Case Digest: Ernesto M. Maceda vs. Energy Regulatory Board, et al.

18 July 1991 :: G.R. No. 96266 Republic of the Philippines

Medialdea, J. SUPREME COURT
Manila
FACTS:

Upon the outbreak of the Persian Gulf conflict on August 1990, private EN BANC
respondents oil companies filed with the ERB their respective
applications on oil price increases. ERB then issued an order granting
a provisional increase of P1.42 per liter. Petitioner Maceda filed a
petition for Prohibition seeking to nullify said increase.

ISSUE: G.R. No. 96266 July 18, 1991

Whether or not the decisions of the Energy Regulatory Board should ERNESTO M. MACEDA, petitioner,
be subject to presidential review. vs.
ENERGY REGULATORY BOARD, CALTEX (Philippines),
HELD: INC., PILIPINAS SHELL PETROLEUM CORPORATION AND
PETRON CORPORATION, respondents.
Pursuant to Section 8 of E.O. No. 172, while hearing is indispensable,
it does not preclude the Board from ordering a provisional increase
subject to final disposition of whether or not to make it permanent or to G.R. No. 96349 July 18, 1991
reduce or increase it further or to deny the application. The provisional
increase is akin to a temporary restraining order, which are given ex- EUGENIO O. ORIGINAL, IRENEO N. AARON, JR., RENE
parte. LEDESMA, ROLANDO VALLE, ORLANDO MONTANO,
The Court further noted the Solicitor General’s comments that “the STEVE ABITANG, NERI JINON, WILFREDO DELEONIO,
ERB is not averse to the idea of a presidential review of its decision,” RENATO BORRO, RODRIGO DE VERA, ALVIN BAYUANG,
except that there is no law at present authorizing the same. The Court JESUS MELENDEZ, NUMERIANO CAJILIG JR., RUFINO DE
suggested that it will be under the scope of the legislative to allow the LA CRUZ AND JOVELINO G. TIPON, petitioners,
presidential review of the decisions of the ERB since, despite its being vs.
a quasi-judicial body, it is still “ an administrative body under the ENERGY REGULATORY BOARD, CALTEX (Philippines),
Office of the President whose decisions should be appealed to the INC., PILIPINAS SHELL PETROLEUM CORPORATION AND
President under the established principle of exhaustion of PETRON CORPORATION, respondents.
administrative remedies,” especially on a matter as transcendental as
oil price increases which affect the lives of almost all Filipinos.
G.R. No. 96284 July 18,1991

CEFERINO S. PAREDES, JR., petitioner,

vs.
ENERGY REGULATORY BOARD, CALTEX (Philippines),
INC., PILIPINAS SHELL, INC. AND PETROPHIL
CORPORATION, respondents.

RESOLUTION

MEDIALDEA, J.:

In G.R. No. 96266, petitioner Maceda seeks nullification of the Energy

Regulatory Board (ERB) Orders dated December 5 and 6, 1990 on the
ground that the hearings conducted on the second provisional increase
in oil prices did not allow him substantial cross-examination, in effect,
allegedly, a denial of due process.

The facts of the case are as follows:

Upon the outbreak of the Persian Gulf conflict on August 2, 1990,

private respondents oil companies filed with the ERB their respective
applications on oil price increases (docketed as ERB Case Nos. 90-106,
90-382 and 90-384, respectively).

On September 21, 1990, the ERB issued an order granting a

provisional increase of P1.42 per liter. Petitioner Maceda filed a
petition for Prohibition on September 26, 1990 (E. Maceda v. ERB, et
al., G.R. No. 95203), seeking to nullify the provisional increase. We
dismissed the petition on December 18, 1990, reaffirming ERB's
authority to grant provisional increase even without prior hearing,
pursuant to Sec. 8 of E.O. No. 172, clarifying as follows:

What must be stressed is that while under Executive Order

No. 172, a hearing is indispensable, it does not preclude the
Board from ordering, ex-parte, a provisional increase, as it
did here, subject to its final disposition of whether or not: (1)
to make it permanent; (2) to reduce or increase it further; or
(3) to deny the application. Section 3, paragraph (e) is akin
to a temporary restraining order or a writ of preliminary
1 ADMIN LAW CASES 0901
 attachment issued by the courts, which are given ex- . . . The order of testimony both with respect to the
parte and which are subject to the resolution of the main examination of the particular witness and to the general
case. course of the trial is within the discretion of the court and the
exercise of this discretion in permitting to be introduced out
of the order prescribed by the rules is not improper (88
Section 3, paragraph (e) and Section 8 do not negate each
other, or otherwise, operate exclusively of the other, in that C.J.S. 206-207).
the Board may resort to one but not to both at the same time.
Section 3(e) outlines the jurisdiction of the Board and the Such a relaxed procedure is especially true in administrative
grounds for which it may decree a price adjustment, subject bodies, such as the ERB which in matters of rate or price
to the requirements of notice and hearing. Pending that, fixing is considered as exercising a quasi-legislative, not
however, it may order, under Section 8, an authority to quasi-judicial, function As such administrative agency, it is
increase provisionally, without need of a hearing, subject to not bound by the strict or technical rules of evidence
the final outcome of the proceeding. The Board, of course, is governing court proceedings (Sec. 29, Public Service Act;
not prevented from conducting a hearing on the grant of Dickenson v. United States, 346, U.S. 389, 98 L. ed. 132, 74
provisional authority-which is of course, the better S. St. 152). (Emphasis supplied)
procedure — however, it cannot be stigmatized later if it
failed to conduct one. (pp. 129-130, Rollo) (Emphasis In fact, Section 2, Rule I of the Rules of Practice and
supplied)
Procedure Governing Hearings Before the ERB provides
that —
In the same order of September 21, 1990, authorizing provisional
increase, the ERB set the applications for hearing with due notice to all These Rules shall govern pleadings, practice and procedure
interested parties on October 16, 1990. Petitioner Maceda failed to
before the Energy Regulatory Board in all matters of
appear at said hearing as well as on the second hearing on October 17, inquiry, study, hearing, investigation and/or any other
1990.
proceedings within the jurisdiction of the Board. However,
in the broader interest of justice, the Board may, in any
To afford registered oppositors the opportunity to cross-examine the particular matter, except itself from these rules and apply
witnesses, the ERB set the continuation of the hearing to October 24, such suitable procedure as shall promote the objectives of
1990. This was postponed to November 5, 1990, on written notice of the Order.
petitioner Maceda.
(pp. 163-164, Rollo)
On November 5, 1990, the three oil companies filed their respective
motions for leave to file or admit amended/supplemental applications
Petitioner Maceda also claims that there is no substantial evidence on
to further increase the prices of petroleum products. record to support the provisional relief.

The ERB admitted the respective supplemental/amended petitions on We have, in G.R. Nos. 95203-05, previously taken judicial notice of
November 6, 1990 at the same time requiring applicants to publish the
matters and events related to the oil industry, as follows:
corresponding Notices of Public Hearing in two newspapers of general
circulation (p. 4, Rollo and Annexes "F" and "G," pp. 60 and
62, Rollo). . . . (1) as of June 30, 1990, the OPSF has incurred a deficit
of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to
$1.00; (3) the country's balance of payments is expected to
Hearing for the presentation of the evidence-in-chief commenced on reach $1 Billion; (4) our trade deficit is at P2.855 Billion as
November 21, 1990 with ERB ruling that testimonies of witnesses
of the first nine months of the year.
were to be in the form of Affidavits (p. 6, Rollo). ERB subsequently
outlined the procedure to be observed in the reception of evidence, as
follows: . . . (p. 150, Rollo)

CHAIRMAN FERNANDO: The Solicitor General likewise commented:

Well, at the last hearing, applicant Caltex presented its Among the pieces of evidence considered by ERB in the
evidence-in-chief and there is an understanding or it is the grant of the contested provisional relief were: (1) certified
Board's wish that for purposes of good order in the copies of bins of lading issued by crude oil suppliers to the
presentation of the evidence considering that these are being private respondents; (2) reports of the Bankers Association
heard together, we will defer the cross-examination of of the Philippines on the peso-dollar exchange rate at the
applicant Caltex's witness and ask the other applicants to BAP oil pit; and (3) OPSF status reports of the Office of
present their evidence-in-chief so that the oppositors win Energy Affairs. The ERB was likewise guided in the
have a better Idea of what an of these will lead to because as determination of international crude oil prices by traditional
I mentioned earlier, it has been traditional and it is the authoritative sources of information on crude oil and
intention of the Board to act on these applications on an petroleum products, such as Platt's Oilgram and Petroleum
industry-wide basis, whether to accept, reject, modify or Intelligence Weekly. (p. 158, Rollo)
whatever, the Board win do it on an industry wide basis, so,
the best way to have (sic) the oppositors and the Board a Thus, We concede ERB's authority to grant the provisional increase in
clear picture of what the applicants are asking for is to have oil price, as We note that the Order of December 5, 1990 explicitly
all the evidence-in-chief to be placed on record first and then stated:
the examination will come later, the cross-examination will
come later. . . . (pp. 5-6, tsn., November 23, 1990, ERB
Cases Nos. 90-106, 90382 and 90-384). (p. 162, Rollo) in the light, therefore, of the rise in crude oil importation
costs, which as earlier mentioned, reached an average of
$30.3318 per barrel at $25.551/US $ in September-October
Petitioner Maceda maintains that this order of proof deprived him of 1990; the huge OPSF deficit which, as reported by the
his right to finish his cross-examination of Petron's witnesses and Office of Energy Affairs, has amounted to P5.7 Billion
denied him his right to cross-examine each of the witnesses of Caltex (based on filed claims only and net of the P5 Billion OPSF)
and Shell. He points out that this relaxed procedure resulted in the as of September 30, 1990, and is estimated to further
denial of due process. increase to over P10 Billion by end December 1990; the
decision of the government to discontinue subsidizing oil
We disagree. The Solicitor General has pointed out: prices in view of inflationary pressures; the apparent
inadequacy of the proposed additional P5.1 Billion
government appropriation for the OPSF and the sharp drop
in the value of the peso in relation to the US dollar to
2 ADMIN LAW CASES 0901
 P28/US $, this Board is left with no other recourse but to Applied for 2.8685
grant applicants oil companies further relief by increasing
the prices of petroleum products sold by them. (p.
Nonetheless, it is relevant to point out that on December 10, 1990, the
161, Rollo) ERB, in response to the President's appeal, brought back the increases
in Premium and Regular gasoline to the levels mandated by the
Petitioner Maceda together with petitioner Original (G.R. No. 96349) December 5, 1990 Order (P6.9600 and P6.3900, respectively), as
also claim that the provisional increase involved amounts over and follows:
above that sought by the petitioning oil companies.
Product In Pesos Per Liter
The Solicitor General has pointed out that aside from the increase in
crude oil prices, all the applications of the respondent oil companies
OPSF
filed with the ERB covered claims from the OPSF.

