Case # 5
Anak Mindanao Party List v Executive Secretary
G.R. No. 166052, August 29, 2007
FACTS:
Anak Mindanao Party List wants to avail the executive
order which seeks that the Presidential Commission on
Urban Poor be placed under the supervision and control
of Department of Land Reform and the National
Indigenous people shall be attached to Department of
Land Reform. It contends that those agencies
mentioned are created by statutes; therefore, it can
only be transformed, merged or attached only by
statutes not by mere Executive Orders.
ISSUE:
Whether or not the president can issue executive orders
that reorganize the said agencies.
HELD:
Yes. The president as provided by the Administrative
Code of 1987, Sec.31 provides that the president,
subject to the policy in the executive office and in order
to achieve simplicity, economy and efficient, shall have
continuing authority to reorganize the administrative
structure of the office of the president. For this purpose,
the president may take the following actions: (1)
Restructure the internal organization of the Office of
the president, (2) Transfer any function under his office
to any department or agency, and (3) Transfer any
agency from his office to other departments or those
departments to his office.
Case # 6 Beja Sr. vs. Court of Appeals (207 SCRA 689)
FACTS:
Fidencio Beja Sr. an employee of Philippine Ports
Authority (PPA) was filed with an administrative case by
the PPA general manager and such administrative case
was forwarded to DOTC and such case was heard by
AAB. Beja was charged with grave misconduct, violation
of office rules and regulation, prejudicial to the best
interest of service and being notoriously undesirable.
He was then placed under preventive suspension by the
general manager.
ISSUE:
Whether or not the DOTC-AAB has the jurisdiction to
hear the case of Beja, being an employee below the
rank of assistant general manager.
HELD:
PPA being an attached agency to DTOC has a larger
measure of independence than one being under direct
supervision and control or administrative supervision.
The attachment is merely for policy and program
coordination. Moreover, the Administrative Code
provides that chapter 8of Book IV on supervision and
control shall not apply to chartered institutions attached
to a department. With respect to management of
personnel, an attached agency is to a certain extent free
from department interference and control as shown in
P.D. No 857 Sec.8 on Management and Staff. Although
the section do not provide for a mechanism for
administrative investigation by giving to remove erring
employees to the General Manager subject to the
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approval of the board, the law impliedly grants said
official the power to investigate. Hence, the
investigation made by DOTC-AAB is void and the case is
remanded to PPA.
Case # 7
Manila International Airport vs City of Pasay
G.R. No. 163072, April 2, 2009
FACTS:
Manila International Airport Authority (MIAA) operates
and administers NAIA. They received final notice of real
property tax delinquency form the City of Pasay. Now,
City of Pasay move to levy the properties of MIAA which
sought the latter to file for prohibition and injunction in
the Court of Appeals. CA dismissed said petition
because it held that as a Government Owned and
Controlled Corporation (GOCC), MIAA’s tax exemption
has been withdrawn upon the effectivity of the Local
Government Code.
ISSUE:
Whether or not MIAA is a GOCC, which lead to it being
subject to tax by the local government.
HELD:
MIAA is not a GOCC under section 2(13) of the
introductory portion of the Administrative Code
because it is not organized as a stock or non-stock
corporation. MIAA is a government instrumentality
vested with corporate powers and performing essential
public service pursuant to section 2(10) of the
introductory provisions of the Administrative Code. As
an instrumentality, it is therefore exempt to any kind of
tax by the local government. MIAA is a government
instrumentality that does not qualify as a GOCC.
Wherefore, MIAA is held to be exempt from real
property tax imposed by the City of Pasay.
Case # 8
University of the Philippines v Dizon
G.R. NO. 171182, August 23, 2012
FACTS:
University of the Philippines (UP) entered into a several
construction agreements with Stern Builders. UP was
able to pay the first two billings but was later on unable
to pay the third billing which lead for Stern builders to
file for collection of the remaining balance and
damages. RTC then ordered UP to pay, which was
upheld by CA which ordered the garnishment of UP’s
property.
ISSUE:
Whether or not UP’s properties can be subject to
garnishment.
HELD:
University of the Philippines is considered as a
government instrumentality, performing state
mandated of promoting quality and accessible
education. The funds of UP are public in character that
may be spent only for the attainment of institutional
objectives. The constitution strictly mandates that no
money shall be paid out of the treasury except in
pursuance of an appropriation made by law. The
execution of monetary judgment against UP was within
the primary jurisdiction of COA.
13. NATIONAL ELECTRIFICATION ADMINISTRATION and
its BOARD OF ADMINISTRATORS vs. DANILO MORALES
FACTS:
Danilo Morales and 105 other employees of the NEA
filed with the RTC of Quezon City a class suit against
their employer for payment of rice allowance, meal
allowance, medical/dental/optical allowance, children’s
allowance and longevity pay as authorized under RA No.
