Law On Sales Digested Cases
Law On Sales Digested Cases
Law On Sales Digested Cases
FACTUAL ANTECEDENTS Understandably aggrieved after discovering these circumstances, CGA filed a
complaint against the respondents before the RTC on April 30, 2002.10 CGA
The present controversy traces its roots to the case filed by CGA against the claimed that the respondents fraudulently concealed the fact that the subject
Spouses Avelino and Priscilla Ignacio (respondents) for rescission of their property was part of a property under litigation; thus, the Contract to Sell was a
Contract to Sell before the RTC, Branch 14, Malolos, Bulacan. The facts, rescissible contract under Article 1381 of the Civil Code. CGA asked the trial
drawn from the records and outlined below, are not in dispute. court to rescind the contract; order the respondents to return the amounts
already paid; and award actual, moral and exemplary damages, attorney’s
On April 30, 1998, CGA entered into a Contract to Sell a subdivision fees and litigation expenses.
lot4 (subject property) with the respondents – the registered owners and
developers of a housing subdivision known as Villa Priscilla Subdivision Instead of filing an answer, the respondents filed a motion to dismiss asserting
located in Barangay Cutcut, Pulilan, Bulacan. Under the Contract to Sell, CGA that the RTC had no jurisdiction over the case.11 Citing PD No. 95712 and PD
would pay P2,373,000.00 for the subject property on installment basis; they No. 1344, the respondents claimed that the case falls within the exclusive
were to pay a down payment of P1,186,500, with the balance payable within jurisdiction of the HLURB since it involved the sale of a subdivision lot. CGA
three years on equal monthly amortization payments of P46,593.85, inclusive opposed the motion to dismiss, claiming that the action is for rescission of
of interest at 24% per annum, starting June 1998. contract, not specific performance, and is not among the actions within the
exclusive jurisdiction of the HLURB, as specified by PD No. 957 and PD No.
On August 5, 2000, the parties mutually agreed to amend the Contract to Sell 1344.
to extend the payment period from three to five years, calculated from the date
of purchase and based on the increased total consideration of P2,706,600, On October 15, 2002, the RTC issued an order denying the respondents’
motion to dismiss. The RTC held that the action for rescission of contract and
damages due to the respondents’ fraudulent misrepresentation that they are Development of the HLURB’s jurisdiction
the rightful owners of the subject property, free from all liens and
encumbrances, is outside the HLURB’s jurisdiction. 1avv phi1
The nature of an action and the jurisdiction of a tribunal are determined by the
material allegations of the complaint and the law governing at the time the
The respondents countered by filing a petition for certiorari with the CA. In its action was commenced. The jurisdiction of the tribunal over the subject matter
October 20, 2003 decision, the CA found merit in the respondents’ position or nature of an action is conferred only by law, not by the parties’ consent or by
and set the RTC order aside; the CA ruled that the HLURB had exclusive their waiver in favor of a court that would otherwise have no jurisdiction over
jurisdiction over the subject matter of the complaint since it involved a contract the subject matter or the nature of an action.14 Thus, the determination of
to sell a subdivision lot based on the provisions of PD No. 957 and PD No. whether the CGA’s cause of action falls under the jurisdiction of the HLURB
1344. necessitates a closer examination of the laws defining the HLURB’s jurisdiction
and authority.
Contending that the CA committed reversible error, the CGA now comes
before the Court asking us to overturn the CA decision and resolution. PD No. 957, enacted on July 12, 1976, was intended to closely supervise and
regulate the real estate subdivision and condominium businesses in order to
THE PETITION curb the growing number of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and
In its petition, CGA argues that the CA erred - operators. As one of its "whereas clauses" states:
(1) in applying Article 1191 of the Civil Code for breach of reciprocal WHEREAS, reports of alarming magnitude also show cases of swindling and
obligation, while the petitioner’s action is for the rescission of a fraudulent manipulations perpetrated by unscrupulous subdivision and
rescissible contract under Article 1381 of the same Code, which is condominium sellers and operators, such as failure to deliver titles to the
cognizable by the regular court; and buyers or titles free from liens and encumbrances, and to pay real estate
taxes, and fraudulent sales of the same subdivision lots to different innocent
purchasers for value;
(2) in holding that the HLURB has exclusive jurisdiction over the
petitioner’s action by applying Antipolo Realty Corp v. National Housing
Corporation13 and other cited cases. Section 3 of PD No. 957 granted the National Housing Authority (NHA) the
"exclusive jurisdiction to regulate the real estate trade and business."
Thereafter, PD No. 1344 was issued on April 2, 1978 to expand the jurisdiction
In essence, the main issue we are asked to resolve is which of the two – the
of the NHA to include the following:
regular court or the HLURB – has exclusive jurisdiction over CGA’s action for
rescission and damages.
SECTION 1. In the exercise of its functions to regulate the real estate trade
and business and in addition to its powers provided for in Presidential Decree
According to CGA, the exclusive jurisdiction of the HLURB, as set forth in PD
No. 957, the National Housing Authority shall have exclusive jurisdiction to
No. 1344 and PD No. 957, is limited to cases involving specific performance
hear and decide cases of the following nature:
and does not cover actions for rescission.
A. Unsound real estate business practices;
Taking the opposing view, respondents insist that since CGA’s case involves
the sale of a subdivision lot, it falls under the HLURB’s exclusive jurisdiction.
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
THE COURT’S RULING
dealer, broker or salesman; and
We find no merit in the petition and consequently affirm the CA decision.
C. Cases involving specific performance of contractual and statutory SEC. 1. In the exercise of its functions to regulate the real estate trade and
obligations filed by buyers of subdivision lot or condominium unit business and in addition to its powers provided for in Presidential Decree No.
against the owner, developer, dealer, broker or salesman. 957, the National Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
Executive Order No. 648 (EO 648), dated February 7, 1981, transferred the
regulatory and quasi-judicial functions of the NHA to the Human Settlements A. Unsound real estate business practices;
Regulatory Commission (HSRC). Section 8 of EO 648 provides:
B. Claims involving refund and any other claims filed by subdivision lot
SECTION 8. Transfer of Functions. -The regulatory functions of the National or condominium unit buyer against the project owner, developer,
Housing Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and dealer, broker or salesman; and
other related laws are hereby transferred to the Commission [Human
Settlements Regulatory Commission]. x x x. Among these regulatory functions C. Cases involving specific performance of contractual and statutory
are: 1) Regulation of the real estate trade and business; x x x 11) Hear and obligations filed by buyers of subdivision lots or condominium units
decide cases of unsound real estate business practices; claims involving against the owner, developer, dealer, broker or salesman.
refund filed against project owners, developers, dealers, brokers, or salesmen;
and cases of specific performance. The extent to which the HLURB has been vested with quasi-judicial authority
must also be determined by referring to the terms of P.D. No. 957, "The
Pursuant to Executive Order No. 90 dated December 17, 1986, the HSRC was Subdivision And Condominium Buyers' Protective Decree." Section 3 of this
renamed as the HLURB. statute provides:
Rationale for HLURB’s extensive quasi-judicial powers x x x National Housing Authority [now HLURB]. - The National Housing
Authority shall have exclusive jurisdiction to regulate the real estate trade and
The surge in the real estate business in the country brought with it an business in accordance with the provisions of this Decree.
increasing number of cases between subdivision owners/developers and lot
buyers on the issue of the extent of the HLURB’s exclusive jurisdiction. In the The need for the scope of the regulatory authority thus lodged in the HLURB is
cases that reached us, we have consistently ruled that the HLURB has indicated in the second, third and fourth preambular paragraphs of PD 957
exclusive jurisdiction over complaints arising from contracts between the which provide:
subdivision developer and the lot buyer or those aimed at compelling the
subdivision developer to comply with its contractual and statutory obligations to WHEREAS, numerous reports reveal that many real estate subdivision
make the subdivision a better place to live in.15 owners, developers, operators, and/or sellers have reneged on their
representations and obligations to provide and maintain properly subdivision
We explained the HLURB’s exclusive jurisdiction at length in Sps. Osea v. roads, drainage, sewerage, water systems, lighting systems, and other similar
Ambrosio,16 where we said: basic requirements, thus endangering the health and safety of home and lot
buyers;
Generally, the extent to which an administrative agency may exercise its
powers depends largely, if not wholly, on the provisions of the statute creating WHEREAS, reports of alarming magnitude also show cases of swindling and
or empowering such agency. Presidential Decree (P.D.) No. 1344, fraudulent manipulations perpetrated by unscrupulous subdivision and
"Empowering The National Housing Authority To Issue Writ Of Execution In condominium sellers and operators, such as failure to deliver titles to the
The Enforcement Of Its Decision Under Presidential Decree No. 957," clarifies buyers or titles free from liens and encumbrances, and to pay real estate
and spells out the quasi-judicial dimensions of the grant of jurisdiction to the taxes, and fraudulent sales of the same subdivision lots to different innocent
HLURB in the following specific terms: purchasers for value;
xxxx In this era of clogged court dockets, the need for specialized administrative
boards or commissions with the special knowledge, experience and capability
WHEREAS, this state of affairs has rendered it imperative that the real estate to hear and determine promptly disputes on technical matters or essentially
subdivision and condominium businesses be closely supervised and regulated, factual matters, subject to judicial review in case of grave abuse of discretion,
and that penalties be imposed on fraudulent practices and manipulations has become well nigh indispensable. Thus, in 1984, the Court noted that
committed in connection therewith. ‘between the power lodged in an administrative body and a court, the
unmistakable trend has been to refer it to the former’.
The provisions of PD 957 were intended to encompass all questions regarding
subdivisions and condominiums. The intention was aimed at providing for an xxx
appropriate government agency, the HLURB, to which all parties aggrieved in
the implementation of provisions and the enforcement of contractual rights with In general, the quantum of judicial or quasi-judicial powers which an
respect to said category of real estate may take recourse. The business of administrative agency may exercise is defined in the enabling act of such
developing subdivisions and corporations being imbued with public interest agency. In other words, the extent to which an administrative entity may
and welfare, any question arising from the exercise of that prerogative should exercise such powers depends largely, if not wholly on the provisions of the
be brought to the HLURB which has the technical know-how on the matter. In statute creating or empowering such agency. In the exercise of such powers,
the exercise of its powers, the HLURB must commonly interpret and apply the agency concerned must commonly interpret and apply contracts and
contracts and determine the rights of private parties under such contracts. This determine the rights of private parties under such contracts, One thrust of the
ancillary power is no longer a uniquely judicial function, exercisable only by the multiplication of administrative agencies is that the interpretation of contracts
regular courts. and the determination of private rights thereunder is no longer a uniquely
judicial function, exercisable only by our regular courts. [Emphasis supplied.]
As observed in C.T. Torres Enterprises, Inc. v. Hibionada:
Subdivision cases under the RTC’s jurisdiction
The argument that only courts of justice can adjudicate claims resoluble under
the provisions of the Civil Code is out of step with the fast-changing times. The expansive grant of jurisdiction to the HLURB does not mean, however,
There are hundreds of administrative bodies now performing this function by that all cases involving subdivision lots automatically fall under its jurisdiction.
virtue of a valid authorization from the legislature. This quasi-judicial function, As we said in Roxas v. Court of Appeals: 18
as it is called, is exercised by them as an incident of the principal power
entrusted to them of regulating certain activities falling under their particular In our view, the mere relationship between the parties, i.e., that of being
expertise. subdivision owner/developer and subdivision lot buyer, does not automatically
vest jurisdiction in the HLURB. For an action to fall within the exclusive
In the Solid Homes case for example the Court affirmed the competence of the jurisdiction of the HLURB, the decisive element is the nature of the action as
Housing and Land Use Regulatory Board to award damages although this is enumerated in Section 1 of P.D. 1344. On this matter, we have consistently
an essentially judicial power exercisable ordinarily only by the courts of justice. held that the concerned administrative agency, the National Housing Authority
This departure from the traditional allocation of governmental powers is (NHA) before and now the HLURB, has jurisdiction over complaints aimed at
justified by expediency, or the need of the government to respond swiftly and compelling the subdivision developer to comply with its contractual and
competently to the pressing problems of the modern world. [Emphasis statutory obligations.
supplied.]
xxx
Another case – Antipolo Realty Corporation v. NHA – explained the grant of
17
the HLURB’s expansive quasi-judicial powers. We said: Note particularly pars. (b) and (c) as worded, where the HLURB’s jurisdiction
concerns cases commenced by subdivision lot or condominium unit buyers. As
to par. (a), concerning "unsound real estate practices," it would appear that the
logical complainant would be the buyers and customers against the sellers 2.01. Defendants are the registered owners and developers of a
(subdivision owners and developers or condominium builders and realtors ), housing subdivision presently known as Villa Priscilla Subdivision
and not vice versa. [Emphasis supplied.] located at Brgy. Cutcut, Pulilan, Bulacan;
Pursuant to Roxas, we held in Pilar Development Corporation v. Villar19 and 2.02 On or about April 30, 1998, the plaintiff thru its Administrative
Suntay v. Gocolay20 that the HLURB has no jurisdiction over cases filed by Pastor bought from defendants on installment basis a parcel of land
subdivision or condominium owners or developers against subdivision lot or designated at Lot 1, Block 4 of the said Villa Priscilla Subdivision xxx
condominium unit buyers or owners. The rationale behind this can be found in
the wordings of Sec. 1, PD No. 1344, which expressly qualifies that the cases xxx
cognizable by the HLURB are those instituted by subdivision or condomium
buyers or owners against the project developer or owner. This is also in 2.04 At the time of the execution of the second Contract to Sell (Annex
keeping with the policy of the law, which is to curb unscrupulous practices in "B"), Lot 1, Block 4 of the Villa Priscilla Subdivision was already
the real estate trade and business.21 covered by Transfer Certificate of Title No. T-127776 of the Registry of
Deeds of Quezon City in the name of Iluminada T. Soneja, married to
Thus, in the cases of Fajardo Jr. v. Freedom to Build, Inc.,[22] and Cadimas v. Asterio Soneja (defendant Priscilla T. Ignacio’s sister and brother-in-
Carrion,23 we upheld the RTC’s jurisdiction even if the subject matter was a law) and the defendants as co-owners, but the latter represented
subdivision lot since it was the subdivision developer who filed the action themselves to be the real and absolute owners thereof, as in fact it was
against the buyer for violation of the contract to sell. annotated in the title that they were empowered to sell the same. Copy
of TCT No. T-127776 is hereto attached and made part hereof as
The only instance that HLURB may take cognizance of a case filed by the Annex "C".
developer is when said case is instituted as a compulsory counterclaim to a
pending case filed against it by the buyer or owner of a subdivision lot or 2.05 Plaintiff has been religiously paying the agreed monthly
condominium unit. This was what happened in Francel Realty Corporation v. installments until its Administrative Pastor discovered recently that
Sycip,24 where the HLURB took cognizance of the developer’s claim against while apparently clean on its face, the title covering the subject lot
the buyer in order to forestall splitting of causes of action. actually suffers from fatal flaws and defects as it is part of the property
involved in litigation even before the original Contract to Sell (Annex
Obviously, where it is not clear from the allegations in the complaint that the "A"), which defendants deliberately and fraudulently concealed from
property involved is a subdivision lot, as in Javellana v. Hon. Presiding Judge, the plaintiff;
RTC, Branch 30, Manila,25 the case falls under the jurisdiction of the regular
courts and not the HLURB. Similarly, in Spouses Dela Cruz v. Court of 2.06 As shown in the technical description of TCT No. T-127776
Appeals,26 we held that the RTC had jurisdiction over a case where the conflict (Annex "C"), it covers a portion of consolidated Lots 2-F and 2-G Bsd-
involved a subdivision lot buyer and a party who owned a number of 04-000829 (OLT), which were respectively acquired by defendants
subdivision lots but was not himself the subdivision developer. from Nicanor Adriano and Ceferino Sison, former tenants-beneficiaries
of Purificacion S. Imperial, whose property at Cutcut, Pulilan, Bulacan
The Present Case originally covered by TCT No. 240878 containing an area of 119,431
square meters was placed under Operation Land Transfer under P.D.
In the present case, CGA is unquestionably the buyer of a subdivision lot from No. 27;
the respondents, who sold the property in their capacities as owner and
developer. As CGA stated in its complaint: 2.07 Said Purificacion S. Imperial applied for retention of five (5)
hectares of her property at Cutcut, Pulilan, Bulacan under Rep, Act No.
6657 and the same was granted by the Department of Agrarian Reform
(DAR) to cover in whole or in part farm lots previously awarded to
tenants-beneficiaries, including inter alia Nicanor Adriano’s Lot 2-F and xxx
Ceferino Sison’s Lot 2-G Bsd-04-000829 (OLT).
B. Claims involving refund and any other claims filed by subdivision lot
xxx or condominium unit buyer against the project owner, developer,
dealer, broker or salesman; and
2.08 Said order of October 2, 1997 was affirmed and declared final and
executory, and the case was considered closed, as in fact there was We view CGA’s contention – that the CA erred in applying Article 1191 of the
already an Implementing Order dated November 10, 1997. Civil Code as basis for the contract’s rescission – to be a negligible point.
Regardless of whether the rescission of contract is based on Article 1191 or
xxx 1381 of the Civil Code, the fact remains that what CGA principally wants is a
refund of all payments it already made to the respondents. This intent, amply
3.03 As may thus be seen, the defendants deliberately and articulated in its complaint, places its action within the ambit of the HLURB’s
fraudulently concealed from the plaintiff that fact that the parcel of land exclusive jurisdiction and outside the reach of the regular courts. Accordingly,
sold to the latter under the Contract to Sell (Annexes "A" and "B") is CGA has to file its complaint before the HLURB, the body with the proper
part of the property already under litigation and in fact part of the five- jurisdiction.
hectare retention awarded to the original owner, Purificacion S.
Imperial. WHEREFORE, premises considered, we DENY the petition and AFFIRM the
October 20, 2003 Decision of the Court of Appeals in CA G.R. SP No. 75717
xxx dismissing for lack of jurisdiction the CGA complaint filed with the RTC, Branch
14 of Malolos, Bulacan.
3.05 Plaintiff is by law entitled to the rescission of the Contracts to Sell
(Annexes "A" and "B") by restitution of what has already been paid to SO ORDERED.
date for the subject property in the total amount of P2,515,899.20, thus
formal demand therefor was made on the defendants thru a letter
dated April 5, 2002, which they received but refused to acknowledge
receipt. Copy of said letter is hereto attached and made part hereof as
Annex "J". 27 [Emphasis supplied.]
From these allegations, the main thrust of the CGA complaint is clear – to
compel the respondents to refund the payments already made for the subject
property because the respondents were selling a property that they apparently
did not own. In other words, CGA claims that since the respondents cannot
comply with their obligations under the contract, i.e., to deliver the property
free from all liens and encumbrances, CGA is entitled to rescind the contract
and get a refund of the payments already made. This cause of action clearly
falls under the actions contemplated by Paragraph (b), Section 1 of PD No.
1344, which reads:
SEC. 1. In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No.
957, the National Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
G.R. No. 109703 July 5, 1994 2. To pay complainant actual, nominal and moral damages, the
amount of which will be proved in the hearing;
REALTY EXCHANGE VENTURE CORPORATION AND/OR MAGDIWANG,
REALTY CORPORATION, petitioner, 3. To pay complainant attorney's fee in the sum of P10,000.00;
vs.
LUCINA S. SENDINO and the OFFICE OF THE EXECUTIVE SECRETARY, 4. To pay complainant exemplary damages in the sum of
Office of the President, Malacañang, Manila, respondents. P10,000.00 to set an example and to avoid a repetition of such
illegal and unsound business practices of the respondent. 6
Siruelo, Muyco & Associates Law Office for petitioner.
This petition was amended on August 17, 1990 by impleading petitioners
Sisenando Villaluz, Jr. for private respondent. Magdiwang Realty Corporation (MRC) which appeared to be the registered
owner of the subject lot as per TCT No. 76023.
On April 3, 1991 the HLURB, whose authority to hear and decide the complaint
KAPUNAN, J.: was challenged by REVI in its answer, 7 rendered its judgment in favor of private
respondent and ordered petitioners to continue with the sale of the house and lot
Private respondent Lucina C. Sendino entered into a reservation agreement and to pay private respondent P5,000 as moral damages, P5,000 as exemplary
damages and P6,000 as attorney's fees and costs of the suit. 8 An appeal from this
with Realty Exchange Venture, Inc. (REVI) for a 120-square meter lot in
decision was taken to the HLURB OAALA Arbiter, which affirmed the Board's
Raymondville Subdivision in Sucat, Paranaque for P307,800.00 as its
decision. The decision of the OAALA Arbiter was appealed to the Office of the
purchase price. 1 She paid P1,000.00 as partial reservation fee on January 15, President, herein public respondent.
1989 and completed payment of this fee on January 20, 1989 by paying
P4,000.00. 2
On January 7, 1993, the public respondent rendered its decision dismissing
the petitioners' appeal. Motion for reconsideration of the decision was denied
On July 18, 1989, private respondent paid REVI P16,600.00 as full
by the public respondent on January 26, 1993. Consequently petitioners come
downpayment on the purchase price. 3However, she was advised by REVI to
before this Court, in this petition, which the Court resolves to treat as a petition
change her co-maker, which she agreed, asking for an extension of one month to
do so.
for certiorari, raising the following issues:
a) Concrete curbs and gutters Mr. Yuson refused to pay the September 1972-October 1976 monthly
installments but agreed to pay the post October 1976 installments. Antipolo
b) Underground drainage system Realty responded by rescinding the Contract to Sell, and claiming the forfeiture
of all installment payments previously made by Mr. Yuson.
c) Asphalt paved roads
Aggrieved by the rescission of the Contract to Sell, Mr. Yuson brought his Sell, it could validly terminate its agreement with Mr. Yuson and, as a
dispute with Antipolo Realty before public respondent NHA through a letter- consequence thereof, retain all the prior installment payments made by the
complaint dated 10 May 1977 which complaint was docketed in NHA as Case latter. 4
No. 2123.
This Court denied certiorari in a minute resolution issued on 11 December
Antipolo Realty filed a Motion to Dismiss which was heard on 2 September 1978, "without prejudice to petitioner's pursuing the administrative remedy." 5 A
1977. Antipolo Realty, without presenting any evidence, moved for the motion for reconsideration was denied on 29 January 1979.
consolidation of Case No. 2123 with several other cases filed against it by
other subdivision lot buyers, then pending before the NHA. In an Order issued Thereafter, petitioner interposed an appeal from the NHA decision with the
on 7 February 1978, the NHA denied the motion to dismiss and scheduled Office of the President which, on 9 March 1979, dismissed the same through
Case No. 2123 for hearing. public respondent Presidential Executive Assistant Jacobo C. Clave. 6
After hearing, the NHA rendered a decision on 9 March 1978 ordering the In the present petition, Antipolo Realty again asserts that, in hearing the
reinstatement of the Contract to Sell under the following conditions: complaint of private respondent Yuson and in ordering the reinstatement of the
Contract to Sell between the parties, the NHA had not only acted on a matter
l) Antipolo Realty Corporation shall sent [sic] to Virgilio Yuzon a beyond its competence, but had also, in effect, assumed the performance of
statement of account for the monthly amortizations from judicial or quasi-judicial functions which the NHA was not authorized to
November 1976 to the present; perform.
m) No penalty interest shall be charged for the period from We find the petitioner's arguments lacking in merit.
November 1976 to the date of the statement of account; and
It is by now commonplace learning that many administrative agencies exercise
n) Virgilio Yuzon shall be given sixty (60) days to pay the and perform adjudicatory powers and functions, though to a limited extent only.
arrears shown in the statement of account. 2 Limited delegation of judicial or quasi-judicial authority to administrative
agencies (e.g., the Securities and Exchange Commission and the National
Antipolo Realty filed a Motion for Reconsideration asserting: (a) that it had Labor Relations Commission) is well recognized in our jurisdiction, 7 basically
been denied due process of law since it had not been served with notice of the because the need for special competence and experience has been recognized as
scheduled hearing; and (b) that the jurisdiction to hear and decide Mr. Yuson's essential in the resolution of questions of complex or specialized character and
complaint was lodged in the regular courts, not in the NHA, since that because of a companion recognition that the dockets of our regular courts have
complaint involved the interpretation and application of the Contract to Sell. remained crowded and clogged. In Spouses Jose Abejo and Aurora Abejo, et al.
vs. Hon. Rafael dela Cruz, etc., et al., 8 the Court, through Mr. Chief Justice
Teehankee, said:
The motion for reconsideration was denied on 28 June 1978 by respondent
NHA General Manager G.V. Tobias, who sustained the jurisdiction of the NHA
In the fifties, the Court taking cognizance of the move to vest
to hear and decide the Yuson complaint. He also found that Antipolo Realty
jurisdiction in administrative commissions and boards the
had in fact been served with notice of the date of the hearing, but that its
power to resolve specialized disputes in the field of labor (as in
counsel had failed to attend the hearing. 3 The case was submitted for decision,
corporations, public transportation and public utilities) ruled that
and eventually decided, solely on the evidence presented by the complainant.
Congress in requiring the Industrial Court's intervention in the
resolution of labor management controversies likely to cause
On 2 October 1978, Antipolo Realty came to this Court with a Petition for strikes or lockouts meant such jurisdiction to be exclusive,
certiorari and Prohibition with Writ of Preliminary Injunction, which was although it did not so expressly state in the law. The Court held
docketed as G.R. No. L-49051. Once more, the jurisdiction of the NHA was that under the "sense-making and expeditious doctrine of
assailed. Petitioner further asserted that, under Clause 7 of the Contract to
primary jurisdiction . . . the courts cannot or will not determine a being vested with quasi-judicial powers. The ever increasing
controversy involving a question which is within the jurisdiction variety of powers and functions given to administrative
of an administrative tribunal where the question demands the agencies recognizes the need for the active intervention of
exercise of sound administrative discretion requiring the special administrative agencies in matters calling for technical
knowledge, experience, and services of the administrative knowledge and speed in countless controversies which cannot
tribunal to determine technical and intricate matters of fact, and possibly be handled by regular courts.
a uniformity of ruling is essential to comply with the purposes of
the regulatory statute administered" (Pambujan Sur United In general the quantum of judicial or quasi-judicial powers which an
Mine Workers v. Samar Mining Co., Inc., 94 Phil, 932, 941 administrative agency may exercise is defined in the enabling act of such
[1954]). agency. In other words, the extent to which an administrative entity may
exercise such powers depends largely, if not wholly, on the provisions of the
In this era of clogged court dockets, the need for specialized statute creating or empowering such agency. 10 In the exercise of such powers, the agency
administrative boards or commissions with the special concerned must commonly interpret and apply contracts and determine the rights of private parties under such
contracts. One thrust of the multiplication of administrative agencies is that the interpretation of contracts and
knowledge, experience and capability to hear and determine the determination of private rights thereunder is no longer a uniquely judicial function, exercisable only by our
promptly disputes on technical matters or essentially factual regular courts.
matters, subject to judicial review in case of grave abuse of
discretion has become well nigh indispensable. Thus, in 1984, Thus, the extent to which the NHA has been vested with quasi-judicial
the Court noted that 'between the power lodged in an authority must be determined by referring to the terms of Presidential Decree
administrative body and a court, the unmistakeable trend has No. 957, known as "The Subdivision and Condominium Buyers'
been to refer it to the former, "Increasingly, this Court has been Decree." 11 Section 3 of this statute provides as follows:
committed to the view that unless the law speaks clearly and
unequivocably, the choice should fall on fan administrative National Housing Authority. — The National Housing Authority
agency]" ' (NFL v. Eisma, 127 SCRA 419, 428, citing shall have exclusive jurisdiction to regulate the real estate trade
precedents). The Court in the earlier case of Ebon vs. De and business in accordance with the provisions of this decree
Guzman (113 SCRA 52, 56 [1982]), noted that the lawmaking (emphasis supplied)
authority, in restoring to the labor arbiters and the NLRC their
jurisdiction to award all kinds of damages in labor cases, as The need for and therefore the scope of the regulatory authority thus lodged in
against the previous P.D. amendment splitting their jurisdiction the NHA are indicated in the second and third preambular paragraphs of the
with the regular courts, "evidently, . . . had second thoughts statute which provide:
about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that
WHEREAS, numerous reports reveal that many real estate
setup would mean duplicity of suits, splitting the cause of action
subdivision owners, developers, operators, and/or sellers
and possible conflicting findings and conclusions by two
have reneged on their representations and obligations to
tribunals on one and the same claim."
provide and maintain properly subdivision roads, drainage,
sewerage, water systems lighting systems and other similar
In an even more recent case, Tropical Homes, Inc. vs. National Housing basic requirements, thus endangering the health and safety of
Authority, et al., 9 Mr. Justice Gutierrez, speaking for the Court, observed that: home and lot buyers;
There is no question that a statute may vest exclusive original WHEREAS, reports of alarming magnitude also show cases of
jurisdiction in an administrative agency over certain disputes swindling and fraudulent manipulations perpetrated by
and controversies falling within the agency's special expertise. unscrupulous subdivision and condominium sellers and
The very definition of an administrative agency includes its operators, such as failure to deliver titles to the buyers or titles
free from liens and encumbrances, and to pay real estate Having failed to comply with its contractual obligation to complete certain
taxes, and fraudulent sales of the same subdivision lots to specified improvements in the subdivision within the specified period of two
different innocent purchasers for value — . (emphasis supplied) years from the date of the execution of the Contract to Sell, petitioner was not
entitled to exercise its options under Clause 7 of the Contract. Hence,
Presidential Decree No. 1344 12 clarified and spelled out the quasi-judicial dimensions of the petitioner could neither rescind the Contract to Sell nor treat the installment
grant of regulatory authority to the NHA in the following quite specific terms: payments made by the private respondent as forfeited in its favor. Indeed,
under the general Civil Law, 13 in view of petitioner's breach of its contract with private respondent,
SECTION 1. In the exercise of its functions to regulate the real it is the latter who is vested with the option either to rescind the contract and receive reimbursement of an
installment payments (with legal interest) made for the purchase of the subdivision lot in question, or to
estate trade and business and in addition to its powers suspend payment of further purchase installments until such time as the petitioner had fulfilled its obligations
provided for in Presidential Decree No. 957, the National to the buyer. The NHA was therefore correct in holding that private respondent's prior installment payments
could not be forfeited in favor of petitioner.
Housing Authority shall have exclusive jurisdiction to hear and
decide cases of the following nature:
Neither did the NHA commit any abuse, let alone a grave abuse of discretion
or act in excess of its jurisdiction when it ordered the reinstatement of the
A. Unsound real estate business practices:
Contract to Sell between the parties. Such reinstatement is no more than a
logical consequence of the NHA's correct ruling, just noted, that the petitioner
B. Claims involving refund and any other claims filed by sub- was not entitled to rescind the Contract to Sell. There is, in any case, no
division lot or condominium unit buyer against the project question that under Presidential Decree No. 957, the NHA was legally
owner, developer, dealer, broker or salesman; and empowered to determine and protect the rights of contracting parties under the
law administered by it and under the respective agreements, as well as to
C. Cases involving specific performance of contractual and ensure that their obligations thereunder are faithfully performed.
statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, We turn to petitioner's assertion that it had been denied the right to due
broker or salesman. (emphasis supplied.) process. This assertion lacks substance. The record shows that a copy of the
order denying the Motion to Dismiss and scheduling the hearing of the
The substantive provisions being applied and enforced by the NHA in the complaint for the morning of 6 March 1978, was duly served on counsel for
instant case are found in Section 23 of Presidential Decree No. 957 which petitioner, as evidenced by the annotation appearing at the bottom of said
reads: copy indicating that such service had been effected. 14 But even if it be assumed,
arguendo, that such notice had not been served on the petitioner, nevertheless the latter was not deprived of
due process, for what the fundamental law abhors is not the absence of previous notice but rather the absolute
Sec. 23. Non-Forfeiture of Payments. — No installment lack of opportunity to be heard. 15 In the instant case, petitioner was given ample opportunity to present its
payment made by a buyer in a subdivision or condominium side and to be heard on a motion for reconsideration as well, and not just on a motion to dismiss; the claim of
denial of due process must hence sound even more hollow. 16
project for the lot or unit he contracted to buy shall be forfeited
in favor of the owner or developer when the buyer, after due
notice to the owner or developer, desists from further payment We turn finally to the question of the amount of P16,994.73 which petitioner
due to the failure of the owner or developer to develop the insists had accrued during the period from September 1972 to October 1976,
subdivision or condominium project according to the approved when private respondent had suspended payment of his monthly installments
plans and within the time limit for complying with the same. on his chosen subdivision lot. The NHA in its 9 March 1978 resolution ruled
Such buyer may, at his option, be reimbursed the total amount that the regular monthly installments under the Contract to Sell did not accrue
paid including amortization and interests but excluding during the September 1972 — October 1976 period:
delinquency interests, with interest thereon at the legal rate.
(emphasis supplied.) [R]espondent allowed the complainant to suspend payment of
his monthly installments until the improvements in the
subdivision shall have been completed. Respondent informed
complainant on November 1976 that the improvements have on the part of the lot buyer. In the words of the NHA resolution, "never would
been completed. Monthly installments during the period of [the buyer] incur any arrears."
suspension of payment did not become due and demandable
Neither did they accrue Such must be the case, otherwise, WHEREFORE, the Petition for certiorari is DISMISSED. The NHA decision
there is no sense in suspending payments. If the suspension is appealed from is hereby AFFIRMED and clarified as providing for the
lifted the debtor shall resume payments but never did he incur lengthening of the original contract period for payment of installments under
any arrears. the Contract to Sell by four (4) years and two (2) months, during which
extended time private respondent shall continue to pay the regular monthly
Such being the case, the demand of respondent for installment payments until the entire original contract price shall have been
complainant to pay the arrears due during the period of paid. No pronouncement as to costs.
suspension of payment is null and void. Consequently, the
notice of cancellation based on the refusal to pay the s that SO ORDERED.
were not due and demandable is also null and void. 17
The NHA resolution is probably too terse and in need of certification and
amplification. The NHA correctly held that no installment payments should be
considered as having accrued during the period of suspension of payments.
Clearly, the critical issue is what happens to the installment payments which
would have accrued and fallen due during the period of suspension had no
default on the part of the petitioner intervened. To our mind, the NHA
resolution is most appropriately read as directing that the original period of
payment in the Contract to Sell must be deemed extended by a period of time
equal to the period of suspension (i.e., by four (4) years and two (2) months)
during which extended time (tacked on to the original contract period) private
respondent buyer must continue to pay the monthly installment payments until
the entire original contract price shall have been paid. We think that such is the
intent of the NHA resolution which directed that "[i]f the suspension is lifted, the
debtor shall resume payments" and that such is the most equitable and just
reading that may be given to the NHA resolution. To permit Antipolo Realty to
collect the disputed amount in a lump sum after it had defaulted on its
obligations to its lot buyers, would tend to defeat the purpose of the
authorization (under Sec. 23 of Presidential Decree No. 957, supra) to lot
buyers to suspend installment payments. As the NHA resolution pointed out,
[s]uch must be the case, otherwise, there is no sense in suspending
payments." Upon the other hand, to condone the entire amount that would
have become due would be an expressively harsh penalty upon the petitioner
and would result in the unjust enrichment of the private respondent at the
expense of the petitioner. It should be recalled that the latter had already
fulfilled, albeit tardily, its obligations to its lot buyers under their Contracts to
Sell. At the same time, the lot buyer should not be regarded as delinquent and
as such charged penalty interest. The suspension of installment payments was
attributable to the petitioner, not the private respondent. The tacking on of the
period of suspension to the end of the original period precisely prevents default
G.R. No. 108461. October 21, 1996] WHEREFORE, premises considered, judgment is hereby rendered
in favor of Petitioner and Intervenor and against the Respondent, as
follows:
PHILIPPINE INTERNATIONAL TRADING
1) Enjoining the further implementation by the respondent of the
CORPORATION, petitioners, vs. HON PRESIDING
following issuances relative to the applications for importation of
JUDGE ZOSIMO Z. ANGELES, BRANCH 58, RTC,
products from the Peoples Republic of China, to wit:
MAKATI; REMINGTON INDUSTRIAL SALES
CORPORATION; AND FIRESTONE CERAMIC, a) Administrative Order No. SOCPEC 89-08-01 dated August 30,
INC., respondents. 1989 (Annex A, Amended petition);
DECISION b) Prescribed Export Undertaking Form (Annex B, Id.);
TORRES, JR., J.:
c) Prescribed Importer-Exporter Agreement Form for non-exporter-
The PHILIPPINE INTERNATIONAL TRADING importer (Annex C, Id.);
CORPORATION (PITC, for brevity) filed this Petition for
Review on Certiorari, seeking the reversal of the Decision d) Memorandum dated April 16, 1990 relative to amendments of
dated January 4, 1993 of public respondent Hon. Zosimo Z. Administrative Order NO. SOCPEC 89-08-01 (Annex D, Id.);
Angeles. Presiding Judge of the Regional Trial Court of
Makati, Branch 58, in civil Case No.92-158 entitled e) Memorandum dated May 6, 1991 relative to Revised Schedule
Remington Industrial Sales Corporation, et. al. vs. Philippine of Fees for the processing of import applications (Annexes E, E-1.,
Industrial Trading Corporation. Ind.);
The said decision upheld the Petition for Prohibition f) Rules and Regulations relative to liquidation of unfulfilled
and Mandamus of REMINGTON INDUSTRIAL SALES Undertakings and expired export credits (Annex Z, Supplemental
CORPORATION (Remington, for brevity) and FIRESTONE Petition),
CERAMICS, INC. (Firestone, for brevity), and, in the process,
declared as null and void and unconstitutional, PITCs the foregoing being all null and void and unconstitutional;
Administrative Order No. SOCPEC 89-08-01 and its and,
appurtenant regulations. The dispositive portion of the
decision reads: 2) Commanding respondent to approve forthwith all the pending
applications of, and all those that may hereafter be filed by, the
petitioner and the Intervenor, free from and without the
requirements prescribed in a the above-mentioned issuance.
IT IS SO ORDERED." a. By the IMPORTER himself if he has the capabilities and
facilities to carry out the export of Philippine products to PROC in
The controversy springs from the issuance by the PITC of his own name; or
Administrative Order No. SOCPEC 89-08-01, under which,
[1]
applications to the PITC for importation from the Peoples b. Through a tie-up between the IMPORTER and a legitimate
Republic of China (PROC. for brevity) must be accompanied exporter (of Philippine products) who is willing to carry out the
by a viable and confirmed Export Program of Philippine export commitments of the IMPORTER under these rules. The tie-
Products to PROC carried out by the importer himself or up shall not make the IMPORTER the exporter of the goods but
through a tie-up with a legitimate importer in an amount shall merely ensure that the importation sought to be approved is
equivalent to the value of the importation from PROC being matched one-to-one (1:1) in value with a corresponding export of
applied for, or, simply, at one is to one ratio. Philippine Products to PROC. [2]
Pertinent provisions of the questioned administrative 3.3 EXPORT PROGRAM DOCUMENTS which are to be
order read: submitted by the importer together with his Import Application are
as follows:
3. COUNTERPART EXPORTS TO PROC
a) Firm Contract, Sales Invoice or Letter of Credit.
In addition to existing requirements for the processing of import
application for goods and commodities originating from PROC, it
b) Export Performance Guarantee (See Article 4 hereof).
is declared that:
c) IMPORTER-EXPORTER AGREEMENT for non-exporter
3.1 All applications covered by these rules must be accompanied
IMPORTER (PITC Form No. M-1006). This form should be used
by a viable and confirmed EXPORT PROGRAM of Philippine
if IMPORTER has a tie-up with an exporter for the export of
products to PROC in an amount equivalent to the value of the
Philippine Products to PROC.
importation from PROC being applied for. Such export program
must be carried out and completed within six (6) months from date 4. EXPORT GUARANTEE
of approval of the Import Application by PITC. PITC shall
reject/deny any application for importation from PROC without the To ensure that the export commitments of the IMPORTER are
accompanying export program mentioned above. carried out in accordance with these rules, all IMPORTERS
concerned are required to submit an EXPORT PERFORMANCE
3.2 The EXPORT PROGRAM may be carried out by any of the GUARANTEE (the Guarantee) at the time of filing of the Import
following: Application. The amount of the guarantee shall be as follows:
For essential commodities: 15% of the value of the imports applied 5.1 All other requirements for importations of goods and
for. commodities from PROC must be complied with in addition to the
above.
For other commodities: 50% of the value of the imports applied for.
5.2 PITC shall have the right to disapprove any and all import
4.1 The guarantee may be in the form of (i) a non-interest bearing application not in accordance with the rules and regulations herein
cash deposit; (ii) Bank hold-out in favor of PITC (PITC Form No. prescribed.
M-1007) or (iii) a Domestic Letter of Credit (with all bank opening
charges for account of Importer) opened in favor of PITC as 5.3 Should the IMPORTER or any of his duly authorized
beneficiary. representatives make any false statements or fraudulent
misrepresentations in the Import/Export Application, or falsify,
4.2 The guarantee shall be made in favor of PITC and will be forge or simulate any document required under these rules and
automatically forfeited in favor of PITC, fully or partially, if the regulations, PITC is authorized to reject all pending and future
required export program is not completed by the importer within import/export applications of said IMPORTER and/or disqualify
six (6) months from date of approval of the Import Application. said IMPORTER and/or disqualify said IMPORTER from doing
any business with SOCPEC through PITC.
4.3 Within the six (6) months period above stated, the IMPORTER
is entitled to a (i) refund of the cash deposited without interest; (ii) Desiring to make importations from PROC, private
cancellation of the Bank holdout or (iii) Cancellation of the respondents Remington and Firestone, both domestic
Domestic Letter of Credit upon showing that he has completed the corporations, organized and existing under Philippines laws,
export commitment pertaining to his importation and provided individually applied for authority to import from PROC with
further that the following documents are submitted to PITC: the petitioner, They were granted such authority after
satisfying the requirements for importers, and after they
a) Final Sales Invoice executed respective undertakings to balance their
importations from PROC with corresponding export of
b) Bill of lading or Airway bill Philippine products to PROC.
c) Bank Certificate of Inward remittance Private respondent Remington was allowed to import
tools, machineries and other similar goods. Firestones, on
d) PITC EXPORT APPLICATION FOR NO. M-1005 the other hand, imported Calcine Vauxite, which it used for
the manufacture of fire bricks, one of its products.