Premium Gasoline 6.9600

We shall thus respect the ERB's Order of December 5, 1990 granting a
provisional price increase on petroleum products premised on the oil
companies' OPSF claims, crude cost peso differentials, forex risk for a Regular Gasoline 6.3900
subsidy on sale to NPC (p. 167, Rollo), since the oil companies are
"entitled to as much relief as the fact alleged constituting the course of Avturbo 4.9950
action may warrant," (Javellana v. D.O. Plaza Enterprises, Inc., G.R.
No. L-28297, March 30, 1970, 32 SCRA 261 citing Rosales v. Reyes,
25 Phil. 495; Aguilar v. Rubiato, 40 Phil. 470) as follows: Kerosene 1.4100

Per Liter Diesel Oil 1.4100

Weighted Fuel Oil/Feedstock 0.2405

Petron Shell Caltex Average LPG 1.2200

Crude Cost P3.11 P3.6047 P2.9248 P3.1523 Asphalt 2.5000

Peso Cost Thinner 2.5000

Diffn'l 2.1747 1.5203 1.5669 1.8123 In G.R. No. 96349, petitioner Original additionally claims that if the
price increase will be used to augment the OPSF this will constitute
illegal taxation. In the Maceda case, (G.R. Nos. 95203-05, supra) this
Forex Risk Court has already ruled that "the Board Order authorizing the proceeds
generated by the increase to be deposited to the OPSF is not an act of
Fee -0.1089 -0,0719 -0.0790 -0.0896 taxation but is authorized by Presidential Decree No. 1956, as amended
by Executive Order No. 137.
Subsidy on
The petitions of E.O. Original et al. (G.R. No. 96349) and C.S.
Povedas, Jr. (G.R. No. 96284), insofar as they question the ERB's
Sales to NPC 0.1955 0.0685 0.0590 0.1203
authority under Sec. 8 of E.O. 172, have become moot and academic.

Total Price
We lament Our helplessness over this second provisional increase in
oil price. We have stated that this "is a question best judged by the
Increase political leadership" (G.R. Nos. 95203-05, G.R. Nos. 95119-21, supra).
We wish to reiterate Our previous pronouncements therein that while
the government is able to justify a provisional increase, these findings
Applied for P59.3713 P5.1216 P4.4717 P4.9954
"are not final, and it is up to petitioners to demonstrate that the present
economic picture does not warrant a permanent increase."
Less: September 21 Price
In this regard, We also note the Solicitor General's comments that "the
Relief ERB is not averse to the idea of a presidential review of its decision,"
except that there is no law at present authorizing the same. Perhaps, as
Actual Price Increase P1.42 pointed out by Justice Padilla, our lawmakers may see the wisdom of
allowing presidential review of the decisions of the ERB since, despite
its being a quasi-judicial body, it is still "an administrative body under
Actual Tax Reduction: the Office of the President whose decisions should be appealed to the
President under the established principle of exhaustion of
Ad Valorem Tax administrative remedies," especially on a matter as transcendental as
oil price increases which affect the lives of almost an Filipinos.
(per Sept. 1, 1990
ACCORDINGLY, the petitions are hereby DISMISSED.
price build-up) P1.3333
SO ORDERED.
Specific Tax (per

Oct. 5, 1990 price

build-up) .6264 .7069 2.1269

Net Price Increase

3 ADMIN LAW CASES 0901

G.R. 1051 May 19, 1903 2. On the other hand, the Sedition Act of 1798, the term
‘government’ is used in an abstract sense (e.q. President,
Congress), meaning the existing political system, its laws and
U.S. v. Dorr
institutions. The Court opines that it is in this sense that the term
is used in the enactment (Art. 292) under consideration.
3. Hence, in Art. 292, the meaning of “Insular of the Government
of the Phil. Islands” is the government as a system, however, the
FACTS: article in questions attacks the ‘government’ as the aggregate of
public officials who run it.
1. Herein respondents were alleged to have committed an offense
of writing, publishing and circulating scurrilous libel against 4. The Court ruled that the article in question contains no attack
the Government of the U.S. and the Insular Government of upon the governmental system of the U.S., by which the
the Philippine Islands in violation of Section 8, Act 292 of the authority of the U.S. is enforced in these Islands per se. In this
Commission. case, it is the character of men who are entrusted with the
administration of the government which the writer wants to
2. The alleged libel was published in “Manila Freedom” issue bring disrepute due to their motives, public integrity, and private
dated 06 April 1902 as an editorial issue. morals and wisdoms of their policy. The publication does not
3. The editorial is about the appointment of rascal natives constitute any seditious tendency being apparent to be in
(Filipinos) to important Government positions by the Civil violation of Art. 292.
Commission (CC for brevity).
Respondents are acquitted.
The following are part of the article:
[1] ADMINISTRATION – the aggregate of persons in whose hands
the reins of government are for the time being.

“…the Civil Commission has, in its distribution of offices, constituted a

protectorate over a set of men who should be in jail or
deported…xxx…this kind of foolish work that the Commission is doing Republic of the Philippines
all over the Island, reinstating insurgents and rogues and turning down SUPREME COURT
the men who have during struggle, at the risk of their lives, aided the Manila
Americans.”
EN BANC

G.R. No. 1051 May 19, 1903

“The commission has exalted to the highest position in the Islands
Filipinos who are alleged to be notoriously corrupt and rascally, and THE UNITED STATES, complainant-appellee,
men of no personal character”. vs.
FRED L. DORR, ET AL., defendants-appellants.

F. G. Waite for appellants.

“it is a notorious fact that many branches of the Government Solicitor-General Araneta for appellee.
organized by the Civil Commission are rotten and corrupt…xxx”.
LADD, J.:

The defendants have been convicted upon a complaint charging them

4. Article 292, section 8 has provided modes for committing an with the offense of writing, publishing, and circulating a scurrilous
offense against it. However, albeit the article has a virulent libel against the Government of the United States and the Insular
attack against the policy of the CC, the complaint in question Government of the Philippine Islands. The complaint is based upon
cannot be regarded as having a tendency to produce anything section 8 of Act No. 292 of the Commission, which is as follows:
like what may be called disaffection or a state of feeling
incompatible with a disposition to remain loyal to the
Every person who shall utter seditious words or speeches,
Government and obedient to the laws.
write, publish, or circulate scurrilous libels against the
5. There is a question as how the term “the Insular Government of Government of the United States or the Insular Government
the Phil. Islands”, is used in Section 8, Art. 292. Is it defined as of the Philippine Islands, or which tend to disturb or obstruct
“the existing law and institutions of the Islands” or “the any lawful officer in executing his office, or which tend to
aggregate of the individuals by whom the government of the instigate others to cabal or meet together for unlawful
Islands is administered”? purposes, or which suggest or incite rebellious conspiracies
or riots, or which tend to stir up the people against the lawful
authorities, or to disturb the peace of the community, the
safety and order of the Government, or who shall knowingly
conceal such evil practices, shall be punished by a fine not
ISSUE: Whether the Article published by the respondents is in exceeding two thousand dollars or by imprisonment not
violation of the Art. 292 for it directly attacks the U.S. government and exceeding two years, or both, in the discretion of the court.
the Insular Government of the Phil. Island?
The alleged libel was published as an editorial in the issue of the
"Manila Freedom" of April 6, 1902, under the caption of "A few hard
facts."
RULING:
The Attorney-General in his brief indicates the following passages of
1. In modern political science, the term government is defined the article as those upon which he relies to sustain the conviction:
as “the institution or aggregate of institutions by which an
independent society makes and carries out those
Sidney Adamson, in a late letter in "Leslie's Weekly," has
rules…xxx…the government is the aggregation of authorities
the following to say of the action of the Civil Commission in
which rule a society (administration)”.[1]
appointing rascally natives to important Government
positions:
4 ADMIN LAW CASES 0901
 "It is a strong thing to say, but nevertheless true, against the Government of the United States or the Insular Government
that the Civil Commission, through its ex- of the Philippine Islands; (3) the writing, publishing, or circulating of
insurgent office holders, and by its continual libels which tend to disturb or obstruct any lawful officer in executing
disregard for the records of natives obtained his office; (4) or which tend to instigate others to cabal or meet
during the military rule of the Islands, has, in its together for unlawful purposes; (5) or which suggest or incite
distribution of offices, constituted a protectorate rebellious conspiracies or riots; (6) or which tend to stir up the people
over a set of men who should be in jail or against the lawful authorities or to disturb the peace of the community,
deported. . . . [Reference is then made to the the safety and order of the Government; (7) knowingly concealing such
appointment of one Tecson as justice of the evil practices.
peace.] This is the kind of foolish work that the
Commission is doing all over the Islands, The complaint appears to be framed upon the theory that a writing, in
reinstating insurgents and rogues and turning
order to be punishable as a libel under this section, must be of a
down the men who have during the struggle, at scurrilous nature and directed against the Government of the United
the risk of their lives, aided the Americans."
States or the Insular Government of the Philippine Islands, and must, in
addition, tend to some one of the results enumerated in the section. The
xxx xxx xxx article in question is described in the complaint as "a scurrilous libel
against the Government of the United States and the Insular
Government of the Philippine Islands, which tends to obstruct the
There is no doubt but that the Filipino office holders of the
Islands are in a good many instances rascals. lawful officers of the United States and the Insular Government of the
Philippine Islands in the execution of their offices, and which tends to
instigate others to cabal and meet together for unlawful purposes, and
xxx xxx xxx which suggests and incites rebellious conspiracies, and which tends to
stir up the people against the lawful authorities, and which disturbs the
The commission has exalted to the highest positions in the safety and order of the Government of the United States and the Insular
Islands Filipinos who are alleged to be notoriously corrupt Government of the Philippine Islands." But it is "a well-settled rule in
and rascally, and men of no personal character. considering indictments that where an offense may be committed in
any of several different modes, and the offense, in any particular
instance, is alleged to have been committed in two or more modes
xxx xxx xxx specified, it is sufficient to prove the offense committed in any one of
them, provided that it be such as to constitute the substantive offense"
Editor Valdez, of "Miau," made serious charges against two of the (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants
native Commissioners — charges against Trinidad H. Pardo de Tavera, may, therefore, be convicted if any one of the substantive charges into
which, if true, would brand the man as a coward and a rascal, and with which the complaint may be separated has been made out.
what result? . . . [Reference is then made to the prosecution and
conviction of Valdez for libel "under a law which specifies that the We are all, however, agreed upon the proposition that the article in
greater the truth the greater the libel."] Is it the desire of the people of question has no appreciable tendency to "disturb or obstruct any lawful
the United States that the natives against whom these charges have officer in executing his office," or to "instigate" any person or class of
been made (which, if true, absolutely vilify their personal characters) persons "to cabal or meet together for unlawful purposes," or to
be permitted to retain their seats on the Civil Commission, the "suggest or incite rebellious conspiracies or riots," or to "stir up the
executive body of the Philippine Government, without an people against the lawful authorities or to disturb the peace of the
investigation? community, the safety and order of the Government." All these various
tendencies, which are described in section 8 of Act No. 292, each one
xxx xxx xxx of which is made an element of a certain form of libel, may be
characterized in general terms as seditious tendencies. This is
recognized in the description of the offenses punished by this section,
It is a notorious fact that many branches of the Government which is found in the title of the act, where they are defined as the
organized by the Civil Commission are rotten and corrupt. crimes of the "seditious utterances, whether written or spoken."
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 Excluding from consideration the offense of publishing "scurrilous
is far from being what it should. Neither fiscals nor judges libels against the Government of the United States or the Insular
can be persuaded to convict insurgents when they wish to Government of the Philippine Islands," which may conceivably stand
protect them. on a somewhat different footing, the offenses punished by this section
all consist in inciting, orally or in writing, to acts of disloyalty or
disobedience to the lawfully constituted authorities in these Islands.
xxx xxx xxx And while the article in question, which is, in the main, a virulent
attack against the policy of the Civil Commission in appointing natives
Now we hear all sorts of reports as to rottenness existing in to office, may have had the effect of exciting among certain classes
the province [of Tayabas], and especially the northern end of dissatisfaction with the Commission and its measures, we are unable to
it; it is said that it is impossible to secure the conviction of discover anything in it which can be regarded as having a tendency to
lawbreakers and outlaws by the native justices, or a produce anything like what may be called disaffection, or, in other
prosecution by the native fiscals. words, a state of feeling incompatible with a disposition to remain
loyal to the Government and obedient to the laws. There can be no
conviction, therefore, for any of the offenses described in the section
xxx xxx xxx
on which the complaint is based, unless it is for the offense of
publishing a scurrilous libel against the Government of the of the
The long and short of it is that Americans will not stand for United States or the Insular Government of the Philippine Islands.
an arbitrary government, especially when evidences of
carpetbagging and rumors of graft are too thick to be
Can the article be regarded as embraced within the description of
pleasant.
"scurrilous libels against the Government of the United States or the
Insular Government of the Philippine Islands?" In the determination of
We do not understand that it is claimed that the defendants succeeded this question we have encountered great difficulty, by reason of the
in establishing at the trial the truth of any of the foregoing statements. almost entire lack of American precedents which might serve as a
The only question which we have considered is whether their guide in the construction of the law. There are, indeed, numerous
publication constitutes an offense under section 8 of Act No. 292, English decisions, most of them of the eighteenth century, on the
above cited. subject of libelous attacks upon the "Government, the constitution, or
the law generally," attacks upon the Houses of Parliament, the Cabinet,
Several allied offenses or modes of committing the same offense are the Established Church, and other governmental organisms, but these
defined in that section, viz: (1) The uttering of seditious words or decisions are not now accessible to us, and, if they were, they were
speeches; (2) the writing, publishing, or circulating of scurrilous libels made under such different conditions from those which prevail at the

