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COURSE: ADMIN PROFESSOR: ARRIOLA

ADMINISTRATIVE LAW CASE DIGESTS


6. GUDANI
VS. SENGA

FACTS: On Sept. 22, 2005, Sen. Biazon invited several senior officers of the AFP, including Gen. Gudani, to appear at a public hearing before the Senate Committee on National Defense and Security concerning the conduct of the 2004 elections wherein allegations of massive cheating and the Hello Garci tapes emerged. AFP Chief of Staff Gen. Senga issued a Memorandum, prohibiting Gen. Gudani, Col. Balutan and company from appearing before the Senate Committee without Presidential approval. Nevertheless, Gen. Gudani and Col. Balutan testified before said Committee, prompting Gen. Senga to order them subjected to General Court Martial proceedings for willfully violating an order of a superior officer. In the meantime, President Arroyo issued EO 464, which was subsequently declared unconstitutional. ISSUES: Whether or not E.O. 464 which provides among others that no AFP personnel shall appear before any congressional or senate hearing without her approval is constitutional? YES W/N the case can be subject to judicial review? HELD: Insofar as E.O. 464 compelled officials of the executive branch to seek prior presidential approval before appearing before Congress, the notion of executive control also comes into consideration. The impression is wrong. The ability of the President to require a military official to secure prior consent before appearing in Congress pertains to wholly different and independent specie of presidential authoritythe commander-in-chief powers of the President. By tradition and jurisprudence, the commander-in-chief powers of the President are not encumbered by the same degree of restriction as that which may attach to executive privilege or executive control. SC holds that the President has constitutional authority to do so, by virtue of her power as commander-in-chief, and that as a consequence a military officer who defies such injunction is liable under military justice. At the same time, we also hold that any chamber of Congress which seeks to appear before it a military officer against the consent of the President has adequate remedies under law to compel such attendance. Any military official whom Congress summons to testify before it may be compelled to do so by the President. If the President is not so inclined, the President may be commanded by judicial order to compel the attendance of the military officer. Final judicial orders have the force of the law of the land which the President has the duty to faithfully execute. Again, let it be emphasized that the ability of the President to prevent military officers from testifying before Congress does not turn on executive privilege, but on the Chief Executives power as commanderin-chief to control the actions and speech of members of the armed forces. The Presidents prerogatives as commander-in-chief are not hampered by the same limitations as in executive privilege. The commander-in-chief provision in the Constitution is denominated as Section 18, Article VII, which begins with the simple declaration that [t]he President shall be the Commander-in-Chief of all armed forces of the Philippines. Outside explicit constitutional limitations, such as those found in Section 5, Article XVI, the commander-in-chief clause vests on the President, as commander-in-chief, absolute authority over the

persons and actions of the members of the armed forces. Such authority includes the ability of the President to restrict the travel, movement and speech of military officers, activities which may otherwise be sanctioned under civilian law. Judicial relief as remedy: The refusal of the President to allow members of the military to appear before Congress is not absolute. Inasmuch as it is ill-advised for Congress to interfere with the Presidents power as commander-inchief, it is similarly detrimental for the President to unduly interfere with Congresss right to conduct legislative inquiries. The impasse did not come to pass in this petition, since petitioners testified anyway despite the presidential prohibition. The remedy lies with the courts. It may thus be subjected to judicial review pursuant to the Courts certiorari powers under Section 1, Article VIII of the Constitution. To avoid conflict, Congress must indicate in its invitations to the public officials concerned, or to any person for that matter, the possible needed statute which prompted the need for the inquiry. Section 21, Article VI likewise establishes critical safeguards that proscribe the legislative power of inquiry. The provision requires that the inquiry be done in accordance with the Senate or Houses duly published rules of procedure, necessarily implying the constitutional infirmity of an inquiry conducted without duly published rules of procedure. Section 21 also mandates that the rights of persons appearing in or affected by such inquiries be respected, an imposition that obligates Congress to adhere to the guarantees in the Bill of Rights. Courts are empowered, under the constitutional principle of judicial review, to arbitrate disputes between the legislative and executive branches of government on the proper constitutional parameters of power. By this and, if the courts so rule, the duty falls on the shoulders of the President, as commander-in-chief, to authorize the appearance of the military officers before Congress. Even if the President has earlier disagreed with the notion of officers appearing before the legislature to testify, the Chief Executive is nonetheless obliged to comply with the final orders of the courts.

7.

CARPIO

VS. EXECUTIVE SECRETARY

FACTS: Congress passed RA 6975 (An Act Establishing the PNP under a Reorganized DILG). Petitioner Carpio, as citizen, taxpayer and member of the Bar filed a petition seeking to declare the said RA unconstitutional. Petitioner advances the view that the RA weakened the National Police Commission (NAPOLCOM) by limiting its power to administrative control over the PNP, thus, control remained with the DILG secretary under whom both the NAPOLCOM and PNP were placed. Petitioner further asserts that in manifest derogation of the power of control of the NAPOLCOM over the PNP, RA 6975 vested the power to choose the PNP Provincial Director and the Chiefs of Police in the Governors and Mayors, respectively; the power of "operational supervision and control" over police units in city and municipal mayors; in the Civil Service Commission, participation in appointments to the positions of Senior Superintendent to Deputy Director-General as well as the administration of qualifying entrance examinations; disciplinary powers over PNP members in the "People's Law Enforcement Boards" and in city and municipal mayors. Petitioner also contends that Section 12 of the questioned Act (Relationship with the DND) constitutes an "encroachment upon, interference with, and an abdication by the President of, executive control and commander-in-chief powers."

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COURSE: ADMIN PROFESSOR: ARRIOLA