5. MISCELLANEOUS
Subsequently, for failing to comply with their undertakings
to submit export credits equivalent to the value of their
importations, further import applications were withheld by
petitioner PITC from private respondents, such that the latter in LOI 444 from the enumeration of powers that it could exercise
both barred from importing goods from PROC. [3]
effective February 27, 1987 in virtue of Section 16 (d), EO No.
133, it may now be successfully argued that the PITC can no longer
Consequently, Remington filed a Petition for Prohibition
exercise such specific regulatory power in question conformably
and Mandamus, with prayer for issuance of Temporary
with the legal precept expresio unius est exclusio alterius.
Restraining Order and/or Writ of Preliminary Injunction
on January 20, 1992, against PITC in the RTC Makati Branch Moreover, the court continued, none of the Trade
58. The court issued a Temporary Restraining Order
[4]
protocols of 1989, 1990 or 1991, has empowered the PITC,
on January 21, 1992, ordering PITC to cease from exercising expressly or impliedly to formulate or promulgate the assailed
any power to process applications of goods from
Administrative Order. This fact, makes the continued
PROC. Hearings on the application for writ of preliminary
[5]
exercise by PITC of the regulatory powers in question
injunction ensued. unworthy of judicial approval. Otherwise, it would be
Private respondents Firestones was allowed to intervene sanctioning an undue exercise of legislative power vested
in the petition on July 2, 1992, thus joining Remington in the
[6]
solely in the Congress of the Philippines by Section 1, Article
latters charges against PITC. It specifically asserts that the VII of the 1987 Philippine Constitution.
questioned Administrative Order is an undue restrictions of
The lower court stated that the subject Administrative
trade, and hence, unconstitutional.
Order and other similar issuances by PITC suffer from
Upon trial, it was agreed that the evidence adduced upon serious constitutional infirmity, having been promulgated in
the hearing on the Preliminary Injunction was sufficient to pursuance of an international agreement (the Memorandum
completely adjudicate the case, thus, the parties deemed it of Agreement between the Philippine and PROC), which has
proper that the entire case be submitted for decision upon not been concurred in by at least 2/3 of all the members of
the evidence so far presented. the Philippine Senate as required by Article VII, Section 21,
of the 1987 Constitution, and therefore, null and void.
The court rendered its Decision on January 4, 1992. The
[7]
court ruled that PITCs authority to process and approve Section 21. No treaty or international agreement shall be valid and
applications for imports from SOCPEC and to issue rules and effective unless concurred in by at least two-thirds of all the
regulations pursuant to LOI 444 and P.D. No. 1071, has Members of the Senate.
already been repealed by EO No. 133, issued on February
27, 1987 by President Aquino. Furthermore, the subject Administrative Order was issued
The court observed: in restraint of trade, in violation of Sections 1 and 19, Article
XII of the 1987 Constitution, which reads:
Given such obliteration and/or withdrawal of what used to be
PITCs regulatory authority under the Special provisions embodied
Section 1. The goals of the national economy are a more equitable Counsel Antonio T. Carpio, directed the Department of Trade
distribution of opportunities, income and wealth; a sustained and Industry and the PITC to cease implementing
increase in the amount of goods and services produced by the Administrative Order No. SOCPEC 89-08-01, as amended by
nation for the benefit of the people; and, an expanding productivity PITC Board Resolution Nos. 92-01-05 and 92-03-08. [9]
as the key to raising the equality of life for all, especially the
In the implementation of such order, PITC President Jose
underprivileged.
Luis U. Yulo, Jr. issued a corporate
Section 19. The State shall regulate or prohibit monopolies when Memorandum instructing that all import applications for the
[10]
the public interest so requires. No combination is restraint of trade PROC filed with the PITC as of April 20, 1993 shall no longer
or unfair competition shall be allowed. be covered by the trade balancing program outlined in the
Administrative Order.
Lastly, the court declared the Administrative Order to be Forthwith, the PITC allowed the private respondents to
null and void, since the same was not published, contrary to import anew from the PROC, without being required to
Article 2 of the New Civil Code which provides, that: comply anymore with the lifted requirement of balancing its
imports with exports of Philippine products to PROC. In [11]
Article 2. Laws shall take effect fifteen (15) days following the its Constancia filed with the Court on November 22, 1993,
[12]
completion of their publication in the Official Gazette, unless the Remington expressed its desire to have the present action
law otherwise provides. xxx declared moot and academic considering the new
supervening developments. For its part, respondent
Petitioner now comes to us on a Petition for Review Firestone made a Manifestation in lieu of its Memorandum,
[13]
No. 89-08-01, since respondent Remington had incurred 1973. P.D. No. 1071, issued on May 9, 1977 which revised
[18]
obligations to the petitioner consisting of charges for the the provisions of P.D. 252. The purposes and powers of said
0.5% Counter Export Development Service provided by PITC governmental entity were enumerated under Section 5 and 6
to Remington, which obligations remain outstanding. The [16] thereof.[19]
propriety of such charges must still be resolved, petitioner On August 9, 1976, the late President Marcos issued
argues, thereby maintaining the issue of the validity of Letter of Instruction (LOI) No. 444, directing, inter alia, that
[20]
SOCPEC Order No. 89-08-01, before it was abrogated by trade (export or import of all commodities), whether direct or
Executive fiat. indirect, between the Philippines and any of the Socialist and
There is no question that from April 20, 1993, when trade other Centrally Planned Economy Countries (SOCPEC),
balancing measures with PROC were lifted by the President, including the Peoples Republic of China (PROC) shall be
Administrative Order SOCPEC No. 89-08-01 no longer has undertaken or coursed through the PITC. Under the LOI,
force and effect, and respondents are thus entitled anew to PITC was mandated to: 1) participate in all official trade and
apply for authority to import from the PROC, without the trade economic discussions between the Philippines and
balancing requirements previously imposed on proposed SOCPEC; 2) adopt such measures and issue such rules and
regulations as may be necessary for the effective discharge necessary for the effective discharge of its functions under
of its functions under its instructions; and 3) Undertake the these instructions. In this connection, the processing and
processing and approval of all applications for export to or approval of applications for export to or import from the
import from the SOCPEC. Socialist and other centrally-planned economy countries shall,
henceforth, be performed by the said Corporation. (Emphasis
Pertinent provisions of the Letter of Instruction are herein
ours)
reproduced:
After the EDSA Revolution, or more specifically on
LETTER OF INSTRUCTION 444
February 27, 1987, then President Corazon C. Aquino
xxx promulgated Executive Order (EO) No. 133 reorganizing
[21]
shall upon issuance hereof, be undertaken by or coursed The Executive Order reads in part:
through the Philippine International Trading Corporation. This
shall apply to the export and import of all commodities of EXECUTIVE ORDER NO. 133
products including those specified for export or import by
expressly authorized government agencies. XXX
4. The Philippine International Trading Corporation shall The following line corporate agencies and government entities
participate in all official trade and economic discussions defined in Section 9 (c) of this Executive Order that will perform
between the Philippines and other centrally-planned economy their specific regulatory functions, particularly developmental
countries. responsibilities and specialized business activities in a manner
consonant with the Department mandate, objectives, policies, plans
xxx and programs:
V. SPECIAL PROVISIONS xxx
The Philippine International Trading Corporation shall adopt
such measures and issue such rules and regulations as may be
d) Philippine International Trading Corporation. This corporation, 1991, under which was specified the commodities to be
[24]
which shall be supervised by the Undersecretary for International traded between them. The protocols affirmed their agreement
Trade, shall only engage in both export and trading on new or non- to jointly endeavor to achieve more or less a balance
traditional products and markets not normally pursued by the between the values of their imports and exports in their
private business sector; provide a wide range of export oriented bilateral trade.
auxiliary services to the private sector; arrange for a establish
It is allegedly in line with its powers under LOI 444 and in
comprehensive system and physical facilities for handling the
keeping with the MOU and Trade Protocols with PROC that
collection, processing, and distribution of cargoes and other
PITC issued its now assailed Administrative Order No.
commodities; monitor or coordinate risk insurance services for the
SOCPEC 89-08-01 on August 30, 1989(amended in
[25]
from SOCPEC countries. Though it does not mention the Industry is given the power to promulgate rules and
grant of regulatory power, EO 133, as worded, is silent as to regulations necessary to carry out the departments
the abolition or limitation of such powers, previously granted objectives, policies, plans, programs and projects.
under P.D. 1071, from the PITC.
The PITC, on the other hand, was attached as an integral
Likewise, the general repealing clause in EO 133 stating part to the said department as one of its line agencies, and
[29]
that all laws, ordinances, rules , and regulations, or other was given the focal task of implementing the departments
parts thereof, which are inconsistent with the Executive Order programs. The absence of the regulatory power formerly
[30]
are hereby repealed or modified accordingly, cannot operate enshrined in the Special Provisions of LOI 444, from Section
to abolish the grant of regulatory powers to the PITC. There 16 of EO 133, and the limitation of its previously wide range
can be no repeal of the said powers, absent any cogency of of functions, is noted. This does not mean, however, that
irreconcilable inconsistency or repugnancy between the PITC has lost the authority to issue the questioned
issuances, relating to the regulatory power of the PITC. Administrative Order. It is our view that PITC still holds such
authority, and may legally exercise it, as an implementing
The President, in promulgating EO 133, had not intended
arm, and under the supervision of, the Department of Trade
to overhaul the functions of the PITC. The DTI was
and Industry.
established, and was given powers and duties including
those previously held by the PITC as an independent Furthermore, the lower courts ruling to the effect that the
government entity, under P.D. 1071 and LOI 444. The PITC PITCs authority to process and approve applications for
was thereby attached to the DTI as an implementing arm of imports from SOCPEC and to issue rules and regulations
the said department. pursuant to LOI 444 and P.D. 1071 has been repealed by EO
133, is misplaced, and did not consider the import behind the
EO 133 established the DTI as the primary coordinative,
issuance of the later presidential edict.
promotive, facilitative and regulatory arm of government for
the countrys trade, industry and investment activities, which The President could not have intended to deprive herself
shall act as a catalyst for intensified private sector activity in of the power to regulate the flow of trade between
order to accelerate and sustain economic growth. In [27]
the Philippines and PROC under the two countries
furtherance of this mandate, the DTI was empowered, among Memorandum of Understanding, a power which necessarily
others, to plan, implement, and coordinate activities of the flows from her office as Chief Executive. In issuing Executive
government related to trade industry and investments; to Order 133, the President intended merely to reorganize the
Department of Trade and Industry to cope with the need of administrative agencies is that the interpretation of contracts
streamlined bureaucracy. [31]
and the determination of private rights thereunder is no
longer uniquely judicial function, exercisable only by our
Thus, there is no real inconsistency between LOI 444 and
regular courts. (Antipolo Realty Corporation vs. National
EO 133. There is, admittedly, a rearranging of the
Housing Authority, G.R. No. L- 50444, August 31, 1987, 153
administrative functions among the administrative bodies
SCRA 399).
affected by the edict, but not an abolition of executive
power. Consistency in statutes as in executive issuances, is With global trade and business becoming more intricate
of prime importance, and, in the absence of a showing to the nay even with new discoveries in technology and electronics
contrary, all laws are presumed to be consistent with each notwithstanding, the time has come to grapple with
other. Where it is possible to do so, it is the duty of courts, in legislations and even judicial decisions aimed at resolving
the construction of statutes, to harmonize and reconcile issues affecting not only individual rights but also activities of
them, and to adopt a constructions of a statutory provision which foreign governments or entities may have
which harmonizes and reconciles it with other statutory interests. Thus, administrative policies and regulations must
provisions. The fact that a later enactment may relate to the
[32]
be devised to suit these changing business needs in a faster
same subject matter as that of an earlier statute is not of rate than to resort to traditional acts of the legislature.
itself sufficient to cause an implied repeal of the latter, since
This tendency finds support in a well-stated work on the
the law may be cumulative or a continuation of the old one. [33]
subject, viz.:
Similarly, the grant of quasi-legislative powers in
administrative bodies is not unconstitutional. Thus, as a Since legislatures had neither the time nor the knowledge to create
result of the growing complexity of the modern society, it has detailed rules, however, it was soon clear that new governmental
become necessary to create more and more administrative arrangements would be needed to handle the job of rule-
bodies to help in the regulation of its ramified making. The courts, moreover, many of them already congested,
activities. Specialized in the particular field assigned to them, would have been swamped if they had to adjudicate all the
they can deal with the problems thereof with more expertise controversies that the new legislation was bound to create; and the
and dispatch than can be expected from the legislature or the judges, already obliged to handle a great diversity of cases, would
courts of justice. This is the reason for the increasing vesture have been hard pressed to acquire the knowledge they needed to
of quasi-legislative and quasi-judicial powers in what is now deal intelligently with all the new types of controversy.
not unreasonably called the fourth department of the
government. Evidently, in the exercise of such powers, the
[34] So the need to create a large number of specialized administrative
agency concerned must commonly interpret and apply agencies and to give them broader powers than administrators had
contracts and determine the rights of private parties under traditionally exercised. These included the power to issue
such contracts. One thrust of the multiplication of regulations having the force of law, and the power to hear and
decide cases powers that had previously been reserved to the The fact that the amendments to Administrative Order
legislatures and the courts. (Houghteling/Pierce, Lawmaking by No. SOCPEC 89-08-01 were filed with, and published by the
Administrative Agencies, p. 166.) UP Law Center in the National Administrative Register, does
not cure the defect related to the effectivity of the
The respondents likewise argue that PITC is not Administrative Order.
empowered to issue the Administrative Order because no
grant of such power was made under the Trade Protocols of This court, in Tanada vs. Tuvera stated, thus:
[36]
it is for the latter to delegate the exercise of such power Covered by this rule are presidential decrees and executive orders
among its designated agencies. promulgated by the President in the exercise of legislative powers
In sum, the PITC was legally empowered to issue or, at present, directly conferred by the
Administrative Orders, as a valid exercise of a power Constitution. Administrative rules and Regulations must also be
ancillary to legislation. published if their purpose is to enforce or implement existing law
pursuant also to a valid delegation,
This does not imply however, that the subject
Administrative Order is a valid exercise of such quasi- Interpretative regulations and those merely internal in nature, that
legislative power. The original Administrative Order issued is, regulating only the personnel of the administrative agency and
on August 30, 1989, under which the respondents filed their not the public, need not be published. Neither is publication
applications for importations, was not published in the Official required of the so-called letters of instructions issued by
Gazette or in a newspaper of general circulation. The administrative superiors concerning the rules or guidelines to be
questioned Administrative Order, legally, until it is published, followed by their subordinates in the performance of their duties.
is invalid within the context of Article 2 of Civil Code, which
reads: xxx
Article 2. Laws shall take effect after fifteen days following the We agree that the publication must be in full or it is no publication
completion of their publication in the Official Gazette (or in a at all since its purpose is to inform the public of the contents of the
newspaper of general circulation in the Philippines), unless it is laws.
otherwise provided. xxx
The Administrative Order under consideration is one of rendered in favor of the private respondents, subject to the
those issuances which should be published for its effectivity, following MODIFICATIONS:
since its purpose is to enforce and implement an existing law 1) Enjoining the petitioner:
pursuant to a valid delegation, i.e., P.D. 1071, in relation to
LOI 444 and EO 133. a) From further charging the petitioners the Counter Export
Thus, even before the trade balancing measures issued Development Service fee of 0.5% of the total value of the
by the petitioner were lifted by President Fidel V. Ramos, the unliquidated or unfulfilled Undertakings of the private respondents;
same were never legally effective, and private respondents,
therefore, cannot be made subject to them, because b) From further implementing the provisions of Administrative
Administrative Order 89-08-01 embodying the same was Order No. SOCPEC 89-08-01 and its appurtenant rules; and
never published, as mandated by law, for its effectivity. It was 2) Requiring petitioner to approve forthwith all the pending
only on March 30, 1992 when the amendments to the said applications of, and all those that may hereafter be filed by, the
Administrative Order were filed in the UP Law Center, and petitioner and the Intervenor, free from and without complying
published in the National Administrative Register as required with the requirements prescribed in the above-stated
issuances.
by the Administrative Code of 1987.
Finally, it is the declared Policy of the Government to SO ORDERED
develop and strengthen trade relations with the Peoples
Republic of China. As declared by the President in EO 244
issued on May 12, 1995, continued coverage of the Peoples
Republic of China by Letter of Instructions No. 444 is no
longer consistent with the countrys national interest, as
coursing RP-PROC trade through the PITC as provided for
under Letter of Instructions No. 444 is becoming an
unnecessary barrier to trade. [37]
Every person who shall utter seditious words or speeches, write, xxx xxx xxx
publish, or circulate scurrilous libels against the Government of the
United States or the Insular Government of the Philippine Islands, or The commission has exalted to the highest positions in the Islands
which tend to disturb or obstruct any lawful officer in executing his Filipinos who are alleged to be notoriously corrupt and rascally, and
office, or which tend to instigate others to cabal or meet together for men of no personal character.
unlawful purposes, or which suggest or incite rebellious conspiracies or
riots, or which tend to stir up the people against the lawful authorities, xxx xxx xxx
or to disturb the peace of the community, the safety and order of the
Government, or who shall knowingly conceal such evil practices, shall Editor Valdez, of "Miau," made serious charges against two of the native
be punished by a fine not exceeding two thousand dollars or by Commissioners — charges against Trinidad H. Pardo de Tavera, which, if true,
imprisonment not exceeding two years, or both, in the discretion of the would brand the man as a coward and a rascal, and with what result? . . .
court. [Reference is then made to the prosecution and conviction of Valdez for libel
"under a law which specifies that the greater the truth the greater the libel."] Is
The alleged libel was published as an editorial in the issue of the "Manila it the desire of the people of the United States that the natives against whom
Freedom" of April 6, 1902, under the caption of "A few hard facts." these charges have been made (which, if true, absolutely vilify their personal
characters) be permitted to retain their seats on the Civil Commission, the
The Attorney-General in his brief indicates the following passages of the article executive body of the Philippine Government, without an investigation?
as those upon which he relies to sustain the conviction:
xxx xxx xxx
Sidney Adamson, in a late letter in "Leslie's Weekly," has the following
to say of the action of the Civil Commission in appointing rascally It is a notorious fact that many branches of the Government organized
natives to important Government positions: by the Civil Commission are rotten and corrupt. The fiscal system,
upon which life, liberty, and justice depends, is admitted by the
Attorney-General himself to be most unsatisfactory. It is a fact that the
Philippine judiciary is far from being what it should. Neither fiscals nor
judges can be persuaded to convict insurgents when they wish to suggests and incites rebellious conspiracies, and which tends to stir up the
protect them. people against the lawful authorities, and which disturbs the safety and order
of the Government of the United States and the Insular Government of the
xxx xxx xxx Philippine Islands." But it is "a well-settled rule in considering indictments that
where an offense may be committed in any of several different modes, and the
Now we hear all sorts of reports as to rottenness existing in the offense, in any particular instance, is alleged to have been committed in two or
province [of Tayabas], and especially the northern end of it; it is said more modes specified, it is sufficient to prove the offense committed in any
that it is impossible to secure the conviction of lawbreakers and one of them, provided that it be such as to constitute the substantive offense"
outlaws by the native justices, or a prosecution by the native fiscals. (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may,
therefore, be convicted if any one of the substantive charges into which the
complaint may be separated has been made out.
xxx xxx xxx
We are all, however, agreed upon the proposition that the article in question
The long and short of it is that Americans will not stand for an arbitrary
has no appreciable tendency to "disturb or obstruct any lawful officer in
government, especially when evidences of carpetbagging and rumors
executing his office," or to "instigate" any person or class of persons "to cabal
of graft are too thick to be pleasant.
or meet together for unlawful purposes," or to "suggest or incite rebellious
conspiracies or riots," or to "stir up the people against the lawful authorities or
We do not understand that it is claimed that the defendants succeeded in to disturb the peace of the community, the safety and order of the
establishing at the trial the truth of any of the foregoing statements. The only Government." All these various tendencies, which are described in section 8 of
question which we have considered is whether their publication constitutes an Act No. 292, each one of which is made an element of a certain form of libel,
offense under section 8 of Act No. 292, above cited. may be characterized in general terms as seditious tendencies. This is
recognized in the description of the offenses punished by this section, which is
Several allied offenses or modes of committing the same offense are defined found in the title of the act, where they are defined as the crimes of the
in that section, viz: (1) The uttering of seditious words or speeches; (2) the "seditious utterances, whether written or spoken."
writing, publishing, or circulating of scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands; (3) the Excluding from consideration the offense of publishing "scurrilous libels against
writing, publishing, or circulating of libels which tend to disturb or obstruct any the Government of the United States or the Insular Government of the
lawful officer in executing his office; (4) or which tend to instigate others to Philippine Islands," which may conceivably stand on a somewhat different
cabal or meet together for unlawful purposes; (5) or which suggest or incite footing, the offenses punished by this section all consist in inciting, orally or in
rebellious conspiracies or riots; (6) or which tend to stir up the people against writing, to acts of disloyalty or disobedience to the lawfully constituted
the lawful authorities or to disturb the peace of the community, the safety and authorities in these Islands. And while the article in question, which is, in the
order of the Government; (7) knowingly concealing such evil practices. main, a virulent attack against the policy of the Civil Commission in appointing
natives to office, may have had the effect of exciting among certain classes
The complaint appears to be framed upon the theory that a writing, in order to dissatisfaction with the Commission and its measures, we are unable to
be punishable as a libel under this section, must be of a scurrilous nature and discover anything in it which can be regarded as having a tendency to produce
directed against the Government of the United States or the Insular anything like what may be called disaffection, or, in other words, a state of
Government of the Philippine Islands, and must, in addition, tend to some one feeling incompatible with a disposition to remain loyal to the Government and
of the results enumerated in the section. The article in question is described in obedient to the laws. There can be no conviction, therefore, for any of the
the complaint as "a scurrilous libel against the Government of the United offenses described in the section on which the complaint is based, unless it is
States and the Insular Government of the Philippine Islands, which tends to for the offense of publishing a scurrilous libel against the Government of the of
obstruct the lawful officers of the United States and the Insular Government of the United States or the Insular Government of the Philippine Islands.
the Philippine Islands in the execution of their offices, and which tends to
instigate others to cabal and meet together for unlawful purposes, and which
Can the article be regarded as embraced within the description of "scurrilous government of the Islands is, for the time being, administered? Either sense
libels against the Government of the United States or the Insular Government would doubtless be admissible.
of the Philippine Islands?" In the determination of this question we have
encountered great difficulty, by reason of the almost entire lack of American We understand, in modern political science, . . . by the term government, that
precedents which might serve as a guide in the construction of the law. There institution or aggregate of institutions by which an independent society makes
are, indeed, numerous English decisions, most of them of the eighteenth and carries out those rules of action which are unnecessary to enable men to
century, on the subject of libelous attacks upon the "Government, the live in a social state, or which are imposed upon the people forming that
constitution, or the law generally," attacks upon the Houses of Parliament, the society by those who possess the power or authority of prescribing them.
Cabinet, the Established Church, and other governmental organisms, but Government is the aggregate of authorities which rule a society. By
these decisions are not now accessible to us, and, if they were, they were "dministration, again, we understand in modern times, and especially in more
made under such different conditions from those which prevail at the present or less free countries, the aggregate of those persons in whose hands the
day, and are founded upon theories of government so foreign to those which reins of government are for the time being (the chief ministers or heads of
have inspired the legislation of which the enactment in question forms a part, departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the
that they would probably afford but little light in the present inquiry. In England, terms "government" and "administration" are not always used in their
in the latter part of the eighteenth century, any "written censure upon public strictness, and that "government" is often used for "administration."
men for their conduct as such," as well as any written censure "upon the laws
or upon the institutions of the country," would probably have been regarded as In the act of Congress of July 14, 1798, commonly known as the "Sedition
a libel upon the Government. (2 Stephen, History of the Criminal Law of Act," it is made an offense to "write, print, utter, or published," or to "knowingly
England, 348.) This has ceased to be the law in England, and it is doubtful and willingly assist or aid in writing, printing, uttering, or publishing any false,
whether it was ever the common law of any American State. "It is true that scandalous, and malicious writing or writings against the Government of the
there are ancient dicta to the effect that any publication tending to "possess the United States, or either House of the Congress of the United States, or the
people with an ill opinion of the Government" is a seditious libel ( per Holt, C. President of the United States, with intent to defame the said Government, or
J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in either House of the said Congress, or the said President, or to bring them, or
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that either of them, into contempt or disrepute, or to excite against them or either or
doctrine now. Unless the words used directly tend to foment riot or rebellion or any of them the hatred of the good people of the United States," etc. The term
otherwise to disturb the peace and tranquility of the Kingdom, the utmost "government" would appear to be used here in the abstract sense of the
latitude is allowed in the discussion of all public affairs." (11 Enc. of the Laws existing political system, as distinguished from the concrete organisms of the
of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common Government — the Houses of Congress and the Executive — which are also
law rule which made libels on the constitution or the government indictable, as specially mentioned.
it was administered by the courts, seems to us unsuited to the condition and
circumstances of the people of America, and therefore never to have been
Upon the whole, we are of the opinion that this is the sense in which the term
adopted in the several States."
is used in the enactment under consideration.
We find no decisions construing the Tennessee statute (Code, sec. 6663),
It may be said that there can be no such thing as a scurrilous libel, or any sort
which is apparently the only existing American statute of a similar character to
of a libel, upon an abstraction like the Government in the sense of the laws
that in question, and from which much of the phraseology of then latter
and institutions of a country, but we think an answer to this suggestion is that
appears to have been taken, though with some essential modifications.
the expression "scurrilous libel" is not used in section 8 of Act No. 292 in the
sense in which it is used in the general libel law (Act No. 277) — that is, in the
The important question is to determine what is meant in section 8 of Act No. sense of written defamation of individuals — but in the wider sense, in which it
292 by the expression "the Insular Government of the Philippine Islands." is applied in the common law to blasphemous, obscene, or seditious
Does it mean in a general and abstract sense the existing laws and institutions publications in which there may be no element of defamation whatever. "The
of the Islands, or does it mean the aggregate of the individuals by whom the word 'libel' as popularly used, seems to mean only defamatory words; but
words written, if obscene, blasphemous, or seditious, are technically called An attack upon the lawfully established system of civil government in the
libels, and the publication of them is, by the law of England, an indictable Philippine Islands, like that which Dennie was accused of making upon the
offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. republican form of government lawfully established in the United States and in
See Com. vs. Kneeland, 20 Pick., 206, 211.) the State of Pennsylvania would, we think, if couched in scandalous language,
constitute the precise offense described in section 8 of Act No. 292 as a
While libels upon forms of government, unconnected with defamation of scurrilous libel against the Insular Government of the Philippine Islands.
individuals, must in the nature of things be of uncommon occurrence, the
offense is by no means an imaginary one. An instance of a prosecution for an Defamation of individuals, whether holding official positions or not, and
offense essentially of this nature is Republica vs. Dennie, 4 Yeates (Pa.), 267, whether directed to their public conduct or to their private life, may always be
where the defendant was indicted "as a factious and seditious person of a adequately punished under the general libel law. Defamation of the Civil
wicked mind and unquiet and turbulent disposition and conversation, Commission as an aggregation, it being "a body of persons definite and small
seditiously, maliciously, and willfully intending, as much as in him lay, to bring enough for its individual members to be recognized as such" (Stephen, Digest
into contempt and hatred the independence of the United States, the of the Criminal Law, art. 277), as well as defamation of any of the individual
constitution of this Commonwealth and of the United States, to excite popular members of the Commission or of the Civil Governor, either in his public
discontent and dissatisfaction against the scheme of polity instituted, and upon capacity or as a private individual, may be so punished. The general libel law
trial in the said United States and in the said Commonwealth, to molest, enacted by the Commission was in force when Act No. 292, was passed.
disturb, and destroy the peace and tranquility of the said United States and of There was no occasion for any further legislation on the subject of libels
the said Commonwealth, to condemn the principles of the Revolution, and against the individuals by whom the Insular Government is administered —
revile, depreciate, and scandalize the characters of the Revolutionary patriots against the Insular Government in the sense of the aggregate of such
and statesmen, to endanger, subvert, and totally destroy the republican individuals. There was occasion for stringent legislation against seditious
constitutions and free governments of the said United States and this words or libels, and that is the main if not the sole purpose of the section under
Commonwealth, to involve the said United States and this Commonwealth in consideration. It is not unreasonable to suppose that the Commission, in
civil war, desolation, and anarchy, and to procure by art and force a radical enacting this section, may have conceived of attacks of a malignant or
change and alteration in the principles and forms of the said constitutions and scurrilous nature upon the existing political system of the United States, or the
governments, without the free will, wish, and concurrence of the people of the political system established in these Islands by the authority of the United
said United States and this Commonwealth, respectively," the charge being States, as necessarily of a seditious tendency, but it is not so reasonable to
that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable suppose that they conceived of attacks upon the personnel of the government
intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did as necessarily tending to sedition. Had this been their view it seems probable
make, compose, write, and publish the following libel, to wit; 'A democracy is that they would, like the framers of the Sedition Act of 1798, have expressly
scarcely tolerable at any period of national history. Its omens are always and specifically mentioned the various public officials and collegiate
sinister and its powers are unpropitious. With all the lights or experience governmental bodies defamation of which they meant to punish as sedition.
blazing before our eyes, it is impossible not to discover the futility of this form
of government. It was weak and wicked at Athens, it was bad in Sparta, and The article in question contains no attack upon the governmental system of the
worse in Rome. It has been tried in France and terminated in despotism. it was United States, and it is quite apparent that, though grossly abusive as respects
tried in England and rejected with the utmost loathing and abhorrence. It is on both the Commission as a body and some of its individual members, it
its trial here and its issue will be civil war, desolation, and anarchy. No wise contains no attack upon the governmental system by which the authority of the
man but discerns its imperfections; no good man but shudders at its miseries; United States is enforced in these Islands. The form of government by a Civil
no honest man but proclaims its fraud, and no brave man but draws his sword Commission and a Civil Governor is not assailed. It is the character of the men
against its force. The institution of a scheme of polity so radically contemptible who are intrusted with the administration of the government that the writer is
and vicious is a memorable example of what the villainy of some men can seeking to bring into disrepute by impugning the purity of their motives, their
devise, the folly of others receive, and both establish, in despite of reason, public integrity, and their private morals, and the wisdom of their policy. The
reflection, and sensation.'" publication of the article, therefore, no seditious tendency being apparent,
constitutes no offense under Act No. 292, section 8.
The judgment of conviction is reversed and the defendants are acquitted, with merchandise, actually left the ports of embarkation, Los Angeles, and San
costs de oficio. Francisco, on January 12 and January 16, 1954 respectively. Hence,
according to the defendant, the importation must be considered as having
been made without a valid import license, because under the regulations
issued by the Central Bank and the Monetary Board, "all shipments that left the
port of origin after June 30, 1953, and are covered by ICC licenses, may be
released by the Bureau of Customs without the need of a Central Bank release
certificate; provided they left the port of origin within the period of validity of the
G.R. No. L-12859 November 18, 1959 licenses". No Central Bank certificate for the release of the goods having been
shown or presented to the defendant, the latter refused to make the delivery.
CEBU UNITED ENTERPRISES, plaintiff-appellee,
vs. The lower court was thus conformed with the issue of determining whether the
JOSE GALLOFIN, Collector of Customs, Cebu Port, defendant-appellant. valid period of the license in question should be counted up to the time when
the vessels carrying the imported items left the ports of origin on January 12
Manuel A. Zoza for appellee. and January 16, 1954, or when the corresponding bills of lading were dated, or
First Assistant Solicitor General Guillermo E. Torres and Solicitors Frine C. December 17, 1953. The court chose the latter date, and held:
Zaballero and Pedro Ocampo for appellant.
In view therefore, this Court pronounces judgment making writ of
REYES, J.B.L., J.: preliminary mandatory injunction issued against defendant permanent,
with orders for the cancellation of plaintiff's bond, this after whatever
This suit for mandatory injunction was instituted in the Court of First Instance advance sales tax or any taxes, surcharges and so forth might be due
of Cebu United Enterprise to compel Jose Gallofin, as collector of Customs, on the goods shall have been paid, without costs.
Cebu Port, to release and deliver to the plaintiff two imported shipments of
7,834 bales of over issue newspapers purchased by the latter from the United The defendant appealed to the Court of Appeals. The question raised,
States. As ancillary relief during the pendency of the action, the plaintiff prayed however, being purely one of law, the appeal was certified to us pursuant to a
for the issuance of a writ of preliminary mandatory injunction, which was resolution of said court dated July 19, 1957. The appeal has no merit.
granted by the court after the plaintiff posted a bond in the amount of
P60,000.00 in favor of the defendant. Thereafter, the goods were released to The authority of the appellee to import was contained in the Import Control
the plaintiff, it appearing further that the advance sales tax due on the same Commission License No. 17225, validated on June 18, 1953, and under
had been duly paid upon arrival of the merchandise at port. Resolution 70 of the Commission (adopted March 27, 1952), the same had a
six-month period of validity counted from the said date June 18, 1953. This
The importation of the aforesaid shipments was made under and by virtue of license states, among other conditions, that —
an Import Control Commission License No. 1225, issued by the defunct Import
Control Commission. Under the terms of the license, the plaintiff could import, Commodities covered by this license must be shipped from the country
on a no-dollar remittance basis, over issue newspapers up to the amount or of origin before the expiry date of the license, and are subject to sec.
value of $118,000.00. 13 of Republic Act. No. 650.
The refusal of the defendant to deliver the imported items is premised on his Although Republic Act No. 650, creating the Import Control Commission,
contention that while the five bills of lading covering the two shipments of the expired on July 31, 1953, it is to be conceded that its duly executed acts can
over issue newspapers were all dated at Los Angeles, U.S.A. December 17, have valid effects even beyond the life span of said governmental agency.
1953, or one day before the expiration of the import license in question, the
vessels M/S VENTURA and M/S BATAAN, carrying on board the said
What is important to consider only is the legal connotation of the word six months mean 180 days, which in this case expired on December 15,
"shipped" as the term was used in the license. Defendant maintains that it is cannot now be entertained because the defendant-appellant, under paragraph
when the vessel leaves the port of embarkation, while plaintiff holds that it is 3 of his answer to the Complaint, expressly admitted that the date appearing
the dates of the bills of lading, which are usually issued after the cargo is on the bills of lading (December 17, 1953) as the date of loading on board the
placed on board the vessel. The date of the shipment is the date when the vessels "is one day before the expiration of the validity of the import license".
goods for dispatch are loaded on board the vessel, and not necessarily when What he only questioned in the court below is the legal connotation of the word
the ship puts to sea, is clearly implied from our ruling in the case of U.S "shipped" under the import license.
Tobacco Corporation vs. Rufino Luna, et al., (87 Phil., 4), wherein we said:
In the light of the resolution we have taken on the main issue, it becomes
By section 6 of Act No. 426, all goods including leaf tobacco have been unnecessary for us to dwell further upon the other questions raised by the
placed under control. Petitioner's merchandise left the port of departure parties.
before the passage of that Act but arrived in Manila after its approval.
For the purpose of enforcing or applying said section 6, there can only Wherefore, the appeal should be dismissed and the judgment of the lower
be one date of importation. Which was the date? The date the goods court affirmed. So rendered.
were ordered, the date they were put on board vessel, or the date they
reached the port of destination? We are of the opinion that the date of
importation is the date of shipment and not the date of Arrival in
Manila. (Emphasis supplied)
It should also be considered that it is entirely outside the shipper's hands to fix
the dates of departure, route or arrival of a vessel (unless he charters the
whole ship [see Art. 656, Code of Commerce]).
Defendant's reliance upon Central Bank regulations that the shipment licensed
must have "left the port of origin within the period of validity of the "license" is
not maintainable in the present case, because the regulations came onto effect
only on July 1, 1953 already after issuance of the appellee' license and cannot
be read into the same.
The Solicitor General's contention that, assuming the six months are counted
up to the date the imports goods were placed on board the vessels for
shipment the period of validity had likewise already elapsed because, legally
G.R. No. 106296 July 5, 1996 Charges of violations of R.A. No. 3019, §3(e) and R.A. No. 992, §§20-21 and
R.A. No. 733, §14 were likewise filed against him with the Office of
ISABELO T. CRISOSTOMO, petitioner, Tanodbayan.
vs.
THE COURT OF APPEALS and the PEOPLE OF THE On June 14, 1976, three (3) informations for violation of Sec. 3(e) of the Anti-
PHILIPPINES, respondents. Graft and Corrupt Practices Act (R.A. No. 3019, as amended) were filed
against him. The informations alleged that he appropriated for himself a bahay
kubo, which was intended for the College, and construction materials worth
P250,000.00, more or less. Petitioner was also accused of using a driver of the
MENDOZA, J.:p College as his personal and family driver. 1
This is a petition to review the decision of the Court of Appeals dated July 15, On October 22, 1976, petitioner was preventively suspended from office
1992, the dispositive portion of which reads: pursuant to R.A. No. 3019, §13, as amended. In his place Dr. Pablo T. Mateo,
Jr. was designated as officer-in-charge on November 10, 1976, and then as
Acting President on May 13, 1977.
WHEREFORE, the present petition is partially granted. The
questioned Orders and writs directing (1) "reinstatement" of
respondent Isabelo T. Crisostomo to the position of "President On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E.
of the Polytechnic University of the Philippines", and (2) Marcos, CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO
payment of "salaries and benefits" which said respondent failed A POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES,
to receive during his suspension insofar as such payment ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS
includes those accruing after the abolition of the PCC and its CURRICULAR OFFERINGS.
transfer to the PUP, are hereby set aside. Accordingly, further
proceedings consistent with this decision may be taken by the Mateo continued as the head of the new University. On April 3, 1979, he was
court a quo to determine the correct amounts due and payable appointed Acting President and on March 28, 1980, as President for a term of
to said respondent by the said university. six (6) years.
The background of this case is as follows: On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment
acquitting petitioner of the charges against him. The dispositive portion of the
Petitioner Isabelo Crisostomo was President of the Philippine College of decision reads:
Commerce (PCC), having been appointed to that position by the President of
the Philippines on July 17, 1974. WHEREFORE, the Court finds the accused, Isabelo T.
Crisostomo, not guilty of the violations charged in all these
During his incumbency as president of the PCC, two administrative cases were three cases and hereby acquits him therefrom, with costs de
filed against petitioner for illegal use of government vehicles, misappropriation officio. The bail bonds filed by said accused for his provisional
of construction materials belonging to the college, oppression and harassment, liberty are hereby cancelled and released.
grave misconduct, nepotism and dishonesty. The administrative cases, which
were filed with the Office of the President, were subsequently referred to the Pursuant to the provisions of Section 13, R.A. No. 3019, as
Office of the Solicitor General for investigation. amended, otherwise known as The Anti-Graft and Corrupt
Practices Act, and under which the accused has been
suspended by this Court in an Order dated October 22, 1976,
said accused is hereby ordered reinstated to the position of
President of the Philippine College of Commerce, now known
as the Polytechnic University of the Philippines, from which he On May 18, 1992, therefore, the People of the Philippines filed a petition
has been suspended. By virtue of said reinstatement, he is for certiorari and prohibition (CA G.R. No. 27931), assailing the two orders and
entitled to receive the salaries and other benefits which he the writs of execution issued by the trial court. It also asked for a temporary
failed to receive during suspension, unless in the meantime restraining order.
administrative proceedings have been filed against him.
On June 25, 1992, the Court of Appeals issued a temporary restraining order,
The bail bonds filed by the accused for his provisional liberty in enjoining petitioner to cease and desist from acting as president of the PUP
these cases are hereby cancelled and released. pursuant to the reinstatement orders of the trial court, and enjoining further
proceedings in Criminal Cases Nos. VI-2329-2331.
SO ORDERED.
On July 15, 1992, the Seventh Division of the Court of Appeals rendered a
The cases filed before the Tanodbayan (now the Ombudsman) were likewise decision, 2 the dispositive portion of which is set forth at the beginning of this
dismissed on August 8, 1991 on the ground that they had become moot and opinion. Said decision set aside the orders and writ of reinstatement issued by the
academic. On the other hand, the administrative cases were dismissed for trial court. The payment of salaries and benefits to petitioner accruing after the
failure of the complainants to prosecute them. conversion of the PCC to the PUP was disallowed. Recovery of salaries and
benefits was limited to those accruing from the time of petitioner's suspension until
the conversion of the PCC to the PUP. The case was remanded to the trial court
On February 12, 1992, petitioner filed with the Regional Trial Court a motion for a determination of the amounts due and payable to petitioner.
for execution of the judgment, particularly the part ordering his reinstatement to
the position of president of the PUP and the payment of his salaries and other
Hence this petition. Petitioner argues that P.D. No. 1341, which converted the
benefits during the period of suspension.
PCC into the PUP, did not abolish the PCC. He contends that if the law had
intended the PCC to lose its existence, it would have specified that the PCC
The motion was granted and a partial writ of execution was issued by the trial was being "abolished" rather than "converted" and that if the PUP was
court on March 6, 1992. On March 26, 1992, however, President Corazon C. intended to be a new institution, the law would have said it was being
Aquino appointed Dr. Jaime Gellor as acting president of the PUP, following "created." Petitioner claims that the PUP is merely a continuation of the
the expiration of the term of office of Dr. Nemesio Prudente, who had existence of the PCC, and, hence, he could be reinstated to his former position
succeeded Dr. Mateo. Petitioner was one of the five nominees considered by as president.
the President of the Philippines for the position.
In part the contention is well taken, but, as will presently be explained,
On April 24, 1992, the Regional Trial Court, through respondent Judge reinstatement is no longer possible because of the promulgation of P.D. No.
