[G.R. No. 153660. June 10, 2003.
rules of evidence are not strictly observed in
PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO
ESPINA, EDDIE LADICA, ARMAN QUELING,
ROLANDO NIETO, RICARDO BARTOLOME, ELUVER
GARCIA, EDUARDO GARCIA and NELSON
MANALASTAS, petitioners, vs. COCA-COLA
BOTTLERS PHILS., INC., respondent.
Facts: On 15 February 1995 sixty-two (62) employees
of respondent Coca-Cola Bottlers, Inc., and its
officers, Lipercon Services, Inc., People's Specialist
Services, Inc., and Interim Services, Inc., filed a
complaint against respondents for unfair labor
practice through illegal dismissal, violation of their
security of tenure and the perpetuation of the "Cabo
System." They thus prayed for reinstatement with
full back wages, and the declaration of their regular
employment status. For failure to prosecute as they
failed to either attend the scheduled mandatory
conferences or submit their respective affidavits, the
claims of fifty-two (52) complainant-employees were
dismissed. In lieu of a position paper, respondent
company filed a motion to dismiss complaint for lack
of jurisdiction and cause of action, there being no
employer-employee relationship between
complainants and Coca-Cola Bottlers, Inc., and that
respondents Lipercon Services, People's Specialist
Services and Interim Services being bona fide
independent contractors, were the real employers of
the complainants.
the Labor Arbiter ruled that the testimonies of the
complainants were more credible as they sufficiently
supplied every detail of their employment,
specifically identifying who their salesmen/drivers
were, their places of assignment, aside from their
dates of engagement and dismissal. Respondent
Coca-Cola Bottlers appealed to the Court of Appeals
which, although affirming the finding of the NLRC
that an employer-employee relationship existed
between the contending parties, nonetheless agreed
with respondent that the affidavits of some of the
complainants, should not have been given probative
value for their failure to affirm the contents thereof
and to undergo cross-examination. As a
consequence, the appellate court dismissed their
complaints for lack of sufficient evidence.
Issue:
Held: we held that "the argument that the affidavit is
hearsay because the affiants were not presented for
cross-examination is not persuasive because the
proceedings before administrative bodies like the
NLRC where decisions may be reached on the basis
of position papers only. this Court likewise sidelined
a similar challenge when it ruled that it was not
necessary for the affiants to appear and testify and
be cross-examined by counsel for the adverse party.
To require otherwise would be to negate the
rationale and purpose of the summary nature of the
proceedings mandated by the Rules and to make
mandatory the application of the technical rules of
evidence.
To reiterate, administrative bodies like the NLRC are
not bound by the technical niceties of law and
procedure and the rules obtaining in courts of law.
Indeed, the Revised Rules of Court and prevailing
jurisprudence may be given only stringent
application, i.e., by analogy or in a suppletory
character and effect. The submission by respondent,
citing People v. Sorrel, 12 that an affidavit not
testified to in a trial, is mere hearsay evidence and
has no real evidentiary value, cannot find relevance
in the present case considering that a criminal
prosecution requires a quantum of evidence
different from that of an administrative proceeding.
Under the Rules of the Commission, the Labor
Arbiter is given the discretion to determine the
necessity of a formal trial or hearing. Hence, trial-
type hearings are not even required as the cases
may be decided based on verified position papers,
with supporting documents and their affidavits.
[G.R. No. 110571. October 7, 1994.]
FIRST LEPANTO CERAMICS, INC., petitioner, vs. THE
COURT OF APPEALS, and MARIWASA
MANUFACTURING, INC., respondents.
Facts: BOI granted petitioner First Lepanto Ceramics,
Inc.'s application to amend its BOI certificate of
registration by changing the scope of its registered
product from "glazed floor tiles" to "ceramic tiles."
Oppositor Mariwasa filed a motion for
reconsideration of the said BOI decision while
oppositor Fil-Hispano Ceramics, Inc. did not move to
reconsider the same nor appeal therefrom. Soon
rebuffed in its bid for reconsideration, Mariwasa
filed a petition for review with CA.
Petitioner's contention is that Circular No. 1-91
cannot be deemed to have superseded Art. 82 of the
Omnibus Investments Code of 1987 (E.O. No. 226)
because the Code, which President Aquino
promulgated in the exercise of legislative authority,
is in the nature of a substantive act of Congress
defining the jurisdiction of courts pursuant to Art.
VIII, Sec. 2 of the Constitution, while the circular is a
rule of procedure which this Court promulgated
pursuant to its rule-making power under Art. VIII,
Sec. 5(5). Petitioner questions the holding of the
Second Division that although the right to appeal
granted by Art. 82 of the Code is a substantive right
which cannot be modified by a rule of procedure,
nonetheless, questions concerning where and in
what manner the appeal can be brought are only
matters of procedure which this Court has the power
to regulate.