6758. RTC granted the petition directing NEA and its
Board to settle the claims of petitioners by issuing a
Writ of Execution. Thereafter, a Notice of Garnishment
was issued against the funds of NEA with DBP. NEA filed
a motion to quash the Writs of Execution/Garnishment
claiming that the garnished public funds are exempt
from execution under Sec 4 of PD No. 1445, but
manifesting that it is willing to pay the claims of
Morales, et al.
In an endorsement letter, the COA advised NEA against
making further payments in settlement of claims of
respondents on grounds that COA already passed upon
claims similar to those of Morales, et al. in its earlier
Decision No. 95-074, stating that the RTC exceeded its
jurisdiction in entertaining respondents’ petition for
settlement on a decision which was already disallowed
by their Auditor. The employees cannot defy this
decision by filing a petition in the lower court, and
clearly, the lower court had no jurisdiction over the
subject case. Moreover, COA was not made a party
thereto, hence, it cannot be compelled to allow
payment of claims.
ISSUE:
W/N RTC erred in directing implementation of writs of
execution/garnishment?
HELD:
Yes. Before execution may proceed against NEA, a claim
for payment of the judgment award must first be filed
with the COA. Under CA No. 327 as amended by PD No.
1445, it is the COA which has primary jurisdiction to
examine, audit and settle all debts and claims due from
or owing the Government or any of its subdivisions,
agencies and instrumentalities, including GOCCs, such
as NEA. Nonetheless, RTC acted prudently in its attempt
to set matters right by directing the party to recourse to
the processes of COA.
14. TRADE AND INVESTMENT DEVELOPMENT
CORPORATION OF THE PHILIPPINES (TIDCORP) vs. MA.
ROSARIO S. MANALANG-DEMIGILIO
FACTS:
The Board of Directors of TIDCORP, a wholly owned
government corporation, charged Ma. Rosario
Demigilio, then a Senior VP of the company, with grave
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misconduct, conduct prejudicial to the best interest of
the service, insubordination gross discourtesy in the
course of official duty. They cited several instances
when respondent allegedly engaged in verbal tussles
with President and CEO, Joel Valdes. They claim that
Demigilio was rude, arrogant and at a time even used
threatening remarks. The charge was then subjected to
investigation and Demigilio was placed under
preventive suspension pending said investigation.
Demigilio assailed her preventive suspension in the CSC
which declared her preventive suspension to be “not in
order” under Section 19 (2) of the Uniform Rules on
Administrative Cases in the Civil Service (Uniform Rules)
on the grounds that the two requirements for a
preventive suspension, which are 1) proof of possibility
of undue influence on potential witnesses and 2) proof
of possibility of documentary evidence tampering, are
absent.
ISSUE:
W/N TIDCORP’s preventive suspension on Demigilio was
valid?
HELD:
Yes. Sections 51 and 52, Chapter 6 (A), Title 1, Book V of
the Revised Administrative Code of 1987 contains the
rules on preventive suspension of a civil service officer.
It provides that the imposition of preventive suspension
by the proper disciplining authority is authorized
provided the charge involves dishonesty, oppression, or
grave misconduct or neglect in the performance of duty.
It does not imply that before a preventive suspension
may be issued there must be proof that the subordinate
may unduly influence the witnesses or tamper
document evidence. An order of preventive suspension
is considered null and void only if the order was not
premised on any of the mentioned grounds, or if the
order was issued without a formal charge and does not
include the previously stated conditions.
15. BOY SCOUTS OF THE PHILIPPINES vs. NLRC and
FORTUNATO ESGUERRA, et. al.
FACTS:
Private respondents were rank-and-file employees of
BSP stationed at the BSP Camp in Makiling, Los Banos,
Laguna at the time of their termination. Prior to
termination, they were informed that they will be
transferred to BSP Land Grant in Davao del Norte with
the assurance that there will be no diminution in salary
and that each of them will receive a relocation
allowance equivalent to one month’s basic pay. These
orders were opposed by private respondents claiming
that the orders were indubitable and irrefutable actions
prejudicial to them and their families. NLRC held that
respondents have been illegally dismissed by BSP and
ordered their reinstatement without loss of seniority
rights and with full backwages. However, it was noted
that petitioner is a “civic service, non-stock and support,
existing under and by virtue of CA No. 111…” which
gives rise to the doubt of NLRC’s jurisdiction over BSP.
ISSUE:
W/N the NLRC has jurisdiction over the case of BSP?
HELD:
No. While the BSP is seen as a mixed type of entity,
combining aspects of both private and public entities, it
is presently constituted under its charter as a
government-controlled corporation within the meaning
of Article IX of the 1987 Constitution. Also, the
Administrative Code of 1987 designates BSP as one of
the attached agencies of the DECS, and is appropriately
regarded as a “government instrumentality.” Neither
the NLRC nor Labor Arbiter had jurisdiction over the
complaint filed by private respondents, vesting no rights
or imposing no liabilities upon any of the parties
involved.
