ARATUC V. COMELEC
The provisional increase is akin
Facts:
Tomatic Aratuc et al. sought the suspension of the
canvass then being undertaken by respondent Board in Cotabato
city. A supervening panel headed by Commissioner of Elections,
Hon- Venancio S. Duque, had conducted of the complaints of the
petitioners therein of alleged irregularities in the election records in
the voting centers. Before hearing, the canvass was suspended.
After hearing the parties, the Court allowed resumption of the
canvass but issued guidelines to be followed but thereafter
modified. On July 11, 1978, respondent Board terminated its
canvass and declared the result of the voting. The petitioners
brought the resolution of respondent Board to the Comelec.
Hearing was held on April 25, 1978, after which , the case was
declared submitted for decision. In order to enable the Commission
to decide the appeal properly : a. It will have to go deeper into the
examination of the voting records and registration records and in
the case of voting centers whose voting and registration records
which have not yet been submitted for the Commission to decide to
open the ballot boxes; and b. To interview and get statements under
oath of impartial and disinterested persons from the area to
determine whether actual voting took place on April 7, 1978, as
well as those of the military authorities in the areas affected. On
January 13, 1979, the Comelec rendered its resolution being
assailed in these cases, declaring the final result of the canvass.
Issue: WON there is grave abuse of discretion amounting to lack of
jurisdiction on the part of COMELEC.
Held:
Under Section 168 of the Revised Election Code of 1978,
"the Commission (on Elections) shall have direct control and
supervision over the board of canvassers" and that relatedly,
Section 175 of the same Code provides that it "shall be the sole
judge of all pre-proclamation controversies." The fact of the matter
is that the authority of the Commission in reviewing actuations of
board of canvassers does not spring from any appellate jurisdiction
conferred by any specific provision of law, for there is none such
provision anywhere in the Election Code, but from the plenary
prerogative of direct control and supervision endowed to it by the
above-quoted provisions of Section 168. And in administrative law,
it is a too well settled postulate to need any supporting citation
here, that a superior body or office having supervision and control
over another may do directly what the latter is supposed to do or
ought to have done. We cannot fault respondent Comelec for its
having extended its inquiry beyond that undertaken by the Board of
Canvass On the contrary, it must be stated that Comelec correctly
and commendably asserted its statutory authority born of its
envisaged constitutional duties vis-a-vis the preservation of the
purity of elections and electoral processes and in doing what
petitioner it should not have done.
MACEDA vs ENERGY REGULATORY BOARD
Facts:
Upon the outbreak of the Persiqn Gulf conflict on August
1990, private respondents oil companies filed with the ERB their
respective applications on oil price increase. ERB then issued an
order granting a provisional increase of 1.42 php per liter.
Petitioner Maceda filed a petition for prohibition seeking to nullify
said increase.
Issue: Whether or not the order of the Energy Regulatory Board
is valid.
Held:
Yes. Pursuant to Section 8 of E.O. No. 172, while
hearing is indispensable, it does not preclude the Board from
ordering a provisional increase subject to final disposition of
whether or not to make it permanent or to reduce or increase it
further or to deny the application.
to a temporary restraining order, which are given ex-parte. The
Court further noted the Solicitor General’s comments that “the
ERB is not averse to the idea of a presidential review of its
decision,” except that there is no law at present authorizing the
same. The Court suggested that it will be under the scope of the
legislative to allow the presidential review of the decisions of the
ERB since, despite its being a quasi-judicial body, it is still “an
administrative body under the Office of the President whose
decisions should be appealed to the President under the established
principle of exhaustion of administrative remedies,” especially on a
matter as transcendental as oil price increases which affect the lives
of almost all Filipinos.
United Residents of Domician Hills vs Commission on Settlement
of Land Problems
FACTS:
The property is a 10.36 hectare property in Baguio City
called Dominican Hills. It was mortgaged to the UCPB which
foreclosed the mortgage, acquired the same as highest bidder, and
was donated to the Republic of the Philippines by UCPB. The deed
of donation stipulated that the property would be utilized for the
"priority programs, projects, activities in human settlements and
economic development and governmental purposes" of the
Ministry of Human Settlements
However, the Ministry of Human Settlements was
abolished when President Corazon Aquino issued EO No. 85. All
the agencies as well as all the assets, programs and projects of the
Ministry were transferred to the Presidential Management Staff
(PMS)
PMS received an application from petitioner UNITED
RESIDENTS OF DOMINICAN HILL, INC. (UNITED) to acquire
a portion of the Dominican Hills property. PMS Secretary referred
the application to the HOME INSURANCE GUARANTY
CORPORATION (HIGC). A MOA was signed by and among the
PMS, the HIGC, and UNITED where PMS would sell the property
to HIGC which would, in turn, sell the same to UNITED.
Eventually, HIGC sold the property to UNITED
Sometime in 1993, private respondents, DOMINICAN
HILL BAGUIO RESIDENTS HOMELESS ASSOCIATION
(ASSOCIATION), entered the Dominican Hills property allocated
to UNITED and constructed houses. Petitioner secured a
demolition order.
Private respondents filed an action for injunction
docketed as Civil Case No. 3316-R but their prayer for writ of
preliminary injunction was later denied. While Civil Case No.
3316-R was pending, private respondents filed Civil Case No.
3382-R represented by the Land Reform Beneficiaries Association,
Inc. (BENEFICIARIES). They prayed for the damages, injunction
and annulment of the said Memorandum of Agreement between
UNITED and HIGC which was dismissed by the trial court.
Another demolition order was subsequently
implemented. To forestall the re-implementation of the demolition
order, private respondents filed petition for annulment of contracts
with prayer for a temporary restraining order in the Commission on
the Settlement of Land Problems (COSLAP) against petitioner
HIGC, PMS, the City Engineer's Office, the City Mayor, as well as
the Register of Deeds of Baguio City. Public respondent COSLAP
issued the contested order requiring the parties to maintain the
status quo.
ISSUE:
 Is COSLAP empowered to hear and try a petition for
annulment of contracts with prayer for a temporary restraining
order and to issue a status quo order and conduct a hearing?
RULING:
No. The COSLAP is not justified in assuming
jurisdiction over the controversy
Section 3(2) of Executive Order 561 states that:
…The resolution, order or decision of the Commission on any of
the foregoing cases shall have the force and effect of a regular
administrative resolution, order or decision and shall be binding
upon the parties therein and upon the agency having jurisdiction
over the same
The COSLAP may not assume jurisdiction over cases
which are already pending in the regular courts. Section 3(2) of
Executive Order 561 speaks of any resolution, order or decision of
the COSLAP as having the "force and effect of a regular
administrative resolution, order or decision." The qualification
places an unmistakable emphasis on the administrative character of
the COSLAP's determination, amplified by the statement that such
resolutions, orders or decisions "shall be binding upon the parties
therein and upon the agency having jurisdiction over the same."
The COSLAP discharges quasi-judicial functions:
"Quasi-judicial function" is a term which applies to the actions,
discretion, etc. of public administrative officers or bodies, who are
required to investigate facts, or ascertain the existence of facts,
hold hearings, and draw conclusions from them, as a basis for their
official action and to exercise discretion of a judicial nature."
However, it does not depart from its basic nature as an
administrative agency, albeit one that exercises quasi-judicial
functions. Still, administrative agencies are not considered courts;
they are neither part of the judicial system nor are they deemed
judicial tribunals. Accordingly, the executive department may not,
by its own fiat, impose the judgment of one of its own agencies,
upon the judiciary. Indeed, under the expanded jurisdiction of the
Supreme Court, it is empowered "to determine whether or not there
has been grave abuse of discretion amounting to lack of or excess
of jurisdiction on the part of any branch or instrumentality of the
Government.
ANAK MINDANAO PARTY-LIST GROUP v. EXECUTIVE
SECRETARY, GR NO. 166052, 2007-08-29
Facts
• Petitioners Anak Mindanao Party-List Group (AMIN)
and Mamalo Descendants Organization, Inc. (MDOI) assail the
constitutionality of Executive Order (E.O.) Nos. 364 and 379, both
issued in 2004, via the present Petition for Certiorari and
Prohibition with prayer for injunctive relief.
• EO. 364, as amended by EO. 379, among other things,
orders that the Presidential Commission for the Urban Poor
(PCUP) placed under the supervision and control of the
Department of Land Reform, and the National Commission on
Indigenous Peoples (NCIP) shall be an attached agency of the
Department of Land Reform.
• Why is this important?
o For AMIN: It alleges that by issuing Eos 364 and 379,
the Executive has impaired the powers of Congress. AMIN
contends that since the DAR, PCUP and NCIP were created by
statutes, they can only be transformed, merged or attached by
statutes, not by mere executive orders.
o For MDOI: It alleges that it is concerned with the
negative impact of NCIP becoming an attached agency of the DAR
on the processing of ancestral domain claims.
• On the issue of Locus Standi
o AMIN: YES. As a member of Congress, it has the
standing to maintain the prerogatives, powers, and privileges
vested by the constitution in his office
o MDOI: NO. No direct interest shown; Raises no issue of
transcendental importance; Too abstract to be considered judicially
cognizable
Issue: WON the placing of the Presidential Commission for the
Urban Poor (PCUP) under the supervision and control of the DAR,
and the National Commission on Indigenous Peoples (NCIP) under
the DAR as an attached agency is within the ambit of Executive
powers.
HELD: YES
• The Constitution confers, by express provision, the
power of control over executive departments, bureaus and offices
in the President alone. And it lays down a limitation on the
legislative power.
• The Constitution’s express grant of the power of control
in the President justifies an executive action to carry out
reorganization measures under a broad authority of law.
