth was done during the administration of Pres. Marcos. However, what
has to be inquired into is whether or not private respondent acted as a
"subordinate" of Pres. Marcos within the contemplation of E.O. No. 1, the law
creating the PCGG, when he allegedly unlawfully acquired the properties.
The term "subordinate" as used in E.O. Nos. 1 and 2 would refer to
one who enjoys a close association or relation with former Pres. Marcos
and/or his wife, similar to the immediate family member, relative, and close
associate in E.O. No. 1 and the close relative, business associate, dummy,
agent, or nominee in E.O. No. 2. It does not suffice, as in this case, that the
respondent is or was a government official or employee during the
administration of former Pres. Marcos. There must be a prima facie showing
that the respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife. This is so
because otherwise the respondent’s case will fall under existing general laws
and procedures on the matter.  interpreted the law but it legislated under its quasi-legislative authority. The
The record shows that private respondent was being investigated
for unlawfully acquired wealth under Rep. Acts Nos. 3019 and 1379, and not
under E.O. Nos. 1, 2, 14 and 14-A. The letter of the chairman of the AFP
Anti-Graft Board to private respondent, dated October 16, 1987, states: "This
letter is in connection with the alleged information received by the AFP Anti-
Graft Board indicating your acquisition of wealth beyond legal means of
income in violation of Rep. Act No. 3019 known as the Anti-Graft and
Corrupt Practices Act." The resolution alleges that private respondent
unlawfully accumulated wealth by taking advantage of his office as Finance
Officer of the Philippine Constabulary. No attempt is made in the Board’s
resolution to link him or his accumulation of wealth to former Pres. Marcos
and/or his wife. Clearly, this alleged unlawful accumulation of wealth is not
that contemplated in E.O. Nos. 1, 2, 14 and 14-A.
As to the trial court’s jurisdiction, it is settled in a number of
jurisprudence that those who wish to question or challenge the PCGG’s acts or
orders must seek recourse in 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 the Supreme
Court. Respondent judge clearly acted without or in excess of his jurisdiction
when he took cognizance of this case.
Thus, we are confronted with a situation wherein the PCGG acted
in excess of its jurisdiction and, hence, may be enjoined from doing so, but the
court that issued the injunction against the PCGG has not been vested by law
with jurisdiction over it and, thus, the injunction issued was null and void. The
Supreme Court therefore ruled that the appropriate prosecutory agencies, i.e.,
the city or provincial prosecutor and the Solicitor General under sec. 2 of Rep.
Act No. 1379, might still investigate the case and file the petition for the
forfeiture of unlawfully acquired wealth against private respondent, now a
private citizen. (On the other hand, as regards respondents for violations of
Rep. Acts Nos. 3019 and 1379 who are still in the government service, the
agency granted the power to investigate and prosecute them is the Office of
the Ombudsman [Rep. Act No. 6770]). Under Presidential Decree No. 1606,
as amended and Batas Pambansa Blg. 195, the Sandiganbayan shall try
violations of Rep. Acts Nos. 3019 and 1379.
Fallo:
WHEREFORE, the order of respondent judge dated June 26, 1989
in Civil Case No. 57092 is NULLIFIED and SET ASIDE. Respondent judge
is ORDERED to dismiss Civil Case No. 57092. The temporary restraining
order issued by the Court on August 29, 1989 is MADE PERMANENT. The
PCGG is ENJOINED from proceeding with the investigation and prosecution
of private respondent in I.S. No. 37, without prejudice to his investigation and
prosecution by the appropriate prosecutory agency.
6. COMMISSIONER OF INTERNAL REVENUE v. HON. COURT OF
APPEALS, HON. COURT OF TAX APPEALS and FORTUNE
TOBACCO CORPORATION. G.R. No. 119761. August 29, 1996]
FACTS: 
Fortune Tobacco Corporation is engaged in the manufacture of different
brands of cigarettes.
On various dates, the Philippine Patent Office issued to the corporation
separate certificates of trademark registration over "Champion," "Hope," and
"More" cigarettes. 
The CIR initially classified 'Champion,' 'Hope,' and 'More' as foreign brands
since they were listed in the World Tobacco Directory as belonging to foreign
companies. However, Fortune changed the names of 'Hope' to Hope Luxury'
and 'More' to 'Premium More,' thereby removing the said brands from the
foreign brand category. Fortune also submitted proof the BIR that 'Champion'
was an original register and therefore a local brand. Ad Valorem taxes were
imposed on these brands. 
RA 7654 was passed in it was provided that 55% ad valorem tax will be
imposed on local brands carrying a foreign name. Two days before the
effectivity of RA 7654, the BIR issued Revenue Memorandum Circular No.
37-93,  in which Fortune was to be imposed 55% ad valorem tax on the three
brands classifying them as local brands carrying a foreign name.
Fortune filed a petition with the CTA which was granted finding the RMC as
defective. The CIR filed a motion for reconsideration with the CTA which
was denied, then to the CA, an appeal, which was also denied.
ISSUE: Whether the RMC was valid.
RULING:
NO. The RMC was made to place the three brands as locally made cigarettes
bearing foreign brands and to thereby have them covered by RA 7654.
Specifically, the new law would have its amendatory provisions applied to
locally manufactured cigarettes which at the time of its effectivity were not so
classified as bearing foreign brands. Prior to the issuance of the RMC, the
brands were subjected to 45% ad valorem tax. In so doing, the BIR not simply
due observance of the requirements of notice, of hearing, and of publication
should not have been then ignored.
Distinction between two kinds of administrative issuances — a legislative
rule  and an interpretative rule.
In Misamis Oriental Association of Coco Traders, Inc., vs. Department of
Finance Secretary, 11 the Court expressed:
. . . a legislative rule is in the nature of subordinate legislation, designed to
implement a primary legislation by providing the details thereof . In the same
way that laws must have the benefit of public hearing, it is generally required
that before a legislative rule is adopted there must be hearing. In this
connection, the Administrative Code of 1987 provides:
Public Participation. — If not otherwise required by law, an agency shall, as
far as practicable, publish or circulate notices of proposed rules and afford
interested parties the opportunity to submit their views prior to the adoption of
any rule.
(2) In the fixing of rates, no rule or final order shall be valid unless the
proposed rates shall have been published in a newspaper of general circulation
at least two (2) weeks before the first hearing thereon.
(3) In case of opposition, the rules on contested cases shall be observed.
In addition such rule must be published. On the other hand, interpretative
rules are designed to provide guidelines to the law which the administrative
agency is in charge of enforcing. 12
It should be understandable that when an administrative rule is merely
interpretative in nature, its applicability needs nothing further than its bare
issuance for it gives no real consequence more than what the law itself has
already prescribed. When, upon the other hand, the administrative rule goes
beyond merely providing for the means that can facilitate or render least
cumbersome the implementation of the law but substantially adds to or
increases the burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard, and thereafter to be duly
informed, before that new issuance is given the force and effect of law.
