Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 192957 September 29, 2014

EMMANUEL B. MORAN, JR., (Deceased), substituted by his widow, CONCORDIA V.

MORAN, Petitioner,
vs.
OFFICE OF THE PRESIDENT OF THE PHILIPPINES, AS REPRESENTED BY THE HONORABLE
EXECUTIVE SECRETARY EDUARDO R. ERMITA and PGA CARS, INC., Respondents.

DECISION

VILLARAMA, JR., J.:

Before us is a petition . for review on certiorari assailing the Resolutions dated March 13, 20091 and
June 25, 2010,2 of the Court of Appeals (CA) in CA-G.R. SP No. 107059. In the Resolution dated
March 13, 2009, the CA outrightly struck down the petition for certiorari that the petitioner had filed to
annul and set aside the Decision3 dated April 3, 2007, and Order4 dated October 22, 2008 of the
Office of the President (OP) in O.P. Case No. 06-E-195. Meanwhile, in the Resolution dated June
25, 2010, the CA denied the petitioner's. motion for reconsideration.

From the records, the following facts emerge:

On February 2, 2004, the late Emmanuel B. Moran, Jr. filed with the Consumer Arbitration Office
(CAO) a verified complaint against private respondent PGA Cars, Inc. pursuant tothe relevant
provisions of Republic Act No. 7394 (RA 7394), otherwise known as the Consumer Act of the
Philippines. Docketed as DTI Administrative Case No. 04-17, the complaint alleged that the private
respondent should be held liable for the product imperfections of a BMW car which it sold to
complainant.

On September 23, 2005, the CAO rendered a Decision5 in favor of complainant and ordered the
private respondent to refund the purchase price of the BMW car in addition to the payment of costs
of litigation and administrative fines:

WHEREFORE, in view of the foregoing, the respondent is hereby found guilty for violation of the
aforequoted provisions and [is] hereby ordered to perform the following:

1. To refund the purchase price ofthe subject vehicle in the amount of three million three
hundred seventy five thousand pesos (₱3,375,000.00);

2. To pay complainant the amount of five thousand pesos (₱5,000.00) as costs of litigation;

3. To pay an administrative finein the amount of ₱10,000.00 payable at 4th flr., DTI Cashier,
361 Sen. Gil Puyat Ave., Makati City.

SO ORDERED.6
On October 19, 2005, the private respondent sought reconsideration of the Decision but the CAO
denied the motion in an Order7 dated January 19, 2006. Thus, the private respondent appealed to
the Secretary of the Department of Trade and Industry (DTI), the quasi-judicial agency designated
by Article 1658 of RA 7394 to entertain appeals from the adverse decisions and orders of the CAO.
However, in a Resolution9 dated April 28, 2006, the DTI Secretary dismissed the appeal of the
private respondent who then filed an appeal with the herein public respondent OP.

On April 3, 2007, the OP granted the appeal, reversed the DTI Secretary’s Resolution, and
dismissed the complaint. The OP ruled that the DTI erred in holding the private respondent liable for
product defects which issue was never raised by the complainant and because the private
respondent was not the manufacturer, builder, producer or importer of the subject BMW car but only
its seller. Assuch, it could not be held liable especially since none of the circumstances under Article
9810 of RA 7394 were present in the case. The OP further ruled that the private respondent could
also not be held liable for product imperfections because the product was never proven to be unfit or
inadequate under the conditions laid down by law. Neither was there any inconsistency in the
information provided in the container or product advertisements/messages. More, it was only after
the lapse of a considerabletime (nearly 10 months) since the purchase of the car and after it had
been driven for 12,518 kilometers, that the complainant first complained about it. The vehicle never
once broke down before then and the complainant could not, in fact, point to any specific part that is
defective.

Complainant filed a motion for reconsideration with the OP, but the OP denied said motion in an
Order dated October 22, 2008. On November 25, 2008, complainant received a copy of the Order
denying his motion for reconsideration.

On January 23, 2009, complainant filed a petition for certiorari with the CA and alleged lack of
jurisdiction on the part of the OP for ruling on cases involving a violation of RA 7394. On March 13,
2009, the CA dismissed the petition for certiorari on the ground that it was a wrong mode of appeal
and for the failure of the petitioner to state material dates. On June 25, 2010, the CA likewise denied
the motion for reconsideration filed by the petitioner.

Since the original complainant Emmanuel B. Moran, Jr. passed away on May 17, 2010, his widow,
Concordia V. Moran filed the present petition for review on certiorari on August 9, 2010. Petitioner
argues that the CA erred in denying the petition for certiorari which alleged error of jurisdiction on the
part of the OP. She contends that in cases alleging error ofjurisdiction on the part of the OP, the
proper remedy is to file a petition for certiorari with the CA because appeal is not available to correct
lack of jurisdiction. Moreover, even though appeal is available, it is not considered as the plain,
speedy, and adequate legal remedy.

Further, the petitioner claims that the OP lacked appellate jurisdiction to review decisions of the DTI
in cases involving a violation of RA 7394 based on Article 16611 thereof, which expressly confers
appellate jurisdiction to review such decisions of the DTI to the proper court through a petition for
certiorari. Hence, the OP cannot be deemed as the "proper court" within the purview of Article 166.