• Administrative Code of 1987 Sec. 31: “The President,
subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have continuing authority
to reorganize the administrative structure of the Office of the
President”
o The consolidation of functions in E.O. 364 aims to attain
the objectives of simplicity, economy and efficiency as gathered
from the provision granting PCUP and NCIP access to the range of
services provided by the DARs technical offices and support
systems.
• In the present case, AMIN glaringly failed to show how
the reorganization by executive fiat would hamper the exercise of
citizens’ rights and privileges.
o A law is presumed constitutional unless proved otherwise
• On the issue of Sec 16 Art. 13 of the Constitution (The
right of the people and their organizations to effective and
reasonable participation at all levels of social, political, and
economic decision-making shall not be abridged. The State shall,
by law, facilitate the establishment of adequate consultation
mechanisms) being violated: the state merely facilitates this
participation, and not necessarily create these mechanisms. The
State provides the support, but eventually it is the people, properly
organized in their associations, who can assert the right and pursue
the objective.
Leyson v. Ombudsman
Facts:
The coconut industry investment fund (CIIF) companies
failed to comply with its contract agreement with the International
Towage and Transport Corporation (ITTC) for the transport of
coconut oil in bulk. ITTC Executive Vice President Manuel
Leyson, Jr. filed a complaint with the office of the ombudsman for
breach of contract, among others. The complaint was dismissed.
Issue:
WON the office of the ombudsman has jurisdiction to
further act on the complaint.
Held:
No. all three corporations comprising the CIIF companies
were organized as stock corporations. The UCPB_CIIF owns
44.10% of the shares of Legaspi Oil, 91.24% of the shares of
GranExport, and 92.85% of the shares of United Coconut.
Obviously, the below 51% shares of stock in Legaspi Oil removes
it from the definition of a government-owned or controlled
corporation. There is no showing that GranExport and United
Coconut was vested with functions relating to public needs whether
governmental or proprietary in nature. Thus, the CIIF companies
are private corporations not within the scope of the Ombudsman’s
jurisdiction.
PEOPLE OF THE PHILIPPINES, Petitioner, v. THE
HONORABLE SANDIGANBAYAN
Does the Sandiganbayan have jurisdiction over presidents,
directors or trustees, or managers of government-owned or
controlled corporations organized and incorporated under the
Corporation Code for purposes of the provisions of RA 3019,
otherwise known as the Anti-Graft and Corrupt Practices Act? The
petitioner, represented by the Office of the Special Prosecutor
(OSP), takes the affirmative position in this Petition for Certiorari
under Rule 65 of the Rules of Court. Respondent Efren L. Alas
contends otherwise, together with the respondent court.
Pursuant to a resolution dated September 30, 1999 of the Office of
the Ombudsman, two separate informations1 for violation of
Section 3(e) of RA 3019, otherwise known as the Anti-Graft and
Corrupt Practices Act, were filed with the Sandiganbayan on
November 17, 1999 against Efren L. Alas. The charges emanated
from the alleged anomalous advertising contracts entered into by
Alas, in his capacity as President and Chief Operating Officer of
the Philippine Postal Savings Bank (PPSB), with Bagong Buhay
Publishing Company which purportedly caused damage and
prejudice to the government.
On October 30, 2002, Alas filed a motion to quash the informations
for lack of jurisdiction, which motion was vehemently opposed by
the prosecution. After considering the arguments of both parties,
the respondent court ruled that PPSB was a private corporation and
that its officers, particularly herein respondent Alas, did not fall
under Sandiganbayan jurisdiction. According to the
Sandiganbayan:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
After a careful consideration of the arguments of the accused-
movant as well as of that of the prosecution, we are of the
considered opinion that the instant motion of the accused is well
taken. Indeed, it is the basic thrust of Republic Act as well as (sic)
Presidential Decree No. 1606 as amended by President Decree No.
1486 and Republic Act No. 7975 and Republic Act No. 8249 that
the Sandiganbayan has jurisdiction only over public officers unless
private persons are charged with them in the commission of the
offenses.
The records disclosed that while Philippine Postal Savings Bank is
a subsidiary of the Philippine Postal Corporation which is a
government owned corporation, the same is not created by a
special law. It was organized and incorporated under the
Corporation Code which is Batas Pambansa Blg. 68. It was
registered with the Securities and Exchange Commission under
SEC No. AS094-005593 on June 22, 1994 with a lifetime of fifty
(50) years. Under its Articles of Incorporation the purpose for
which said entity is formed was primarily for business, xxx
Likewise, a scrutiny of the seven (7) secondary purposes of the
corporation points to the conclusion that it exists for business.
Obviously, it is not involved in the performance of a particular
function in the exercise of government power. Thus, its officers
and employees are not covered by the GSIS and are under the SSS
law, and actions for reinstatement and backwages are not within
the jurisdiction of the Civil Service Commission but by the
National Labor Relations Commission (NLRC).
The Supreme Court, in the case of Trade Unions of the Philippines
and Allied Services v. National Housing Corp., 173 SCRA 33, held
that the Civil Service now covers only government owned or
controlled corporations with original or legislative charters, those
created by an act of Congress or by special law, and not those
incorporated under and pursuant to a general legislation. The
Highest Court categorically ruled that the Civil Service does not
include government-owned or controlled corporation which are
organized as subsidiaries of government-owned or controlled
corporation under the general corporation law.
In Philippine National Oil Company - Energy Development
Corporation v. Leogardo, 175 SCRA 26, the Supreme Court
emphasized that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
The test in determining whether a government-owned or controlled
corporation is subject to the Civil Service Law is the manner of its
creation such that government corporation created by special
charter are subject to its provision while those incorporated under
the general corporation law are not within its coverage.
Likewise in Davao City Water District v. Civil Service
Commission, 201 SCRA 601 it was held that 'by government-
owned or controlled corporation with original charter we mean
government-owned or controlled corporation created by a special
law and not under the Corporation Code of the Philippines' while in
Llenes v. Dicdican, et al., 260 SCRA 207, a public officer has been
ruled, as a person whose duties involve the exercise of discretion in
the performance of the function of government.
Clearly, on the basis of the foregoing pronouncements of the
Supreme Court, the accused herein cannot be considered a public
officer. Thus, this Court may not exercise jurisdiction over his act.2
ςrνll
Dissatisfied, the People, through the Office of the Special
Prosecutor (OSP), filed this petition3 arguing, in essence, that the
PPSB was a government-owned or controlled corporation as the
term was defined under Section 2(13) of the Administrative Code
of 1987.4 Likewise, in further defining the jurisdiction of the
Sandiganbayan, RA 8249 did not make a distinction as to the
manner of creation of the government-owned or controlled
corporations for their officers to fall under its jurisdiction. Hence,
being President and Chief Operating Officer of the PPSB at the
time of commission of the crimes charged, respondent Alas came
under the jurisdiction of the Sandiganbayan.
Quoting at length from the assailed resolution dated February 15,
2001, respondent Alas, on the other hand, practically reiterated the
pronouncements made by the respondent court in support of his
conclusion that the PPSB was not created by special law, hence, its
officers did not fall within the jurisdiction of the Sandiganbayan.5
ςrνll
We find merit in the petition.
Section 2(13) of EO 2926 defines government-owned or controlled
corporations as follows:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Sec. 2. General Terms Defined - Unless the specific words of the
text or the context as a whole or a particular statute, shall require a
different meaning:
xxx
(13) government owned or controlled corporations refer to any
agency organized as a stock or non-stock corporation vested with
functions relating to public needs whether governmental or
proprietary in nature, and owned by the government directly or
indirectly or through its instrumentalities either wholly, or where
applicable as in the case of stock corporations to the extent of at
least 51% of its capital stock: provided, that government owned or
controlled corporations maybe further categorized by the
department of the budget, the civil service commission and the
commission on audit for the purpose of the exercise and discharge
of their respective powers, functions and responsibilities with
respect to such corporations.
From the foregoing, PPSB fits the bill as a government-owned or
controlled corporation, and organized and incorporated under the
Corporation Code as a subsidiary of the Philippine Postal
Corporation (PHILPOST). More than 99% of the authorized capital
stock of PPSB belongs to the government while the rest is
nominally held by its incorporators who are/were themselves
officers of PHILPOST. The creation of PPSB was expressly
sanctioned by Section 32 of RA 7354, otherwise known as the
Postal Service Act of 1992, for purposes of, among others, 'to
encourage and promote the virtue of thrift and the habit of savings
among the general public, especially the youth and the
marginalized sector in the countryside xxx and to facilitate postal
service by 'receiving collections and making payments, including
postal money orders.7 ςrνll
It is not disputed that the Sandiganbayan has jurisdiction over
presidents, directors or trustees, or managers of government-owned
or controlled corporations with original charters whenever charges
of graft and corruption are involved. However, a question arises
whether the Sandiganbayan has jurisdiction over the same officers
in government-owned or controlled corporations organized and
incorporated under the Corporation Code in view of the
delimitation provided for in Article IX-B Section 2(1) of the 1987
Constitution which states that:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
SEC. 2. (1) The Civil Service embraces all branches, subdivisions,
instrumentalities, and agencies of the government, including
government-owned or controlled corporations with original
charters.