The Court is convinced that the hastily promulgated RMC 37-93 has fallen
short of a valid and effective administrative issuance.
7. DADOLE v. COA
GR No. 125350, 2002-12-03
FACT:
In 1986, the RTC and MTC judges of Mandaue City started receiving monthly
allowances of P1,260 each through the yearly appropriation ordinance enacted
by the SangguniangPanlungsod of the said city. In 1991, Mandaue City
increased the amount to P1,500 for each judge.

On March 15, 1994, the Department of Budget and Management (DBM)
issued the disputed Local Budget Circular No. 55 (LBC 55) which provided
that: …such additional allowances in the form of honorarium at rates not
exceeding P1,000.00 in provinces and cities and P700.00 in municipalities
may be granted.
Acting on the DBM's Local Budget Circular No. 55, the Mandaue City
Auditor issued notices of disallowances to RTC and MTC Judges, in excess of
the amount (maximum of P1000 and P700 in provinces and cities and
municipalities, respectively) authorized by said circular. The additional
monthly allowances of the judges shall be reduced to P1000 each. They were
also asked to reimburse the amount they received in excess of P1000 from the
last six months.
The petitioner judges filed a motion for reconsideration and indorsed the same
to the COA. Respondent COA rendered a decision denying petitioners' motion
for reconsideration.
ISSUE:
Whether or not Local Budget Circular No. 55 void for going beyond the
supervisory powers of the President?
RULING:
Yes. Although the Constitution guarantees autonomy to local government
units, the exercise of local autonomy remains subject to the power of control
by Congress and the power of supervision by the President. Sec 4 Art X of
1987 Constitution: "The President of the Philippines shall exercise general
supervision over local governments. x xx" The said provision has been
interpreted to exclude the power of control.
The members of the Cabinet and other executive officials are merely alter
egos of the President. As such, they are subject to the power of control of the
President; he will see to it that the local governments or their officials were
performing their duties as provided by the Constitution and by statutes, at
whose will and behest they can be removed from office; or their actions and
decisions changed, suspended or reversed. They are subject to the President's
supervision only, not control, so long as their acts are exercised within the
sphere of their legitimate powers. The President can only interfere in the
affairs and activities of a LGU if he or she finds that the latter has acted
contrary to law. This is the scope of the President's supervisory powers over
LGUs
We recognize that, although our Constitution[6] guarantees autonomy to local
government units, the exercise of local autonomy remains subject to the power
of control by Congress and the power of supervision by the President. Section
4 of Article X of... the 1987 Philippine Constitution provides that:
Sec. 4. The President of the Philippines shall exercise general supervision
over local governments. x xx
This provision... has been interpreted to exclude the power of control.
In Taule v. Santos,iii[7] we further stated that the Chief Executive wielded no
more authority than that of checking whether local governments or their
officials were performing their duties as... provided by the fundamental law
and by statutes. He cannot interfere with local governments, so long as they
act within the scope of their authority. "Supervisory power, when contrasted
with control, is the power of mere oversight over an inferior body; it does
not... include any restraining authority over such body,"... the heads of...
political subdivisions are elected by the people. Their sovereign powers
emanate from the electorate, to whom they are directly accountable.
By constitutional fiat, they are subject to the President's supervision only, not
control, so long as their acts are exercised... within the sphere of their
legitimate powers. By the same token, the President may not withhold or alter
any authority or power given them by the Constitution and the law.
the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law.
This is the scope of the President's supervisory powers over local government
units. Hence, the President or any... of his or her alter egos cannot interfere in
local affairs as long as the concerned local government unit acts within the
parameters of the law and the Constitution. Any directive therefore by the
President or any of his or her alter egos seeking to alter the wisdom of a... law-
conforming judgment on local affairs of a local government unit is a patent
nullity because it violates the principle of local autonomy and separation of
powers of the executive and legislative departments in governing municipal
corporations.
Section 458, par. (a)(1)(xi), of RA 7160, the law that supposedly serves as the
legal basis of LBC 55,... allows the grant of additional allowances to judges
"when the finances of the city government allow." The said provision does not
authorize setting a definite maximum limit to the additional allowances
granted to judges. Thus, we need not belabor the point that the finances of a...
city government may allow the grant of additional allowances higher than
P1,000 if the revenues of the said city government exceed its annual
expenditures.
Setting a uniform amount for the grant of additional allowances is an
inappropriate way of enforcing the criterion found in Section 458, par. (a)(1)
(xi), of RA 7160. The DBM over-stepped its power of supervision over local
government units by imposing a prohibition that did not... correspond with the
law it sought to implement. In other words, the prohibitory nature of the
circular had no legal basis.
Principles:
Officers in control lay down the rules in the performance or accomplishment
of... an act. If these rules are not followed, they may, in their discretion, order
the act undone or redone by their subordinates or even decide to do it
themselves. On the other hand, supervision does not cover such authority.
Supervising officials merely see to it... that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to
modify or replace them. If the rules are not observed, they may order the
work done or redone, but only to conform to such rules. They may not
prescribe... their own manner of execution of the act. They have no discretion
on this matter except to see to it that the rules are followed.
the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law.
This is the scope of the President's supervisory powers over local government
units. Hence, the President or any... of his or her alter egos cannot interfere in
local affairs as long as the concerned local government unit acts within the
parameters of the law and the Constitution. Any directive therefore by the
President or any of his or her alter egos seeking to alter the wisdom of a... law-
conforming judgment on local affairs of a local government unit is a patent
nullity because it violates the principle of local autonomy and separation of
powers of the executive and legislative departments in governing municipal
corporations.
8.) G.R. No. 151908            August 12, 2003
SMART COMMUNICATIONS, INC. (SMART) and PILIPINO
TELEPHONE CORPORATION (PILTEL), petitioners,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION
(NTC), respondent.
x---------------------------------------------------------x
G.R. No. 152063 August 12, 2003
GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS
CO., INC. (ISLACOM), petitioners,
vs.
COURT OF APPEALS (The Former 6th Division) and the NATIONAL
TELECOMMUNICATIONS COMMISSION, respondents.
FACTS
Pursuant to its rule-making and regulatory powers, the National
Telecommunications Commission (NTC) issued Memorandum Circular No.
13-6-2000, promulgating rules and regulations on the billing of
telecommunications services. On August 30, 2000, the NTC issued a
Memorandum to all cellular mobile telephone service (CMTS) operators
which contained measures to minimize if not totally eliminate the incidence of
stealing of cellular phone units. This was followed by another Memorandum
dated October 6, 2000 addressed to all public telecommunications entities,
which reads:
This is to remind you that the validity of all prepaid cards sold on
07 October 2000 and beyond shall be valid for at least two (2)
years from date of first use pursuant to MC 13-6-2000.
