YSMAEL vs.

THE DEPUTY EXECUTIVE SECRETARY

FACTS:
Petitioner entered into a timber license agreement designated as TLA No. 87 with
the Department of Agriculture and Natural Resources wherein it was issued an exclusive
license to cut, collect and remove timber except prohibited species within a specified portion of
public forest land.
Later on, the Director of the Bureau of Forest Development (Bureau) issued a
memorandum order stopping all logging operations, and cancelling the logging concession
of petitioner and nine other forest concessionaires,
Subsequently, petitioner received a telegram from the Bureau, requesting to stop all
logging operations to conserve the remaining forests.

After the cancellation of its timber license agreement, petitioner sent a letter to
President Marcos seeking reconsideration of the Bureau's directive however, the office of the
president did not take favorable action regarding petitioner’s letter.

One year after, one-half of the area formerly covered by TLA No. 87 was re-
awarded to Twin Peaks Development and Reality Corporation under TLA No. 356 which
was set to expire on July 31, 2009, while the other half was allowed to be logged by
Filipinas Loggers, Inc. without the benefit of a formal award or license; and,

The said corporations, according to petitioner, were controlled or owned by relatives or

cronies of deposed President Marcos. Acting on petitioner's letter, the MNR issued an order
denying petitioner's request. The Ministry ruled that a timber license was not a contract within
the due process clause of the Constitution, but only a privilege which could be withdrawn
whenever public interest or welfare so demands, and that petitioner was not discriminated
against in view of the fact that it was among ten concessionaires whose licenses were revoked
in 1983.

Petitioner moved for reconsideration of the aforestated order reiterating its request
that TLA No. 356 issued to private respondent be declared null and void. The MNR however
denied this motion.

Petitioner's supplemental motion for reconsideration was likewise denied.

Meanwhile, per MNR Administrative Order No. 54, series of 1986, the logging ban in the
province of Quirino was lifted.

Petitioner subsequently appealed from the orders of the MNR to the Office of the
President however, they denied petitioner's appeal for lack of merit.
Hence, petitioner filed directly with this Court a petition for certiorari, with prayer
for the issuance of a restraining order or writ of preliminary injunction.
ISSUE:
Whether or not public respondents herein acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in refusing to overturn administrative orders
issued by their predecessors in the past regime.

RULING:

No, the petitioner failed to show that public respondents acted in grave abuse of
discretion.

1. The refusal of public respondents to reverse final and executory

administrative orders does not constitute grave abuse of
discretion amounting to lack or excess of jurisdiction.
The decisions and orders of administrative agencies have upon their finality, the
force and binding effect of a final judgment within the purview of the doctrine of res
judicata. These decisions and orders are as conclusive upon the rights of the affected parties
as though the same had been rendered by a court of general jurisdiction. The rule of res
judicata thus forbids the reopening of a matter once determined by competent authority acting
within their exclusive jurisdiction

Moreover, petitioner did not avail of its remedies under the law, i.e. Section 8 of
Pres. Dec. No. 705 as amended, for attacking the validity of these administrative actions
until after 1986. By the time petitioner sent its letter dated April 2, 1986 to the newly appointed
Minister of the MNR requesting reconsideration of the above Bureau actions, these were
already settled matters as far as petitioner was concerned.

2. there is a more significant factor which bars the issuance of a

writ of certiorari in favor of petitioner and against public
respondents herein.
Section 16 of Article II of the 1987 Constitution provides:

SEC. 16. The State shall protect and promote the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature.

In light of this provision, public respondents indicated that there is an ongoing department
evaluation of all timber license agreements entered in response to the renewed and
growing global concern over the despoliation of forest lands

It is a more essential need to ensure future generations of Filipinos of their survival

in a viable environment demands effective and circumspect action from the government
to check further denudation of whatever remains of the forest lands.
 A long line of cases establish the basic rule that the courts will not interfere in matters
which are addressed to the sound discretion of government agencies entrusted with the
regulation of activities coming under the special technical knowledge and training of
such agencies.

In fine, the legal precepts highlighted in the foregoing discussion more than suffice to
justify the Court's refusal to interfere in the DENR evaluation of timber licenses and
permits
 RUZOL vs. SANDIGANBAYAN

FACTS:

Ruzol was the mayor of General Nakar, Quezon from 2001 to 2004.

Earlier in his term, he organized a Multi-Sectoral Consultative Assembly with the end in view of regulating
and monitoring the transportation of salvaged forest products. During the said assembly, the participants
agreed that to regulate the salvaged forests products through the use of a permit to transport
after payment of the corresponding fees to the municipal treasurer.

Consequently, from 2001 to 2004:

 221 permits to transport salvaged forest products were issued
o Ruzol - 43
o Sabiduria – 178

221 Informations for violation of Art. 177 of the RPC or for Usurpation of Authority or
Official Functions were filed against Ruzol and Sabiduria,

Ruzol's Defense

(1) General welfare clause provided in Section 16, Chapter 2, Title One, Book I of RA 7160
which give the LGU not only express powers but also those powers that are necessarily implied
from the powers expressly granted as well as those that are necessary, appropriate or incidental
to the LGU’s efficient and effective governance.

(2) R.A. 7160 has devolved certain functions and responsibilities of the DENR to the LGU.
And the permits to transport were issued pursuant to the devolved function to manage and control
communal forests with an area not exceeding fifty (50) square kilometers.

(3) The Permits to Transport were issued as an incident to the payment of Transport Fees levied
by the municipality for the use of local public roads for the transport of salvaged forest products.
Under (a) Section 5, Article X of the Constitution, (b) Section 129, Chapter I, Title One Book
II of R.A. 7160, and (c) Section 186, Article Five, Chapter 5, Tile One, Book II of R.A. 7160,
the municipality is granted the power to create its own sources of revenue and to levy fees in
accordance therewith.