Issue: WON the Court is correct in sustaining the
appellate jurisdiction of the CA in decisions from the
Board of Investments.
Held: he Constitution now provides in Art. VI, Sec. 30
that "No law shall be passed increasing the appellate
jurisdiction of the Supreme Court as provided in this
Constitution without its advice and concurrence."
This provision is intended to give the Supreme Court
a measure of control over cases placed under its
appellate jurisdiction. For the indiscriminate
enactment of legislation enlarging its appellate
jurisdiction can unnecessarily burden the Court and
thereby undermine its essential function of
expounding the law in its most profound national
aspects. Now, Art. 82 of the 1987 Omnibus
Investments Code, by providing for direct appeals to
the Supreme Court from the decisions and final
orders of the BOI, increases the appellate jurisdiction
of this Court. Since it was enacted without the advice
and concurrence of this Court, this provision never
became effective, with the result that it can never be
deemed to have amended BP Blg. 129, Sec. 9.
Consequently, the authority of the Court of Appeals
to decide cases appealed to it from the BOI must be
deemed to have been conferred by B.P. Blg. 129,
Sec. 9, to be exercised by it in accordance with the
procedure prescribed by Circular No. 1-91. Indeed,
there is no reason why decisions and final orders of
the BOI must be directly appealed to this Court. As
already noted in the main decision in this case, the
purpose of Sec. 9 of B.P. Blg. 129 is to provide
uniform appeals to the Court of Appeals from the
decisions and final orders of all quasi-judicial
agencies, with the exception only of those issued
under the Labor Code and those rendered by the
Central Board of Assessment Appeals. It is,
therefore, regrettable that in the adoption of the
Omnibus Investments Code of 1987 the advice and
concurrence of the Supreme Court, as required by
the Constitution, had not been obtained in providing
for the appeal of the decisions and final orders of the
BOI directly to the Supreme Court.
[G.R. No. 69871. August 24, 1990.]
ANITA VILLA, petitioner, vs. MANUEL LAZARO, as
Presidential Assistant for Legal Affairs, Office of the
President, and the HUMAN SETTLEMENTS
REGULATORY COMMISSION, respondents.
Facts: Anita Villa was granted a building permit to
construct a funeral parlor at Santiago Boulevard in
Gen. Santos City. The permit was issued by the City
Engineer after the application was "processed by
Engineer Dominador Solana of the City Engineer's
Office, and on the strength of the Certification of
Manuel Sales, City Planning and Development
Coordinator that the 'project was in consonance
with the Land Use Plan of the City and within the full
provision of the Zoning Ordinance.'" In October of
that same year, as the funeral parlor was nearing
completion, a suit for injunction was brought against
Villa by Dr. Jesus Veneracion, the owner of St.
Elizabeth Hospital, standing about 132.36 meters
from the funeral parlor. 3 The complaint sought the
perpetual enjoinment of the construction because
allegedly violative of the Zoning Ordinance of
General Santos City. After appropriate proceedings
and trial, judgment on the merits was rendered
dismissing Veneracion's complaint as well as the
counterclaim pleaded by Villa. The Trial Court found
that there was a falsified Zoning Ordinance,
containing a provision governing funeral parlors,
which had been submitted to and ratified by the
Ministry of Human Settlements, but that ordinance
had never been passed by the Sangguniang
Panlungsod; and that the genuine Zoning Ordinance
of General Santos City contained no prohibition
whatever relative to such parlors' "distance from
hospitals, whether public or private." 5 Villa then
resumed construction of her building and completed
it. Veneracion did not appeal from this adverse
judgment which therefore became final. Instead, he
brought the matter up with the Human Settlements
Regulatory Commission. He lodged a complaint with
that commission praying "that the funeral parlor be
relocated because it was near the St. Elizabeth
Hospital and Villa failed to secure the necessary
locational clearance."
On February 8, 1982 Villa received what was
evidently the "official communication" referred to in
Commissioner Dizon's telegram of January 21, 1982,
supra, an "Order to Present Proof of Locational
Clearance" dated January 20,1982. Knowing this and
"considering also that she . . . (had) already sent the
(required) locational clearance on January 27, 1982,"
Villa made no response. By Order dated January 21,
1983, Commissioner Dizon denied the
reconsideration prayed for by Villa in her letter of
November 22, 1982, opining that the plea for
reconsideration had been presented out of time, 32
and the order of June 29, 1982 had become final and
executory. 33
Villa then filed an appeal with "the Commission
Proper, which denied it in an order dated September
7, 1983, also on account of the finality of the order
of the Commissioner for Enforcement. Her
subsequent motion for reconsideration xx (was also)
denied in the order of June 7, 1984 . .Villa then
sought to take an appeal to the Office of the
President. It is noteworthy that Lazaro's resolution,
like the orders of Commissioner Dizon and
respondent Commission, contains no reference
whatsoever to the telegrams and documents sent by
Villa to the latter on various occasions evidencing her
prompt responses to the orders of Dizon and the
Commission, and her substantial compliance with the
general requirement for her to present the requisite
clearances or documents of authority for the erection
of her funeral parlor.