Finally, petitioner submits that the creation of a "Special Oversight Committee" under Section 84 of the Act, especially the inclusion therein of some legislators as members is an "unconstitutional encroachment upon and a diminution of, the President's power of control over all executive departments, bureaus and offices." ISSUES: (1) Whether the RA limited the power of NAPOLCOM to administrative control? (2) Whether the power given to local officials and to the CSC by the Act limits the power of control of NAPOLCOM over the NPN? (3) Whether Section 12 of the RA constitutes an abdication by the President of his executive control and commander-in-chief powers? (4) Whether the creation of Special Oversight Committee which includes some legislators encroach upon the Presidents power of control? HELD: (1) NO. To begin with, one need only refer to the fundamental principle in Constitutional Law that the President has control of all executive departments, bureaus, and offices to lay at rest petitioners contention. Equally well accepted, as a corollary rule to the control powers of the President, is the "Doctrine of Qualified Political Agency". Under this doctrine, "all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or law to act in person on the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the Secretaries of such departments, performed and promulgated in the regular course of business, unless disapproved or reprobated by the Chief Executive presumptively the acts of the Chief Executive." Thus, and in short, "the President's power of control is directly exercised by him over the members of the Cabinet who, in turn, and by his authority, control the bureaus and other offices under their respective jurisdictions in the executive department." The circumstance that the NAPOLCOM and the PNP are placed under the reorganized Department of Interior and Local Government is merely an administrative realignment that would bolster a system of coordination and cooperation among the citizenry, local executives and the integrated law enforcement agencies and public safety agencies created. Such organizational set-up does not detract from the mandate of the Constitution that the national police force shall be administered and controlled by a national police commission as at any rate, and in fact, the Act in question adequately provides for administration and control at the commission level. (2) NO. It is clear from the act that full control remains with the NAPOLCOM.There is no usurpation of the power of control of the NAPOLCOM under Section 51 because under this very same provision, it is clear that the local executives are only acting as representatives of the NAPOLCOM. . . . As such deputies, they are answerable to the NAPOLCOM for their actions in the exercise of their functions under that section. Thus, unless countermanded by the NAPOLCOM, their acts are valid and binding as acts of the NAPOLCOM." It is significant to note that the local officials, as NAPOLCOM representatives, will choose the officers concerned from a list of eligibles (those who meet the general qualifications for appointment to the PNP) to be recommended by PNP officials. the same holding is true with respect to the contention on the operational supervision and control exercised by the local officials. Those officials would simply be acting as representatives of the Commission. As regards the assertion involving the Civil Service

Commission, suffice it to say that the questioned provisions precisely underscore the civilian character of the national police force, and will undoubtedly professionalize the same. The grant of disciplinary powers over PNP members to the "People's Law Enforcement Boards" (or the PLEB) and city and municipal mayors is also not in derogation of the commission's power of control over the PNP. Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the regional appellate boards, over decisions of both the PLEB and the said mayors. Furthermore, it is the Commission which shall issue the implementing guidelines and procedures to be adopted by the PLEB for in the conduct of its hearings, and it may assign NAPOLCOM hearing officers to act as legal consultants of the PLEBs .As a disciplinary board primarily created to hear and decide citizen's complaints against erring officers and members of the PNP, the establishment of PLEBs in every city, and municipality would all the more help professionalize the police force. (3) NO.The provision herein assailed precisely gives muscle to and enforces the proposition that the national police force does not fall under the Commander-in-Chief powers of the President. This is necessarily so since the police force, not being integrated with the military, is not a part of the Armed Forces of the Philippines. As a civilian agency of the government, it properly comes within, and is subject to, the exercise by the President of the power of executive control. Consequently, Section 12 does not constitute abdication of commander-in-chief powers. It simply provides for the transition period or process during which the national police would gradually assume the civilian function of safeguarding the internal security of the State. (4) NO. There is not the least interference with the President's power of control under Section 84. The Special Oversight Committee is simply an ad hoc or transitory body, established and tasked solely with planning and overseeing the immediate "transfer, merger and/or absorption" into the Department of the Interior and Local Governments of the "involved agencies." This it will undertake in accordance with the phases of implementation already laid down in Section 85 of the Act and once this is carried out, its functions as well as the committee itself would cease altogether. As an ad hoc body, its creation and the functions it exercises, decidedly do not constitute an encroachment and in diminution of the power of control which properly belongs to the President. What is more, no executive department, bureau or office is placed under the control or authority, of the committee. NOTE: The Court also opined that the three Constitutional Commissions (Civil Service, Audit, Elections) and the additional commission created by the Constitution (Human Rights) are all independent of the Executive; but the National Police Commission is not. And that in fact, it was stressed during the CONCOM deliberations that this commission would be under the President, and hence may be controlled by the President, thru his or her alter ego, the Secretary of the Interior and Local Government.

8.

CENTRAL BANK vs. CLORIBEL

Facts: Banco Filipino is a savings and mortgage bank duly organized and existing under the laws of the Philippines. CB issued, pursuant to Resolution No. 1769 of the Monetary Board, CB Cir No. 185. Subsequently, however, within the same year, Banco Filipino changed its policy by compounding and paying the interest on its savings deposits, at the maximum rate fixed by the Monetary Board, from the quarterly to the monthly basis, and by paying, in advance, the maximum rates of interest on time deposits.

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COURSE: ADMIN PROFESSOR: ARRIOLA

THE Monetary Board approved a resolution, directing the Banco Filipino to comply strictly with Central Bank Circular No. 222. Banco Filipino filed with the Court of First Instance of Manila a petition for prohibition and preliminary injunction against Petitioner herein and the Monetary Board, "insofar as they restrict the payment of monthly interests on savings deposits and advance interests on time deposits," and praying that a writ of preliminary injunction be issued ex parte to restrain the Petitioner, its officials and/or agents from enforcing the aforementioned circulars and resolutions to the extent that the same imposed said restrictions, or, should the court "require that a hearing be conducted on the petition for a preliminary injunction, that a preliminary restraining order to the same effect be issued pending such hearing." Thereupon, Cloribel, as Judge of said court, issued ex parte the restraining order prayed for. After the hearing and the submission by the parties of their respective memoranda, Judge Cloribel granted said application for a writ of preliminary injunction. Accordingly, the latter instituted the order of November 23 and to meanwhile restrain its enforcement, upon the ground that, in issuing said order, Judge Cloribel had committed a grave abuse of discretion amounting to excess of jurisdiction. Banco Filipino sets up, the following defenses, to wit: 1) that said petition should be dismissed, because "petitioner has not exhausted all remedies in the Court of First Instance of Manila before coming to this Honorable Court"; 2) that having heard the parties before issuing the contested order, respondent Judge had neither committed a grave abuse of discretion, nor exceeded his jurisdiction, in acting as he did; and 3) that the contested resolutions and circulars are null and void for (a) they were issued without previous notice and hearing, (b) they impair vested rights, and (c) the statutory power of the Monetary Board to "fix the maximum rates of interest which banks may pay on deposits and any other obligations" does "not include the regulation of the manner of computing and paying interest, since this function is not expressly granted petitioner." Issues: (1) W/N petition is improper because CB has not exhausted all remedies in the Court of First Instance of Manila? NO. (2) W/N resolutions and circulars are null and void? NO. (3) W/N respondent Judge had neither committed a grave abuse of discretion, nor exceeded his jurisdiction, in acting as he did? YES. Held: (1) It is true that Petitioner herein did not seek a reconsideration of the order complained of, and that, as a general rule, a petition for certiorari will not be entertained unless the respondent has had, through a motion for reconsideration, a chance to correct the error imputed to him. This rule is subject, however, to exceptions, among which are the following, namely: 1) where the issue raised is one purely of law; 2) where public interest is involved; and 3) in case of urgency. These circumstances are present in the case at bar. Moreover, Petitioner herein had raised in its answer in the main case and in the rejoinder to the memorandom of the Banco Filipino in support of the latter's application for a writ of preliminary injunction the very same questions'raised in the Petition herein. In other words, Judge Cloribel has already had an opportunity to considered and pass upon those