(4) The only kind of document the DENR issues relating to log, timber or lumber is denominated
"Certificate of Timber Origin" or CTO for logs and "Certificate of Lumber Origin" or CLO for
lumber; hence, even if accused issued the Transport Permits on his side, a person wanting to
transport the said forest products would have to apply and obtain a CTO or CLO from the DENR.
The Transport Permits issued by the accused were never taken as a substitute for the CTO
or CLO, and this is the reason why said permits contain the annotation "Subject to DENR
rules, laws and regulations."

(5) There is no proof of conspiracy between the accused. The Transport Permits were issued by
accused Sabiduria in his capacity as Municipal Administrator and his mere issuance is not
enough to impute upon the accused Ruzol any transgression or wrongdoing that may have been
committed in the issuance thereof following the ruling in Arias v. Sandiganbayan (180 SCRA
309).
 (6) The DENR directly sanctioned and expressly authorized the issuance of the 221 Transport
permits through the Provincial Environment and natural Resources officer Rogelio Delgado Sr., in
a Multi-Sectoral Consultative Assembly.

(7) The accused cannot be convicted of Usurpation of Authority since they did not act "under the
pretense of official position," accused Ruzol having issued the permits in his capacity as
Mayor and there was no pretense or misrepresentation on his part that he was an officer of
DENR.7

Ruling of the Sandiganbayan

1. LEOVEGILDO R. RUZOL
GUILTY :
 221 counts of Usurpation of Official Functions
 To suffer for each case a straight penalty of 6 MONTHS and 1 DAY.
 Entitled to the benefit of the three-fold rule as provided in Article 70 of RPC.

2. GUILLERMO M. SABIDURIA
ACQUITTED of all 221 charges.

The Sandiganbayan ruled that the authority to issue transport permits with respect to
salvaged forest products lies with the DENR and that such authority had not been devolved to the
local government of General Nakar.

SANDIGANBAYAN ARGUMENTS:

1. Sandiganbayan invoked Sec. 5 of PD 705 in relation to Sec. 4 & 5 of EO 192

Section 5 of PD 705 provides:

Section 5. Jurisdiction of Bureau. The Bureau of Forest Management shall have

jurisdiction and authority over all forest land, grazing lands, and all forest reservations including
watershed reservations presently administered by other government agencies or
instrumentalities.

It shall be responsible for the protection, development, management, regeneration, and

reforestation of forest lands; the regulation and supervision of the operation of licensees,
lessees and permittees for the taking or use of forest products therefrom or the occupancy or
use thereof; the implementation of multiple use and sustained yield management in forest
lands; the protection, development and preservation of national parks, marine parks, game
refuges and wildlife; the implementation of measures and programs to prevent kaingin and
managed occupancy of forest and grazing lands; in collaboration with other bureaus, the
effective, efficient and economic classification of lands of the public domain; and the
enforcement of forestry, reforestation, parks, game and wildlife laws, rules, and regulations.

The Bureau shall regulate the establishment and operation of sawmills, veneer and
plywood mills and other wood processing plants and conduct studies of domestic and world
markets of forest products.

Section 4 of EO 192 states that:

SECTION 4. Mandate. The Department shall be the primary government agency responsible
for the conservation, management, development, and proper use of the country’s environment
and natural resources, specifically forest and grazing lands of the public domain, as well as the
licensing and regulation of all natural resources as maybe provided for by law in order to ensure
 equitable sharing of the benefits derived therefrom for the welfare of the present and future
generations of Filipinos.

SECTION 5. Powers and Functions. To accomplish its mandate, the Department shall have the
following functions:

(d) Exercise supervision and control over forest lands, alienable and disposal lands, and
mineral resources and in the process of exercising such control the Department shall
impose appropriate payments, fees, charges, rentals and any such revenues for the
exploration, development, utilization or gathering of such resources.

(j) Regulate the development, disposition, extraction, exploration and use of the
country’s forest, land and mineral resources;

(k) Assume responsibility for the assessment, development, protection, conservation,

licensing and regulation as provided for by law, where applicable, of all natural
resources; the regulation and monitoring of service contractors, licensees, lessees, and
permittees for the extraction, exploration, development and utilization of natural
resources products; the implementation of programs and measures with the end in view
of promoting close collaboration between the government and the private sector; the
effective and efficient classification and sub-classification of lands of the public domain;
and the enforcement of natural resources laws, rules and regulations;

(l) Promulgate rules, regulations and guidelines on the issuance of co-production, joint
venture or production sharing agreements, licenses, permits, concessions, leases and
such other privileges and arrangement concerning the development, exploration and
utilization of the country’s natural resources and shall continue to oversee, supervise
and police our natural resources; to cancel or cause to cancel such privileges and
arrangement upon failure, non-compliance or violations of any regulations, orders, and
for all other causes which are furtherance of the conservation of natural resources and
supportive of the national interests;

(n) Implement measures for the regulation and supervision of the processing of forest
products, grading and inspection of lumber and other forest products and monitoring of
the movement of timber and other forest products. (Emphasis Ours.)

Invoked too is DENR Administrative Order No. 2000-78 (DAO 2000-78) which mandates that the
permittee should secure the necessary transport and other related documents before the retrieved wood
materials are sold to the buyers/users and/or wood processing plants. 10 

2. “Monitoring and regulating salvaged forest products" is not one of the DENR’s functions which
had been devolved upon LGUs.

According to the Sandiganbayan, Sec. 17 of the LGC has limited the devolved functions of the DENR to
the LGUs to the following:
(1) the implementation of community-based forestry products;
(2) management and control of communal forests with an area not exceeding fifty (50) square
kilometers; and
(3) establishment of tree parks, greenbelts and similar forest development projects. 13 

Provided, that the implementation of the foregoing activities outside the devolved areas above mentioned,
shall remain with the DENR.
The Sandiganbayan ruled that since the authority relative to salvaged forest products was not
included in the enumeration of devolved functions, the authority to issue transport permits
remains with the DENR and, thus, cannot be exercised by the LGUs.