16. FAR EAST BANK AND TRUST COMPANY vs. COURT
OF APPEALS, COURT OF TAX APPEALS and
COMMISSIONER OF INTERNAL REVENUE
FACTS:
Far East Bank and Trust Company merged with Cavite
Development Bank (CDB), a domestic banking
corporation, with the former as its surviving entity and
acquiring all assets of the latter. Petitioner claims for of
excess creditable tax withheld from the sale of some
assets acquired by CDB. The evidences presented by
petitioner are 1) confirmation receipts, payment orders
and official receipts issued by the Central Bank and BIR;
2) ITR for years 1990 and 1991 with attached financial
statements; and 3) a list showing the CDB schedule of
creditable withholding tax applied for refund for 1990
and 1991; all of which failed to clearly establish the
taxes arising from the sale of assets and was thus
denied by the CA.
ISSUE:
W/N the dismissal of Petitioner’s appeal by CA was not
based on facts and law?
HELD:
The findings of fact of the CTA, a special court exercising
particular expertise on the subject of tax, are generally
regarded as final, binding and conclusive, especially if
these are substantially similar to the findings of the CA,
which is normally the final arbiter of questions of facts.
Consequently, questions of fact are not reviewable by
the SC, and as a rule, review of cases decided by the CA
is only confined to questions of law distinctly set forth in
a petition. Petitioner has not met its burden of proof in
establishing the factual basis for its claim for refund,
thus the ruling of the CA and CTA shall not be disturbed.
Case no. 17. SEA-LAND SERVICE, INC VS CA AND CIR
Facts:
Appeal via centiorari from the decision of the court of
Appeals affirming in tot that of the Court of Tax Appeals
which denied petitioners claim for tax credit or refund
of income tax paid on its gross Philippine billings.
Sea-Land services Incorporated (SEA-LAND), an
American international shipping company licensed by
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the SEC to do business in the Philippines entered into a
contract with the United States Government to
transport military household goods and effect of
U.S.military personnel assigned to the Subic Naval Base.
From the aforementioned contract, SEA-LAND derived
an income for the taxable year 1984 amounting to
P58,006,207.54. During the taxable year in question,
SEA-LAND filed with the BIR the corresponding
corporate Income Tax Return (ITR) and paid the income
tax due thereon of 1.5% as required in section 25 (a) (2)
of the National Internal Revenue Code (NIRC) in relation
to article 9 of the RP-US Tax Treaty, amounting to
870,093.12 Claiming that it paid the aforementioned
income tax by mistake, a written claim for refund was
filed with the BIR. However, before the said claim for
refund could be acted upon by the commissioner of
Internal Revenue, SEA-LAND filed a petition for review
with the CTA docketed, to judicially pursue its claim for
refund and to stop the running of the two-year
prescriptive period under the then section 243 of the
NIRC. CTA rendered its decision denying SEA-LANDs
claim for refund of the income tax it paid in 1984.
Petitioner appealed the decision of the CTA to the CA.
The CA promulgated its decision dismissing the appeal
and affirming in toto the decision of the CTA. Hence,
this petition.
Issue:
Whether the income that petitioner derived from
derived from service in transporting the household
goods and effects of U.S. military personnel fails within
the tax exemption provided in Art. XII, paragraph 4 of
the RP-US Military Bases Agreement
Held:
No. Laws granting exemption from tax are construed
strictissimi juris against the taxpayer and liberally in
favor of the taxing power. Taxation is the rule and
exemption is the exception. The law does not look with
favor on tax exemptions and that he who would seek to
be thus privileged must justify it by words too plain to
be mistaken and too categorical to be misinterpreted.
Case no. 18. Yamane V Ba Lepanto Condominium
Corporation 474 SCRA 258
Facts:
Petitioner City Treasurer of Makati, Luz Yamane
Respondent BA-Lepanto Condominium Corporation... is
a duly organized condominium corporation... which
owns and holds title to the common and limited
common areas of the BA-Lepanto Condominium...
situated in Paseo de Roxas, Makati City. the Corporation
received a Notice of Assessment... signed by the City
Treasurer. liable to pay the correct city business taxes
The Notice of Assessment was silent as to the statutory
basis of the business taxes assessed. Corporation
responded with a written tax protest... submit that the
Assessment has no basis as the Corporation is not liable
for business taxes Makati [Revenue] Code imposes
business tax on owners or operators of any business
Corporation is not an owner or operator of any business
in the contemplation of the Makati [Revenue] Code and
even the [Local Government] Code It was submitted
that the Corporation, as a condominium corporation,
was organized not for profit... under its articles of
incorporation or by-laws to engage in profit-making
activities The protest was rejected by the City Treasurer
She insisted that the collection of dues from the unit
owners was effected primarily... for... profit Corporation
filed an Appeal with the Regional Trial Court (RTC) of
Makati. Dismissing the appeal for lack... of merit. RTC
concluded that the activities of the Corporation fell
squarely under the definition of "business"... thus
subject to local business taxation Corporation filed a
Petition for Review... with the Court of Appeals.