5 ADMIN LAW CASES 0901

present day, and are founded upon theories of government so foreign to common law to blasphemous, obscene, or seditious publications in
those which have inspired the legislation of which the enactment in which there may be no element of defamation whatever. "The word
question forms a part, that they would probably afford but little light in 'libel' as popularly used, seems to mean only defamatory words; but
the present inquiry. In England, in the latter part of the eighteenth words written, if obscene, blasphemous, or seditious, are technically
century, any "written censure upon public men for their conduct as called libels, and the publication of them is, by the law of England, an
such," as well as any written censure "upon the laws or upon the indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627,
institutions of the country," would probably have been regarded as a per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206, 211.)
libel upon the Government. (2 Stephen, History of the Criminal Law of
England, 348.) This has ceased to be the law in England, and it is While libels upon forms of government, unconnected with defamation
doubtful whether it was ever the common law of any American State. of individuals, must in the nature of things be of uncommon
"It is true that there are ancient dicta to the effect that any publication occurrence, the offense is by no means an imaginary one. An instance
tending to "possess the people with an ill opinion of the Government"
of a prosecution for an offense essentially of this nature is
is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., Republica vs. Dennie, 4 Yeates (Pa.), 267, where the defendant was
532, and Ellenborough, C. J., in R. vs. Cobbett, 1804, 29 How. St. Tr.,
indicted "as a factious and seditious person of a wicked mind and
49), but no one would accept that doctrine now. Unless the words used unquiet and turbulent disposition and conversation, seditiously,
directly tend to foment riot or rebellion or otherwise to disturb the maliciously, and willfully intending, as much as in him lay, to bring
peace and tranquility of the Kingdom, the utmost latitude is allowed in into contempt and hatred the independence of the United States, the
the discussion of all public affairs." (11 Enc. of the Laws of England, constitution of this Commonwealth and of the United States, to excite
450.) Judge Cooley says (Const. Lim., 528): "The English common popular discontent and dissatisfaction against the scheme of polity
law rule which made libels on the constitution or the government instituted, and upon trial in the said United States and in the said
indictable, as it was administered by the courts, seems to us unsuited to Commonwealth, to molest, disturb, and destroy the peace and
the condition and circumstances of the people of America, and tranquility of the said United States and of the said Commonwealth, to
therefore never to have been adopted in the several States."
condemn the principles of the Revolution, and revile, depreciate, and
scandalize the characters of the Revolutionary patriots and statesmen,
We find no decisions construing the Tennessee statute (Code, sec. to endanger, subvert, and totally destroy the republican constitutions
6663), which is apparently the only existing American statute of a and free governments of the said United States and this
similar character to that in question, and from which much of the Commonwealth, to involve the said United States and this
phraseology of then latter appears to have been taken, though with Commonwealth in civil war, desolation, and anarchy, and to procure
some essential modifications. by art and force a radical change and alteration in the principles and
forms of the said constitutions and governments, without the free will,
The important question is to determine what is meant in section 8 of wish, and concurrence of the people of the said United States and this
Act No. 292 by the expression "the Insular Government of the Commonwealth, respectively," the charge being that "to fulfill, perfect,
Philippine Islands." Does it mean in a general and abstract sense the and bring to effect his wicked, seditious, and detestable intentions
existing laws and institutions of the Islands, or does it mean the aforesaid he . . . falsely, maliciously, factiously, and seditiously did
aggregate of the individuals by whom the government of the Islands is, make, compose, write, and publish the following libel, to wit; 'A
for the time being, administered? Either sense would doubtless be democracy is scarcely tolerable at any period of national history. Its
admissible. omens are always sinister and its powers are unpropitious. With all the
lights or experience blazing before our eyes, it is impossible not to
discover the futility of this form of government. It was weak and
We understand, in modern political science, . . . by the wicked at Athens, it was bad in Sparta, and worse in Rome. It has been
term government, that institution or aggregate of institutions by which tried in France and terminated in despotism. it was tried in England and
an independent society makes and carries out those rules of action rejected with the utmost loathing and abhorrence. It is on its trial here
which are unnecessary to enable men to live in a social state, or which and its issue will be civil war, desolation, and anarchy. No wise man
are imposed upon the people forming that society by those who possess but discerns its imperfections; no good man but shudders at its
the power or authority of prescribing them. Government is the miseries; no honest man but proclaims its fraud, and no brave man but
aggregate of authorities which rule a society. By "dministration, again, draws his sword against its force. The institution of a scheme of polity
we understand in modern times, and especially in more or less free so radically contemptible and vicious is a memorable example of what
countries, the aggregate of those persons in whose hands the reins of the villainy of some men can devise, the folly of others receive, and
government are for the time being (the chief ministers or heads of both establish, in despite of reason, reflection, and sensation.'"
departments)." (Bouvier, Law Dictionary, 891.) But the writer adds
that the terms "government" and "administration" are not always used
in their strictness, and that "government" is often used for An attack upon the lawfully established system of civil government in
"administration." the Philippine Islands, like that which Dennie was accused of making
upon the republican form of government lawfully established in the
United States and in the State of Pennsylvania would, we think, if
In the act of Congress of July 14, 1798, commonly known as the couched in scandalous language, constitute the precise offense
"Sedition Act," it is made an offense to "write, print, utter, or described in section 8 of Act No. 292 as a scurrilous libel against the
published," or to "knowingly and willingly assist or aid in writing, Insular Government of the Philippine Islands.
printing, uttering, or publishing any false, scandalous, and malicious
writing or writings against the Government of the United States, or
Defamation of individuals, whether holding official positions or not,
either House of the Congress of the United States, or the President of
the United States, with intent to defame the said Government, or either and whether directed to their public conduct or to their private life,
House of the said Congress, or the said President, or to bring them, or may always be adequately punished under the general libel law.
either of them, into contempt or disrepute, or to excite against them or Defamation of the Civil Commission as an aggregation, it being "a
either or any of them the hatred of the good people of the United body of persons definite and small enough for its individual members
States," etc. The term "government" would appear to be used here in to be recognized as such" (Stephen, Digest of the Criminal Law, art.
the abstract sense of the existing political system, as distinguished from 277), as well as defamation of any of the individual members of the
Commission or of the Civil Governor, either in his public capacity or
the concrete organisms of the Government — the Houses of Congress
and the Executive — which are also specially mentioned. as a private individual, may be so punished. The general libel law
enacted by the Commission was in force when Act No. 292, was
passed. There was no occasion for any further legislation on the subject
Upon the whole, we are of the opinion that this is the sense in which of libels against the individuals by whom the Insular Government is
the term is used in the enactment under consideration. administered — against the Insular Government in the sense of the
aggregate of such individuals. There was occasion for stringent
It may be said that there can be no such thing as a scurrilous libel, or legislation against seditious words or libels, and that is the main if not
any sort of a libel, upon an abstraction like the Government in the the sole purpose of the section under consideration. It is not
sense of the laws and institutions of a country, but we think an answer unreasonable to suppose that the Commission, in enacting this section,
to this suggestion is that the expression "scurrilous libel" is not used in may have conceived of attacks of a malignant or scurrilous nature upon
section 8 of Act No. 292 in the sense in which it is used in the general the existing political system of the United States, or the political
libel law (Act No. 277) — that is, in the sense of written defamation of system established in these Islands by the authority of the United
individuals — but in the wider sense, in which it is applied in the States, as necessarily of a seditious tendency, but it is not so reasonable
to suppose that they conceived of attacks upon the personnel of the
6 ADMIN LAW CASES 0901
government as necessarily tending to sedition. Had this been their view
it seems probable that they would, like the framers of the Sedition Act
of 1798, have expressly and specifically mentioned the various public
officials and collegiate governmental bodies defamation of which they
meant to punish as sedition.