ISSUE:

1. Whether or not the authority to monitor and regulate the transportation of salvaged forest product
is solely with the DENR, and no one else.
2. Subsidiary Issue: Whether the Permits to Transport Issued by Ruzol Are Valid
3. Whether Ruzol Is Guilty of Usurpation of Official Functions

RULING:

1. Whether or not the authority to monitor and regulate the transportation of salvaged forest
product is solely with the DENR, and no one else.

Under the LGC, LGU’s are given authority to promulgate rules, regulations to monitor and
regulate salvaged forest products, provided that the parameters set forth by law for their enactment have
been faithfully complied with.
While the law has designated DENR as the primary agency tasked to protect the
environment, it was not the intention of the law to give to the DENR the exclusive power of exercising
this function. The word "primary" can never be taken to be synonymous with "sole" or "exclusive."
On the contrary, the claim of DENR’s supposedly exclusive mandate is easily negated by the
principle of local autonomy enshrined in the 1987 Constitution in relation to the general welfare
clause under Sec. 16 of the LGC of 1991, which provides:

Section 16. General Welfare. - Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are essential
to the promotion of the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology,
encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve the
comfort and convenience of their inhabitants. (Emphasis Ours.)

As held in Oposa v. Factoran, Jr.,18 the right of the people "to a balanced and healthful ecology carries
with it the correlative duty to refrain from impairing the environment." In ensuring that this duty is upheld
and maintained, a local government unit may, if it deems necessary, promulgate ordinances aimed at
enhancing the right of the people to a balanced ecology and, accordingly, provide adequate measures in
the proper utility and conservation of natural resources within its territorial jurisdiction.

The monitoring and regulation of salvaged forest products through the issuance of appropriate permits is
a shared responsibility which may be done either by DENR or by the LGUs or by both.

DAO 1992-30: the "LGUs shall share with the national government, particularly the DENR, the
responsibility in the sustainable management and development of the environment and
natural resources within their territorial jurisdiction." 20 

Joint Memorandum Circular No. 98-01(JMC 1998-01) or the Manual of Procedures for DENR-DILG-LGU
Partnership on Devolved and other Forest Management Functions, which was promulgated jointly by the
DILG and the DENR in 1998, and provides as follows:
To our mind, the requirement of permits to transport salvaged forest products is not a manifestation of
usurpation of DENR’s authority but rather an additional measure which was meant to complement
DENR’s duty to regulate and monitor forest resources within the LGU’s territorial jurisdiction.

CANON OF LEGAL HERMENEUTICS

that instead of pitting one statute against another in an inevitably destructive confrontation,
courts must exert every effort to reconcile them, remembering that both laws deserve respect as
the handiwork of coordinate branches of the government."21 

Accordingly, although the DENR requires a Wood Recovery Permit, an LGU is not necessarily
precluded from promulgating, complementary orders, rules or ordinances to monitor and regulate
the transportation of salvaged forest products.

2. Subsidiary Issue: Whether the Permits to Transport Issued by Ruzol Are Valid

Permits to Transport issued by Ruzol are INVALID because he failed to comply with the
procedural requirements set forth by law for its enforcement.

Ruzol argues that he has been conferred by law the right to issue subject permits as an
incident to the LGU’s power to create its own sources of revenue.

However, according to the ruling of the SC, an enabling ordinance is necessary to confer the
subject permits with validity. The power to levy fees or charges under the LGC is exercised by the
Sangguniang Bayan through the enactment of an appropriate ordinance wherein the terms,
conditions and rates of the fees are prescribed.

It is likewise expressly stated in Sec. 444(b)(3)(iv) of the LGC that the authority of the
municipal mayor to issue licenses and permits should be "pursuant to a law or ordinance." It is the
Sangguniang Bayan, as the legislative body of the municipality, which is mandated by law to enact
ordinances against acts which endanger the environment.
 AQUINO vs. MUNICIPALITY OF MALAY, AKLAN

FACTS:

Petitioner is the president and chief executive officer of Boracay Island West Cove Management
Philippines, Inc. (Boracay West Cove).
The company applied for a zoning compliance with the municipal government of Malay, Aklan. 
While the company was already operating a resort in the area, the application sought the
issuance of a building permit covering the construction of a three-storey hotel over a parcel
of land 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.
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.
Petitioner followed up his appeal through a letter but no action was ever taken by the
respondent mayor.
Subsequently, a Notice of Assessment was sent to petitioner asking for the settlement of Boracay
West Cove’s unpaid taxes and other liabilities
In reply, petitioner expressed willingness to settle the company’s obligations, but the municipal
treasurer refused to accept the tendered payment. Meanwhile, petitioner continued with the
construction, expansion, and operation of the resort hotel.
Subsequently, on March 28, 2011, 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.
EO 10 was partially implemented on June 10, 2011. Thereafter, two more instances followed
wherein respondents demolished the improvements introduced by Boracay West Cove, the most
recent of which was made in February 2014.
Alleging that the order was issued and executed with grave abuse of discretion, petitioner
filed a Petition for Certiorari with prayer for injunctive relief with the CA.

He argued that:

1. judicial proceedings should first be conducted before the respondent mayor could order the
demolition of the company’s establishment;

2. that Boracay West Cove was granted a FLAgT by the DENR, which bestowed the company the
right to construct permanent improvements on the area in question; thatsince the area is a
forestland, it is the DENR—and not the municipality of Malay, or any other local government unit for
that matter—that has primary jurisdiction over the area, and that the Regional Executive Director of
DENR-Region 6 had officially issued an opinion regarding the legal issues involved in the present
case;

3. that the Ordinance admits of exceptions; and

4. that it is the mayor who should be blamed for not issuing the necessary clearances in the
company’s favor.