appellate court... declared that the Corporation was not
liable to pay business taxes to the City of Makati. The
Corporation was not engaged in profit. as its sole
purpose was to hold title to the common areas in the
condominium and to maintain the condominium...
assessment collected from unit owners limited to
those... necessary to defray the expenses in the
maintenance of the common areas and management
the condominium... the City Treasurer... argued that the
Corporation is engaged in business, for the dues
collected from the different unit... owners... is utilized
towards the beautification and maintenance of the
Condominium, resulting in "full appreciative living
values" for the condominium units which would
command better market prices should they be sold in
the future
Issues:
Whether a local government unit can, under the Local
Government Code, impel a condominium... corporation
to pay business taxes. [1]... whether the City of Makati
may collect business taxes on condominium
corporations.
Ruling:
Respondent BA-Lepanto Condominium Corporation (the
"Corporation") is a duly organized condominium
corporation. Nowhere therein is there any citation
made by the City Treasurer of any provision of the
Revenue Code which would serve as the legal authority
for the collection of business taxes from condominiums
in Makati. Reference to the local tax ordinance is vital,
for the... power of local government units to impose
local taxes is exercised through the appropriate
ordinance enacted by the sanggunian, and not by the
Local Government Code alone. What determines tax
liability is the tax ordinance, the Local Government
Code being the enabling law for the local legislative
body. City Treasurer failed to cite the specific statutory
basis of the tax. Condominium corporations are
generally exempt from local business taxation under the
Local Government Code The assessment appears to be
based solely on the Corporation's collection of
assessments from unit owners, such... assessments
being utilized to defray the necessary expenses for the
Condominium Project and the common areas. Hence,
the assailed tax assessment has no basis under the Local
Government Code or the Makati Revenue Code
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Case no. 19. Gualberto De La Llana vs Manuel Alba 112
SCRA 294
FACTS:
BP 129 In 1981, Batas Pambansa Blg. 129, entitled “An
Act Reorganizing the Judiciary, Appropriating Funds
Therefor and for Other Purposes”, was passed.
Gualberto De la Llana, a judge in Olongapo, was
assailing its validity because, first of all, he would be one
of the judges that would be removed because of the
reorganization and second, he said such law would
contravene the constitutional provision which provides
the security of tenure of judges of the courts. He
averred that only the Supreme Court can remove judges
NOT the Congress.
ISSUE:
Whether or not a judge like Judge De La Llana can be
validly removed by the legislature by such statute (BP
129).
HELD:
Yes. The SC ruled the following way: “Moreover, this
Court is empowered “to discipline judges of inferior
courts and, by a vote of at least eight members, order
their dismissal.” Thus it possesses the competence to
remove judges. Under the Judiciary Act, it was the
President who was vested with such power. R emoval
is, of course, to be distinguished from termination by
virtue of the abolition of the office. There can be no
tenure to a non-existent office.
Case no. 20. Bagaoisan vs Nat'l Tobacco
Administration. G.R. No. 152845: August 5, 2003.
ADMINISTRATIVE CASE.
FACTS:
1. The petitioner was terminated from their position in
the national tobacco administration as a result of the
executive order issued by president Estrada which
mandates for the stream lining of the national tobacco
administration, a government agency under the
department of agriculture.
2. The petitioners filed a letter of appeal to the civil
service commission to recall the ossp.
3. Petitioner all file a petition for certiorari with
prohibition an mandamus with prayer for preliminary
mandatory injunction and a temporary restraining
order with the regional trial court of Batak to prevent
the respondent from enforcing the notice of
termination and from ousting the petitioners in there
respective offices.
4. The regional trial court issued an order ordering the
national tobacco administration to appoint the
petitioner to the ossp to position similar to the
one that they hold before.
5. The national tobacco administration appealed to the
court of appeals who reversed the decision of the RTC.
6. Petitioner appealed to the supreme court.
ISSUE:
Whether or not, the reorganization of the national
tobacco administration is valid true issuance of
executive order by the president.
Held:
According to the supreme court, the president has the
power to reorganized an office to achieve simplicity,
economy and efficiency as provided under executive
order 292 sec. 31 and section 48 of RA 7645 which
provides that activities of executive agencies may be
scaled down if it is no longer essential for the delivery of
public service. WHEREFORE, the Motion to Admit
Petition for En Banc resolution and the Petition for an
En Banc Resolution are DENIED for lack of merit. Let
entry of judgment be made in due course. No costs.
Case no.21. DENR vs DENR region 12
Facts:
On November 15, 1999 regional executive director of
DENR for region 12, Israel Gaddi, issued memorandum
3directing the immediate transfer of the DNR 12 offices
from Cotabato City to Koronadal. Respondents,
employees of the DNR region 1 who are members of the
employees of DENR 1, filed with the RTC of Cotabato, a
petition for nullity of orders with prayer for preliminary
injunction.
Issue:
Whether the memorandum order is valid?