The article in question contains no attack upon the governmental

system of the United States, and it is quite apparent that, though
grossly abusive as respects both the Commission as a body and some
of its individual members, it contains no attack upon the governmental
system by which the authority of the United States is enforced in these
Islands. The form of government by a Civil Commission and a Civil
Governor is not assailed. It is the character of the men who are
intrusted with the administration of the government that the writer is
seeking to bring into disrepute by impugning the purity of their
motives, their public integrity, and their private morals, and the
wisdom of their policy. The 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 costs de oficio.

7 ADMIN LAW CASES 0901

Malaga vs. Penachos (Digest) serious detriment to public service. Lastly, an additional amount of
Ma. Elena Malaga, et. al. vs. Manuel R. Penachos, Jr., [Link]. P1.5M had been appropriated out of the funds of the National Treasury
GR No. 86995 03 September 1992 and it was also decreed in its charter that the funds and maintenance of
the state college would henceforth be included in the General
Appropriations Law.
Chartered Institution and GOCC, defined.
Nevertheless, it does not automatically follow that ISCOF is covered
by the prohibition in the said decree as there are irregularities present
FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre- surrounding the transaction that justified the injunction issued as
qualifications, Bids and Awards Committee (PBAC) caused the regards to the bidding and the award of the project (citing the case of
publication in the November 25, 26 and 28, 1988 issues of the Western Datiles vs. Sucaldito).
Visayas Daily an Invitation to Bid for the construction of a Micro
Laboratory Building at ISCOF. The notice announced that the last day
for the submission of pre-qualification requirements was on December
2, 1988, and that the bids would be received and opened on December
12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the name of BE

Construction and Best Built Construction, respectively, submitted their
pre-qualification documents at two o'clock in the afternoon of
December 2, 1988. Petitioner Occeana submitted his own PRE-C1 on
December 5, 1988. All three of them were not allowed to participate in
the bidding as their documents were considered late.

On December 12, 1988, the petitioners filed a complaint with the Iloilo
RTC against the officers of PBAC for their refusal without just cause
to accept them resulting to their non-inclusion in the list of pre-
qualified bidders. They sought to the resetting of the December 12,
1988 bidding and the acceptance of their documents. They also asked
that if the bidding had already been conducted, the defendants be
directed not to award the project pending resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining order

prohibiting PBAC from conducting the bidding and award the project.
The defendants filed a motion to lift the restraining order on the ground
that the court is prohibited from issuing such order, preliminary
injunction and preliminary mandatory injunction in government
infrastructure project under Sec. 1 of P.D. 1818. They also contended
that the preliminary injunction had become moot and academic as it
was served after the bidding had been awarded and closed.

On January 2, 1989, the trial court lifted the restraining order and
denied the petition for preliminary injunction. It declared that the
building sought to be constructed at the ISCOF was an infrastructure
project of the government falling within the coverage of the subject
law.

ISSUE: Whether or not ISCOF is a government instrumentality subject

to the provisions of PD 1818?

RULING: The 1987 Administrative Code defines a government

instrumentality as follows:
Instrumentality refers to any agency of the National Government, not
integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions, and government-owned or
controlled corporations. (Sec. 2 (5) Introductory Provisions).

The same Code describes a chartered institution thus:

Chartered institution - refers to any agency organized or operating
under a special charter, and vested by law with functions relating to
specific constitutional policies or objectives. This term includes the
state universities and colleges, and the monetary authority of the state.
(Sec. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered

institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government

instrumentality. First, it was created in pursuance of the integrated
fisheries development policy of the State, a priority program of the
government to effect the socio-economic life of the nation. Second, the
Treasurer of the Republic of the Philippines shall also be the ex-officio
Treasurer of the state college with its accounts and expenses to be
audited by the Commission on Audit or its duly authorized
representative. Third, heads of bureaus and offices of the National
Government are authorized to loan or transfer to it, upon request of the
president of the state college, such apparatus, equipment, or supplies
and even the services of such employees as can be spared without
8 ADMIN LAW CASES 0901
MARIA ELENA MALAGA, doing business under the name B.E. 1594, prescribing policies and guidelines for government infrastructure
CONSTRUCTION; JOSIELEEN NAJARRO, doing business contracts, PBAC shall provide prospective bidders with the Notice to
under the name BEST BUILT CONSTRUCTION; JOSE N. Pre-qualification and other relevant information regarding the proposed
OCCEÑA, doing business under the name THE FIRM OF JOSE work. Prospective contractors shall be required to file their ARC-
N. OCCEÑA; and the ILOILO BUILDERS Contractors Confidential Application for Registration & Classifications
CORPORATION, Petitioners, v. MANUEL R. PENACHOS, JR., & the PRE-C2 Confidential Pre-qualification Statement for the Project
ALFREDO MATANGGA, ENRICO TICAR AND TERESITA (prior to the amendment of the rules, this was referred to as Pre-C1) not
VILLANUEVA, in their respective capacities as Chairman and later than the deadline set in the published Invitation to Bid, after
Members of the Pre-qualification Bids and Awards Committee which date no PRE-C2 shall be submitted and received. Invitations to
(PBAC)-BENIGNO PANISTANTE, in his capacity as President of Bid shall be advertised for at least three times within a reasonable
Iloilo State College of Fisheries, as well as in their respective period but in no case less than two weeks in at least two newspapers of
personal capacities; and HON. LODRIGIO L. general circulations. (IB 13 1.2-19, Implementing Rules and
LEBAQUIN, Respondents. Regulations of P.D. 1594 as amended) PBAC advertised the pre-
qualification deadline as December 2, 1988, without stating the hour
Salas, Villareal & Velasco, for Petitioners. thereof, and announced that the opening of bids would be at 3 o’clock
in the afternoon of December 12, 1988. This scheduled was changed
Virgilio A. Sindico for Respondents. and a notice of such change was merely posted at the ISCOF bulletin
board. The notice advanced the cut-off time for the submission of pre-
qualification documents to 10 o’clock in the morning of December 2,
SYLLABUS 1988, and the opening of bids to 1 o’clock in the afternoon of
December 12, 1988. The new schedule caused the pre-disqualification
of the petitioners as recorded in the minutes of the PBAC meeting held
1. ADMINISTRATIVE LAW; GOVERNMENT on December 6, 1988. While it may be true that there were fourteen
INSTRUMENTALITY, DEFINED. — The 1987 Administrative Code contractors who were pre-qualified despite the change in schedule, this
defines a government instrumentality as follows: Instrumentality refers fact did not cure the defect of the irregular notice. Notably, the
to any agency of the National Government, not integrated within the petitioners were disqualified because they failed to meet the new
department framework, vested with special functions or jurisdiction by deadline and not because of their expired licenses. (B.E. & Best Built’s
law, endowed with some if not all corporate powers, administering licenses were valid until June 30, 1989. [Ex. P & O respectively: both
special funds, and enjoying operational autonomy, usually through a were marked on December 28, 1988]) We have held that where the law
charter. This term includes regulatory agencies, chartered institutions, requires a previous advertisement before government contracts can be
and government-owned or controlled corporations. (Sec. 2 (5) awarded, non-compliance with the requirement will, as a general rule,
Introductory Provisions). render the same void and of no effect. (Caltex Phil. v. Delgado Bros.,
96 Phil. 368) The fact that an invitation for bids has been
2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN communicated to a number of possible bidders is not necessarily
CASE AT BAR. — The 1987 Administrative Code describes a sufficient to establish compliance with the requirements of the law if it
chartered institution thus: Chartered institution — refers to any agency is shown that other possible bidders have not been similarly notified.
organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This 5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. — The
term includes the state universities and colleges, and the monetary purpose of the rules implementing P.D. 1594 is to secure competitive
authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear bidding and to prevent favoritism, collusion and fraud in the award of
from the above definitions that ISCOF is a chartered institution and is these contracts to the detriment of the public. This purpose was
therefore covered by P.D. 1818. There are also indications in its charter defeated by the irregularities committed by PBAC. It has been held that
that ISCOF is a government instrumentality. First, it was created in the three principles in public bidding are the offer to the public, an
pursuance of the integrated fisheries development policy of the State, a opportunity for competition and a basis for exact comparison of bids. A
priority program of the government to effect the socio-economic life of regulation of the matter which excludes any of these factors destroys
the nation. Second, the Treasurer of the Republic of the Philippines the distinctive character of the system and thwarts the purpose of its
shall also be the ex-officio Treasurer of the state college with its adoption. (Hannan v. Board of Education, 25 Okla. 372) In the case at
accounts and expenses to be audited by the Commission on Audit or its bar, it was the lack of proper notice regarding the pre-qualification
duly authorized representative. Third, heads of bureaus and offices of requirement and the bidding that caused the elimination of petitioners
the National Government are authorized to loan or transfer to it, upon B.E. and Best Built. It was not because of their expired licenses, as
request of the president of the state college, such apparatus, equipment, private respondents now claim. Moreover, the plans and specifications
or supplies and even the services of such employees as can be spared which are the contractors’ guide to an intelligent bid, were not issued
without serious detriment to public service. Lastly, an additional on time, thus defeating the guaranty that contractors be placed on equal
amount of P1.5M had been appropriated out of the funds of the footing when they submit their bids. The purpose of competitive
National Treasury and it was also decreed in its charter that the funds bidding is negated if some contractors are informed ahead of their
and maintenance of the state college would henceforth be included in rivals of the plans and specifications that are to be the subject of their
the General Appropriations Law. (Presidential Decree No. 1523) bids.