In rebuttal, respondents contended that the FLAgT does not excuse the company from complying with the
Ordinance and Presidential Decree No. 1096 (PD 1096), otherwise known as the National Building Code
of the Philippines. Respondents also argued that 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.

RULING OF CA

CA dismissed the petition solely on procedural ground

the special writ of certiorari can only be directed against a tribunal, board, or officer exercising
judicial or quasi-judicial functions and since the issuance of EO 10 was done in the exercise of
executive functions, and not of judicial or quasi-judicial functions, certiorari will not lie.
Petitioner sought reconsideration but this was denied by the CA.

ISSUES:

1. Whether or not the CA correctly ruled that the respondent mayor was performing neither a judicial nor
quasi-judicial function when he ordered the closure and demolition of Boracay West Cove’s hotel

2. Whether or not respondent mayor committed grave abuse of discretion when he issued EO 10

3. Whether or not the DENR has primary jurisdiction over the controversy, not the LGU.

RULING:

1. Whether or not the CA correctly ruled that the respondent mayor was performing neither a judicial nor
quasi-judicial function when he ordered the closure and demolition of Boracay West Cove’s hotel;

judicial function where he has the power to determine what the law is and what legal rights of the
parties are, and then undertakes to determine these questions and adjudicate upon the rights of the
parties, whereas

quasi-judicial function is "a term which applies to the actions, discretion, etc., of public administrative
officers or bodies required to investigate facts or ascertain the existence of facts, hold hearings, and draw
conclusions from themas a basis for their official action and to exercise discretion of a judicial nature."

In the case at bench, the assailed EO 10 was issued upon the respondent mayor’s finding that Boracay
West Cove’s construction, expansion, and operation of its hotel in Malay, Aklan is illegal. Such a finding
of illegality required the respondent mayor’s exercise of quasi-judicial functions, against which
the special writ of certiorari may lie.

With the foregoing discussion, the CA erred in ruling that the respondent mayor was
merely exercising his executive functions, for clearly, the first requisite for the special writ has
been satisfied.

2. Whether or not respondent mayor committed grave abuse of discretion when he issued EO 10

b. Respondent mayor has the power to order the demolition of illegal constructions

Generally, LGUs have no power to declare a particular thing as a nuisance unless such a thing is a
nuisance per se.   However, despite the hotel’s classification as a nuisance per accidens, the SC finds in
16

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 fulfil the objectives of the government.

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.

Petitioner cannot justify his position by passing the blame onto the respondent mayor and the
latter’s failure to act on his appeal for this does not, in any way, imply that petitioner can proceed
with his infrastructure projects. The illegality of the construction cannot be cured by merely tendering
payment for the necessary fees and permits since the LGU’s refusal rests on valid grounds.

Instead of taking the law into his own hands, petitioner could have filed, a petition for mandamus to
compel the respondent mayor to exercise discretion and resolve the controversy pending before
his office.

This twin violation of law and ordinance warranted the LGU’s invocation of Sec. 444 (b)(3)(vi) of
the LGC, which power is separate and distinct from the power to summarily abate nuisances per
se. 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.

ii. Observance of procedural due process rights

In the case at bench, the due process requirement is deemed to have been sufficiently complied
with. Verily, the only grounds invoked by petitioner in crying due process violation are:
(1) the absence of a court order prior to demolition and
(2) that the DENR has jurisdiction over the controversy and not the municipal government
The hotel was demolished because it failed to comply with the legal requirements prior to
construction. It just so happened that, in the case at bar, the hotel’s incident that qualified it as a
nuisance per accidens––its being constructed within the no build zone––further resulted in the non-
issuance of the necessary permits and clearances, which is a ground for demolition under the LGC.
Under the premises, a court order that is required under normal circumstances is hereby dispensed
with.

3. The DENR DOES NOT have primary jurisdiction over the controversy

Petitioner argued that the hotel site is a forestland under the primary jurisdiction of the DENR. As such,
the merits of the case should have been passed upon by the agency and not by the LGU. In the
alternative, petitioner explains that even if jurisdiction over the matter has been devolved in favor of the
LGU, the DENR still has the power of review and supervision over the former’s rulings.

We disagree.

The case DOES NOT concern the development and the proper use of the country’s environment
and natural resources, BUT the principal issue, which is Boracay West Cove's non-compliance
with the permit, clearance, and zoning requirements for building constructions under national and
municipal laws.

Based on law and jurisprudence, the office of the mayor has quasijudicial powers to order the closing and
demolition of establishments.  This power granted by the LGC is not the same power devolved in favor of
1âwphi1

the LGU which is subject to review by the DENR.

What is involved here 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.

WHEREFORE, in view of the foregoing, the petition is hereby DENIED for lack of merit. The Decision and
the Resolution of the Court of Appeals in CA-G.R. SP No. 120042 dated August 13, 2013 and February 3,
2014, respectively, are hereby AFFIRMED.
2. EXHAUSTION OF ADMINISTRATIVE REMEDIES

SUNVILLE TIMBER PRODUCTS, INC. vs. ABAD

FACTS:

The petitioner was granted a Timber License Agreement (TLA), within the concession area
covering 29,500 hectares of forest land in Zamboanga del Sur, for a period of ten years expiring on
September 31, 1992.
Private respondents filed a petition with the DENR for the cancellation of the TLA on the
ground of serious violations of its conditions and the provisions of forestry laws and regulations.
The same charges were subsequently made in a complaint for injunction with damages
against the petitioner in the Regional Trial Court of Pagadian City.
The petitioner moved to dismiss this case on three grounds, to wit:
1) the court had no jurisdiction over the complaint;
2) the plaintiffs had not yet exhausted administrative remedies; and
3) the injunction sought was expressly prohibited by section 1 of PD 605.