Held:
Yes, the power of the President to reorganize the
administrative regions carries with it the power to
determine the regional centers. In identifying the
regional centers, the President intended to effectively
enhance the field of services of government agencies.
Case 22. Carpio vs Exec. Secretary
Facts:
Congress passed RA 6975 entitled “an act establishing
the Philippine national police under a reorganized
department of the interior and local government and
for other purposes. However, petitioner as citizen and
member of the BAR filed a petition seeking this court’s
declaration of unconstitutionality of RA 6975 with
prayer for temporary restraining order.
Issue:
Whether RA 6975 is valid?
Held:
Yes, the President has control of all executive
departments, bureaus, and offices. The NAPOLCOM and
the PNP under reorganized DILG is merely an
administrative realignment that would enhance the
system of coordination and cooperation among
citizenry.
Case no. 23. Banda vs Ermita
Facts:
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The present controversy arose from a petition for
certiorari and prohibition challenging the
constitutionality of executive order no. 378, issued by
President Arroyo. The National printing press was
created by President Corazon Aquino, however it was
reorganized by President Arroyo. The employees of the
National printing press, contend the order of the
President.
Issue:
Whether EO 378 is valid?
Held:
Yes, the President, subject to the policy in the executive
office and in order to achieve simplicity and efficiency,
shall have the continuing authority to reorganize the
administrative structure of the office of the President.
Case no. 24.
Facts:
The President Gloria Arroyo issued executive order no.
12 creating the Presidential Anti-graft commission and
vesting it with the power to investigate or hear
administrative cases or complaints for possible graft and
corruption. The petitioner asserts that the President is
not authorized to create the investigative division.
Issue:
Whether EO 12 is valid?
Held:
It became valid when President Noy Noy Aquino
reorganized EO 12 to EO 13. The President, subject to
the policy of the executive office, shall have the
continuing authority to reorganize the administrative
structure of the office of the President.
Case # 25. Lacson-Magallanes Co., Inc. vs. Jose Paño,
et. al. G.R. No. L-27811 (27 November 1967)
FACTS:
In 1932, Jose Magallanes was a permittee and actual
occupant of a 1,103-hectare pasture land situated in
Davao. On 1953, Magallanes ceded his rights and
interests to a portion of the above public land to the
plaintiff. On 1954, the same was officially released from
the forest zone as pasture land and declared agricultural
land. On 1955, Jose Paño and nineteen other claimants
applied for the purchase of 90 hectares of the released
area. Plaintiff in turn filed its own sales application
covering the entire released area. The Director of
Lands, following an investigation of the conflict,
rendered a decision on 1956 giving due course to the
application of plaintiff corporation. When the case was
elevated to the President of the Philippines, Executive
Secretary Juan Pajo, by authority of the president,
declared that it would be for public interest that
appellants, who are mostly landless farmers, be
allocated that portion on which the petitioner have
made improvements.
ISSUES:
May the Executive Secretary, acting by authority of the
President, reverse a decision of the Director of Lands
that had been affirmed by the Executive Secretary of
Agriculture and Natural Resources?
HELD:
YES. The President’s duty to execute the law and
control of all executive departments are of
constitutional origin. Naturally, he controls and directs
their acts. Implicit then is his authority to go over,
confirm, modify or reverse the action taken by his
department secretaries. It may also be stated that the
right to appeal to the President reposes upon the
President’s power of control over the executive
departments. He may delegate to his Executive
Secretary acts which the Constitution does not
command that he perform in person. As the Executive
Secretary acts by authority of the President, his decision
is that of the President’s. Such decision is to be given
full faith and credit by our courts, unless disapproved or
reprobated by the Chief Executive.
Case # 26. Medalla vs. Sayo (103 Phil. 587)
FACTS:
Petitioner, Dr. Eustaquio M. Medalla, Jr, is the chief of
clinics of the Caloocan City General Hospital, Caloocan
city. Private respondent Dr. Honorato G. Mackay was
the Resident Physician thereat. When the position of
assistant, hospital administrator of the Caloocan City
general hospital became vacant upon the resignation of
the incumbent, former Caloocan city mayor Alejandro
A. Fider designated and subsequently appointed, as
assistant hospital administrator private respondent Dr.
Mackay, a Resident Physician in said hospital. Petitioner,
Dr. Medalla, Jr, Protested Dr. MacKay designation and
subsequent appointment alleging among others that,
chief of clinics, he (Medalla) was next-in-rank, the then
acting city Mayor Virgililo P.Robles, who succeeded
former mayor, now Assemblyman Alejandro A. Fider, in
his 4th endorsement dated September 20,1978,
sustained Mackay appointment state that as of April 18,
1978 when Dr. Honorato G. Mackay was promoted to
assistant hospital administrator from his previous
position of Resident Physician, he was next in rank to
the said higher position by reason of his having
completed all academic requirements for the certificate
in Hospital administration contrary to the claim of Dr.
Eustaquio Medalla, Jr. in his letter of May 2, 1978.