Issue: WON Villa was denied of due process against
which the defense of failure to take timely appeal
will not avail.
Held: The Court finds no merit in the proposition
that relief is foreclosed to Villa because her motion
for reconsideration of November 22, 1982 was filed
out of time. The very informal character of the so-
called administrative proceedings, an informality for
which Commissioner Dizon himself was responsible
and which he never sought to rectify, militates
against imposing strict observance of the limiting
periods applicable to proceedings otherwise
properly initiated and regularly conducted. Indeed,
considering the rather "off-the-cuff" manner in
which the inquiry was carried out, it is not even
certain that said petitioner is chargeable with
tardiness in connection with any incident thereof.
What the record shows is that she invariably
responded promptly, at times within a day or two of
receiving them, to orders of communications sent to
her. At any rate, the Court will not permit the result
of an administrative proceeding riddled with the
serious defects already pointed out to negate an
earlier judgment on the merits on the same matter
regularly rendered by competent court.
Whether born of ineptitude, negligence, bias or
malice, such lapses are indefensible. No excuse can
be advanced for avoiding all mention or
consideration of certifications issued by respondent
Commission's own officials in General Santos City,
which included the very relevant one executed by
Human Settlements Officer Josefina E. Alaba that
petitioner's application for a funeral parlor at the
questioned location had ". . . passed the criteria of
this office for this purpose." 39 It was thus not even
necessary for petitioner to bring that document to
the notice of the Commission which, together with
Commissioner Dizon, was chargeable with
knowledge of its own workings and of all acts done
in the performance of duty by its officials and
employees. Petitioner is plainly the victim of either
gross ignorance or negligence or abuse of power, or
a combination of both.
All of the foregoing translate to a denial of due
process against which the defense of failure to take
timely appeal will not avail. Well-esconced in our
jurisprudence is the rule:
". . . that administrative proceedings are not exempt
from the operation of certain basic and fundamental
procedural principles, such as the due process
requirements in investigations and trials. And this
administrative due process is recognized to include
(a) the right to notice, be it actual or constructive, of
the institution of the proceedings that may affect a
person's legal right; (b) reasonable opportunity to
appear and defend his rights, introduce witnesses
and relevant evidence in his favor, (c) a tribunal so
constituted as to give him reasonable assurance of
honesty and impartiality, and one of competent
jurisdiction; and (d) a finding or decision by that
tribunal supported by substantial evidence
presented at the hearing, or at least contained in the
records or disclosed to the parties affected."
[G.R. Nos. 90660-61. January 21, 1991.]
UTE PATEROK, petitioner-appellant, vs. BUREAU OF
CUSTOMS and HON. SALVADOR N. MISON,
respondents-appellees.
Facts: In March 1986, the petitioner shipped from
Germany to the Philippines two (2) containers, one
with used household goods and the other with two
(2) used automobiles (one Bourgetti and one
Mercedes Benz 450 SLC). The first container was
released by the Bureau of Customs and later on, the
Bourgetti car, too. The Mercedes Benz, however,
remained under the custody of the said Bureau.In
December 1987, after earnest efforts to secure the
release of the said Mercedes Benz, the petitioner
received a notice 3 of hearing from the legal officer
of the Manila International Container Port, Bureau of
Customs informing the former that seizure
proceedings were being initiated against the said
Mercedes Benz for violation of Batas Pambansa Blg.
73 in relation to Section 2530(F) of the Tariff and
Customs Code of the Philippines (TCCP), as
amended, and Central Bank Circular (CBC) 1069.
While the said case was pending, the petitioner
received only on April, 1988, a letter 4 informing her
that a decision ordering the forfeiture of her
Mercedes Benz had been rendered on December 16,
1986 by the District Collector of Customs. The
petitioner had not been informed that a separate
seizure case was filed on the same Mercedes Benz in
question before the said District Collector, an office
likewise under the Bureau of Customs. The
petitioner later found out that on November 13,
1986, a Notice of Hearing set on December 2, 1986,
concerning the said Mercedes Benz, was posted on
the bulletin board of the Bureau of Customs at Port
Area, Manila. The petitioner, thereafter, filed a
motion for new trial 5 before the Collector of
Customs, Port of Manila, but the latter, in an order 6
dated May 30, 1988, denied the same, invoking the
failure of the former to appear in the said hearing
despite the posting of the notice on the bulletin
board.