questions, so that a motion for reconsideration of his contested order would have served no practical purpose. The rule requiring exhaustion of remedies does not call for an exercise in futility. (2) Then, too, the Central Bank is supposed to gather relevant data and make the necessary study, but has no legal obligation to notify and hear anybody, before exercising its power to fix the maximum rates of interest that banks may pay on deposits or any other obligations. Previous notice and hearing, as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class of persons or enterprises, unless the law provides otherwise, and there is no statutory requirement to this effect, insofar as the fixing of maximum states of interest payable by banks is concerned. It is also clear from the authorities that where the function of the administrative body is legislative, notice or hearing is not required by due process of law. "If the nature of the administrative agency is essentially legislative, the requirements of notice and hearing are not necessary. The validity of a rule of future action which affects a group, if vested rights of liberty or property are not involved, is not determined according to the same rules which apply in the case of the direct application of a policy to a specific individual. Procedural due process is not required, however, in the formulation and issuance of general rules and regulation as distinguished from the rendering of determinations and decisions in adjudicatory proceedings. Nor is procedural due process required where there is no interference with life, liberty, or a vested property right. What is more, it is presumed that the Monetary Board has exercised its power to fix maximum rates of interest conformably to law, and courts will not interfere with the policy of the Board thereon unless it acted without or in excess of its jurisdiction or in a manifestly arbitrary or unduly oppressive manner upon the theory that the Board is, for obvious reasons, in a better position to determine such question. In the case at bar, Banco Filipino does not impugn either the legality or the wisdom of the maximum rates of interest fixed in the contested resolutions and circulars. It merely assails the authority of the Board to fix or regulate the "manner" of compounding and paying said rates of interest, which is discussed in subsequent pages. The theory to the effect that the contested resolutions and circulars impair vested rights is obviously unfounded, for the said resolutions and circulars operate prospectively, and affect only deposits made and/or interests accruing subsequently to the promulgation thereof. Indeed, consistently with the third paragraph of section 109 of the Central Bank Act reading: Any modifications in the maximum interest rates permitted for the borrowing or lending operations of the banks shall apply only to future operations and not to those made prior to the date on which the modification becomes effective.

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COURSE: ADMIN PROFESSOR: ARRIOLA

Circular No. 185 issued on December 15, 1964, states: "This Circular shall take effect on January 1, 1965," whereas Circular No. 222, dated June 14, 1966, specifies that it "shall take effect immediately," and, hence, beginning from June 14, 1966, not prior thereto. Furthermore, all contracts are subject to the police power of the State. Being an inherent attribute of sovereignty, such power is deemed incorporated into the laws of the land, which are part of all contracts, thereby qualifying the obligations arising therefrom. In short, all contractual obligations are subject as an implied reservation therein to the policy power of the state, of which the regulatory authority of the Central Bank may be regarded as a mere 14 extension. Far from being an impairment of contractual obligations, the exercise of that authority constitutes, therefore, a mere enforcement of one of the conditions deemed imposed in all contracts. The main issue raised is whether or not the authority of the Monetary Board to "fix the maximum rates of interest which banks may pay on deposits and on any other obligations" includes the power to determine and fix the manner in which said interests may be compounded and paid. It is significant that the Sections 14 and 109 of Republic Act No. 265 does not merely authorize the Board to "fix the maximum rates of interest which banks may pay on deposits and on any other obligations." It, also, expressly empowers the Board "(i)n order to avoid possible evasion of maximum interest rates set by the ... Board" to fix also "the maximum rates that banks may pay to or collect from their customers in the form of ... payments of any sort." Indeed, the authority to establish maximum rates of interest carries with it, necessarily, the power to determine the maximum rates payable as interest for given periods of time. In other words, it connotes the right to specify the length of time for which the rates thus fixed shall be computed. Consequently, it cannot but include the prerogative to regulate (a) the manner of computing said rates and (b) the manner or time of payment of interest, insofar as these factors affect the amount of interest to be paid. The justification for the inclusion, in the power to fix maximum rates of interest, of the authority to prescribe the time or manner of payment thereof springs, (a) not only from the implied grant of all powers 16 necessary to carry out those expressly conferred, and (b) from the explicit authority of the Monetary Board "to avoid possible evasion of maximum interest rates" fixed by it, by, likewise, fixing maximum rates that banks may pay to their customers in any other "form," but, also, (c) from the reasons underlying the grant of authority to fix said maximum rates of interest that banks may pay for deposits and on any other obligations. Otherwise stated, the objective of the power to fix maximum rates of interest payable by banks is to establish a uniform ceiling applicable to all banks, in order to avoid that a competition among the same, in the form of higher rates of interest offered to depositors, may ensue and reach such a point that, to offset the resulting reduction in their profits, said institutions might be impelled to increase their earnings, by resorting to risky ventures, or "less conservative and more remunerative loans and investments," which could impair the stability of the banking system and jeopardize the financial condition of the nation. The important thing is the amount paid or to be deposited by the latter and made available for the operations of the bank, within the

period for which the rate has been fixed. The manner of computing such rate and the time or manner of payment of interest are merely incidental thereto. As above indicated, the purpose of the resolutions and circulars fixing maximum rates of interest payable by banks on savings deposits and prohibiting the payment in advance of interest on time deposits, is to protect the stability of banking institutions as vital factors in the national economy from the danger that may result from cut-throat competition among said institutions. No such danger would result either from the interest that banks may collect in advance from its borrowers or from high rates of interest the former may charge from the latter, aside from the fact that such rates are subject to the limitations imposed by the laws on usury. (3) It was, therefore, apparent from the pleadings and memoranda that Banco Filipino had no cause of action against Petitioner herein to restrain the same from demanding strict compliance with said circulars. Pursuant to Section 3 of Rule 58 of the Rules of Court, "(a) preliminary injunction may be granted ... when it is established" (1) that "the plaintiff is entitled to the relief demanded," which consists in restraining "the commission or continuance of the acts complained of," and (2) that the commission or continuance thereof "would probably work injustice to the plaintiff" or be "in violation of the plaintiff's rights" and tend "to render the judgment ineffectual." Since Banco Filipino was clearly not entitled to the relief sought in said Civil Case No. 67181 and no "injustice" to said institution would, accordingly, result from its compliance with the contested resolutions and circulars, it follows that Respondent Judge had committed a grave abuse of discretion, amounting to excess of jurisdiction, in issuing its aforementioned order of November 23, 1966, in said case.

9.