3. ID.; PROHIBITION OF ANY COURT FROM ISSUING 6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. — It
INJUNCTION IN CASES INVOLVING INFRASTRUCTURE has been held in a long line of cases that a contract granted without the
PROJECTS OF GOVERNMENT (P.D. 1818); POWER OF THE competitive bidding required by law is void, and the party to whom it
COURTS TO RESTRAIN APPLICATION. — In the case of Datiles is awarded cannot benefit from it. It has not been shown that the
and Co. v. Sucaldito, (186 SCRA 704) this Court interpreted a similar irregularities committed by PBAC were induced by or participated in
prohibition contained in P.D. 605, the law after which P.D. 1818 was by any of the contractors. Hence, liability shall attach only to the
patterned. It was there declared that the prohibition pertained to the private respondents for the prejudice sustained by the petitioners as a
issuance of injunctions or restraining orders by courts against result of the anomalies described above.
administrative acts in controversies involving facts or the exercise of
discretion in technical cases. The Court observed that to allow the 7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF,
courts to judge these matters would disturb the smooth functioning of WHEN AVAILABLE. — As there is no evidence of the actual loss
the administrative machinery. Justice Teodoro Padilla made it clear, suffered by the petitioners, compensatory damage may not be awarded
however, that on issues definitely outside of this dimension and to them. Moral damages do not appear to be due either. Even so, the
involving questions of law, courts could not be prevented by P.D. No. Court cannot close its eyes to the evident bad faith that characterized
605 from exercising their power to restrain or prohibit administrative the conduct of the private respondents, including the irregularities in
acts. We see no reason why the above ruling should not apply to P.D. the announcement of the bidding and their efforts to persuade the
1818. There are at least two irregularities committed by PBAC that ISCOF president to award the project after two days from receipt of the
justified injunction of the bidding and the award of the project. restraining order and before they moved to lift such order. For such
questionable acts, they are liable in nominal damages at least in
4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR accordance with Article 2221 of the Civil Code, which states: Art.
GOVERNMENT INFRASTRUCTURE (PD 1594); RULES 2221. Nominal damages are adjudicated in order that a right of the
IMPLEMENTING THEREOF, NOT SUFFICIENTLY COMPLIED plaintiff, which has been violated or invaded by the defendant may be
WITH IN CASE AT BAR. — Under the Rules Implementing P.D. vindicated or, recognized, and not for the purpose of indemnifying the
9 ADMIN LAW CASES 0901
plaintiff for any loss suffered by him. These damages are to be applicability of P.D. 1818, pointing out that while ISCOF was a state
assessed against the private respondents in the amount of P10,000.00 college, it had its own charter and separate existence and was not part
each, to be paid separately for each of petitioners B.E. Construction of the national government or of any local political subdivision. Even if
and Best Built Construction. P.D. 1818 were applicable, the prohibition presumed a valid and legal
government project, not one tainted with anomalies like the project at
bar.
DECISION
They also cited Filipinas Marble Corp. v. IAC, 3 where the Court
allowed the issuance of a writ of preliminary injunction despite a
CRUZ, J.: similar prohibition found in P.D. 385. The Court therein stated
that:chanrob1es virtual 1aw library

This controversy involves the extent and applicability of P.D. 1818, The government, however, is bound by basic principles of fairness and
which prohibits any court from issuing injunctions in cases involving decency under the due process clauses of the Bill of Rights. P.D. 385
infrastructure projects of the [Link] : virtual was never meant to protect officials of government-lending institutions
law library who take over the management of a borrower corporation, lead that
corporation to bankruptcy through mismanagement or
The facts are not disputed. misappropriation of its funds, and who, after ruining it, use the
mandatory provisions of the decree to avoid the consequences of their
The Iloilo State College of Fisheries (henceforth ISCOF) through its misleads (p. 188, Emphasis supplied).
Pre-qualification, Bids and Awards Committee (henceforth PBAC)
caused the publication in the November 25, 26, 28, 1988 issues of the On January 2, 1989, the trial court lifted the restraining order and
Western Visayas Daily an Invitation to Bid for the construction of the denied the petition for preliminary injunction. It declared that the
Micro Laboratory Building at ISCOF. The notice announced that the building sought to be construed at the ISCOF was an infrastructure
last day for the submission of pre-qualification requirements (PRE C- project of the government falling within the coverage of P.D. 1818.
1) ** was December 2, 1988, and that the bids would be received and Even if it were not, the petition for the issuance of a writ of preliminary
opened on December 12, 1988, 3 o’clock in the afternoon. 1 injunction would still fail because the sheriff’s return showed that
PBAC was served a copy of the restraining order after the bidding
Petitioners Maria Elena Malaga and Josieleen Najarro, respectively sought to be restrained had already been held. Furthermore, the
doing business under the name of the B.E. Construction and Best Built members of the PBAC could not be restrained from awarding the
Construction, submitted their pre-qualification documents at two project because the authority to do so was lodged in the President of
o’clock in the afternoon of December 2, 1988. Petitioner Jose Occeña the ISCOF, who was not a party to the case. 4
submitted his own PRE-C1 on December 5, 1988. All three of them
were not allowed to participate in the bidding because their documents In the petition now before us, it is reiterated that P.D. 1818 does not
were considered late, having been submitted after the cut-off time of cover the ISCOF because of its separate and distinct corporate
ten o’clock in the morning of December 2, 1988. personality. It is also stressed again that the prohibition under P.D.
1818 could not apply to the present controversy because the project
On December 12, 1988, the petitioners filed a complaint with the was vitiated with irregularities, to wit:[Link] : virtual law
Regional Trial Court of Iloilo against the chairman and members of library
PBAC in their official and personal capacities. The plaintiffs claimed
that although they had submitted their PRE-C1 on time, the PBAC 1. The invitation to bid as published fixed the deadline of submission
refused without just cause to accept them. As a result, they were not of pre-qualification document on December 2, 1988 without indicating
included in the list of pre-qualified bidders, could not secure the any time, yet after 10:00 o’clock of the given late, the PBAC already
needed plans and other documents, and were unable to participate in refused to accept petitioners’ documents.
the scheduled bidding.
2. The time and date of bidding was published as December 12, 1988
In their prayer, they sought the resetting of the December 12, 1988 at 3:00 p.m. yet it was held at 10:00 o’clock in the morning.
bidding and the acceptance of their PRE-C1 documents. They also
asked that if the bidding had already been conducted, the defendants be 3. Private respondents, for the purpose of inviting bidders to
directed not to award the project pending resolution of their complaint. participate, issued a mimeographed "Invitation to Bid" form, which by
law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the
On the same date, Judge Lodrigio L. Lebaquin issued a restraining particulars of the project subject of bidding for the purpose of.
order prohibiting PBAC from conducting the bidding and awarding the
project. 2 (i) enabling bidders to make an intelligent and accurate bids;

On December 16, 1988, the defendants filed a motion to lift the (ii) for PBAC to have a uniform basis for evaluating the bids;
restraining order on the ground that the Court was prohibited from
issued restraining orders, preliminary injunctions and preliminary (iii) to prevent collusion between a bidder and the PBAC, by opening
mandatory injunctions by P.D. [Link] to all the particulars of a project.

The decree reads pertinently as follows:chanrob1es virtual 1aw library Additionally, the Invitation to Bid prepared by the respondents and the
Itemized Bill of Quantities therein were left blank. 5 And although the
Section 1. No Court in the Philippines shall have jurisdiction to issue project in question was a "Construction," the private respondents used
any restraining order, preliminary injunction, or preliminary an Invitation to Bid form for "Materials." 6
infrastructure project, or a mining, fishery, forest or other natural
resource development project of the government, or any public utility The petitioners also point out that the validity of the writ of preliminary
operated by the government, including among others public utilities for injunction had not yet become moot and academic because even if the
the transport of the goods and commodities, stevedoring and arrastre bids had been opened before the restraining order was issued, the
contracts, to prohibit any person or persons, entity or government project itself had not yet been awarded. The ISCOF president was not
official from proceeding with, or continuing the execution or an indispensable party because the signing of the award was merely a
implementation of any such project, or the operation of such public ministerial function which he could perform only upon the
utility, or pursuing any lawful activity necessary for such execution, recommendation of the Award Committee. At any rate, the complaint
implementation or operation. had already been duly amended to include him as a party defendant.