Teresita Dy-Liaco Flores, issued another order, reiterating her earlier order for 1437 by the President of the Philippines on June 10, 1978.
the reinstatement of petitioner to the position of PUP president. A writ of
execution, ordering the sheriff to implement the order of reinstatement, was
P.D. No. 1341 did not abolish, but only changed, the former Philippine College
issued.
of Commerce into what is now the Polytechnic University of the Philippines, in
the same way that earlier in 1952, R.A. No. 778 had converted what was then
In his return dated April 28, 1992, the sheriff stated that he had executed the the Philippine School of Commerce into the Philippine College of Commerce.
writ by installing petitioner as President of the PUP, although Dr. Gellor did not What took place was a change in academic status of the educational
vacate the office as he wanted to consult with the President of the Philippines institution, not in its corporate life. Hence the change in its name, the
first. This led to a contempt citation against Dr. Gellor. A hearing was set on expansion of its curricular offerings, and the changes in its structure and
May 7, 1992. On May 5, 1992, petitioner also moved to cite Department of organization.
Education, Culture and Sports Secretary Isidro Cariño in contempt of court.
Petitioner assumed the office of president of the PUP.
As petitioner correctly points out, when the purpose is to abolish a department §90. Status of Present NAPOLCOM, PC-INP. - Upon the
or an office or an organization and to replace it with another one, the effectivity of this Act, the present National Police Commission,
lawmaking authority says so. He cites the following examples: and the Philippine Constabulary-Integrated National Police
shall cease to exist. The Philippine Constabulary, which is the
E.O. No. 709: nucleus of the integrated Philippine Constabulary-Integrated
National Police, shall cease to be a major service of the Armed
§1. There is hereby created a Ministry of Trade and Industry, Forces of the Philippines. The Integrated National Police, which
hereinafter referred to as the Ministry. The existing Ministry of is the civilian component of the Philippine Constabulary-
Trade established pursuant to Presidential Decree No. 721 as Integrated National Police, shall cease to be the national police
amended, and the existing Ministry established pursuant to force and in lieu thereof, a new police force shall be
Presidential Decree No. 488 as amended, are abolished established and constituted pursuant to this Act.
together with their services, bureaus and similar agencies,
regional offices, and all other entities under their supervision In contrast, P.D. No. 1341, provides:
and control.
§1. The present Philippine College of Commerce is hereby
E.O. No. 710: converted into a university to be known as the "Polytechnic
University of the Philippines," hereinafter referred to in this
§1. There is hereby created a Ministry of Public Works and Decree as the University.
Highways, hereinafter referred to as the Ministry. The existing
Ministry of Public Works established pursuant to Executive As already noted, R.A. No. 778 earlier provided:
Order No. 546 as amended, and the existing Ministry of Public
Highways established pursuant to Presidential Decree No. 458 §1. The present Philippine School of Commerce, located in the
as amended, are abolished together with their services, City of Manila, Philippines, is hereby granted full college status
bureaus and similar agencies, regional offices, and all other and converted into the Philippine College of Commerce, which
entities within their supervision and control. . . . will offer not only its present one-year and two-year vocational
commercial curricula, the latter leading to the titles of Associate
R.A. No. 6975: in Business Education and/or Associate in Commerce, but also
four-year courses leading to the degrees of Bachelor of
§13. Creation and Composition. -- A National Police Science in Business in Education and Bachelor of Science in
Commission, hereinafter referred to as the Commission, is Commerce, and five-year courses leading to the degrees of
hereby created for the purpose of effectively discharging the Master of Arts in Business Education and Master of Arts in
functions prescribed in the Constitution and provided in this Commerce, respectively.
Act. The Commission shall be a collegial body within the
Department. It shall be composed of a Chairman and four (4) The appellate court ruled, however, that the PUP and the PCC are not "one
regular commissioners, one (1) of whom shall be designated as and the same institution" but "two different entities" and that since petitioner
Vice-Chairman by the President. The Secretary of the Crisostomo's term was coterminous with the legal existence of the PCC,
Department shall be the ex-officio Chairman of the petitioner's term expired upon the abolition of the PCC. In reaching this
Commission, while the Vice-Chairman shall act as the conclusion, the Court of Appeals took into account the following:
executive officer of the Commission.
a) After respondent Crisostomo's suspension, P.D. No. 1341
xxx xxx xxx (entitled "CONVERTING THE PHILIPPINE COLLEGE OF
COMMERCE INTO A POLYTECHNIC UNIVERSITY,
DEFINING ITS OBJECTIVES, ORGANIZATIONAL But these are hardly indicia of an intent to abolish an existing institution and to
STRUCTURE AND FUNCTIONS, AND EXPANDING ITS create a new one. New course offerings can be added to the curriculum of a
CURRICULAR OFFERINGS") was issued on April 1, 1978. school without affecting its legal existence. Nor will changes in its existing
This decree explicitly provides that PUP's objectives and structure and organization bring about its abolition and the creation of a new
purposes cover not only PCC's offering of programs "in the one. Only an express declaration to that effect by the lawmaking authority will.
field of commerce and business administration" but also
"programs in other polytechnic areas" and "in other fields such The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly
as agriculture, arts and trades and fisheries . . ." (section 2). implying the abolition of the PCC and the creation of a new one - the PUP - in
Being a university, PUP was conceived as a bigger institution its stead:
absorbing, merging and integrating the entire PCC and other
"national schools" as may be "transferred" to this new state §12. All parcels of land, buildings, equipment and facilities
university. owned by the Philippine College of Commerce and such other
national schools as may be integrated by virtue of this decree,
b) The manner of selection and appointment of the university including their obligations and appropriations thereof, shall
head is substantially different from that provided by the PCC stand transferred to the Polytechnic University of the
Charter. The PUP President "shall be appointed by the Philippines, provided, however, that said national schools shall
President of the Philippines upon recommendation of the continue to receive their corresponding shares from the special
Secretary of Education and Culture after consultation with the education fund of the municipal/provincial/city government
University Board of Regents" (section 4, P.D. 1341). The concerned as are now enjoyed by them in accordance with
President of PCC, on the other hand, was appointed "by the existing laws and/or decrees.
President of the Philippines upon recommendation of the Board
of Trustees" (Section 4, R.A. 778). The law does not state that the lands, buildings and equipment owned by the
PCC were being "transferred" to the PUP but only that they "stand transferred"
c) The composition of the new university's Board of Regents in to it. "Stand transferred" simply means, for example, that lands transferred to
likewise different from that of the PCC Board of Trustees the PCC were to be understood as transferred to the PUP as the new name of
(which included the chairman of the Senate Committee on the institution.
Education and the chairman of the House Committee on
Education, the President of the PCC Alumni Association as But the reinstatement of petitioner to the position of president of the PUP could
well as the President of the Chamber of Commerce of the not be ordered by the trial court because on June 10, 1978, P.D. No. 1437 had
Philippines). Whereas, among others, the NEDA Director- been promulgated fixing the term of office of presidents of state universities
General, the Secretary of Industry and the Secretary of Labor and colleges at six (6) years, renewable for another term of six (6) years, and
are members of the PUP Board of Regents. (section 6, P.D. authorizing the President of the Philippines to terminate the terms of
1341) incumbents who were not reappointed. P.D. No. 1437 provides:
d) The decree moreover transferred to the new university all §6. The head of the university or college shall be known as the
the properties including "equipment and facilities:" President of the university or college. He shall be qualified for
the position and appointed for a term of six (6) years by the
". . . owned by the Philippine College of President of the Philippines upon recommendation of the
Commerce and such other National Schools as Secretary of Education and Culture after consulting with the
may be integrated . . . including Board which may be renewed for another term upon
their obligations and appropriations . . ." (sec. recommendation of the Secretary of Education and Culture
12; emphasis supplied) 3 after consulting the Board. In case of vacancy by reason of
death, absence or resignation, the Secretary of Education and G.R. No. 115844 August 15, 1997
Culture shall have the authority to designate an officer in
charge of the college or university pending the appointment of CESAR G. VIOLA, Chairman, Brgy. 167, Zone 15, District II,
the President. Manila, petitioner,
vs.
The powers and duties of the President of the university or HON. RAFAEL M. ALUNAN III, Secretary DILG, ALEX L. DAVID,
college, in addition to those specifically provided for in this President/Secretary General, National Liga ng mga Barangay,
Decree shall be those usually pertaining to the office of the LEONARDO L. ANGAT, President, City of Manila, Liga ng mga
president of a university or college. Barangay, respondents.
The post of executive vice president is in reality that of the vice president in Justice Davide contends in dissent, however, that "only the Board of Directors
§493 of the LGC, so that the only additional positions created for each chapter — and not any other body — is vested with the power to create other positions
in the Constitution and By-laws are those of first, second and third vice as may be necessary for the management of the chapter" and that, in any
presidents and auditor. Contrary to petitioner's contention, the creation of the case, there is no showing that the Barangay National Assembly was
additional positions is authorized by the LGC which provides as follows: authorized to draft the Constitution and By-laws because he is unable to find
any creating it. The Barangay National Assembly is actually the Pambansang
Katipunan ng mga Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules
§493. Organization. The liga at the municipal, city, provincial,
and Regulations Implementing the Local Government Code of 1991, which
Metropolitan political subdivision, and national levels directly
Justice Davide's dissent cites. It will be helpful to quote these provisions:
elect a president, a vice-president, and five (5) members of the
board of directors. The board shall appoint its secretary and
treasurer and create such other positions as it may deem (2) A secretary-general shall be elected from among the
necessary for the management of the chapter. A secretary- members of the national liga who shall be responsible for the
general shall be elected form among the members of the overall operation of the liga. Pending election of a secretary-
national liga and shall be charged with the overall operation of general under this rule, the incumbent president of the
the liga on the national level. The board shall coordinate the pambansang katipunan ng mga barangay shall act as the
activities of the chapters of the liga. (emphasis added) secretary-general. The incumbent members of the board of the
pambansang katipunan ng mga barangay, headed by the
secretary-general, who continue to be presidents of the
This provision in fact requires — and not merely authorizes the board of
respective chapters of the liga to which they belong, shall
directors to "create such other positions as it may deem necessary for the
constitute a committee to exercise the powers and duties of the
management of the chapter" and belies petitioner's claim that said provision
national liga and draft or amend the constitution and by-laws of
(§493) limits the officers of a chapter to the president, vice president, five
the national liga to conform to the provisions of this Rule.
members of the board of directors, secretary, and treasurer. That Congress
can delegate the power to create positions such as these has been settled by
our decisions upholding the validity of reorganization statutes authorizing the (3) The board of directors shall coordinate the activities of the
President of the Philippines to create, abolish or merge officers in the various chapters of the liga.
(Emphasis added) metropolitan political subdivision chapters shall constitute the
National Liga ng mga Barangay.
Pursuant to these provisions, pending the organization of the Liga ng mga
Barangay, the board of directors of the PKB was constituted into a committee, §493. Organization. — The liga at the municipal, city,
headed by the PKB president, who acted as secretary general, with a two-fold provincial, metropolitan political subdivision, and national
mandate: "[I] exercise the powers and duties of the national liga and [2] draft or levels directly elect a president, a vice-president, and five (5)
amend the constitution and by-laws of the national liga to conform to the members of the board of directors. The board shall appoint its
provisions of this Rule." The board of directors of the PKB, functioning in place secretary and treasurer and create such other positions as it
of the board of directors of the National Liga ng mga Barangay, exercised one may deem necessary for the management of the chapter. A
of these powers of the National Liga board, namely, to create additional secretary-general shall be elected from among the members of
positions which it deemed necessary for the management of a chapter. There the national liga and shall be charged with the overall operation
is therefore no basis for the claim that because the power to create additional of the liga on the national level. The board shall coordinate the
positions in the Liga on its chapters is vested only in the board of directors the activities of the chapters of the liga.
exercise of this power by the Barangay National Assembly is unauthorized and
illegal and positions created are void. The Barangay National Assembly was (Emphasis added)
actually the Pambansang Katipunan ng mga Barangay or PKB. Pending the
organization of the Liga ng mga Barangay, it served as the Liga. While the board of directors of a local chapter can create additional positions
to provide for the needs of the chapter, the board of directors of the National
But it is contended in the dissent that "Section 493 of the LGC . . . vests the Liga must be deemed to have the power to create additional positions not only
power to create additional positions in the Board of Directors of the chapter." for its management but also for that of all the chapters at the municipal, city,
The implication seems to be that the board of the directors at the national level provincial and metropolitan political subdivision levels. Otherwise the National
did not have that power. It is necessary to consider the organizational structure Liga would be no different from the local chapters. There would then be only
of the Liga ng mga Barangay as provided in the LGC, as follows: so many local chapters without a national one, when what is contemplated in
the above-quoted provisions of the LGC is that there should be one Liga ng
§492. Representation, Chapters, National Liga. — Every mga Barangay with local chapters at all levels of local government units. The
barangay shall be represented in said liga by the punong dissent, by denying to the board of directors at the National Liga the power to
barangay, or in his absence or incapacity, by a sangguniang create additional positions in the local chapters, would reduce such board to a
member duly elected for the purpose among its members, who board of a local chapter. The fact is that §493 grants the power to create
shall attend all meetings or deliberations called by the different positions not only to the boards of the local chapters but to the board of the
chapters of the liga. Liga at the national level as well.
The liga shall have chapters at the municipal, city, provincial Indeed what was done in the Constitution and By-laws of their liga was to
and metropolitan political subdivision levels. create additional positions in each chapters, whether national or local, without
however precluding the boards of directors of the chapters as well as that of
The municipal and city chapters of the liga shall be composed the national liga from creating other positions for their peculiar needs. The
of the barangay representatives of municipal and city creation by the board of the National Liga of the positions of first, second and
barangays, respectively. The duly elected presidents of third vice presidents, auditors and public relations officers was intended to
component municipal and city chapters shall constitute the provide uniform officers for the various chapters in line with the mandate in Art.
provincial chapter or the metropolitan political subdivision 210(g)(2) of the Rules and Regulations Implementing the Local Government
chapter. The duly elected presidents of highly-urbanized cities, Code of 1991 to the Barangay National Assembly to
provincial chapters, the Metropolitan Manila chapter and "formulate uniform constitution and by-laws applicable to the national liga and
all local chapters." The various chapters could have different minor officers
depending on their local needs, but they must have the same major elective G.R. No. 112745 October 16, 1997
officers, meaning to say, the additional vice-presidents and auditors.
AQUILINO T. LARIN, petitioner,
The dissent further argues that, following the rule of ejusdem generis, what vs.
may be created as additional positions can only be appointive ones because THE EXECUTIVE SECRETARY, SECRETARY OF FINANCE,
the positions of secretary and treasurer are appointive positions. The rule COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE AND THE
might apply if what is involved is the appointment of other officers. But what we COMMITTEE CREATED TO INVESTIGATE THE ADMINISTRATIVE
are dealing with in this case is the creation of additional positions. Section 493 COMPLAINT AGAINST AQUILINO T. LARIN, COMPOSED OF FRUMENCIO
actually gives the board the power to "[1] appoint its secretary and treasurer A. LAGUSTAN, JOSE B. ALEJANDRINO AND JAIME M.
and [2] create such other positions as it may deem necessary for the MAZA, respondents.
management of the chapter." The additional positions to be created need not
therefore be appointive positions.
Nor is it correct to say that §493, in providing that additional positions to be TORRES, JR., J.:
created must be those which are "deemed necessary for the management of
the chapter," contemplates only appointive positions. Management positions Challenged in this petition is the validity of petitioner's removal from service as
are not necessarily limited to appointive positions. Elective officers, such as Assistant Commissioner of the Excise Tax Service of the Bureau of Internal
the president and vice-president, can be expected to be involved in the general Revenue. Incidentally, he questions Memorandum Order No. 164 issued by
administration or management of the chapter. Hence, the creation of other the Office of the President, which provides for the creation of "A Committee to
elective positions which may be deemed necessary for the management of the Investigate the Administrative Complaint Against Aquilino T. Larin, Assistant
chapter is within the purview of §493. Commissioner, Bureau of Internal Revenue" as well as the investigation made
in pursuance thereto, and Administrative Order No. 101 dated December 2,
WHEREFORE, the petition for prohibition is DISMISSED for lack of merit. 1993 which found him guilty of grave misconduct in the administrative charge
and imposed upon him the penalty of dismissal from office.
SO ORDERED.
Likewise, petitioner seeks to assail the legality of Executive Order No. 132,
issued by President Ramos on October 26, 1993, which provides for the
"Streamlining of the Bureau of Internal Revenue," and of its implementing rules
issued by the Bureau of Internal Revenue, namely: a) Administrative Order No.
4-93, which provides for the "Organizational Structure and Statement of
General Functions of Offices in the National Office" and b) Administrative
Order No. 5-93, which provides for "Redefining the Areas of Jurisdiction and
Renumbering of Regional And District Offices."
The antecedent facts of the instant case as succinctly related by the Solicitor
General are as follows:
It is clear from the foregoing that Mr. Larin has been found Consequently, the Committee directed the petitioner to respond to the
beyond reasonable doubt to have committed acts constituting administrative charge leveled against him through a letter dated September
grave misconduct. Under the Civil Service Laws and Rules 17, 1993, thus:
which require only preponderance of evidence, grave
misconduct is punishable by dismissal.
Presidential Memorandum Order No. 164 dated August 25,
1993, a xerox copy of which is hereto attached for your ready
Acting by authority of the President, Sr. Deputy Executive Secretary Leonardo reference, created an Investigation Committee to look into the
A. Quisumbing issued Memorandum Order No. 164 dated August 25, 1993 charges against you which are also the subject of the Criminal
Cases No. 14208 and 14209 entitled People of the Philippines filing only of the criminal charges against him, b) by res judicata, c) by double
vs. Aquilino T . Larin, et. al. jeopardy, and d) because to proceed with the case would be redundant,
oppressive and a plain persecution against him.
The Committee has in its possession a certified true copy of
the Decision of the Sandiganbayan in the above-mentioned Meanwhile, the President issued the challenged Executive Order No. 132
cases. dated October 26, 1993 which mandates for the streamlining of the Bureau of
Internal Revenue. Under said order, some positions and functions are either
Pursuant to Presidential Memorandum Order No. 164, you are abolished, renamed, decentralized or transferred to other offices, while other
hereby directed to file your position paper on the offices are also created. The Excise Tax Service or the Specific Tax Service,
aforementioned charges within seven (7) days from receipt of which petitioner was the Assistant Commissioner, was one of those offices
hereof . . . . that was abolished by said executive order.
Failure to file the required position paper shall be considered The corresponding implementing rules of Executive Order No. 132, namely,
as a waiver on your part to submit such paper or to be heard, in Revenue Administrative Orders Nos. 4-93 and 5-93, were subsequently issued
which case, the Committee shall deem the case submitted on by the Bureau of Internal Revenue.
the basis of the documents and records at hand.
On October 27, 1993, or one day after the promulgation of Executive Order
In compliance, petitioner submitted a letter dated September 30, 1993 which No. 132, the President appointed the following as BIR Assistant
was addressed to Atty. Frumencio A. Lagustan, the Chairman of the Commissioners:
Investigating Committee. In said latter, he asserts that,
1. Bernardo A. Frianeza
The case being sub-judice, I may not, therefore, comment on
the merits of the issues involved for fear of being cited in 2. Dominador L. Galura
contempt of Court. This position paper is thus limited to
furnishing the Committee pertinent documents submitted with 3. Jaime D. Gonzales
the Supreme Court and other tribunal which took cognizance of
the case in the past, as follows: 4. Lilia C. Guillermo
In the same letter, petitioner claims that the administrative complaint against 10. Joel L. Tan-Torres
him is already barred: a) on jurisdictional ground as the Office of the
Ombudsman had already taken cognizance of the case and had caused the
Consequently, the President, in the assailed Administrative Order No. 101 this, the other legal bases of E.O. No. 132 as stated in its preamble are
dated December 2, 1993, found petitioner guilty of grave misconduct in the Section 63 of E.O. No. 127 (Reorganizing the Ministry of Finance), and Section
administrative charge and imposed upon him the penalty of dismissal with 20, Book III of E.O. No. 292, otherwise known as the Administrative Code of
forfeiture of his leave credits and retirement benefits including disqualification 1987. In addition, it is clear that in Section 11 of R.A. No. 6656 future
for reappointment in the government service. reorganization is expressly contemplated and nothing in said law that prohibits
subsequent reorganization through an executive order. Significantly,
Aggrieved, petitioner filed directly with this Court the instant petition on respondents clarified that petitioner was not dismissed by virtue of EO 132.
December 13, 1993 to question basically his alleged unlawful removal from Respondents claimed that he was removed from office because he was found
office. guilty of grave misconduct in the administrative cases filed against him.
On April 17, 1996 and while the instant petition is pending, this Court set aside The ultimate issue to be resolved in the instant case falls on the determination
the conviction of petitioner in Criminal Case Nos. 14208 and 14209. of the validity of petitioner's dismissal from office. Incidentally, in order to
resolve this matter, it is imperative that We consider these questions: a) Who
In his petition, petitioner challenged the authority of the President to dismiss has the power to discipline the petitioner?, b) Were the proceedings taken
him from office. He argued that in so far as presidential appointees who are pursuant to Memorandum Order No. 164 in accord with due process?, c) What
Career Executive Service Officers are concerned, the President exercises only is the effect of petitioner's acquittal in the criminal case to his administrative
the power of control not the power to remove. He also averred that the charge?, d) Does the President have the power to reorganize the BIR or to
administrative investigation conducted under Memorandum Order No. 164 is issue the questioned E.O. NO. 132?, and e) Is the reorganization of BIR
void as it violated his right to due process. According to him, the letter of the pursuant to E.O. No. 132 tainted with bad faith?
Committee dated September 17, 1993 and his position paper dated
September 30, 1993 are not sufficient for purposes of complying with the At the outset, it is worthy to note that the position of Assistant Commissioner of
requirements of due process. He alleged that he was not informed of the the BIR is part of the Career Executive Service. 2 Under the law, 3 Career
administrative charges leveled against him nor was he given official notice of Executive Service officers, namely, Undersecretary, Assistant Secretary, Bureau
his dismissal. Director, Assistant Bureau Director, Regional Director, Assistant Regional Director,
Chief of Department Service and other officers of equivalent rank as may be
identified by the Career Executive Service Board, are all appointed by the
Petitioner likewise claimed that he was removed as a result of the
President. Concededly, petitioner was appointed as Assistant Commissioner in
reorganization made by the Executive Department in the BIR pursuant to January, 1987 by then President Aquino. Thus, petitioner is a presidential
Executive Order No. 132. Thus, he assailed said Executive Order No. 132 and appointee who belongs to career service of the Civil Service. Being a presidential
its implementing rules, namely, Revenue Administrative Orders 4-93 and 5-93 appointee, he comes under the direct disciplining authority of the President. This is
for being ultra vires. He claimed that there is yet no law enacted by Congress in line with the well settled principle that the "power to remove is inherent in the
which authorizes the reorganization by the Executive Department of executive power to appoint" conferred to the President by Section 16, Article VII of the
agencies, particularly the Bureau of Internal Revenue. He said that the Constitution. Thus, it is ineluctably clear that Memorandum Order No. 164, which
reorganization sought to be effected by the Executive Department on the basis created a committee to investigate the administrative charge against petitioner,
of E.O. No. 132 is tainted with bad faith in apparent violation of Section 2 of was issued pursuant to the power of removal of the President. This power of
R.A. 6656, otherwise known as the Act Protecting the Security of Tenure of removal, however, is not an absolute one which accepts no reservation. It must be
Civil Service Officers and Employees in the Implementation of Government pointed out that petitioner is a career service officer. Under the Administrative
Reorganization. Code of 1987, career service is characterized by the existence of security of
tenure, as contra-distinguished from non-career service whose tenure is co-
On the other hand. respondents contended that since petitioner is a terminus with that of the appointing authority or subject to his pleasure, or limited
presidential appointee, he falls under the disciplining authority of the President. to a period specified by law or to the duration of a particular project for which
purpose the employment was made. As a career service officer, petitioner enjoys
They also contended that E.O. No. 132 and its implementing rules were validly
the right to security of tenure. No less than the 1987 Constitution guarantees the
issued pursuant to Sections 48 and 62 of Republic Act No. 7645. Apart from
right of security of tenure of the employees of the civil service. Specifically, Section
36 of P.D. No. 807, as amended, otherwise known as Civil Service Decree of the which had resulted in an appropriate tax credit of
Philippines, is emphatic that career service officers and employees who enjoy P180,701,682.00 in favor of Tanduay. The government had
security of tenure may be removed only for any of the causes enumerated in said been defrauded of a tax revenue — for the full amount, if one is
law. In other words, the fact that petitioner is a presidential appointee does not give to look at the availments or utilization thereof (Exhibits "AA" to
the appointing authority the license to remove him at will or at his pleasure for it is "AA- 31-a"), or for a substantial portion thereof
an admitted fact that he is likewise a career service officer who under the law is the (P73,000,000.00) if we are to rely on the letter of Deputy
recipient of tenurial protection, thus, may only be removed for a cause and in Commissioner Eufracio D. Santos (Exhibits "21" for all the
accordance with procedural due process. accused).
Was petitioner then removed from office for a legal cause under a valid As pointed out above, the confluence of acts and omissions
proceeding? committed by accused Larin, Pareno and Evangelista
adequately prove conspiracy among them for no other purpose
Although the proceedings taken complied with the requirements of procedural than to bring about a tax credit which Tanduay did not deserve.
due process, this Court, however, considers that petitioner was not dismissed These misrepresentations as to how much Tanduay had paid
for a valid cause. in ad valorem taxes obviously constituted a fraud of tax
revenue of the government . . . . 5
It should be noted that what precipitated the creation of the investigative
committee to look into the administrative charge against petitioner is his However, it must be stressed at this juncture that the conviction of petitioner by
conviction by the Sandiganbayan in Criminal Case Nos. 14208 and 14209. As the Sandiganbayan was set aside by this Court in our decision promulgated on
admitted by the respondents, the administrative case against petitioner is April 17, 1996 in G.R. Nos. 108037-38 and 107119-20. We specifically ruled in
based on the Sandiganbayan Decision of September 18, 1992. Thus, in the no uncertain terms that: a) petitioner can not be held negligent in relying on the
Administrative Order No. 101 issued by Senior Deputy Executive Secretary certification of a co-equal unit in the BIR, b) it is not incumbent upon Larin to
Quisumbing which found petitioner guilty of grave misconduct, it clearly states go beyond the certification made by the Revenue Accounting Division that
that: Tanduay Distillery, Inc. had paid the ad valorem taxes, c) there is nothing
irregular or anything false in Larin's marginal note on the memorandum
This pertains to the administrative charge against Assistant addressed to Pareno, the Chief of Alcohol Tax Division who was also one of
Commissioner Aquilino T. Larin of the Bureau of Internal the accused, but eventually acquitted, in the said criminal cases, and d) there
Revenue, for grave misconduct by virtue of a Memorandum is no proof of actual agreement between the accused, including petitioner, to
signed by Acting Secretary Leong of the Department of commit the illegal acts charged. We are emphatic in our resolution in said
Finance, on the basis of a decision handed down by the Hon. cases that there is nothing "illegal with the acts committed by the petitioner(s)."
Sandiganbayan convicting Larin, et. al. in Criminal Case Nos. We also declare that "there is no showing that petitioner(s) had acted
14208 and 14209. 4 irregularly, or performed acts outside of his (their) official functions."
Significantly, these acts which. We categorically declare to be not unlawful and
In a nutshell, the criminal cases against petitioner refer to his alleged violation improper in G.R. Nos. 108037-38 and G.R. Nos. 107119-20 are the very same
of Section 268 (4) of the National Internal Revenue Code and of Section 3 (e) acts for which petitioner is held to be administratively responsible. Any charge
of R.A. No. 3019 as a consequence of his act of favorably recommending the of malfeasance or misfeasance on the part of the petitioner is clearly belied by
grant of tax credit to Tanduay Distillery, Inc.. The pertinent portion of the our conclusion in said cases. In the light of this decisive pronouncement, We
judgment of the Sandiganbayan reads: see no reason for the administrative charge to continue — it must, thus, be
dismissed.
As above pointed out, the accused had conspired in knowingly
preparing false memoranda and certification in order to effect a We are not unaware of the rule that since administrative cases are
fraud upon taxes due to the government. By their separate acts independent from criminal actions for the same act or omission, the dismissal
or acquittal of the criminal charge does not foreclose the institution of Sec. 48. Scaling Down and Phase Out of Activities of Agencies
administrative action nor carry with it the relief from administrative Within the Executive Branch. — The heads of departments,
liability. 6 However, the circumstantial setting of the instant case sets it miles apart bureaus and offices and agencies are hereby directed to
from the foregoing rule and placed it well within the exception. Corollarily, where identify their respective activities which are no longer essential
the very basis of the administrative case against petitioner is his conviction in the in the delivery of public services and which may be scaled
criminal action which was later on set aside by this Court upon a categorical and down, phased out or abolished, subject to civil service rules
clear finding that the acts for which he was administratively held liable are not and regulations. . . . Actual scaling down, phasing out or
unlawful and irregular, the acquittal of the petitioner in the criminal case abolition of the activities shall be effected pursuant to Circulars
necessarily entails the dismissal of the administrative action against him, because or Orders issued for the purpose by the Office of the President.
in such a case, there is no more basis nor justifiable reason to maintain the (emphasis ours)
administrative suit.
Said provision clearly mentions the acts of "scaling down, phasing out and
On the aspect of procedural due process, suffice it to say that petitioner was abolition" of offices only and does not cover the creation of offices or transfer
given every chance to present his side. The rule is well settled that the of functions. Nevertheless, the act of creating and decentralizing is included in
essence of due process in administrative proceedings is that a party be the subsequent provision of Section 62, which provides that:
afforded a reasonable opportunity to be heard and to submit any evidence he
may have in support of his defense.7 The records clearly show that on October 1,
1993 petitioner submitted his letter-response dated September 30, 1993 to the
Sec. 62. Unauthorized organizational charges. — Unless
administrative charge filed against him. Aside from his letter, he also submitted otherwise created by law or directed by the President of the
various documents attached as annexes to his letter, all of which are evidences Philippines, no organizational unit of charges in key positions in
supporting his defense. Prior to this, he received a letter dated September 17, any department or agency shall be authorized in their
1993 from the Investigation Committee requiring him to explain his side concerning respective organization structures and be funded from
the charge. It can not therefore be argued that petitioner was denied of due appropriations by this Act. (emphasis ours)
process.
The foregoing provision evidently shows that the President is authorized to
Let us now examine Executive Order No. 132. effect organizational charges including the creation of offices in the department
or agency concerned.
As stated earlier, with the issuance of Executive Order No. 132, some of the
positions and offices, including the office of Excise Tax Services of which The contention of petitioner that the two provisions are riders deserves scant
petitioner was the Assistant Commissioner, were abolished or otherwise consideration. Well settled is the rule that every law has in its favor the
decentralized. Consequently, the President released the list of appointed presumption of constitutionality. 8 Unless and until a specific provision of the law
Assistant Commissioners of the BIR. Apparently, petitioner was not included. is declared invalid and unconstitutional, the same is valid and biding for all intents
and purposes.
We do not agree.
Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292
Under its preamble, E.O. No. 132 lays down the legal bases of its issuance, which states:
namely: a) Section 48 and 62 of R.A. No. 7645, b) Section 63 of E.O. No. 127,
and c) Section 20, Book III of E.O. No. 292. Sec. 20. Residual Powers. — Unless Congress provides
otherwise, the President shall exercise such other powers and
Section 48 of R.A. 7645 provides that: functions vested in the President which are provided for under
the laws and which are not specifically enumerated above or
which are not delegated by the President in accordance with
law. (emphasis ours)
This provision speaks of such other powers vested in the President under the While the President's power to reorganize can not be denied, this does not
law. What law then which gives him the power to reorganize? It is Presidential mean however that the reorganization itself is properly made in accordance
Decree No. 1772 9 which amended Presidential Decree No. 1416. These decrees with law. Well-settled is the rule that reorganization is regarded as valid
expressly grant the President of the Philippines the continuing authority to provided it is pursued in good faith. Thus, in Dario vs. Mison, this Court has
reorganize the national government, which includes the power to group, had the occasion to clarify that:
consolidate bureaus and agencies, to abolish offices, to transfer functions, to
create and classify functions, services and activities and to standardize salaries As a general rule, a reorganization is carried out in "good faith"
and materials. The validity of these two decrees are unquestionable. The 1987 if it is for the purpose of economy or to make bureaucracy more
Constitution clearly provides that "all laws, decrees, executive orders,
efficient. In that event no dismissal or separation actually
proclamations, letters of instructions and other executive issuances not
occurs because the position itself ceases to exist. And in that
inconsistent with this Constitution shall remain operative until amended, repealed
or revoked." 10 So far, there is yet no law amending or repealing said decrees.
case the security of tenure would not be a Chinese wall. Be
Significantly, the Constitution itself recognizes future reorganizations in the that as it may, if the abolition which is nothing else but a
government as what is revealed in Section 16 of Article XVIII, thus: separation or removal, is done for political reasons or
purposely to defeat security of tenure, or otherwise not in good
faith, no valid abolition takes place and whatever abolition is
Sec. 16. Career civil service employees separated from service
done is void ab initio. There is an invalid abolition as where
not for cause but as a result of the . . . reorganization following
there is merely a change of nomenclature of positions or where
the ratification of this Constitution shall be entitled to
claims of economy are belied by the existence of ample
appropriate separation pay . . .
funds. 11
However, We can not consider E.O. No. 127 signed on January 30, 1987 as a
In this regard, it is worth mentioning that Section 2 of R. A. No. 6656 lists down
legal basis for the reorganization of the BIR. E.O. No. 127 should be related to
the circumstances evidencing bad faith in the removal of employees as a result
the second paragraph of Section 11 of Republic Act No. 6656.
of the reorganization, thus:
Section 11 provides inter alia:
Sec. 2. No officer or employee in the career service shall be
removed except for a valid cause and after due notice and
xxx xxx xxx hearing. A valid cause for removal exists when, pursuant to a
bona fide reorganization, a position has been abolished or
In the case of the 1987 reorganization of the executive branch, rendered redundant or there is a need to merge, divide, or
all departments and agencies which are authorized by consolidate positions in order to meet the exigencies of the
executive orders promulgated by the President to reorganize service, or other lawful causes allowed by the Civil Service
shall have ninety days from the approval of this act within Law. The existence of any or some of the following
which to implement their respective reorganization plans in circumstances may be considered as evidence of bad faith in
accordance with the provisions of this Act. (emphasis ours) the removals made as a result of the reorganization, giving rise
to a claim for reinstatement or reappointment by an aggrieved
Executive Order No. 127 was part of the 1987 reorganization contemplated party:
under said provision. Obviously, it had become stale by virtue of the expiration
of the ninety day deadline period. It can not thus be used as a proper basis for a) Where there is a significant increase in the number of
the reorganization of the BIR. Nevertheless, as shown earlier, there are other positions in the new staffing pattern of the department or
legal bases to sustain the authority of the President to issue the questioned agency concerned;
E.O. NO. 132.
b) Where an office is abolished and another performing appointment to the new positions in the approved staffing pattern comparable
substantially the same functions is created; to their former positions or in case there are not enough comparable positions
to positions next lower in rank. It is undeniable that petitioner is a career
c) Where incumbents are replaced by those less qualified in executive officer who is holding a permanent position. Hence, he should have
terms of status of appointment, performance and merit; been given preference for appointment in the position of Assistant
Commissioner. As claimed by petitioner, Antonio Pangilinan who was one of
d) Where there is a reclassification of offices in the department those appointed as Assistant Commissioner, "is an outsider of sorts to the
or agency concerned and the reclassified offices perform Bureau, not having been an incumbent officer of the Bureau at the time of the
substantially the same functions as the original offices; reorganization." We should not lose sight of the second paragraph of Section 4
of R.A. No. 6656 which explicitly states that no new employees shall be taken
in until all permanent officers shall have been appointed for permanent
e) Where the removal violates the order of separation provided
position.
in Section 3 hereof.
IN VIEW OF THE FOREGOING, the petition is granted, and petitioner is
A reading of some of the provisions of the questioned E.O. No. 132 clearly
hereby reinstated to his position as Assistant Commissioner without loss of
leads us to an inescapable conclusion that there are circumstances considered
seniority rights and shall be entitled to full backwages from the time of his
as evidences of bad faith in the reorganization of the BIR.
separation from service until actual reinstatement unless, in the meanwhile, he
would have reached the compulsory retirement age of sixty-five years in which
Section 1.1.2 of said executive order provides that: case, he shall be deemed to have retired at such age and entitled thereafter to
the corresponding retirement benefits.
1.1.2 The Intelligence and Investigation Office and the
Inspection Service are abolished. An Intelligence and SO ORDERED.
Investigation Service is
hereby created to absorb the same functions of the abolished
office and service. . . . (emphasis ours)
On March 25, 1986, President Corazon Aquino promulgated Proclamation No. Actually, the reorganization process started as early as February 25, 1986,
3, "DECLARING A NATIONAL POLICY TO IMPLEMENT THE REFORMS when the President, in her first act in office, called upon "all appointive public
MANDATED BY THE PEOPLE, PROTECTING THEIR BASIC RIGHTS, officials to submit their courtesy resignation(s) beginning with the members of
ADOPTING A PROVISIONAL CONSTITUTION, AND PROVIDING FOR AN the Supreme Court."3 Later on, she abolished the Batasang Pambansa4 and
ORDERLY TRANSITION TO A GOVERNMENT UNDER A NEW the positions of Prime Minister and Cabinet 5 under the 1973 Constitution.
CONSTITUTION." Among other things, Proclamation No. 3 provided:
Since then, the President has issued a number of executive orders and
SECTION 1. ... directives reorganizing various other government offices, a number of which,
with respect to elected local officials, has been challenged in this Court, 6and
The President shall give priority to measures to achieve the mandate of two of which, with respect to appointed functionaries, have likewise been
the people to: questioned herein. 7
(a) Completely reorganize the government, eradicate unjust On May 28, 1986, the President enacted Executive Order No. 17,
and oppressive structures, and all iniquitous vestiges of the "PRESCRIBING RULES AND REGULATIONS FOR THE IMPLEMENTATION
previous regime; 1 OF SECTION 2, ARTICLE III OF THE FREEDOM CONSTITUTION."
Executive Order No. 17 recognized the "unnecessary anxiety and
... demoralization among the deserving officials and employees" the ongoing
government reorganization had generated, and prescribed as "grounds for the
Pursuant thereto, it was also provided: separation/replacement of personnel," the following:
SECTION 3. The following shall be the grounds for separation c) informed of their termination. 13
replacement of personnel:
On the same date, Commissioner Mison constituted a Reorganization Appeals
1) Existence of a case for summary dismissal pursuant to Board charged with adjudicating appeals from removals under the above
Section 40 of the Civil Service Law; Memorandum. 14 On January 26, 1988, Commissioner Mison addressed
several notices to various Customs officials, in the tenor as follows:
2) Existence of a probable cause for violation of the Anti-Graft
and Corrupt Practices Act as determined by the Mnistry Head Sir:
concerned;
Please be informed that the Bureau is now in the process of
3) Gross incompetence or inefficiency in the discharge of implementing the Reorganization Program under Executive Order No.
functions; 127.
4) Misuse of public office for partisan political purposes; Pursuant to Section 59 of the same Executive Order, all officers and
employees of the Department of Finance, or the Bureau of Customs in
5) Any other analogous ground showing that the incumbent is particular, shall continue to perform their respective duties and
unfit to remain in the service or his separation/replacement is in responsibilities in a hold-over capacity, and that those incumbents
the interest of the service.8 whose positions are not carried in the new reorganization pattern, or
who are not re- appointed, shall be deemed separated from the
On January 30, 1987, the President promulgated Executive Order No. 127, service.
"REORGANIZING THE MINISTRY OF FINANCE." 9 Among other offices,
Executive Order No. 127 provided for the reorganization of the Bureau of In this connection, we regret to inform you that your services are
Customs 10 and prescribed a new staffing pattern therefor. hereby terminated as of February 28, 1988. Subject to the normal
clearances, you may receive the retirement benefits to which you may
Three days later, on February 2, 1987, 11 the Filipino people adopted the new be entitled under existing laws, rules and regulations.
Constitution.
In the meantime, your name will be included in the consolidated list
On January 6, 1988, incumbent Commissioner of Customs Salvador Mison compiled by the Civil Service Commission so that you may be given
issued a Memorandum, in the nature of "Guidelines on the Implementation of priority for future employment with the Government as the need arises.
Reorganization Executive Orders," 12 prescribing the procedure in personnel
placement. It also provided: Sincerely yours,
(Sgd)
1. By February 28, 1988, the employees covered by Executive SALVADOR M.
Order 127 and the grace period extended to the Bureau of MISON
Customs by the President of the Philippines on reorganization Commissioner15
shall be:
As far as the records will yield, the following were recipients of these notices:
a) informed of their re-appointment, or
1. CESAR DARIO
b) offered another position in the same department or
agency or
2. VICENTE FERIA, JR. 22. PORFIRIO TABINO
260. RUANTO, REY CRISTO C., JR. 280. TURINGAN, ENRICO T JR.
291. VILLALUZ, EMELITO V. Cesar Dario is the petitioner in G.R. No. 81954; Vicente Feria, Jr., is the
petitioner in G.R. No. 81967; Messrs. Adolfo Caserano Pacifico Lagleva Julian
292. VILLAR, LUZ L. C. Espiritu, Dennis A. Azarraga Renato de Jesus, Nicasio C. Gamboa,
Mesdames Corazon Rallos Nieves and Felicitacion R. Geluz Messrs.
293. ZATA, ANGELA JR. Leodegario H. Floresca, Subaer Pacasum Ms. Zenaida Lanaria Mr. Jose B.
Ortiz, Ms. Gliceria R. Dolar, Ms. Cornelia Napa, Pablo B. Santos, Fermin
294. ACHARON, CRISTETO Rodriguez, Ms. Daligay Bautista, Messrs. Leonardo Jose, Alberto Lontok,
Porfirio Tabino Jose Barredo, Roberto Arnaldo, Ms. Ester Tan, Messrs. Pedro
Bakal, Rosario David, Rodolfo Afuang, Lorenzo Catre,, Ms. Leoncia Catre, and
295. ALBA, RENATO B. Roberto Abaca, are the petitioners in G.R. No. 82023; the last
279 16 individuals mentioned are the private respondents in G.R. No. 85310.
296. AMON, JULITA C.
As far as the records will likewise reveal, 17 a total of 394 officials and
297. AUSTRIA, ERNESTO C. employees of the Bureau of Customs were given individual notices of
separation. A number supposedly sought reinstatement with the
298. CALO, RAYMUNDO M. Reorganization Appeals Board while others went to the Civil Service
Commission. The first thirty-one mentioned above came directly to this Court.