In addition, all CMTS operators are reminded that all SIM packs
used by subscribers of prepaid cards sold on 07 October 2000 and
beyond shall be valid for at least two (2) years from date of first
use. Also,the billing unit shall be on a six (6) seconds pulse
effective 07 October 2000. For strict compliance.
On October 20, 2000, petitioners ISLACOM and PILTEL filed against the
NTC, Commissioner Joseph A.
Santiago, Deputy Commissioner Aurelio M. Umali and Deputy Commissioner
Nestor C. Dacanay, an action for declaration of nullity of NTC Memorandum
Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum
dated October 6, 2000, with prayer for the issuance of a writ of preliminary
injunction and temporary restraining order at the Regional Trial Court of
Quezon City, Branch 77.
Petitioners Islacom and Piltel alleged,that the NTC has no jurisdiction to
regulate the sale of consumer goods such as the prepaid call cards since such
jurisdiction belongs to the Department of Trade and Industry under the
Consumer Act of the Philippines; that the Billing Circular is oppressive,
confiscatory and violative of the constitutional prohibition against deprivation
of property without due process of law; that the Circular will result in the
impairment of the viability of the prepaid cellular service by unduly
prolonging the validity and expiration of the prepaid SIM and call cards; and
that the requirements of identification of prepaid card buyers and call balance
announcement are unreasonable. Hence, they prayed that the Billing Circular
be declared null and voidab initio.
Globe Telecom and Smart filed a joint Motion for Leave to Intervene which
was granted by the trial court. On October 27, 2000, the trial court issued a
temporary restraining order enjoining the NTC fromimplementing
Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6,
2000.
In the meantime, respondent NTC and its co-defendants filed a motion to
dismiss the case on the ground of petitioners' failure to exhaust administrative
remedies. Subsequently, the trial court denied the defendant’s motion to
dismiss. Defendants filed a motion for reconsideration, which was denied in
an Order dated February1, 2001.
Respondent NTC thus filed a special civil action for certiorari and prohibition
with the Court of Appeals, which was granted and annulled the injunction
issued by the lower court.
Petitioners' motions for reconsideration were denied in a Resolution dated
January 10, 2002 for lack of merit.
Hence, the instant petition for review filed by Smart and Piltel.
ISSUE
WON RTC has jurisdiction over the case
HELD
YES. Administrative agencies possess quasi-legislative or rule-making
powers and quasi-judicial or administrative adjudicatory powers. Quasi-
legislative or rule-making power is the power to make rules and regulations
which results in delegated legislation that is within the confines of the
granting statute and the doctrine of non-delegability and separability of
powers.16
The rules and regulations that administrative agencies promulgate, which are
the product of a delegated legislative power to create new and additional legal
provisions that have the effect of law, should be within the scope of the
statutory authority granted by the legislature to the administrative agency. It is
required that the regulation be germane to the objects and purposes of the law,
and be not in contradiction to, but in conformity with, the standards prescribed
by law.17 They must conform to and be consistent with the provisions of the
enabling statute in order for such rule or regulation to be valid. Constitutional
and statutory provisions control with respect to what rules and regulations
may be promulgated by an administrative body, as well as with respect to
what fields are subject to regulation by it. It may not make rules and
regulations which are inconsistent with the provisions of the Constitution or a
statute, particularly the statute it is administering or which created it, or which
are in derogation of, or defeat, the purpose of a statute. In case of conflict
between a statute and an administrative order, the former must prevail.18
Not to be confused with the quasi-legislative or rule-making power of an
administrative agency is its quasi-judicial or administrative adjudicatory
power. This is the power to hear and determine questions of fact to which the
legislative policy is to apply and to decide in accordance with the standards
laid down by the law itself in enforcing and administering the same law. The
administrative body exercises its quasi-judicial power when it performs in a
judicial manner an act which is essentially of an executive or administrative
nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty
entrusted to it. In carrying out their quasi-judicial functions, the administrative
officers or bodies are required to investigate facts or ascertain the existence of
facts, hold hearings, weigh evidence, and draw conclusions from them as basis
for their official action and exercise of discretion in a judicial nature.19
In questioning the validity or constitutionality of a rule or regulation issued by
an administrative agency, a party need not exhaust administrative remedies
before going to court. This principle applies only where the act of the
administrative agency concerned was performed pursuant to its quasi-judicial
function, and not when the assailed act pertained to its rule-making or quasi-
legislative power.
Even assuming arguendo that the principle of exhaustion of administrative
remedies apply in this case, the records reveal that petitioners sufficiently
complied with this requirement. Even during the drafting and deliberation
stages leading to the issuance of Memorandum Circular No. 13-6-2000,
petitioners were able to register their protests to the proposed billing
guidelines. They submitted their respective position papers setting forth their
objections and submitting proposed schemes for the billing circular. 21 After
the same was issued, petitioners wrote successive letters dated July 3,
200022 and July 5, 2000,23 asking for the suspension and reconsideration of the
so-called Billing Circular. These letters were not acted upon until October 6,
2000, when respondent NTC issued the second assailed Memorandum
implementing certain provisions of the Billing Circular. This was taken by
petitioners as a clear denial of the requests contained in their previous letters,
thus prompting them to seek judicial relief.
In like manner, the doctrine of primary jurisdiction applies only where the
administrative agency exercises its quasi-judicial or adjudicatory function.
Thus, in cases involving specialized disputes, the practice has been to refer the
same to an administrative agency of special competence pursuant to the
doctrine of primary jurisdiction. The courts will not determine a controversy
involving a question which is within the jurisdiction of the administrative
tribunal prior to the resolution of that question by the administrative tribunal,
where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative
tribunal to determine technical and intricate matters of fact, and a uniformity
of ruling is essential to comply with the premises of the regulatory statute
administered. The objective of the doctrine of primary jurisdiction is to guide
a court in determining whether it should refrain from exercising its jurisdiction
until after an administrative agency has determined some question or some
aspect of some question arising in the proceeding before the court. It applies
where the claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, has been placed within the special competence of
an administrative body; in such case, the judicial process is suspended
pending referral of such issues to the administrative body for its view.24
However, where what is assailed is the validity or constitutionality of a rule or
regulation issued by the administrative agency in the performance of its quasi-
legislative function, the regular courts have jurisdiction to pass upon the same.
The determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the constitution is within the
jurisdiction of the regular courts. Indeed, the Constitution vests the power of
judicial review or the power to declare a law, treaty, international or executive
agreement, presidential decree, order, instruction, ordinance, or regulation in
the courts, including the regional trial courts.25 This is within the scope of
judicial power, which includes the authority of the courts to determine in an
appropriate action the validity of the acts of the political
departments.26 Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch
or instrumentality of the Government.27
In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-
6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-
legislative or rule-making power. As such, petitioners were justified in
invoking the judicial power of the Regional Trial Court to assail the
constitutionality and validity of the said issuances.