The movants also contended that the question of the propriety of a In their Comment, the private respondents maintain that since the
preliminary injunction had become moot and academic because the members of the board of trustees of the ISCOF are all government
restraining order was received late, at 2 o’clock in the afternoon of officials under Section 7 of P.D. 1523 and since the operations and
December 12, 1988, after the bidding had been conducted and closed at maintenance of the ISCOF are provided for in the General
eleven thirty in the morning of that date. Appropriations Law, it is should be considered a government
institution whose infrastructure project is covered by P.D. 1818.
In their opposition of the motion, the plaintiffs argued against the
10 ADMIN LAW CASES 0901
Regarding the schedule for pre-qualification, the private respondents similar prohibition contained in P.D. 605, the law after which P.D.
insist that PBAC posted on the ISCOF bulletin board an announcement 1818 was patterned. It was there declared that the prohibition pertained
that the deadline for the submission of pre-qualifications documents to the issuance of injunctions or restraining orders by courts against
was at 10 o’clock of December 2, 1988, and the opening of bids would administrative acts in controversies involving facts or the exercise of
be held at 1 o’clock in the afternoon of December 12, 1988. As of ten discretion in technical cases. The Court observed that to allow the
o’clock in the morning of December 2, 1988, B.E. construction and courts to judge these matters would disturb the smooth functioning of
Best Built construction had filed only their letters of intent. At two the administrative machinery. Justice Teodoro Padilla made it clear,
o’clock in the afternoon, B.E., and Best Built filed through their however, that on issues definitely outside of this dimension and
common representative, Nenette Garuello, their pre-qualification involving questions of law, courts could not be prevented by P.D. No.
documents which were admitted but stamped "submitted late." The 605 from exercising their power to restrain or prohibit administrative
petitioners were informed of their disqualification on the same date, acts.
and the disqualification became final on December 6, 1988. Having
failed to take immediate action to compel PBAC to pre-qualify them We see no reason why the above ruling should not apply to P.D. 1818.
despite their notice of disqualification, they cannot now come to this
Court to question the binding proper in which they had not There are at least two irregularities committed by PBAC that justified
participated. injunction of the bidding and the award of the [Link]
virtualawlibrary [Link]:[Link]
In the petitioners’ Reply, they raise as an additional irregularity the
violation of the rule that where the estimate project cost is from P1M to First, PBAC set deadlines for the filing of the PRE-C1 and the opening
P5M, the issuance of plans, specifications and proposal book forms of bids and then changed these deadlines without prior notice to
should made thirty days before the date of bidding. 7 They point out prospective participants.
that these forms were issued only on December 2, 1988, and not at the
latest on November 12, 1988, the beginning of the 30-day period prior Under the Rules Implementing P.D. 1594, prescribing policies and
to the scheduled bidding. guidelines for government infrastructure contracts, PBAC shall provide
prospective bidders with the Notice of Pre-qualification and other
In their Rejoinder, the private respondents aver that the documents of relevant information regarding the proposed work. Prospective
B.E. and Best Built were received although filed late and were contractors shall be required to file their ARC-Contractors Confidential
reviewed by the Award Committee, which discovered that the Application for Registration & Classifications & the PRE-C2
contractors had expired licenses. B.E.’s temporary certificate of Confidential Pre-qualification Statement for the Project (prior to the
Renewal of Contractor’s License was valid only until September 30, amendment of the rules, this was referred to as PRE-C1) not later than
1988, while Best Built’s license was valid only up to June 30, the deadline set in the published Invitation to Bid, after which date no
[Link] lawlibrary : rednad PRE-C2 shall be submitted and received. Invitations to Bid shall be
advertised for at least three times within a reasonable period but in no
The Court has considered the arguments of the parties in light of their case less than two weeks in at least two newspapers of general
testimonial and documentary evidence and the applicable laws and circulations. 10
jurisprudence. It finds for the petitioners.
PBAC advertised the pre-qualification deadline as December 2, 1988,
The 1987 Administrative Code defines a government instrumentality as without stating the hour thereof, and announced that the opening of
follows:chanrob1es virtual 1aw library bids would be at 3 o’clock in the afternoon of December 12, 1988. This
schedule was changed and a notice of such change was merely posted
Instrumentality refers to any agency of the National Government, not at the ISCOF bulletin board. The notice advanced the cut-off time for
integrated within the department framework, vested with special the submission of pre-qualification documents to 10 o’clock in the
functions or jurisdiction by law, endowed with some if not all morning of December 2, 1988, and the opening of bids to 1 o’clock in
corporate powers, administering special funds, and enjoying the afternoon of December 12, 1988.
operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions, and government-owned or The new schedule caused the pre-disqualification of the petitioners as
controlled corporations. (Sec. 2 (5) Introductory Provisions). recorded in the minutes of the PBAC meeting held on December 6,
1988. While it may be true that there were fourteen contractors who
The same Code describes a chartered institution thus:chanrob1es were pre-qualified despite the change in schedule, this fact did not cure
virtual 1aw library the defect of the irregular notice. Notably, the petitioners were
disqualified because they failed to meet the new deadline and not
Chartered institution — refers to any agency organized or operating because of their expired licenses. ***
under a special charter, and vested by law with functions relating to
specific constitutional policies or objectives. This term includes the We have held that where the law requires a previous advertisement
state universities and colleges, and the monetary authority of the state. before government contracts can be awarded, non-compliance with the
(Sec. 2 (12) Introductory Provisions). requirement will, as a general rule, render the same void and of no
effect 11 The facts that an invitation for bids has been communicated
It is clear from the above definitions that ISCOF is a chartered to a number of possible bidders is not necessarily sufficient to establish
institution and is therefore covered by P.D. 1818. compliance with the requirements of the law if it is shown that other
public bidders have not been similarly notified. 12
There are also indications in its charter that ISCOF is a government
instrumentality. First, it was created in pursuance of the integrated Second, PBAC was required to issue to pre-qualified applicants the
fisheries development policy of the State, a priority program of the plans, specifications and proposal book forms for the project to be bid
government of effect the socio-economic life of the nation. Second, the thirty days before the date of bidding if the estimate project cost was
Treasurer of the Republic of the Philippines also be the ex-officio between P1M and P5M. PBAC has not denied that these forms were
Treasurer of the state college with its accounts and expenses to be issued only on December 2, 1988, or only ten days before the bidding
audited by the Commission on Audit or its duly authorized scheduled for December 12, 1988. At the very latest, PBAC should
representative. Third, heads of bureaus and offices of the National have issued them on November 12, 1988, or 30 days before the
Government are authorized to loan or transfer to it, upon request of the scheduled bidding.
president of the state college, such apparatus, equipment, or supplies
and even the services of such employees as can be spared without It is apparent that the present controversy did not arise from the
serious detriment to public service. Lastly, an additional amount of discretionary acts of the administrative body nor does it involve merely
P1.5M had been appropriated out of the funds of the National Treasury technical matters. What is involved here is non-compliance with the
and it was also decreed in its charter that the funds and maintenance of procedural rules on bidding which required strict observance. The
the state college would henceforth be included in the General purpose of the rules implementing P.D. 1594 is to secure competitive
Appropriations Law. 8 bidding and to prevent favoritism, collusion and fraud in the award of
these contracts to the detriment of the public. This purpose was
Nevertheless, it does not automatically follow that ISCOF is covered defeated by the irregularities committed by [Link] law
by the prohibition in the said decree. library : red

In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a It has been held that the three principles in public bidding are the offer
11 ADMIN LAW CASES 0901
to the public, an opportunity for competition and a basis for exact
comparison of bids. A regulation of the matter which excludes any of
these factors destroys the distinctive character of the system and
thwarts and purpose of its adoption. 13

In the case at bar, it was the lack of proper notice regarding the pre-
qualification requirement and the bidding that caused the elimination
of petitioners B.E. and Best Built. It was not because of their expired
licenses, as private respondents now claim. Moreover, the plans and
specifications which are the contractors’ guide to an intelligent bid,
were not issued on time, thus defeating the guaranty that contractors be
placed on equal footing when they submit their bids. The purpose of
competitive bidding is negated if some contractors are informed ahead
of their rivals of the plans and specifications that are to be the subject
of their bids.

P.D. 1818 was not intended to shield from judicial scrutiny

irregularities committed by administrative agencies such as the
anomalies above described. Hence, the challenged restraining order
was not improperly issued by the respondent judge and the writ of
preliminary injunction should not have been denied. We note from
Annex Q of the private respondent’s memorandum, however, that the
subject project has already been "100% completed as to the
Engineering Standard." This fait accompli has made the petition for a
writ of preliminary injunction moot and academic.

We come now to the liabilities of the private respondents.

It has been held in a long line of cases that a contract granted without
the competitive bidding required by law is void, and the party to whom
it is awarded cannot benefit from it. 14 It has not been shown that the
irregularities committed by PBAC were induced by or participated in
by any of the contractors. Hence, liability shall attach only to the
private respondents for the prejudice sustained by the petitioners as a
result of the anomalies described above.

As there is no evidence of the actual loss suffered by the petitioners,

compensatory damage may not be awarded to them. Moral damages do
not appear to be due either. Even so, the Court cannot close its eyes to
the evident bad faith that characterized the conduct of the private
respondents, including the irregularities in the announcement of the
bidding and their efforts to persuade the ISCOF president to award the
project after two days from receipt of the restraining order and before
they moved to lift such order. For such questionable acts, they are
liable in nominal damages at least in accordance with Article 2221 of
the Civil Code, which states:jgc:[Link]

"Art. 2221. Nominal damages are adjudicated in order that a right of

the plaintiff, which has been violated or invaded by the defendant may
be vindicated or, recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.

These damages are to assessed against the private respondents in the

amount of P10,000.00 each, to be paid separately for each of
petitioners B.E. Construction and Best Built Construction. The other
petitioner, Occeña Builders, is not entitled to relief because it
admittedly submitted its pre-qualification documents on December 5,
1988, or three days after the [Link] virtual lawlibrary

WHEREFORE, judgment is hereby rendered: a) upholding the

restraining order dated December 12, 1988, as not covered by the
prohibition in P.D. 1818; b) ordering the chairman and the members of
the PBAC board of trustees, namely Manuel R. Penachos, Jr., Alfredo
Matangga, Enrico Ticar, and Teresita Villanueva, to each pay
separately to petitioners Maria Elena Malaga and Josieleen Najarro
nominal damages P10,000.00 each; and c) removing the said chairman
and members from the PBAC board of trustees, or whoever among
them is still incumbent therein, for their malfeasance in office. Costs
against PBAC.

Let a copy of this decision be sent to the Office of the Ombudsman.

SO ORDERED.