It should be pointed out however, that the jurisdiction of the
Sandiganbayan is separate and distinct from the Civil Service
Commission. The same is governed by Article XI, Section 4 of the
1987 Constitution which provides that 'the present anti-graft court
known as the Sandiganbayan shall continue to function and
exercise its jurisdiction as now or hereafter may be provided by
law. This provision, in effect, retained the jurisdiction of the anti-
graft court as defined under Article XIII, Section 5 of the 1973
Constitution which mandated its creation, thus:ςηαñrοblεš νιr†υαl
lαω lιbrαrÿ
Sec. 5. The Batasang Pambansa shall create a special court, to be
known as Sandiganbayan, which shall have jurisdiction over
criminal and civil cases involving graft and corrupt practices and
such other offense committed by public officers and employees,
including those in government-owned or controlled corporations, in
relation to their office as may be determined by law. (Italics ours)
On March 30, 1995, Congress, pursuant to its authority vested
under the 1987 Constitution, enacted RA 79758 maintaining the
jurisdiction of the Sandiganbayan over presidents, directors or
trustees, or managers of government-owned or controlled
corporations without any distinction whatsoever. Thereafter, on
February 5, 1997, Congress enacted RA 82499 which preserved the
subject provision:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Section 4, Jurisdiction. The Sandiganbayan shall exercise exclusive
original jurisdiction in all cases involving:ςηαñrοblεš νιr†υαl lαω
lιbrαrÿ
A. Violations of Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act, Republic Act
No. 1379, and Chapter II, Section, Title VII, Book II of the
Revised Penal Code, where one or more of the accused are officials
occupying the following positions in the government, whether in a
permanent, acting or interim capacity, at the time of the
commission of the offense,
(1) Officials of the executive branch occupying the positions of
regional director, and higher, otherwise classified as grade '27 and
higher, of the Compensation and Position Classification Act of
1989 (Republic Act No. 6758) specifically including:
xxx
(g) Presidents, directors or trustees, or managers of government-
owned or controlled corporations, state universities or educational
institutions or foundations. (Italics ours)
The legislature, in mandating the inclusion of 'presidents, directors
or trustees, or managers of government-owned or controlled
corporations' within the jurisdiction of the Sandiganbayan, has
consistently refrained from making any distinction with respect to
the manner of their creation.
The deliberate omission, in our view, clearly reveals the intention
of the legislature to include the presidents, directors or trustees, or
managers of both types of corporations within the jurisdiction of
the Sandiganbayan whenever they are involved in graft and
corruption. Had it been otherwise, it could have simply made the
necessary distinction. But it did not.
It is a basic principle of statutory construction that when the law
does not distinguish, we should not distinguish. Ubi lex non
distinguit nec nos distinguere debemos. Corollarily, Article XI
Section 12 of the 1987 Constitution, on the jurisdiction of the
Ombudsman (the government's prosecutory arm against persons
charged with graft and corruption), includes officers and
employees of government-owned or controlled corporations,
likewise without any distinction.
In Quimpo v. Tanodbayan,10 this Court, already mindful of the
pertinent provisions of the 1987 Constitution, ruled that the
concerned officers of government-owned or controlled
corporations, whether created by special law or formed under the
Corporation Code, come under the jurisdiction of the
Sandiganbayan for purposes of the provisions of the Anti-Graft and
Corrupt Practices Act. Otherwise, as we emphasized therein, a
major policy of Government, which is to eradicate, or at the very
least minimize, the graft and corruption that has permeated the
fabric of the public service like a malignant social cancer, would be
seriously undermined. In fact, Section 1 of the Anti-Graft and
Corrupt Practices Act embodies this policy of the government, that
is, to repress certain acts not only of public officers but also of
private persons constituting graft or corrupt practices or which may
lead thereto.
The foregoing pronouncement has not outlived its usefulness. On
the contrary, it has become even more relevant today due to the
rampant cases of graft and corruption that erode the people's faith
in government. For indeed, a government-owned or controlled
corporation can conceivably create as many subsidiary
corporations under the Corporation Code as it might wish, use
public funds, disclaim public accountability and escape the
liabilities and responsibilities provided by law. By including the
concerned officers of government-owned or controlled
corporations organized and incorporated under the Corporation
Code within the jurisdiction of the Sandiganbayan, the legislature
evidently seeks to avoid just that.
WHEREFORE, in view of the foregoing, the petition is hereby
GRANTED and the assailed resolution dated February 15, 2001 of
the respondent court is hereby REVERSED and SET ASIDE.

Manila International Airport Authority vs CA
Facts:
Manila International Airport Authority (MIAA) is the
operator of the Ninoy International Airport located at Paranaque
City. The Officers of Paranaque City sent notices to MIAA due to
real estate tax delinquency. MIAA then settled some of the amount.
When MIAA failed to settle the entire amount, the officers of
Paranaque city threatened to levy and subject to auction the land
and buildings of MIAA, which they did. MIAA sought for a
Temporary Restraining Order from the CA but failed to do so
within the 60 days reglementary period, so the petition was
dismissed. MIAA then sought for the TRO with the Supreme Court
a day before the public auction, MIAA was granted with the TRO
but unfortunately the TRO was received by the Paranaque City
officers 3 hours after the public auction.
MIAA claims that although the charter provides that the title of the
land and building are with MIAA still the ownership is with the
Republic of the Philippines. MIAA also contends that it is an
instrumentality of the government and as such exempted from real
estate tax. That the land and buildings of MIAA are of public
dominion therefore cannot be subjected to levy and auction sale.
On the other hand, the officers of Paranaque City claim that MIAA
is a government owned and controlled corporation therefore not
exempted to real estate tax.
Issues:
Whether or not MIAA is an instrumentality of the
government and not a government owned and controlled
corporation and as such exempted from tax.
Whether or not the land and buildings of MIAA are part
of the public dominion and thus cannot be the subject of levy and
auction sale.
Ruling:
Under the Local government code, government owned
and controlled corporations are not exempted from real estate tax.
MIAA is not a government owned and controlled corporation, for
to become one MIAA should either be a stock or non stock
corporation. MIAA is not a stock corporation for its capital is not
divided into shares. It is not a non stock corporation since it has no
members. MIAA is an instrumentality of the government vested
with corporate powers and government functions.
Under the civil code, property may either be under public
dominion or private ownership. Those under public dominion are
owned by the State and are utilized for public use, public service
and for the development of national wealth. The ports included in
the public dominion pertain either to seaports or airports. When
properties under public dominion cease to be for public use and
service, they form part of the patrimonial property of the State.
The court held that the land and buildings of MIAA are
part of the public dominion. Since the airport is devoted for public
use, for the domestic and international travel and transportation.
Even if MIAA charge fees, this is for support of its operation and
for regulation and does not change the character of the land and
buildings of MIAA as part of the public dominion. As part of the
public dominion the land and buildings of MIAA are outside the
commerce of man. To subject them to levy and public auction is
contrary to public policy. Unless the President issues a
proclamation withdrawing the airport land and buildings from
public use, these properties remain to be of public dominion and
are inalienable. As long as the land and buildings are for public use
the ownership is with the Republic of the Philippines.
Manila International Airport Authority vs. City of Pasay
Facts:
Petitioner Manila International Airport Authority
(MIAA) operates and administers the Ninoy Aquino International
Airport (NAIA) Complex under Executive Order No. 903 (EO
903), otherwise known as the Revised Charter of the Manila
International Airport Authority. Under Sections 3 and 22 of EO
903, approximately 600 hectares of land, including the runways,
the airport tower, and other airport buildings, were transferred to
MIAA. The NAIA Complex is located along the border between
Pasay City and Parañaque City.
MIAA received Final Notices of Real Property Tax Delinquency
from the City of Pasay for the taxable years 1992 to 2001. The City
of Pasay, through its City Treasurer, issued notices of levy and
warrants of levy for the NAIA Pasay properties. Thereafter, the
City Mayor of Pasay threatened to sell at public auction the NAIA
Pasay properties if the delinquent real property taxes remain
unpaid.
MIAA filed with the Court of Appeals a petition for prohibition
and injunction with prayer for preliminary injunction or temporary
restraining order. The petition sought to enjoin the City of Pasay
from imposing real property taxes on, levying against, and
auctioning for public sale the NAIA Pasay properties.
Court of Appeals: Upheld the power of the City of Pasay to impose
and collect realty taxes on the NAIA Pasay properties. Sections
193 and 234 of Republic Act No. 7160 or the Local Government
Code withdrew the exemption from payment of real property taxes
granted to natural or juridical persons, including government-
owned or controlled corporations. Since MIAA is a government-
owned corporation, it follows that its tax exemption under Section
21 of EO 903 has been withdrawn upon the effectivity of the Local
Government Code.
Issue:
WON the NAIA Pasay properties of MIAA are exempt
from real property tax – YES.
Held:
1. MIAA is a government "instrumentality" that does not
qualify as a "government-owned or controlled corporation. Under
Section 133(o) of the Local Government Code, local government
units have no power to tax instrumentalities of the national
government. Therefore, MIAA is exempt from any kind of tax
from the local governments.
A government "instrumentality" may or may not be a "government-
owned or controlled corporation" (Section 2(10) of the
Introductory Provisions of the Administrative Code of 1987). A
government-owned or controlled corporation must be "organized as
a stock or non-stock corporation." MIAA is not organized as a
stock or non-stock corporation. It is not a stock corporation
because it has no capital stock divided into shares. It is also not a
non-stock corporation because it has no members. The Government
cannot be considered as the sole member of MIAA because non-
stock corporations cannot distribute any part of their income to
their members. Section 11 of the MIAA Charter mandates MIAA
to remit 20% of its annual gross operating income to the National
Treasury.
MIAA is like any other government instrumentality, but is vested
with corporate powers to perform efficiently its governmental
functions. When the law vests in a government instrumentality
corporate powers, the instrumentality does not become a
corporation.
2. The airport lands and buildings of MIAA are properties
of public dominion intended for public use, and as such are exempt
from real property tax under Section 234(a) of the Local
Government Code.
(Note: In Manila International Airport Authority v. Court of
Appeals (2006 MIAA case), the Court already resolved the issue of
whether the airport lands and buildings of MIAA are exempt from
tax under existing laws. The court merely reiterated its ruling in
that case.)