ISSUE:
Whether or not that appointment of Dr. Honorato G.
Mackay as assistant hospital Administrator is valid
HELD:
When a presidential act is challenged before the court
of justice, it is not to be implied there from that the
executive is being made subject and subordinate to
courts the legality of his acts are under judicial review,
not because the executive is inferior to the courts, but
because the law is above the chief executive himself,
and the court seek only to interpret, apply or implement
it a judicial review of the President decision of a case of
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an employee decided by the civil service board of
appeals should be viewed in this light and the bringing
of the case to the courts should be governed by the
same principles as govern the judicial review of all
administrative act of all administrative officer. The court
may always examine into the exercise of power by a
ministerial officer to the extent of determining whether
it is a legal power that could have been granted to him
and whether it has been exercised in a legal manner.
And under the civil service section 19 (3) of the civil
service PD no. 807 the recruitment of selection of
employees for promotion is drawn from the next-in-
rank.
Case No. 27. Leonardo Montes vs. The Civil Service
Board (101 Phil 490)
FACTS:
In Administratice Case No. R-8182 instituted against
Montes for negligence in the performance of duty as a
watchman of the Floating Equipment Section, Ports and
Harbours Division of Bureau of Public Works, the
Commissioner of Civil Service exonerated him on the
basis of findings made by a committee. On appeal, the
Civil Service Board of Appeals modified the decision,
finding petitioner guilty of contributory negligence in
not pumping the water from the bilge which sunk the
dredge under his watch, and ordered that he be
considered resigned effective his last day of duty with
pay, without prejudice to reinstatement at the
discretion of the appointing officer.
Petitioner files an action before the Court of First
Instance of Manila to review the decision. On a Motion
to Dismiss, the said court dismissed the action on the
ground that petitioner had not exhausted all his
administrative remedies before he instituted the action
as provided in Section 2 of Commonwealth Act 598.
Montes argued that there is no duty imposed upon him
to appeal to the President. Hence, this petition.
ISSUE:
Whether or not Montes erred in filing the action
immediately before the Court of First Instance of Manila
instead of filing an appeal before the President of the
Philippines?
HELD:
The doctrine of exhaustion of administrative remedies
requires where an administrative remedy is provided by
statute, as in this case, relief must be sought by
exhausting this remedy before the courts will act. The
doctrine is a device based on considerations of comity
and convenience. If a remedy is still available within the
administrative machinery, this should be resorted to
before resort can be made to the courts, not only to
give the administrative agency opportunity to decide
the matter by itself correctly, but also to prevent
unnecessary and premature resort to the courts.
Section 2 of Commonwealth Act 598 provides that:
The Civil Service Board of Appeals shall have the power
and authority to hear and decide all administrative
cases brought before it on appeal, and its decisions in
such cases shall be final, unless revised or modified by
the President of the Philippines. The above-mentioned
provision is a clear expression of the policy or principle
of exhaustion of administrative remedies. If the
President, under whom the Civil Service directly falls in
our administrative system as head of the executive
department, may be able to grant the remedy that
petitioner pursues, reasons of comity and orderly
procedure demand that resort be made to him before
recourse can be had to the courts.
Case # 29
SMART COMMUNICATIONS, INC. (SMART) and
PILIPINO TELEPHONE CORPORATION (PILTEL) vs.
NATIONAL TELECOMMUNICATIONS COMMISSION G.R.
No. 151908 August 12,
2003
FACTS:
Pursuant to its rule-making and regulatory powers, the
National Telecommunications Commission issued a
Memorandum Circulars on the billing of
telecommunications services and on measures in
minimizing, if not eliminating, the incidence of stealing
of cellular phone unit. Isla Communications Co., Inc.
(IslaCom) and Pilipino Telephone Corporation (PilTel)
filed an action for the declaration of nullity of the
memorandum circulars, alleging that NTC has no
jurisdiction to regulate the sale of consumer goods as
stated in the subject memorandum circulars. Such
jurisdiction belongs to the DTI under the Consumer Acts
of the Philippines. Soon thereafter, Globe Telecom, Inc.
and Smart Communications, Inc. filed a joint motion for
leave to intervene and to admit complaint-in-
intervention. This was granted by the trial court.
The trial court issued a TRO enjoining NTC from
implementing the MCs. NTC filed a Motion to Dismiss,
on the ground that petitioners failed to exhaust
administrative remedies. The defendant's MD is denied
for lack of merit. NTC filed a MR but was later on
denied by the trial court. The CA, upon NTC's filing of a
special action for certiorari and prohibition, reversed
the decision of the lower court. Hence this petition.
ISSUE:
W/N the CA erred in holding that the private
respondents failed to exhaust administrative remedies?
RULING:
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.
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.
They must conform to and be consistent with the
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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.
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.
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.
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. 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. 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.