12 ADMIN LAW CASES 0901

THE UNITED RESIDENTS OF DOMINICAN HILL, INC.,
vs. COMMISSION ON THE SETTLEMENT OF LAND However, it does not depart from its basic nature as an administrative
PROBLEMS agency, albeit one that exercises quasi-judicial functions. Still,
G.R. No. administrative agencies are not considered courts; they are neither part
135945 Mar of the judicial system nor are they deemed judicial tribunals. The
ch 7, 2001 doctrine of separation of powers observed in our system of government
reposes the three (3) great powers into its three (3) branches — the
TOPIC: AN EXECUTIVE AGENCY IS NOT A COURT. legislative, the executive, and the judiciary — each department being
co-equal and coordinate, and supreme in its own sphere. Accordingly,
FACTS: Dominican Hills, formerly registered as Diplomat Hills in the executive department may not, by its own fiat, impose the
Baguio City, was mortgaged to the United Coconut Planters Bank judgment of one of its own agencies, upon the judiciary. Indeed, under
(UCPB). It was eventually foreclosed and acquired later on by the said the expanded jurisdiction of the Supreme Court, it is empowered "to
bank as the highest bidder. On 11 April 1983, through its President determine whether or not there has been grave abuse of discretion
Eduardo Cojuangco Jr., the subject property was donated to the amounting to lack of or excess of jurisdiction on the part of any branch
Republic of the Philippines. The deed of donation stipulated that or instrumentality of the Government."
Dominican Hills would be utilized for the "priority programs, projects,
activities in human settlements and economic development and
governmental purposes" of the Ministry of Human Settlements.
THE UNITED RESIDENTS OF DOMINICAN HILL, INC.,
represented by its President RODRIGO S. MACARIO,
On December 12, 1986, then President Corazon Aquino issued EO 85 SR., petitioner, v. COMMISSION ON THE SETTLEMENT OF
abolishing the Ministry of Human Settlements. All agencies under the LAND PROBLEMS, represented by its Commissioner, RUFINO V.
its supervision as well as all its assets, programs and projects, were MIJARES; MARIO PADILAN, PONCIANO BASILAN, HIPOLITO
transferred to the Presidential Management Staff (PMS).
ESLAVA, WILLIAM LUMPISA, PACITO MOISES, DIONISIO
ANAS, NOLI DANGLA, NAPOLEON BALESTEROS, ELSIE
On 18 October 1988, United (Dominican Hills) submitted its
MOISES, SEBIO LACWASAN, BEN FLORES, DOMINGO
application before the PMS to acquire a portion of the Dominican Hills CANUTAB, MARCELINO GABRIANO, TINA TARNATE,
property. In a MOA, PMS and United agreed that the latter may ANDREW ABRAZADO, DANNY LEDDA, FERNANDO DAYAO,
purchase a portion of the said property from HOME INSURANCE JONATHAN DE LA PENA, JERRY PASSION, PETER AGUINSOD,
GUARANTY CORPORATIO, acting as originator, on a selling price and LOLITA DURAN, Respondents.
of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to DE LEON, JR., J.:
UNITED. The deed of conditional sale provided that ten (10) per cent
of the purchase price would be paid upon signing, with the balance to Before us is a petition for prohibition and declaratory relief seeking the
be amortized within one year from its date of execution. After annulment of a status quo order1dated September 29, 1998 issued by
UNITED made its final payment on January 31, 1992, HIGC executed the public respondent Commission on the Settlement of Land Problems
a Deed of Absolute Sale dated July 1, 1992. (COSLAP, for brevity) in COSLAP Case No. 98-253.
Petitioner alleges that sometime in 1993, private respondents entered
the Dominican Hills property allocated to UNITED and constructed The facts are:
houses thereon. Petitioner was able to secure a demolition order from
the city mayor. Unable to stop the razing of their houses, private The property being fought over by the parties is a 10.36-hectare
respondents, under the name DOMINICAN HILL BAGUIO property in Baguio City called Dominican Hills, formerly registered in
RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for the name of Diplomat Hills, Inc. It appeared that the property was
brevity) filed an action for injunction before RTC Baguio City. Private mortgaged to the United Coconut Planters Bank (UCPB) which
respondents were able to obtain a temporary restraining order but their eventually foreclosed the mortgage thereon and acquired the same as
prayer for a writ of preliminary injunction was later denied. highest bidder. On April 11, 1983, it was donated to the Republic of
the Philippines by UCPB through its President, Eduardo Cojuangco.
The ASSOCIATION filed a separate civil case for damages, injunction The deed of donation stipulated that Dominican Hills would be utilized
and annulment of the said MOA. It was later on dismissed upon for the "priority programs, projects, activities in human settlements and
motion of United. The said Order of dismissal is currently on appeal economic development and governmental purposes" of the Ministry of
with the Court of Appeals. Human Settlements.

The demolition order was subsequently implemented by the Office of

the City Mayor and the City Engineer's Office of Baguio City. On December 12, 1986, the then President Corazon C. Aquino issued
However, petitioner avers that private respondents returned and Executive Order No. 85 abolishing the Office of Media Affairs and the
reconstructed the demolished structures. Ministry of Human Settlements. All agencies under the latter's
supervision as well as all its assets, programs and projects, were
To forestall the re-implementation of the demolition order, private transferred to the Presidential Management Staff (PMS).2
respondents filed a petition for annulment of contracts with prayer for a
temporary restraining order before the Commission on the Settlement On October 18, 1988, the PMS received an application from petitioner
of Land Problems (COSLAP) against petitioner, HIGC, PMS, the City UNITED RESIDENTS OF DOMINICAN HILL, INC. (UNITED, for
Engineer's Office, the City Mayor, as well as the Register of Deeds of brevity), a community housing association composed of non-real
Baguio City. On the very same day, public respondent COSLAP issued property owning residents of Baguio City, to acquire a portion of the
the contested order requiring the parties to maintain the status Dominican Hills property. On February 2, 1990, PMS Secretary Elfren
quo. Without filing a motion for reconsideration from the Cruz referred the application to the HOME INSURANCE
aforesaid status quo order, petitioner filed the instant petition GUARANTY CORPORATION (HIGC). HIGC consented to act as
questioning the jurisdiction of the COSLAP. originator for UNITED.3 Accordingly, on May 9, 1990, a
Memorandum of Agreement was signed by and among the PMS, the
ISSUE: W/O COSLAP is empowered to hear and try a petition for HIGC, and UNITED. The Memorandum of Agreement called for the
annulment of contracts with prayer for a TRO and to issue a status quo PMS to sell the Dominican Hills property to HIGC which would, in
order and conduct a hearing thereof? turn, sell the same to UNITED. The parties agreed on a selling price of
P75.00 per square meter.
RULING: COSLAP is not justified in assuming jurisdiction over the
controversy. It discharges quasi-judicial functions:
Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to
UNITED. The deed of conditional sale provided that ten (10) per cent
"Quasi-judicial function" is a term which applies to the actions,
of the purchase price would be paid upon signing, with the balance to
discretion, etc. of public administrative officers or bodies, who are
be amortized within one year from its date of execution. After
required to investigate facts, or ascertain the existence of facts, hold
UNITED made its final payment on January 31, 1992, HIGC executed
hearings, and draw conclusions from them, as a basis for their official
a Deed of Absolute Sale dated July 1, 1992.
action and to exercise discretion of a judicial nature."
13 ADMIN LAW CASES 0901
Petitioner alleges that sometime in 1993, private respondents entered committee was tasked "to expedite and coordinate the investigation and
the Dominican Hills property allocated to UNITED and constructed resolution of land disputes, streamline and shorten administrative
houses thereon. Petitioner was able to secure a demolition order from procedures, adopt bold and decisive measures to solve land problems,
the city mayor.4 and/or recommend other solutions." It was given the power to issue
subpoenas duces tecum and ad testificandum and to call upon any
Unable to stop the razing of their houses, private respondents, under department, office, agency or instrumentality of the government,
the name DOMINICAN HILL BAGUIO RESIDENTS HOMELESS including government owned or controlled corporations and local
ASSOCIATION (ASSOCIATION, for brevity) filed an action5 for government units, for assistance in the performance of its functions. At
injunction docketed as Civil Case No. 3316-R, in the Regional Trial the time, the PACLAP did not exercise quasi-judicial functions.
Court of Baguio City, Branch 4. Private respondents were able to
obtain a temporary restraining order but their prayer for a writ of On March 19, 1971, Executive Order No. 305 was issued
preliminary injunction was later denied in an Order dated March 18, reconstituting the PACLAP.13 The committee was given exclusive
1996.6 jurisdiction over all cases involving public lands and other lands of the
public domain and accordingly was tasked:
While Civil Case No. 3316-R was pending, the ASSOCIATION, this
time represented by the Land Reform Beneficiaries Association, Inc. 1. To investigate, coordinate, and resolve expeditiously land disputes,
(BENEFICIARIES, for brevity), filed Civil Case No. 3382-R before streamline administrative procedures, and in general, to adopt bold and
Branch 61 of the same court. The complaint7 prayed for damages, decisive measures to solve problems involving public lands and lands
injunction and annulment of the said Memorandum of Agreement of the public domain;
between UNITED and HIGC. Upon motion of UNITED, the trial court
in an Order dated May 27, 1996 dismissed Civil Case No. 3382- 2. To coordinate and integrate the activities of all government agencies
R.8 The said Order of dismissal is currently on appeal with the Court of
having to do with public lands or lands of the public domain;
Appeals.9

3. To study and review present policies as embodied in land laws and

Demolition Order No. 1-96 was subsequently implemented by the administrative rules and regulations, in relation to the needs for land of
Office of the City Mayor and the City Engineer's Office of Baguio
the agro-industrial sector and small farmers, with the end in view to
City. However, petitioner avers that private respondents returned and evolving and recommending new laws and policies and establishing
reconstructed the demolished structures.
priorities in the grant of public land, and the simplification of
processing of land applications in order to relieve the small man from
To forestall the re-implementation of the demolition order, private the complexities of existing laws, rules and regulations;
respondents filed on September 29, 1998 a petition10 for annulment of
contracts with prayer for a temporary restraining order, docketed as
4. To evolve and implement a system for the speedy investigation and
COSLAP Case No. 98-253, in the Commission on the Settlement of resolution of land disputes;
Land Problems (COSLAP) against petitioner, HIGC, PMS, the City
Engineer's Office, the City Mayor, as well as the Register of Deeds of
Baguio City. On the very same day, public respondent COSLAP issued 5. To receive all complaints of settlers and small farmers, involving
the contested order requiring the parties to maintain the status quo. public lands or other lands of the public domain;

Without filing a motion for reconsideration from the aforesaid status 6. To look into the conflicts between Christians and non-Christians,
quo order, petitioner filed the instant petition questioning the between corporations and small settlers and farmers; cause the speedy
jurisdiction of the COSLAP. settlement of such conflicts in accordance with priorities or policies
established by the Committee; and
The issues we are called upon to resolve are:
7. To perform such other functions as may be assigned to it by the
President.
1