On the other hand, private respondentargues that the CA was correct in denying the petition for
certiorari since this was an improper remedy in view of the availability of an appeal from the OP.
Furthermore, the private respondent confirms the appellate jurisdiction of the OP over the DTI based
on the constitutional power of control of the OP over Executive Departments and the well-
entrenched doctrine of exhaustion of administrative remedies.

Meanwhile, the public respondent, through the Office of the Solicitor General (OSG), claims that the
availability of an appeal from the OP precluded the petitioner from availing of the extraordinary
remedy of certiorari. Even though there is an allegation of error of jurisdiction, the OSG avers that
appeal still takes precedence over a petition for certiorari as long as the same is at the disposal ofthe
petitioner. However, in the present case, the OSG claims that the OP acted within its jurisdiction in
deciding the case on appeal from the DTI Secretary as Article 166 of RA 7394 must yield to the
constitutional power of control of the OP over Executive Departments. The OSG also cites the
doctrine of exhaustion of administrative remedies to support the appellate jurisdiction of the OP over
the DTI.

Is the CA correct in dismissing the petition for certiorari on the ground that petitioner resorted to a
wrong mode of appeal?

We rule in the negative.

Under the Consumer Act (RA 7394), the DTI has the authority and the mandate to act upon
complaints filed by consumers pursuant to the State policy of protecting the consumeragainst
deceptive, unfair and unconscionable sales, acts or practices.12 Said law provided for an arbitration
procedure whereby consumer complaints are heard and investigated by consumer arbitration
officers whose decisions are appealable to the DTI Secretary.13 Article 166 thereof provides:

ART. 166. Decision on Appeal.– The Secretary shall decide the appeal within thirty (30) days
fromreceipt thereof. The decision becomes final after fifteen (15) days from receipt thereof unless a
1âw phi 1

petition for certiorari is filed with the proper court. (Emphasis supplied.)

In his motion for reconsideration from the OP’s Decision dated April 3, 2007 which reversed and set
aside the resolution dated April 28, 2006 of the DTI Secretary, complainant EmmanuelB. Moran, Jr.
raised the issue of lack of jurisdiction of the OP, not being the proper court referred to in Article 166
of R.A. 7394. The OP, however, denied his motion on the ground that the President’spower of
control over the executive department grants him the power to amend, modify, alter or repeal
decisions of the department secretaries. On the other hand, the CA, in dismissing outright the
petition for certiorari filed by Moran, Jr., implicitly sustained such reasoning when it held that the
proper remedy from an adverse order or judgment of the OP is a petition for review under Rule 43 of
the 1997 Rules of Civil Procedure, as amended.

We reverse the CA.

The procedure for appeals to the OP is governed by Administrative Order No. 18,14 Series of 1987.
Section 1 thereof provides:

SECTION 1. Unless otherwise governed by special laws, an appeal to the Office of the President
shall be taken within thirty (30) days from receipt by the aggrieved party of the
decision/resolution/order complained of or appealed from… (Emphasis supplied.)

In Phillips Seafood (Philippines) Corporation v. The Board of Investments,15 we interpreted the above
provision and declared that "a decision or order issued by a department or agency need notbe
appealed to the Office of the President when there is a speciallaw that provides for a different mode
of appeal." Thus:

Petitioner further contends that from the decision of respondent BOI, appeal to the Office of the
President should be allowed; otherwise, the constitutional power of the President to review acts of
department secretaries will be rendered illusory by mere rules of procedure.
The executive power of control over the acts of department secretaries is laid down in Section 17,
Article VII of the 1987 Constitution. The power of control has been defined as the "power of an
officer to alter or modify or nullify orset aside what a subordinate officer had done in the performance
of his duties and to substitute the judgment of the former for that of the latter."

Such "executive control" is not absolute. The definition of the structure of the executive branch of
government, and the corresponding degrees of administrative control and supervision is not the
exclusive preserve of the executive. It may be effectively limited by the Constitution, by law, or by
judicial decisions. All the more in the matter of appellate procedure as in the instant case.Appeals
are remedial in nature; hence, constitutionally subject to this Court’s rulemaking power. The Rules of
Procedure was issued by the Court pursuant to Section 5, Article VIII of the Constitution, which
expressly empowers the Supreme Court to promulgate rules concerning the procedure in all courts.

Parenthetically, Administrative Order (A.O.) No. 18 expressly recognizes an exception to the

remedyof appeal to the Office of the President from the decisions of executive departments and
agencies. Under Section 1 thereof, a decision or order issued by a department or agency need not
be appealed to the Office of the President when there is a special law that provides for a different
mode of appeal. In the instant case, the enabling law of respondent BOI, E.O. No. 226, explicitly
allows for immediate judicial relieffrom the decision of respondent BOI involving petitioner’s
application for an ITH. E.O. No. 226 is a law of special nature and should prevail over A.O. No.
18.16 (Emphasis supplied.)