Case #30. EASTERN TELECOMMUNICATIONS
PHILIPPINES v. INTERNATIONAL COMMUNICATION
CORPORATION, GR NO. 135992, 2006-01-31
Facts:
Respondent now seeks a partial reconsideration of the
portion of the Court's decision requiring it to make a
20% escrow deposit and to post a 10% performance
bond. Respondent claims that Section 27 of NTC MC No.
11-9-93, which required the foregoing amounts,
pertains only to... applications filed under Executive
Order No. 109 (E.O. No. 109) and not to applications
voluntarily filed
Respondent now seeks a partial reconsideration of the
portion of the Court's decision requiring it to make a
20% escrow deposit and to post a 10% performance
bond. Respondent claims that Section 27 of NTC MC No.
11-9-93, which required the foregoing amounts,
pertains only to... applications filed under Executive
Order No. 109 (E.O. No. 109) and not to applications
voluntarily filed. In its Manifestation in support of the
motion for partial reconsideration, respondent attached
a letter from Deputy Commissioner and Officer-in-
Charge (OIC), Kathleen G.
Heceta, of the National Telecommunications
Commission (NTC), stating thus:... x x x
Please be informed that the escrow deposit and
performance bond were required to public
telecommunications entities to ensure that the
mandated installation of local exchange lines are
installed within three (3) years pursuant to EO 109 and
RA 7925. Since your company has... already complied
with its obligation by the installation of more than
300,000 lines in Quezon City, Malabon City and
Valenzuela City in the National Capital Region and
Region V in early 1997, the escrow deposit and
performance bond were not required in your
subsequent authorizations
In its Manifestation in support of the motion for partial
reconsideration, respondent attached a letter from
Deputy Commissioner and Officer-in-Charge (OIC),
Kathleen G.
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Subsequently, in its Manifestation/Comment filed on
January 11, 2005, the Office of the Solicitor General
(OSG), in behalf of the NTC, likewise referred to the
same letter of OIC Heceta and declared that it fully
agrees with respondent that the escrow deposit and
performance... bond are not required in subsequent
authorizations for additional/new areas outside its
original roll-out obligation under the Service Area
Scheme of E.O. No. 109.
Petitioners did not file any comment and it was only
after the Court issued a show cause and compliance
Resolution on October 19, 2005 that petitioners
manifested in their Entry of Special Appearance,
Manifestation and Compliance dated November 25,
2005 that they have no further... comments on
respondent's motion for partial reconsideration.
Issues:
whether the posting of an escrow deposit and
performance bond is a condition sine qua non for the
grant of a provisional authority.
Ruling:
The NTC, through the OSG, explicitly clarified, which...
was not disputed by petitioners, that the escrow
deposit and performance bond are not required in
subsequent authorizations for additional/new areas
outside its original roll-out obligation under E.O. No.
109. The OSG agreed with respondent's stance that
since the provisional... authority in this case involves a
voluntary application not covered by the original service
areas created by the NTC under E.O. No. 109, then it is
not subject to the posting of an escrow deposit and
performance bond as required by E.O. No. 109, but only
to the conditions... provided in the provisional authority
The NTC, being the government agency entrusted with
the regulation of activities coming under its special and
technical forte, and possessing the necessary rule-
making power to implement its objectives, is in the best
position to interpret its own rules,... regulations and
guidelines. The Court has consistently yielded and
accorded great respect to the interpretation by
administrative agencies of their own rules unless there
is an error of law, abuse of power, lack of jurisdiction or
grave abuse of discretion clearly conflicting... with the
letter and spirit of the law
In City Government of Makati vs. Civil Service
Commission, the Court cited cases where the
interpretation of a particular administrative agency of a
certain rule was adhered to
This principle is not new to us. In Geukeko v. Araneta
this Court upheld the interpretation of the Department
of Agriculture and Commerce of its own rules of
procedure in suspending the period of appeal even if
such action was nowhere stated therein.
Thus, the Court holds that the interpretation of the NTC
that Section 27 of NTC MC No. 11-9-93 regarding the
escrow deposit and performance bond shall pertain
only to a local exchange operator's original roll-out
obligation under E.O. No. 109, and not to roll-out
obligations... made under subsequent or voluntary
applications outside E.O. No. 109, should be sustained.
IN VIEW THEREOF, respondent's Motion for Partial
Reconsideration is GRANTED. The Court's Decision
dated July 23, 2004 is AMENDED, the dispositive portion
of which should read as follows:
WHEREFORE, the petition for review on certiorari is
DENIED. The Order of the National Telecommunications
Commission dated November 10, 1997 in NTC Case No.
96-195 is AFFIRMED.
thereby deleting the order requiring respondent to
make a 20% escrow deposit and to post a 10%
performance bond.
Principles:
In City Government of Makati vs. Civil Service
Commission, the Court cited cases where the
interpretation of a particular administrative agency of a
certain rule was adhered to.