In their complaint before the Regional Trial Court, petitioners averred that the
Circular contravened Civil Code provisions on sales and violated the
constitutional prohibition against the deprivation of property without due
process of law. These are within the competence of the trial judge. Contrary to
the finding of the Court of Appeals, the issues raised in the complaint do not
entail highly technical matters. Rather, what is required of the judge who will
resolve this issue is a basic familiarity with the workings of the cellular
telephone service, including prepaid SIM and call cards – and this is judicially
known to be within the knowledge of a good percentage of our population –
and expertise in fundamental principles of civil law and the Constitution.
Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case
No. Q-00-42221. The Court of Appeals erred in setting aside the orders of the
trial court and in dismissing the case.
12. Alliance for the Family Foundation, Philippines, Inc. (ALFI) et.al. vs.
Hon. Garin (G.R. Nos. 217872 and 221866, 26 April 2017)
Facts: Petitioners opposed the unilateral act of the Food and Drugs
Administration (FDA) on re-certifying the contraceptive drugs named
Implanon and Implanon NXT; the basis of their opposition hinges on the fact
that these drugs are abortifacients. Thus, according to them, they should have
been given notice of the certification proceedings, and a chance to present
evidence that indeed such drugs are abortifacients.
Respondents, on the other hand, alleged that petitioners are not entitled to
notice and hearing because the said proceedings are done in the exercise of its
regulatory power, not quasi-judicial power; also, they alleged that the
Honorable Supreme Court is incompetent to rule on the instant controversy
due to the same reason.
Issues:
(a) Whether or not said controversy is outside the scope of Judicial Review;
(b) Whether or not petitioners were deprived of substantial and procedural due
process of law;
Held/Doctrines:
It is quite fascinating that the Supreme Court again reminded us the two
fundamental powers of an administrative body, in the words of the Honorable
Court:
“The powers of an administrative body are classified into two fundamental
powers: quasi-legislative and quasi-judicial. Quasi-legislative power,
otherwise known as the power of subordinate legislation, has been defined as
the authority delegated by the lawmaking body to the administrative body to
adopt rules and regulations intended to carry out the provisions of law and
implement legislative policy. A legislative rule is in the nature of subordinate
legislation designed to implement a primary legislation by providing the
details thereof. The exercise by the administrative body of its quasi-legislative
power through the promulgation of regulations of general application does
not, as a rule, require notice and hearing. The only exception being where the
Legislature itself requires it and mandates that the regulation shall be based on
certain facts as determined at an appropriate investigation.
Quasi-judicial power, on the other hand, is known as the power of the
administrative agency to determine questions of fact to which the legislative
policy is to apply, in accordance with the standards laid down by the law
itself. As it involves the exercise of discretion in determining the rights and
liabilities of the parties, the proper exercise of quasi-judicial power requires
the concurrence of two elements: one, jurisdiction which must be acquired by
the administrative body and two, the observance of the requirements of due
process, that is, the right to notice and hearing.”
To answer (a) above, the Supreme Court has this to say, viz:
“On the argument that the certification proceedings were conducted by the
FDA in the exercise of its “regulatory powers” and, therefore, beyond judicial
review, the Court holds that it has the power to review all acts and decisions
where there is a commission of grave abuse of discretion. No less than the
Constitution decrees that the Court must exercise its duty to ensure that no
grave abuse of discretion amounting to lack or excess of jurisdiction is
committed by any branch or instrumentality of the Government. Such is
committed when there is a violation of the constitutional mandate that “no
person is deprived of life, liberty, and property without due process of law.”
The Court’s power cannot be curtailed by the FDA’s invocation of its
regulatory power.”
With regard to (b), the Supreme Court ruled that petitioners were deprived of
their Right to Due Process. Perusal of the law and rules of procedure of the
instant agency reveals the need of an issuance of notice to all concerned
MAHs and a posting of the contraceptive products for public
comments. These, respondents failed to do.
This was thoroughly explained by the Court, to wit:
“Due process of law has two aspects: substantive and procedural. In order that
a particular act may not be impugned as violative of the due process clause,
there must be compliance with both the substantive and procedural
requirements thereof. Substantive due process refers to the intrinsic validity of
a law that interferes with the rights of a person to his property. Procedural due
process, on the other hand, means compliance with the procedures or steps,
even periods, prescribed by the statute, in conformity with the standard of fair
play and without arbitrariness on the part of those who are called upon to
administer it. xxx
xxx To conclude that product registration, recertification, procurement, and
distribution of the questioned contraceptive drugs and devices by the FDA in
the exercise of its regulatory power need not comply with the requirements of
due process would render the issuance of notices to concerned MAHs and the
posting of a list of contraceptives for public comment a meaningless exercise.
Concerned MAHs and the public in general will be deprived of any significant
participation if what they will submit will not be considered.
Section 7.04, Rule 7 of the IRR of the RH Law (RH-IRR), relied upon by the
respondents in support of their claims, expressly allows the consideration of
conflicting evidence, such as that supplied by the petitioners in support of
their opposition to the approval of certain contraceptive drugs and devices. In
fact, the said provision mandated that the FDA utilize the “best evidence
available” to ensure that no abortifacient is approved as family planning drug
or device. It bears mentioning that the same provision even allows an
independent evidence review group (ERG) to ensure that evidence for or
against the certification of a contraceptive drug or device is duly considered.”
12.) LINTANG BEDOL v. COMMISSION ON ELECTIONS,
G.R. No. 179830/ December 3, 2009
FACTS: On May 14, 2007, the National and Local elections were held under
the auspices of this Commission.
As Chair of the Provincial Board of Canvassers (PBOC) for the province of
Maguindanao, the respondent [petitioner] Lintang Bedol discharged his
official functions and was able to ensure the PBOC’s performance of its
ministerial duty to canvass the Certificates of Canvass coming from the
twenty two (22) city and municipalities in the province.
At that time, respondent [petitioner] also was charged with the burdensome
and gargantuan duty of being the concurrent Provincial Elections Supervisor
for the Province of Shariff Kabunsuan a neighboring province of
Maguindanao.
Respondent [petitioner] Bedol failed to attend the scheduled canvassing of the
Provincial Certificates of Canvass (PCOC) of Maguindanao of which he is the
Provincial Election Supervisor which was slated on May 22, 2007.
On May 25, 2007, respondent appeared before the Commission, en banc
sitting as the National Board of Canvassers (NBOC) for the election of
senators to submit the provincial certificate of canvass for Maguindanao,
pursuant to his functions as Provincial Elections Supervisor and chair of the
PBOC for Maguindanao. Due to certain ‘observations’ on the provincial
certificates of canvass by certain parties, canvassing of the certificate was held
in abeyance and respondent was queried on the alleged fraud which attended
the conduct of elections in his area.