SMART COM vs. NTC

Facts: On June 00, pursuant to its, rule-making and regulatory powers, NTC issued Memorandum Circular 13-6-2000, promulgating rules on the billing of telecommunications services. Pertinent parts: Bill given within 30 days, grace period for subscriber if not complied No charge for voice mailbox calls and the like Prepaid card owners shall be verified by the companies, 2 years lifespan of prepaid card Subscribers updated of remaining value of call card Billing: from 1 min/pulse to 6 sec/pulse On Aug 00, NTC issued a Memorandum, containing measures to minimize theft of cell phones like compliance with the preceding Memo. On Oct 00, another Memo was issued for compliance with the preceding Memos. Petitioners thereafter filed to declare nullification of NTC Memo Circulars. They contend that NTC has no jurisdiction, jurisdiction belongs to DTI where there has been a violation of Constitution, deprivation of property w/o due process and impairment of prepaid service. TRO was issued. Subsequently, the NTC motion to dismiss: failure to exhaust administrative remedies. RTC: injunction granted pending resolution of case. CA: Reversed, exhaust administrative remedies. Issue:

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COURSE: ADMIN PROFESSOR: ARRIOLA

Whether or not the Courts have jurisdiction? YES. Held: In questioning the validity or constitutionality of a rule or regulation issued by an administrative agency, a party need not exhaust administrative remedies before going to court. Exhaustion applies only where the act of the administrative agency concerned was performed pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative power. Even assuming that the principle of exhaustion of administrative remedies apply in this case, the records reveal that petitioners sufficiently complied with this requirement. In like manner, the doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners were justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality and validity of the said issuances. In their complaint before the Regional Trial Court, petitioners averred that the Circular contravened Civil Code provisions on sales and violated the constitutional prohibition against the deprivation of property without due process of law. These are within the competence of the trial judge. Contrary to the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the workings of the cellular telephone service, including prepaid SIM and call cards and this is judicially known to be within the knowledge of a good percentage of our population and expertise in fundamental principles of civil law and the Constitution.

supposed delay of leather soles from the United States as an excuse for the non-compliance with the said contract. This resulted to a case between ANG TIBAY and the aggrieved labor union. ANG TIBAY won in the SC. There were two Motions for Reconsideration submitted by the Solicitor General, in behalf ot eh Court of Industrial Relations (CIR); and the National Labor Union, Inc. The latter MR submitted by the union wants the case to be reopened and alleges that: 1. Teodoros claim that the shortage of leather soles in ANG TIBAY made it necessary for the temporary layoff of members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather. 2. The supposed lack of leather materials was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army. 3. The National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Teodoro, the existence and functions of which are illegal. 4. The Rights of workers to collective bargaining, majority rule and elective representation are highly essential and indispensable. 5. The employer Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood. ANG TIBAY filed an opposition for such MR. ISSUE: W/N the case should be reopened in the CIR? YES! GRANTED HELD: MR of SOLGEN is not given credence. We shall proceed to dispose of the motion for new trial of the respondent labor union. Nature and Powers of the Court of Industrial Relations: SC have re-examined the entire record of the proceedings before the Court of Industrial Relations in this case, and have found no substantial evidence that the exclusion of the 89 laborers here was due to their union affiliation or activity. The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the CIR, is more active, affirmative and dynamic. Other powers of the CIR It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and regulate the relations between them. It shall also endeavor for the reconciliation of the parties and induce them to settle the dispute amicably before continuing with the case. When directed by the President of the Philippines, it shall investigate and study all industries established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for

10. ANG TIBAY vs. CIR


FACTS: ANG TIBAY is a company owned and controlled by one Toribio Teodoro. ANG TIBAY has two major labor unions. The first one is the National Workers Brotherhood, which is a company or employer union alleged to be dominated by Teodoro. The second one is the National Labor Union Inc, which is a union dominated by the laborers of ...ANG TIBAY. The Laborers sought to have a Collective Bargaining Agreement with ANG TIBAY. Teodoro felt it necessary to temporarily dismiss some 89 employees, particularly members of the National Labor Union Inc. He used the shortage of leather soles in ANG TIBAY as a reason for such act. ANG TIBAY had a contract, secured by a bond, with the Philippine Army. This contract was breached by ANG TIBAY. The former used the

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COURSE: ADMIN PROFESSOR: ARRIOLA

such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less to landowners. There is a mingling of executive and judicial functions in the CIR, which is a departure from the rigid doctrine of the separation of governmental powers. The CIR is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." The fact that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are primary rights which must be respected even in proceedings of this character: (1) The Right to a Hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. (2) The Tribunal must consider the evidence presented. (3) The Decision must have something to support itself. (4) The Evidence must be substantial. (5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. NOTE: 7 lang ang nakasulat sa case. In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Worker's Brotherhood , the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a conclusion of law. This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc. The interest of justice would be better served if the aggrieved labor union is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result.

This petition alleges that the Benjamin Romualdez and Juliette Gomez Romualdez (spouses) in violation of the Anti-Graft and Corrupt Practices Act acquired through abuse of right and power and through unjust enrichment some 6,299,177 sequestered shares of stock in the Philippine Commercial International Bank (PCIBank) of which PCGG prays for the return, reconveyance, accounting and restitution with damages in favor of the Republic of the Philippines. They were said to have used respondents, Trans Middle East Philippine Equities (Equities) and Narciso as their dummy buyers, with no or negligible cash out. Equities files for a motion for intervention with the court claiming ownership over said shares. Herein petitioner, First Philippine Holdings Corporation, filed its own Motion for leave to intervene and to admit complaint in Intervention which alleges that PCIBank shares were obtained by means of fraud and acts contrary to law, morals, good customs and public policy, as well as in breach of fiduciary duty and the acquisition is either voidable or void or unenforceable on any of said grounds. And that the purchase price was extravagantly low, which the aggregate amount of about P47M was supposedly pegged at P104M. Petitioner therefore asks that said shares be returned to it the rightful owner. The Court denied petitioners motion saying that the issue involved an intra-corporate dispute and that the intervention would unduly delay the proceedings. ISSUES: (1) (2) (3) Whether or not petitioner has legal interest? Whether or not Sandiganbayan has jurisdiction? Whether or not the court abuse its discretion in denying the Motion for Intervention and may the writ of mandamus be issued to compel it to grant such motion?

Held: Yes, intervention is a remedy by which a third party, not originally impleaded in a proceeding, becomes a litigant therein to enable him to protect or preserve a right or interest which may be affected by such proceeding. Its purpose, according to Francisco, is "to settle in one action and by a single judgment the whole controversy (among) the persons involved" Under the rule above-quoted, intervention shall be allowed when a person has: a legal interest in the matter in litigation; or in the success of any of the parties or an interest against the parties or when he is so situated as to be adversely affected by a distribution or disposition of property in the custody of the court or of an officer thereof.

We have no doubt that petitioner has a legal interest in the shares which are the subject of the controversy. At the very least, it is "so situated as to be adversely affected by a distribution or disposition of the (sequestered shares) in the custody of the court". The jurisdiction of the Sandiganbayan has been clarified in the case of PCGG vs. Hon. Emmanuel G. Pea, etc., et al., thus: . . . Under section 2 of the President's Executive Order No. 14 issued on May 7, 1986, all cases of the Commission regarding "the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda Romualdez

11. FIRST PHILIPPINE SANDIGANBAYAN


Facts:

HOLDINGS

CORPORATION

vs.