Case #31 Sta. Rosa Realty Development Corp vs. Court
of Appeals
Facts:
The case is a petition regarding Department of Agrarian
Reform Adjudication Board’s (DARAB) order of
compulsory acquisition of petitioner’s property under
the Comprehensive Agrarian Reform Program
(CARP). Sta. Rosa was the registered owner of two
parcels of land in Cabuyao Laguna. According to them,
these lands are watersheds which provide clean and
potable (drinkable) water to the Canlubang community
and that 90 light industries are located in that area.
They were alleging respondents usurped its rights over
their property thereby destroying the ecosystem. Since
the said land provides water to the residents,
respondents sought an easement of a right of a way to
and from Barangay Castile, to which, by counterclaim,
Sta. Rosa sought ejectment against respondents.
Respondents went to the DAR and filed a case for
compulsory acquisition of the Sta. Rosa Property under
the Comprehensive Agrarian Reform Program.
Compulsory acquisition is the power of the government
to acquire private rights in land without the willing
consent of its owner or occupant in order to benefit the
society. The said land was inspected by the Municipal
and Agrarian Reform Officer, and upon consensus of the
authorities concerned, they decided that the said land
must be placed under compulsory acquisition.
Petitioners filed an objection on the ground that: The
area is not appropriate for agricultural purposes. The
area was rugged in terrain with slopes 18% and above.
(which falls under the exception in compulsory
acquisition of CARP) The occupants of the land were
illegal settlers or (squatters) who by no means are
entitled to the land as beneficiaries. Another issue
raised by the petitioners was that the DAR failed to
follow the due process because instead of paying just
compensation, a trust account was made in favour of
the petitioners.
Issues:
1. Whether these parcels of land fall within the
coverage of the Compulsory Acquisition Program of the
CARP?
2. Whether the petition of land conversion of the
parcels of land may be granted?
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Court Ruling:
1. Art. 67 of the Water Code: Any watershed or any area
of land adjacent to any surface water or overlying any
ground water may be declared by DENR as a protected
area. In this case, the DENR did not declare the land as a
protected area, In the past the municipality issued a
resolution that the said land is an agricultural land.
2. Although evidence of petitioners is strong, the
Supreme Court opines that the area must be
maintained for watershed purposes for ecological and
environmental considerations despite the 88 families
who are beneficiaries of the CARP. It is important that a
larger view of the situation be taken because of the
thousands of residents downstream if the watershed
will not be protected and maintained for its natural
purpose.
3. Despite Supreme Court’s strong opinion of protection
of watersheds as an intergenerational responsibility,
they however ordered to DARAB to conduct a re-
evaluation of the case since the said land falls under
exception.
Case # 32
CABRAL vs. CA, DAR RD, et. al G.R. No. 101974, July 12,
2001 By Richard Troy A. Colmenares
Nature of the Case:
A petition for certiorari assailing the decision of the CA
with an urgent subsequent prayer for issuance of
temporary restraining order (TRO) due to conveyance
of property in issue by private respondent to a third
party.
Facts:
Sometime in July 1973, petitioner sought in frustration
DAR’s reclassification of property into residential,
commercial or industrial purposes. However, in April 25,
1988, Emancipation Patents and Transfer Certificates of
Title (EP and TCT) were issued in favor of private-
respondents. Thus, petitioner sought for cancellation of
the EP and TCT before the BARC on 16 January 1990
citing four reasons. On 19 January 1990, petitioner also
petitioned DAR for cancellation of the EP and TCT but
DAR denied the same on trial and on motion for
reconsideration, and by CA on certiorari and motion for
reconsideration. Thus, this petition for certiorari. A TRO
was granted on subsequent motion of petitioner due to
conveyance of private-respondent to a third party that
has commenced conversion of the property on issue for
commercial and industrial use.
Issue(s):
(1). Whether it is the DAR Regional Office (RO) or
DARAB that has jurisdiction over agrarian reform issues.
(2). Whether petitioner was denied due process being
not given the opportunity to be heard on appeal.
Held:
(1). DARAB has jurisdiction, and not DAR RO. The
function of DAR RO is the implementation (purely
executive) of agrarian reform laws whereas that of
DARAB/RARAD2/PARAD 3
 (in this hierarchical order) is for adjudication (judicial in
nature) of agrarian reform cases. These were the laws
at the time. Although the CA cited that DARAB can
delegate its powers and functions (judicial) to the
regional office, adjudication has been delegated to the
Regional Office, the same is however subject to the
rules promulgated by DARAB. The same rules have been
revised, so that the same has now been delegated to
RARAD and PARAD which are deemed part of the
Regional Office where it is located. This comingling of
powers (executive and judicial) must not be confused,
for duplication of functions would seem: 1) impractical;
2) confusion as to what each agency serves; 3) divides
agency’s resources. The intention of law is to avoid such
confusion, and thus, the theory that DAR RO has
jurisdiction is without merit. The petition is granted, CA
Resolution is reversed and set aside. TRO made
permanent. (2). The Court did not resolve the issue on
denial of due process by DAR since DAR has no
jurisdiction in the first place.

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