He was already informed of the resetting of the canvassing for May 30, 2007,
but failed to appear despite prior knowledge.
Respondent’s [petitioner] contention:
Bedol explained before the Task Force during its June 11, 2007 fact finding
activity that, while in his custody and possession, the election paraphernalia
were stolen sometime on May 29, 2007, or some fifteen (15) days after the
elections. This was the first time such an excuse was given by the respondent
[petitioner] and no written report was ever filed with the Commission
regarding the alleged loss.
Due to absences in the next scheduled investigative proceedings and due to
failure and refusal to submit a written explanation of his absences, respondent
[petitioner] was issued a contempt charge by COMELEC.
Petitioner was later arrested by members of the Philippine National Police on
the basis of an Order of Arrest issued on June 29, 2007 by the COMELEC
after petitioner repeatedly failed to appear during the fact-finding proceedings
before Task Force Maguindanao.
Petitioner questioned the COMELEC’s legal basis for issuing the warrant of
arrest and its assumption of jurisdiction over the contempt charges.
Nevertheless, he was declared in contempt by COMELEC.
Petitioner, then, filed a motion for reconsideration which was denied by the
COMELEC in the other assailed Resolution dated August 31, 2007.
ISSUE: Whether or not the initiation and issuance of contempt order is
within the constitutional powers of the COMELEC.
RULING: YES.
Powers of COMELEC
The COMELEC possesses the power to conduct investigations as an adjunct
to its constitutional duty to enforce and administer all election laws, by virtue
of the explicit provisions of paragraph 6, Section 2, Article IX of the 1987
Constitution, which reads:
Article IX-C, Section 2. xxx
(6) xxx; investigate and, where appropriate, prosecute cases of violations of
election laws, including acts or omissions constituting election frauds,
offenses, and malpractices.
The powers and functions of the COMELEC, conferred upon it by the 1987
Constitution and the Omnibus Election Code, may be classified into
administrative, quasi-legislative, and quasi-judicial. The quasi-judicial power
of the COMELEC embraces the power to resolve controversies arising from
the enforcement of election laws, and to be the sole judge of all pre-
proclamation controversies; and of all contests relating to the elections,
returns, and qualifications. Its quasi-legislative power refers to the issuance of
rules and regulations to implement the election laws and to exercise such
legislative functions as may expressly be delegated to it by Congress. Its
administrative function refers to the enforcement and administration of
election laws. In the exercise of such power, the Constitution (Section 6,
Article IX-A) and the Omnibus Election Code (Section 52 [c]) authorize the
COMELEC to issue rules and regulations to implement the provisions of the
1987 Constitution and the Omnibus Election Code.
The quasi-judicial or administrative adjudicatory power is the power to hear
and determine questions of fact to which the legislative policy is to apply, and
to decide in accordance with the standards laid down by the law itself in
enforcing and administering the same law.
The exercise of judicial functions may involve the performance of legislative
or administrative duties, and the performance of and administrative or
ministerial duties, may, in a measure, involve the exercise of judicial
functions. It may be said generally that the exercise of judicial functions is to
determine what the law is, and what the legal rights of parties are, with respect
to a matter in controversy; and whenever an officer is clothed with that
authority, and undertakes to determine those questions, he acts judicially.
The language of the Omnibus Election Code and the COMELEC Rules of
Procedure is broad enough to allow the initiation of indirect contempt
proceedings by the COMELEC motu proprio. Furthermore, the above-quoted
provision of Section 52(e), Article VII of the Omnibus Election Code
explicitly adopts the procedure and penalties provided by the Rules of Court.
Findings of guilt of indirect contempt
Petitioner was found guilty of contempt on four (4) grounds.
First, he repeatedly failed to attend, despite notice of the scheduled[12]
canvassing of the Provincial Certificates of Canvass, the hearing of the Task
Force Maguindanao; and refused to submit his explanation for such absences,
which he had undertaken to submit, in violation of paragraphs (b) and (f) of
Section 2, Rule 29 of the COMELEC Rules of Procedure.
Second, he unlawfully assumed custody of accountable election documents,
which were lost while in his possession, and consequently failed to deliver the
same, in violation of paragraphs (a), (c) and (d) Section 2, Rule 29 of same
Rules.
Third and fourth, he publicly displayed disrespect for the authority of the
COMELEC through the media (interviews on national television channels,
and in newspapers and radios) by flaunting an armory of long firearms and
side arms in public, and posing for the front page of a national broadsheet,
with a shiny pistol tucked in a holster, in violation of paragraphs (a) and (d),
Section 2, Rule 29 of same Rules.
WHEREFORE, the petition is hereby DISMISSED and the prayer for a
Temporary Restraining Order and/or a Writ of Preliminary Injunction is
hereby DENIED. No costs.
13. CLARK INVESTORS., Petitioner, v. SECRETARY OF
FINANCE, Respondents.
G.R. No. 200670, July 06, 2015
The controversy arose when Department of Finance (DOF) on February 17,
2012 upon recommendation of the Bureau of Internal Revenue (BIR) issued
Revenue Regulations No. 2-2012 (RR 2-2012) which imposes Value Added
Tax (VAT) and excise tax on the importation of petroleum and petroleum
products from abroad into the Freeport or Economic Zones. According to the
Petitioner RR 2-2012 is void and contrary to Republic Act (RA) No. 7227,
otherwise known as the Bases Conversion and Development Act of 1992, as
amended by RA No. 9400.
Republic Act (RA) No. 7227, otherwise known as
the Bases Conversion and Development Act of 1992, as
amended by RA No. 9400 exempts businesses and
enterprises within the Clark Freeport Zone from the
payment of all taxes and duties on the importation of
raw materials, capital and equipment.
Petitioner, which represents the businesses and enterprises within the Clark
Freeport Zone, filed the instant petition alleging that respondents acted with
grave abuse of discretion in issuing RR 2-2012. It argues that by imposing the
VAT and excise tax on the importation of petroleum and petroleum products
from abroad and into the Freeport or Economic Zones, RR 2-2012 unilaterally
revoked the tax exemption granted by RA No. 7227 and RA No. 9400 to the
businesses and enterprises operating within the Subic Special Economic Zone
and Clark Freeport Zone.
In response, respondents, through the Office of the Solicitor General (OSG),
contend that the petition must be denied outright because the special civil
action for certiorari cannot be used to assail RR 2-2012 which was issued by
the respondents in the exercise of their quasi-legislative or rule-making
powers. According to the OSG, certiorari can only be used against a public
officer exercising judicial or quasi-judicial powers.