In this case, a special law, RA 7394,likewise expressly provided for immediate judicial relief from
decisionsof the DTI Secretary by filing a petition for certiorari with the "proper court." Hence, private
respondent should have elevated the case directly to the CA through a petition for certiorari.

In filing a petition for certiorari beforethe CA raising the issue of the OP’s lack of jurisdiction,
complainant Moran, Jr. thus availed of the proper remedy.

Certiorariis an extraordinary remedy available in extraordinary cases where a tribunal, board or

officer, among others, completely acted without jurisdiction. Ineluctably, a judgment rendered
1âwphi1

without jurisdiction over the subject matter is void.17 While errors of judgmentare correctible by
appeal, errors of jurisdiction are reviewable by certiorari.18 Considering that the OP had no
jurisdiction to entertain private respondent’s appeal, certiorari lies to correct such jurisdictional error.
The CA thus erred in dismissing the petition for certiorari on the ground of being an improper
remedy.

Further, we hold that the Resolution dated April 28, 2006 of the DTI Secretary had become FINAL
and EXECUTORY with private respondent’s failure to appeal the same withinthe 15-day
reglementary period.

WHEREFORE, the petition for review on certiorari is GRANTED. The Resolutions dated March 13,
2009 and June 25, 2010 in CA-G.R. SP No. 107059 are REVERSED and SET ASIDE. The Decision
dated April 3, 2007 and Order dated October 22, 2008 of the Office of the President are hereby
declared NULL and VOID. Consequently, the Resolution dated April 28, 2006 of the DTI Secretary is
hereby REINSTATED and UPHELD.

No pronouncement as to costs.

SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson

DIOSDADO M. PERALTA BIENVENIDO L. REYES

Associate Justice Associate Justice

FRANCIS H. JARDELEZA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

PRESBITERO J. VELASCO, JR.

Associate Justice
Chaiperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Acting Chief Justice

Footnotes

1
Rollo, pp. 37-38. Penned by Associate Justice Arturo G. Tayag with Associate Justices
Hakim S. Abdulwahid and Ricardo R. Rosario concurring.

2
Id. at 40-41. Penned by Associate Justice Ricardo R. Rosario with Associate Justices
Hakim S. Abdulwahid and Ramon M. Bato, Jr. concurring.

3
Id. at 60-70. Penned by Executive Secretary Eduardo R. Ermita.

4
Id. at 71-73.

5
Id. at 48-54.
6
Id. at 54.

7
Id. at 55-57.

8
ART. 165. Appeal from Orders. – Any order, not interlocutory, of Consumer arbitration
officer, becomes final and executory unless appealed to the Department Secretary
concerned within fifteen (15) days from receipt of such order. An appealmay be entertained
only on any of the following grounds:

a) grave abuse of discretion;

b) the order is in excess of the jurisdiction or authority of the consumer arbitration

office;

c) the order is not supported by the evidence or there is serious error in the findings
of facts.

9
Rollo, pp. 58-59.

ART. 98. Liability of Tradesman or Seller. – The tradesman/seller is likewise liable,

10

pursuant to the preceding article when:

a) it is not possible to identify the manufacturer, builder, producer or importer;

b) the product is supplied, without clear identification of the manufacturer, producer,

builder or importer;

c) he does not adequately preserve perishable goods. The party making payment to
the damaged party may exercise the right to recover a part ofthe whole of the
payment made against the other responsible parties, in accordance with their part
orresponsibility in the cause of the damage effected.

11
ART. 166. Decision on Appeal. – The Secretary shall decide the appeal within thirty (30)
days from receipt thereof. The decision becomes final after fifteen (15) days from receipt
thereof unless a petition for certiorari is filed with the proper court.

12
ART 2. Declaration of Basic Policy. — It is the policy of the State to protect the interests of
the consumer, promote his general welfare and to establish standards of conduct for
business and industry.

Towards this end, the State shall implement measures to achieve the following
objectives:

a) protection against hazards to health and safety;

b) protection against deceptive, unfair and unconscionable sales acts and practices;

c) provision of information and education to facilitate sound choice and the proper
exercise of rights by the consumer;
 d) provision of adequate rights and means of redress; and

e) involvement of consumer representatives in the formulation of social and

economic policies.

13
ART. 165. Appeal from Orders. – Any order, not interlocutory, of the Consumer arbitration
officer, becomes final and executory unless appealed to the Department Secretary
concerned within fifteen (15) days from receipt of such order. An appeal may be entertained
only on any of the following grounds:

a) grave abuse of discretion;

b) the order is in excess of the jurisdiction or authority of the consumer arbitration

officer;

c) the order is not supported bythe evidence or there is serious error in the findings of
facts.

Entitled "Prescribing Rules and Regulations Governing Appeals to the Office of the
14

President of the Philippines," issued on February 12, 1987.

15
597 Phil. 649, 662 (2009).

16
Id. at 661-662.

17
Arcelona v. Court of Appeals, 345 Phil. 250, 266 (1997).

18
Ongsitco v. Court of Appeals, 325 Phil. 1069, 1076 (1996).