UP V. DIZON
FACTS:
University of the Philippines (UP) entered into a General
Construction Agreement with respondent Stern Builders
Corporation (Stern Builders) for the construction and renovation of
the buildings in the campus of the UP in Los Bas. UP was able to
pay its first and second billing. However, the third billing worth
P273,729.47 was not paid due to its disallowance by the
Commission on Audit (COA). Thus, Stern Builders sued the UP to
collect the unpaid balance.
On November 28, 2001, the RTC rendered its decision ordering UP
to pay Stern Builders. Then on January 16, 2002, the UP filed its
motion for reconsideration. The RTC denied the motion. The
denial of the said motion was served upon Atty. Felimon Nolasco
(Atty.Nolasco) of the UPLB Legal Office on May 17, 2002.
Notably, Atty. Nolasco was not the counsel of record of the UP but
the OLS inDiliman, Quezon City.
Thereafter, the UP filed a notice of appeal on June 3, 2002.
However, the RTC denied due course to the notice of appeal for
having been filed out of time. On October 4, 2002, upon motion of
Stern Builders, the RTC issued the writ of execution.
On appeal, both the CA and the High Court denied UPs petition.
The denial became final and executory. Hence, Stern Builders filed
in the RTC its motion for execution despite their previous motion
having already been granted and despite the writ of execution
having already issued. On June 11, 2003, the RTC granted another
motion for execution filed on May 9, 2003 (although the RTC had
already issued the writ of execution on October 4, 2002).
Consequently, the sheriff served notices of garnishment to the UPs
depositary banks and the RTC ordered the release of the funds.
Aggrieved, UP elevated the matter to the CA. The CA sustained
the RTC. Hence, this petition.
ISSUES:
I. Was UP's funds validly garnished?
II. Has the UP's appeal dated June 3, 2002 been filed out of time?
HELD: UP's funds, being government funds, are not subject to
garnishment. (Garnishment of public funds; suability vs. liability of
the State)
Despite its establishment as a body corporate, the UP remains to be
a "chartered institution" performing a legitimate government
function. Irrefragably, the UP is a government instrumentality,
performing the States constitutional mandate of promoting quality
and accessible education. As a government instrumentality, the UP
administers special funds sourced from the fees and income
enumerated under Act No. 1870 and Section 1 of Executive Order
No. 714, and from the yearly appropriations, to achieve the
purposes laid down by Section 2 of Act 1870, as expanded in
Republic Act No. 9500. All the funds going into the possession of
the UP, including any interest accruing from the deposit of such
funds in any banking institution, constitute a "special trust fund,"
the disbursement of which should always be aligned with the UPs
mission and purpose, and should always be subject to auditing by
the COA. The funds of the UP are government funds that are
public in character. They include the income accruing from the use
of real property ceded to the UP that may be spent only for the
attainment of its institutional objectives.
A marked distinction exists between suability of the State and its
liability. As the Court succinctly stated in Municipality of San
Fernando, La Union v. Firme: A distinction should first be made
between suability and liability. "Suability depends on the consent
of the state to be sued, liability on the applicable law and the
established facts. The circumstance that a state is suable does not
necessarily mean that it is liable; on the other hand, it can never be
held liable if it does not first consent to be sued. Liability is not
conceded by the mere fact that the state has allowed itself to be
sued. When the state does waive its sovereign immunity, it is only
giving the plaintiff the chance to prove, if it can, that the defendant
is liable.
The Constitution strictly mandated that "no money shall be paid
out of the Treasury except in pursuance of an appropriation made
by law." The execution of the monetary judgment against the UP
was within the primary jurisdiction of the COA. It was of no
moment that a final and executory decision already validated the
claim against the UP.
HELD:
The period of appeal did not start without effective
service of decision upon counsel of record. (The doctrine of
immutability of a final judgment; service of judgments; fresh-
period rule; computation of time)
At stake in the UPs plea for equity was the return of the amount of
P16,370,191.74 illegally garnished from its trust funds. Obstructing
the plea is the finality of the judgment based on the supposed
tardiness of UPs appeal, which the RTC declared on September 26,
2002. It is true that a decision that has attained finality becomes
immutable and unalterable, and cannot be modified in any respect,
even if the modification is meant to correct erroneous conclusions
of fact and law, and whether the modification is made by the court
that rendered it or by this Court as the highest court of the land. But
the doctrine of immutability of a final judgment has not been
absolute, and has admitted several exceptions, among them: (a) the
correction of clerical errors; (b) the so-called nunc pro tunc entries
that cause no prejudice to any party; (c) void judgments; and (d)
whenever circumstances transpire after the finality of the decision
that render its execution unjust and inequitable. We rule that the
UPs plea for equity warrants the Courts exercise of the exceptional
power to disregard the declaration of finality of the judgment of the
RTC for being in clear violation of the UPs right to due process.
Firstly, the service of the denial of the motion for reconsideration
upon Atty. Nolasco of the UPLB Legal Office was invalid and
ineffectual because he was admittedly not the counsel of record of
the UP. Verily, the service of the denial of the motion for
reconsideration could only be validly made upon the OLS in
Diliman, and no other. It is settled that where a party has appeared
by counsel, service must be made upon such counsel. This is clear
enough from Section 2, second paragraph, of Rule 13, Rules of
Court, which explicitly states that: "If any party has appeared by
counsel, service upon him shall be made upon his counsel or one of
them, unless service upon the party himself is ordered by the court.
Where one counsel appears for several parties, he shall only be
entitled to one copy of any paper served upon him by the opposite
side."
Secondly, even assuming that the service upon Atty. Nolasco was
valid and effective, such that the remaining period for the UP to
take a timely appeal would end by May 23, 2002, it would still not
be correct to find that the judgment of the RTC became final and
immutable thereafter due to the notice of appeal being filed too late
on June 3, 2002. In so declaring the judgment of the RTC as final
against the UP, the CA and the RTC applied the rule contained in
the second paragraph of Section 3, Rule 41 of the Rules of Court to
the effect that the filing of a motion for reconsideration interrupted
the running of the period for filing the appeal; and that the period
resumed upon notice of the denial of the motion for
reconsideration. For that reason, the CA and the RTC might not be
taken to task for strictly adhering to the rule then prevailing.
However, equity calls for the retroactive application in the UPs
favor of the fresh-period rule that the Court first announced in mid-
September of 2005 through its ruling in Neypes v. Court of
Appeals, viz: "to standardize the appeal periods provided in the
Rules and to afford litigants fair opportunity to appeal their cases,
the Court deems it practical to allow a fresh period of 15 days
within which to file the notice of appeal in the Regional Trial
Court, counted from receipt of the order dismissing a motion for a
new trial or motion for reconsideration." The retroactive
application of the fresh-period rule, a procedural law that aims "to
regiment or make the appeal period uniform, to be counted from
receipt of the order denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order or
resolution," is impervious to any serious challenge. This is because
there are no vested rights in rules of procedure.
Consequently, even if the reckoning started from May 17, 2002,
when Atty. Nolasco received the denial, the UPs filing on June 3,
2002 of the notice of appeal was not tardy within the context of the
fresh-period rule. For the UP, the fresh period of 15-days counted
from service of the denial of the motion for reconsideration would
end on June 1, 2002, which was a Saturday. Hence, the UP had
until the next working day, or June 3, 2002, a Monday, within
which to appeal, conformably with Section 1 of Rule 22, Rules of
Court, which holds that: "If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal holiday in the
place where the court sits, the time shall not run until the next
working day. GRANTED.
REPUBLIC v. CITY OF PARAÑAQUE
Facts:
The Public Estates Authority (PEA) is a government
corporation created by virtue of Presidential Decree (P.D.) No.
1084 (Creating the Public Estates Authority, Defining its Powers
and Functions, Providing Funds Therefor and For Other Purposes)
which took... effect on February 4, 1977 to provide a coordinated,
economical and efficient reclamation of lands, and the
administration and operation of lands belonging to, managed
and/or operated by, the government with the object of maximizing
their utilization and hastening their... development consistent with
public interest.
On February 14, 1979, by virtue of Executive Order (E.O.) No. 525
issued by then President Ferdinand Marcos, PEA was designated as
the agency primarily responsible for integrating, directing and
coordinating all reclamation projects for and on behalf of the
National Government.
On October 26, 2004, then President Gloria Macapagal-Arroyo
issued E.O. No. 380 transforming PEA into PRA, which shall
perform all the powers and functions of the PEA relating to
reclamation activities.
By virtue of its mandate, PRA reclaimed several portions of the
foreshore and offshore areas of Manila Bay, including those
located in Parañaque City, and was issued Original Certificates of
Title (OCT Nos. 180, 202, 206, 207, 289, 557, and 559) and
Transfer Certificates of Title (TCT Nos. 104628, 7312, 7309, 7311,
9685, and 9686) over the reclaimed lands.
On February 19, 2003, then Parañaque City Treasurer Liberato M.
Carabeo (Carabeo) issued Warrants of Levy on PRA's reclaimed
properties (Central Business Park and Barangay San Dionisio)
located in Parañaque City based on the assessment for delinquent
real property... taxes made by then Parañaque City Assessor
Soledad Medina Cue for tax years 2001 and 2002.
On January 8, 2010, the RTC rendered its decision dismissing
PRA's petition. In ruling that PRA was not exempt from payment
of real property taxes, the RTC reasoned out that it was a GOCC
under Section 3 of P.D. No. 1084. It was organized as a stock
corporation because it had an... authorized capital stock divided
into no par value shares. In fact, PRA admitted its corporate
personality and that said properties were registered in its name as
shown by the certificates of title. Therefore, as a GOCC, local tax
exemption is withdrawn by virtue of Section 193... of Republic Act
(R.A.) No. 7160 [Local Government Code (LGC)] which was the
prevailing law in 2001 and 2002 with respect to real property
taxation. The RTC also ruled that the tax exemption claimed by
PRA under E.O. No. 654 had already been expressly repealed by
R.A. No.