ISSUE:
Whether or not petition for certiorari is not the proper remedy.
RULING:
YES.Special civil action for certiorari to prosper, the following requisites
must concur: (1) it must be directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions; (2) the tribunal, board, or
officer must have acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is
no appeal or any plain, speedy, and adequate remedy in the ordinary course of
law.
Department of Finance (DOF) upon recommendation of the Bureau of Internal
Revenue (BIR) issuedRR 2-2012 in the exercise of their quasi-legislative or
rule-making powers, and not judicial or quasi-judicial functions. Verily,
respondents did not adjudicate or determine the rights of the parties.
Conformably with our ruling in BPI Leasing Corporation that the application
of Section 244 of the NIRC is an exercise of quasi-legislative or rule-making
powers of the Secretary of Finance, and since RR 2-2012 was issued by the
Secretary of Finance based on Section 244 of the NIRC, such administrative
issuance is therefore quasi-legislative in nature which is outside the scope of a
petition for certiorari.
The petition is DISMISSED.
14. THE HONORABLE MONETARY BOARD AND GAIL U. FULE,
DIRECTOR, SUPERVISION AND EXAMINATION DEPARTMENT II,
AND BANGKO SENTRAL NG PILIPINAS, Petitioners, v. PHILIPPINE
VETERANS BANK, Respondent.
G.R. No. 189571, January 21, 2015
DECISION PERALTA, J.:
FACTS:
Respondent established a pension loan product for bona fide veterans or their
surviving spouses, as well as salary loan product for teachers and low-salaried
employees pursuant to its mandate under Republic Act (RA) Nos. 3518 and
7169 to provide financial assistance to veterans and teachers.
As its clientele usually do not have real estate or security to cover their
pension or salary loan, other than their continuing good health and/or
employment, respondent devised a program by charging a premium in the
form of a higher fee known as Credit Redemption Fund (CRF) from said
borrowers. Resultantly, Special Trust Funds were established by respondent
for the pension loans of the veteran-borrowers, salary loans of teachers and
low-salaried employees. These trust funds were, in turn, managed by
respondent’s Trust and Investment Department, with respondent as
beneficiary. The fees charged against the borrowers were credited to the
respective trust funds, which would be used to fully pay the outstanding
obligation of the borrowers in case of death.
On April 30, 2002, an examination was conducted by the Supervision and
Examination Department (SED) II of the Bangko Sentral ng Pilipinas (BSP).
It found, among other things, that respondent’s collection of premiums from
the proceeds of various salary and pension loans of borrowers to guarantee
payment of outstanding loans violated Section 54 of RA No. 8791 5 which
states that banks shall not directly engage in insurance business as insurer.
Subsequently, respondent wrote a letter to petitioners justifying the existence
of the CRF.
In a letter dated March 17, 2003, the BSP notified respondent about the
Insurance Commission’s opinion that the CRF is a form of insurance. Thus,
respondent was requested to discontinue the collection of said fees.
On February 24, 2004, respondent complied with the BSP’s directive and
discontinued the collection of fees for CRF.
On September 16, 2005, petitioners issued Monetary Board (MB) Resolution
No. 1139 directing respondent’s Trust and Investment Department to return to
the borrowers all the balances of the CRF in the amount of P144,713,224.54
as of August 31, 2004, and to preserve the records of borrowers who were
deducted CRFs from their loan proceeds pending resolution or ruling of the
Office of the General Counsel of the BSP. Thus, respondent requested
reconsideration of said MB Resolution. However, the same was denied in a
letter dated December 5, 2006.
Accordingly, respondent filed a Petition for Declaratory Relief with the RTC
of Makati City.
In response, petitioners filed a Motion to Dismiss alleging that the petition for
declaratory relief cannot prosper due to respondent’s prior breach of Section
54 of RA No. 8791.
In an Order6 dated September 24, 2007, the RTC dismissed respondent’s
petition for declaratory relief.
ISSUE:
Whether or not the petition for declaratory relief is proper.
RULING: In the negative.
In view of the foregoing, the decision of the BSP Monetary Board cannot be a
proper subject matter for a petition for declaratory relief since it was issued by
the BSP Monetary Board in the exercise of its quasi-judicial powers or
functions.
The authority of the petitioners to issue the questioned MB Resolution
emanated from its powers under Section 37 of  RA No. 7653 and Section
6613 of RA No. 8791 to impose, at its discretion, administrative sanctions,
upon any bank for violation of any banking law.
The nature of the BSP Monetary Board as a quasi-judicial agency, and the
character of its determination of whether or not appropriate sanctions may be
imposed upon erring banks, as an exercise of quasi-judicial function.
A priori, having established that the BSP Monetary Board is indeed a quasi-
judicial body exercising quasi-judicial functions, then its decision in MB
Resolution No. 1139 cannot be the proper subject of declaratory relief.
Lastly, also worth noting is the fact that the court a quo’s Order dated
September 24, 2007, which dismissed respondent’s petition for declaratory
relief, had long become final and executory.
To recall, said Order was duly served on and received by respondent on
October 17, 2007, as evidenced by the Certification issued by the Philippine
Postal Corporation. Almost a year later, however, or on October 15, 2008,
respondent moved for reconsideration of the court a quo’s Order of dismissal,
claiming it received a copy of said Order only on September 3, 2008. Thus,
respondent’s self-serving claim should not have prevailed over the
Certification issued by the Philippine Postal Corporation. It was error for the
trial court to entertain it for the second time despite the lapse of almost a year
before respondent filed its motion for reconsideration against said Order.
15. DEPARTMENT OF AGRARIAN REFORM v. PARAMOUNT
HOLDINGS EQUITIES, INC.
G.R. No. 176838               June 13, 2013
REYES, J.:
FACTS:
The case stems from the petition4 docketed as DARAB Case No. R
0403-0009-02, filed with the Office of the Provincial Adjudicator (PARAD)
by the DAR through Provincial Agrarian Reform Officer (PARO) Felixberto
Q. Kagahastian. The petition sought to nullify the sale to the respondents of
several parcels of land.
The PARO argued that the properties were agricultural land yet
their sale was effected without DAR Clearance as required under Republic
Act No. 6657 (R.A. No. 6657), otherwise known as the Comprehensive
Agrarian Reform Law (CARL). Allegedly, the PARO came to know of the
transactions only after he had received a directive from the Secretary of
Agrarian Reform to investigate the matter, following the latter’s receipt of a
letter-request from persons5 who claimed to be the tenant-farmers of the
properties’ previous owners.6
Respondents opposed the petition, contending that since the matter
involves an administrative implementation of R.A. No. 6657, the case is
cognizable by the Secretary of Agrarian Reform, not the DARAB. They also
sought the petition’s dismissal on the grounds of prescription, litis pendentia,
res judicata and forum shopping.