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COURSE: ADMIN PROFESSOR: ARRIOLA

Marcos, their Close Relatives , Subordinates , Business Associates , Dummies, Agents, or Nominees" whether civil or criminal, are lodged within the "exclusive and original jurisdiction of the Sandiganbayan" and all incidents arising from, incidental to, or related to, such cases necessarily fall likewise under the Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court. Furthermore, the intervention must be allowed otherwise the Sandiganbayan will not be able to determine the ultimate owner of the shares under sequestration. That allowing the intervention may entail some delay in the proceedings in Civil Case No. 0035 is of no moment. After all, there may be even longer delays and, worse, confusion in processes and rulings, and uncertainty in results, if petitioners were to be authorized and/or required to file a separate action to litigate the herein matter. In resolving to deny petitioner's motion for intervention, respondent Court abused its discretion because, clearly, the question of ownership of the shares under sequestration is within its jurisdiction, being an incident arising from or in connection with the case under its exclusive and original jurisdiction. As provided under Rule 12, Sec. 2 (b), intervention shall be allowed "in the exercise of discretion" by a court. Ordinarily, mandamus will not prosper to compel a discretionary act. But where there is "gross abuse of discretion, manifest injustice or palpable excess of authority" equivalent to denial of a settled right to which petitioner is entitled, and there is no other plain, speedy and adequate remedy, the writ shall issue.

completed and the animals actually segregated and confined; that the accused, in violation of such quarantine and of the orders of the Bureau of Agriculture, duly promulgated, broke the quarantine, removed the animals and used them in the ordinary work of his plantation. The fact that the information in its preamble charged a violation of act No. 1760 does not prevent us from finding the accused guilty of a violation of an article of the Penal Code. SC would not permit an accused to be convicted under one Act when he is charged with the violation of another, if the change from one statute to another involved a change of the theory of the trial or required of the defendant a different defense or surprised him in any other way. The allegations required under Act No. 1760 include those required under article.

13. PEOPLE vs. MACEREN


Facts: Buenaventura, Reyes, Aquino and del Rosario were charged by a Constabulary investigator in the municipal court of Sta. Cruz, Laguna with having violated Fisheries AO. Accused in resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by using their own motor banca, equipped with motor; with a generator with attached dynamo; and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current, which destroy any aquatic animals within its cuffed reach, to the detriment and prejudice of the populace. Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed. The Court of First Instance of Laguna affirmed the order of dismissal. The case is now before this Court on appeal by the prosecution under Republic Act No. 5440. The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance it is not a substance at all but a form of energy conducted or transmitted by substances. The lower court held that the law does not clearly prohibit electro fishing, the executive and judicial departments cannot consider it unlawful. Secretary of Agriculture and Natural Resources, upon the recommendation of the Fisheries Commission, issued Fisheries Administrative Order by restricting the ban against electro fishing to fresh water fisheries. Issue: (1) W/N Administrative Orders Nos. 84 and 84-1 were not issued under section 11 of the Fisheries Law which punishes fishing by means of an obnoxious or poisonous substance? NO. Held: The penal provision of Administrative Order No. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries

12. US vs. PANLILIO


Facts: Respondent was convicted of violating the law relating to the quarantining of animals suffering from dangerous communicable diseases thereby sentencing him to pay a fine of 40pesos.The accused allegedly permitted his carabaos to be taken from the corral where they were quarantined because of rinderpest. It appears from the evidence that the accused was notified that his carabaos had rinderpest and the subsequent declaration of quarantine, and that the respondent fully understood that he was not to remove the animals from the corral in which they were placed. Accused avers that the facts alleged do not constitute an offense Issue: (1) W/N facts alleged in the information constitute an offense punishable under Act No 1760? No Although the original information of the accused charged him with violating section 6 of Act No. 1760, the information was subsequently amended, however the amended information did not specify which section of Act No 1760 was violated. The only sections of Act No. 1760, which prohibit acts and pronounce them unlawful are 3, 4 and 5. This case does not fall within any of them. However, defendant did violate art 581, paragraph 2 of the Penal Code which punishes any person who violates any regulations or ordinances with regard to any epidemic disease among animals It alleged in the information and was proved on the trial that the Bureau of agriculture had ordered a quarantine of the carabaos at the time and place mentioned; that the quarantine had been executed and

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COURSE: ADMIN PROFESSOR: ARRIOLA

Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission, Republic Act No. 3512. The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in the old Fisheries Law. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. However, at present, there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. 704, which is a revision and consolidation of all laws and decrees affecting fishing and fisheries expressly punishes electro fishing in fresh water and salt water areas. The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing. An examination of the rule-making power of executive officials and administrative agencies and, in particular, of the Secretary of Agriculture and Natural under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order. Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes. The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute. The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the nondeleption of legislative, powers. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the law". The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority granting statute, do not represent a valid precise of the rule-making power but constitute an attempt by an administrative body to. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. An administrative agency cannot amend an act of Congress.

In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body, and the order will be scrutinized with special care.

14. VICTORIAS MILLING vs. SSS


Facts: On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following tenor: "Effective November 1, 1958, all Employers in computing the premiums due the System, will take in...to consideration and include in the Employee's remuneration all bonuses and overtime pay, as well as the cash value of other media of remuneration. All these will comprise the Employee's remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a maximum of P500 for any one month." Petitioner Victorias Milling Company, Inc. wrote the Social Security Commission in effect protesting against the circular as contradictory to a previous Circular No. 7, dated October 7, 1957 expressly excluding overtime pay and bonus in the computation of the employers' and employees' respective monthly premium contributions. Moreover, it contended that due notice via publication was not complied with. Issue: (1) Whether or not Circular No. 22 is a rule or regulation, as contemplated in Section 4(a) of Republic Act 1161 empowering the Social Security Commission "to adopt, amend and repeal subject to the approval of the President such rules and regulations as may be necessary to carry out the provisions and purposes of this Act." Held: It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay given in addition to the regular or base pay were expressly excluded, or exempted from the definition of the term "compensation", such exemption or exclusion was deleted by the amendatory law. It thus became necessary for the Social Security Commission to interpret the effect of such deletion or elimination. Circular No. 22 was, therefore, issued to apprise those concerned of the interpretation or understanding of the Commission, of the law as amended, which it was its duty to enforce. It did not add any duty or detail that was not already in the law as amended. It merely stated and circularized the opinion of the Commission as to how the law should be construed.

15. PHILIPPINE CONSUMERS FOUNDATION, INC. SECRETARY OF EDUCATION, CULTURE AND SPORTS
Facts:

vs.