Issue: WON THE RESPONDENT-APPELLEE (Bureau of
Customs) ERRED IN THE RULING THAT A NOTICE OF
HEARING POSTED IN THE BULLETIN BOARD IS
SUFFICIENT NOTICE AND FAILURE OF PETITIONER-
APPELLANT TO APPEAR CAUSED HER DECLARATION
IN DEFAULT
Held: As regards the first assignment of error, we
agree with the petitioner that a notice of hearing
posted on the bulletin board of the public respondent
in a forfeiture proceeding where the owner of the
alleged prohibited article is known does not
constitute sufficient compliance with proper service
of notice and procedural due process. The Court has
emphasized the imperative necessity for
administrative agencies to observe the elementary
rules of due process. And no rule is better
established under the due process clause of the
Constitution than that which requires notice and
opportunity to be heard before any person can be
lawfully deprived of his rights.
In the present case, although there was a notice of
hearing posted on the bulletin board, the said
procedure is premised on the ground that the party
or owner of the property in question is unknown.
This is clear from the provisions of the TCCP relied
upon by the public respondent, namely, Sections
2304 and 2306, captioned "Notification of Unknown
Owner" and "Proceedings in Case of Property
Belonging to Unknown Parties," respectively,
wherein the posting of the notice of hearing on the
bulletin board is specifically allowed.
But in the case at bar, the facts evidently show that
the petitioner could not have been unknown. The
petitioner had previous transactions with the Bureau
of Customs and in fact, the latter had earlier
released the first container consisting of household
goods and the Bourgetti car to the former at her
address (as stated in the Bill of Lading). Moreover,
there was a similar seizure case 12 that had been
instituted by the Manila International Container
Port, docketed as S.I. No. 86-224, covering the same
Mercedes Benz in question and involving the same
owner, the petitioner herein. question and involving
the same owner, the petitioner herein. If only the
public respondents had exercised some reasonable
diligence to ascertain from their own records the
identity and address of the petitioner as the owner
and the consignee of the property in question, the
necessary information could have been easily
obtained which would have assured the sending of
the notice of hearing properly and legally. Then, the
petitioner would have been afforded the
opportunity to be heard and to present her defense
which is the essence of procedural due process. But
the public respondent regrettably failed to perform
such basic duty.
Lumiqued v. Exevea, G.R. No. 117565, [November
18, 1997], 346 PHIL 807-830
Facts: Arsenio P. Lumiqued was the Regional
Director of the Department of Agrarian Reform —
Cordillera Autonomous Region (DAR-CAR) until
President Fidel V. Ramos dismissed him from that
position pursuant to Administrative Order No. 52.
The dismissal was the aftermath of three complaints
filed by DAR-CAR Regional Cashier and private
respondent Jeannette Obar-Zamudio with the Board
of Discipline of the DAR. The first affidavit-complaint
charged Lumiqued with malversation through
falsification of official documents. From May to
September 1989, Lumiqued allegedly committed at
least 93 counts of falsification by padding gasoline
receipts. With the use of falsified receipts, Lumiqued
claimed and was reimbursed the sum of P44,172.46.
Private respondent added that Lumiqued seldom
made field trips and preferred to stay in the office,
making it impossible for him to consume the nearly
120 liters of gasoline he claimed everyday. The
investigating committee accordingly issued a
subpoena directing Lumiqued to submit his counter-
affidavit on or before June 17, 1992. Committee
hearings on the complaints were conducted, but
Lumiqued was not assisted by counsel. On the
second hearing date, he moved for its resetting to
enable him to employ the services of counsel. The
committee granted the motion, but neither
Lumiqued nor his counsel appeared on the date he
himself had chosen, so the committee deemed the
case submitted for resolution.
Following the conclusion of the hearings, the
investigating committee rendered a report finding
Lumiqued liable for all the charges against him.
Accordingly, the investigating committee
recommended Lumiqued's dismissal or removal
from office, without prejudice to the filing of the
appropriate criminal charges against him. President
Fidel V. Ramos himself issued Administrative Order
No. 52 (A.O. No. 52), 16 finding Lumiqued
administratively liable for dishonesty in the
alteration of fifteen gasoline receipts, and dismissing
him from the service, with forfeiture of his
retirement and other benefits. Undaunted,
Lumiqued filed a second motion for reconsideration,
alleging, among other things, that he was denied the
constitutional right to counsel during the hearing. 19
On May 19, 1994, 20 however, before his motion
could be resolved, Lumiqued died.
Issue: WON Limqued was denied of due process of
law granted by the Constitution.
Held: These arguments are untenable and
misplaced. The right to counsel, which cannot be
waived unless the waiver is in writing and in the
presence of counsel, is a right afforded a suspect or
an accused during custodial investigation. 23 It is not
an absolute right and may, thus, be invoked or
rejected in a criminal proceeding and, with more
reason, in an administrative inquiry. In the case at
bar, petitioners invoke the right of an accused in
criminal proceedings to have competent and
independent counsel of his own choice. Lumiqued,
however, was not accused of any crime in the
proceedings below. The investigation conducted by
the committee created by Department Order No.