The Provincial Adjudicator Virgilio M. Sorita (PA Sorita) issued a
Resolution7 dismissing the petition for lack of jurisdiction.
Furthermore, PA Sorita cited the absence of any showing that the
petition was filed with the knowledge and authority of the Solicitor General,
as the official counsel of the government being the aggrieved party in the
dispute.
The DAR’s motion for reconsideration was denied, prompting the
filing of an appeal with the DARAB.
The DARAB granted the appeal. A new judgment is rendered
nullifying the Deeds of Sale and ordering the Register of Deeds of Laguna to
cancel the aforesaid Deeds of Sale, as well as the Transfer Certificates of Title
issued to the respective private respondents concerned.
Contrary to the findings of PA Sorita, the DARAB ruled that: first,
the failure of the parties to the sale to obtain the required clearance indicates
that their transactions were fraudulent;11 second, the PARO had the
personality to file the petition even in the absence of the Solicitor General’s
assistance, citing Memorandum Circular No. 2, series of 2001 (Circular No.
2), and the policy of DAR to "acquire and distribute all lands covered by RA
6657, including those subject of illegal transfers x x x";12 and third, the
DARAB has the jurisdiction over the case, since its jurisdiction under Circular
No. 2 covers the cancellation of deeds of conveyance and corresponding
transfer certificates of title over agricultural lands.
The denial14 of the respondents’ motion for reconsideration led to
the filing of a petition with the CA.
The CA granted the petition. The CA emphasized that the
DARAB’s jurisdiction over the dispute should be determined by the
allegations made in the petition. Since the action was essentially for the
nullification of the subject properties’ sale, it did not involve an agrarian suit
that is within the DARAB’s jurisdiction.
DAR’s motion for reconsideration was denied. Hence, this petition.
ISSUE:
Whether or not the DARAB has jurisdiction over the dispute that
seeks the nullification of the subject properties’ sale.
HELD:
The Court answers in the negative.
The jurisdiction of the DARAB is limited under the law, as it was
created under Executive Order (E.O.) No. 129-A specifically to assume
powers and functions with respect to the adjudication of agrarian reform cases
under E.O. No. 229 and E.O. No. 129-A. 22 Significantly, it was organized
under the Office of the Secretary of Agrarian Reform. The limitation on the
authority of it to mere agrarian reform matters is only consistent with the
extent of DAR’s quasi-judicial powers under R.A. No. 6657 and E.O. No.
229.
Not every sale or transfer of agricultural land would warrant
DARAB’s exercise of its jurisdiction. The law is specific that the property
must be shown to be under the coverage of agrarian reform laws. As the CA
correctly ruled:
It is easily discernable x x x that the cause of action of the DAR
sufficiently established a suit for the declaration of the sale of the subject
landholdings null and void (in violation of Administrative Order No. 1, Series
of 1989). Obviously, it does not involve an agrarian suit, hence, does not fall
under the jurisdiction of the DARAB. It must be emphasized that, "(t)here
must be a tenancy relationship between the party litigants for the DARAB to
validly take cognizance of a controversy." (Suarez vs. Saul, 473 SCRA 628).
Also, it is necessary that the controversy must relate to "tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over
lands devoted to agriculture, including disputes concerning farmworkers
associations or representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial
arrangements," (Section 3 (d), Chapter I in relation to Section 50, Chapter XII,
R.A. 6657 and Section 1, Rule II, DARAB Rules of [Procedure]). Here, an
allegation to declare null and void a certain sale of a landholding does not ipso
facto make the case an agrarian dispute.27 (Emphasis ours)
Its finding on the DARAB’s lack of jurisdiction over the PARO’s
petition renders it needless for the Court to discuss the other issues that are
raised in the petition. In any case, the Court finds it worthy to discuss that the
original petition remains dismissible on the merits.
Even during the proceedings before the PARAD, the respondents
have raised the pendency with the Regional Trial Court of Biñan, Laguna of
Civil Case No. B-5862, an appeal from the decision of the Municipal Trial
Court of Santa Rosa, Laguna in Civil Case No. 2478. The records indicate that
when the matter was elevated to the CA via the petition docketed as CA G.R.
SP No. 68110, the appellate court declared the subject properties to have long
been reclassified from "agricultural" to "industrial". Thus, the CA Decision
which states that there is no record of tenancy or written agricultural leasehold
contract with respect to the subject lands, nor are the same covered by
Operation Land Transfer pursuant to P.D. 27. Thus, for being industrial in
nature, the subject lands are outside the ambit of existing agricultural tenancy
laws.28 
The Housing Land Use Regulatory Board has affirmed through a
Certification30 dated May 22, 1991 that the zoning ordinance referred to was
approved on December 2, 1981. Thus, the respondents correctly argued that
since the subject properties were already classified as "industrial" long before
the effectivity of the CARL, their sale could not have been covered by the
CARP and the requirement for a clearance. Significantly, DAR failed to refute
said allegation, which the Court finds duly supported by documents that form
part of the case records.
WHEREFORE, premises considered, the petition is DISMISSED.
16. Carlito G. Encinas v. PO1 Alfredo Agustin, Jr. and PO1 Joel
CaubangG.R. No. 187317, April 11, 2013
Doctrine:
The doctrine of res judicata applies only to judicial or quasi-judicial
proceedings, and not to the exercise of administrative powers.Moreover, the
subsequent desistance by respondents does not free petitioner from
liability, as the purpose of an administrative proceeding is to protect the
public service based on the time-honored principle that a public office is a
public trust. And petitioners act of demanding money in exchange for
their non-reassignment constitutes grave misconduct.
Facts:
 Respondents were then both holding positions as Fire Officer I in Nueva
Ecija. They claim that petitioner who was then Provincial Fire Marshall
of Nueva Ecija informed them that unless they gave him P5K they
would be relieved from their station at Cabanatuan City and transferred
to far-flung areas.
 Respondent Alfredo P. Agustin (Agustin) would supposedly be
transferred to the Cuyapo Fire Station (Cuyapo), and respondent Joel S.
Caubang (Caubang) to Talugtug Fire Station (Talugtug). Fearing the
reassignment, they decided to pay petitioner.
 In the house of a certain "Myrna," respondents came up short and
managed to give only P2K prompting petitioner to direct them to come
 up with the balance within a week. When they failed to deliver the
balance, petitioner reassigned them.
 Respondents filed with the Bureau of Fire Protection (BFP) a letter-
complaint (BFP Complaint) for illegal transfer of personnel under RA
No. 6975 or DILG Act of 1990. The BFP Complaint provides that
Encina relieved them from their present assignment and transferred us to
different far places without any cause and due process of law based from
the BFP Manual RA 6975. The reason why he relieved us was due to our
failure to give the money he was asking from both of them.