On February 21, 1987, the Task Force on Private Higher Education created by DECS submitted a report entitled "Report and Recommendations on a Policy for Tuition and Other School Fees." The report favorably recommended to the DECS the following courses of action with respect to the Government's policy on increases in school fees for the SY 1987 to 1988. DECS took note of the report and issued an Order authorizing the 15% to 20% increase in school fees as

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COURSE: ADMIN PROFESSOR: ARRIOLA

recommended by the Task Force. Petitioner sought for reconsideration on the ground that increases were too high. Thereafter, the Order was modified reducing the increases to a lower ceiling of 10% to 15%. Petitioner still opposed the increases. Petitioner, allegedly on the basis of the public interest, went to this Court and filed the instant Petition for prohibition, seeking that judgment be rendered declaring the questioned Department Order unconstitutional. The thrust of the Petition is that the said Department Order was issued without any legal basis. The petitioner also maintains that the questioned Department Order was issued in violation of the due process clause of the Constitution in as much as the petitioner was not given due notice and hearing before the said Department Order was issued. In support of the first argument, the petitioner argues that while the DECS is authorized by law to regulate school fees in educational institutions, the power to regulate does not always include the power to increase school fees. Regarding the second argument, the petitioner maintains that students and parents are interested parties that should be afforded an opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that the questioned Order constitutes a denial of substantive and procedural due process of law. Issue: Whether or not DECS has the power to prescribe school fees? Held: Yes. In the absence of a statute stating otherwise, this power includes the power to prescribe school fees. No other government agency has been vested with the authority to fix school fees and as such, the power should be considered lodged with the DECS if it is to properly and effectively discharge its functions and duties under the law. The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. As regards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such rates. When the rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial in character. Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? We believe so. The assailed Department Order prescribes the maximum school fees that may be charged by all private schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to the validity of its issuance.

action. A motion to dismiss was filed by petitioner based on 3 ground: 1) the court ad no jurisdiction; 2) non-exhaustion of administrative remedies; and 3) the complaint was prohibited by PD 605. The motion was denied by Judge Abad, which denial was sustained by the CA. The Court of Appeals held that the doctrine of exhaustion of administrative remedies was not without exception and pointed to the several instances approved by this Court where it could be dispensed with. The respondent court found that in the case before it, the applicable exception was the urgent need for judicial intervention. It was found out that the City Council of Pagadian City sent a resolution in 1981 to the Bureau of Forest Development to reserve 1,000 hectares of the Lison Valley, but was not acted upon by the Bureau. Instead, petitioner was granted the TLA, and the logging operations of petitioner caused heavy siltation in various rivers In other words, the adverse effects of the logging operations of the defendant have already covered a wider area than that feared to be adversely affected by the City Council of Pagadian City, thus, urgent judicial intervention on the matter was necessary, as reliance on the DENR is not enough. Issue: Should the doctrine of exhaustion of administrative remedies apply in this case? Yes Held: The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. Non-observance of the doctrine results in lack of a cause of action, which is one of the grounds allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection as a ground for a motion to dismiss and the court may then proceed with the case as if the doctrine had been observed. One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of noninterference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so. A no less important consideration is that administrative decisions are usually questioned in the special civil actions of certiorari, prohibition and mandamus, which are allowed only when there is no other plain, speedy and adequate remedy available to the petitioner. It may be added that strict enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their heavily loaded dockets. As correctly suggested by the respondent court, however, there are a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: 1) when the question raised is purely legal; 2) when the administrative body is in estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for judicial intervention; 5) when the claim involved is small; 6) when irreparable damage will be suffered; 7) when there is no other plain, speedy and adequate remedy; 8) when strong public interest is involved; 9) when the subject of the controversy is private land; and 10) in quo warranto proceedings. Even if it be assumed that the forestry laws do not expressly require prior resort to administrative remedies, the reasons for the doctrine above given, if nothing else, would suffice to still require its observance. Even if such reasons were disregarded, there would still be the explicit language of pertinent laws vesting in the DENR the power and function "to regulate the development,

16. SUNVILLE vs. JUDGE ABAD


Facts: Sunville was granted a Timber License Agreement (TLA), authorizing it to exploit timber within a concession area in Lison Valley, Zamboanga del Sur for a period of 30 years, to expire on 31 September 1992. Gilbolingo and Bugtai filed a petition with the DENR to annul the said TLA due to some serious violations of its conditions and provisions of forestry laws, carried out by petitioner. They also filed a complaint for injunction in the RTC against petitioner, based on the same causes of

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COURSE: ADMIN PROFESSOR: ARRIOLA

disposition, extraction, exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the "management and disposition of all lands of the public domain," and in the Forest Management Bureau (formerly the Bureau of Forest Development) the responsibility for the enforcement of the forestry laws aid regulations here claimed to have been violated. This comprehensive conferment clearly implies at the very least that the DENR should be allowed to rule in the first instance on any controversy coming under its express powers before the courts of justice may intervene. As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national interest, the record does not show that the petitioners have satisfactorily established these extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative remedies and immediate resort to the courts of justice. In fact, this particular submission must fall flat against the petitioner's uncontested contention that it has since 1988 stopped its operations under the TLA in compliance with the order of the DENR. As the wrong alleged in the complaint was supposedly committed as a result of the unlawful logging activities of the petitioner, it will be necessary first to determine whether or not the TLA and the forestry laws and regulations had indeed been violated. To repeat for emphasis, determination of this question is the primary responsibility of the Forest Management Bureau of the DENR. The application of the expertise of the administrative agency in the resolution of the issue raised is a condition precedent for the eventual examination, if still necessary, of the same question by a court of justice. Petition dismissed, and the decision of the CA is reversed and set aside.

Morcoso also assailed the jurisdiction of the trial court because of a pending administrative case before the BFAR regarding their conflicting claims. The trial court ruled that the fishpond in dispute belongs to Tirol. The Court of Appeals affirmed said decision on appeal. Issue: (1)

(2) Held:

W/N the trial court had jurisdiction over a conflict of claims involving a parcel of land of the public domain under the administration and control of another government agency? YES W/N the trial court erred in declaring Tirol as the owner of said parcel of land of the public domain? NO