7160 and that PRA failed to comply with the procedural
requirements in Section 206 thereof.
PRA asserts that it is not a GOCC under Section 2(13) of the
Introductory Provisions of the Administrative Code. Neither is it a
GOCC under Section 16, Article XII of the 1987 Constitution
because it is not required to meet the test of economic viability.
Instead, PRA is a... government instrumentality vested with
corporate powers and performing an essential public service
pursuant to Section 2(10) of the Introductory Provisions of the
Administrative Code. Although it has a capital stock divided into
shares, it is not authorized to distribute... dividends and allotment
of surplus and profits to its stockholders. Therefore, it may not be
classified as a stock corporation because it lacks the second
requisite of a stock corporation which is the distribution of
dividends and allotment of surplus and profits to the...
stockholders.
It insists that it may not be classified as a non-stock corporation
because it has no members and it is not organized for charitable,
religious, educational, professional, cultural, recreational, fraternal,
literary, scientific, social, civil service, or similar purposes, like...
trade, industry, agriculture and like chambers as provided in
Section 88 of the Corporation Code.
Moreover, PRA points out that it was not created to compete in the
market place as there was no competing reclamation company
operated by the private sector. Also, while PRA is vested with
corporate powers under P.D. No. 1084, such circumstance does not
make it a corporation but... merely an incorporated instrumentality
and that the mere fact that an incorporated instrumentality of the
National Government holds title to real property does not make
said instrumentality a GOCC. Section 48, Chapter 12, Book I of the
Administrative Code of 1987 recognizes a... scenario where a piece
of land owned by the Republic is titled in the name of a
department, agency or instrumentality.
Thus, PRA insists that, as an incorporated instrumentality of the
National Government, it is exempt from payment of real property
tax except when the beneficial use of the real property is granted to
a taxable person. PRA claims that based on Section 133(o) of the
LGC, local... governments cannot tax the national government
which delegate to local governments the power to tax.

It explains that reclaimed lands are part of the public domain,
owned by the State, thus, exempt from the payment of real estate
taxes. Reclaimed lands retain their inherent potential as areas for
public use or public service. While the subject reclaimed lands are
still in its... hands, these lands remain public lands and form part of
the public domain. Hence, the assessment of real property taxes
made on said lands, as well as the levy thereon, and the public sale
thereof on April 7, 2003, including the issuance of the certificates
of sale in favor of... the respondent Parañaque City, are invalid and
of no force and effect.
Issues:
Whether the Trial Court erred when it failed to consider
that reclaimed lands are part of the public domain.
Ruling:
The Court finds merit in the petition.
In the case at bench, PRA is not a GOCC because it is
neither a stock nor a non-stock corporation. It cannot be considered
as a stock corporation because although it has a capital stock
divided into no par value shares as provided in Section 7... of P.D.
No. 1084, it is not authorized to distribute dividends, surplus
allotments or profits to stockholders. There is no provision
whatsoever in P.D. No. 1084 or in any of the subsequent executive
issuances pertaining to PRA, particularly, E.O. No. 525,... E.O. No.
654... and EO No. 798... that authorizes PRA to distribute
dividends, surplus allotments or profits to its stockholders.
PRA cannot be considered a non-stock corporation either because
it does not have members. A non-stock corporation must have
members.
Moreover, it was not organized for any of the purposes mentioned
in Section 88 of the Corporation Code. Specifically, it... was
created to manage all government reclamation projects.
Likewise, it is worthy to mention Section 14, Chapter 4, Title I,
Book III of the Administrative Code of 1987, thus:
SEC 14. Power to Reserve Lands of the Public and Private
Dominion of the Government.- (1) The President shall have the
power to reserve for settlement or public use, and for specific
public purposes, any of the lands of the public domain, the use of
which is not otherwise directed by law. The reserved land shall
thereafter remain subject to the specific public... purpose indicated
until otherwise provided by law or proclamation.
Reclaimed lands such as the subject lands in issue are reserved
lands for public use. They are properties of public dominion. The
ownership of such lands remains with the State unless they are
withdrawn by law or presidential proclamation from public use.
Under Section 2, Article XII of the 1987 Constitution, the
foreshore and submerged areas of Manila Bay are part of the "lands
of the public domain, waters x x x and other natural resources" and
consequently "owned by the State." As such, foreshore and
submerged areas "shall not be alienated," unless they are classified
as "agricultural lands" of the public domain. The mere reclamation
of these areas by PEA does not convert these inalienable natural
resources of the State into alienable or disposable lands of the
public domain. There must be... a law or presidential proclamation
officially classifying these reclaimed lands as alienable or
disposable and open to disposition or concession. Moreover, these
reclaimed lands cannot be classified as alienable or disposable if
the law has reserved them for some public or... quasi-public use.
As the Court has repeatedly ruled, properties of public dominion
are not subject to execution or foreclosure sale.
Thus, the assessment, levy and foreclosure made on the subject
reclaimed lands by respondent, as well as the issuances of
certificates of... title in favor of respondent, are without basis.
Principles:
Two requisites must concur before one may be classified as a stock
corporation, namely: (1) that it has capital stock divided into
shares; and (2) that it is authorized to distribute dividends and
allotments of surplus and profits to its stockholders. If only one...
requisite is present, it cannot be properly classified as a stock
corporation. As for non-stock corporations, they must have
members and must not distribute any part of their income to said
members.
AGRA V. COA
FACTS:
On July 1, 1989, Republic Act No. 6758 (the
Compensation and Position Classification Act of 1989) took effect,
Section 12 of which provides for the standardization of salary rates
of government employees.
Pursuant to its authority to implement Republic Act No. 6758
under Section 23 thereof, the Department of Budget and
Management (DBM) on October 2, 1989 issued Corporate
Compensation Circular No. 10 (DBM-CCC No. 10), otherwise
known as the "Implementing Rules and Regulations of R.A. No.
6758."
A group of NEA employees claimed that they did not receive meal,
rice, and children's allowances. Thus, they filed a special civil
action for mandamus against NEA and its Board of Administrators
alleging violation of their right to the equal protection clause under
the Constitution.
RTC rendered its Decision in their favor. RTC issued a Writ of
Execution. Thereafter, the RTC issued a Notice of Garnishment
against the funds of NEA with Development Bank of the
Philippines (DBP).
NEA questioned before the Court of Appeals the Orders of the
lower court. Court of Appeals rendered a Decision declaring null
and void the Resolution as well as the Order of the RTC, and
ordering the implementation of a writ of execution against the
funds of NEA. Thus, NEA filed a Petition for Review on Certiorari
with this Court.
Court reversed and set aside the Court of Appeals decision.
However, the resident auditor of COA did not allow the payment of
rice allowance to NEA employees who were not incumbents as of
June 30, 1989, under Notice of Disallowance. NEA appealed
Agullana's disallowance to the COA arguing that the disallowance
had no basis in law and in fact, and that the subject disbursement
was anchored on a court decision that had become final and
executory. The COA denied the appeal from the disallowance in a
Decision.
ISSUE: Whether or not the NEA employees hired after June 30,
1989 are entitled to rice allowance?
HELD: COAs resolution is sustained.
CONSTITUTIONAL LAW: public officers
We have defined an incumbent as "a person who is in present
possession of an office; one who is legally authorized to discharge
the duties of an office." There is no question that petitioners were
not incumbents as of June 30, 1989. We have likewise
characterized NEA as a GOCC in National Electrification
Administration v. Morales. Thus, Section 5.5 quoted above, issued
pursuant to the authority given to the DBM under Section 12 of
Republic Act No. 6758, was correctly applied by the COA.
As petitioners were hired after June 30, 1989, the COA was correct
in disallowing the grant of the benefit to them, as they were clearly
not entitled to it. As quoted above, we have repeatedly held that
under Section 12 of Republic Act No. 6758, the only requirements
for the continuous grant of allowances and fringe benefits on top of
the standardized salary rates for employees of GOCCs and GFIs
are as follows: (1) the employee must be an incumbent as of July 1,
1989; and (2) the allowance or benefit was not consolidated in the
standardized salary rate as prescribed by Republic Act No. 6758.
TIDCORP V. DEMIGILLO
FACTS:
The Board of Directors of Trade and Investment
Development Corporation of the Philippines (TIDCORP), a wholly
owned government corporation, formally charged Maria Rosario
Manalang-Demigillo (Demigillo), then a Senior Vice-President in
TIDCORP, with grave misconduct, conduct prejudicial to the best
interest of the service, insubordination, and gross discourtesy in the
course of official duties. TIDCORP alleged that Demigillo engaged
in a verbal tussle with Mr. Joel Valdes (Valdes), President and
CEO of TIDCORP. Allegedly, Demigillo also sent a memorandum
addressed to Valdes which contained discourteous and arrogant
words.
Pending the investigation, TIDCORP placed Demigillo under
preventive suspension for 90 days.
Demigillo assailed her preventive suspension in the Civil Service
Commission (CSC). The CSC ruled that her suspension was not
proper because under Section 19(2), Rule II, of the Uniform Rules
on Administrative Cases in the Civil Service (Uniform Rules), a
civil service officer like Demigillo might be preventively
suspended by the disciplining authority only if any of the two
grounds were present, to wit: (1) there was a possibility that the
civil service employee might unduly influence or intimidate
potential witnesses against him; or (2) there was a possibility that
the civil service employee might tamper the documentary evidence
on file in her office. On appeal, the CA affirmed the CSC .
ISSUE: Was Demigillo's 90-day preventive suspension proper?