Judge Abad denied the motion to dismiss and the motion for reconsideration. 

The petitioner then elevated the matter to the respondent Court of Appeals, which sustained the trial
court and denied the motion for reconsideration. 

The Court of Appeals held that the doctrine of exhaustion of administrative remedies was not
without exception and pointed to the several instances approved by this Court where it could be
dispensed with. The respondent court found that in the case before it, the applicable exception was the
urgent need for judicial intervention, which it explained thus:

The respondent court cited in support of this conclusion the case of De Lara v.  Cloribel,   where5

"irreparable damage and injury" was allowed as an exceptional ground, and Arrow Transportation
Corporation v.  Board of Transportation,   where the doctrine was waived because of "the strong public
6

interest in having the matter settled" as soon as possible.

The decision also declared invalid Section 1 of PD 605, which provides:

Sec. 1. No court of the Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction or preliminary mandatory injunction in any case involving or
growing out of the issuance, approval or disapproval, revocation or suspension of, or any
action whatsoever by the proper administrative official or body on concessions, licenses,
permits, patents, or public grants of any kind in connection with the disposition,
exploitation, utilization, exploration and/or development of the natural resources of the
Philippines.
This was held to be an encroachment on the judicial power vested in the Supreme Court and the lower
courts by Article VIII, Section 1, of the Constitution. The respondent court cited Export Processing Zone
Authority v.  Dulay,   where several presidential decrees were declared unconstitutional for divesting the
7

courts of the judicial power to determine just compensation in expropriation cases.

The petitioner is now before the Court, contending that the doctrine of exhaustion of
administrative remedies was not correctly applied and that the declaration of the
unconstitutionality of Section 1 of PD 605 was improper.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate
administrative authorities in the resolution of a controversy falling under their jurisdiction before
the same may be elevated to the courts of justice for review. Non-observance of the doctrine results
in lack of a cause of action, which is one of the grounds allowed in the Rules of Court for the dismissal of
the complaint.

The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection as a ground
for a motion to dismiss and the court may then proceed with the case as if the doctrine had been
observed.

One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the
Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively)
within the competence of the other departments.

The theory is that the administrative authorities are in a better position to resolve questions
addressed to their particular expertise and that errors committed by subordinates in their
resolution may be rectified by their superiors if given a chance to do so.

A no less important consideration is that administrative decisions are usually questioned in the special
civil actions of certiorari, prohibition and  mandamus, which are allowed only when there is no other plain,
speedy and adequate remedy available to the petitioner. It may be added that strict enforcement of the
rule could also relieve the courts of a considerable number of avoidable cases which otherwise would
burden their heavily loaded dockets.  9

As correctly suggested by the respondent court, however, there are a number of instances when the
doctrine may be dispensed with and judicial action validly resorted to immediately. Among these
exceptional cases are:
1) when the question raised is purely legal; 
2) when the administrative body is in estoppel; 
3) when the act complained of is patently illegal; 
4) when there is urgent need for judicial intervention; 
5) when the claim involved is small;
6) when irreparable damage will be suffered; 
7) when there is no other plain, speedy and adequate remedy; 
8) when strong public interest is involved; 
9) when the subject of the controversy is private land; 
10) in quo warranto proceedings.  19

The private respondents now submit that their complaint comes under the exceptions because
forestry laws do not require observance of the doctrine as a condition precedent to judicial action; the
question they are raising is purely legal; application of the doctrine will cause great and irreparable
damage; and public interest is involved.

ISSUE:
Whether or not the present case falls under the exception to the doctrine of exhaustion of administrative
remedies

RULING:

Even if it be assumed that the forestry laws do not expressly require prior resort to administrative
remedies, the reasons for the doctrine (exhaustion of remedies) would suffice to still require its
observance.

Even if such reasons were disregarded, there would still be the explicit language of pertinent laws
vesting in the DENR the power and function "to regulate the development, disposition, extraction,
exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the
"management and disposition of all lands of the public domain,"   and in the Forest Management
20

Bureau (formerly the Bureau of Forest Development) the responsibility for the enforcement of the forestry
laws aid regulations   here claimed to have been violated. This comprehensive conferment
21

clearly  implies  at the very least that the DENR should be allowed to rule in the first instance on
any controversy coming under its express powers before the courts of justice may intervene.

The charge involves factual issues calling for the presentation of supporting evidence. Such
evidence is best evaluated first by the administrative authorities, employing their specialized
knowledge of the agreement and the rules allegedly violated, before the courts may step in to
exercise their powers of review.

As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the
national interest, the record does not show that the petitioners have satisfactorily established these
extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative
remedies and immediate resort to the courts of justice. In fact, this particular submission must fall flat
against the petitioner's uncontested contention that it has since 1988 stopped its operations under the
TLA in compliance with the order of the DENR.

In the memorandum filed by the petitioner with this Court, it is informed that "the Secretary of the DENR
suspended petitioner's logging operations until further investigation. The suspension is still in force up to
this date after the lapse of almost 3 years." 
24

These statements have not been disputed by the private respondents in their pleadings before the
respondent court and this Court and are therefore deemed admitted.

There in no question that Civil Case No. 2732 comes within the jurisdiction of the respondent court.
Nevertheless, as the wrong alleged in the complaint was supposedly committed as a result of the unlawful
logging activities of the petitioner, it will be necessary first to determine whether or not the TLA and the
forestry laws and regulations had indeed been violated. To repeat for emphasis, determination of this
question is the primary responsibility of the Forest Management Bureau of the DENR. The application of
the expertise of the administrative agency in the resolution of the issue raised is a condition precedent for
the eventual examination, if still necessary, of the same question by a court of justice.
WHEREFORE, the petition is GRANTED. The decision of the respondent court dated July 4, 1988, and
its resolution dated September 27, 1988, as well as the resolutions of the trial court dated December 11,
1987 and February 15, 1988, are all REVERSED and SET ASIDE. Civil Case No. 2732 in the Regional
Trial Court of Pagadian City is hereby DISMISSED.