(1) The doctrine requiring prior exhaustion of administrative remedies before recourse to courts is inapplicable to the instant case because the fishpond in dispute is private and not public land. In the sketch of the 4.5 hectare land of Tirol- Maquirang, are two lots, identified as Lot 1 and Lot 2. During the pre-trial, the parties agreed as to the identity of the land in dispute, which is Lot 1. In the lease contract, the land subject of the lease is bounded as follows: North, Luciano Tirol Sitiar; East, Ciriaco, Rosa all Tirol; South, Ipil Creek; and, West, Adiango Creek. In the sketch Lot 1, has the same boundaries in the north, east and south, except in the West side, which is Aslum River. This is because the former Adiango Creek due to a change of course became Aslum River. The fishpond is not part of the public domain, as claimed by appellant. We agree with the trial court's reasoning that The plaintiffs have sufficiently established that they and their predecessors-in-interest have been in possession of the land in question under claim of ownership for a very long period of time. Eriberto Tirol, father of TirolMaquirang, purchased the land in question which was then included in a bigger parcel on June 28, 1918 by means of a public instrument, Exhibit 1 and had it declared for taxation purposes as early as 1921, Exhibit J. (2) He paid the corresponding land taxes thereon as shown by his tax receipts mentioned above. Upon his death in 1930, Tiro-Maquirang succeeded to its possession. Nobody had disturbed them in their possession and usufruct of the land up to the time the defendant made an unwarranted claim over it. The defendant, emboldened and taking advantage of the information he got from the personnel of the BFAR that the fishpond under lease was a public land, applied for a fishpond permit and thereby refused to recognize the existing and legitimate claim of ownership over the land by the plaintiffs.' We find the foregoing conclusions drawn by the trial court from the documentary evidence submitted by the parties to be in order. The technical descriptions of the fishpond stated in the lease contract and in the sketch plan of the BFAR personnel who conducted an ocular inspection of the fishpond area applied for by Morcoso explicitly show that the latter was the subject of the lease contract between Tirol and Morcoso. The fishpond not having been part of the public domain, the trial court correctly adjudged Tirol as the rightful owner thereof. Well settled is the rule that the factual findings of the trial court are entitled to great weight and respect on appeal especially then established by unrebutted testimonial and documentary evidence, as in this case.

17. MORCOSO V. CA
FACTS In 1984, private respondent Tirol (now Tirol-Maquirang) filed a complaint against the petitioner Morcoso for the recovery of possession and declaration of ownership of a fishpond situated in Barangay Aslum, Ibajay, Aklan. She alleged that the said fishpond is a part of the 4.5 hectare of land she inherited from her father in 1930 In December 28, 1979, she entered into a lease agreement with Morcoso, allowing him to lease 5,880 sq.m. for 6yrs without paying, and develop it into a fishpond, with usufructuary rights. While working on the fishpond, Morcoso was informed by the personnel of the Bureau of Fisheries and Aquatic Resources (BFAR) that the land Tirol leased to him is within the area of alienable and disposable public land, thus inn 1973, Morcoso applied for a fishpond permit with the BFAR; Morcoso subsequently refused to surrender the possession of the fishpond to Tirol in 1976 when the term of the lease expired Tirol filed an unlawful detainer case against Morcoso but the same was dismissed for not having been timely filed. As his defense, Morcoso claimed that the fishpond in dispute is not the fishpond subject of the contract of lease. He developed two fishponds: (a) the fishpond subject of the lease, from which he was forcibly ejected by Tirol in 1971 as a result of a disagreement with her; and (b) the fishpond in dispute, which adjoins the first fishpond and which he developed after the BFAR personnel assured him that the area he had moved to is a forested area, suitable for fishpond development. He applied for a fishpond permit in 1973 and he declared said fishpond in his name for taxation purposes.

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COURSE: ADMIN PROFESSOR: ARRIOLA

18. NFA vs. CA


(2) Facts: The NFA through its Administrator Pelayo J. Gabaldon conducted a public bidding to award security contracts for the protection of its properties and facilities all over the country. 12 security agencies were awarded one-year contracts, among whom were the private respondents. In 1992, Romeo David became the new Administrator of the NFA. He caused a review of all the security service contracts in force. Subsequently, Administrator David created a Prequalification, Bids and Awards Committee (PBAC) by virtue of Special Order no. 0407, which would undertake the pre-qualification of prospective bidders, conduct the bidding, evaluate the bids tendered and recommend to David the bids accepted. When the time for bidding came, some of the bids were disqualified for failure to comply with the documentary requirements (i.e. submission of proof of financial capability to support the bid). Some of the applicants who failed to prequalify namely Lanting Security and Watchman Agency and respondent Lasala filed complaints with the RTC to restrain the Administrator from proceeding with the public bidding. The court issued restraining orders and a preliminary injunction, thus, no bidding took place. During the pendency of the writ of preliminary injunction, Adminstrator David sent to all incumbent security agencies notices of termination, informing them that their contracts had expired and they no longer enjoyed the trust and confidence of NFA. Thereafter, the Administrator engaged the services of seven new security agencies on a month-to-month basis pending resolution of the injunction against bidding. Respondents filed for another complaint to restrain the NFA from terminating their services and from awarding and installing the seven new security agencies, which was granted by the trial court. NFA appealed to the CA alleging grave abuse of discretion of the trial court judges. CA rendered a decision partially granting the petition by annulling that part of the orders restraining NFA from terminating the contracts but upheld the orders insofar as they enjoined NFA from awarding the new contracts. The petitioners, before the SC, contend that: (1) Private respondents did not avail of, much less exhaust administrative remedies. Therefore, their complaint is premature and legally deficient to merit the grant of judicial relief. (2) The execution of the new interim monthly negotiated security contracts intended to provide the NFA with ample security during the temporary emergency period that a public bidding cannot be conducted due to injunctions issued against it are consistent with the law, being a legitimate exception to the general requirement of public bidding. Held: (1) The doctrine of exhaustion of administrative remedies is subject to some limitations and exceptions. In the case at bar, respondents contracts were terminated in the midst of bidding preparations and their replacements hired barely five days after. An appeal to the NFA Board or Council of Trustees and the Secretary of Agriculture as mandated by the provisions of the Administrative Code of 1987 was not a plain, speedy and adequate remedy in the ordinary course

(3)

of law. The urgency of the situation which necessitated a recourse to the courts is justified. The injunction issued by the trial court hardly created a temporary emergency period. However, even assuming that an emergency actually existed and the negotiated contracts were justified, the petitioners failure to conduct a public bidding and select the bidder within reasonable time casts doubt on the good faith behind the negotiated contracts. The petitioners manifest reluctance to hold a public bidding and award a contract to the winning bidder smacks of favoritism and partiality toward the security agencies to whom it awarded the negotiated contracts and cannot be countenanced. A competitive public bidding aims to protect the public interest by giving the public the best possible advantages through open competition. It is a mechanism that enables the government agency to avoid or preclude anomalies in the execution of public contracts.