145 was for the purpose of determining if he could
be held administratively liable under the law for the
complaints filed against him.
While investigations conducted by an administrative
body may at times be akin to a criminal proceeding,
the fact remains that under existing laws, a party in
an administrative inquiry may or may not be assisted
by counsel, irrespective of the nature of the charges
and of the respondent's capacity to represent
himself, and no duty rests on such a body to furnish
the person being investigated with counsel. 28 In an
administrative proceeding such as the one that
transpired below, a respondent (such as Lumiqued)
has the option of engaging the services of counsel or
not. This is clear from the provisions of Section 32,
Article VII of Republic Act No. 2260 29 (otherwise
known as the Civil Service Act) and Section 39,
paragraph 2, Rule XIV (on Discipline) of the Omnibus
Rules Implementing Book V of Executive Order No.
292 30 (otherwise known as the Administrative Code
of 1987). Excerpts from the transcript of
stenographic notes of the hearings attended by
Lumiqued 31 clearly show that he was confident of
his capacity and so opted to represent himself .
Thus, the right to counsel is not imperative in
administrative investigations because such inquiries
are conducted merely to determine whether there
are facts that merit disciplinary measures against
erring public officers and employees, with the
purpose of maintaining the dignity of government
service.
[G.R. No. 146137. June 8, 2005.]
HAYDEE C. CASIMIRO, in her capacity as Municipal
Assessor of San Jose, Romblon, Province of
Romblon, petitioner, vs. FILIPINO T. TANDOG, in his
capacity as the Municipal Mayor of San Jose,
Romblon, respondent.
Facts: Petitioner Haydee Casimiro began her service
in the government as assessment clerk in the Office
of the Treasurer of San Jose, Romblon. In August
1983, she was appointed Municipal Assessor.
Administrative Officer Nelson M. Andres, submitted
a report based on an investigation he conducted into
alleged irregularities in the office of petitioner
Casimero. The report spoke of an anomalous
cancellation of Tax Declarations No. 0236 in the
name of Teodulo Matillano and the issuance of a
new one in the name of petitioner's brother Ulysses
Cawaling and Tax Declarations No. 0380 and No.
0376 in the name of Antipas San Sebastian and the
issuance of new ones in favor of petitioner's brother-
in-law Marcelo Molina. Immediately thereafter,
respondent Mayor Tandog issued Memorandum
Order No. 13, placing the petitioner under
preventive suspension for thirty (30) days. Three (3)
days later, Mayor Tandog issued Memorandum
Order No. 15, directing petitioner to answer the
charge of irregularities in her office. In her answer,
petitioner denied the alleged irregularities claiming,
in essence, that the cancellation of the tax
declaration in favor of her brother Ulysses Cawaling
was done prior to her assumption to office as
municipal assessor, and that she issued new tax
declarations in favor of her brother-in-law Marcelo
Molina by virtue of a deed of sale executed by
Antipas San Sebastian in Molina's favor.
Memorandum Order No. 18 6 was issued by
respondent Mayor directing petitioner to answer in
writing the affidavit-complaint.
In response to Memorandum Order No. 18,
petitioner submitted a letter stating that with
respect to the complaint of Noraida San Sebastian
Cesar, she had already explained her side in the
letter dated 26 September 1996. As to the complaint
of Teodulo Matillano, she alleged that it was a
certain Lilia Barrientos who executed a deed of
absolute sale over the parcel of land subject of the
complaint in favor of her brother, Ulysses Cawaling.
Not satisfied, respondent Mayor created a fact-
finding committee to investigate the matter. After a
series of hearings, the committee, on 22 November
1996, submitted its reportrecommending
petitioner's separation from service. Undeterred by
that setback, petitioner appealed to the CSC, which
affirmed respondent Mayor's order of dismissal. A
motion for reconsideration was filed, but the same
was denied. Dissatisfied, petitioner elevated her case
to the Court of Appeals, which subsequently
affirmed the CSC decision. Her motion for
reconsideration was likewise denied. She avers that
Lorna Tandog Vilasenor, a member of the fact-
finding committee, is the sister of respondent Mayor.
She further alludes that while the committee
chairman, Nelson M. Andres, was appointed by the
respondent Mayor to the position of Administrative
Officer II only on 01 August 1996, no sooner was he
given the chairmanship of the Committee. Further
the affiants-complainants were not presented for
cross examination.
Issue: whether or not petitioner was afforded
procedural and substantive due process when she
was terminated from her employment as Municipal
Assessor of San Jose, Romblon.