PAAT vs. COURT OF APPEALS

FACTS:
The truck of respondent, de Guzman was seized by the DENR personnel in Aritao, Nueva
Vizcaya because the driver could not produce the required documents for the forest products in
the truck.

Petitioner Jovito Layugan, the CENRO in Aritao, Cagayan, issued an order of confiscation of
the truck and gave the owner thereof fifteen (15) days within which to submit an
explanation why the truck should not be forfeited.

Private respondents failed to submit the required explanation.

Regional Executive Director Rogelio Baggayan of DENR sustained petitioner Layugan's

action of confiscation and ordered the forfeiture of the truck

Private respondents filed a letter of reconsideration which was DENIED.

Subsequently, the case was brought by the petitioners to the Secretary of DENR pursuant to
private respondents' statement in their letter that in case their letter for reconsideration would be
denied then "this letter should be considered as an appeal to the Secretary."

Pending resolution of the appeal, a suit for replevin was filed by the private respondents
against petitioners with the Regional Trial Court , which issued a writ ordering the return of the
truck to private respondents.

Petitioners filed a motion to dismiss contending that private respondents had no cause of
action for their failure to exhaust administrative remedies.

The trial court DENIED the motion to dismiss. Their motion for reconsideration was
likewise DENIED.

A petition for certiorari was filed with the Court of Appeals which sustained the trial court's
order ruling that the question involved is purely a legal question.

Hence, this present petition, with prayer for temporary restraining order and/or preliminary
injunction, seeking to reverse the decision of the respondent Court of Appeals was filed by the
petitioners on September 9, 1993. By virtue of the Resolution dated September 27, 1993,  the 10

prayer for the issuance of temporary restraining order of petitioners was granted by this Court.

ISSUE

1. Whether or not an action for replevin to recover a movable property can prosper, notwithstanding the
pending administrative forfeiture proceeding in the DENR without violating the principle of exhaustion
of administrative remedies.
2. Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?

RULING:

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial court
could not legally entertain the suit for replevin because the truck was under administrative seizure
proceedings pursuant to Section 68-A of P.D. 705, as amended by E.O. 277.

Private respondents, on the other hand, would seek to avoid the operation of this principle asserting that
the instant case falls within the exception of the doctrine upon the justification that:

(1) due process was violated because they were not given the chance to be heard, and

(2) the seizure and forfeiture was unlawful on the grounds:

(a) that the Secretary of DENR and his representatives have no authority to confiscate
and forfeit conveyances utilized in transporting illegal forest products, and
(b) that the truck as admitted by petitioners was not used in the commission of the crime.

The court ruled in favor of the petitioners.

Before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have
availed of all the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such
remedy should be exhausted first before court's judicial power can be sought.
The premature invocation of court's intervention is fatal to one's cause of action. Accordingly, absent any
finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action.
This doctrine of exhaustion of administrative remedies was not without its practical and legal reasons, for
one thing, availment of administrative remedy entails lesser expenses and provides for a speedier
disposition of controversies.
It is no less true to state that the courts of justice for reasons of comity and convenience will shy away
from a dispute until the system of administrative redress has been completed and complied with so as to
give the administrative agency concerned every opportunity to correct its error and to dispose of
the case.

However, we are not amiss to reiterate that the principle of exhaustion of administrative remedies as
tested by a battery of cases is not an ironclad rule. Hence, the exceptions:
(1) when there is a violation of due process
(2) when the issue involved is purely a legal question
(3) when the administrative action is patently illegal amounting to lack or excess of
jurisdiction
(4) when there is estoppel on the part of the administrative agency concerned
(5) when there is irreparable injury
(6) when the respondent is a department secretary whose acts as an alter ego of the
President bears the implied and assumed approval of the latter
 (7) when to require exhaustion of administrative remedies would be unreasonable
(8) when it would amount to a nullification of a claim
(9) when the subject matter is a private land in land case proceedings
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention

It is important to point out that the enforcement of forestry laws, rules and regulations and
the protection, development and management of forest lands fall within the primary and special
responsibilities of the Department of Environment and Natural Resources.
The assumption by the trial court of the replevin suit constitutes an unjustified encroachment
into the domain of the administrative agency's prerogative. The doctrine of primary jurisdiction does
not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which
is initially lodged with an administrative body of special competence.

Defense of Respondents and Ruling (Exception to the Principle of Exhaustion of Administrative

Remedies)

1. DUE PROCESS OF LAW

First, they argued that there was violation of due process because they did not receive the order
of confiscation of petitioner Layugan.
Due process does not necessarily mean or require a hearing, but simply an opportunity or
right to be heard. One may be heard, not solely by verbal presentation but also, and perhaps many
times more creditably and practicable than oral argument, through pleadings.

In administrative proceedings moreover, technical rules of procedure and evidence are not strictly
applied; administrative process cannot be fully equated with due process in its strict judicial
sense.  Indeed, deprivation of due process cannot be successfully invoked where a party was
30

given the chance to be heard on his motion for reconsideration.

2. ADMINISTRATIVE ACTION IS PATENTLY ILLEGAL

Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck because
the administrative officers of the DENR allegedly have no power to perform these acts under the law.
They insisted that only the court is authorized to confiscate and forfeit conveyances used in transporting
illegal forest products as can be gleaned from the second paragraph of Section 68 of P.D. 705, as
amended by E.O. 277. The pertinent provision reads as follows:
Sec. 68. The court shall further order the confiscation in favor of the government of
the timber or any forest products  cut, gathered, collected, removed, or possessed, as well as
the machinery, equipments, implements and tools illegaly [sic] used in the area where the
timber or forest products are found.