19. ESPIRITU vs. MELGAR AND JUDGE VIROLA


Facts: This case stems from Mayor Melgar allegedly attacking one Ramir Garing and having him arrested and detained in abuse of his position as Mayor of Oriental Mindoro. Ramir Garing included in his complaints, requests to the Provincial Governor Espiritu for the Mayor to be placed under preventive suspension and prompt action. The Sangguniang Panlalawigan of Oriental Mindoro, After evaluating the complaint and its supporting documents, as well as the Mayor's answer and the affidavits of his witnesses, passed Resolution No. 55, recommending the Provincial Governor to place the Mayor under preventive suspension for 45 days pending investigation of the administrative complaint.This was based on reasonable grounds in the complaint corroborated by several witnesses. Mayor then resorted to the RTC to issue a TRO on the Provincial Gov. as he alleges that his suspension was unjustified. Gov. now appeals it to the SC through certiorari and prohibition, citing that the judge committed GADLEJ in issuing the TRO Issue: (1) Whether or not the Provincial Governor committed GADLEJ by placing the Mayor under preventive suspension? NO (2) Whether or not the Judge committed GADLEJ? YES Held: (1) There is nothing improper in suspending an officer before the charges against him are heard and before he is given an opportunity to prove his innocence. Preventive suspension is allowed so that the respondent may not hamper the normal course of the investigation through the use of his influence and authority over possible witnesses If the Mayor thought that preventive suspension was unjustified and politically motivated, he should have sought relief first from the Secretary DILG and not from the courts. Mayor Melgar's direct recourse to the courts without exhausting administrative remedies was premature As a general rule, the office or body that is invested with the power of removal or suspension should be the sole judge of the necessity and sufficiency of the cause

11 | M I R A N D A R E Y E S A V I L A S U A R E Z R E V O T E A N B O C H I A T I L L O S U L I T D E TORRES DIMALANTA WEIGAND NABOYA HIRANG-OLAVE GARCIA

COURSE: ADMIN PROFESSOR: ARRIOLA

The provincial governor of Oriental Mindoro is authorized by law to preventively suspend the municipal mayor of Naujan at anytime after the issues had been joined and any of the following grounds were shown to exist: 1. When there is reasonable ground to believe that the respondent has committed the act or acts complained of; 2. When the evidence of culpability is strong; 3. When the gravity of the offense so warrants; or 4. When the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence.

Mortgage Trust Agreement, constituted in its favor by MMIC after the latter defaulted in its obligation totalling around P22 million as of 15 July 1984. The Court of Appeals eventually dismissed the case against the PNB. Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC. Trial Court ordered the rescission of the Memorandum of Agreement, declared the continued efficacy of the coal operating contract in favor of IEI; ordered the reversion of the two coal blocks covered by the coal operating contract; ordered BED to issue its written affirmation of the coal operating contract and to expeditiously cause the conversion thereof from exploration to development in favor of IEI; directed BED to give due course to IEI's application for a coal operating contract; directed BED to give due course to IEI's application for three more coal blocks; and ordered the payment of damages and rehabilitation expenses. Court of Appeals held that the rendition of the summary judgment was not proper since there were genuine issues in controversy between the parties, and more importantly, that the Trial Court had no jurisdiction over the action considering that, under Presidential Decree No. 1206, it is the BED that has the power to decide controversies relative to the exploration, exploitation and development of coal blocks. Issues: W/N the doctrine of primary jurisdiction is applicable? YES Held: While the action filed by IEI sought the rescission of what appears to be an ordinary civil contract cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be rescinded is derived from a coal-operating contract and is inextricably tied up with the right to develop coal-bearing lands and the determination of whether or not the reversion of the coal operating contract over the subject coal blocks to IEI would be in line with the integrated national program for coaldevelopment and with the objective of rationalizing the country's overall coal-supply-demand balance, IEI's cause of action was not merely the rescission of a contract but the reversion or return to it of the operation of the coal blocks. Thus it was that in its Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared the continued efficacy of the coal-operating contract in IEI's favor and directed the BED to give due course to IEI's application for three (3) IEI more coal blocks. These are matters properly falling within the domain of the BED. For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive and integrated national program for the exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal resources; adopting a coal development program; regulating all activities relative thereto; and undertaking by itself or through service contracts such exploitation and development, all in the interest of an effective and coordinated development of extracted resources. That law further provides that the powers and functions of the defunct Energy Development Board relative to the implementation of P.D. No.

(2) The regional trial court had no jurisdiction over Special Civil Action No. R-5003 and gravely abused its discretion in refusing to dismiss the case. However, regardless, it has become moot and academic as the TRO was issued on August 6, 1991, a month after the maximum allowable preventive suspension (60 days) which he has already served, thus the Mayor should be reinstated without prejudice to the continuation of the administrative investigation of the charges against him.

20. INDUSTRIAL ENTERPRISES, INC vs.CA


Facts: Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract for the exploration of three additional coal blocks which, together with the original two blocks, comprised the so-called "Giporlos Area." IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supply-demand balance the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the subject of IEI's coal operating contract. Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with damages against MMIC and the then Minister of Energy Geronimo Velasco alleging that MMIC took possession of the subject coal blocks even before the Memorandum of Agreement was finalized and approved by the BED; that MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for the adjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed upon and to assume IEI's loan obligation as provided in the Memorandum of Agreement. IEI also prayed that the Energy Minister be ordered to approve the return of the coal operating contract from MMIC to petitioner, with a written confirmation that said contract is valid and effective, and, in due course, to convert said contract from an exploration agreement to a development/production or exploitation contract in IEI's favor. PNB, was later impleaded as co-defendant in an Amended Complaint when the latter with the Development Bank of the Philippines effected extra-judicial foreclosures on certain mortgages, particularly the

12 | M I R A N D A R E Y E S A V I L A S U A R E Z R E V O T E A N B O C H I A T I L L O S U L I T D E TORRES DIMALANTA WEIGAND NABOYA HIRANG-OLAVE GARCIA

COURSE: ADMIN PROFESSOR: ARRIOLA

972 on coal exploration and development have been transferred to the BED, provided that coal operating contracts including the transfer or assignment of interest in said contracts, shall require the approval of the Secretary (Minister) of Energy (Sec. 12, P.D. No. 1206). P.D. No. 972 also provides: Sec. 8. Each coal operating contract herein authorized shall . . . be executed by the Energy Development Board. It has been the jurisprudential trend to apply the doctrine of primary jurisdiction in many cases involving matters that demand the special competence of administrative agencies. It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have 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" (United States v. Western Pacific Railroad Co., 352 U.S. 59, Emphasis supplied). Clearly, the doctrine of primary jurisdiction finds application in this case since the question of what coal areas should be exploited and developed and which entity should be granted coal operating contracts over said areas involves a technical determination by the BED as the administrative agency in possession of the specialized expertise to act on the matter. The Trial Court does not have the competence to decide matters concerning activities relative to the exploration, exploitation, development and extraction of mineral resources like coal. These issues preclude an initial judicial determination. It behooves the courts to stand aside even when apparently they have statutory power to proceed in recognition of the primary jurisdiction of an administrative agency. The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of the case below. It need only be suspended until after the matters within the competence of the BED are threshed out and determined. Thereby, the principal purpose behind the doctrine of primary jurisdiction is salutarily served.

13 | M I R A N D A R E Y E S A V I L A S U A R E Z R E V O T E A N B O C H I A T I L L O S U L I T D E TORRES DIMALANTA WEIGAND NABOYA HIRANG-OLAVE GARCIA

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