299. CENTENO, BENJAMIN R.
On June 30, 1988, the Civil Service Commission promulgated its ruling
300. DONATO, ESTELITA P. ordering the reinstatement of the 279 employees, the 279 private respondents
in G.R. No. 85310, the dispositive portion of which reads as follows:
301. DONATO, FELIPE S
WHEREFORE, it is hereby ordered that:
1. Appellants be immediately reappointed to positions of 2. Appellants be paid their back salaries to be reckoned from
comparable or equivalent rank in the Bureau of Customs the date of their illegal termination based on the rates under the
without loss of seniority rights; approved new staffing pattern but not lower than their former
salaries.
2. Appellants be paid their back salaries reckoned from the
dates of their illegal termination based on the rates under the This action of the Commission should not, however, be interpreted as
approved new staffing pattern but not lower than their former an exoneration of the herein appellants from any accusation of any
salaries. wrongdoing and therefore, their reappointments are without prejudice
to:
This action of the Commission should not, however, be interpreted as
an exoneration of the appellants from any accusation of wrongdoing 1. Proceeding with investigation of appellants with pending
and, therefore, their reappointments are without prejudice to: administrative cases, if any, and where investigations have
been finished, to promptly, render the appropriate decisions;
1. Proceeding with investigation of appellants with pending and
administrative cases, and where investigations have been
finished, to promptly, render the appropriate decisions; 2. The filing of appropriate administrative complaints against
appellant with derogatory reports or information, if any, and if
2. The filing of appropriate administrative complaints against evidence so warrants.
appellants with derogatory reports or information if evidence so
warrants. SO ORDERED. 20
On October 20, 1988, Commissioner Mison instituted certiorari proceedings On June 10, 1988, Republic Act No. 6656, "AN ACT TO PROTECT THE
with this Court, docketed, as above-stated, as G.R. No. 85310 of this Court. SECURITY OF TENURE OF CIVIL SERVICE OFFICERS AND EMPLOYEES
IN THE IMPLEMENTATION OF GOVERNMENT REORGANIZATION," 22was
On November 16,1988, the Civil Service Commission further disposed the signed into law. Under Section 7, thereof:
appeal (from the resolution of the Reorganization Appeals Board) of five more
employees, holding as follows: Sec. 9. All officers and employees who are found by the Civil Service
Commission to have been separated in violation of the provisions of
WHEREFORE, it is hereby ordered that: this Act, shall be ordered reinstated or reappointed as the case may be
without loss of seniority and shall be entitled to full pay for the period of
separation. Unless also separated for cause, all officers and
1. Appellants be immediately reappointed to positions of
employees, including casuals and temporary employees, who have
comparable or equivalent rank in the Bureau of Customs
been separated pursuant to reorganization shall, if entitled thereto, be
without loss of seniority rights; and
paid the appropriate separation pay and retirement and other benefits
under existing laws within ninety (90) days from the date of the
effectivity of their separation or from the date of the receipt of the
resolution of their appeals as the case may be: Provided, That The Court understands that the parties are agreed on the validity of a
application for clearance has been filed and no action thereon has reorganization per se the only question being, as shall be later seen: What is
been made by the corresponding department or agency. Those who the nature and extent of this government reorganization?
are not entitled to said benefits shall be paid a separation gratuity in
the amount equivalent to one (1) month salary for every year of The Court disregards the questions raised as to procedure, failure to exhaust
service. Such separation pay and retirement benefits shall have priority administrative remedies, the standing of certain parties to sue, 25 and other
of payment out of the savings of the department or agency technical objections, for two reasons, "[b]ecause of the demands of public
concerned. 23 interest, including the need for stability in the public service,"26 and because of
the serious implications of these cases on the administration of the Philippine
On June 23, 1988, Benedicto Amasa and William Dionisio, customs examiners civil service and the rights of public servants.
appointed by Commissioner Mison pursuant to the ostensible reorganization
subject of this controversy, petitioned the Court to contest the validity of the The urgings in G.R. Nos. 85335 and 85310, that the Civil Service
statute. The petition is docketed as G.R. No. 83737. Commission's Resolution dated June 30, 1988 had attained a character of
finality for failure of Commissioner Mison to apply for judicial review or ask for
On October 21, 1988, thirty-five more Customs officials whom the Civil Service reconsideration seasonalbly under Presidential Decree No. 807, 27 or under
Commission had ordered reinstated by its June 30,1988 Resolution filed their Republic Act No. 6656, 28 or under the Constitution, 29 are likewise rejected.
own petition to compel the Commissioner of Customs to comply with the said The records show that the Bureau of Customs had until July 15, 1988 to ask
Resolution. The petition is docketed as G.R. No. 85335. for reconsideration or come to this Court pursuant to Section 39 of Presidential
Decree No. 807. The records likewise show that the Solicitor General filed a
On November 29, 1988, we resolved to consolidate all seven petitions. motion for reconsideration on July 15, 1988.30 The Civil Service Commission
issued its Resolution denying reconsideration on September 20, 1988; a copy
On the same date, we resolved to set the matter for hearing on January 12, of this Resolution was received by the Bureau on September 23,
1989. At the said hearing, the parties, represented by their counsels (a) retired 1988.31 Hence the Bureau had until October 23, 1988 to elevate the matter
Justice Ruperto Martin; (b) retired Justice Lino Patajo. (c) former Dean Froilan on certiorari to this Court.32 Since the Bureau's petition was filed on October
Bacungan (d) Atty. Lester Escobar (e) Atty. Faustino Tugade and (f) Atty. 20, 1988, it was filed on time.
Alexander Padilla, presented their arguments. Solicitor General Francisco
Chavez argued on behalf of the Commissioner of Customs (except in G.R. We reject, finally, contentions that the Bureau's petition (in G.R. 85310) raises
85335, in which he represented the Bureau of Customs and the Civil Service no jurisdictional questions, and is therefore bereft of any basis as a petition
Commission). Former Senator Ambrosio Padilla also appeared and argued
lâwphî1.ñèt
for certiorari under Rule 65 of the Rules of Court. 33 We find that the questions
as amicus curiae Thereafter, we resolved to require the parties to submit their raised in Commissioner Mison's petition (in G.R. 85310) are, indeed, proper
respective memoranda which they did in due time. for certiorari, if by "jurisdictional questions" we mean questions having to do
with "an indifferent disregard of the law, arbitrariness and caprice, or omission
There is no question that the administration may validly carry out a to weigh pertinent considerations, a decision arrived at without rational
government reorganization — insofar as these cases are concerned, the deliberation, 34 as distinguished from questions that require "digging into the
reorganization of the Bureau of Customs — by mandate not only of the merits and unearthing errors of judgment 35 which is the office, on the other
Provisional Constitution, supra, but also of the various Executive Orders hand, of review under Rule 45 of the said Rules. What cannot be denied is the
decreed by the Chief Executive in her capacity as sole lawmaking authority fact that the act of the Civil Service Commission of reinstating hundreds of
under the 1986-1987 revolutionary government. It should also be noted that Customs employees Commissioner Mison had separated, has implications not
under the present Constitution, there is a recognition, albeit implied, that a only on the entire reorganization process decreed no less than by the
government reorganization may be legitimately undertaken, subject to certain Provisional Constitution, but on the Philippine bureaucracy in general; these
conditions. 24 implications are of such a magnitude that it cannot be said that — assuming
that the Civil Service Commission erred — the Commission committed a plain
"error of judgment" that Aratuc says cannot be corrected by the extraordinary While Republic Act No. 6656 states that judgments of the Commission are
remedy of certiorari or any special civil action. We reaffirm the teaching "final and executory"40 and hence, unappealable, under Rule
of Aratuc — as regards recourse to this Court with respect to rulings of the 65, certiorari precisely lies in the absence of an appeal. 41
Civil Service Commission — which is that judgments of the Commission may
be brought to the Supreme Court through certiorari alone, under Rule 65 of the Accordingly, we accept Commissioner Mison petition (G.R. No. 85310) which
Rules of Court. clearly charges the Civil Service Commission with grave abuse of discretion, a
proper subject of certiorari, although it may not have so stated in explicit terms.
In Aratuc we declared:
As to charges that the said petition has been filed out of time, we reiterate that
It is once evident from these constitutional and statutory modifications it has been filed seasonably. It is to be stressed that the Solicitor General had
that there is a definite tendency to enhance and invigorate the role of thirty days from September 23, 1988 (the date the Resolution, dated
the Commission on Elections as the independent constitutional body September 20,1988, of the Civil Service Commission, denying reconsideration,
charged with the safeguarding of free, peaceful and honest elections. was received) to commence the instant certiorari proceedings. As we stated,
The framers of the new Constitution must be presumed to have definite under the Constitution, an aggrieved party has thirty days within which to
knowledge of what it means to make the decisions, orders and rulings challenge "any decision, order, or ruling" 42 of the Commission. To say that the
of the Commission "subject to review by the Supreme Court'. And period should be counted from the Solicitor's receipt of the main Resolution,
since instead of maintaining that provision intact, it ordained that the dated June 30, 1988, is to say that he should not have asked for
Commission's actuations be instead 'brought to the Supreme Court reconsideration But to say that is to deny him the right to contest (by a motion
on certiorari", We cannot insist that there was no intent to change the for reconsideration) any ruling, other than the main decision, when, precisely,
nature of the remedy, considering that the limited scope of certiorari, the Constitution gives him such a right. That is also to place him at a "no-win"
compared to a review, is well known in remedial law.36 situation because if he did not move for a reconsideration, he would have been
faulted for demanding certiorari too early, under the general rule that a motion
We observe no fundamental difference between the Commission on Elections for reconsideration should preface a resort to a special civil action. 43 Hence,
and the Civil Service Commission (or the Commission on Audit for that matter) we must reckon the thirty-day period from receipt of the order of denial.
in terms of the constitutional intent to leave the constitutional bodies alone in
the enforcement of laws relative to elections, with respect to the former, and We come to the merits of these cases.
the civil service, with respect to the latter (or the audit of government accounts,
with respect to the Commission on Audit). As the poll body is the "sole G.R. Nos. 81954, 81967, 82023, and 85335:
judge" 37 of all election cases, so is the Civil Service Commission the single
arbiter of all controversies pertaining to the civil service. The Case for the Employees
It should also be noted that under the new Constitution, as under the 1973 The petitioner in G.R. No. 81954, Cesar Dario was one of the Deputy
Charter, "any decision, order, or ruling of each Commission may be brought to Commissioners of the Bureau of Customs until his relief on orders of
the Supreme Court on certiorari," 38 which, as Aratuc tells us, "technically Commissioner Mison on January 26, 1988. In essence, he questions the
connotes something less than saying that the same 'shall be subject to review legality of his dismiss, which he alleges was upon the authority of Section 59 of
by the Supreme Court,' " 39 which in turn suggests an appeal by petition for Executive Order No. 127, supra, hereinbelow reproduced as follows:
review under Rule 45. Therefore, our jurisdiction over cases emanating from
the Civil Service Commission is limited to complaints of lack or excess of
SEC. 59. New Structure and Pattern. Upon approval of this Executive
jurisdiction or grave abuse of discretion tantamount to lack or excess of
Order, the officers and employees of the Ministry shall, in a holdover
jurisdiction, complaints that justify certiorari under Rule 65.
capacity, continue to perform their respective duties and
responsibilities and receive the corresponding salaries and benefits
unless in the meantime they are separated from government service
pursuant to Executive Order No. 17 (1986) or Article III of the Freedom 1986 — during the effectivity of the Provisional Constitution. He adds that
Constitution. under Executive Order No. 39, "ENLARGING THE POWERS AND
FUNCTIONS OF THE COMMISSIONER OF CUSTOMS,"52 the Commissioner
The new position structure and staffing pattern of the Ministry shall be of Customs has the power "[t]o appoint all Bureau personnel, except those
approved and prescribed by the Minister within one hundred twenty appointed by the President," 53 and that his position, which is that of a
(120) days from the approval of this Executive Order and the Presidential appointee, is beyond the control of Commissioner Mison for
authorized positions created hereunder shall be filled with regular purposes of reorganization.
appointments by him or by the President, as the case may be. Those
incumbents whose positions are not included therein or who are not The petitioners in G.R. No. 82023, collectors and examiners in venous ports of
reappointed shall be deemed separated from the service. Those the Philippines, say, on the other hand, that the purpose of reorganization is to
separated from the service shall receive the retirement benefits to end corruption at the Bureau of Customs and that since there is no finding that
which they may be entitled under existing laws, rules and regulations. they are guilty of corruption, they cannot be validly dismissed from the service.
Otherwise, they shall be paid the equivalent of one month basic salary
for every year of service, or the equivalent nearest fraction thereof The Case for Commissioner Mison
favorable to them on the basis of highest salary received but in no case
shall such payment exceed the equivalent of 12 months salary. In his comments, the Commissioner relies on this Court's resolution in Jose
v. Arroyo54 in which the following statement appears in the last paragraph
No court or administrative body shall issue any writ of preliminary thereof:
injunction or restraining order to enjoin the separation/replacement of
any officer or employee effected under this Executive Order.44 The contention of petitioner that Executive Order No. 127 is violative of
the provision of the 1987 Constitution guaranteeing career civil service
a provision he claims the Commissioner could not have legally invoked. He employees security of tenure overlooks the provisions of Section 16,
avers that he could not have been legally deemed to be an "[incumbent] whose Article XVIII (Transitory Provisions) which explicitly authorize the
[position] [is] not included therein or who [is] not reappointed"45 to justify his removal of career civil service employees "not for cause but as a result
separation from the service. He contends that neither the Executive Order of the reorganization pursuant to Proclamation No. 3 dated March 25,
(under the second paragraph of the section) nor the staffing pattern proposed 1986 and the reorganization following the ratification of this
by the Secretary of Finance 46 abolished the office of Deputy Commissioner of Constitution." By virtue of said provision, the reorganization of the
Customs, but, rather, increased it to three. 47 Nor can it be said, so he further Bureau of Customs under Executive Order No. 127 may continue even
maintains, that he had not been "reappointed" 48 (under the second paragraph after the ratification of the Constitution, and career civil service
of the section) because "[[r]eappointment therein presupposes that the position employees may be separated from the service without cause as a
to which it refers is a new one in lieu of that which has been abolished or result of such reorganization.55
although an existing one, has absorbed that which has been abolished." 49 He
claims, finally, that under the Provisional Constitution, the power to dismiss For this reason, Mison posits, claims of violation of security of tenure are
public officials without cause ended on February 25, 1987,50 and that allegedly no defense. He further states that the deadline prescribed by the
thereafter, public officials enjoyed security of tenure under the provisions of the Provisional Constitution (February 25, 1987) has been superseded by the
1987 Constitution.51 1987 Constitution, specifically, the transitory provisions thereof, 56 which allows
a reorganization thereafter (after February 25, 1987) as this very Court has so
Like Dario Vicente Feria, the petitioner in G.R. No. 81967, was a Deputy declared in Jose v. Arroyo. Mison submits that contrary to the employees'
Commissioner at the Bureau until his separation directed by Commissioner argument, Section 59 of Executive Order No. 127 is applicable (in particular, to
Mison. And like Dario he claims that under the 1987 Constitution, he has Dario and Feria in the sense that retention in the Bureau, under the Executive
acquired security of tenure and that he cannot be said to be covered by Order, depends on either retention of the position in the new staffing pattern or
Section 59 of Executive Order No. 127, having been appointed on April 22, reappointment of the incumbent, and since the dismissed employees had not
been reappointed, they had been considered legally separated. Moreover, 5. Republic Act No. 6656 is of doubtful constitutionality.
Mison proffers that under Section 59 incumbents are considered on holdover
status, "which means that all those positions were considered vacant." 57The The Ruling of the Civil Service Commission
Solicitor General denies the applicability of Palma-Fernandez v. De la
Paz 58 because that case supposedly involved a mere transfer and not a The position of the Civil Service Commission is as follows:
separation. He rejects, finally, the force and effect of Executive Order Nos. 17
and 39 for the reason that Executive Order No. 17, which was meant to
1. Reorganizations occur where there has been a reduction in personnel or
implement the Provisional Constitution, 59had ceased to have force and effect
redundancy of functions; there is no showing that the reorganization in
upon the ratification of the 1987 Constitution, and that, under Executive Order
question has been carried out for either purpose — on the contrary, the
No. 39, the dismissals contemplated were "for cause" while the separations
dismissals now disputed were carried out by mere service of notices;
now under question were "not for cause" and were a result of government
reorganize organization decreed by Executive Order No. 127. Anent Republic
Act No. 6656, he expresses doubts on the constitutionality of the grant of 2. The current Customs reorganization has not been made according to
retroactivity therein (as regards the reinforcement of security of tenure) since Malacañ;ang guidelines; information on file with the Commission shows that
the new Constitution clearly allows reorganization after its effectivity. Commissioner Mison has been appointing unqualified personnel;
G.R. Nos. 85310 and 86241 3. Jose v. Arroyo, in validating Executive Order No. 127, did not countenance
illegal removals;
The Position of Commissioner Mison
4. Republic Act No. 6656 protects security of tenure in the course of
reorganizations.
Commissioner's twin petitions are direct challenges to three rulings of the Civil
Service Commission: (1) the Resolution, dated June 30, 1988, reinstating the
265 customs employees above-stated; (2) the Resolution, dated September The Court's ruling
20, 1988, denying reconsideration; and (3) the Resolution, dated November
16, 1988, reinstating five employees. The Commissioner's arguments are as Reorganization, Fundamental Principles of. —
follows:
I.
1. The ongoing government reorganization is in the nature of a
"progressive" 60 reorganization "impelled by the need to overhaul the entire The core provision of law involved is Section 16 Article XVIII, of the 1987
government bureaucracy" 61 following the people power revolution of 1986; Constitution. We quote:
2. There was faithful compliance by the Bureau of the various guidelines Sec. 16. Career civil service employees separated from the service not
issued by the President, in particular, as to deliberation, and selection of for cause but as a result of the reorganization pursuant to Proclamation
personnel for appointment under the new staffing pattern; No. 3 dated March 25, 1986 and the reorganization following the
ratification of this Constitution shag be entitled to appropriate
3. The separated employees have been, under Section 59 of Executive Order separation pay and to retirement and other benefits accruing to them
No. 127, on mere holdover standing, "which means that all positions are under the laws of general application in force at the time of their
declared vacant;" 62 separation. In lieul thereof, at the option of the employees, they may be
considered for employment in the Government or in any of its
4. Jose v. Arroyo has declared the validity of Executive Order No. 127 under subdivisions, instrumentalities, or agencies, including government-
the transitory provisions of the 1987 Constitution; owned or controlled corporations and their subsidiaries. This provision
also applies to career officers whose resignation, tendered in line with SECTION 2. All elective and appointive officials and employees under
the existing policy, had been accepted. 63 the 1973 Constitution shall continue in office until otherwise provided
by proclamation or executive order or upon the appointment and
The Court considers the above provision critical for two reasons: (1) It is the qualification of their successors, if such is made within a period of one
only provision — in so far as it mentions removals not for cause — that would year from February 25, 1986.67
arguably support the challenged dismissals by mere notice, and (2) It is the
single existing law on reorganization after the ratification of the 1987 Charter, Other than references to "reorganization following the ratification of this
except Republic Act No. 6656, which came much later, on June 10, 1988. Constitution," there is no provision for "automatic" vacancies under the 1987
[Nota been Executive Orders No. 116 (covering the Ministry of Agriculture & Constitution.
Food), 117 (Ministry of Education, Culture & Sports), 119 (Health), 120
(Tourism), 123 (Social Welfare & Development), 124 (Public Works & Invariably, transition periods are characterized by provisions for "automatic"
Highways), 125 transportation & Communications), 126 (Labor & vacancies. They are dictated by the need to hasten the passage from the old
Employment), 127 (Finance), 128 (Science & Technology), 129 (Agrarian to the new Constitution free from the "fetters" of due process and security of
Reform), 131 (Natural Resources), 132 (Foreign Affairs), and 133 (Trade & tenure.
Industry) were all promulgated on January 30,1987, prior to the adoption of the
Constitution on February 2, 1987].64 At this point, we must distinguish removals from separations arising from
abolition of office (not by virtue of the Constitution) as a result of reorganization
It is also to be observed that unlike the grants of power to effect carried out by reason of economy or to remove redundancy of functions. In the
reorganizations under the past Constitutions, the above provision comes as a latter case, the Government is obliged to prove good faith.68 In case of
mere recognition of the right of the Government to reorganize its offices, removals undertaken to comply with clear and explicit constitutional mandates,
bureaus, and instrumentalities. Under Section 4, Article XVI, of the 1935 the Government is not hard put to prove anything, plainly and simply because
Constitution: the Constitution allows it.
Section 4. All officers and employees in the existing Government of the Evidently, the question is whether or not Section 16 of Article XVIII of the 1987
Philippine Islands shall continue in office until the Congress shall Constitution is a grant of a license upon the Government to remove career
provide otherwise, but all officers whose appointments are by this public officials it could have validly done under an "automatic" vacancy-
Constitution vested in the President shall vacate their respective authority and to remove them without rhyme or reason.
office(s) upon the appointment and qualification of their successors, if
such appointment is made within a period of one year from the date of As we have seen, since 1935, transition periods have been characterized by
the inauguration of the Commonwealth of the Philippines. 65 provisions for "automatic" vacancies. We take the silence of the 1987
Constitution on this matter as a restraint upon the Government to dismiss
Under Section 9, Article XVII, of the 1973 Charter: public servants at a moment's notice.
Section 9. All officials and employees in the existing Government of the What is, indeed, apparent is the fact that if the present Charter envisioned an
Republic of the Philippines shall continue in office until otherwise "automatic" vacancy, it should have said so in clearer terms, as its 1935, 1973,
provided by law or decreed by the incumbent President of the and 1986 counterparts had so stated.
Philippines, but all officials whose appointments are by this
Constitution vested in the Prime Minister shall vacate their respective The constitutional "lapse" means either one of two things: (1) The Constitution
offices upon the appointment and qualification of their successors. 66 meant to continue the reorganization under the prior Charter (of the
Revolutionary Government), in the sense that the latter provides for
The Freedom Constitution is, as earlier seen, couched in similar language: "automatic" vacancies, or (2) It meant to put a stop to those 'automatic"
vacancies. By itself, however, it is ambiguous, referring as it does to two
stages of reorganization — the first, to its conferment or authorization under cause." In other words, in order to be entitled to the benefits granted under
Proclamation No. 3 (Freedom Charter) and the second, to its implementation Section 16 of Article XVIII of the Constitution of 1987, two requisites, one
on its effectivity date (February 2, 1987). But as we asserted, if the intent of
lâwphî1.ñèt negative and the other positive, must concur, to wit:
Section 16 of Article XVIII of the 1987 Constitution were to extend the effects
of reorganize tion under the Freedom Constitution, it should have said so in 1. the separation must not be for cause, and
clear terms. It is illogical why it should talk of two phases of reorganization
when it could have simply acknowledged the continuing effect of the first 2. the separation must be due to any of the three situations
reorganization. mentioned above.
Second, plainly the concern of Section 16 is to ensure compensation for By its terms, the authority to remove public officials under the Provisional
victims" of constitutional revamps — whether under the Freedom or existing Constitution ended on February 25, 1987, advanced by jurisprudence to
Constitution — and only secondarily and impliedly, to allow reorganization. We February 2, 1987. 70 It Can only mean, then, that whatever reorganization is
turn to the records of the Constitutional Commission: taking place is upon the authority of the present Charter, and necessarily, upon
the mantle of its provisions and safeguards. Hence, it can not be legitimately
INQUIRY OF MR. PADILLA stated that we are merely continuing what the revolutionary Constitution of the
Revolutionary Government had started. We are through with reorganization
On the query of Mr. Padilla whether there is a need for a specific under the Freedom Constitution — the first stage. We are on the second stage
reference to Proclamation No. 3 and not merely state "result of the — that inferred from the provisions of Section 16 of Article XVIII of the
reorganization following the ratification of this Constitution', Mr. Suarez, permanent basic document.
on behalf of the Committee, replied that it is necessary, inasmuch as
there are two stages of reorganization covered by the Section. This is confirmed not only by the deliberations of the Constitutional
Commission, supra, but is apparent from the Charter's own words. It also
Mr. Padilla pointed out that since the proposal of the Commission on warrants our holding in Esguerra and Palma-Fernandez, in which we
Government Reorganization have not been implemented yet, it would categorically declared that after February 2, 1987, incumbent officials and
be better to use the phrase "reorganization before or after the employees have acquired security of tenure, which is not a deterrent against
ratification of the Constitution' to simplify the Section. Mr. Suarez separation by reorganization under the quondam fundamental law.
instead suggested the phrase "as a result of the reorganization
effected before or after the ratification of the Constitution' on the Finally, there is the concern of the State to ensure that this reorganization is no
understanding that the provision would apply to employees terminated "purge" like the execrated reorganizations under martial rule. And, of course,
because of the reorganization pursuant to Proclamation No. 3 and we also have the democratic character of the Charter itself.
even those affected by the reorganization during the Marcos regime.
Additionally, Mr. Suarez pointed out that it is also for this reason that Commissioner Mison would have had a point, insofar as he contends that the
the Committee specified the two Constitutions the Freedom reorganization is open-ended ("progressive"), had it been a reorganization
Constitution — and the 1986 [1987] Constitution. 69 under the revolutionary authority, specifically of the Provisional Constitution.
For then, the power to remove government employees would have been truly
Simply, the provision benefits career civil service employees separated from wide ranging and limitless, not only because Proclamation No. 3 permitted it,
the service. And the separation contemplated must be due to or the result of but because of the nature of revolutionary authority itself, its totalitarian
(1) the reorganization pursuant to Proclamation No. 3 dated March 25, 1986, tendencies, and the monopoly of power in the men and women who wield it.
(2) the reorganization from February 2, 1987, and (3) the resignations of
career officers tendered in line with the existing policy and which resignations What must be understood, however, is that notwithstanding her immense
have been accepted. The phrase "not for cause" is clearly and primarily revolutionary powers, the President was, nevertheless, magnanimous in her
exclusionary, to exclude those career civil service employees separated "for rule. This is apparent from Executive Order No. 17, which established
safeguards against the strong arm and ruthless propensity that accompanies the regime of the 1987 Constitution. Jose v. Arroyo73 is said to be the authority
reorganizations — notwithstanding the fact that removals arising therefrom for this argument. Evidently, if Arroyo indeed so ruled, Arroyo would be
were "not for cause," and in spite of the fact that such removals would have inconsistent with the earlier pronouncement of Esguerra and the later holding
been valid and unquestionable. Despite that, the Chief Executive saw, as we of Palma-Fernandez. The question, however, is: Did Arroyo, in fact, extend the
said, the "unnecessary anxiety and demoralization" in the government rank effects of reorganization under the revolutionary Charter to the era of the new
and file that reorganization was causing, and prescribed guidelines for Constitution?
personnel action. Specifically, she said on May 28, 1986:
There are a few points about Arroyo that have to be explained. First, the
WHEREAS, in order to obviate unnecessary anxiety and opinion expressed therein that "[b]y virtue of said provision the reorganization
demoralization among the deserving officials and employees, of the Bureau of Customs under Executive Order No. 127 may continue even
particularly in the career civil service, it is necessary to prescribe the after the ratification of this constitution and career civil service employees may
rules and regulations for implementing the said constitutional provision be separated from the service without cause as a result of such
to protect career civil servants whose qualifications and performance reorganization" 74 is in the nature of an obiter dictum. We dismissed Jose's
meet the standards of service demanded by the New Government, and petition 75 primarily because it was "clearly premature, speculative, and purely
to ensure that only those found corrupt, inefficient and undeserving are anticipatory, based merely on newspaper reports which do not show any direct
separated from the government service; 71 or threatened injury," 76 it appearing that the reorganization of the Bureau of
Customs had not been, then, set in motion. Jose therefore had no cause for
Noteworthy is the injunction embodied in the Executive Order that dismissals complaint, which was enough basis to dismiss the petition. The remark anent
should be made on the basis of findings of inefficiency, graft, and unfitness to separation "without cause" was therefore not necessary for the disposition of
render public service.* the case. In Morales v. Parades,77 it was held that an obiter dictum "lacks the
force of an adjudication and should not ordinarily be regarded as such."78
The President's Memorandum of October 14, 1987 should furthermore be
considered. We quote, in part: Secondly, Arroyo is an unsigned resolution while Palma Fernandez is a full-
blown decision, although both are en banc cases. While a resolution of the
Further to the Memorandum dated October 2, 1987 on the same Court is no less forceful than a decision, the latter has a special weight.
subject, I have ordered that there will be no further layoffs this year of
personnel as a result of the government reorganization. 72 Thirdly, Palma-Fernandez v. De la Paz comes as a later doctrine. (Jose v.
Arroyo was promulgated on August 11, 1987 while Palma-Fernandez was
Assuming, then, that this reorganization allows removals "not for cause" in a decided on August 31, 1987.) It is well-established that a later judgment
manner that would have been permissible in a revolutionary setting as supersedes a prior one in case of an inconsistency.
Commissioner Mison so purports, it would seem that the Commissioner would
have been powerless, in any event, to order dismissals at the Customs Bureau As we have suggested, the transitory provisions of the 1987 Constitution
left and right. Hence, even if we accepted his "progressive" reorganization allude to two stages of the reorganization, the first stage being the
theory, he would still have to come to terms with the Chief Executive's reorganization under Proclamation No. 3 — which had already been
subsequent directives moderating the revolutionary authority's plenary power consummated — the second stage being that adverted to in the transitory
to separate government officials and employees. provisions themselves — which is underway. Hence, when we spoke,
in Arroyo, of reorganization after the effectivity of the new Constitution, we
Reorganization under the 1987 Constitution, Nature, Extent, and Limitations of; referred to the second stage of the reorganization. Accordingly, we cannot be
Jose v. Arroyo, clarified. — said to have carried over reorganization under the Freedom Constitution to its
1987 counterpart.
The controversy seems to be that we have, ourselves, supposedly extended
the effects of government reorganization under the Provisional Constitution to
Finally, Arroyo is not necessarily incompatible with Palma- "not for cause," if by "cause" we refer to "grounds" or conditions that call for
Fernandez (or Esguerra). disciplinary action.**
As we have demonstrated, reorganization under the aegis of the 1987 Good faith, as a component of a reorganization under a constitutional regime,
Constitution is not as stern as reorganization under the prior Charter. Whereas is judged from the facts of each case. However, under Republic Act No. 6656,
the latter, sans the President's subsequently imposed constraints, envisioned a we are told:
purgation, the same cannot be said of the reorganization inferred under the
new Constitution because, precisely, the new Constitution seeks to usher in a SEC. 2. No officer or employee in the career service shall be removed
democratic regime. But even if we concede ex gratiaargumenti that Section 16 except for a valid cause and after due notice and hearing. A valid
is an exception to due process and no-removal-"except for cause provided by cause for removal exists when, pursuant to a bona fide reorganization,
law" principles enshrined in the very same 1987 Constitution, 79 which may a position has been abolished or rendered redundant or there is a
possibly justify removals "not for cause," there is no contradiction in terms here need to merge, divide, or consolidate positions in order to meet the
because, while the former Constitution left the axe to fall where it might, the exigencies of the service, or other lawful causes allowed by the Civil
present organic act requires that removals "not for cause" must be as a result Service Law. The existence of any or some of the following
of reorganization. As we observed, the Constitution does not provide for circumstances may be considered as evidence of bad faith in the
"automatic" vacancies. It must also pass the test of good faith — a test not removals made as a result of reorganization, giving rise to a claim for
obviously required under the revolutionary government formerly prevailing, but reinstatement or reappointment by an aggrieved party: (a) Where there
a test well-established in democratic societies and in this government under a is a significant increase in the number of positions in the new staffing
democratic Charter. pattern of the department or agency concerned; (b) Where an office is
abolished and another performing substantially the same functions is
When, therefore, Arroyo permitted a reorganization under Executive Order No. created; (c) Where incumbents are replaced by those less qualified in
127 after the ratification of the 1987 Constitution, Arroyo permitted a terms of status of appointment, performance and merit; (d) Where
reorganization provided that it is done in good faith. Otherwise, security of there is a reclassification of offices in the department or agency
tenure would be an insuperable implement. 80 concerned and the reclassified offices perform substantially the same
functions as the original offices; (e) Where the removal violates the
Reorganizations in this jurisdiction have been regarded as valid provided they order of separation provided in Section 3 hereof. 84
are pursued in good faith. 81 As a general rule, a reorganization is carried out in
"good faith" if it is for the purpose of economy or to make bureaucracy more It is in light hereof that we take up questions about Commissioner Mison's
efficient. In that event, no dismissal (in case of a dismissal) or separation good faith, or lack of it.
actually occurs because the position itself ceases to exist. And in that case,
security of tenure would not be a Chinese wall. Be that as it may, if the Reorganization of the Bureau of Customs,
"abolition," which is nothing else but a separation or removal, is done for Lack of Good Faith in. —
political reasons or purposely to defeat sty of tenure, or otherwise not in good
faith, no valid "abolition' takes place and whatever "abolition' is done, is void ab The Court finds that after February 2, 1987 no perceptible restructuring of the
initio. There is an invalid "abolition" as where there is merely a change of Customs hierarchy — except for the change of personnel — has occurred,
nomenclature of positions, 82 or where claims of economy are belied by the which would have justified (an things being equal) the contested dismisses.
existence of ample funds. 83 The contention that the staffing pattern at the Bureau (which would have
furnished a justification for a personnel movement) is the same s pattern
It is to be stressed that by predisposing a reorganization to the yardstick of prescribed by Section 34 of Executive Order No. 127 already prevailing when
good faith, we are not, as a consequence, imposing a "cause" for restructuring. Commissioner Mison took over the Customs helm, has not been successfully
Retrenchment in the course of a reorganization in good faith is still removal contradicted 85 There is no showing that legitimate structural changes have
been made — or a reorganization actually undertaken, for that matter — at the
Bureau since Commissioner Mison assumed office, which would have validly performance of her duties merely in a hold over capacity and could be
prompted him to hire and fire employees. There can therefore be no actual transferred to another position without violating any of her legal rights,
reorganization to speak of, in the sense, say, of reduction of personnel, is untenable. The occupancy of a position in a hold-over capacity was
consolidation of offices, or abolition thereof by reason of economy or conceived to facilitate reorganization and would have lapsed on 25
redundancy of functions, but a revamp of personnel pure and simple. February 1987 (under the Provisional Constitution), but advanced to
February 2, 1987 when the 1987 Constitution became effective (De
The records indeed show that Commissioner Mison separated about 394 Leon. et al., vs. Hon. Benjamin B. Esquerra, et. al., G.R. No. 78059, 31
Customs personnel but replaced them with 522 as of August 18, 1988. 86 This August 1987). After the said date the provisions of the latter on security
betrays a clear intent to "pack" the Bureau of Customs. He did so, furthermore, of tenure govern. 90
in defiance of the President's directive to halt further layoffs as a consequence
of reorganization. 87Finally, he was aware that layoffs should observe the It should be seen, finally, that we are not barring Commissioner Mison from
procedure laid down by Executive Order No. 17. carrying out a reorganization under the transitory provisions of the 1987
Constitution. But such a reorganization should be subject to the criterion of
We are not, of course, striking down Executive Order No. 127 for repugnancy good faith.
to the Constitution. While the act is valid, still and all, the means with which it
was implemented is not. 88 Resume. —
Executive Order No. 127, Specific Case of. — In resume, we restate as follows:
With respect to Executive Order No. 127, Commissioner Mison submits that 1. The President could have validly removed government employees, elected
under Section 59 thereof, "[t]hose incumbents whose positions are not or appointed, without cause but only before the effectivity of the 1987
included therein or who are not reappointed shall be deemed separated from Constitution on February 2, 1987 (De Leon v. Esguerra, supra; Palma-
the service." He submits that because the 394 removed personnel have not Fernandez vs. De la Paz, supra); in this connection, Section 59 (on non-
been "reappointed," they are considered terminated. To begin with, the reappointment of incumbents) of Executive Order No. 127 cannot be a basis
Commissioner's appointing power is subject to the provisions of Executive for termination;
Order No. 39. Under Executive Order No. 39, the Commissioner of Customs
may "appoint all Bureau personnel, except those appointed by the 2. In such a case, dismissed employees shall be paid separation and
President." 89 retirement benefits or upon their option be given reemployment opportunities
(CONST. [1987], art. XVIII, sec. 16; Rep. Act No. 6656, sec. 9);
Accordingly, with respect to Deputy Commissioners Cesar Dario and Vicente
Feria, Jr., Commissioner Mison could not have validly terminated them, they 3. From February 2, 1987, the State does not lose the right to reorganize the
being Presidential appointees. Government resulting in the separation of career civil service employees
[CONST. (1987), supra] provided, that such a reorganization is made in good
Secondly, and as we have asserted, Section 59 has been rendered inoperative faith. (Rep. Act No. 6656, supra.)
according to our holding in Palma-Fernandez.
G.R. No. 83737
That Customs employees, under Section 59 of Executive Order No. 127 had
been on a mere holdover status cannot mean that the positions held by them This disposition also resolves G.R. No. 83737. As we have indicated, G.R. No.
had become vacant. In Palma-Fernandez, we said in no uncertain terms: 83737 is a challenge to the validity of Republic Act No. 6656. In brief, it is
argued that the Act, insofar as it strengthens security of tenure 91 and as far as
The argument that, on the basis of this provision, petitioner's term of it provides for a retroactive effect, 92 runs counter to the transitory provisions of
office ended on 30 January 1987 and that she continued in the the new Constitution on removals not for cause.
It can be seen that the Act, insofar as it provides for reinstatament of
employees separated without "a valid cause and after due notice and
hearing" 93 is not contrary to the transitory provisions of the new Constitution.
The Court reiterates that although the Charter's transitory provisions mention
separations "not for cause," separations thereunder must nevertheless be on
account of a valid reorganization and which do not come about automatically.
Otherwise, security of tenure may be invoked. Moreover, it can be seen that
the statute itself recognizes removals without cause. However, it also
acknowledges the possibility of the leadership using the artifice of
reorganization to frustrate security of tenure. For this reason, it has installed
safeguards. There is nothing unconstitutional about the Act.
THE PETITIONS IN G.R. NOS. 81954, 81967, 82023, AND 85335 ARE
GRANTED. THE PETITIONS IN G.R. NOS. 83737, 85310 AND 86241 ARE
DISMISSED.
NO COSTS.
IT IS SO ORDERED.
G.R. No. 83578 March 16, 1989 Force. Said Josefin M. Castro is likewise the sole deponent in the purported
deposition to support the application for the issuance of the six (6) search
THE PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE, petitioner, warrants involved in this case. The application filed by Atty. Gatmaytan, the
vs. affidavit and deposition of Josefin M. Castro are all dated March 12, 1985. 5
HONORABLE COURT OF APPEALS, HONORABLE TEOFILO L, GUADIZ,
JR.,Presiding Judge, REGIONAL TRIAL COURT, Branch 147: NCR Shortly thereafter, the private respondent (the petitioner below) went to the
(MAKATI), and KARAMFIL IMPORT-EXPORT CO., INC., respondents. Regional Trial Court on a petition to enjoin the implementation of the search
warrants in question. 6 On March 13, 1985, the trial court issued a temporary restraining order
[effective "for a period of five (5) days notice " 7 ] and set the case for hearing on March 18, 1985.
K. V. Faylona & Associates for respondents.
In disposing of the petition, the said court found the material issues to be:
a) In deviating from the settled policy and rulings of the In submitting that it is a quasi-judicial entity, the petitioner states that it is
Supreme Court that no Regional Trial Courts may countermand endowed with "express powers and functions under PD No. 1936, to prosecute
or restrain the enforcement of lawful writs or decrees issued by foreign exchange violations as defined and punished under PD No.
a quasi-judicial body of equal and coordinate rank, like the 1883." 13 "By the very nature of its express powers as conferred by the laws," so it is contended, "which are
decidedly quasi-judicial or discretionary function, such as to conduct preliminary investigation on the charges
PADS Task Force; of foreign exchange violations, issue search warrants or warrants of arrest, hold departure orders, among
others, and depending upon the evidence presented, to dismiss the charges or to file the corresponding
information in court of Executive Order No. 934, PD No. 1936 and its Implementing Rules and Regulations
b) For resorting to judicial legislation to arrive at its erroneous effective August 26, 1984), petitioner exercises quasi-judicial power or the power of adjudication ." 14
basis for reconsidering its previous Decision dated October 24,
1986 (see Annex "I") and thus promulgated the questioned The Court of Appeals, in its Resolution now assailed, 15 was of the opinion that "[t]he grant of quasi-judicial
Resolutions (Annexes "A" and "B"), which violated the powers to petitioner did not diminish the regular courts' judicial power of interpretation. The right to interpret a
law and, if necessary to declare one unconstitutional, exclusively pertains to the judiciary. In assuming this
constitutional doctrine on separation of powers; function, courts do not proceed on the theory that the judiciary is superior to the two other coordinate branches
of the government, but solely on the theory that they are required to declare the law in every case which come
before them." 16
This Court finds the Appellate Court to be in error, since what the petitioner Likewise:
puts to question is the Regional Trial Court's act of assuming jurisdiction over
the private respondent's petition below and its subsequent countermand of the ... The Supreme Court may designate certain branches of the
Presidential Anti-Dollar Salting Task Force's orders of search and seizure, for Regional Trial Court to handle exclusively criminal cases,
the reason that the presidential body, as an entity (allegedly) coordinate and juvenile and domestic relations cases, agrarian case, urban
co-equal with the Regional Trial Court, was (is) not vested with such a land reform cases which do not fall under the jurisdiction of
jurisdiction. An examination of the Presidential Anti-Dollar Salting Task Force's quasi- judicial bodies and agencies and/or such other special
petition shows indeed its recognition of judicial review (of the acts of cases as the Supreme Court may determine in the interest of a
Government) as a basic privilege of the courts. Its objection, precisely, is speedy and efficient administration of justice. 21
whether it is the Regional Trial Court, or the superior courts, that may
undertake such a review. xxx xxx xxx
Under the Judiciary Reorganization Act of 1980, 17 the Court of Appeals exercises: Under our Resolution dated January 11, 1983: 22
(3) Exclusive appellate jurisdiction over all final judgments, ... The appeals to the Intermediate Appellate Court [now, Court
decisions, resolutions, orders or awards of Regional Trial Court of Appeals] from quasi-judicial bodies shall continue to be
and quasi-judicial agencies, instrumentalities, boards or governed by the provisions of Republic Act No. 5434 insofar as
commissions, except those falling within the appellate the same is not inconsistent with the provisions of B.P. Blg.
jurisdiction of the Supreme Court in accordance with the 129. 23
Constitution, the provisions of this Act, and of subparagraph (1)
of the third paragraph and subparagraph (4) of the fourth
The pertinent provisions of Republic Act No. 5434 are as follows:
paragraph of Section 17 of the Judiciary Act of 1948. 18
SECTION 1. Appeals from specified agencies.— Any provision
xxx xxx xxx
of existing law or Rule of Court to the contrary notwithstanding,
parties aggrieved by a final ruling, award, order, decision, or
Under the present Constitution, with respect to its provisions on Constitutional judgment of the Court of Agrarian Relations; the Secretary of
Commissions, it is provided, in part that: Labor under Section 7 of Republic Act Numbered Six hundred
and two, also known as the "Minimum Wage Law"; the
... Unless otherwise provided by this Constitution or by law, any Department of Labor under Section 23 of Republic Act
decision, order, or ruling of each Commission may be brought Numbered Eight hundred seventy-five, also known as the
to the Supreme Court on certiorari by the aggrieved party "Industrial Peace Act"; the Land Registration Commission; the
within thirty days from receipt of a copy thereof. 19 Securities and Exchange Commission; the Social Security
Commission; the Civil Aeronautics Board; the Patent Office and
On the other hand, Regional Trial Courts have exclusive original jurisdiction: the Agricultural Inventions Board, may appeal therefrom to the
Court of Appeals, within the period and in the manner herein
(6) In all cases not within the exclusive jurisdiction of any court, provided, whether the appeal involves questions of fact, mixed
tribunal, person or body exercising judicial or quasi-judicial questions of fact and law, or questions of law, or all three kinds
functions. 20 of questions. From final judgments or decisions of the Court of
Appeals, the aggrieved party may appeal by certiorari to the
xxx xxx xxx Supreme Court as provided in Rule 45 of the Rules of Court. 24
Because of subsequent amendments, including the abolition of various special like the Bureau of Posts, the Postal Savings Bank, Metropolitan
courts, 25 jurisdiction over quasi-judicial bodies has to be, consequently, determined by the corresponding Waterworks & Sewerage Authority, Philippine National
amendatory statutes. Under the Labor Code, decisions and awards of the National Labor Relations Railways, the Civil Aeronautics Administration.