 Respondents likewise filed with the CSC Regional Office in San
Fernando, Pampanga (CSCRO), as well as with the CSC Field Office in
Cabanatuan City, their Joint Affidavit/Complaint (CSCRO Complaint).
This time, they accused petitioner of violation of Section 4(c) of R.A.
No. 6713 or the Code of Conduct and Ethical Standards for Public
Officials and Employees. The said complaint provides that they executed
an affidavit against Encinas for violation of Section 4(C) of RA 6713 as
regards justness and sincerity.
 After a fact-finding investigation was conducted in connection with his
alleged extortion activities, petitioner was formally charged with
dishonesty, grave misconduct, and conduct prejudicial to the best
interest of service. He was required to file an answer within five (5) days
from notice.
 Petitioner claimed that charges against him in the BF Complaint has
already been dropped by the investigating team for insufficiency of
evidence. Also, for the CSCRO complaint, he alleged that they were
reassigned after it was discovered that they had conducted a fire safety
inspection of establishments within Nueva Ecija without any mission
order.
 Also, an affidavit of desistance were made by respondents and admitted
that what happened was a misunderstanding and misapprehension of
facts between them.
IAS= Reassignment of respondents was within the ambit of authority of the
head of office.
CSCRO= Petitioner administratively liable for grave misconduct and conduct
prejudicial to the best interest of service, and ordered his dismissal from
service. MR=Denied.
CSC= The Appeal Memorandum denied. No forum shopping since one
complaint was for violation of RA No. 6713 and the other RA No. 6975. CSC
found that respondents clearly established that petitioner had demanded P5K
in exchange for their reassignment. It further ruled that the withdrawal of the
complaint by the respondents would not result in their outright dismissal or
absolve the person complained of from administrative liability.
CA= Denied petitioners appeal. Affirmed CSC. MR= Denied.
Issue/s:
WON CA erred in affirming the CSC Resolution and ruling that respondents
were not guilty of forum shopping. (NO.)
Held:
We rule that the dismissal of the BFP Complaint does not constitute res
judicata in relation to the CSCRO Complaint. Thus, there is no forum-
shopping on the part of respondents.The dismissal of the BFP Complaint in
the Resolution was the result of a fact-finding investigation for purposes of
determining whether a formal charge for an administrative offense should be
filed. Hence, no rights and liabilities of parties were determined therein with
finality.
The CA was correct in ruling that the doctrine of res judicata
applies only to judicial or quasi-judicial proceedings, and not to the exercise
of administrative powers. The Court has laid down the test for determining
whether an administrative body is exercising judicial or merely investigatory
functions: adjudication signifies the exercise of the power and authority to
adjudicate upon the rights and obligations of the parties. In this case, an
analysis of the proceedings before the BFP yields the conclusion that they
were purely administrative in nature and constituted a fact-finding
investigation for purposes of determining whether a formal charge for an
administrative offense should be filed against petitioner.
measuring 998 sqm. located in Sitio Diniwid, Barangay Balagab, Boracay
Island, Malay, Aklan, which is covered by a Forest Land Use Agreement for
Tourism Purposes (FLAgT) issued by the Department of Environment and
Natural Resources (DENR) in favor of Boracay West Cove.
Through a Decision on Zoning dated January 20, 2010, the Municipal Zoning
Administrator denied petitioner’s application on the ground that the proposed
construction site was within the “no build zone” demarcated in Municipal
Ordinance 2000-131 (Ordinance).
Petitioner appealed the denial action to the Office of the Mayor but despite
follow up, no action was ever taken by the respondent mayor. A Cease and
Desist Order was issued by the municipal government, enjoining the
expansion of the resort, and on June 7, 2011, the Office of the Mayor of
Malay, Aklan issued the assailed EO 10, ordering the closure and demolition
of Boracay West Cove’s hotel.
Petitioner filed a Petition for Certiorari with prayer for injunctive relief with
the CA Alleging that the order was issued and executed with grave abuse of
discretion.
PETITIONER CONTENTION: The hotel cannot summarily be abated
because it is not a nuisance per se, given the hundred million peso-worth of
capital infused in the venture. And the Municipality of Malay, Aklan should
have first secured a court order before proceeding with the demolition.
RESPONDENTS CONTENTION: The demolition needed no court order
because the municipal mayor has the express power under the Local
Government Code (LGC) to order the removal of illegally constructed
buildings.
ISSUE
Whether or not a judicial proceedings be conducted first before the LGU can
order the closure and demolition of the property in question.
RULING
Generally, LGUs have no power to declare a particular thing as a nuisance
unless such a thing is a nuisance per se.
            Despite the hotel’s classification as a nuisance per accidens, however,
we still find in this case that the LGU may nevertheless properly order the
hotel’s demolition. This is because, in the exercise of police power and the
general welfare clause, property rights of individuals may be subjected to
restraints and burdens in order to fulfill the objectives of the government.
Otherwise stated, the government may enact legislation that may interfere
with personal liberty, property, lawful businesses and occupations to promote
the general welfare.
Under the law, insofar as illegal constructions are concerned, the mayor can,
after satisfying the requirement of due notice and hearing, order their closure
and demolition.
One such piece of legislation is the LGC, which authorizes city and municipal
governments, acting through their local chief executives, to issue demolition
orders. Under existing laws, the office of the mayor is given powers not only
relative to its function as the executive official of the town; it has also been
endowed with authority to hear issues involving property rights of individuals
and to come out with an effective order or resolution thereon.20 Pertinent
herein is Sec. 444 (b) (3) (vi) of the LGC, which empowered the mayor to
order the closure and removal of illegally constructed establishments for
failing to secure the necessary permits.

17. CRISOSTOMO B. AQUINO

 vs. MUNICIPALITY OF MALAY AKLAN,
G.R. No. 211356;
September 29, 2014

DOCTRINE: Based on law and jurisprudence, the office of the mayor has

quasi-judicial powers to order the closing and demolition of establishments.
This power granted by the LGC, as earlier explained, We believe, is not the
same power devolved in favor of the LGU under Sec. 17 (b)(2)(ii), as above-
quoted, which is subject to review by the DENR. The fact that the building to
be demolished is located within a forestland under the administration of the
DENR is of no moment, for what is involved herein, strictly speaking, is not
an issue on environmental protection, conservation of natural resources, and
the maintenance of ecological balance, but the legality or illegality of the
structure. Rather than treating this as an environmental issue then, focus
should not be diverted from the root cause of this debacle compliance.
 FACTS
Petitioner is the president and chief executive officer of Boracay Island West
Cove Management Philippines, Inc. (Boracay West Cove). On January 7,
2010, the company applied for a zoning compliance with the municipal
government of Malay, Aklan.2 While the company was already operating a
resort in the area, and the application sought the issuance of a building permit
covering the construction of a three-storey hotel over a parcel of land