Held: The essence of procedural due process is
embodied in the basic requirement of notice and a
real opportunity to be heard. 18 In administrative
proceedings, such as in the case at bar, procedural
due process simply means the opportunity to explain
one's side or the opportunity to seek a
reconsideration of the action or ruling complained
of. 19 "To be heard" does not mean only verbal
arguments in court; one may be heard also thru
pleadings. Where opportunity to be heard, either
through oral arguments or pleadings, is accorded,
there is no denial of procedural due process. In
administrative proceedings, procedural due process
has been recognized to include the following: (1) the
right to actual or constructive notice of the
institution of proceedings which may affect a
respondent's legal rights; (2) a real opportunity to be
heard personally or with the assistance of counsel,
to present witnesses and evidence in one's favor,
and to defend one's rights; (3) a tribunal vested with
competent jurisdiction and so constituted as to
afford a person charged administratively a
reasonable guarantee of honesty as well as
impartiality; and (4) a finding by said tribunal which
is supported by substantial evidence submitted for
consideration during the hearing or contained in the
records or made known to the parties affected.
In the case at bar, what appears in the record is that
a hearing was conducted on 01 October 1996, which
petitioner attended and where she answered
questions propounded by the members of the fact-
finding committee. Records further show that the
petitioner was accorded every opportunity to
present her side. She filed her answer to the formal
charge against her. After a careful evaluation of
evidence adduced, the committee rendered a
decision, which was affirmed by the CSC and the
Court of Appeals, upon a move to review the same
by the petitioner. Indeed, she has even brought the
matter to this Court for final adjudication. Kinship
alone does not establish bias and partiality. 22 Bias
and partiality cannot be presumed. In administrative
proceedings, no less than substantial proof is
required. 23 Mere allegation is not equivalent to
proof.
In the case at bar, there is substantial evidence to
prove petitioner's dismissal. Two alleged
irregularities provided the dismissal from service of
herein petitioner:
1. The cancellation of complainant Teodulo
Matillano's tax declaration and the issuance of a new
one in favor of petitioner's brother Ulysses Cawaling;
and
2. The cancellation of the tax declaration in the
name of complainant Noraida San Sebastian Cesar's
parent in favor of petitioner's brother-in-law,
Marcelo Molina.
[G.R. No. 125221. June 19, 1997.]
REYNALDO M. LOZANO, petitioner, vs. HON.
ELIEZER R. DE LOS SANTOS, Presiding Judge, RTC,
Br. 58, Angeles City; and ANTONIO ANDA,
respondents.
Facts: petitioner Reynaldo M. Lozano filed Civil Case
for damages against respondent Antonio Anda
before the Municipal Circuit Trial Court (MCTC),
Mabalacat and Magalang, Pampanga. Petitioner
alleged that he was the president of the Kapatirang
Mabalacat-Angeles Jeepney Drivers' Association, Inc.
(KAMAJDA) while respondent Anda was the
president of the Samahang Angeles-Mabalacat
Jeepney Operators' and Drivers' Association, Inc.
(SAMAJODA); in August 1995, upon the request of
the Sangguniang Bayan of Mabalacat, Pampanga,
petitioner and private respondent agreed to
consolidate their respective associations and form
the Unified Mabalacat-Angeles Jeepney Operators'
and Drivers' Association, Inc. (UMAJODA); petitioner
and private respondent also agreed to elect one set
of officers who shall be given the sole authority to
collect the daily dues from the members of the
consolidated association; elections were held and
both petitioner and private respondent ran for
president; petitioner won; private respondent
protested and, alleging fraud, refused to recognize
the results of the election; private respondent also
refused to abide by their agreement and continued
collecting the dues from the members of his
association despite several demands to desist.
Petitioner was thus constrained to file the complaint
to restrain private respondent from collecting the
dues and to order him to pay damages in the
amount of P25,000.00 and attorney's fees of
P500.00.
Private respondent moved to dismiss the complaint
for lack of jurisdiction, claiming that jurisdiction was
lodged with the Securities and Exchange Commission
(SEC). The MCTC denied the motion.
Issue: WON there exists an intracorporate relation
between petitioner and private respondent.
Held: The grant of jurisdiction to the SEC must be
viewed in the light of its nature and function under
the law. 8 This jurisdiction is determined by a
concurrence of two elements: (1) the status or
relationship of the parties; and (2) the nature of the
question that is the subject of their controversy. 9
The KAMAJDA and SAMAJODA to which petitioner
and private respondent belong are duly registered
with the SEC, but these associations are two
separate entities. The dispute between petitioner
and private respondent is not within the KAMAJDA
nor the SAMAJODA. It is between members of
separate and distinct associations. Petitioner and
private respondent have no intracorporate relation
much less do they have an intracorporate dispute.
The SEC therefore has no jurisdiction over the
complaint.