Commission are final and executory, but, nevertheless, 'reviewable by this Court through a petition for
certiorari and not by way of appeal." 26
(4) Agencies set up to function in situations wherein the
Under the Property Registration Decree, decisions of the Commission of Land government is seeking to regulate business affected with public
Registration, en consults, are appealable to the Court of Appeals. 27 interest, like the Fiber Inspections Board, the Philippine Patent
Office, Office of the Insurance Commissioner.
The decisions of the Securities and Exchange Commission are likewise
appealable to the Appellate Court, 28 and so are decisions of the Social Security (5) Agencies set up to function in situations wherein the
Commission.29 government is seeking under the police power to regulate
private business and individuals, like the Securities &
As a rule, where legislation provides for an appeal from decisions of certain Exchange Commission, Board of Food Inspectors, the Board of
administrative bodies to the Court of Appeals, it means that such bodies are Review for Moving Pictures, and the Professional Regulation
co-equal with the Regional Trial Courts, in terms of rank and stature, and Commission.
logically, beyond the control of the latter.
(6) Agencies set up to function in situations wherein the
As we have observed, the question is whether or not the Presidential Anti- government is seeking to adjust individual controversies
Dollar Salting Task Force is, in the first place, a quasi-judicial body, and one because of some strong social policy involved, such as the
whose decisions may not be challenged before the regular courts, other than National Labor Relations Commission, the Court of Agrarian
the higher tribunals the Court of Appeals and this Court. Relations, the Regional Offices of the Ministry of Labor, the
Social Security Commission, Bureau of Labor Standards,
A quasi-judicial body has been defined as "an organ of government other than Women and Minors Bureau. 31
a court and other than a legislature, which affects the rights of private parties
through either adjudication or rule making." 30 The most common types of such bodies have As may be seen, it is the basic function of these bodies to adjudicate claims
been listed as follows: and/or to determine rights, and unless its decision are seasonably appealed to
the proper reviewing authorities, the same attain finality and become
(1) Agencies created to function in situations wherein the executory. A perusal of the Presidential Anti-Dollar Salting Task Force's
government is offering some gratuity, grant, or special organic act, Presidential Decree No. 1936, as amended by Presidential Decree
privilege, like the defunct Philippine Veterans Board, Board on No. 2002, convinces the Court that the Task Force was not meant to exercise
Pensions for Veterans, and NARRA, and Philippine Veterans quasi-judicial functions, that is, to try and decide claims and execute its
Administration. judgments. As the President's arm called upon to combat the vice of "dollar
salting" or the blackmarketing and salting of foreign exchange, 32 it is tasked alone
(2) Agencies set up to function in situations wherein the by the Decree to handle the prosecution of such activities, but nothing more. We quote:
It is our ruling, thus, that when the 1973 Constitution spoke of "responsible
Since the 1973 Constitution took force and effect and until it was so officer" to whom the authority to issue arrest and search warrants may be
unceremoniously discarded in 1986, its provisions conferring the power to delegated by legislation, it did not furnish the legislator with the license to give
issue arrest and search warrants upon an officer, other than a judge, by fiat of that authority to whomsoever it pleased. It is to be noted that the Charter itself
legislation have been at best controversial. In Lim v. Ponce de Leon, 36 a 1975 makes the qualification that the officer himself must be "responsible". We are
decision, this Court ruled that a fiscal has no authority to issue search warrants, but held in the same vein that,
by virtue of the responsible officer" clause of the 1973 Bill of Rights, "any lawful officer authorized by law can not saying, of course, that the Presidential Anti-Dollar Salting Task Force (or
issue a search warrant or warrant of arrest.37 Authorities, however, have continued to express reservations any similar prosecutor) is or has been irresponsible in discharging its duty.
whether or not fiscals may, by statute, be given such a power. 38
Rather, we take "responsibility", as used by the Constitution, to mean not only
skill and competence but more significantly, neutrality and independence
Less than a year later, we promulgated Collector of Customs v. Villaluz, 39 in comparable to the impartiality presumed of a judicial officer. A prosecutor can
which we categorically averred: Until now only the judge can issue the warrant of arrest." 40 "No law or
presidential decree has been enacted or promulgated vesting the same authority in a particular responsible in no manner be said to be possessed of the latter qualities.
officer ." 41
According to the Court of Appeals, the implied exclusion of prosecutors under
Apparently, Villaluz had settled the debate, but the same question persisted the 1973 Constitution was founded on the requirements of due process,
following this Courts subsequent rulings upholding the President's alleged notably, the assurance to the respondent of an unbiased inquiry of the charges
emergency arrest powers .42 [Mr. Justice Hugo Gutierrez would hold, however, that a Presidential against him prior to the arrest of his person or seizure of his property. We add
Commitment Order (PCO) is (was) not a species of "arrest" in its technical sense, and that the (deposed) Chief
Executive, in issuing one, does not do so in his capacity as a "responsible officer" under the 1973 Charter, but
that the exclusion is also demanded by the principle of separation of powers
rather, as Commander-in-Chief of the Armed Forces in times of emergency, or in order to carry out the on which our republican structure rests. Prosecutors exercise essentially an
deportation of undesirable aliens.43 In the distinguished Justice's opinion then, these are acts that can be executive function (the petitioner itself is chaired by the Minister, now
done without need of judicial intervention because they are not, precisely, judicial but Presidential actions.]
Secretary, of Trade and Industry), since under the Constitution, the President
has pledged to execute the laws. 52 As such, they cannot be made to issue judicial processes
In Ponsica v. Ignalaga,44 however, we held that the mayor has been made a "responsible officer' by without unlawfully impinging the prerogative of the courts.
the Local Government Code, 45 but had ceased to be one with the approval of the 1987 Constitution
according judges sole authority to issue arrest and search warrants. But in the same breath, we did not rule
the grant under the Code unconstitutional based on the provisions of the former Constitution. We were agreed, At any rate, Ponsica v. Ignalaga should foreclose all questions on the matter,
though, that the "responsible officer" referred to by the fundamental law should be one capable of
approximating "the cold neutrality of an impartial judge." 46
although the Court hopes that this disposition has clarified a controversy that
had generated often bitter debates and bickerings.
In striking down Presidential Decree No. 1936 the respondent Court relied on
American jurisprudence, notably, Katz v. United States, 47 Johnson v. United The Court joins the Government in its campaign against the scourge of "dollar-
States, 48 and Coolidge v. New Hampshire 49 in which the American Supreme Court ruled that prosecutors salting", a pernicious practice that has substantially drained the nation's coffers
and has seriously threatened its economy. We recognize the menace it has
posed (and continues to pose) unto the very stability of the country, the SPOUSES BERNYL G. R. No. 174350
urgency for tough measures designed to contain if not eradicate it, and
foremost, the need for cooperation from the citizenry in an all-out campaign. BALANGAUAN &
But while we support the State's efforts, we do so not at the expense of KATHERENE
fundamental rights and liberties and constitutional safeguards against arbitrary BALANGAUAN, Present:
and unreasonable acts of Government. If in the event that as a result of this
ruling, we prove to be an "obstacle" to the vital endeavour of stamping out the Petitioners,
blackmarketing of valuable foreign exchange, we do not relish it and certainly, YNARES-
do not mean it. The Constitution simply does not leave us much choice. SANTIAGO, J.,
WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.
- versus - Chairperson,
AUSTRIA-MARTINEZ,
TINGA,*
THE HONORABLE COURT CHICO-NAZARIO, and
OF APPEALS, SPECIAL REYES, JJ.
NINETEENTH (19TH)
DIVISION, CEBU CITY &
THE HONGKONG AND Promulgated:
SHANGHAI BANKING
CORPORATION, LTD.,
Respondents. August 13, 2008
x--------------------------------------------
------x
DECISION
CHICO-NAZARIO, J.:
By and large, the evidence on record do (sic) The DOJ justified its ruling in this wise:
not engender enough bases to establish a probable
cause against respondents.[10]
A perusal of the motion reveals no new matter
or argument which was not taken into consideration in
On 1 July 2003, respondent HSBC appealed the above- our review of the case. Hence, we find no cogent
quoted resolution and foregoing comment to the Secretary of the reason to reconsider our resolution. Appellant failed
to present any iota of evidence directly showing that
DOJ by means of a Petition for Review.
respondent Katherene Balangauan took the money
and invested it somewhere else. All it tried to
In a Resolution dated 6 April 2004, the Chief State establish was that Katherene unlawfully took the
Prosecutor, Jovencito R. Zuo, for the Secretary of the DOJ, money and fraudulently invested it somewhere else x
dismissed the petition. In denying respondent HSBCs recourse, x x, because after the withdrawals were made, the
the Chief State Prosecutor held that: money never reached Roger York as appellant
adopted hook, line and sinker the latters declaration,
despite Yorks signatures on the withdrawal slips
covering the total amount of P2,500,000.00 x x x.
While appellant has every reason to suspect WHEREFORE, in view of the foregoing premises,
Katherene for the loss of the P2,500,000.00 as per judgment is hereby rendered by us GRANTING the petition
Yorks bank statements, the cash deposits were filed in this case. The assailed Resolutions dated April 6,
2004 and August 30, 2004 are ANNULLED and SET
identified by the numerals CEO8 and it was only
ASIDE.
Katherene who could transact from the computer in
the work station CEO-8, plus alleged photographs The City Prosecutor of Cebu City is hereby
showing Katherene leaving her office at 5:28 p.m. ORDERED to file the appropriate Information against the
with a bulky plastic bag presumably containing cash private respondents.[12]
since a portion of the funds was withdrawn, we do
not, however, dwell on possibilities, suspicion and
speculation. We rule based on hard facts and solid Petitioners Bernyl and Katherenes motion for
evidence.
reconsideration proved futile, as it was denied by the appellate
Moreover, an examination of the petition for court in a Resolution dated 29 June 2006.
review reveals that appellant failed to append thereto
all annexes to respondents urgent manifestations x x x
together with supplemental affidavits of Melanie de Hence, this petition for certiorari filed under Rule 65 of
Ocampo and Rex B. Balucan x x x, which are the Revised Rules of Court.
pertinent documents required under Section 5 of
Department Circular No. 70 dated July 3, 2000.[11]
Petitioners Bernyl and Katherene filed the present petition
on the argument that the Court of Appeals committed grave
Respondent HSBC then went to the Court of Appeals by abuse of discretion in reversing and setting aside the resolutions
means of a Petition for Certiorari under Rule 65 of the Revised of the DOJ when: (1) [i]t reversed the resolution of the Secretary
Rules of Court. of Justice, Manila dated August 30, 2004 and correspondingly,
gave due course to the Petition for Certiorari filed by HSBC on
On 28 April 2006, the Court of Appeals promulgated its April 28, 2006 despite want of probable cause to warrant the
Decision granting respondent HSBCs petition, thereby annulling filing of an information against the herein petitioners[13]; (2) [i]t
and setting aside the twin resolutions of the DOJ. appreciated the dubious evidence adduced by HSBC albeit the
absence of legal standing or personality of the latter[14]; (3) [i]t
denied the motions for reconsideration on June 29, 2006
The fallo of the assailed decision reads:
notwithstanding the glaring evidence proving the innocence of and resolution of the Court of Appeals dated 28 April
the petitioners[15]; (4) [i]t rebuffed the evidence of the herein 2006 and 29 June 2006, respectively. The Revised Rules of
petitioners in spite of the fact that, examining such evidence Court, particularly Rule 45 thereof, specifically provides that an
alone would establish that the money in question was already appeal by certiorari from the judgments or final orders or
withdrawn by Mr. Roger Dwayne York[16]; and (5) [i]t failed to resolutions of the appellate court is by verified petition for
dismiss outright the petition by HSBC considering that the review on certiorari.[20]
required affidavit of service was not made part or attached in the
said petition pursuant to Section 13, Rule 13 in relation to In the present case, there is no question that the 28 April
Section 3, Rule 46, and Section 2, Rule 56 of the Rules of 2006 Decision and 29 June 2006 Resolution of the Court of
Court.[17] Appeals granting the respondent HSBCs petition in CA-G.R.
CEB. SP No. 00068 is already a disposition on the
Required to comment on the petition, respondent HSBC merits. Therefore, both decision and resolution, issued by the
remarked that the filing of the present petition is improper and Court of Appeals, are in the nature of a final disposition of the
should be dismissed. It argued that the correct remedy is an case set before it, and which, under Rule 45, are appealable to
appeal by certiorariunder Rule 45 of the Revised Rules of Court. this Court via a Petition for Review on Certiorari, viz:
Petitioners Bernyl and Katherene, on the other hand, SECTION 1. Filing of petition with Supreme
asserted in their Reply[18] that the petition filed under Rule 65 Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of
was rightfully filed considering that not only questions of law
Appeals, the Sandiganbayan, the Regional Trial Court
were raised but questions of fact and error of jurisdiction as or other courts whenever authorized by law, may file
well. They insist that the Court of Appeals clearly usurped into with the Supreme Court a verified petition for review
the jurisdiction and authority of the Public Prosecutor/Secretary on certiorari. The petition shall raise only questions
of justice (sic) x x x.[19] of law which must be distinctly set forth. (Emphasis
supplied.)
Given the foregoing arguments, there is need to address,
first, the issue of the mode of appeal resorted to by petitioners It is elementary in remedial law that a writ
Bernyl and Katherene. The present petition is one of certiorari will not issue where the remedy of appeal is
for certiorari under Rule 65 of the Revised Rules of Court. available to an aggrieved party. A remedy is considered "plain,
Notice that what is being assailed in this recourse is the decision
speedy and adequate" if it will promptly relieve the petitioners of the filing of said petition, 59 days had elapsed, way beyond
from the injurious effects of the judgment and the acts of the the 15-day period within which to file a petition for review under
lower court or agency.[21] In this case, appeal was not only Rule 45, and even beyond an extended period of 30 days, the
available but also a speedy and adequate remedy.[22]And while it maximum period for extension allowed by the rules had
is true that in accordance with the liberal spirit pervading the petitioners sought to move for such extra time. As the facts
Rules of Court and in the interest of substantial justice,[23] this stand, petitioners Bernyl and Katherene had lost the right to
Court has, before,[24] treated a petition for certiorari as a petition appeal via Rule 45.
for review on certiorari, particularly if the petition
for certiorari was filed within the reglementary period within Be that as it may, alternatively, if the decision of the
which to file a petition for review on certiorari;[25] this exception appellate court is attended by grave abuse of discretion
is not applicable to the present factual milieu. amounting to lack or excess of jurisdiction, then such ruling is
fatally defective on jurisdictional ground and may be questioned
Pursuant to Sec. 2, Rule 45 of the Revised Rules of Court: even after the lapse of the period of appeal under Rule 45[26] but
still within the period for filing a petition for certiorari under
SEC. 2. Time for filing; extension. The petition Rule 65.
shall be filed within fifteen (15) days from notice of
the judgment or final order or resolution appealed
We have previously ruled that grave abuse of discretion
from, or of the denial of the petitioners motion for
new trial or reconsideration filed in due time after may arise when a lower court or tribunal violates and
notice of the judgment. x x x. contravenes the Constitution, the law or existing
jurisprudence. By grave abuse of discretion is meant such
capricious and whimsical exercise of judgment as is equivalent
a party litigant wishing to file a petition for review to lack of jurisdiction. The abuse of discretion must be grave, as
on certiorari must do so within 15 days from receipt of the where the power is exercised in an arbitrary or despotic manner
judgment, final order or resolution sought to be appealed. In this by reason of passion or personal hostility and must be so patent
case, petitioners Bernyl and Katherenes motion for and gross as to amount to an evasion of positive duty or to a
reconsideration of the appellate courts Resolution was denied by virtual refusal to perform the duty enjoined by or to act at all in
the Court of Appeals in its Resolution dated 29 June 2006, a contemplation of law.[27] The word capricious, usually used in
copy of which was received by petitioners on 4 July 2006. The tandem with the term arbitrary, conveys the notion of willful and
present petition was filed on 1 September 2006; thus, at the time unreasoning action. Thus, when seeking the corrective hand
of certiorari, a clear showing of caprice and arbitrariness in the inquiry into whether there is sufficient evidence to
exercise of discretion is imperative.[28] procure a conviction. It is enough that it is believed
that the act or omission complained of constitutes the
offense charged. The term does not mean actual or
In reversing and setting aside the resolutions of the DOJ, positive cause; (sic) nor does it import absolute
petitioners Bernyl and Katherene contend that the Court of certainty. It is merely based on opinion and
Appeals acted with grave abuse of discretion amounting to lack reasonable belief. [Citation omitted.] A trial is there
or excess of jurisdiction. precisely for the reception of evidence of the
prosecution in support of the charge.
The Court of Appeals, when it resolved to grant the
In this case, the petitioner had amply
petition in CA-G.R. CEB. SP No. 00068, did so on two established that it has a prima facie case against the
grounds, i.e., 1) that the public respondent (DOJ) gravely abused private respondents. As observed by the public
his discretion in finding that there was no reversible error on the respondent in his second assailed resolution,
part of the Cebu City Prosecutor dismissing the case against the petitioner was able to present photographs of private
private respondent without stating the facts and the law upon respondent Ms. Balangauan leaving her office
which this conclusion was made[29]; and 2) that the public carrying a bulky plastic bag. There was also the fact
that the transactions in Mr. Yorks account used the
respondent (DOJ) made reference to the facts and circumstances
code CEO8 which presumably point to the private
of the case leading to his finding that no probable cause exists, x respondent Ms. Balangauan as the author thereof for
x x (the) very facts and circumstances (which) show that there she is the one assigned to such work station.
exists a probable cause to believe that indeed the private
respondents committed the crimes x x x charged against them.[30] Furthermore, petitioner was able to establish
that it was Ms. Balangauan who handled Mr. Yorks
account and she was the one authorized to make the
It explained that:
placement of the sum of P2,500,000.00. Since said
sum is nowhere to be found in the records of the bank,
In refusing to file the appropriate information then, apparently, Ms. Balangauan must be made to
against the private respondents because he does not account for the same.[31]
dwell on possibilities, suspicion and speculation and
that he rules based on hard facts and solid evidence,
(sic) the public respondent exceeded his authority and
The appellate court then concluded that:
gravely abused his discretion. It must be remembered
that a finding of probable cause does not require an
These facts engender a well-founded belief that reversal of the assailed resolution which is in accord with the law
that (sic) a crime has been committed and that the and evidence on the matter.
private respondents are probably guilty thereof. In
refusing to file the corresponding information against
the private respondents despite the presence of the It must be remembered that a preliminary investigation is
circumstances making out a prima facie case against not a quasi-judicial proceeding, and that the DOJ is not a quasi-
them, the public respondent gravely abused his judicial agency exercising a quasi-judicial function when it
discretion amounting to an evasion of a positive duty reviews the findings of a public prosecutor regarding the
or to a virtual refusal either to perform the duty presence of probable cause. In Bautista v. Court of
enjoined or to act at all in contemplation of law.[32] Appeals,[34] this Court held that a preliminary investigation is not
a quasi-judicial proceeding, thus:
The Court of Appeals found fault in the DOJs failure to
[T]he prosecutor in a preliminary investigation does
identify and discuss the issues raised by the respondent HSBC in not determine the guilt or innocence of the
its Petition for Review filed therewith. And, in support thereof, accused. He does not exercise adjudication nor rule-
respondent HSBC maintains that it is incorrect to argue that it making functions. Preliminary investigation is merely
was not necessary for the Secretary of Justice to have his inquisitorial, and is often the only means of
resolution recite the facts and the law on which it was based, discovering the persons who may be reasonably
because courts and quasi-judicial bodies should faithfully charged with a crime and to enable the fiscal to
prepare his complaint or information. It is not a trial
comply with Section 14, Article VIII of the Constitution
of the case on the merits and has no purpose except
requiring that decisions rendered by them should state clearly that of determining whether a crime has been
and distinctly the facts of the case and the law on which the committed and whether there is probable cause to
decision is based.[33] believe that the accused is guilty thereof. While the
fiscal makes that determination, he cannot be said to
Petitioners Bernyl and Katherene, joined by the Office of be acting as a quasi-court, for it is the courts,
ultimately, that pass judgment on the accused, not the
the Solicitor General, on the other hand, defends the DOJ and
fiscal.
assert that the questioned resolution was complete in that it
stated the legal basis for denying respondent HSBCs petition for
review that (after) an examination (of) the petition and its Though some cases[35] describe the public prosecutors
attachment [it] found no reversible error that would justify a power to conduct a preliminary investigation as quasi-judicial in
nature, this is true only to the extent that, like quasi-judicial to warrant the filing in court of an Information for estafa and/or
bodies, the prosecutor is an officer of the executive department qualified estafa against petitioners Bernyl and Katherene. It was
exercising powers akin to those of a court, and the similarity the reasoning of the DOJ that [w]hile appellant has every reason
ends at this point.[36] A quasi-judicial body is an organ of to suspect Katherene for the loss of the P2,500,000.00 as per
government other than a court and other than a legislature which Yorks bank statements, the cash deposits were identified by the
affects the rights of private parties through either adjudication or numerals CEO8 and it was only Katherene who could transact
rule-making.[37] A quasi-judicial agency performs adjudicatory from the computer in the work station CEO-8, plus alleged
functions such that its awards, determine the rights of parties, photographs showing Katherene leaving her office at 5:28 p.m.
and their decisions have the same effect as judgments of a with a bulky plastic bag presumably containing cash since
court. Such is not the case when a public prosecutor conducts a a portion of the funds was withdrawn, we do not, however, dwell
preliminary investigation to determine probable cause to file an on possibilities, suspicion and speculation. We rule based on
Information against a person charged with a criminal offense, or hard facts and solid evidence.[38]
when the Secretary of Justice is reviewing the formers order or
resolutions. In this case, since the DOJ is not a quasi-judicial We do not agree.
body, Section 14, Article VIII of the Constitution finds no
application. Be that as it may, the DOJ rectified the shortness of Probable cause has been defined as the existence of such
its first resolution by issuing a lengthier one when it resolved facts and circumstances as would excite belief in a reasonable
respondent HSBCs motion for reconsideration. mind, acting on the facts within the knowledge of the prosecutor,
that the person charged was guilty of the crime for which he was
Anent the substantial merit of the case, whether or not the prosecuted.[39] A finding of probable cause merely binds over the
Court of Appeals decision and resolution are tainted with grave suspect to stand trial. It is not a pronouncement of guilt.[40]
abuse of discretion in finding probable cause, this Court finds the
petition dismissible. The executive department of the government is
accountable for the prosecution of crimes, its principal obligation
The Court of Appeals cannot be said to have acted with being the faithful execution of the laws of the land. A necessary
grave abuse of discretion amounting to lack or excess of component of the power to execute the laws is the right to
jurisdiction in reversing and setting aside the resolutions of the prosecute their violators,[41] the responsibility for which is thrust
DOJ. In the resolutions of the DOJ, it affirmed the upon the DOJ. Hence, the determination of whether or not
recommendation of ACP Laborte that no probable cause existed probable cause exists to warrant the prosecution in court of an
accused is consigned and entrusted to the DOJ. And by the Applying the foregoing disquisition to the present petition,
nature of his office, a public prosecutor is under no compulsion the reasons of DOJ for affirming the dismissal of the criminal
to file a particular criminal information where he is not complaints for estafa and/or qualified estafa are determinative of
convinced that he has evidence to prop up the averments thereof, whether or not it committed grave abuse of discretion amounting
or that the evidence at hand points to a different conclusion. to lack or excess of jurisdiction. In requiring hard facts and solid
evidence as the basis for a finding of probable cause to hold
But this is not to discount the possibility of the petitioners Bernyl and Katherene liable to stand trial for the
commission of abuses on the part of the prosecutor. It is entirely crime complained of, the DOJ disregards the definition of
possible that the investigating prosecutor has erroneously probable cause that it is a reasonable ground of presumption that
exercised the discretion lodged in him by law. This, however, a matter is, or may be, well-founded, such a state of facts in the
does not render his act amenable to correction and annulment by mind of the prosecutor as would lead a person of ordinary
the extraordinary remedy of certiorari, absent any showing of caution and prudence to believe, or entertain an honest or strong
grave abuse of discretion amounting to excess of jurisdiction.[42] suspicion, that a thing is so.[46] The term does not mean actual
and positive cause nor does it import absolute certainty.[47] It is
And while it is this Courts general policy not to interfere merely based on opinion and reasonable belief;[48] that is, the
in the conduct of preliminary investigations, leaving the belief that the act or omission complained of constitutes the
investigating officers sufficient discretion to determine probable offense charged. While probable cause demands more than bare
cause,[43] we have nonetheless made some exceptions to the suspicion, it requires less than evidence which would justify
general rule, such as when the acts of the officer are without or conviction. Herein, the DOJ reasoned as if no evidence was
in excess of authority,[44] resulting from a grave abuse of actually presented by respondent HSBC when in fact the records
discretion. Although there is no general formula or fixed rule for of the case were teeming; or it discounted the value of such
the determination of probable cause, since the same must be substantiation when in fact the evidence presented was adequate
decided in the light of the conditions obtaining in given to excite in a reasonable mind the probability that petitioners
situations and its existence depends to a large degree upon the Bernyl and Katherene committed the crime/s complained of. In
finding or opinion of the judge conducting the examination, such so doing, the DOJ whimsically and capriciously exercised its
a finding should not disregard the facts before the judge (public discretion, amounting to grave abuse of discretion, which
prosecutor) or run counter to the clear dictates of reason.[45] rendered its resolutions amenable to correction and annulment by
the extraordinary remedy of certiorari.
From the records of the case, it is clear that a prima sign several transaction documents in order to transfer the funds
facie case for estafa/qualified estafa exists against petitioners to the new product; that said documents turned out to be
Bernyl and Katherene. A perusal of the records, i.e., the withdrawal slips and cash movement tickets; that at no time did
affidavits of respondent HSBCs witnesses, the documentary York receive the cash as a result of signing the documents that
evidence presented, as well as the analysis of the factual milieu turned out to be withdrawal slips/cash movement tickets; that
of the case, leads this Court to agree with the Court of Appeals Yorks account was regularly credited loose change in the
that, taken together, they are enough to excite the belief, in a amounts of P12,500.00 and P8,333.33 beginning in the month
reasonable mind, that the Spouses Bernyl Balangauan and after the alleged transfer of Yorks funds to the new product; that
Katherene Balangauan are guilty of the crime complained the regular deposits of loose change were transacted with the use
of. Whether or not they will be convicted by a trial court based of petitioner Katherenes work terminal accessed by her password
on the same evidence is not a consideration. It is enough that acts CEO8; that the CEO8 password was keyed in with the use of a
or omissions complained of by respondent HSBC constitute the swipe card always in the possession of petitioner Katherene; that
crime of estafa and/or qualified estafa. one of the loose-change deposits was transacted via the phone
banking feature of respondent HSBC and that when traced, the
Collectively, the photographs of petitioner Katherene phone number used was the landline number of the house of
leaving the premises of respondent HSBC carrying a bulky petitioners Bernyl and Katherene; that respondent HSBCs bank
plastic bag and the affidavits of respondent HSBCs witnesses personnel, as well as York, supposedly a) talked with petitioner
sufficiently establish acts adequate to constitute the crime of Katherene on the phone, and that she allegedly admitted that the
estafa and/or qualified estafa. What the affidavits bear out are the missing funds were invested with Shell Company, of which York
following: that York was a Premier Client of respondent HSBC; approved, and that it was only for one year; and b) met with
that petitioner Katherene handled all the accounts of York; that petitioner Bernyl, and that the latter at first denied having
not one of Yorks accounts reflect the P2,500,000.00 allegedly knowledge of his wifes complicity, but later on admitted that he
deposited in a higher yielding account; that prior to the discovery knew of the investment with Shell Company, and that he
of her alleged acts and omissions, petitioner Katherene supposedly made the loose-change deposit via phone banking;
supposedly persuaded York to invest in a new product of that after 23 April 2002, York was told that respondent HSBC
respondent HSBC, i.e., a higher interest yielding time deposit; had no new product or that it was promoting investment with
that York made a total of P2,500,000.00 investment in the new Shell Company; that York denied having any knowledge that his
product by authorizing petitioner Balangauan to transfer said money was invested outside of respondent HSBC; and that
funds to it; that petitioner Katherene supposedly asked York to petitioner Katherene would not have been able to facilitate the
alleged acts or omissions without taking advantage of her and set aside the resolutions of the DOJ. There is no showing
position or office, as a consequence of which, HSBC had to that the appellate court acted in an arbitrary and despotic manner,
reimburse York the missing P2,500,000.00. so patent or gross as to amount to an evasion or unilateral refusal
to perform its legally mandated duty. On the contrary, we find
From the above, the alleged circumstances of the case at the assailed decision and resolution of the Court of Appeals to be
bar make up the elements of abuse of confidence, deceit or more in accordance with the evidence on record and relevant
fraudulent means, and damage under Art. 315 of the Revised laws and jurisprudence than the resolutions of the DOJ.
Penal Code on estafa and/or qualified estafa. They give rise to
the presumption or reasonable belief that the offense of Considering the allegations, issues and arguments adduced
estafa has been committed; and, thus, the filing of an Information and our disquisition above, we hereby dismiss the instant petition
against petitioners Bernyl and Katherene is warranted. That for being the wrong remedy under the Revised Rules of Court, as
respondent HSBC is supposed to have no personality to file any well as for petitioner Bernyl and Katherenes failure to
criminal complaint against petitioners Bernyl and Katherene sufficiently show that the challenged Decision and Resolution of
does not ipso facto clear them of prima facie guilt. The same the Court of Appeals were rendered in grave abuse of discretion
goes for their basic denial of the acts or omissions complained amounting to lack or excess of jurisdiction.
of; or their attempt at shifting the doubt to the person of York;
and their claim that witnesses of respondent HSBC are guilty of WHEREFORE, premises considered, the instant Petition
fabricating the whole scenario. These are matters of defense; for Certiorari is DISMISSED for lack of merit. The 28 April
their validity needs to be tested in the crucible of a full-blown 2006 Decision and the 29 June 2006 Resolution of the Court of
trial. Lest it be forgotten, the presence or absence of the elements Appeals in CA-G.R. CEB- SP No. 00068, are
of the crime is evidentiary in nature and is a matter of defense, hereby AFFIRMED. With costs against petitioners -- Spouses
the truth of which can best be passed upon after a full-blown trial Bernyl Balangauan and Katherene Balangauan.
on the merits. Litigation will prove petitioners Bernyl and
Katherenes innocence if their defense be true. SO ORDERED.
All cases against Celso G. delos Angeles, Jr., et al. under Legacy Group of The following issues are now to be resolved, to wit:
Companies, may be filed with the docket section of the National Prosecution
Service, Department of Justice, Padre Faura, Manila and shall be forwarded to 1. Did petitioners properly bring their petition for certiorari, prohibition
the Secretariat of the Special Panel for assignment and distribution to panel and mandamus directly to the Court?
members, per Department Order No. 84 dated February 13, 2009.
2. Did respondent Secretary of Justice commit grave abuse of
However, cases already filed against Celso G. delos Angeles, Jr. et al. of discretion in issuing DO No. 182?
Legacy group of Companies in your respective offices with the exemption of
the cases filed in Cagayan de Oro City which is covered by Memorandum 3. Did DO No. 182 and DOJ Memorandum dated March 2, 2009 violate
dated March 2, 2009, should be forwarded to the Secretariat of the Special petitioners’ constitutionally guaranteed rights?
Ruling presented. This is and should continue to be the policy in this regard, a policy
that courts and lawyers must strictly observe. (Emphasis supplied)
The petition for certiorari, prohibition and mandamus, being bereft of
substance and merit, is dismissed. In People v. Cuaresma, the Court has also amplified the need for strict
adherence to the policy of hierarchy of courts. There, noting "a growing
Firstly, petitioners have unduly disregarded the hierarchy of courts by coming tendency on the part of litigants and lawyers to have their applications for the
directly to the Court with their petition for certiorari, prohibition and mandamus so-called extraordinary writs, and sometimes even their appeals, passed upon
without tendering therein any special, important or compelling reason to justify and adjudicated directly and immediately by the highest tribunal of the land,"
the direct filing of the petition. the Court has cautioned lawyers and litigants against taking a direct resort to
the highest tribunal, viz:
We emphasize that the concurrence of jurisdiction among the Supreme Court,
Court of Appeals and the Regional Trial Courts to issue the writs of certiorari, x x x. This Court’s original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction did not prohibition, mandamus, quo warranto, habeas corpus and injunction) is not
give petitioners the unrestricted freedom of choice of court forum.4 An undue exclusive. It is shared by this Court with Regional Trial Courts x x x, which may
disregard of this policy against direct resort to the Court will cause the issue the writ, enforceable in any part of their respective regions. It is also
dismissal of the recourse. In Bañez, Jr. v. Concepcion,5 we explained why, to shared by this Court, and by the Regional Trial Court, with the Court of
wit: Appeals x x x, although prior to the effectivity of Batas Pambansa Bilang 129
on August 14, 1981, the latter's competence to issue the extraordinary writs
The Court must enjoin the observance of the policy on the hierarchy of courts, was restricted to those "in aid of its appellate jurisdiction." This concurrence of
and now affirms that the policy is not to be ignored without serious jurisdiction is not, however, to be taken as according to parties seeking any of
consequences. The strictness of the policy is designed to shield the Court from the writs an absolute, unrestrained freedom of choice of the court to which
having to deal with causes that are also well within the competence of the application therefor will be directed. There is after all a hierarchy of courts.
lower courts, and thus leave time to the Court to deal with the more That hierarchy is determinative of the venue of appeals, and should also serve
fundamental and more essential tasks that the Constitution has assigned to it. as a general determinant of the appropriate forum for petitions for the
The Court may act on petitions for the extraordinary writs of certiorari, extraordinary writs. A becoming regard for that judicial hierarchy most certainly
prohibition and mandamus only when absolutely necessary or when serious indicates that petitions for the issuance of extraordinary writs against first level
and important reasons exist to justify an exception to the policy. This was why ("inferior") courts should be filed with the Regional Trial Court, and those
the Court stressed in Vergara, Sr. v. Suelto: against the latter, with the Court of Appeals. A direct invocation of the
Supreme Court's original jurisdiction to issue these writs should be allowed
only when there are special and important reasons therefor, clearly and
x x x. The Supreme Court is a court of last resort, and must so remain if it is to
specifically set out in the petition. This is established policy. It is a policy that is
satisfactorily perform the functions assigned to it by the fundamental charter
necessary to prevent inordinate demands upon the Court’s time and attention
and immemorial tradition. It cannot and should not be burdened with the task
which are better devoted to those matters within its exclusive jurisdiction, and
of dealing with causes in the first instance. Its original jurisdiction to issue the
to prevent further over-crowding of the Court's docket. Indeed, the removal of
so-called extraordinary writs should be exercised only where absolutely
the restriction on the jurisdiction of the Court of Appeals in this regard, supra—
necessary or where serious and important reasons exist therefor. Hence, that
resulting from the deletion of the qualifying phrase, "in aid of its appellate
jurisdiction should generally be exercised relative to actions or proceedings
jurisdiction" — was evidently intended precisely to relieve this Court pro tanto
before the Court of Appeals, or before constitutional or other tribunals, bodies
of the burden of dealing with applications for the extraordinary writs which, but
or agencies whose acts for some reason or another are not controllable by the
for the expansion of the Appellate Court corresponding jurisdiction, would have
Court of Appeals. Where the issuance of an extraordinary writ is also within the
had to be filed with it.
competence of the Court of Appeals or a Regional Trial Court, it is in either of
1âw phi1
these courts that the specific action for the writ’s procurement must be
xxxx
The Court therefore closes this decision with the declaration for the information x x x is the correction of errors of jurisdiction, which includes the commission of
and evidence of all concerned, that it will not only continue to enforce the grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere
policy, but will require a more strict observance thereof. (Emphasis supplied) abuse of discretion is not enough to warrant the issuance of the writ. The
abuse of discretion must be grave, which means either that the judicial or
Accordingly, every litigant must remember that the Court is not the only judicial quasi-judicial power was exercised in an arbitrary or despotic manner by
forum from which to seek and obtain effective redress of their grievances. As a reason of passion or personal hostility, or that the respondent judge, tribunal or
rule, the Court is a court of last resort, not a court of the first instance. Hence, board evaded a positive duty, or virtually refused to perform the duty enjoined
every litigant who brings the petitions for the extraordinary writs of certiorari, or to act in contemplation of law, such as when such judge, tribunal or board
prohibition and mandamus should ever be mindful of the policy on the exercising judicial or quasi-judicial powers acted in a capricious or whimsical
hierarchy of courts, the observance of which is explicitly defined and enjoined manner as to be equivalent to lack of jurisdiction.
in Section 4 of Rule 65, Rules of Court, viz:
For a special civil action for certiorari to prosper, therefore, the following
Section 4. When and where petition filed. - The petition shall be filed not later requisites must concur, namely: (a) it must be directed against a tribunal,
than sixty (60) days from notice of the judgment, order or resolution. In case a board or officer exercising judicial or quasi-judicial functions; (b) the tribunal,
motion for reconsideration or new trial is timely filed, whether such motion is board, or officer must have acted without or in excess of jurisdiction or with
required or not, the sixty (60) day period shall be counted from notice of the grave abuse of discretion amounting to lack or excess of jurisdiction; and (c)
denial of the said motion. there is no appeal nor any plain, speedy, and adequate remedy in the ordinary
course of law.9 The burden of proof lies on petitioners to demonstrate that the
The petition shall be filed in the Supreme Court or, if it relates to the acts or assailed order was issued without or in excess of jurisdiction or with grave
omissions of a lower court or of a corporation, board, officer or person, in the abuse of discretion amounting to lack or excess of jurisdiction.
Regional Trial Court exercising jurisdiction over the territorial area as defined
by the Supreme Court. It may also be filed in the Court of Appeals whether or Yet, petitioners have not shown a compliance with the requisites. To start with,
not the same is in the aid of its appellate jurisdiction, or in the Sandiganbayan they merely alleged that the Secretary of Justice had acted without or in
if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a excess of his jurisdiction. Also, the petition did not show that the Secretary of
quasi-judicial agency, unless otherwise provided by law or these rules, the Justice was an officer exercising judicial or quasi-judicial functions. Instead,
petition shall be filed in and cognizable only by the Court of Appeals. the Secretary of Justice would appear to be not exercising any judicial or
quasi-judicial functions because his questioned issuances were ostensibly
In election cases involving an act or an omission of a municipal or a regional intended to ensure his subordinates’ efficiency and economy in the conduct of
trial court, the petition shall be filed exclusively with the Commission on the preliminary investigation of all the cases involving the Legacy Group. The
Elections, in aid of its appellate jurisdiction.6 function involved was purely executive or administrative.