HELD:
The 90-day preventive suspension order issued against
Demigillo was valid. Under Section 51 of the Revised
Administrative Code, 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, or if there are reasons to believe that the
respondent is guilty of charges which would warrant his removal
from the service. Section 51 nowhere states or implies that before a
preventive suspension may issue there must be proof that the
subordinate may unduly influence the witnesses against him or
may tamper the documentary evidence on file in her office.
Pursuant to its rule-making authority, the CSC promulgated the
Uniform Rules on August 31, 1999. It is clear from Section
19,supra, that before an order of preventive suspension pending an
investigation may validly issue, only two prerequisites need be
shown, namely: (1) that the proper disciplining authority has served
a formal charge to the affected officer or employee; and (2) that the
charge involves either dishonesty, oppression, grave misconduct,
neglect in the performance of duty, or if there are reasons to
believe that the respondent is guilty of the charges which would
warrant her removal from the service.Proof showing that the
subordinate officer or employee may unduly influence the
witnesses against her or may tamper the documentary evidence on
file in her office is not among the prerequisites.
In Gloria v. Court of Appeals, we stated that preventive suspension
pending investigation "is a measure intended to enable the
disciplining authority to investigate charges against respondent by
preventing the latter from intimidating or in any way influencing
witnesses against him." As such, preventing the subordinate officer
or employee from intimidating the witnesses during investigation
or from tampering the documentary evidence in her office is a
purpose, not a condition, for imposing preventive suspension, as
shown in the use of the word "intended." GRANTED.
LUZ R. YAMANE, in her capacity as the CITY TREASURER OF
MAKATI, petitioner vs. BA LEPANTO CONDOMINIUM
CORPORATION, respondent.
Facts:
Respondent BA-Lepanto Condominium Corporation (the
“Corporation”) is a condominium corporation constituted in
accordance with the Condominium Act, which owns and holds title
to the common and limited common areas of the BA-Lepanto
Condominium (the “Condominium”), situated in Makati City. Its
membership comprises the various unit owners. The Corporation is
authorized, under Article V of its Amended By-Laws, to collect
regular assessments from its members for operating expenses,
capital expenditures on the common areas, and other special
assessments as provided for in the Master Deed with Declaration of
Restrictions of the Condominium.
The Corporation received a Notice of Assessment signed
by the City Treasurer. The Notice of Assessment stated that the
Corporation is “liable to pay the correct city business taxes.” The
Notice of Assessment was silent as to the statutory basis of the
business taxes assessed. The Corporation responded with a written
tax protest addressed to the City Treasurer.
According to respondent, under both the Makati Code
and the Local Government Code, “business” is defined as “trade or
commercial activity regularly engaged in as a means of livelihood
or with a view to profit.” It was submitted that the Corporation, as
a condominium corporation, was organized not for profit, but to
hold title over the common areas of the Condominium, to manage
the Condominium for the unit owners, and to hold title to the
parcels of land on which the Condominium was located. Neither
was the Corporation authorized, under its articles of incorporation
or by-laws to engage in profit-making activities. The assessments it
did collect from the unit owners were for capital expenditures and
operating expenses.
The protest was rejected by the City Treasurer and
insisted that the collection of dues from the unit owners was
effected primarily “to sustain and maintain the expenses of the
common areas, with the end in view of getting full appreciative
living values for the individual condominium occupants and to
command better marketable prices for those occupants” who would
in the future sell their respective units. In short, the petitioner avers
that it is engaged in business for profit making.
Because of the denial of the protest, respondent filed an
Appeal with the RTC of Makati. However, the latter dismissed the
case. As a recourse, respondent filed a Petition for Review under
Rule 42 of the Rules of Civil Procedure with the CA. It was
dismissed outright because only decisions of the RTC brought on
appeal from a first level court could be elevated for review under
Rule 42. However, it was reinstated by the CA because of Sec. 195
of the LGC stating that the remedy of the taxpayer on the denial of
the protest filed with the local treasurer is to appeal the denial with
the court of competent jurisdiction. Afterwards, the CA reversed
the ruling of the RTC.
Issue:
a. Whether the RTC, in deciding an appeal taken from a
denial of a protest by a local treasurer under Section 195 of the
Local Government Code, exercises “original jurisdiction” or
“appellate jurisdiction.”
b. Whether or not the City of Makati may collect
business taxes on condominium corporations.
Held:
a. The review taken by the RTC over the denial of the
protest by the local treasurer would fall within that court’s original
jurisdiction. The review is the initial judicial cognizance of the
matter. Moreover, labeling the said review as an exercise of
appellate jurisdiction is inappropriate, since the denial of the
protest is not the judgment or order of a lower court, but of a local
government official. Republic Act No. 9282 definitively proves
that the CTA exercises exclusive appellate jurisdiction to review on
appeal decisions, orders or resolutions of the Regional Trial Courts
in local tax cases original decided or resolved by them in the
exercise of their originally or appellate jurisdiction. Moreover, the
provision also states that the review is triggered “by filing a
petition for review under a procedure analogous to that provided
for under Rule 42 of the 1997 Rules of Civil Procedure.” Republic
Act No. 9282, however, would not apply to this case simply
because it arose prior to the effectivity of that law.
b. No. Section 143 of the Code specifically enumerates
several types of business on which municipalities and cities may
impose taxes. However, the Corporation does not fall under such
law. Moreover, nowhere in the Makati Revenue Code that would
serve as the legal authority for the collection of business taxes from
condominiums in Makati. We can elicit from the Condominium
Act that a condominium corporation is precluded by statute from
engaging in corporate activities other than the holding of the
common areas, the administration of the condominium project, and
other acts necessary, incidental or convenient to the
accomplishment of such purposes. Neither the maintenance of
livelihood, nor the procurement of profit, fall within the scope of
permissible corporate purposes of a condominium corporation
under the Condominium Act. None of these stated corporate
purposes are geared towards maintaining a livelihood or the
obtention of profit. Even though the Corporation is empowered to
levy assessments or dues from the unit owners, these amounts
collected are not intended for the incurrence of profit by the
Corporation or its members, but to shoulder the multitude of
necessary expenses that arise from the maintenance of the
Condominium Project.
DENR VS DENR EMPLOYEES
FACTS:
DENR Reg 12 Employees filed a petition for nullity of
the memorandum order issued by the Regional Exec. Director of
DENR, directing the immediate transfer of the DENR 12 Regional
Offices from Cotabato to Koronadal City. The memorandum was
issued pursuant to DENR Executive Order issued by the DENR
Secretary.
Issue:
Whether or not DENR Secretary has the authority to
reorganize the DENR Region 12 Office.
RULING:
The qualified political agency doctrine, all executive and
administrative organizations are adjuncts of the Executive
Department, and the acts of the Secretaries of such departments,
performed and promulgated in the regular course of business, are,
unless disapproved or reprobated by the Chief Executive, are
presumptively the acts of the Chief Executive. It is corollary to the
control power of the President as provided for under Art. VII Sec.
17 of the 1987 Constitution: "The President shall have control of
all the executive departments, bureaus, and offices. He shall
ensure that the laws be faithfully executed."
In the case at bar, the DENR Secretary can validly reorganize the
DENR by ordering the transfer of the DENR XII Regional Offices
from Cotabato City to Koronadal, South Cotabato. The exercise of
this authority by the DENR Secretary, as an alter ego, is presumed
to be the acts of the President for the latter had not expressly
repudiated the same.
ATTY. SYLVIA BANDA v. EDUARDO R. ERMITA,
Facts:
Executive Order No. 378, amending Section 6 of
Executive Order No. 285 by, inter alia, removing the exclusive
jurisdiction of the NPO over the printing services requirements of
government agencies and... instrumentalities.
Pursuant to Executive Order No. 378, government agencies and
instrumentalities are allowed to source their printing services from
the private sector through competitive bidding, subject to the
condition that the services offered by the private supplier be of
superior... quality and lower in cost compared to what was offered
by the NPO. Executive Order No. 378 also limited NPO's
appropriation in the General Appropriations Act to its income.
First
Petitioners maintain that former President Aquino's Executive
Order No. 285 is a legislative enactment,... as the same was issued
while President Aquino still had legislative powers under the
Freedom Constitution;[11] thus, only Congress through legislation
can validly amend Executive Order No. 285.
Second
petitioners maintain that the issuance of Executive Order No. 378
would lead to the eventual abolition of the NPO and would violate
the security of tenure of NPO employees.
petitioners avow that the reorganization of the NPO under
Executive Order No. 378 is tainted with bad faith
Issues:
WON it is beyond the executive powers of President
Arroyo to amend or repeal Executive Order No. 285 issued by...
former President Aquino when the latter still exercised legislative
powers
WON Executive Order No. 378 violates petitioners'
security of tenure, because it paves the way for the gradual
abolition of the NPO.
Ruling:
No, it is a well-settled principle in jurisprudence that the
President has the power to reorganize the offices and agencies in
the executive department in line with the President's
constitutionally granted power of control over executive offices
and by virtue of previous delegation... of the legislative power to
reorganize executive offices under existing statutes.
It is undisputed that the NPO, as an agency that is part of the Office
of the Press Secretary (which in various times has been an agency
directly attached to the Office of the Press Secretary or as an
agency under the Philippine Information Agency), is part of the
Office of the
President.[14]
Concomitant to such power to abolish, merge or consolidate offices
in the Office of the President Proper and to transfer
functions/offices not only among the offices in the Office of
President Proper but also the rest of the Office of the President and
the Executive Branch, the President implicitly has the power to
effect less radical or less substantive changes to the functional and
internal structure of the Office of the President, including the
modification of functions of such executive agencies as the
exigencies of the service may require.
there was neither an abolition of the NPO nor a removal of any of
its functions to be transferred to another agency.
he NPO remains the main printing arm of the government for all
kinds of government forms and... publications but in the interest of
greater economy and encouraging efficiency and profitability, it
must now compete with the private sector for certain government
printing jobs,... Republic Act No. 7645,... Executive Order No. 191
2003 General Appropriations Act... the aforequoted provisions in
the appropriations law recognize the power of the President to
reorganize even executive offices already funded by the said
appropriations act, including the power to implement structural,
functional, and operational adjustments... in the executive
bureaucracy and, in so doing, modify or realign appropriations of
funds as may be necessary under such reorganization.
the... power of the President to reorganize agencies under the
executive department by executive or administrative order is
constitutionally and statutorily recognized.