Private respondents' interpretation of the subject provision unduly restricts the clear intention of the law
and inevitably reduces the other provision of Section 68-A, which is quoted herein below:

Sec. 68-A. Administrative Authority of the Department or His Duly Authorized Representative
To Order Confiscation. In all cases of violation of this Code or other forest laws, rules and
regulations, the Department Head or his duly authorized representative, may order the
confiscation of any forest products illegally cut, gathered, removed, or possessed or
abandoned, and all conveyances used either by land, water or air in the commission of
 the offense and to dispose of the same in accordance with pertinent laws, regulations
and policies on the matter.

Thus it is clear from that the Secretary and his duly authorized representatives are given the authority to
confiscate and forfeit any conveyances utilized in violating the Code or other forest laws, rules and
regulations.

The phrase "to dispose of the same" is broad enough to cover the act of forfeiting conveyances in favor of
the government. The only limitation is that it should be made "in accordance with pertinent laws,
regulations or policies on the matter."

It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate,
not only "conveyances," but forest products as well. On the other hand, confiscation of forest
products by the "court" in a criminal action has long been provided for in Section 68. If as private
respondents insist, the power on confiscation cannot be exercised except only through the court under
Section 68, then Section 68-A would have no Purpose at all. Simply put, Section 68-A would not have
provided any solution to the problem perceived in EO 277.

Private respondents, likewise, contend that the seizure was illegal because the petitioners themselves
admitted in the Order of Executive Director Baggayan that the truck of private respondents was not used
in the commission of the crime.

We observed that private respondents misread the content of the aforestated order and obviously
misinterpreted the intention of petitioners. What is contemplated by the petitioners when they stated that
the truck "was not used in the commission of the crime" is that it was not used in the commission of the
crime of theft, hence, in no case can a criminal action be filed against the owner thereof for violation of
Article 309 and 310 of the Revised Penal Code.

Petitioners did not eliminate the possibility that the truck was being used in the commission of another
crime, that is, the breach of Section 68 of P.D. 705 as amended by E.O. 277.

Private respondents, however, contended that there is no crime defined and punishable under Section 68
other than qualified theft, so that, when petitioners admitted in the order that private respondents could
not be charged for theft as provided for under Articles 309 and 310 of the Revised Penal Code, then
necessarily private respondents could not have committed an act constituting a crime under Section 68.

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the
petitioners for the subject truck taken and retained by them for administrative forfeiture
proceedings in pursuant to Section 68-A of the P.D. 705, as amended.

Dismissal of the replevin suit for lack of cause of action in view of the private respondents' failure to
exhaust administrative remedies should have been the proper course of action by the lower court instead
of assuming jurisdiction over the case and consequently issuing the writ ordering the return of the truck.

Exhaustion of the remedies in the administrative forum, being a condition precedent prior to one's
recourse to the courts and more importantly, being an element of private respondents' right of action, is
too significant to be waylaid by the lower court.

It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the defendant
wrongfully withholds the property sought to be recovered.

Under the Rules of Court, it is indispensable in replevin proceeding that the plaintiff must show by his own
affidavit that he is entitled to the possession of property, that the property is wrongfully detained by the
defendant, alleging the cause of detention, that the same has not been taken for tax assessment, or
seized under execution, or attachment, or if so seized, that it is exempt from such seizure, and the actual
value of the property.  Private respondents miserably failed to convince this Court that a wrongful
42

detention of the subject truck obtains in the instant case.

It should be noted that the truck was seized by the petitioners because it was transporting forest products
without the required permit of the DENR in manifest contravention of Section 68 of P.D. 705 as amended
by E.O 277. Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as
the disposition by the Secretary of DENR or his duly authorized representatives of the conveyances used
in violating the provision of forestry laws. Evidently, the continued possession or detention of the
truck by the petitioners for administrative forfeiture proceeding is legally permissible, hence, no
wrongful detention exists in the case at bar.

Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation
and forfeiture issued by the DENR in pursuance to the authority given under P.D. 705, as amended.
Section 8 of the said law is explicit that actions taken by the Director of the Bureau of Forest Development
concerning the enforcement of the provisions of the said law are subject to review by the Secretary of
DENR and that courts may not review the decisions of the Secretary except through a special civil action
for certiorari or prohibition. It reads:

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals
are hereby SET ASIDE AND REVERSED; and the Secretary of DENR is directed to resolve the
controversy with utmost dispatch.
 IPEKDJIAN MERCHANDISING CO., INC. vs. COURT OF TAX APPEALS and COMMISSIONER OF
INTERNAL REVENUE

FACTS:

Respondent CIR assessed and demanded from Ipekdjian Merchandising the amount of P97,502.25, as
compensating tax and surcharge on gold chains imported by it which were later melted and converted into
gold bullion and sold as such, plus the amount of P200.00 as compromise penalty, for violation of Sec.
190 of the Tax Code.

Petitioner appealed from the Commissioner's decision to the Board of Tax Appeals, which after
hearing on the merits, rendered judgment affirming the Commissioner judgment (B.T.A. case No. 10).

Petitioner appealed, but this Court DISMISSED the appeal. The dismissal having become final and
executory

Petitioner sought to reinstate its appeal in this Court but it was DENIED.

Petitioner sought to reopen the case in the CTA by filing a "petition for review” which was
DISMISSED for lack of jurisdiction, petitioner having failed to maintain the necessary action in the
Court of First Instance of Manila in accordance with Section 306, Tax Code, or with the Court of Tax
Appeals within 30 days from its creation (on June 16, 1954) pursuant to Section 11, R.A. 1125.
Petitioner's motion for reconsideration of the dismissal was denied. .