Secondly, even assuming arguendo that petitioners’ direct resort to the Court The fact that the DOJ is the primary prosecution arm of the Government does
was permissible, the petition must still be dismissed. not make it a quasi-judicial office or agency. Its preliminary investigation of
cases is not a quasi-judicial proceeding. Nor does the DOJ exercise a quasi-
judicial function when it reviews the findings of a public prosecutor on the
The writ of certiorari is available only when any tribunal, board or officer
finding of probable cause in any case. Indeed, in Bautista v. Court of
exercising judicial or quasi-judicial functions has acted without or in excess of
Appeals,10 the Supreme Court has held that a preliminary investigation is not a
its or his jurisdiction, or with grave abuse of discretion amounting to lack or
quasi-judicial proceeding, stating:
excess of jurisdiction, and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law.7 "The sole office of the writ of
certiorari," according to Delos Santos v. Metropolitan Bank and Trust x x x the prosecutor in a preliminary investigation does not determine the guilt
Company:8 or innocence of the accused. He does not exercise adjudication nor rule-
making functions. Preliminary investigation is merely inquisitorial, and is often
the only means of discovering the persons who may be reasonably charged rendered commanding the respondent to desist from further proceedings in the
with a crime and to enable the fiscal to prepare his complaint or information. It action or matter specified therein, or otherwise granting such incidental reliefs
is not a trial of the case on the merits and has no purpose except that of as law and justice may require.
determining whether a crime has been committed and whether there is
probable cause to believe that the accused is guilty thereof. While the fiscal The petition shall likewise be accompanied by a certified true copy of the
makes that determination, he cannot be said to be acting as a quasi-court, for judgment, order or resolution subject thereof, copies of all pleadings and
it is the courts, ultimately, that pass judgment on the accused, not the fiscal.11 documents relevant and pertinent thereto, and a sworn certification of non-
forum shopping as provided in the third paragraph of section 3, Rule 46. (2a)
There may be some decisions of the Court that have characterized the public Similarly, the petition could not be one for mandamus, which is a remedy
prosecutor’s power to conduct a preliminary investigation as quasi-judicial in available only when "any tribunal, corporation, board, officer or person
nature. Still, this characterization is true only to the extent that the public unlawfully neglects the performance of an act which the law specifically enjoins
prosecutor, like a quasi-judicial body, is an officer of the executive department as a duty resulting from an office, trust, or station, or unlawfully excludes
exercising powers akin to those of a court of law. another from the use and enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy in the
But the limited similarity between the public prosecutor and a quasi-judicial ordinary course of law, the person aggrieved thereby may file a verified petition
body quickly endsthere. For sure, a quasi-judicial body is an organ of in the proper court."12 The main objective of mandamus is to compel the
government other than a court of law or a legislative office that affects the performance of a ministerial duty on the part of the respondent. Plainly
rights of private parties through either adjudication or rule-making; it performs enough, the writ of mandamus does not issue to control or review the exercise
adjudicatory functions, and its awards and adjudications determine the rights of discretion or to compel a course of conduct,13 which, it quickly seems to us,
of the parties coming before it; its decisions have the same effect as the was what petitioners would have the Secretary of Justice do in their favor.
judgments of a court of law. In contrast, that is not the effect whenever a public Consequently, their petition has not indicated how and where the Secretary of
prosecutor conducts a preliminary investigation to determine probable cause in Justice’s assailed issuances excluded them from the use and enjoyment of a
order to file a criminal information against a person properly charged with the right or office to which they were unquestionably entitled.
offense, or whenever the Secretary of Justice reviews the public prosecutor’s
orders or resolutions. Thirdly, there is no question that DO No. 182 enjoyed a strong presumption of
its validity. In ABAKADA Guro Party List v. Purisima,14 the Court has extended
Petitioners have self-styled their petition to be also for prohibition. However, the presumption of validity to legislative issuances as well as to rules and
we do not see how that can be. They have not shown in their petition in what regulations issued by administrative agencies, saying:
manner and at what point the Secretary of Justice, in handing out the assailed
issuances, acted without or in excess of his jurisdiction, or with grave abuse of Administrative regulations enacted by administrative agencies to implement
discretion amounting to lack or excess of jurisdiction. On the other hand, we and interpret the law which they are entrusted to enforce have the force of law
already indicated why the issuances were not infirmed by any defect of and are entitled to respect. Such rules and regulations partake of the nature of
jurisdiction. Hence, the blatant omissions of the petition transgressed Section a statute and are just as binding as if they have been written in the statute
2, Rule 65 of the Rules of Court, to wit: itself. As such, they have the force and effect of law and enjoy the presumption
of constitutionality and legality until they are set aside with finality in an
Section 2. Petition for prohibition. — When the proceedings of any tribunal, appropriate case by a competent court.15
corporation, board, officer or person, whether exercising judicial, quasi-judicial
or ministerial functions, are without or in excess of its or his jurisdiction, or with DO No. 182 was issued pursuant to Department Order No. 84 that the
grave abuse of discretion amounting to lack or excess of jurisdiction, and there Secretary of Justice had promulgated to govern the performance of the
is no appeal or any other plain, speedy, and adequate remedy in the ordinary mandate of the DOJ to "administer the criminal justice system in accordance
course of law, a person aggrieved thereby may file a verified petition in the with the accepted processes thereof"16 as expressed in Republic Act No.
proper court, alleging the facts with certainty and praying that judgment be 10071 (Prosecution Service Act of 2010) and Section 3, Chapter I, Title III and
Section 1, Chapter I, Title III of Book IV of Executive Order 292 (Administrative Petitioners’ attack deserves no consideration. The equal protection clause of
Code of 1987). the Constitution does not require the universal application of the laws to all
persons or things without distinction; what it requires is simply equality among
To overcome this strong presumption of validity of the questioned issuances, it equals as determined according to a valid classification.18 Hence, the Court
became incumbent upon petitioners to prove their unconstitutionality and has affirmed that if a law neither burdens a fundamental right nor targets a
invalidity, either by showing that the Administrative Code of 1987 did not suspect class, the classification stands as long as it bears a rational
authorize the Secretary of Justice to issue DO No. 182, or by demonstrating relationship to some legitimate government end.19
that DO No. 182 exceeded the bounds of the Administrative Code of 1987 and
other pertinent laws. They did not do so. They must further show that the That is the situation here. In issuing the assailed DOJ Memorandum dated
performance of the DOJ’s functions under the Administrative Code of 1987 March 2, 2009, the Secretary of Justice took into account the relative distance
and other pertinent laws did not call for the impositions laid down by the between Cagayan de Oro, where many complainants against the Legacy
assailed issuances. That was not true here, for DO No 182 did not deprive Group resided, and Manila, where the preliminary investigations would be
petitioners in any degree of their right to seek redress for the alleged wrong conducted by the special panel. He also took into account that the cases had
done against them by the Legacy Group. Instead, the issuances were already been filed in the City Prosecutor’s Office of Cagayan de Oro at the
designed to assist petitioners and others like them expedite the prosecution, if time he issued DO No. 182. Given the considerable number of complainants
warranted under the law, of all those responsible for the wrong through the residing in Cagayan de Oro City, the Secretary of Justice was fully justified in
creation of the special panel of state prosecutors and prosecution attorneys in excluding the cases commenced in Cagayan de Oro from the ambit of DO No.
order to conduct a nationwide and comprehensive preliminary investigation 182. The classification taken into consideration by the Secretary of Justice was
and prosecution of the cases. Thereby, the Secretary of Justice did not act really valid. Resultantly, petitioners could not inquire into the wisdom behind
arbitrarily or oppressively against petitioners. the exemption upon the ground that the non-application of the exemption to
them would cause them some inconvenience.
Fourthly, petitioners attack the exemption from the consolidation decreed in
DO No. 182 of the cases filed or pending in the Office of the City Prosecutor of Fifthly, petitioners contend that DO No. 182 violated their right to the speedy
Cagayan de Oro City, claiming that the exemption traversed the constitutional disposition of cases guaranteed by the Constitution. They posit that there
guaranty in their favor of the equal protection of law.17 would be considerable delay in the resolution of their cases that would
definitely be "a flagrant transgression of petitioners’ constitutional rights to
The exemption is covered by the assailed DOJ Memorandum dated March 2, speedy disposition of their cases."20
2009, to wit:
We cannot favor their contention.
It has come to the attention of the undersigned that cases for syndicated
estafa were filed with your office against officers of the Legacy Group of In The Ombudsman v. Jurado,21 the Court has clarified that although the
Companies. Considering the distance of the place of complainants therein to Constitution guarantees the right to the speedy disposition of cases, such
Manila, your Office is hereby exempted from the directive previously issued by speedy disposition is a flexible concept. To properly define that concept, the
the undersigned requiring prosecution offices to forward the records of all facts and circumstances surrounding each case must be evaluated and taken
cases involving Legacy Group of Companies to the Task Force. into account. There occurs a violation of the right to a speedy disposition of a
case only when the proceedings are attended by vexatious, capricious, and
Anent the foregoing, you are hereby directed to conduct preliminary oppressive delays, or when unjustified postponements of the trial are sought
investigation of all cases involving the Legacy Group of Companies filed in and secured, or when, without cause or justifiable motive, a long period of time
your office with dispatch and to file the corresponding informations if evidence is allowed to elapse without the party having his case tried.22 It is cogent to
warrants and to prosecute the same in court. mention that a mere mathematical reckoning of the time involved is not
determinant of the concept.23
The consolidation of the cases against Delos Angeles, Jr., et al. was ordered and the prosecution of offenders is fully sanctioned by law. Towards that end,
obviously to obtain expeditious justice for the parties with the least cost and the Secretary of Justice exercises control and supervision over all the regional,
vexation to them. Inasmuch as the cases filed involved similar or related provincial, and city prosecutors of the country; has broad discretion in the
questions to be dealt with during the preliminary investigation, the Secretary of discharge of the DOJ’s functions; and administers the DOJ and its adjunct
Justice rightly found the consolidation of the cases to be the most feasible offices and agencies by promulgating rules and regulations to carry out their
means of promoting the efficient use of public resources and of having a objectives, policies and functions.
comprehensive investigation of the cases.
Consequently, unless and until the Secretary of Justice acts beyond the
On the other hand, we do not ignore the possibility that there would be more bounds of his authority, or arbitrarily, or whimsically, or oppressively, any
cases reaching the DOJ in addition to those already brought by petitioners and person or entity who may feel to be thereby aggrieved or adversely affected
other parties. Yet, any delays in petitioners’ cases occasioned by such other should have no right to call for the invalidation or nullification of the rules and
and subsequent cases should not warrant the invalidation of DO No. 182. The regulations issued by, as well as other actions taken by the Secretary of
Constitution prohibits only the delays that are unreasonable, arbitrary and Justice.
oppressive, and tend to render rights nugatory.24 In fine, we see neither undue
delays, nor any violation of the right of petitioners to the speedy disposition of WHEREFORE, the Court DISMISSES the omnibus petition for certiorari,
their cases. prohibition, and mandamus for lack of merit.
Sixthly, petitioners assert that the assailed issuances should cover only future Petitioners shall pay the costs of suit.
cases against Delos Angeles, Jr., et al., not those already being investigated.
They maintain that DO No. 182 was issued in violation of the prohibition SO ORDERED.
against passing laws with retroactive effect.
Finally, petitioners have averred but failed to establish that DO No. 182
constituted obstruction of justice. This ground of the petition, being
unsubstantiated, was unfounded.
G.R. No. 151108 October 14, 2002 "That the ProvisionalToll Rates, which are not to exceed the following:
At-Grade
The focal point upon which these two consolidated cases converge is whether Portion
Resolution No. 2001-89 issued by the Toll Regulatory Board (TRB) is valid.
Magallanes to
19.35 19.50 38.50 58.00
A brief narration of the factual backdrop is imperative, thus: Bicutan
Bicutan to Sucat 11.21 11.00 22.50 34.00
On November 9, 2001, the TRB issued Resolution No. 2001-89 authorizing
provisional toll rate adjustments at the Metro Manila Skyway, effective January Sucat to Alabang 10.99 11.00 21.00 32.50
1, 2002,[1] thus:
"NOW THEREFORE, it is RESOLVED, as it is hereby RESOLVED: * includes C5 entry/exit and Merville exit.
1. That in view of urgent public interest, the Board hereby GRANTS to "For implementation starting January 1, 2002 after its publication once a week
the Metro Manila Skyway Project, Provisional Relief in accordance with for three (3) consecutive weeks in a newspaper of general circulation and that
Rule 10, Section 3 of the Rules of Practice and Procedure Governing said Provisional Toll Rate Increase shall remain in effect until such time that
Hearing before the Toll Regulatory Board which states, among others the TRB Board has determined otherwise:
"that the Board may grant (provisional relief)…in its own
"Be APPROVED as it is hereby APPROVED.
"RESOLVED FURTHERMORE, as it is hereby RESOLVED that the a. The Investor and/or the Operator shall be entitled to apply for and if
Provisional Toll Rates be implemented in two (2) stages in accordance with the warranted, to be granted an interim adjustment of Toll Rates upon the
following schedule: occurrence of any of the following events:
Hence, petitioners Ceferino Padua and Eduardo Zialcita assail before this Upon the other hand, on January 9, 2002, petitioner Eduardo Zialcita, as a
Court the validity and legality of TRB Resolution No. 2001-89. taxpayer and as Congressman of Parañaque City, filed the present petition for
prohibition[16] with prayer for a temporary restraining order and/or writ of
Petitioner Ceferino Padua, as a toll payer, filed an "Urgent Motion for a preliminary injunction against TRB and CITRA, docketed as G.R. No. 151108,
Temporary Restraining Order to Stop Arbitrary Toll Fee Increases"[11] in G.R. impugning the same Resolution No. 2001-89.
No. 141949,[12] a petition for mandamus earlier filed by him. In that petition,
Padua seeks to compel respondent Judge Santiago Ranada of the Regional Petitioner Zialcita asserts that the provisional toll rate adjustments are
Trial Court, Branch 137, Makati City, to issue a writ of execution for the exorbitant and that the TRB violated its own Charter, Presidential Decree No.
enforcement of the Court of Appeals’ Decision dated August 4, 1989 in CA- 1112,[17] when it promulgated Resolution No. 2001-89 without the benefit of
G.R. SP No. 13235. In its Decision, the Court of Appeals ordered the exclusion any public hearing. He also maintains that the TRB violated the Constitution
of certain portions of the expressways (from Villamor Air Base to Alabang in when it did not express clearly and distinctly the facts and the law on which
the South, and from Balintawak to Tabang in the North) from the franchise of Resolution No. 2001-89 was based. And lastly, he claims that Section 3, Rule
the PNCC. 10 of the TRB Rules of Procedure is not sanctioned by P.D. No. 1112.
Private respondent CITRA, in its comment[18] on Congressman Zialcita’s The remedy of prohibition initiated by petitioner Zialcita in G.R. No. 151108
petition, counters that: (1) the TRB has primary administrative jurisdiction over also suffers several infirmities. Initially, it violates the twin doctrine of primary
all matters relating to toll rates; (2) prohibition is an inappropriate remedy administrative jurisdiction and non-exhaustion of administrative remedies.
because its function is to restrain acts about to be done and not acts already
accomplished; (3) Resolution No. 2001-89 was issued in accordance with law; P.D. No. 1112 explicitly provides that "the decisions of the TRB on petitions for
(4) Section 3, Rule 10 of the TRB Rules is constitutional; and (5) private the increase of toll rate shall be appealable to the Office of the President within
respondent and the Republic of the Philippines would suffer more irreparable ten (10) days from the promulgation thereof."[21] P.D. No. 1894 reiterates this
damages than petitioner. instruction and further provides:
The TRB, through the OSG, filed a separate comment[19] reiterating the same "SECTION 9. The GRANTEE shall have the right and authority to adjust any
arguments raised by private respondent CITRA. existing toll being charged the users of the Expressways under the following
guidelines:
On January 11, 2002, this Court resolved to consolidate the instant petitions,
G.R. No. 141949 and G.R. No. 151108.[20] xxx xxx
We rule for the respondents. c) Any interested Expressways user shall have the right to file, within a period
of ninety (90) days after the date of publication of the adjusted toll rate (s), a
In assailing Resolution No. 2001-89, petitioners came to us via two petition with the Toll Regulatory Board for a review of the adjusted toll rate (s);
unconventional remedies – one is an urgent motion for a TRO to stop arbitrary provided, however, that notwithstanding the filing of such petition and the
toll fee increases; and the other is a petition for prohibition. Unfortunately, both pendency of the resolution thereof, the adjusted toll shall be enforceable and
are procedurally impermissible. collectible by the GRANTEE effective on the first day of January in accordance
with the immediately preceding paragraph.
I
xxx xxx
Petitioner Padua’s motion is a leap to a legal contest of different dimension. As
previously stated, G.R. No. 141949 is a petition for mandamus seeking to e) Decisions of the Toll Regulatory Board on petitions for review of adjusted
compel respondent Judge Ranada to issue a writ of execution for the toll shall be appealable to the Office of the President within ten (10) days from
enforcement of the Court of Appeal’s Decision dated August 4, 1989 in CA- the promulgation thereof."
G.R. SP No. 13235. The issue therein is whether the application for a writ of
execution should be by a mere motion or by an action for revival of judgment. These same provisions are incorporated in the TRB Rules of Procedure,
Thus, for petitioner Padua to suddenly interject in the same petition the issue particularly in Section 6, Rule 5 and Section 1, Rule 12 thereof.[22]
of whether Resolution No. 2001-89 is valid is to drag this Court to his web of
legal convolution. Courts cannot, as a case progresses, resolve the intrinsic Obviously, the laws and the TRB Rules of Procedure have provided the
merit of every issue that comes along its way, particularly those which bear no remedies of an interested Expressways user.[23] The initial proper recourse is
relevance to the resolution of the case. to file a petition for review of the adjusted toll rates with the TRB. The need for
a prior resort to this body is with reason. The TRB, as the agency assigned to
Certainly, petitioner Padua’s recourse in challenging the validity of TRB supervise the collection of toll fees and the operation of toll facilities, has the
Resolution No. 2001-89 should have been to institute an action, separate and necessary expertise, training and skills to judiciously decide matters of this
independent from G.R. No. 141949. kind. As may be gleaned from the petition, the main thrust of petitioner
Zialcita’s argument is that the provisional toll rate adjustments are exorbitant,
II oppressive, onerous and unconscionable. This is obviously a question of fact
requiring knowledge of the formula used and the factors considered in
determining the assailed rates. Definitely, this task is within the province of the For one, it is not true that the provisional toll rate adjustments were not
TRB. published prior to its implementation on January 1, 2002. Records show that
they were published on December 17, 24 and 31, 2001[27] in three
We take cognizance of the wealth of jurisprudence on the doctrine of primary newspapers of general circulation, particularly the Philippine Star, Philippine
administrative jurisdiction and exhaustion of administrative remedies. In this Daily Inquirer and The Manila Bulletin. Surely, such publications sufficiently
era of clogged court dockets, the need for specialized administrative boards or complied with Section 5 of P.D. No. 1112 which mandates that "no new rates
commissions with the special knowledge, experience and capability to hear shall be collected unless published in a newspaper of general publication at
and determine promptly disputes on technical matters or intricate questions of least once a week for three consecutive weeks." At any rate, it must be pointed
facts, subject to judicial review in case of grave abuse of discretion, is out that under Letter of Instruction No. 1334-A,[28] the TRB may grant and
indispensable. Between the power lodged in an administrative body and a issue ex-parte to any petitioner, without need of notice, publication or hearing,
court, the unmistakable trend is to refer it to the former."[24] In Industrial provisional authority to collect, pending hearing and decision on the merits of
Enterprises, Inc. vs. Court of Appeals,[25] we ruled: the petition, the increase in rates prayed for or such lesser amount as the TRB
may in its discretion provisionally grant. That LOI No. 1334-A has the force and
"x x x, if the case is such that its determination requires the expertise, effect of law finds support in a catena of cases decreeing that "all
specialized skills and knowledge of the proper administrative bodies because proclamations, orders, decrees, instructions, and acts promulgated, issued, or
technical matters or intricate questions of facts are involved, then relief must done by the former President (Ferdinand E. Marcos) are part of the law of the
first be obtained in an administrative proceeding before a remedy will be land, and shall remain valid, legal, binding, and effective, unless modified,
supplied by the courts even though the matter is within the proper jurisdiction revoked or superseded by subsequent proclamations, orders, decrees,
of a court." instructions, or other acts of the President."[29] In Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform,[30] this
Court held:
Moreover, petitioner Zialcita’s resort to prohibition is intrinsically inappropriate.
It bears stressing that the office of this remedy is not to correct errors of
judgment but to prevent or restrain usurpation of jurisdiction or authority by "The Court wryly observes that during the past dictatorship, every presidential
inferior tribunals and to compel them to observe the limitation of their issuance, by whatever name it was called, had the force and effect of law
jurisdictions. G.R. No. 151108, while designated as a petition for prohibition, because it came from President Marcos. Such are the ways of despots.
has for its object the setting aside of Resolution No. 2001-89 on the ground Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI
that it was issued without prior notice, hearing and publication and that the 474 could not have repealed P.D. No. 27 because the former was only a letter
provisional toll rate adjustments are exorbitant. This is not the proper subject of of instruction. The important thing is that it was issued by President Marcos,
prohibition because as long as the inferior court, tribunal or board has whose word was law during that time." (Emphasis supplied)
jurisdiction over the person and subject matter of the controversy, the writ will
not lie to correct errors and irregularities in procedure, or to prevent an For another, it is not true that it was TRB Executive Director Dumlao, Jr. alone
erroneous decision or an enforcement of an erroneous judgment. And even in who issued Resolution No. 2001-89. The Resolution itself contains the
cases of encroachment, usurpation, and improper assumption of jurisdiction, signature of the four TRB Directors, namely, Simeon A. Datumanong,
the writ will not issue where an adequate and applicable remedy by appeal, Emmanuel P. Bonoan, Ruben S. Reinoso, Jr. and Mario K. Espinosa.[31]
writ or error, certiorari, or other prescribed methods of review are available.[26] Petitioner Padua would argue that while these Directors signed the Resolution,
In this case, petitioner Zialcita should have sought a review of the assailed none of them personally attended the hearing. This argument is misplaced.
Resolution before the TRB. Under our jurisprudence, an administrative agency may employ other persons,
such as a hearing officer, examiner or investigator, to receive evidence,
III conduct hearing and make reports, on the basis of which the agency shall
render its decision. Such a procedure is a practical necessity.[32] Thus, in
Mollaneda vs. Umacob,[33] we ruled:
Even granting that petitioners’ recourse to the instant remedies is in order, still,
we cannot rule in their favor.
" x x x At any rate, it cannot be gainsaid that the term "administrative body or hereby direct, order and instruct the Toll Regulatory Board to grant and issue
agency" includes the subordinate officials upon whose hand the body or ex-parte to any petitioner, without need of notice, publication or hearing,
agency delegates a portion of its authority. Included therein are the hearing provisional authority to collect, pending hearing of and decision on the merits
officers through whose eyes and ears the administrative body or agency of such petition, the increase in rates prayed for or such lesser amount as the
observes the demeanor, conduct and attitude of the witnesses and listens to Board may in its discretion provisionally grant, upon (a) a finding that the said
their testimonies. petition is sufficient in form and substance, (b) the submission of an affidavit by
the petitioner showing that the increase in rates substantially conforms to the
"It must be emphasized that the appointment of competent officers to hear and formula, if any stipulated in the franchise or toll operation agreement/certificate
receive evidence is commonly resorted to by administrative bodies or agencies of the petitioner and that failure to immediately impose and collect the increase
in the interest of an orderly and efficient disposition of administrative cases. x x in rates would result in outright delay or stoppage of urgently needed
x improvements, expansion or repairs of toll facilities and/or in great irreparable
injury to the petitioner, and (c) the submission by the petitioner to the Board of
"x x x Corollarily, in a catena of cases, this Court laid down the cardinal a bond, in such amount and from such surety or sureties and under such terms
requirements of due process in administrative proceedings, one of which is and conditions as the Board shall fix, to guarantee the refund of the increase in
that "the tribunal or body or any of its judges must act on its or his own rates to the affected toll payers in case it is finally determined, after notice and
independent consideration of the law and facts of the controversy, and not hearing, that the petitioner is not entitled, in whole or in part, to the same. Any
simply accept the views of a subordinate." Thus, it is logical to say that this provisional toll rate increases shall be effective immediately upon approval
mandate was rendered precisely to ensure that in cases where the hearing or without need of publication."
reception of evidence is assigned to a subordinate, the body or agency shall
not merely rely on his recommendation but instead shall personally weigh and Thereafter, the TRB promulgated as part of its Rules of Procedure, the
assess the evidence which the said subordinate has gathered." following provision:
Be that as it may, we must stress that the TRB’s authority to grant provisional "RULE 5
toll rate adjustments does not require the conduct of a hearing. Pertinent laws
and jurisprudence support this conclusion. PROCEDURE FOR APPROVAL OF TOLL RATE
It may be recalled that Former President Ferdinand E. Marcos promulgated "Section 2. Provisional Relief – Upon initial findings of the Board that the
P.D. No. 1112 creating the TRB on March 31, 1977. The end in view was to Petition for the approval of initial toll rate or the petition for toll rate adjustment
authorize the collection of toll fees for the use of certain public improvements is in accordance with Sections 1 and 2 of Rule 2, Section 2 of Rule 3 and
in order to attract private sector investment in the government infrastructure Section 1 of Rule 4 hereof, the Board within a reasonable time after the filing of
projects. The TRB was tasked to supervise the collection of toll fees and the the Petition, may in an en banc decision provisionally approve the initial toll
operation of toll facilities. One of its powers is to "issue, modify and promulgate rate or toll rate adjustment, without the necessity of any notice and hearing."
from time to time the rates of toll that will be charged the direct users of toll
facilities and upon notice and hearing, to approve or disapprove petitions for From the foregoing, it is clear that a hearing is not necessary for the grant of
the increase thereof."[34] provisional toll rate adjustment. The language of LOI No. 1334-A is not
susceptible of equivocation. It "directs, orders and instructs" the TRB to issue
To clarify the intent of P.D. No. 1112 as to the extent of the TRB’s power,[35] provisional toll rates adjustment ex-parte without the need of notice, hearing
Former President Marcos further issued LOI No. 1334-A expressly allowing the and publication. All that is necessary is that it be issued upon (1) a finding that
TRB to grant ex-parte provisional or temporary increase in toll rates, thus: the main petition is sufficient in form and substance; (2) the submission of an
affidavit showing that the increase in rates substantially conforms to the
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic formula, if any is stipulated in the franchise or toll operation agreement, and
of the Philippines, by virtue of the powers vested in me by the Constitution, do that failure to immediately impose and collect the increase in rates would result
in great irreparable injury to the petitioner; and (3) the submission of a bond. Metro Manila Skyway, coupled with the rehabilitated at-grade portion of the
Again, whether or not CITRA complied with these requirements is an issue that South Luzon Expressway, from Alabang to Quirino Avenue; (b) the Central
must be addressed to the TRB. Metro Manila Skyway, from Quirino Avenue to A. Bonifacio Avenue; x x x."[41]
The practice is not something peculiar. We have ruled in a number of cases Petitioner Zialcita faults the TRB for not stating the facts and the law on which
that an administrative agency may be empowered to approve provisionally, Resolution No. 2001-89 is based. Petitioner is wrong. Suffice it to state that
when demanded by urgent public need, rates of public utilities without a while Section 14, Article VIII of the 1987 Constitution provides that "no decision
hearing. The reason is easily discerned from the fact that provisional rates are shall be rendered by any court without expressing therein clearly and distinctly
by their nature temporary and subject to adjustment in conformity with the the facts and the law on which it is based," this rule applies only to a decision
definitive rates approved after final hearing.[36] In Maceda vs. Energy of a court of justice, not TRB.[42]
Regulatory Board,[37] we ruled that while the ERB is not precluded from
conducting a hearing on the grant of provisional authority –which is of course, At this point, let it be stressed that we are not passing upon the
the better procedure – however, it can not be stigmatized if it failed to conduct reasonableness of the provisional toll rate adjustments. As we have earlier
one. Citing Citizens’ Alliance for Consumer Protection vs. Energy Regulatory mentioned, this matter is best addressed to the TRB.
Board,[38] this Court held:
IV
In the light of Section 8 quoted above, public respondent Board need not even
have conducted formal hearings in these cases prior to issuance of its Order of In fine, as what we intimated in Philippine National Construction Corp. vs.
14 August 1987 granting a provisional increase of prices. The Board, upon its Court of Appeals,[43] we commend petitioners for devoting their time and effort
own discretion and on the basis of documents and evidence submitted by on a matter so imbued with public interest as in this case. But we can do no
private respondents, could have issued an order granting provisional relief better than to brush aside their chief objections to the provisional toll rate
immediately upon filing by private respondents of their respective applications. adjustments, for a different approach would lead this Court astray into the field
In this respect, the Court considers the evidence presented by private of factual conflict where its pronouncements would not rest on solid grounds.
respondents in support of their applications -–.i.e., evidence showing that Time and again, we have impressed that this Court is not a trier of facts, more
importation costs of petroleum products had gone up; that the peso had so, in the consideration of an extraordinary remedy of prohibition where only
depreciated in value; and that the Oil Price Stabilization Fund (OPSF) had questions of lack or excess of jurisdiction or grave abuse of discretion is to be
been depleted – as substantial and hence constitutive of at least prima facie entertained.
basis for issuance by the Board of a provisional relief order granting an
increase in the prices of petroleum products.
And to accord the main petition for mandamus in G.R. No. 141949 the full
deliberation it deserves, we deem it appropriate to discuss its merit on another
Anent petitioner Padua’s contention that CITRA has no standing to apply for a occasion. Anyway, G.R. No. 141949 was consolidated with G.R. No. 151108
toll fee increase, suffice it to say that CITRA’s right stems from the STOA only by reason of petitioner Padua’s deviant motion assailing Resolution 2001-
which was entered into by no less than the Republic of the Philippines and by 89. As we have previously said, the main petition in G.R. No. 141949 presents
the PNCC. Section 7.04 of the STOA provides that the Investor, CITRA, and/or an entirely different issue and is set on a different factual landscape.
the Operator, PNCC, shall be entitled to apply for and if warranted, to be
granted an interim adjustment of toll rates in case of force majeure and a
WHEREFORE, petitioner Padua’s "Urgent Motion for Temporary Restraining
significant currency valuation.[39] Now, unless set aside through proper action,
Order to Stop Arbitrary Toll Fee Increases" is DENIED and petitioner Zialcita’s
the STOA has the force and effect of law between the contracting parties, and
"Petition for Prohibition" is DISMISSED.
is entitled to recognition by this Court. [40] On the same breath, we cannot
sustain Padua’s contention that the term "Metro Manila Skyway" Project
excludes the at-grade portions of the South Luzon Expressway considering SO ORDERED.
that under the same STOA the "Metro Manila Skyway" includes: "(a) the South
G.R. No. 131255 May 20, 1998
HON. EDUARDO NONATO JOSON, in his capacity as the Governor of the obligation; that petitioner's act of barging in and intimidating private
Province of Nueva Ecija, petitioner, respondents was a serious insult to the integrity and independence of the
vs. Sangguniang Panlalawigan; and that the presence of his private army posed
EXECUTIVE SECRETARY RUBEN D. TORRES, the DEPARTMENT OF THE grave danger to private respondents' lives and safety. Private respondents
INTERIOR & LOCAL GOVERNMENTS, represented by SECRETARY prayed for the suspension or removal of petitioner; for an emergency audit of
ROBERT Z. BARBERS and UNDERSECRETARY MANUEL R. SANCHEZ, the provincial treasury of Nueva Ecija; and for the review of the proposed loan
MR. OSCAR C. TINIO, in his capacity as Provincial Vice-Governor of in light of the financial condition of the province, to wit:
Nueva Ecija, and MR. LORETO P. PANGILINAN, MR. CRISPULO S.
ESGUERRA, MS. SOLITA C. SANTOS, MR. VICENTE C. PALILIO, and MR. In this regard, we respectfully request for the following assistance from
NAPOLEON G. INTERIOR, in their capacity as Provincial Board Members your good office:
of Nueva Ecija, respondents.
1. To immediately suspend Governor N. [sic] Joson considering the
actual dangers that we are facing now, and provide adequate police
security detail for the Sangguniang Panlalawigan of Nueva Ecija.
PUNO, J.: Should the evidence warrant after investigation, to order his removal
from office.
The case at bar involves the validity of the suspension from office of petitioner
Eduardo Nonato Joson as Governor of the province of Nueva Ecija. Private 2. To conduct an emergency audit of the provincial treasury of Nueva
respondent Oscar C. Tinio is the Vice-Governor of said province while private Ecija by the auditors from the Commission on Audit Central Office with
respondents Loreto P. Pangilinan, Crispulo S. Esguerra, Solita C. Santos, adequate police security assistance. Should the evidence so warrant,
Vicente C. Palilio and Napoleon Interior are members of the Sangguniang to file necessary charges against responsible and accountable officers.
Panlalawigan.
3. To advise the Philippine National Bank to review the capability of the
On September 17, 1996, private respondents filed with the Office of the province of Nueva Ecija to secure more loans and the feasibility of the
President a letter-complaint dated September 13, 1997 charging petitioner with same in the light of the present financial condition of the province. Or if
grave misconduct and abuse of authority. Private respondents alleged that in said loan will be contrary to sound banking practice, recommend its
the morning of September 12, 1996, they were at the session hall of the disapproval. 1
provincial capitol for a scheduled session of the Sangguniang Panlalawigan
when petitioner belligerently barged into the Hall; petitioner angrily kicked the The letter-complaint was submitted with the joint affidavit of Elnora Escombien
door and chairs in the Hall and uttered threatening words at them; close and Jacqueline Jane Perez, two (2) employees of the Sangguniang
behind petitioner were several men with long and short firearms who encircled Panlalawigan who witnessed the incident. The letter was endorsed by
the area. Private respondents claim that this incident was an offshoot of their Congressmen Eleuterio Violago and Pacifico Fajardo of the Second and Third
resistance to a pending legislative measure supported by petitioner that the Districts of Nueva Ecija, former Congressman Victorio Lorenzo of the Fourth
province of Nueva Ecija obtain a loan of P150 million from the Philippine District, and Mayor Placido Calma, President of the Mayors' League of said
National Bank; that petitioner's acts were intended to harass them into province. 2
approving this loan; that fortunately, no session of the Sangguniang
Panlalawigan was held that day for lack of quorum and the proposed The President acted on the complaint by writing on its margin the following:
legislative measure was not considered; that private respondents opposed the
loan because the province of Nueva Ecija had an unliquidated obligation of
17 Sep 96
more than P70 million incurred without prior authorization from the
Sangguniang Panlalawigan; that the provincial budget officer and treasurer
had earlier disclosed that the province could not afford to contract another To: SILG info Exec. Sec. and Sec. of Justice:
1. Noted. There appears no justification for the use of force, be reckoned, however, from November 13, 1996, i.e., the day petitioner received
intimidation or armed followers in the situation of 12 Sep at the Session the order to answer. 8
Hall. 2. Take appropriate preemptive and investigative actions. 3
BREAK NOT the PEACE. In a letter dated December 9, 1996, petitioner moved for another extension of
thirty (30) days to file his answer. He stated that he had already sent letters to
FIDEL V. RAMOS various law firms in Metro Manila but that he had not yet contracted their
services; that the advent of the Christmas season kept him busy with
(Signed). 3 "numerous and inevitable official engagements." 9 The DILG granted the request
for extension "for the last time up to January 13 only." 10
President Ramos noted that the situation of "12 Sep at the Session Hall," i.e.,
the refusal of the members of the Sangguniang Panlalawigan to approve the On January 7, 1997, petitioner requested for another extension of thirty (30)
proposed loan, did not appear to justify "the use of force, intimidation or armed days to file his answer. According to him, the Christmas season kept him very
followers." He thus instructed the then Secretary of the Interior and Local busy and preoccupied with his numerous official engagements; that the law
Governments (SILG) Robert Barbers to "[t]ake appropriate preemptive and firms he invited to handle his case have favorably replied but that he needed
investigative actions," but to "[b]reak not the peace." time to confer with them personally; and that during this period, he, with the
help of his friends, was exploring the possibility of an amicable settlement of
the case. 11 The DILG granted petitioner's request "for the last time" but gave him
The letter-complaint together with the President's marginal notes were sent to
an extension of only ten (10) days from January 13, 1997 to January 23, 1997. The
Secretary Robert Z. Barbers on September 20, 1996. Acting upon the
DILG also informed him that his "failure to submit answer will be considered a
instructions of the President, Secretary Barbers notified petitioner of the case waiver and that the plaintiff [shall] be allowed to present his evidence ex parte." 12
against him 4 and attached to the notice a copy of the complaint and its annexes.
In the same notice, Secretary Barbers directed petitioner "to submit [his]
verified/sworn answer thereto, not a motion to dismiss, together with such Petitioner moved for reconsideration of the order. He reiterated his prayer for
documentary evidence that [he] has in support thereof, within fifteen (15) days an extension of thirty (30) days on the following grounds: (a) that he was still in
from receipt. 5 the process of choosing competent and experienced counsel; (b) that some
law firms refused to accept his case because it was perceived to be politically
Immediately thereafter, Secretary Barbers proceeded to Nueva Ecija and motivated; and (c) the multifarious activities, appointments and official
summoned petitioner and private respondents to a conference to settle the functions of his office hindered his efforts to secure counsel of
controversy. The parties entered into an agreement whereby petitioner choice. 13
promised to maintain peace and order in the province while private
respondents promised to refrain from filing cases that would adversely affect Three months later, on April 22, 1997, Undersecretary Manuel Sanchez, then
their peaceful co-existence. 6 Acting Secretary of the DILG, issued an order declaring petitioner in default
and to have waived his right to present evidence. Private respondents were
The peace agreement was not respected by the parties and the private ordered to present their evidence ex-parte. The order reads as follows:
respondents reiterated their letter-complaint. Petitioner was again ordered to
file his answer to the letter-complaint within fifteen days from receipt. Petitioner ORDER
received a copy of this order on November 13, 1996. On the same day,
petitioner requested for an extension of thirty (30) days to submit his answer It appearing that respondent failed to submit his answer to the
because he was "trying to secure the services of legal counsel experienced in complaint despite the grant to him of three (3) extensions, such
administrative law practice. 7 The Department of the Interior and Local unreasonable failure is deemed a waiver of his right to present
Government (DILG), acting through Director Almario de los Santos, Officer-In- evidence in his behalf pursuant to Section 4, Rule 4 of Administrative
Charge of the Legal Service, granted the motion, with the thirty-day extension to Order No. 23 dated December 17, 1992, as amended.
Respondent is hereby declared in default, meanwhile, complainants Secretary Barbers directed the Philippine National Police to assist in the
are directed to present their evidence ex-parte. However, considering implementation of the order of preventive suspension. In petitioner's stead,
the prohibition on the conduct of administrative investigation due to the Secretary Barbers designated Vice-Governor Oscar Tinio as Acting Governor
forthcoming barangay elections, complainants will be notified on the until such time as petitioner's temporary legal incapacity shall have ceased to
date after the barangay election for them to present their evidence. exist. 18
SO ORDERED. 14 Forthwith, petitioner filed a petition for certiorari and prohibition with the Court
of Appeals challenging the order of preventive suspension and the order of
Two days later, on April 24, 1997, the law firm of Padilla, Jimenez, Kintanar & default. 19
Asuncion, representing petitioner, filed with the DILG an "Entry of Appearance
with Motion for Time to File Answer Ad Cautelam." Meanwhile, the proceedings before the DILG continued. On August 20, 1997,
Undersecretary Sanchez issued an order denying petitioner's "Motion to
Petitioner received a copy of the order of default on May 2, 1997. Through Dismiss" and " Urgent Ex-Parte Motion for Reconsideration." In the same
counsel, he moved for reconsideration. On May 19, 1997, Undersecretary order, he required the parties to submit their position papers within an
Sanchez reconsidered the order of default in the interest of justice. He noted inextendible period of ten days from receipt after which the case shall be
the appearance of petitioner's counsel and gave petitioner "for the last time" deemed submitted for resolution, to wit:
fifteen (15) days from receipt to file his answer. 15
WHEREFORE, for lack of merit, both motions are denied. However, for
On June 23, 1997, Undersecretary Sanchez issued an order stating that this office to have a better appreciation of the issues raised in the
petitioner's counsel, whose office is in Manila, should have received a copy of instant case, the parties, through their respective counsels are hereby
the May 19, 1997 order ten days after mailing on May 27, 1997. Since directed to submit their position papers within a period of ten (10) days
petitioner still failed to file his answer, he was deemed to have waived his right from receipt hereof, which period is inextendible, after which the case
to present evidence in his behalf. Undersecretary Sanchez reinstated the order is deemed submitted for resolution. 20
of default and directed private respondents to present their evidence ex-
parte on July 15, 1997. 16 On August 27, 1997, petitioner filed with the DILG a "Motion to Lift Order of
Preventive Suspension." On September 10, 1997, petitioner followed this with
The following day, June 24, 1997, petitioner, through counsel, filed a "Motion a "Motion to Lift Default Order and Admit Answer Ad Cautelam." 21 Attached to
to Dismiss." Petitioner alleged that the letter-complaint was not verified on the the motion was the "Answer Ad Cautelam". 22 and sworn statements of his
day it was filed with the Office of the President; and that the DILG had no witnesses. On the other hand, complainants (private respondents herein)
jurisdiction over the case and no authority to require him, to answer the manifested that they were submitting the case for decision based on the records,
complaint. the complaint and affidavits of their witnesses. 23
On July 4, 1997, petitioner filed an "Urgent Ex-Parte Motion for In his Answer Ad Cautelam, petitioner alleged that in the morning of
Reconsideration" of the order of June 23, 1997 reinstating the order of default. September 12, 1996, while he was at his district office in the town of Munoz,
Petitioner also prayed that the hearing on the merits of the case be held in he received a phone call from Sangguniang Panlalawigan member Jose del
abeyance until after the "Motion to Dismiss" shall have been resolved. Mundo. Del Mundo, who belonged to petitioner's political party, informed him
that Vice-Governor Tinio was enraged at the members of the Sangguniang
Panlalawigan who were in petitioner's party because they refused to place on
On July 11, 1997, on recommendation of Secretary Barbers, Executive
the agenda the ratification of the proposed P150 million loan of the province.
Secretary Ruben Torres issued an order, by authority of the President, placing
Petitioner repaired to the provincial capitol to advise his party-mates on their
petitioner under preventive suspension for sixty (60) days pending
problem and at the same time attend to his official functions. Upon arrival, he
investigation of the charges against him. 17
went to the Session Hall and asked the members present where Vice-
Governor Tinio was. However, without waiting for their reply, he left the Hall A few days after filing the petition before this Court, petitioner filed a "Motion
and proceeded to his office. for Leave to File Herein Incorporated Urgent Motion for the Issuance of a
Temporary Restraining Order and/or a Writ of Preliminary Injunction."