No, we find nothing objectionable in the provision in
Executive Order No. 378 limiting the appropriation of the NPO to
its own income.
In all, Executive Order No. 378, which purports to institute
necessary reforms in government in order to improve and upgrade
efficiency in the delivery of public services by redefining the
functions of the NPO and limiting its funding to its own income
and to transform it into a... self-reliant agency able to compete with
the private sector, is well within the prerogative of President
Arroyo under her continuing delegated legislative power to
reorganize her own office... the presidential power to reorganize
agencies and offices in the executive branch of government is
subject to the condition that such reorganization is carried out in
good faith.
Principles:
The law grants the President the power to... reorganize the Office
of the President in recognition of the recurring need of every
President to reorganize his or her office "to achieve simplicity,
economy and efficiency.
PICHAY V. OFFICE OF THE DEPUTY EXECUTIVE
SECRETARY (2012)
FACTS:
On November 15, 2010, President Benigno Simeon
Aquino III issued Executive Order No. 13 (E.O. 13), abolishing the
PAGC and transferring its functions to the Office of the Deputy
Executive Secretary for Legal Affairs (ODESLA), more
particularly to its newly-established Investigative and Adjudicatory
Division (IAD).
On April 6, 2011, respondent Finance Secretary Cesar V.
Purisima filed before the IAD-ODESLA a complaint-affidavit for
grave misconduct against petitioner Prospero A. Pichay, Jr.,
Chairman of the Board of Trustees of the Local Water Utilities
Administration (LWUA), as well as the incumbent members of the
LWUA Board of Trustees, namely, Renato Velasco, Susana
Dumlao Vargas, Bonifacio Mario M. Pena, Sr. and Daniel
Landingin, which arose from the purchase by the LWUA of Four
Hundred Forty-Five Thousand Three Hundred Seventy Seven
(445,377) shares of stock of Express Savings Bank, Inc.
On April 14, 2011, petitioner received an Order3 signed
by Executive Secretary Paquito N. Ochoa, Jr. requiring him and his
co-respondents to submit their respective written explanations
under oath. In compliance therewith, petitioner filed a Motion to
Dismiss Ex Abundante Ad Cautelam manifesting that a case
involving the same transaction and charge of grave misconduct
entitled, "Rustico B. Tutol, et al. v. Prospero Pichay, et al.", and
docketed as OMB-C-A-10-0426-I, is already pending before the
Office of the Ombudsman.
ISSUE
Whether E.O. 13 is unconstitutional for abrogating unto
an administrative office a quasi-judicial function through and E.O.
and not through legislative enactment by Congress.
HELD
NO.
The President has Continuing Authority to Reorganize
the Executive Department under E.O. 292. In the case of Buklod ng
Kawaning EIIB v. Zamora the Court affirmed that the President's
authority to carry out a reorganization in any branch or agency of
the executive department is an express grant by the legislature by
virtue of Section 31, Book III, E.O. 292 (the Administrative Code
of 1987), "the President, subject to the policy of the Executive
Office and in order to achieve simplicity, economy and efficiency,
shall have the continuing authority to reorganize the administrative
structure of the Office of the President."
The law grants the President this power in recognition of
the recurring need of every President to reorganize his office "to
achieve simplicity, economy and efficiency." The Office of the
President is the nerve center of the Executive Branch. To remain
effective and efficient, the Office of the President must be capable
of being shaped and reshaped by the President in the manner he
deems fit to carry out his directives and policies. After all, the
Office of the President is the command post of the President.
(Emphasis supplied)
Clearly, the abolition of the PAGC and the transfer of its
functions to a division specially created within the ODESLA is
properly within the prerogative of the President under his
continuing "delegated legislative authority to reorganize" his own
office pursuant to E.O. 292.
The President's power to reorganize the Office of the
President under Section 31 (2) and (3) of EO 292 should be
distinguished from his power to reorganize the Office of the
President Proper. Under Section 31 (1) of EO 292, the President
can reorganize the Office of the President Proper by abolishing,
consolidating or merging units, or by transferring functions from
one unit to another. In contrast, under Section 31 (2) and (3) of EO
292, the President's power to reorganize offices outside the Office
of the President Proper but still within the Office of the President is
limited to merely transferring functions or agencies from the Office
of the President to Departments or gencies, and vice versa.
The distinction between the allowable organizational
actions under Section 31(1) on the one hand and Section 31 (2) and
(3) on the other is crucial not only as it affects employees' tenurial
security but also insofar as it touches upon the validity of the
reorganization, that is, whether the executive actions undertaken
fall within the limitations prescribed under E.O. 292. When the
PAGC was created under E.O. 12, it was composed of a Chairman
and two (2) Commissioners who held the ranks of Presidential
Assistant II and I, respectively,9 and was placed directly "under the
Office of the President."10 On the other hand, the ODESLA, to
which the functions of the PAGC have now been transferred, is an
office within the Office of the President Proper.11 Since both of
these offices belong to the Office of the President Proper, the
reorganization by way of abolishing the PAGC and transferring its
functions to the ODESLA is allowable under Section 31 (1) of E.O.
292.
What actions does reorganization include? The
Reorganization Did not Entail the Creation of a New, Separate and
Distinct Office. The abolition of the PAGC did not require the
creation of a new, additional and distinct office as the duties and
functions that pertained to the defunct anti-graft body were simply
transferred to the ODESLA, which is an existing office within the
Office of the President Proper. The reorganization required no
more than a mere alteration of the administrative structure of the
ODESLA through the establishment of a third division – the
Investigative and Adjudicatory Division – through which ODESLA
could take on the additional functions it has been tasked to
discharge under E.O. 13.
Reorganization takes place when there is an alteration of
the existing structure of government offices or units therein,
including the lines of control, authority and responsibility between
them. It involves a reduction of personnel, consolidation of offices,
or abolition thereof by reason of economy or redundancy of
functions.
The IAD-ODESLA is a fact-finding and
recommendatory body not vested with quasi-judicial powers. while
the term "adjudicatory" appears part of its appellation, the IAD-
ODESLA cannot try and resolve cases, its authority being limited
to the conduct of investigations, preparation of reports and
submission of recommendations. E.O. 13 explicitly states that the
IAD- ODESLA shall "perform powers, functions and duties xxx, of
PAGC."
Under E.O. 12, the PAGC was given the authority to
"investigate or hear administrative cases or complaints against all
presidential appointees in the government" and to "submit its report
and recommendations to the President." The IAD-ODESLA is a
fact-finding and recommendatory body to the President, not having
the power to settlecontroversies and adjudicate cases. As the Court
ruled in Cariño v. Commission on Human Rights, and later
reiterated in Biraogo v. The Philippine Truth Commission:
Fact-finding is not adjudication and it cannot be likened to the
judicial function of a court of justice, or even a quasi- judicial
agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial
function. To be considered as such, the act of receiving evidence
and arriving at factual conclusions in a controversy must be
accompanied by the authority of applying the law to the factual
conclusions to the end that the controversy may be decided or
determined authoritatively, finally and definitively, subject to such
appeals or modes of review as may be provided by law.
The IAD-ODESLA does not encroach upon the powers and duties
of the Ombudsman.
Contrary to petitioner's contention, the IAD-ODESLA
did not encroach upon the Ombudsman's primary jurisdiction when
it took cognizance of the complaint affidavit filed against him
notwithstanding the earlier filing of criminal and administrative
cases involving the same charges and allegations before the Office
of the Ombudsman. The primary jurisdiction of the Ombudsman to
investigate and prosecute cases refers to criminal cases cognizable
by the Sandiganbayan and not to administrative cases. It is only in
the exercise of its primary jurisdiction that the Ombudsman may, at
any time, take over the investigation being conducted by another
investigatory agency. Section 15 (1) of R.A. No. 6770 or the
Ombudsman Act of 1989.
While the Ombudsman's function goes into the
determination of the existence of probable cause and the
adjudication of the merits of a criminal accusation, the
investigative authority of the IAD- ODESLA is limited to that of a
fact-finding investigator whose determinations and
recommendations remain so until acted upon by the President.
Finally, petitioner doubts that the IAD-ODESLA can
lawfully perform its duties as an impartial tribunal, contending that
both the IAD-ODESLA and respondent Secretary Purisima are
connected to the President. The mere suspicion of partiality will
not suffice to invalidate the actions of the IAD-ODESLA. Mere
allegation is not equivalent to proof. Bias and partiality cannot be
presumed. Petitioner must present substantial proof to show that
the lAD-ODES LA had unjustifiably sided against him in the
conduct of the investigation. No such evidence has been presented
as to defeat the presumption of regularity m the performance of the
fact-finding investigator's duties. The assertion, therefore, deserves
scant consideration.
Every law has in its favor the presumption of
constitutionality, and to justify its nullification, there must be a
clear and unequivocal breach of the Constitution, not a doubtful
and argumentative one.39 Petitioner has failed to discharge the
burden of proving the illegality of E.O. 13, which IS indubitably a
valid exercise of the President's continuing authority to reorganize
the Office of the President.