The doctrine of corporation by estoppel advanced
by private respondent cannot override jurisdictional
requirements. Jurisdiction is fixed by law and is not
subject to the agreement of the parties. 17 It cannot
be acquired through or waived, enlarged or
diminished by, any act or omission of the parties,
neither can it be conferred by the acquiescence of
the court. Corporation by estoppel is founded on
principles of equity and is designed to prevent
injustice and unfairness. It applies when persons
assume to form a corporation and exercise
corporate functions and enter into business relations
with third persons. Where there is no third person
involved and the conflict arises only among those
assuming the form of a corporation, who therefore
know that it has not been registered there is no
corporation by estoppel.
Globe vs NTC
Facts: Globe and private respondent Smart
Communications, Inc. (Smart) are both grantees of
valid and subsisting legislative franchises,[13]
authorizing them, among others, to operate a
Cellular Mobile Telephone System (CMTS), utilizing
the Global System for Mobile Communication (GSM)
technology.[1Among the inherent services
supported by the GSM network is the Short Message
Services (SMS),[15] also known colloquially as
texting, which has attained immense popularity in
the Philippines as a mode of electronic
communication. On 4 June 1999, Smart filed a
Complaint[16] with public respondent NTC, praying
that NTC order the immediate interconnection of
Smarts and Globes GSM networks, particularly their
respective SMS or texting services. The Complaint
arose from the inability of the two leading CMTS
providers to effect interconnection. Smart alleged
that Globe, with evident bad faith and malice,
refused to grant Smarts request for the
interconnection of SMS.On 7 June 1999, NTC issued
a Show Cause Order, informing Globe of the
Complaint, specifically the allegations therein that,
among othersdespite formal request made by Smart
to Globe for the interconnection of their respective
SMS or text messaging services, Globe, with evident
bad faith, malice and to the prejudice of Smart and
Globe and the public in general, refused to grant
Smarts request for the interconnection of their
respective SMS or text messaging services, in
violation of the mandate of Republic Act 7925,
Executive Order No. 39, and their respective
implementing rules and regulations.Globe filed its
Answer with Motion to Dismiss on 7 June 1999,
interposing grounds that the Complaint was
premature, Smarts failure to comply with the
conditions precedent required in Section 6 of NTC
Memorandum Circular 9-7-93,[19] and its omission
of the mandatory Certification of Non-Forum
Shopping.[20] Smart responded that it had already
submitted the voluminous documents asked by
Globe in connection with other interconnection
agreements between the two carriers, and that with
those voluminous documents the interconnection of
the SMS systems could be expedited by merely
amending the parties existing CMTS-to-CMTS
interconnection agreements.On 19 July 1999, NTC
issued the Order now subject of the present petition.
In the Order, after noting that both Smart and Globe
were equally blameworthy for their lack of
cooperation in the submission of the documentation
required for interconnection and for having unduly
maneuvered the situation into the present impasse,
[22] NTC held that since SMS falls squarely within
the definition of value-added service or enhanced-
service given in NTC Memorandum Circular No. 8-
9-95 (MC No. 8-9-95) the implementation of SMS
interconnection is mandatory pursuant to Executive
Order (E.O.) No. 59.The NTC also declared that both
Smart and Globe have been providing SMS without
authority from it, in violation of Section 420 (f) of MC
No. 8-9-95 which requires PTEs intending to provide
value-added services (VAS) to secure prior approval
from NTC through an administrative process. Yet, in
view of what it noted as the peculiar circumstances
of the case, NTC refrained from issuing a Show Cause
Order with a Cease and Desist Order, and instead
directed the parties to secure the requisite authority
to provide SMS within thirty (30) days, subject to the
payment of fine in the amount of two hundred pesos
(P200.00) from the date of violation and for every
day during which such violation continues.[24]Globe
filed with the Court of Appeals a Petition for
Certiorari and Prohibition[25] to nullify and set aside
the Order and to prohibit NTC from taking any
further action in the case. It reiterated its previous
arguments that the complaint should have been
dismissed for failure to comply with conditions
precedent and the non-forum shopping rule. It also
claimed that NTC acted without jurisdiction in
declaring that it had no authority to render SMS,
pointing out that the matter was not raised as an
issue before it at all. Finally, Globe alleged that the
Order is a patent nullity as it imposed an
administrative penalty for an offense for which
neither it nor Smart was sufficiently charged nor
heard on in violation of their right to due process. On
22 November 1999, a Decision[28] was promulgated
by the Former Special Fifth Division of the Court of
Appeals[29] affirming in toto the NTC Order.
Interestingly, on the same day Globe and Smart
voluntarily agreed to interconnect their respective
SMS systems, and the interconnection was effected
at midnight of that day.
Globe contends that the Court of Appeals erred in
holding that the NTC has the power under Section 17
of the Public Service Law[34] to subject Globe to an
administrative sanction and a fine without prior
notice and hearing in violation of the due process
requirements; that specifically due process was
denied Globe because the hearings actually
conducted dwelt on different issues; and, the
appellate court erred in holding that any possible
violation of due process committed by NTC was
cured by the fact that NTC refrained from issuing a
Show Cause Order with a Cease and Desist Order,
directing instead the parties to secure the requisite
authority within thirty days. Globe also contends
that in treating it differently from other carriers
providing SMS the Court of Appeals denied it equal
protection of the law.