Petitioner claimed that there was nothing in his conduct that threatened the Petitioner alleged that subsequent to the institution of this petition, the
members of the Sangguniang Panlalawigan or caused alarm to the Secretary of the Interior and Local Governments rendered a resolution on the
employees. He said that like Vice-Governor Tinio, he was always case finding him guilty of the offenses charged. 29 His finding was based on the
accompanied by his official security escorts whenever he reported for work. He position papers and affidavits of witnesses submitted by the parties. The DILG
also alleged that the joint affidavit of Elnora Escombien and Jacqueline Jane Secretary found the affidavits of complainants' witnesses to be "more natural,
Perez was false. Escombien was purportedly not inside the session hall during reasonable and probable" than those of herein petitioner Joson's. 30
the incident but was at her desk at the office and could not in any way have
seen petitioner in the hall. To attest to the truth of his allegations, petitioner On January 8, 1998, the Executive Secretary, by authority of the President,
submitted three (3) joint affidavits — two (2) affidavits executed by six (6) and adopted the findings and recommendation of the DILG Secretary. He imposed
ten (10) employees, respectively, of the provincial government, and a third by on petitioner the penalty of suspension from office for six (6) months without
four members of the Sangguniang Panlalawigan. 24 pay, to wit:
On September 11, 1997, petitioner filed an "Urgent Motion for WHEREFORE, as recommended by the Secretary of the Interior and
Reconsideration" of the order of August 20, 1997 denying his motion to Local Government, respondent Nueva Ecija Governor Eduardo Nonato
dismiss. The "Urgent Motion for Reconsideration" was rejected by Joson is hereby found guilty of the offenses charged and is meted the
Undersecretary Sanchez on October 8, 1997. Undesecretary Sanchez, penalty of suspension from office for a period of six (6) months without
however, granted the "Motion to Lift Default Order and to Admit Answer Ad pay. 31
Cautelam" and admitted the "Answer Ad Cautelam" as petitioner's position
paper pursuant to the order of August 20, 1997. 25 On January 14, 1998, we issued a temporary restraining order enjoining the
implementation of the order of the Executive Secretary.
On October 15, 1997, petitioner filed a "Motion to Conduct Formal
Investigation." Petitioner prayed that a formal investigation of his case be On January 19, 1998, private respondents submitted a Manifestation informing
conducted pursuant to the provisions of the Local Government Code of 1991 this Court that the suspension of petitioner was implemented on January 9,
and Rule 7 of Administrative Order No. 23; and that this be held at the 1998; that on the same day, private respondent Oscar Tinio was installed as
province of Nueva Ecija. 26 On October 29, 1997, petitioner submitted a Acting Governor of the province; and that in view of these events, the
"Manifestation and Motion" before the DILG reiterating his right to a formal temporary restraining order had lost its purpose and effectivity and was
investigation. fait accompli. 32 We noted this Manifestation.
In the meantime, on October 24, 1997, the Court of Appeals dismissed In his petition, petitioner alleges that:
petitioner's petition. 27
I THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
Hence this recourse. RULES OF PROCEDURE AND EVIDENCE SHOULD NOT BE
STRICTLY APPLIED IN THE ADMINISTRATIVE DISCIPLINARY AND
The proceedings before the DILG continued however. In an order dated CLEARLY PUNITIVE PROCEEDINGS IN THE CASE AGAINST
November 11, 1997, the DILG denied petitioner's "Motion to Conduct Formal PETITIONER GOVERNOR EDNO JOSON;
Investigation" declaring that the submission of position papers substantially
complies with the requirements of procedural due process in administrative II THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE
proceedings. 28 ALTER-EGO PRINCIPLE BECAUSE, CONTRARY TO LAW, IT WAS
THE SECRETARY OF THE DILG WHO WAS EXERCISING THE
POWERS OF THE PRESIDENT WHICH ARE CLEARLY VESTED BY Municipalities in Metropolitan Manila." 35 In all matters not provided in A.O. No.
LAW ONLY UPON HIM OR THE EXECUTIVE SECRETARY. 23, the Rules of Court and the Administrative Code of 1987 apply in a suppletory
character. 36
III THE COURT OF APPEALS ERRED IN RULING THAT THE
PETITIONER WAS PROPERLY DECLARED IN DEFAULT WHEN HE I
FILED A MOTION TO DISMISS INSTEAD OF AN ANSWER, AS
DIRECTED BY THE DILG, BECAUSE A MOTION TO DISMISS Section 60 of Chapter 4, Title II, Book I of the Local Government Code
BASED ON JURISDICTIONAL GROUNDS IS NOT A PROHIBITIVE enumerates the grounds for which an elective local official may be disciplined,
[sic] PLEADING IN ADMINISTRATIVE DISCIPLINARY CASES. suspended or removed from office. Section 60 reads:
IV THE COURT OF APPEALS ERRED IN RULING THAT THE Sec. 60. Grounds for Disciplinary Actions. — An elective local official
IMPOSITION OF PREVENTIVE SUSPENSION AGAINST THE may be disciplined, suspended, or removed from office on any of the
PETITIONER WAS PROPER BECAUSE THERE WAS NO JOINDER following grounds:
OF ISSUES YET UPON ITS IMPOSITION AND THERE WAS NO
EVIDENCE OF GUILT AGAINST PETITIONER. 33 (a) Disloyalty to the Republic of the Philippines;
In his "Motion for Leave to File Herein Incorporated Urgent Motion for the (b) Culpable violation of the Constitution;
Issuance of a Temporary Restraining Order and/or a Writ of Preliminary
Injunction," petitioner also claims that: (c) Dishonesty, oppression, misconduct in office, gross negligence, or
dereliction of duty;
I THE RESOLUTION OF JANUARY 8, 1998 AND THE MEMORANDA
ISSUED PURSUANT THERETO (i.e., ANNEXES "C," "D," "E," "F," (d) Commission of any offense involving moral turpitude or an offense
AND "G" HEREOF) WERE ISSUED WITH UNDUE HASTE, IN punishable by at least prision mayor;
VIOLATION OF THE PERTINENT PROVISIONS OF THE 1991
LOCAL GOVERNMENT CODE AND ADMINISTRATIVE ORDER NO.
(e) Abuse of authority;
23, AND IN COMPLETE DISREGARD OF PETITIONER'S
CONSTITUTIONAL RIGHT TO DUE PROCESS.
(f) Unauthorized absence for fifteen (15) consecutive working days,
except in the case of members of the sangguniang panlalawigan,
II THE IMPLEMENTATION OF THE INVALID RESOLUTION OF
sangguniang panlunsod, sangguniang bayan, and sangguniang
JANUARY 8, 1998 (ANNEX "C" HEREOF) BY THE PUBLIC
barangay;
RESPONDENTS ENTITLES PETITIONER TO THE IMMEDIATE
ISSUANCE OF THE TEMPORARY RESTRAINING ORDER/WRIT OF
PRELIMINARY INJUNCTION HEREIN PRAYED FOR. 34 (g) Application for, or acquisition of, foreign citizenship or residence or
the status of an immigrant of another country; and
We find merit in the petition.
(h) Such other grounds as may be provided in this Code and other
laws.
Administrative disciplinary proceedings against elective local officials are
governed by the Local Government Code of 1991, the Rules and Regulations
Implementing the Local Government Code of 1991, and Administrative Order An elective local official may be removed from office on the grounds
No. 23 entitled "Prescribing the Rules and Procedures on the Investigation of enumerated above by order of the proper court.
Administrative Disciplinary Cases Against Elective Local Officials of Provinces,
Highly Urbanized Cities, Independent Component Cities, and Cities and
When an elective local official commits an act that falls under the grounds for We find no merit in the contention of the petitioner. The absence of the
disciplinary action, the administrative complaint against him must be verified document, page or book number of the notarial register of the subscribing
and filed with any of the following: officer is insufficient to prove petitioner's claim. The lack of these entries may
constitute proof of neglect on the part of the subscribing officer in complying
Sec. 61. Form and Filing of Administrative Complaints. — A verified with the requirements for notarization and proper verification. They may give
complaint against any erring local elective official shall be prepared as grounds for the revocation of his notarial commission. 40 But they do not
follows: indubitably prove that the verification was inserted or intercalated after the letter-
complaint was filed with the Office of the President.
(a) A complaint against any elective official of a province, a highly
urbanized city, an independent component city or component city shall Nor is the fact of intercalation sufficiently established by the affidavit of Solita
be filed before the Office of the President. C. Santos. Private respondent Santos was one of the signatories to the letter-
complaint. In her affidavit, she prayed that she be dropped as one of the
(b) A complaint against any elective official of a municipality shall be complainants since she had just joined the political party of petitioner Joson.
filed before the sangguniang panlalawigan whose decision may be She decided to reveal the intercalation because she was disillusioned with the
appealed to the Office of the President; and "dirty tactics" of Vice-Governor Tinio to grab power from petitioner
Joson. 41 Private respondent Santos cannot in anyway be considered an unbiased
witness. Her motive and change of heart render her affidavit suspect.
(c) A complaint against any elective barangay official shall be filed
before the sangguniang panlungsod or sangguniang bayan concerned
Assuming, nonetheless, that the letter-complaint was unverified when
whose decision shall be final and executory. 37
submitted to the Office of the President, the defect was not fatal. The
requirement of verification was deemed waived by the President himself when
An administrative complaint against an erring elective official must be verified he acted on the complaint.
and filed with the proper government office. A complaint against an elective
provincial or city official must be filed with the Office of the President. A
Verification is a formal, not jurisdictional requisite. 42 Verification is mainly
complaint against an elective municipal official must be filed with the
intended to secure an assurance that the allegations therein made are done in
Sangguniang Panlalawigan while that of a barangay official must be filed
good faith or are true and correct and not mere speculation. 43 The lack of
before the Sangguniang Panlungsod or Sangguniang Bayan. verification is a mere formal defect. 44 The court may order the correction of the
pleading, if not verified, or act on the unverified pleading if the attending
In the instant case, petitioner Joson is an elective official of the province of circumstances are such that a strict compliance with the rule may be dispensed
Nueva Ecija. The letter-complaint against him was therefore properly filed with with in order that the ends of justice may be served. 45
the Office of the President. According to petitioner, however, the letter-
complaint failed to conform with the formal requirements set by the Code. He II
alleges that the complaint was not verified by private respondents and was not
supported by the joint affidavit of the two witnesses named therein; that private In his second assigned error, petitioner questions the jurisdiction and authority
respondents later realized these defects and surreptitiously inserted the of the DILG Secretary over the case. He contends that under the law, it is the
verification and sworn statement while the complaint was still pending with the Office of the President that has jurisdiction over the letter-complaint and that
Office of the President. 38 To prove his allegations, petitioner submitted: (a) the the Court of Appeals erred in applying the alter-ego principle because the
sworn statement of private respondent Solita C. Santos attesting to the alleged fact
power to discipline elective local officials lies with the President, not with the
that after the letter-complaint was filed, Vice-Governor Tinio made her and the
DILG Secretary.
other members of the Sangguniang Panlalawigan sign an additional page which he
had later notarized; and (b) the fact that the verification of the letter-complaint and
the joint affidavit of the witnesses do not indicate the document, page or book
number of the notarial register of the notary public before whom they were made. 39
Jurisdiction over administrative disciplinary actions against elective local of general supervision means no more than the power of ensuring that laws are
officials is lodged in two authorities: the Disciplining Authority and the faithfully executed, or that subordinate officers act within the law. 50Supervision is
Investigating Authority. This is explicit from A.O. No. 23, to wit: not incompatible with discipline. 51 And the power to discipline and ensure that the
laws be faithfully executed must be construed to authorize the President to order
Sec. 2. Disciplining Authority. All administrative complaints, duly an investigation of the act or conduct of local officials when in his opinion the good
of the public service so requires. 52 Thus:
verified, against elective local officials mentioned in the preceding
Section shall be acted upon by the President. The President, who may
act through the Executive Secretary, shall hereinafter be referred to as Independently of any statutory provision authorizing the President to
the Disciplining Authority. conduct an investigation of the nature involved in this proceeding, and
in view of the nature and character of the executive authority with
which the President of the Philippines is invested, the constitutional
Sec. 3. Investigating Authority. The Secretary of the Interior and Local
grant to him of power to exercise general supervision over all local
Government is hereby designated as the Investigating Authority. He
governments and to take care that the laws be faithfully executed must
may constitute an Investigating Committee in the Department of the
be construed to authorize him to order an investigation of the act or
Interior and Local Government for the purpose.
conduct of the petitioner herein. Supervision is not a meaningless
thing. It is an active power. It is certainly not withou t limitation, but it at
The Disciplining Authority may, however, in the interest of the service, least implies authority to inquire into facts and conditions in order to
constitute a Special Investigating Committee in lieu of the Secretary of render the power real and effective. If supervision is to be
the Interior and Local Government. 46 conscientious and rational, and not automatic and brutal, it must be
founded upon a knowledge of actual facts and conditions disclosed
Pursuant to these provisions, the Disciplining Authority is the President of the after careful study and investigation. 53
Philippines, whether acting by himself or through the Executive Secretary. The
Secretary of the Interior and Local Government is the Investigating Authority, The power to discipline evidently includes the power to investigate. As the
who may act by himself or constitute an Investigating Committee. The Disciplining Authority, the President has the power derived from the
Secretary of the DILG, however, is not the exclusive Investigating Authority. In Constitution itself to investigate complaints against local government officials.
lieu of the DILG Secretary, the Disciplinary Authority may designate a Special A.O. No. 23, however, delegates the power to investigate to the DILG or a
Investigating Committee. Special Investigating Committee, as may be constituted by the Disciplining
Authority. This is not undue delegation, contrary to petitioner Joson's claim.
The power of the President over administrative disciplinary cases against The President remains the Disciplining Authority. What is delegated is the
elective local officials is derived from his power of general supervision over power to investigate, not the power to discipline. 54
local governments. Section 4, Article X of the 1987 Constitution provides:
Moreover, the power of the DILG to investigate administrative complaints is
Sec. 4. The President of the Philippines shall exercise general based on the alter-ego principle or the doctrine of qualified political agency.
supervision over local governments. Provinces with respect to Thus:
component cities and municipalities, and cities and municipalities with
respect to component barangays shall ensure that the acts of their Under this doctrine, which recognizes the establishment of a single
component units are within the scope of their prescribed powers and executive, all executive and administrative organizations are adjuncts
functions. 47 of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief Executive, and,
The power of supervision means "overseeing or the authority of an officer to except in cases where the Chief Executive is required by the
see that the subordinate officers perform their duties." 48 If the subordinate Constitution or law to act in person or the exigencies of the situation
officers fail or neglect to fulfill their duties, the official may take such action or step demand that he act personally, the multifarious executive and
as prescribed by law to make them perform their duties. 49 The President's power
administrative functions of the Chief Executive are performed by and the Investigating Authority who shall commence the investigation of the
through the executive departments, and the acts of the Secretaries of case within ten (10) days from receipt of the same.
such departments, performed and promulgated in the regular course of
business, are, unless disapproved or reprobated by the Chief xxx xxx xxx
Executive presumptively the acts of the Chief Executive. 55
Sec. 3. Evaluation. Within twenty (20) days from receipt of the
This doctrine is corollary to the control power of the President. 56 The power of complaint and answer, the Investigating Authority shall determine
control is provided in the Constitution, thus: whether there is a prima facie case to warrant the institution of formal
administrative proceedings.
Sec. 17. The President shall have control of all the executive
departments, bureaus, and offices. He shall ensure that the laws be When an administrative complaint is therefore filed, the Disciplining Authority
faithfully executed. 57 shall issue an order requiring the respondent to submit his verified answer
within fifteen (15) days from notice. Upon filing of the answer, the Disciplining
Control is said to be the very heart of the power of the presidency. 58 As head of Authority shall refer the case to the Investigating Authority for investigation.
the Executive Department, the President, however, may delegate some of his
powers to the Cabinet members except when he is required by the Constitution to In the case at bar, petitioner claims that the DILG Secretary usurped the power
act in person or the exigencies of the situation demand that he acts of the President when he required petitioner to answer the complaint.
personally. 59 The members of Cabinet may act for and in behalf of the President in Undisputably, the letter-complaint was filed with the Office of the President but
certain matters because the President cannot be expected to exercise his control
it was the DILG Secretary who ordered petitioner to answer.
(and supervisory) powers personally all the time. Each head of a department is,
and must be, the President's alter ego in the matters of that department where the
President is required by law to exercise authority. 60 Strictly applying the rules, the Office of the President did not comply with the
provisions of A.O. No. 23. The Office should have first required petitioner to file
The procedure how the Disciplining and Investigating Authorities should his answer. Thereafter, the complaint and the answer should have been
exercise their powers is distinctly set forth in the Local Government Code and referred to the Investigating Authority for further proceedings. Be that as it
A.O. No. 23. Section 62 of the Code provides: may, this procedural lapse is not fatal. The filing of the answer is necessary
merely to enable the President to make a preliminary assessment of the
case. 62 The President found the complaint sufficient in form and substance to
Sec. 62. Notice of Hearing. — (a) Within seven (7) days after the warrant its further investigation. The judgment of the President on the matter is
administrative complaint is filed, the Office of the President or the entitled to respect in the absence of grave abuse of discretion.
sanggunian concerned, as the case may be, shall require the
respondent to submit his verified answer within fifteen (15) days from
III
receipt thereof, and commence investigation of the case within ten (10)
days after receipt of such answer of the respondent.
In his third assigned error, petitioner also claims that the DILG erred in
declaring him in default for filing a motion to dismiss. He alleges that a motion
xxx xxx xxx
to dismiss is not a pleading prohibited by the law or the rules and therefore the
DILG Secretary should have considered it and given him time to file his
Sections 1 and 3, Rule 5 61 of A.O. No. 23 provide: answer.
Sec. 1. Commencement. Within forty-eight (48) hours from receipt of It is true that a motion to dismiss is not a pleading prohibited under the Local
the answer, the Disciplining Authority shall refer the complaint and Government Code of 1991 nor in A.O. No. 23. Petitioner, however, was
answer, together with their attachments and other relevant papers, to instructed not to file a motion to dismiss in the order to file answer. Thrice, he
requested for extension of time to file his answer citing as reasons the search
for competent counsel and the demands of his official duties. And, thrice, his within a single year on the same ground or grounds existing and known
requests were granted. Even the order of default was reconsidered and at the time of the first suspension.
petitioners was given additional time to file answer. After al the requests and
seven months later, he filed a motion to dismiss! xxx xxx xxx
Petitioner should know that the formal investigation of the case is required by In sum, preventive suspension may be imposed by the Disciplining Authority at
law to be finished within one hundred twenty (120) days from the time of formal any time (a) after the issues are joined; (b) when the evidence of guilt is
notice to the respondent. The extensions petitioners requested consumed fifty- strong; and (c) given the gravity of the offense, there is great probability that
five (55) days of this period. 63 Petitioner, in fact, filed his answer nine (9) months the respondent, who continues to hold office, could influence the witnesses or
after the first notice. Indeed, this was more than sufficient time for petitioner to pose a threat to the safety and integrity of the records and other evidence.
comply with the order to file answer.
Executive Secretary Torres, on behalf of the President, imposed preventive
The speedy disposition of administrative complaints is required by public suspension on petitioner Joson after finding that:
service. The efficiency of officials under investigation is impaired when a case
hangs over their heads. Officials deserve to be cleared expeditiously if they are xxx xxx xxx
innocent, also expeditiously if guilty, so that the business of government will
not be prejudiced. 64
DILG Secretary Robert Z. Barbers, in a memorandum for the
President, dated 23 June 1997, recommends that respondent be
IV placed under preventive suspension considering that all the requisites
to justify the same are present. He stated therein that:
In view of petitioner's inexcusable failure to file answer, the DILG did not err in
recommending to the Disciplining Authority his preventive suspension during "Preventive suspension may be imposed at any time
the investigation. Preventive suspension is authorized under Section 63 of the after the issues are joined, that is, after respondent has
Local Government Code, viz: answered the complaint, when the evidence of guilt is
strong and, given the gravity of the offense, there is a
Sec. 63. Preventive Suspension. — (a) Preventive suspension may be great possibility that the continuance in office of the
imposed: respondent could influence the witnesses or pose a
threat to the safety and integrity of the records and
(1) By the President, if the respondent is an elective official of a other evidence (Sec. 3, Rule 6 of Administrative Order
province, a highly urbanized or an independent component city; No. 23).
xxx xxx xxx The failure of respondent to file his answer despite
several opportunities given him is construed as a
(b) Preventive suspension may be imposed at any time after the issues waiver of his right to present evidence in his behalf
are joined, when the evidence of guilt is strong, and given the gravity of (Sec. 4, Rule 4 of Administrative Order No. 23). The
the offense, there is great probability that the continuance in office of requisite of joinder of issues is squarely met with
the respondent could influence the witnesses or pose a threat to the respondent's waiver of right to submit his answer. The
safety and integrity of the records and other evidence; Provided, That, act of respondent in allegedly barging violently into the
any single preventive suspension of local elective officials shall not session hall of the Sangguniang Panlalawigan in the
extend beyond sixty (60) days: Provided, further, That in the event that company of armed men constitutes grave misconduct.
several administrative cases are filed against an elective official, he The allegations of complainants are bolstered by the
cannot be preventively suspended for more than ninety (90) days joint-affidavit of two (2) employees of the Sangguniang
Panlalawigan. Respondent who is the chief executive On November 19, 1997, complainants, through counsel, filed a
of the province is in a position to influence the Manifestation calling our attention to the Decision dated October 24,
witnesses. Further, the history of violent confrontational 1997 of the Court of Appeals, Fifth Division in CA-G.R. SP No. 44694,
politics in the province dictates that extreme entitled "Eduardo Nonato Joson versus Executive Secretary Ruben D.
precautionary measures be taken." Torres, et. al." In the aforestated decision, the Court of Appeals
resolved to sustain the authority of this Department to investigate this
Upon scrutiny of the records and the facts and circumstances administrative case and has likewise validated the order of default as
attendant to this case, we concur with the findings of the Secretary of well as the order of preventive suspension of the respondent.
the Interior and Local Government and find merit in the aforesaid
recommendation. We offer no objection and concur with the assertion of respondent that
he has the right for the conduct of formal investigation. However,
WHEREFORE, and as recommended by the Department of the Interior before there shall be a formal investigation, joinder of issues must
and Local Government, respondent EDUARDO N. JOSON, Governor already be present or respondent's answer has already been filed. In
of Nueva Ecija, is hereby placed under PREVENTIVE SUSPENSION the case at bar, the admission of respondent's answer after having
FOR A PERIOD OF SIXTY (60) DAYS, effective 11 July 1997, pending been declared in default was conditioned on the fact of submission of
investigation of the charges filed against him. position papers by the parties, after which, the case shall be deemed
submitted for resolution. Respondent, instead of submitting his position
SO ORDERED. 65 paper filed his subject motion while complainants manifested to forego
the submission of position paper and submit the case for resolution on
the basis of the pleadings on hand.
Executive Secretary Torres found that all the requisites for the imposition of
preventive suspension had been complied with. Petitioner's failure to file his
answer despite several opportunities given him was construed as a waiver of Settled is the rule that in administrative proceedings, technical rules of
his right to file answer and present evidence; and as a result of this waiver, the procedure and evidence are not strictly applied (Concerned Officials of
issues were deemed to have been joined. The Executive Secretary also found the Metropolitan Waterworks and Sewerage System v. Vasquez, 240
that the evidence of petitioner Joson's guilt was strong and that his SCRA 502). The essence of due process is to be found in the
continuance in office during the pendency of the case could influence the reasonable opportunity to be heard and to submit evidence one may
witnesses and pose a threat to the safety and integrity of the evidence against have in support of one's defense (Tajonera v. Lamaroza, 110 SCRA
him. 438). To be heard does not only mean verbal arguments in court; one
may be heard also through pleadings. Where opportunity to be heard,
either through oral arguments or pleadings, is accorded, there is no
V
denial of procedural due process (Juanita Y. Say, et. al; vs. IAC, G.R.
No. 73451). Thus, when respondent failed to submit his position paper
We now come to the validity of the January 8, 1998 Resolution of the as directed and insisted for the conduct of formal investigation, he was
Executive Secretary finding petitioner guilty as charged and imposing on him not denied of his right of procedural process.
the penalty of suspension from office for six (6) months from office without pay.
WHEREFORE, the Motion for the Conduct of Formal Investigation, for
Petitioner claims that the suspension was made without formal investigation lack of merit, is DENIED.
pursuant to the provisions of Rule 7 of A.O. No. 23. Petitioner filed a "Motion
To Conduct Formal Investigation" three months before the issuance of the
SO ORDERED. 66
order of suspension and this motion was denied by the DILG for the following
reasons:
The denial of petitioner's Motion to Conduct Formal Investigation is erroneous. issues for hearing to those not disposed of by agreement or admission
Petitioner's right to a formal investigation is spelled out in the following of the parties, and shall schedule the formal investigation within ten
provisions of A.O. No. 23, viz: (10) days from its issuance, unless a later date is mutually agreed in
writing by the parties concerned. 67
Sec. 3 Evaluation. Within twenty (20) days from receipt of the
complaint and answer, the Investigating Authority shall determine The records show that on August 27, 1997, petitioner submitted his Answer Ad
whether there is a prima facie case to warrant the institution of formal Cautelam where he disputed the truth of the allegations that he barged into the
administrative proceedings. session hall of the capitol and committed physical violence to harass the
private respondents who were opposed to any move for the province to
Sec. 4. Dismissal motu proprio. If the Investigating Authority contract a P150 million loan from PNB. In his Order of October 8, 1997,
determines that there is no prima facie case to warrant the institution of Undersecretary Sanchez admitted petitioner's Answer Ad Cautelam but treated
formal administrative proceedings, it shall, within the same period it as a position paper. On October 15, 1997, petitioner filed a Motion to
prescribed under the preceding Section, submit its recommendation to Conduct Formal Investigation. Petitioner reiterated this motion on October 29,
the Disciplining Authority for the motu proprio dismissal of the case, 1997. Petitioner's motion was denied on November 11, 1997. Secretary
together with the recommended decision, resolution, and order. Barbers found petitioner guilty as charged on the basis of the parties' position
papers. On January 8, 1998, Executive Secretary Torres adopted Secretary
Sec. 5. Preliminary conference. If the Investigating Authority Barbers' findings and recommendations and imposed on petitioner the penalty
determines that there is prima facie case to warrant the institution of of six (6) months suspension without pay.
formal administrative proceedings, it shall, within the same period
prescribed under the preceding Section, summon the parties to a The rejection of petitioner's right to a formal investigation denied him
preliminary conference to consider the following: procedural due process. Section 5 of A.O. No. 23 provides that at the
preliminary conference, the Investigating Authority shall summon the parties to
a) whether the parties desire a formal investigation or consider whether they desire a formal investigation. This provision does not
are willing to submit the case for resolution on the basis give the Investigating Authority the discretion to determine whether a formal
of the evidence on record; and investigation would be conducted. The records show that petitioner filed a
motion for formal investigation. As respondent, he is accorded several rights
under the law, to wit:
b) If the parties desire a formal investigation, to
consider the simplification of issues, the possibility of
obtaining stipulation or admission of facts and of Sec. 65. Rights of Respondent. — The respondent shall be accorded
documents, specifically affidavits and depositions, to full opportunity to appear and defend himself in person or by counsel,
avoid unnecessary proof, the limitation of number of to confront and cross-examine the witnesses against him, and to
witnesses, and such other matters as may be aid the require the attendance of witnesses and the production of
prompt disposition of the case. documentary evidence in his favor through compulsory process
of subpoena or subpoena duces tecum.
The Investigating Authority shall encourage the parties and their
counsels to enter, at any stage of the proceedings, into amicable An erring elective local official has rights akin to the constitutional rights of an
settlement, compromise and arbitration, the terms and conditions of accused. 68 These rights are essentially part of procedural due process. 69 The
which shall be subject to the approval of the Disciplining Authority. local elective official has the (1) the right to appear and defend himself in person or
by counsel; (2) the right to confront and cross-examine the witnesses against him;
and (3) the right to compulsory attendance of witness and the production of
After the preliminary conference, the Investigating Authority shall issue documentary evidence. These rights are reiterated in the Rules Implementing the
an order reciting the matters taken up thereon, including the facts Local Government Code 70 and in A.O. No. 23. 71 Well to note, petitioner, formally
stipulated and the evidences marked, if any. Such order shall limit the
claimed his right to a formal investigation after his Answer Ad Cautelam has been to investigate and decide disciplinary actions against officers and employees under
admitted by Undersecretary Sanchez. their jurisdiction. 82 When a complaint is filed and the respondent answers, he must
"indicate whether or not he elects a formal investigation if his answer is not
Petitioner's right to a formal investigation was not satisfied when the complaint considered satisfactory." 83 If the officer or employee elects a formal investigation,
against him was decided on the basis of position papers. There is nothing in the direct evidence for the complainant and the respondent "consist[s] of the sworn
the Local Government Code and its Implementing Rules and Regulations nor statement and documents submitted in support of the complaint and answer, as
in A.O. No. 23 that provide that administrative cases against elective local the case may be, without prejudice to the presentation of additional evidence
deemed necessary . . ., upon which the cross-examination by respondent and the
officials can be decided on the basis of position papers. A.O. No. 23 states that
complainant, respectively, is based." 84 The investigation is conducted without
the Investigating Authority may require the parties to submit their respective
adhering to the technical rules applicable in judicial proceedings." 85Moreover, the
memoranda but this is only after formal investigation and hearing. 72 A.O. No. appointive official or employee may be removed or dismissed summarily if (1) the
23 does not authorize the Investigating Authority to dispense with a hearing charge is serious and the evidence of guilt is strong; (2) when the respondent is a
especially in cases involving allegations of fact which are not only in contrast but
recidivist; and (3) when the respondent is notoriously undesirable. 86
contradictory to each other. These contradictions are best settled by allowing the
examination and cross-examination of witnesses. Position papers are often-times
prepared with the assistance of lawyers and their artful preparation can make the The provisions for administrative disciplinary actions against elective local
discovery of truth difficult. The jurisprudence cited by the DILG in its order denying officials are markedly different from appointive officials. 87 The rules on the
petitioner's motion for a formal investigation applies to appointive officials and removal and suspension of elective local officials are more stringent. The
employees. Administrative disciplinary proceedings against elective government procedure of requiring position papers in lieu of a hearing in administrative cases is
officials are not exactly similar to those against appointive officials. In fact, the expressly allowed with respect to appointive officials but not to those elected. An
provisions that apply to elective local officials are separate and distinct from elective official, elected by popular vote, is directly responsible to the community
appointive government officers and employees. This can be gleaned from the that elected him. The official has a definite term of office fixed by law which is
Local Government Code itself. relatively of short duration. Suspension and removal from office definitely affects
and shortens this term of office. When an elective official is suspended or
removed, the people are deprived of the services of the man they had elected.
In the Local Government Code, the entire Title II of Book I of the Code is
Implicit in the right of suffrage is that the people are entitled to the services of the
devoted to elective officials. It provides for their qualifications and elective official of their choice. 88 Suspension and removal are thus imposed only
election, 73 vacancies and succession, 74 local legislation, 75 disciplinary after the elective official is accorded his rights and the evidence against him
actions, 76 and recall. 77 Appointive officers and employees are covered in Title III of strongly dictates their imposition.
Book I of the Code entitled "Human Resources and Development." All matters
pertinent to human resources and development in local government units are
regulated by "the civil service law and such rules and regulations and other IN VIEW WHEREOF, the Resolution of January 8, 1998 of the public
issuances promulgated thereto, unless otherwise provided in the Code." 78 The respondent Executive Secretary is declared null and void and is set aside. No
"investigation and adjudication of administrative complaints against appointive Cost.
local officials and employees as well as their suspension and removal" are "in
accordance with the civil service law and rules and other pertinent laws," the SO ORDERED.
results of which "shall be reported to the Civil Service Commission." 79
xxx xxx xxx But as well pointed out by petitioner and the Solicitor General, Section 17 must
be read together with Section 16 of the said Code which enumerates the
offices under the respondent Commission, viz:
5. The Board shall promulgate rules, standards and procedures
on the selection, classification, compensation and career
development of members of the Career Executive Service. The Sec. 16. Offices in the Commission. — The Commission shall
Board shall set up the organization and operation of the have the following offices:
service. (Emphasis supplied)
(1) The Office of the Executive Director headed by an
It cannot be disputed, therefore, that as the CESB was created by law, it can Executive Director, with a Deputy Executive Director shall
only be abolished by the legislature. This follows an unbroken stream of rulings implement policies, standards, rules and regulations
that the creation and abolition of public offices is primarily a legislative function. promulgated by the Commission; coordinate the programs of
As aptly summed up in AM JUR 2d on Public Officers and the offices of the Commission and render periodic reports on
Employees, 5 viz: their operations, and perform such other functions as may be
assigned by the Commission.
Except for such offices as are created by the Constitution, the
creation of public offices is primarily a legislative function. In so
(2) The Merit System Protection Board composed of a (9) The Office of Career Systems and Standards shall provide
Chairman and two (2) members shall have the following leadership and assistance in the formulation and evaluation of
functions: personnel systems and standards relative to performance
appraisal, merit promotion, and employee incentive benefit and
xxx xxx xxx awards.
(3) The Office of Legal Affairs shall provide the Chairman with (10) The Office of Human Resource Development shall provide
legal advice and assistance; render counselling services; leadership and assistance in the development and retention of
undertake legal studies and researches; prepare opinions and qualified and efficient work force in the Civil Service; formulate
ruling in the interpretation and application of the Civil Service standards for training and staff development; administer
law, rules and regulations; prosecute violations of such law, service-wide scholarship programs; develop training literature
rules and regulations; and represent the Commission before and materials; coordinate and integrate all training activities
any court or tribunal. and evaluate training programs.
(4) The Office of Planning and Management shall formulate (11) The Office of Personnel Inspection and Audit shall develop
development plans, programs and projects; undertake research policies, standards, rules and regulations for the effective
and studies on the different aspects of public personnel conduct or inspection and audit personnel and personnel
management; administer management improvement programs; management programs and the exercise of delegated
and provide fiscal and budgetary services. authority; provide technical and advisory services to Civil
Service Regional Offices and government agencies in the
(5) The Central Administrative Office shall provide the implementation of their personnel programs and evaluation
Commission with personnel, financial, logistics and other basic systems.
support services.
(12) The Office of Personnel Relations shall provide leadership
(6) The Office of Central Personnel Records shall formulate and assistance in the development and implementation of
and implement policies, standards, rules and regulations policies, standards, rules and regulations in the accreditation of
pertaining to personnel records maintenance, security, control employee associations or organizations and in the adjustment
and disposal; provide storage and extension services; and and settlement of employee grievances and management of
provide and maintain library services. employee disputes.
(7) The Office of Position Classification and (13) The Office of Corporate Affairs shall formulate and
Compensation shall formulate and implement policies, implement policies, standards, rules and regulations governing
standards, rules and regulations relative to the administration corporate officials and employees in the areas of recruitment,
of position classification and compensation. examination, placement, career development, merit and
awards systems, position classification and compensation,
performing appraisal, employee welfare and benefit, discipline
(8) The Office of Recruitment, Examination and
and other aspects of personnel management on the basis of
Placement shall provide leadership and assistance in
comparable industry practices.
developing and implementing the overall Commission
programs relating to recruitment, execution and placement, and
formulate policies, standards, rules and regulations for the (14) The Office of Retirement Administration shall be
proper implementation of the Commission's examination and responsible for the enforcement of the constitutional and
placement programs. statutory provisions, relative to retirement and the regulation for
the effective implementation of the retirement of government dismissed for lack of standing of the petitioner, hence, the lack of cause of
officials and employees. action.
(15) The Regional and Field Offices. — The Commission shall IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the
have not less than thirteen (13) Regional offices each to be respondent Commission is hereby annulled and set aside. No costs.
headed by a Director, and such field offices as may be needed,
each to be headed by an official with at least the rank of an SO ORDERED.
Assistant Director.
We will first resolve the issue on the applicability of RA 6971 to petitioner Petitioner contends that the PTA is a government-owned and controlled
ADEPT in G.R. No. 119597 before passing upon the constitutionality or corporation performing proprietary function, and therefore the Secretary
validity of Administrative Orders 29 and 268. of Labor and Employment and Secretary of Finance exceeded their
authority in issuing the aforestated Supplemental Rules Implementing
Sec. 3 of RA 6971, reads: RA 6971.
Sec. 3. Coverage. This Act shall apply to all Government-owned and controlled corporations may perform
business enterprises with or without governmental or proprietary functions or both, depending on the
existing and duly recognized or certified purpose for which they have been created. If the purpose, is to obtain
labor organizations, including government- special corporate benefits or earn pecuniary profit, the function is
owned and controlled corporations proprietary. If it is in the interest of health, safety and for the
performing proprietary functions. It shall advancement of public good and welfare, affecting the public in general,
cover all employees and workers including the function is governmental. 9 Powers classified as "proprietary" are
those intended for private advantage and benefit. 10
The PTA was established by Presidential Decree No. 189, as amended by order of priority
Presidential Decree No. 564 ("PD 564"). for
development of
Its general purposes 11 are: said areas; to
recommend to
1. To implement the policies the President
and programs of the the
Department of Tourism proclamation of
("Department"); a tourist zone;
and to define
and fix the
2. To develop tourist zones;
boundaries of
the zone;
3. To assist private
enterprises in undertaking
b. To formulate
tourism projects;
a development
plan for each
4. To operate and maintain zone;
tourist facilities;
c. To submit to
5. To assure rand availability the President
for private investors in hotels through the
and other tourist facilities; National
Economic and
6. To coordinate all tourism Development
project plans and operations. Athority for
review and
Its specific functions and powers 12 are: approval all
development
1. Planning and development plans before
of tourism projects the same are
enforced or
a. To assist the implemented;
Department
make a d. To submit to
comprehensive the President
survey of the an Annual
physical and Progress
natural tourism Report;
resources of
the Philippines; e. To assist the
to establish the Department to
determine the having tourism
additional potential and
capacity earmarked in
requirements the Tourism
for various Priorities Plans
tourist facilities for intensive
and services; development
to prepare a into a tourist
ten-year zone or as a
Tourism part thereof,
Priorities Plan; subject to the
to update approval of the
annually the President.
ten year
Tourism b. To acquire
Priorities Plan. by purchase,
by negotiation
f. To gather, or by
collate and condemnation
analyze proceedings
statistical data any private
and other land within and
pertinent without the
information for tourist zones
the effective for any of the
implementation following
of PD 564. reasons: (a)
consolidation
2. Acquisition and disposition of lands for
of lands and other assets for tourist zone
tourist zone purposes development
purposes, (b)
a. To acquire prevention of
possession land
and ownership speculation in
of all lands areas declared
transferred to it as tourist
from other zones, (c)
government acquisition of
corporations right of way to
and institutions the zones, (d)
and any land protection of
water shed
areas and undertake
natural assets condominium
with tourism projects
value, and (e) thereon, and
for any other sell subdivision
purpose lots or
expressly condominium
authorized units to private
under PD 564. persons for
investment
c. For the purposes.
purpose of
providing land e. To take over
acquisition or transfer to a
assistance to registered
registered tourism
tourism enterprise in
enterprises, to accordance
sell, subdivide, with law any
resell, lease, lease on
sublease, rent foreshore areas
out, or within a tourist
otherwise, to zone or
said registered adjacent
tourism thereto, in
enterprises cases said
under areas are not
sufficiently soft being utilized
terms for use in accordance
specifically in with the PTA's
the approved zone
development of development
hotels, plan and
recreational wherein the
facilities, and lessee
other tourist concerned
services. does not agree
to conform
d. To develop accordingly.
and/or
subdivide any f. To arrange
land in its for the
name or reclamation of
any land straighten,
adjacent to or obstruct or
adjoining a increase the
tourist zone in flow of water in
coordination streams.
with
appropriate 4. Zone adminstration and
government control
agencies.
a. To formulate
3. Infrastructure development and implement
for tourist zone purposes zoning
regulations.
a. To contract,
supervise and b. To determine
pay for and regulate
infrastructure the enterprises
works and civil to be
works within a established
tourist zone within a tourist
owned and zone.
operated by the
PTA. c. To ensure,
through the
b. To proper
coordinate with authorities
appropriate concerned, the
government ecological
agencies the preservation,
development of maintenance
infrastructure and/or
requirements rehabilitation of
supporting a the common
tourist zone. and the public
areas within a
c. To take water tourist zone
from any public and the
stream, river, environment
creek, lake, thereof.
spring, or
waterfall and to d. To identify
alter, and
recommend to projects as it
the President may deem to
the be vital for
preservation recreation and
and/or rest but not
restoration of sufficiently
national attractive
monuments or economically
preserves; to for private
arrange for the investment.
preservation
and/or b. To construct
restoration of hotel buildings
the same with and other
appropriate tourist facilities
government within a tourist
agencies or zone and in
with the private turn lease such
sector or with facilities to
the owners registered
themselves of tourism
said tourist enterprises for
attractions; and operation,
to identify and management
recommend to and
the appropriate maintenance.
authorities
concerned the c. To organize,
declaration of finance, invest
tourist areas in, manage and
and attractions operate wholly-
as national owned
monuments subsidiary
and preserves. corporations.
a. To identify, a. To
develop, invest administer the
in, own, tax and other
manage and incentives
operate such
granted to f. To extend
registered technical,
enterprises. management
and financial
b. To evaluate, assistance to
approve and tourism
register or projects.
reject any and
all tourism g. To identify,
projects or contact and
enterprises assist in
established negotiations of
within the suitable
tourist zones. partners for
both local and
c. To grant foreign
medium and investors
long-term loans interested in
and/or re-lend investment or
any funds participation in
borrowed for the tourism
the purpose to industry.
duly qualified
registered h. To assist
tourism registered
enterprises. enterprises and
prospective
d. To guarantee investors to
local and have their
foreign papers
borrowings of processed with
registered dispatch by
enterprises. government
offices.
e. To provide
equity 7. Other powers and
investments in functions
the form of
cash and/or a. To engage or
land. retain the
services of
financial,
management, h. To purchase,
legal, technical, hold, and
and/or project alienate shares
consultants of stock or
from the bonds of any
private or corporation.
government
sector. i. To collect
fees or charges
b. To have the as may be
power to imposed under
succeed by its PD 564.
corparate
name. j. To contract
indebtedness
c. To adopt, and issue
alter, and use a bonds.
corporate seal.
k. To fix and
d. To sue and collect rentals
be sued under for the lease,
its corporate use or
name. occupancy of
lands,
e. To enter into buildings, or
any contracts other property
of any kind and owned or
description. administered
by PTA.
f. To own or
possess l. To do any
personal and/or and all acts and
real property. things
necessary to
g. To make, carry out the
adopt and purposes for
enforce rules which the PTA
and regulations is created.
to execute its
powers, duties Categorited in light of the foregoing provisions of law in point, PTA's
and functions. governmental functions include the first, third, fourth, and sixth of the
aforesaid general purposes. The second 13 and fifth general purposes government goes into business, it (divests)
fall under its proprietary functions. itself of its immunity from suit and goes
down to the level of ordinary private
With respect to PTA's specific functions and powers, the first and fourth enterprises and subjects itself to the
are governmental in nature while the specific functions and powers are ordinary laws of the land just like ordinary
proprietary in character. The second, third, sixth, and seventh specific private enterprises. Now, when people work
functions and powers can be considered partly-governmental and partly- therefore in government-owned or
proprietary, considering that 2(a), 2(b), 2(c), 2(d), 2(e), 3(a), 6(c), 6(d), 6(e), controlled corporations, it is as if they are
7(h), 7(j), and 7(k) are proprietary functions while 2(f), 3(b), 3(c), 6(a), 6(b), also, just like in the private sector, entitled
6(f), 6(g), 6(h), 7(a), 7(b), 7(c), 7(d), 7(f), 7(g), and 7(l) are governmental to all the benefits of all laws that apply to
functions. The specific functions and powers treated in 7(e) and 7(i) may workers in the private sector. In my view,
be classified either as propietary or governmental, depending on the even including the right to organize,
circumstances under which they are exercised or performed. bargain. . . . VELOSO (Bicameral Conference
Committee on Labor and Employment, pp.