SMART COMMUNICATIONS, INC. ET AL. V. NATIONAL
TELECOMMUNICATIONS COMMISSION (NTC)
Facts:
The NTC issued Billing Circular 13-6-2000 which
promulgated rules and regulations on the billing of
telecommunications services. Petitioners filed with the RTC a
petition to declare the circular as unconstitutional. A motion to
dismiss was filed by the NTC on the ground of petitioner’s to
exhaust administrative remedies. The RTC denied the motion to
dismiss but on certiorari, the CA reversed RTC.
Held:
1. Administrative bodies had (a) quasi-legislative or rule-
making powers and (b) 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. To be
valid, such rules and regulations must conform to, and be
consistent with, the provisions of enabling statute.
Quasi-judicial or administrative adjudicatory power is the
power to hear and determine questions of fact to which the
legislative policy is to apply and to decide in accordance with the
standards laid down by law itself in enforcing and administering
the same law. 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 for their official action and exercise of
discretion in a judicial.
 2. The determination of whether a specific rule or set of
rules issued by an administrative body contravenes the law or the
constitution is within the judicial power as defined by the
Constitution which is “ 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 haw been a
grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government.” The NTC circular was issued pursuant to its quasi-
legislative or rule-making power. Hence, the action must be filed
directly with the regular courts without requiring exhaustion of
administrative remedies.
3. Where the act of administrative agency was performed
pursuant to its quasi-judicial function, exhaustion of administrative
remedy is required, before going to court.
4. 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 same must be referred to an administrative agency of
special competence pursuant to the doctrine of primary jurisdiction.
This doctrine of primary jurisdiction applies where 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.
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.
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,[6] 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,[8] 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.
Laguna Lake Development Authority vs CA
FACTS:
The Laguna Lake Development Authority (LLDA) was
created through Republic Act No. 4850. It was granted, inter alia,
exclusive jurisdiction to issue permits for the use of all surface
water for any project or activity in or affecting the said region
including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like.
Then came RA 7160, the Local Government Code of
1991. The municipalities in the Laguna Lake region interpreted its
provisions to mean that the newly passed law gave municipal
governments the exclusive jurisdiction to issue fishing privileges
within their municipal waters.
ISSUE:
Who should exercise jurisdiction over the Laguna Lake
and its environs insofar as the issuance of permits for fishing
privileges is concerned, the LLDA or the towns and municipalities
comprising the region?
HELD:
LLDA has jurisdiction over such matters because the
charter of the LLDA prevails over the Local Government Code of
1991. The said charter constitutes a special law, while the latter is a
general law. It is basic in statutory construction that the enactment
of a later legislation which is a general law, cannot be construed to
have repealed a special law. The special law is to be taken as an
exception to the general law in the absence of special
circumstances forcing a contrary conclusion.
In addition, the charter of the LLDA embodies a valid
exercise of police power for the purpose of protecting and
developing the Laguna Lake region, as opposed to the Local
Government Code, which grants powers to municipalities to issue
fishing permits for revenue purposes.
Thus it has to be concluded that the charter of the LLDA
should prevail over the Local Government Code of 1991 on matters
affecting Laguna de Bay.
Securities and Exchange Commission v. Interport Resources
Corporation
Facts:
- The Board of Directors of IRC approved a Memorandum of
Agreement with GHB (Ganda Holdings Berhad). Under said
memorandum of agreement, IRC acquired 100% of the entire
capital stock of GEHI (Ganda Energy Holdings Inc.) which would
own and operate a 102 megawatt gas turbine power generating
barge. In exchange, IRC will issue to GHB 55% of the expanded
capital stock of IRC. On the side, IRC would acquire 67% of the
entire capital of PRCI (Philippine Racing Club).
- It is alleged herein that a press release announcing the approval of
the agreement was sent to the Philippine Stock Exchange through
facsimile and the SEC, but the facsimile machine of the SEC could
not receive it. However, the SEC received reports that the IRC
failed to make timely public disclosures of its negotiations with
GHB and that some of its directors, heavily traded IRC shares
utilizing this material insider information. For this reason, the SEC
required the directors to appear before the SEC to explain the
alleged failure to disclose material information as required by the
Rules on Disclosure of Material Facts. Unsatisfied with the
explanation, the SEC issued an order finding that the IRC violated
the Rules in connection with the then Old Securities Act when it
failed to make timely disclosures of its negotiations with GHB. In
addition, the SEC found that the directors of IRC entered into
transactions involving IRC shares in violation of the Revised
Securities Act.
- Respondents, however, questioned the authority of the SEC to
investigate on said matter since according to PD 902-A,
jurisdiction upon the matter was conferred upon the PED
(Prosecution and Enforcement Department) of the SEC – however,
this issue is already moot since pending the disposition of the case,
the Securities Regulation Code was passed thereby effectively
repealing PD 902-A and abolishing the PED. They also contended
that their right to due process was violated when the SEC required
them to appear before the SEC to show cause why sanctions should
not be imposed upon them since such requirement shifted the
burden of proof to respondents.
The case reached the CA and said court ruled in favor of the
respondents and effectively enjoined the SEC from filing any
criminal, civil or administrative cases against respondents. In its
resolution, the CA stated that since there are no rules and
regulations implementing the rules regarding DISCLOSURE,
INSIDER TRADING OR ANY OF THE PROVISIONS OF THE
REVISED SECURITIES ACT, the SEC has no statutory authority
to file any suit against respondents. The CA, therefore, prohibited
the SEC from taking cognizance or initiating any action against the
respondents for the alleged violations of the Revised Securities
Act.
Issue:
1.) Whether or not the SEC has authority to file suit against
respondents for violations of the RSA.
2.) Whether or not their right to due process was violated when the
SEC denied the parties of their right to cross examination.
Ratio:
- The Revised Securities Act does not require the enactment of
implementing rules to make it binding and effective. The
provisions of the RSA are sufficiently clear and complete by
themselves. The requirements are specifically set out and the acts
which are enjoined are determinable. To tule that absence of
implementing rules can render ineffective an act of Congress
would empower administrative bodies to defeat the legislative will
by delaying the implementing rules. Where the statute contains
sufficient standards and an unmistakable intent (as in this case, the
RSA) there should be no impediment as to its implementation.
- The court does not discern any vagueness or ambiguity in the
RSA such that the acts proscribed and/or required would not be
understood by a person of ordinary intelligence. The provision
explains in simple terms that the insider's misuse of nonpublic and
undisclosed information is the gravamen of illegal conduct and that
the intent of the law is the protection of investors against fraud
committed when an insider, using secret information, takes
advantage of an uninformed investor. Insiders are obligatd to
disclose material information to the other party or abstain from
trading the shares of his corporation. This duty to disclose or
abstain is based n 2 factors: 1) the existence of a relationship giving
access, directly or indirectly to information intended to be available
only for a corporate purpose and not for the personal benefit of
anyone and 2) the inherent unfairness involved when a party takes
advantage of such information knowing it is unavailable to those
with whom he is dealing.
- This obligation to disclose is imposed upon "insiders" which are
particularly officers, directors or controlling stockholders but that
definition has already been expanded and not includes those
persons whose relationship of former relationship to the issuer or
the security that is not generally available and the one who learns
such a fact from an insider knowing that the person from whom he
learns such fact is an insider. In some case, however, there may be
valid corporate reasons for the nondisclosure of material
information but it should not be used for non-corporate purposes.
- Respondent contends that the terms "material fact", "reasonable
person", "nature and reliability" and "generally available" are
vaguely used in the RSA because under the provision of the said
law what is required to be disclosed is a fact of special
significance, meaning:
1. a material fact which would be likely to affect the market
price of a security or;
2. one which a reasonable person would consider especially
important in determining his course of action with regard to the
shares of stock.
- But the court dismissed said contention and stated that material
fact is already defined and explained as one which induces or tends
to induce or otherwise affect the sale or purchase of securities. On
the other hand, "reasonable person" has already been used many
times in jurisprudence and in law since it is a standard on which
most of legal doctrines stand (even the doctrine on negligence uses
such standard) and it has been held to mean "a man who relies on
the calculus of common sense of which all reasonable men have in
abundance"

- As to "nature and reliability" the proper adjudicative body would

be able to determine if facts of a certain nature and reliability can
influence a reasonable person's decision to retain, buy or sell
securities and thereafter explain and justify its factual findings in
its decision since the same must be viewed in connection with the
particular circumstances of a case.
As to "generally available", the court held also that such is a matter
which may be adjudged given the particular circumstances of the
case. The standards of which cannot remain at a standstill.

- There is no violation of due process in this case since the

proceedings before the PED are summary in nature. The hearing
officer may require the parties to submit their respective verified
position papers together will all supporting documents and
affidavits of witnesses. A formal hearing is not mandatory and it is
within the discretion of the hearing officer to determine whether or
not there is a need for a formal hearing.

- Moreover, the law creating the PED empowers it to investigate

violations of the rules and regulations and to file and prosecute
such cases. It does not have an adjudicatory powers. Thus, the PED
need not comply with the provisions of the Administrative Code on
adjudication.

- The SEC retained jurisdiction to investigate violations of the

RSA, reenacted in the Securities Regulations Code despite the
abolition of the PED. In this case, the SEC already commenced
investigating the respondents for violations of the RSA but during
the pendency of the case the Securities and Regulations Code was
passed thereby repealing the RSA. However, the repeal cannot
deprive the SEC of its jurisdiction to continue investigating the
case.

- Investigations by the SEC is a requisite before a criminal case

may be referred to the DOJ since the SEC is an administrative
agency with the special competence to do so. According to the
doctrine of primary jurisdiction, the courts will not determine a
controversy involving a question within the jurisdiction of an
administrative tribunal where the question demands the exercise of
sound administrative discretion requiring the specialized
knowledge and expertise of said administrative tribunal to
determine technical and intricate matters of fact.