On November 3, 1955 petitioner made a partial payment of P5,000.00 on its tax liability, but later on
filed a claim for refund of the same, and requesting the cancellation of the balance of the assessment.
This was denied by the Commissioner on the ground that the decision of the Board of Tax Appeals was
already final and executory.

Petitioner filed a Petition for review in the Court of Tax Appeals (C.T.A. Case No. 374) of the
decision of respondent Commissioner denying its request for refund and cancellation of the balance of the
assessment.

Respondent Commissioner filed his answer to the petition, raising therein as affirmative defense the fact
that the decision in B.T.A. Case NO. 10 operates as res judicata to petitioner's appeal.

Respondent Commissioner filed a motion for execution of judgment in B.T.A. Case No. 10, which was
GRANTED by respondent court

Petitioner filed with this Court a petition for certiorari praying for annulment of the order of execution
of the judgment in B.T.A. case No. 10.
On December 29, 1958 respondent Court dismissed C.T.A. Case No. 374 on the ground of res
judicata. Respondent court having refunded to reconsider the dismissal, petitioner now seeks review
thereof.

The petition for certiorari in  Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, L-14791, was
disclosed by this Court on May 30, 1963.

ISSUE:

whether or not the decision of the Board of Tax Appeals in B.T.A. Case No. 10 operates to bar
C.T.A. Case No. 374.

RULING:

All the requisites for the defense of res judicata being present, respondent court properly
dismissed the petition in C.T.A. Case No. 374.

Appellant argues that the doctrine of res judicata, being a doctrine of expediency, is applicable only to
judgments rendered by a court or judge and does not extend to decisions of administrative agencies, like
the Board of Tax Appeals, which are devoid of judicial functions.

The essential requisites for the existence of res judicata are:

(1) the former judgment must be final;

(2) it must have been rendered by a court having jurisdiction of the subject matter and the parties;
(3) it must be a judgment on the merits; and
(4) there must be, between the first and second actions:
(a) identity of parties
(b) identity of subject matter and
(c) identity of cause of action

Since the Board of Tax Appeals was certainly not a court, the pertinent question is whether the
same had been granted judicial powers.

In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, supra, wherein we refused to annul
respondent court's resolution granting execution of judgment in B.T.A. Case No. 10, we ruled:.

"It is true that in the case of U.S.T. v. BTA,  (supra) an administrative body and it was held that the
BTA was an administrative body and its proceedings and decisions were administrative in
Character. But the petitioner did not take into consideration the fact that subsequently on June
16, 1954, all cases heretofore decided by the said Board of Tax Appeals and thence appealed to
the Supreme Court, pursuant to Executive Order Number Four Hundred One-A, shall be decided
by the Supreme Court on the merits to all intents and purposes as if said Executive Order had
been duly enacted by Congress' and 'that all cases now pending in said Board of Tax Appeals,
shall be transferred to the Court of Appeals and shall be heard and decided by the latter to all
intents and purposes as they had been originally filed therein' (section 21, supra). 
 We can thus see, that Rep. Act No. 1125 had conferred judicial character on the proceedings and
decisions of the BTA. It, therefore, results that the decisions of the BTA, in cases not
subsequently brought before the Court of First Instance, in accordance with the decision in the
case of U.S.T. v. BTA (supra), or before the CTA, under the provisions of Rep. Act No. 1125,
within the 30-day period prescribed in section 11 thereof, counted from the creation or
organization of the CTA (Lim Tio, et al. v. CTA, et al., G.R. No. L-10681, March 29, 1958; Sta.
Clara Lumber Co v. CTA, G.R. No. L-9833, Dee. 21, 1957), received judicial confirmation under
said R.A. No. 1125 and the same should be considered final and executory and enforceable by
execution, just like any other decision of a court of justice. (Emphasis supplied).
1awphîl.nèt

Thus, under the above pronouncement, while the decisions of the B.T.A. were administrative in
character, those that were not brought before the Court of First Instance. following U.S.T. v.
B.T.A. supra, or before the Court of Tax Appeals, pursuant to Section 11, R.A. No. 1125, were
considered as having been judicially confirmed by virtue of R.A. No. 1125. The decisions covered by
the pronouncement assumed the character of decisions of regular courts. Consequently, appellant's
principal argument falls.

It next maintains that the cause of action in B.T.A. Case No. 10 is different from that in C.T.A. Case No.
374.

From appellant's petition in B.T.A. Case No. 10 and the decision of the Board it may be gathered that
what appellant sought therein was the review of the decision of the Collector of Internal Revenue holding
it liable for P97,502.25 as compensating tax, etc., with the purpose in mind of having the same reversed.
In its petition for review in C.T.A. Case No. 374, after alleging the same facts embodied in the B.T.A.
decision, with the addition of the circumstance of payment, it prayed that it be held not subject to the
aforementioned compensating tax that the Collector be made to refund the P5,000.00 it had paid; and
that the respondent Collector's demand or assessment for the balance of the compensating tax be
cancelled.

It is clear that the alleged cause of action in both cases is the same: appellant's claim to non-
liability for compensating taxes. The only appreciable difference is that while in the B.T.A. case is
assailed the Collector's decision assessing the sum of P97,502.25 as compensating tax, etc., and holding
him responsible therefore, in the C.T.A. case, he ostensibly tried a different tack, by assailing the
Collector's denial of the claim for refund and request for cancellation of the balance of the assessment.
Nonetheless, in both cases, the issue is the same: whether or not appellant is liable for the compensating
tax prescribed in Section 190 of the Tax Code. Appellant cannot, by merely superficially changing the
form of his action, plead the non-application of the rule of bar by prior judgment. 2

All the requisites for the defense of res judicata being present, respondent court properly
dismissed the petition in C.T.A. Case No. 374.

The resolution of the Court of Tax Appeals dismissing the petition is hereby affirmed, with costs against
herein petitioner.