The aforecited powers and functions of PTA are predominantly 15-16)
governmental, principally geared towards the development and
promotion of tourism in the scenic Philippine archipelago. But it is After a careful study, the Court is of the view, and go holds, that contrary
irrefutable that PTA.also performs proprietary functions, as envisaged by to petitioner's interpretation, the government-owned and controlled
its charter. corporations Mr. Chairman Veloso had in mind were government-owned
and controlled corporations incorporated under the general corporation
Reliance on the above analysis of the functions and powers of PTA does law. This is so because only workers in private corporations and
not suffice for the determination of whether or not it is within the government-owned and controlled corporations, incorporated under the
coverage of RA 6971. For us to resolve the issues raised here solely on general corporation law, have the right to bargain (collectively). Those in
the basis of the classification of PTA's powers and functions may lead to government corporations with special charter, which are subject to Civil
the rendition of judgment repugnant to the legislative intent and to Service Laws, have no right to bargain (collectively), except where the
established doctrines, as well, such as on the prohibition against terms and conditions of employment are not fixed by law 15. Their rights
government workers to strike. 14 Under RA 6971, the workers have the and duties are not comparable with those in the private sector.
right to strike.
Since the terms and conditions of
To ascertain whether PTA is within the ambit of RA 6971, there is need to government employment are fixed by law,
find out the legislative intent, and to refer to other provisions of RA 6971 government workers cannot use the same
and other pertinent laws, that may aid the Court in ruling on the right or weapons employed by workers in the
officials and employees of PTA to receive bonuses under RA 8971. private sector to secure concessions from
their employers. The principle behind labor
unionism in private industry is that
Petitioner cites an entry in the journal of the House of Representatives to
industrial peace cannot be secured through
buttress its submission that PTA is within the coverage of RA 6971, to
compulsion by law. Relations between
wit:
private employers and their employees rest
on an essentially voluntary basis. Subject to
Chairman Veloso: The intent of including the minimum requirements of wage laws
government-owned and controlled and other labor and welfare legislation, the
corporations within the coverage of the Act terms and conditions of employment in the
is the recognition of the principle that when unionized private sector are settled through
the process of collective bargaining. In Government employees may, therefore,
government employment however, it is the through their unions or associations, either
legisleture and, where properly given petition the Congress the betterment of the
delegated power, the administrative heads terms and conditions of employment which
of government which fix the terms and are within the ambit of legislation or
conditions of employment. And this is negotiate with the appropriate government
effected through statutes or administrative agencies for the improvement of those
circulars, rules, and regulations, not which are not fixed by law. If there be any
through collective bargaining agreements. unresolved grievances, the dispute may be
(Alliance of Government Workers v. Minister referred to the Public Sector Labor-
of Labor and Employment, 124 SCRA 1) Management Council for appropriate action.
(emphasis ours) But employees in the civil service may not
resort to strikes, walkouts and other
Government corporations may be created by special charters or by temporary work stoppages, like workers in
incorporation under the general corporation law. Those created by the private sector, to pressure the
special charters are governed by the Civil Service Law while those Government to accede to their demands,
incorporated under the general corporation law are governed by the (supra, footnote 14, p. 698; emphasis ours)
Labor Code. 16
It is a rule in statutory construction that every part of the statute must be
The legislative intent to place only government-owned and controlled interpreted with reference to the context, i.e., that every part of the
corporations performing proprietary functions under the coverage of RA statute must be considered together with the other parts, and kept
6971 is gleanable from the other provisions of the law. For instance, subservient to the general intent of the whole enactment. 23 The
section 2 17 of said law envisions "industrial peace and harmony" and provisions of RA 6971, taken together, reveal the legislative intent to
"to provide corresponding incentives to both labor and capital;" section include only government-owned and controlled corporations performing
4 18 refers to "representatives of labor and management," section proprietary functions within its coverage.
5 19 mentions of "collective bargaining agent(s) of the bargaining
unit(s);" section 6 20 relates to "existing collective bargaining Every statute must be construed harmonized with other statutes as to
agreements," and "labor and management;" section 7 21 speaks of form a uniform system of jurisprudence. 24 We note Section 1, Rule X of
"strike or lockout;" and section 9 22 purports to "seek the assistance of the Omnibus Rules Implementing Book V of EO 292, which reads:
the National Conciliation and Mediation Board of the Department of
Labor and Employment" and "include the name(s) of the voluntary Sec. 1. — Each department or agency of
arbitrators or panel of voluntary arbitrator." All the aforecited provisions government, whether national or local,
of law apply only to private corporations and government-owned and including bureaus and agencies, state
controlled corporations organized under the general corporation law. colleges and universities, and government
Only they have collective bargaining agents, collective bargaining units, owned and controlled corporations with
collective bargaining agreements, and the right to strike or lockout. original charters, shall establish its own
Department or Agency Employee
To repeat, employees of government corporations created by special Suggestions and Incentives Award System
charters have neither the right to strike nor the right to bargain in accordance with these Rules and shall
collectively, as defined in the Labor Code. The case of Social Security submit the same to the Commission for
System Employees Associalion indicates the following remedy of approval. (emphasis ours)
government workers not allowed to strike or bargain collectively, to wit:
It is thus evident that PTA, being a government-owned and III. THE FORCED REFUND OF
controlled corporation with original charter subject to Civil INCENTIVE PAY IS AN
Service Law, Rules and Regulations, 25 is already within the UNCONSTITUTIONAL
scope of an incentives award systern under Section 1, Rule X of IMPAIRMENT OF A
the Omnibus Rules Implementing EO 292 issued by the Civil CONTRACTUAL
Service Commission ("Commission"). Since government-owned OBLIGAITION.
and controlled corporations with original charters do have an
incentive award system, Congress enacted a law that would IV. ASSUMING, FOR THE
address the same concern of officials and employees of SAKE OF ARGUMENT ONLY,
government-owned and controlled corporations incorporated THAT THE GRANT OF
under the general corporation law. PRODUCTIVITY INCENTIVE
BENEFITS WAS INVALID,
All things studiedly considered in proper perspective, the Court finds no THE SAME SHOULD BE THE
reversible error in the finding by respondent Commission that PTA is not PERSONAL LIABILITY OF
within the purview of RA 6971. As regards the promulgation of OFFICIALS DIRECTLY
implementing rules and regulations, it bears stressing that the "power of RESPONSIBLE THEREFOR IN
administrative officials to promulgate rules in the implementation of the ACCORDANCE WITH
statute is necessarily limited to what is provided for in the legislative SECTION 9 OF AO 268.
enactment." 26 In the case under scrutiny, the Supplementary Rules
Implementing RA 6971 issued by the Secretary of Labor and Employment Issued by the then President Corazon Aquino ("President Aquino") on
and the Secretary of Finance accord with the intendment and provisions July 25, 1987 in the exercise ol her legislative powers under the 1987
of RA 6971. Consequently, not being covered by RA 6971, AO 29 applies Constitution, 27 EO 292, or the Administrative Code or 1987, provided for
to the petitioner. the following incentive award system:
We now tackle the common issue posited by the consolidated petitions Sec. 31. Career and Personnel Development
on the constitutionality of AO 29 and AO 268. Plans. — Each department or agency shall
prepare a career and personnel
Petitioners contend and argue, that: development plan which shall be integrated
into a national plan by the Commission.
I. AO 29 AND AO 268 ARE Such career and personnel development
VIOLATIVE OF THE plans which shall include provisions on
PROVISIONS OF EO 292 AND, merit promotions, performance evaluation,
HENCE, NULL AND VOID. in-service training, including overseas and
local schorlarship and training grants, job
II. AO 29 AND AO 268 rotation, suggestions and incentive award
UNLAWFULLY USURP THE systems, and such other provisions for
CONSTITUTIONAL employees' health, welfare, counseling,
AUTHORITY GRANTED recreation and similar services.
SOLELY TO THE CIVIL
SERVICE COMMISSION. Sec. 35. Employee Suggestions and
Incentive Award Syatem. — There shall be
established a government-wide employee
suggestions and incentive awards system owned and controlled corporations with
which shall be administered under such original charters, shall establish its own
rules, regulations, and standards as maybe Department or Agency Employee
promulgated by the Commssion. Suggestions and Incentives Award System
in accordance with these Rules and shall
In accordance with rules, regulations, and submit the same to the Commission for
standards promulgated by the Commission, approval.
the President or the head of each
department or agency is authorized to incur Sec. 2. — The System is designed to
whatever necessary expensesd involved in encourage creativity, innovativeness,
the honorary recognition of subordinate efficiency, integrity and productivity in the
officers and employees of the government public service by recognizing and rewarding
who by their suggestions, inventions, officials and employees, individually or in
superior accomplishment, and other groups, for their suggestions, inventions,
personal efforts contribute to the efficiency, superior accomplishments, and other
economy, or other improvement of personal efforts which contribute to the
government operations, or who perform efficiency, economy, or other improvement
such other extraordinary acts or services in in government operations, or for other
the public interest in connection with, or in extraordinary acts of services in the public
relations to, their official employment. interest.
Control means "the power of an officer to alter or modify or set aside WHEREAS the faithful implementation of
what a subordinate officer had done in the performance of his duties and statutes, including the Administrative Code
to substitute the judgment of the former for that of the latter." 32 It has of 1987 and all laws governing all forms of
been held that "[t]he President can, by virtue of his power of control, additional compensation and personnel
review, modify, alter or nullify any action, or decision, of his subordinate benefits is a Constitutional prerogative
in the executive departments, bureaus, or offices under him. He can vested in the President of the Philippines
exercise this power motu proprio without need of any appeal from any under Section 17, Article VII of the, 1987
party." 33 Constitution;
When the President issued AO 29 limiting the amount of incentive WHEREAS, the Constitutional prerogetive
benefits, enjoining heads of government agencies from granting includes the determination of the rates, the
incentive benefits without prior approval from him, and directing the timing and schedule of payment, and final
refund of the excess over the prescribed amount, the President was just authority to commit limited resources of
exercising his power of control over executive departments. This is government for the payment of personnel
decisively clear from the WHEREAS CLAUSES of AO 268 and AO 29, to incentives, cash awards, productivity
wit: bonus, and other forms of additional
compensation and fringe benefits;
ADMINISTRATIVE ORDER NO. 268
WHEREAS, some government agencies
xxx xxx xxx have overlooked said Constitutional
prerogative and have unilaterally granted to
WHEREAS, the Productivity incentive their respective officials and employees
benefits granted by the different agencies incentive awards;
are of varying amounts, causing
dissension/demoralization on the part of WHEREAS, the Offioe of the President
those who had received less and those who issued Administrative Order No. 268, dated
have not yet received any such benefit, February 21, 1992, strictly prohibiting the
thereby defeating the purpose for which the grant of Productivity Incentive Bonus or
same should be granted; and other allowances of similar nature for
Calender Year 1992 and future years
WHEREAS, there exists the need to regulate pending the issuance of the requisite
the grant of the productivity incentive authorization by the President;
benefits or other similar allowances in
conformity with the policy on WHEREAS, notwithstanding said prohibition
standardization of compensation pursuant some government offices/agencies and
to Republic Act No. 6758; government-owned and/or controlled
corporations and financial institutions have
xxx xxx xxx granted productivity incentive benefits in
varying nomenclature and amounts without Neither can it be said that the President encroached upon the authority
the proper authorization/coordination with of the Commission on Civil Service to grant benefits to government
the Office of the President; personnel. AO 29 and AO 268 did not revoke the privilege of employees
to receive incentive benefits. The same merely regulated the grant and
WHEREAS, the unilateral and uncoordinated amount thereof.
grant of productivity incentive benefits gave
rise to discontentment, dissatisfaction and Sound management and effective utilization of financial resources of
demoralization among government government are basically executive functions, 34 not the Commission's.
personnel who have received less or have Implicit is this recognition in EO 292, which states:
not received at all such benefits;
Sec. 35. Employee Suggestions and
xxx xxx xxx Incentive Award System. — There shall be
established a government-wide employee
The President issued subject Administrative Orders to regulate suggestions and incentive awards system
the grant of productivity incentive benefits and to prevent which shall be administered under such
discontentment, dissatisfaction and demoralization among rules, regulations, and standards as maybe
government personnel by committing limited resources of promulgated by the Commission.
government for the equal payment of incentives and awards. The
President was only exercising his power of control by modifying In accordance with rules, regulations and
the acts of the respondents who granted incentive benefits to standards promulgeted by the
their employees without appropriate clearance from the Office of Commission, the President or the head of
the President, thereby resulting in the uneven distribution of each department or agency is authorized to
government resources. In the view of the President, respondents incur whatever necessary expenses
did a mistake which had to be corrected. In so acting, the involved in the honorary recognition of
President exercised a constitutionally-protected prerogative — subordinate officers and employees of the
government who by their suggestions,
The President's duty to execute the law is of inventions, superior accomplishment, and
constitutional origin. So, too, is his control other personal efforts contribute to the
of all executive departments. Thus it is, that efficiency, economy, or other improvement
department heads are men of his of government operations, or who perform
confidence. His is the power to appoint such other extraordinary acts or services in
them; his, too, is the privilege to dismiss the public interest in connection with, or in
them at pleasure. Naturally he controls and relation to their official employment.
directs their acts. Implicit then is his (Chapter 5, Subtitle A, Book V) (emphasis
authority to go over, confirm, modify or ours)
reverse the action taken by his department
secretaries. In this context, it may not be Conformably, it is "the President or the head of each department or
said that the President cannot rule on the agency who is authorized to incur the necessary expenses involved in
correctness of a decision of a department the honorary recognition of subordinate officers and employees of the
secretary. (Lacson-Magallanes Co., Inc. v. government." It is not the duty of the Commission to fix the amount of
Paño, 21 SCRA 898) the incentives. Such function belongs to the President or his duly
empowered alter ego.
Anent petitioners' contention that the forcible refund of incentive The Judiciary, the Constitutional
benefits is an unconstitutional impairment of a contractual obligation, Commissions, and the Ombudsman must
suffice it to state that "[n]ot all contracts entered into by the government have the independence and flexibility
will operate as a waiver of its non-suability; distinction must be made needed in the discharge of their
between its sovereign and proprietary acts (United States of America v. constitutional duties. The imposition of
Ruiz, 136 SCRA 487)." 35 The acts involved in this case are restrictions and constraints on the manner
governmental. Besides, the Court is in agreement with the Solicitor the independent constitutional offices
General that the incentive pay or benefit is in the nature of a bonus which allocate and utilize the funds appropriated
is not a demandable or enforceable obligation. for their operations is anathema to fiscal
autonomy and violative not only of the
It is understood that the Judiciary, Civil Service Commission, express mandate of the Constitution but
Commission on Audit, Commission on Elections, and Office of the especially as regards the Supreme Court, of
Ombudsman, which enjoy fiscal autonomy, are not covered by the the independence and separation of powers
amount fixed by the President. As explained in Bengzon vs. Drilon (208 upon which the entire fabric of our
SCRA 133): constitutional system is based. In the
interest of comity and cooperation, the
As envisioned in the Constitution, the fiscal Supreme Court, Constitutional
autonomy enjoyed by the Judiciary, the Civil Commissions, and the Ombudsman have so
Service Commission, the Commission on far limited their objections to constant
Audit, the Commission on Elections, and the reminders. We now agree with the
Office of the Ombudsman contemplates a petitioners that this grant of autonomy
guarantee of full flexibility to allocate and should cease to be a meaningless provision.
utilize their resources with the wisdom and
dispatch that their needs require. It Untenable is petitioners' contention that the herein respondents be held
recognizes the power and authority to levy, personally liable for the refund in question. Absent a showing of bad
assess and collect fees, fix rates of faith or malice, public officers are not personally liable for damage
compensation not exceeding the highest resulting from the performance of official duties. 36
rates authorized by law for compensation
and pay plans of the government and Every public official is entitled to the presumption of good faith in the
allocate and disburse such sums as may be discharge of official duties. 37 Absent any showing of bad faith or
provided by law or prescribed by them in malice, there is likewise a presumption of regularity in the performance
the course of the discharge of their of official duties. 38
functions.
In upholding the constitutionality of AO 268 and AO 29, the Court
Fiscal autonomy means freedom from reiterates the well-entrenched doctrine that "in interpreting statutes, that
outside control. If the Supreme Court says it which will avoid a finding of unconstitutionality is to be preferred." 39
needs 100 typewriters but DBM rules we
need only 10 typewriters and sends its Considering, however, that all the parties here acted in good faith, we
recommendations to Congress without even cannot countenance the refund of subject incentive benefits for the year
informing us, the autonomy given by the 1992, which amounts the petitioners have already received. Indeed,
Constitution becomes an empty and illusory no indicia of bad faith can be detected under the attendant facts and
platitude. circumstances. The officials and chiefs of offices concerned disbursed
such incentive benefits in the honest belief that the amounts given were
due to the recipients and the latter accepted the same with gratitude,
confident that they richly deserve such benefits.
SO ORDERED.
G.R. No. 117565 November 18, 1997 In her second affidavit-complaint dated November 22, 1989, 2 private
respondent accused Lumiqued with violation of Commission on Audit (COA) rules
ARSENIO P. LUMIQUED (deceased), Regional Director, DAR — CAR, and regulations, alleging that during the months of April, May, July, August,
Represented by his Heirs, Francisca A. Lumiqued, May A. Lumiqued, September and October, 1989, he made unliquidated cash advances in the total
Arlene A. Lumiqued and Richard A. Lumiqued, petitioners, amount of P116,000.00. Lumiqued purportedly defrauded the government "by
vs. deliberately concealing his unliquidated cash advances through the falsification of
accounting entries in order not to reflect on 'Cash advances of other officials' under
Honorable APOLONIO G. EXEVEA, ERDOLFO V. BALAJADIA and FELIX
code 8-70-600 of accounting rules."
T. CABADING, ALL Members of Investigating Committee, created by DOJ
Order No. 145 on May 30, 1992; HON. FRANKLIN M. DRILON,
SECRETARY OF JUSTICE, HON. ANTONIO T. CARPIO, CHIEF The third affidavit-complaint dated December 15, 1989, 3 charged Lumiqued
Presidential Legal Adviser/Counsel; and HON. LEONARDO A. with oppression and harassment. According to private respondent, her two
QUISUMBING, Senior Deputy Executive Secretary of the Office of the previous complaints prompted Lumiqued to retaliate by relieving her from her post
as Regional Cashier without just cause.
President, and JEANNETTE OBAR-ZAMUDIO, Private
Respondent, respondents.
The three affidavit-complaints were referred in due course to the Department
of Justice (DOJ) for appropriate action. On May 20, 1992, Acting Justice
Secretary Eduardo G. Montenegro issued Department Order No. 145 creating
a committee to investigate the complaints against Lumiqued. The order
ROMERO, J.: appointed Regional State Prosecutor Apolinario Exevea as committee
chairman with City Prosecutor Erdolfo Balajadia and Provincial Prosecutor
Does the due process clause encompass the right to be assisted by counsel Felix Cabading as members. They were mandated to conduct an investigation
during an administrative inquiry? within thirty days from receipt of the order, and to submit their report and
recommendation within fifteen days from its conclusion.
Arsenio P. Lumiqued was the Regional Director of the Department of Agrarian
Reform — Cordillera Autonomous Region (DAR-CAR) until President Fidel V. The investigating committee accordingly issued a subpoena directing
Ramos dismissed him from that position pursuant to Administrative Order No. Lumiqued to submit his counter-affidavit on or before June 17, 1992.
52 dated May 12, 1993. In view of Lumiqued's death on May 19, 1994, his Lumiqued, however, filed instead an urgent motion to defer submission of his
heirs instituted this petition for certiorari and mandamus, questioning such counter-affidavit pending actual receipt of two of private respondent's
order. complaints. The committee granted the motion and gave him a five-day
extension.
The dismissal was the aftermath of three complaints filed by DAR-CAR
Regional Cashier and private respondent Jeannette Obar-Zamudio with the In his counter-affidavit dated June 23, 1992, 4 Lumiqued alleged, inter alia, that
Board of Discipline of the DAR. The first affidavit-complaint dated November the cases were filed against him to extort money from innocent public servants like
16, 1989, 1 charged Lumiqued with malversation through falsification of official him, and were initiated by private respondent in connivance with a certain Benedict
documents. From May to September 1989, Lumiqued allegedly committed at least Ballug of Tarlac and a certain Benigno Aquino III. He claimed that the apparent
93 counts of falsification by padding gasoline receipts. He even submitted a weakness of the charge was bolstered by private respondent's execution of an
vulcanizing shop receipt worth P550.00 for gasoline bought from the shop, and affidavit of desistance. 5
another receipt for P660.00 for a single vulcanizing job. With the use of falsified
receipts, Lumiqued claimed and was reimbursed the sum of P44,172.46. Private Lumiqued admitted that his average daily gasoline consumption was 108.45
respondent added that Lumiqued seldom made field trips and preferred to stay in liters. He submitted, however, that such consumption was warranted as it was
the office, making it impossible for him to consume the nearly 120 liters of gasoline
the aggregate consumption of the five service vehicles issued under his name
he claimed everyday.
and intended for the use of the Office of the Regional Director of the DAR. He
added that the receipts which were issued beyond his region were made in the
course of his travels to Ifugao Province, the DAR Central Office in Diliman, Lumiqued asserted that she should be relieved from her duties and assigned
Quezon City, and Laguna, where he attended a seminar. Because these to jobs that would not require handling of cash and money matters.
receipts were merely turned over to him by drivers for reimbursement, it was
not his obligation but that of auditors and accountants to determine whether Committee hearings on the complaints were conducted on July 3 and 10,
they were falsified. He affixed his signature on the receipts only to signify that 1992, but Lumiqued was not assisted by counsel. On the second hearing date,
the same were validly issued by the establishments concerned in order that he moved for its resetting to July 17, 1992, to enable him to employ the
official transactions of the DAR-CAR could be carried out. services of counsel. The committee granted the motion, but neither Lumiqued
nor his counsel appeared on the date he himself had chosen, so the
Explaining why a vulcanizing shop issued a gasoline receipt, Lumiqued said committee deemed the case submitted for resolution.
that he and his companions were cruising along Santa Fe, Nueva Vizcaya on
their way to Ifugao when their service vehicle ran out of gas. Since it was On August 12, 1992, Lumiqued filed an urgent motion for additional
almost midnight, they sought the help of the owner of a vulcanizing shop who hearing, 8 alleging that he suffered a stroke on July 10, 1992. The motion was
readily furnished them with the gasoline they needed. The vulcanizing shop forwarded to the Office of the State Prosecutor apparently because
issued its own receipt so that they could reimburse the cost of the gasoline. the investigation had already been terminated. In an order dated September 7,
Domingo Lucero, the owner of said vulcanizing shop, corroborated this 1992, 9 State Prosecutor Zoila C. Montero denied the motion, viz:
explanation in an affidavit dated June 25, 1990. 6 With respect to the accusation
that he sought reimbursement in the amount of P660.00 for one vulcanizing job, The medical certificate given show(s) that respondent was
Lumiqued submitted that the amount was actually only P6.60. Any error committed discharged from the Sacred Heart Hospital on July 17, 1992,
in posting the amount in the books of the Regional Office was not his personal the date of the hearing, which date was upon the request of
error or accountability. respondent (Lumiqued). The records do not disclose that
respondent advised the Investigating committee of his
To refute private respondent's allegation that he violated COA rules and confinement and inability to attend despite his discharge, either
regulations in incurring unliquidated cash advances in the amount of by himself or thru counsel. The records likewise do not show
P116,000.00, Lumiqued presented a certification 7 of DAR-CAR Administrative that efforts were exerted to notify the Committee of
Officer Deogracias F. Almora that he had no outstanding cash advances on record respondent's condition on any reasonable date after July 17,
as of December 31, 1989. 1992. It is herein noted that as early as June 23, 1992,
respondent was already being assisted by counsel.
In disputing the charges of oppression and harassment against him, Lumiqued
contended that private respondent was not terminated from the service but Moreover an evaluation of the counter-affidavit submitted
was merely relieved of her duties due to her prolonged absences. While reveal(s) the sufficiency, completeness and thoroughness of
admitting that private respondent filed the required applications for leave of the counter-affidavit together with the documentary evidence
absence, Lumiqued claimed that the exigency of the service necessitated annexed thereto, such that a judicious determination of the
disapproval of her application for leave of absence. He allegedly rejected her case based on the pleadings submitted is already possible.
second application for leave of absence in view of her failure to file the same
immediately with the head office or upon her return to work. He also asserted
Moreover, considering that the complaint-affidavit was filed as
that no medical certificate supported her application for leave of absence.
far back as November 16, 1989 yet, justice can not be delayed
much longer.
In the same counter-affidavit, Lumiqued also claimed that private respondent
was corrupt and dishonest because a COA examination revealed that her cash
Following the conclusion of the hearings, the investigating committee rendered
accountabilities from June 22 to November 23, 1989, were short by
a report dated July 31, 1992, 10finding Lumiqued liable for all the charges against
P30,406.87. Although private respondent immediately returned the amount on him. It made the following findings:
January 18, 1990, the day following the completion of the cash examination,
After a thorough evaluation of the evidences (sic) submitted by DAR-CAR cannot therefore rebut these concrete evidences
the parties, this committee finds the evidence submitted by the (sic).
complainant sufficient to establish the guilt of the respondent
for Gross Dishonesty and Grave Misconduct. On the third complaint, this committee likewise believes that
the respondent's act in relieving the complainant of her
That most of the gasoline receipts used by the respondent in functions as a Regional Cashier on December 1, 1989 was an
claiming for the reimbursement of his gasoline expenses act of harassment. It is noted that this was done barely two
were falsified is clearly established by the 15 Certified Xerox weeks after the complainant filed charges against her (sic). The
Copies of the duplicate receipts (Annexes G-1 to G-15) and the recommendation of Jose G. Medina of the Commission on
certifications issued by the different gasoline stations where the Audit came only on May 11, 1990 or almost six months after
respondent purchased gasoline. Annexes "G-1" to "G-15" show the respondent's order relieving the complainant was issued.
that the actual average purchase made by the respondent is His act in harassing a subordinate employee in retaliation to a
about 8.46 liters only at a purchase price of P50.00, in contrast complaint she filed constitute(s) Gross Misconduct on the part
to the receipts used by the respondent which reflects an of the respondent who is a head of office.
average of 108.45 liters at a purchase price of P550.00. Here,
the greed of the respondent is made manifest by his act of The affidavits of Joseph In-uyay and Josefina Guting are of no
claiming reimbursements of more than 10 times the value of help to the respondent. In fact, this only show(s) that he is
what he actually spends. While only 15 of the gasoline receipts capable of giving bribes if only to have the cases against him
were ascertained to have been falsified, the motive, the pattern dismissed. He could not have given a certain Benigno Aquino
and the scheme employed by the respondent in defrauding the III the sum of P10,000.00 for any other purpose.
government has, nevertheless, been established.
Accordingly, the investigating committee recommended Lumiqued's dismissal
That the gasoline receipts have been falsified was not rebutted or removal from office, without prejudice to the filing of the appropriate criminal
by the respondent. In fact, he had in effect admitted that he had charges against him.
been claiming for the payment of an average consumption of
108.45 liters/day by justifying that this was being used by the 4 Acting on the report and recommendation, former Justice Secretary Franklin
vehicles issued to his office. Besides he also admitted having M. Drilon adopted the same in his Memorandum to President Fidel V. Ramos
signed the receipts. dated October 22, 1992. He added that the filing of the affidavit of
desistance 11 would not prevent the issuance of a resolution on the matter
Respondent's act in defrauding the government of a considering that what was at stake was not only "the violation of complainant's
considerable sum of money by falsifying receipts constitutes (herein private respondent's) personal rights" but also "the competence and fitness
not only Dishonesty of a high degree but also a criminal of the respondent (Lumiqued) to remain in public office." He opined that, in fact,
offense for Malversation through Falsification of Official the evidence on record could call for "a punitive action against the respondent on
Documents. the initiative of the DAR."
This committee likewise finds that the respondent have On December 17, 1992, Lumiqued filed a motion for reconsideration of "the
(sic) unliquidated cash advances in the year 1989 which is in findings of the Committee" with the DOJ. 12 Undersecretary Ramon S. Esguerra
violation of established office and auditing rules. His cash indorsed the motion to the investigating committee. 13 In a letter dated April 1,
advances totaling to about P116,000.00 were properly 1993, the three-member investigating committee informed Undersecretary
documented. The requests for obligation of allotments and the Esguerra that the committee "had no more authority to act on the same (motion for
vouchers covering the amounts were all signed by him. The reconsideration) considering that the matter has already been forwarded to the
mere certification issued by the Administrative Officer of the Office of the President" and that their authority under Department Order No. 145
ceased when they transmitted their report to the
DOJ. 14 Concurring with this view, Undersecretary Esguerra informed Lumiqued during the hearing. 19 On May 19, 1994, 20 however, before his motion could be
that the investigating committee could no longer act on his motion for resolved, Lumiqued died. On September 28, 1994, 21 Secretary Quisumbing
reconsideration. He added that the motion was also prematurely filed because the denied the second motion for reconsideration for lack of merit.
Office of the President (OP) had yet to act on Secretary Drilon's
recommendation. 15 Hence, the instant petition for certiorari and mandamus praying for the reversal
of the Report and Recommendation of the Investigating Committee, the
On May 12, 1993, President Fidel V. Ramos himself issued Administrative October 22, 1992, Memorandum of then Justice Secretary Drilon, A.O. No. 52
Order No. 52 (A.O. No. 52), 16 finding Lumiqued administratively liable for issued by President Ramos, and the orders of Secretary Quisumbing. In a
dishonesty in the alteration of fifteen gasoline receipts, and dismissing him from nutshell, it prays for the "payment of retirement benefits and other benefits
the service, with forfeiture of his retirement and other benefits. Thus: accorded to deceased Arsenio Lumiqued by law, payable to his heirs; and the
backwages from the period he was dismissed from service up to the time of his
That the receipts were merely turned over to him by his drivers death on May 19, 1994." 22
and that the auditor and accountant of the DAR-CAR should be
the ones to be held liable is untenable. The receipts in question Petitioners fault the investigating committee for its failure to inform Lumiqued
were signed by respondent for the purpose of attesting that of his right to counsel during the hearing. They maintain that his right to
those receipts were validly issued by the commercial counsel could not be waived unless the waiver was in writing and in the
establishments and were properly disbursed and used in the presence of counsel. They assert that the committee should have suspended
official business for which it was intended. the hearing and granted Lumiqued a reasonable time within which to secure a
counsel of his own. If suspension was not possible, the committee should have
This Office is not about to shift the blame for all these to the appointed a counsel de oficio to assist him.
drivers employed by the DAR-CAR as respondent would want
us to do. 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
The OP, however, found that the charges of oppression and harassment, as counsel, is a right afforded a suspect or an accused during custodial
well as that of incurring unliquidated cash advances, were not satisfactorily investigation. 23 It is not an absolute right and may, thus, be invoked or rejected in
established. 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
In a "petition for appeal" 17 addressed to President Ramos, Lumiqued prayed that have competent and independent counsel of his own choice. Lumiqued, however,
A.O. No. 52 be reconsidered and that he be reinstated to his former position "with was not accused of any crime in the proceedings below. The investigation
all the benefits accorded to him by law and existing rules and regulations." This conducted by the committee created by Department Order No. 145 was for the
petition was basically premised on the affidavit dated May 27, 1993, of a certain purpose of determining if he could be held administratively liable under the law for
Dwight L. Lumiqued, a former driver of the DAR-CAR, who confessed to having the complaints filed against him. The order issued by Acting Secretary of Justice
authored the falsification of gasoline receipts and attested to petitioner Lumiqued's Montenegro states thus:
being an "honest man" who had no "premonition" that the receipts he (Dwight)
turned over to him were "altered." 18 In the interest of the public service and pursuant to the
provisions of existing laws, a Committee to conduct the formal
Treating the "petition for appeal" as a motion for reconsideration of A.O. No. investigation of the administrative complaint for oppression,
52, the OP, through Senior Deputy Executive Secretary Leonardo A. dishonesty, disgraceful and immoral conduct, being notoriously
Quisumbing, denied the same on August 31, 1993. undesirable and conduct prejudicial to the best interest of the
service against Mr. ARSENIO P. LUMIQUED, Regional
Undaunted, Lumiqued filed a second motion for reconsideration, alleging, Director, Department of Agrarian Reform, Cordillera
among other things, that he was denied the constitutional right to counsel Autonomous Region, is hereby created . . . 24
As such, the hearing conducted by the investigating committee was not a newspaper of general circulation, 34 much later than the July 1992 hearings of
part of a criminal prosecution. This was even made more pronounced the investigating committee created by Department Order No. 145. Thirdly, the
when, after finding Lumiqued administratively liable, it hinted at the same committee was not remiss in the matter of reminding Lumiqued of his right to
filing of a criminal case for malversation through falsification of public counsel. Thus, at the July 3, 1992, hearing, Lumiqued was repeatedly appraised of
documents in its report and recommendation. his option to secure the services of counsel:
Furthermore, petitioners' reliance on Resolution No. 94-0521 of the Civil You are confident that you will be able to
Service Commission on the Uniform Procedure in the Conduct of represent yourself?
Administrative Investigation stating that a respondent in an administrative
complaint must be "informed of his right to the assistance of a counsel of his DIR. LUMIQUED:
choice," 32 is inappropriate. In the first place, this resolution is applicable only to
cases brought before the Civil Service Commission. 33 Secondly, said resolution, That is my concern. 35 (Emphasis supplied)
which is dated January 25, 1994, took effect fifteen days following its publication in
In the course of private respondent's damaging testimony, the investigating CP BALAJADIA:
committee once again reminded Lumiqued of his need for a counsel. Thus:
Why don't you engage the services of another
CP BALAJADIA: counsel. The charges against you are quite
serious. We are not saying you are guilty
Q. (To Director Lumiqued) You really wish to go already. We are just apprehensive that you will
through with this even without your counsel? go through this investigation without a counsel.
We would like you to be protected legally in the
DIRECTOR LUMIQUED: course of this investigation. Why don't you get
the services of another counsel. There are
plenty here in Baguio . . .
A. I think so, Sir.
DIRECTOR LUMIQUED:
CP BALAJADIA:
I will try to see, Sir . . .
Let us make it of record that we have been
warning you to proceed with the assistance of
counsel but you said that you can take care of CP BALAJADIA:
yourself so we have no other alternative but to
proceed. 36 (Emphasis supplied). Please select your date now, we are only given
one month to finish the investigation, Director
Thereafter, the following colloquies transpired: Lumiqued.
We will suspend in the meantime that we are We will not entertain any postponement. With or
waiting for the supplemental affidavit you are without counsel, we will proceed.
going to present to us. Do you have any
request from the panel of investigators, Director CP BALAJADIA:
Lumiqued?
Madam Witness, will you please submit the
DIRECTOR LUMIQUED: document which we asked for and Director
Lumiqued, if you have other witnesses, please
I was not able to bring a lawyer since the lawyer bring them but reduce their testimonies in
I requested to assist me and was the one who affidavit form so that we can expedite with the
prepared my counter-affidavit is already proceedings. 37
engaged for a hearing and according to him he
is engaged for the whole month of July. At the hearing scheduled for July 10, 1992, Lumiqued still did not avail of the
services of counsel. Pertinent excerpts from said hearing follow:
RSP EXEVEA:
FISCAL BALAJADIA:
We cannot wait . . .
I notice also Mr. Chairman that the respondent push through on said date, and Lumiqued had already submitted his counter-
is not being represented by a counsel. The last affidavit, the committee decided to wind up the proceedings. This did not
time he was asked to invite his lawyer in this mean, however, that Lumiqued was short-changed in his right to due process.
investigation. May we know if he has a lawyer
to represent him in this investigation? Lumiqued, a Regional Director of a major department in the executive branch
of the government, graduated from the University of the Philippines (Los
DIR. LUMIQUED: Baños) with the degree of Bachelor of Science major in Agriculture, was a
recipient of various scholarships and grants, and underwent training seminars
There is none Sir because when I went to my both here and abroad. 39 Hence, he could have defended himself if need be,
lawyer, he told me that he had set a case also without the help of counsel, if truth were on his side. This, apparently, was the
at 9:30 in the other court and he told me if there thought he entertained during the hearings he was able to attend. In his statement,
is a possibility of having this case postponed "That is my concern," one could detect that it had been uttered testily, if not
anytime next week, probably Wednesday so we exasperatedly, because of the doubt or skepticism implicit in the question, "You
will have good time (sic) of presenting the are confident that you will be able to represent yourself?" despite his having
positively asserted earlier, "Yes, I am confident." He was obviously convinced that
affidavit.
he could ably represent himself. Beyond repeatedly reminding him that he could
avail himself of counsel and as often receiving the reply that he is confident of his
FISCAL BALAJADIA: ability to defend himself, the investigating committee could not do more. One can
lead a horse to water but cannot make him drink.
Are you moving for a postponement Director?
May I throw this to the panel. The charges in The right to counsel is not indispensable to due process unless required by the
this case are quite serious and he should be Constitution or the law. In Nera v. Auditor General, 40 the Court said:
given a chance to the assistance of a
counsel/lawyer. . . . There is nothing in the Constitution that says that a party in
a non-criminal proceeding is entitled to be represented by
RSP EXEVEA: counsel and that, without such representation, he shall not be
bound by such proceedings. The assistance of lawyers; while
And is (sic) appearing that the supplemental- desirable, is not indispensable. The legal profession was not
affidavit has been furnished him only now and engrafted in the due process clause such that without the
this has several documents attached to it so I participation of its members, the safeguard is deemed ignored
think we could grant him one last postponement or violated. The ordinary citizen is not that helpless that he
considering that he has already asked for an cannot validly act at all except only with a lawyer at his side.
extension.
In administrative proceedings, the essence of due process is simply the
DIR. LUMIQUED: opportunity to explain one's side. One may be heard, not solely by verbal
presentation but also, and perhaps even much more creditably as it is more
Furthermore Sir, I am now being bothered by practicable than oral arguments, through pleadings. 41 An actual hearing is not
my heart ailment. 38 always an indispensable aspect of due process. 42 As long as a party was given
the opportunity to defend his interests in due course; he cannot be said to have
The hearing was reset to July 17, 1992, the date when Lumiqued was released been denied due process of law, for this opportunity to be heard is the very
essence of due process. 43 Moreover, this constitutional mandate is deemed
from the hospital. Prior to said date, however, Lumiqued did not inform the
satisfied if a person is granted an opportunity to seek reconsideration of the action
committee of his confinement. Consequently because the hearing could not
or ruling complained of. 44 Lumiqued's appeal and his subsequent filing of motions
for reconsideration cured whatever irregularity attended the proceedings Dishonesty is a grave offense penalized by dismissal under Section 23 of Rule
conducted by the committee. 45 XIV of the Omnibus Rules Implementing Book V of the Administrative Code of
1987. Under Section 9 of the same Rule, the penalty of dismissal carries with it
The constitutional provision on due process safeguards life, liberty and "cancellation of eligibility, forfeiture of leave credits and retirement benefits,
property. 46 In the early case of Cornejo v. Gabriel and Provincial Board of and the disqualification for reemployment in the government service." The
Rizal 47 the Court held that a public office is not property within the sense of the instant petition, which is aimed primarily at the "payment of retirement benefits
constitutional guarantee of due process of law for it is a public trust or agency. This and other benefits," plus back wages from the time of Lumiqued's dismissal
jurisprudential pronouncement has been enshrined in the 1987 Constitution under until his demise, must, therefore, fail.
Article XI, Section 1, on accountability of public officers, as follows:
WHEREFORE, the instant petition for certiorari and mandamus is hereby
Sec. 1. Public office is a public trust. Public officers and DISMISSED and Administrative Order no. 52 of the Office of the President is
employees must at all times be accountable to the people, AFFIRMED. Costs against petitioners.
serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest SO ORDERED.
lives.
The committee's findings pinning culpability for the charges of dishonesty and
grave misconduct upon Lumiqued were not, as shown above, fraught with
procedural mischief. Its conclusions were founded on the evidence presented
and evaluated as facts. Well-settled in our jurisdiction is the doctrine that
findings of fact of administrative agencies must be respected as long as they
are supported by substantial evidence, even if such evidence is not
overwhelming or
preponderant. 49 The quantum of proof necessary for a finding of guilt in
administrative cases is only substantial evidence or such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. 50