Ruling: One of the novel introductions of the PTA is
the concept of a value-added service (VAS). Section
11 of the PTA governs the operations of a value-
added service provider, which the law defines as an
entity which relying on the transmission, switching
and local distribution facilities of the local exchange
and inter-exchange operators, and overseas carriers,
offers enhanced services beyond those ordinarily
provided for by such carriers.[51] Section 11
recognizes that VAS providers need not secure a
franchise, provided that they do not put up their
own network.[52] However, a different rule is laid
down for telecommunications entities such as Globe
and PLDT. The section unequivocally requires NTC
approval for the operation of a value-added service.
NTC relied on Section 420(f) of the Implementing
Rules of the PTA (Implementing Rules) as basis for its
claim that prior approval must be secured from it
before Globe can operate SMS. Instead of expressly
defining what VAS is, the Implementing Rules defines
what enhanced services are, namely: a service which
adds a feature or value not ordinarily provided by a
public telecommunications entity such as format,
media conversion, encryption, enhanced security
features, computer processing, and the like.[62]
Given that the PTA defines VAS as enhanced
services, the definition provided in the Implementing
Rules may likewise be applied to VAS. Still, the
language of the Implementing Rules is unnecessarily
confusing. Still, owing to the general nature of the
definition laid down in the Implementing Rules, the
expectation arises that the NTC would promulgate
further issuances defining whether or not a specific
feature newly available in the market is a VAS. Such
expectation is especially demanded if the NTC is to
penalize PTEs who fail to obtain prior approval in
accordance with Section 11 of the PTA. To our
knowledge, the NTC has yet to come out with an
administrative rule or regulation listing which of the
offerings in the market today fall under VAS or
enhanced services. Is SMS a VAS, enhanced service,
or a special feature? Apparently, even the NTC is
unsure. It had told Islacom that SMS was a special
feature, then subsequently held that it was a VAS.
However, the pertinent laws and regulations had not
changed from the time of the Islacom letter up to
the day the Order was issued. Only the thinking of
NTC did.
Every party subject to administrative regulation
deserves an opportunity to know, through
reasonable regulations promulgated by the agency,
of the objective standards that have to be met. Such
rule is integral to due process, as it protects
substantive rights. Such rule also promotes harmony
within the service or industry subject to regulation.
It provides indubitable opportunities to weed out
the most frivolous conflicts with minimum hassle,
and certain footing in deciding more substantive
claims. If this results in a tenfold in administrative
rules and regulations, such price is worth paying if it
also results in clarity and consistency in the
operative rules of the game. The administrative
process will best be vindicated by clarity in its
exercise.[In short, the legal basis invoked by NTC in
claiming that SMS is VAS has not been duly
established. The fault falls squarely on NTC. With
the dual classification of SMS as a special feature and
a VAS and the varying rules pertinent to each
classification, NTC has unnecessarily complicated the
regulatory framework to the detriment of the
industry and the consumers. But does that translate
to a finding that the NTC Order subjecting Globe to
prior approval is void? There is a fine line between
professional mediocrity and illegality. NTCs
byzantine approach to SMS regulation is certainly
inefficient. Unfortunately for NTC, its actions have
also transgressed due process in many ways, as
shown in the ensuing elucidation.
While stability in the law, particularly in the business
field, is desirable, there is no demand that the NTC
slavishly follow precedent.[82] However, we think it
essential, for the sake of clarity and intellectual
honesty, that if an administrative agency decides
inconsistently with previous action, that it explain
thoroughly why a different result is warranted, or if
need be, why the previous standards should no
longer apply or should be overturned.[83] Such
explanation is warranted in order to sufficiently
establish a decision as having rational basis.[84] Any
inconsistent decision lacking thorough, ratiocination
in support may be struck down as being arbitrary.
And any decision with absolutely nothing to support
it is a nullity.[85] Second. Globe and Smart were
denied opportunity to present evidence on the
issues relating to the nature of VAS and the prior
approval. Third. The imposition of fine is void for
violation of due process. In summary: (i) there is no
legal basis under the PTA or the memorandum
circulars promulgated by the NTC to denominate
SMS as VAS, and any subsequent determination by
the NTC on whether SMS is VAS should be made
with proper regard for due process and in
conformity with the PTA; (ii) the assailed Order
violates due process for failure to sufficiently explain
the reason for the decision rendered, for being
unsupported by substantial evidence, and for
imputing violation to, and issuing a corresponding
fine on, Globe despite the absence of due notice and
hearing which would have afforded Globe the right
to present evidence on its behalf.