Thereafter, the PACLAP was reorganized pursuant to Presidential

IS THE COMMISSION ON THE SETTLEMENT OF LAND Decree No. 832 dated November 27, 1975.14 Its jurisdiction was
PROBLEMS [COSLAP] CREATED UNDER EXECUTIVE ORDER
revised thus:
NO. 561 BY THE OFFICE OF THE PHILIPPINES [sic]
EMPOWERED TO HEAR AND TRY A PETITION FOR
ANNULMENT OF CONTRACTS WITH PRAYER FOR A xxx - xxx - xxx
TEMPORARY RESTRAINING ORDER AND THUS, ARROGATE
UNTO ITSELF THE POWER TO ISSUE STATUS QUO ORDER 2. Refer for immediate action any land problem or dispute brought to
AND CONDUCT A HEARING THEREOF [sic]? the attention of the PACLAP, to any member agency having
jurisdiction thereof: Provided, that when the Executive Committee
2 decides to act on a case, its resolution, order or decision thereon, shall
have the force and effect of a regular administrative resolution, order or
decision, and shall be binding upon the parties therein involved and
ASSUMING THAT THE COMMISSION ON THE SETTLEMENT
upon the member agency having jurisdiction thereof;
OF LAND PROBLEMS [COSLAP] HAS JURISDICTION ON THE
MATTER, IS IT EXEMPTED FROM OBSERVING A CLEAR CASE
OF FORUM SHOPPING ON THE PART OF THE PRIVATE xxx - xxx - xxx
RESPONDENTS?
Notably, the said Presidential Decree No. 832 did not contain any
To the extent that the instant case is denominated as one for declaratory provision for judicial review of the resolutions, orders or decisions of
relief, we initially clarify that we do not possess original jurisdiction to the PACLAP.
entertain such petitions.11 Such is vested in the Regional Trial
Courts.12Accordingly, we shall limit our review to ascertaining if the On September 21, 1979, the PACLAP was abolished and its functions
proceedings before public respondent COSLAP are without or in transferred to the present Commission on the Settlement of Land
excess, of its jurisdiction. In this wise, a recounting of the history of the Problems by virtue of Executive Order No. 561. This reorganization,
COSLAP may provide useful insights into the extent of its powers and effected in line with Presidential Decree No. 1416, brought the
functions. COSLAP directly under the Office of the President.15 It was only at
this time that a provision for judicial review was made from
The COSLAP was created by virtue of Executive Order No. 561 dated resolutions, orders or decisions of the said agency, as embodied in
September 21, 1979. Its forerunner was the Presidential Action section 3(2) thereof, to wit:
Committee on Land Problems (PACLAP) founded on July 31, 1970 by
virtue of Executive Order No. 251. As originally conceived, the
14 ADMIN LAW CASES 0901
Powers and functions. - The Commission shall have the following the abolished PACLAP whose functions, including its jurisdiction,
powers and functions: power and authority to act on, decide and resolve land disputes (Sec. 2,
P.D. No. 832) were all assumed by it. The said Executive Order No.
1. Coordinate the activities, particularly the investigation work, of the 561 containing said provision, being enacted only on September 21,
1979, cannot affect the exercise of jurisdiction of the PACLAP
various government offices and agencies involved in the settlement of
land problems or disputes, and streamline administrative procedures to Provincial Committee of Koronadal on September 29, 1978. Neither
relieve small settlers and landholders and members of cultural can it affect the decision of the COSLAP which merely affirmed said
minorities of the expense and time-consuming delay attendant to the exercise of jurisdiction.
solution of such problems or disputes;
Given the facts of the case, it is our view that the COSLAP is not
2. Refer and follow-up for immediate action by the agency having justified in assuming jurisdiction over the controversy. As matters
appropriate jurisdiction any land problem or dispute referred to the stand, it is not the judiciary's place to question the wisdom behind a
Commission: Provided, that the Commission may, in the following law;17 our task is to interpret the law. We feel compelled to observe,
cases, assume jurisdiction and resolve land problems or disputes which though, that by reason of the ambiguous terminology employed in
are critical and explosive in nature considering, for instance, the large Executive Order No. 561, the power to assume jurisdiction granted to
the COSLAP provides an ideal breeding ground for forum shopping, as
number of the parties involved, the presence or emergence of social
tension or unrest, or other similar critical situations requiring we shall explain subsequently. Suffice it to state at this stage that the
COSLAP may not assume jurisdiction over cases which are already
immediate action:
pending in the regular courts.

(a) Between occupants/squatters and pasture lease agreement holders

or timber concessionaires; The reason is simple. Section 3(2) of Executive Order 561 speaks of
any resolution, order or decision of the COSLAP as having the "force
and effect of a regular administrativeresolution, order or decision."
(b) Between occupants/squatters and government reservation grantees; The qualification places an unmistakable emphasis on
the administrative character of the COSLAP's determination, amplified
(c) Between occupants/squatters and public land claimants or by the statement that such resolutions, orders or decisions "shall be
applicants; binding upon the parties therein and upon the agency having
jurisdiction over the same." An agency is defined by statute as "any of
the various units of the Government, including a department, bureau,
(d) Petitions for classification, release and/or subdivision of lands of office, instrumentality, or government-owned or controlled
the public domain; and corporation, or a local government or a distinct unit therein."18 A
department, on the other hand, "refers to an executive department
(e) Other similar land problems of grave urgency and magnitude. created by law."19 Whereas, a bureau is understood to refer "to any
principal subdivision of any department."20 In turn, an office "refers,
within the framework of governmental organization, to any major
The Commission shall promulgate such rules of procedure as will functional unit of a department or bureau including regional offices. It
insure expeditious resolution and action on the above cases. The may also refer to any position held or occupied by individual persons,
resolution, order or decision of the Commission on any of the whose functions are defined by law or regulation."21 An instrumentality
foregoing cases shall have the force and effect of a regular is deemed to refer "to any agency of the National Government, not
administrative resolution, order or decision and shall be binding upon integrated within the department framework, vested with special
the parties therein and upon the agency having jurisdiction over the functions or jurisdiction by law, endowed with some if not all
same. Said resolution, order or decision shall become final and corporate powers, administering special funds and enjoying operational
executory within thirty (30) days from its promulgation and shall be autonomy, usually through a charter. This term includes regulatory
appealable by certiorari only to the Supreme Court. agencies, chartered institutions and government-owned or controlled
corporations."22 Applying the principle in statutory construction
xxx - xxx - xxx of ejusdem generis, i.e., "where general words follow an enumeration
or persons or things, by words of a particular and specific meaning,
such general words are not to be construed in their widest extent, but
In the performance of its functions and discharge of its duties, the
are to be held as applying only to persons or things of the same kind or
Commission is authorized, through the Commission, to
class as those specifically mentioned,"23 section 3(2) of Executive
issue subpoena and subpoena duces tecum for the appearance of
Order 561 patently indicates that the COSLAP's dispositions are
witnesses and the production of records, books and documents before
binding on administrative or executive agencies. The history of the
it. It may also call upon any ministry, office, agency or instrumentality
COSLAP itself bolsters this view. Prior enactments enumerated its
of the National Government, including government-owned or
member agencies among which it was to exercise a coordinating
controlled corporations, and local governments for assistance. This
function.
authority is likewise, conferred upon the provincial offices as may be
established pursuant to Section 5 of this Executive Order.
The COSLAP discharges quasi-judicial functions:
16
In Bañaga v. Commission on the Settlement of Land Problems, we
characterized the COSLAP's jurisdiction as being general in nature, as "Quasi-judicial function" is a term which applies to the actions,
follows: discretion, etc. of public administrative officers or bodies, who are
required to investigate facts, or ascertain the existence of facts, hold
hearings, and draw conclusions from them, as a basis for their official
Petitioners also contend in their petition that the COSLAP itself has no
action and to exercise discretion of a judicial nature."24
jurisdiction to resolve the protest and counter-protest of the parties
because its power to resolve land problems is confined to those cases
"which are critical and explosive in nature." However, it does not depart from its basic nature as an administrative
agency, albeit one that exercises quasi-judicial functions. Still,
administrative agencies are not considered courts; they are neither part
This contention is devoid of merit. It is true that Executive Order No.
of the judicial system nor are they deemed judicial tribunals. 25The
561 provides that the COSLAP may take cognizance of cases which
doctrine of separation of powers observed in our system of government
are "critical and explosive in nature considering, for instance, the large
reposes the three (3) great powers into its three (3) branches - the
number of parties involved, the presence or emergence of social
legislative, the executive, and the judiciary - each department being co-
tension or unrest, or other similar critical situations requiring
equal and coordinate, and supreme in its own sphere. Accordingly, the
immediate action." However, the use of the word "may" does not mean
executive department may not, by its own fiat, impose the judgment of
that the COSLAP's jurisdiction is merely confined to the above
one of its own agencies, upon the judiciary. Indeed, under the
mentioned cases. The provisions of the said Executive Order are clear
expanded jurisdiction of the Supreme Court, it is empowered "to
that the COSLAP was created as a means of providing a more effective
determine whether or not there has been grave abuse of discretion
mechanism for the expeditious settlement of land problems in general,
amounting to lack of or excess of jurisdiction on the part of any branch
which are frequently the source of conflicts among settlers, landowners
or instrumentality of the Government."26
and cultural minorities. Besides, the COSLAP merely took over from

15 ADMIN LAW CASES 0901

There is an equally persuasive reason to grant the petition. As an initiatory pleading is required to swear under oath that he has not
additional ground for the annulment of the assailed status quo order of committed nor will he commit forum shopping. Otherwise, we would
COSLAP, UNITED accuses private respondents of engaging in forum have an absurd situation where the parties themselves would be the
shopping. Forum shopping exists when a party "repetitively avail[s] of judge of whether their actions constitute a violation of said Circular,
several judicial remedies in different courts, simultaneously or and compliance therewith would depend on their belief that they might
successively, all substantially founded on the same transactions and the or might not have violated the requirement. Such interpretation of the
same essential facts and circumstances, and all raising substantially the requirement would defeat the very purpose of Circular 04-94.
same issues either pending in, or already resolved adversely by some
other court."27 In this connection, Supreme Court Administrative Indeed, compliance with the certification against forum shopping is
Circular No. 04-94 dated February 8, 1994 provides: separate from, and independent of, the avoidance of forum shopping
itself. Thus, there is a difference in the treatment - in terms of
Revised Circular No. 28-91, dated February 8, 1994, applies to and imposable sanctions - between failure to comply with the certification
governs the filing of petitions in the Supreme Court and the Court of requirement and violation of the prohibition against forum shopping.
Appeals and is intended to prevent the multiple filing of petitions or The former is merely a cause for the dismissal, without prejudice, of
complaints involving the same issues in other tribunals or agencies as a the complaint or initiatory pleading, while the latter is a ground for
form of forum shopping. summary dismissal thereof and constitutes direct contempt.30

Complementary thereto and for the same purpose, the following A scrutiny of the pleadings filed before the trial courts and the
requirements, in addition to those in pertinent provisions of the Rules COSLAP sufficiently establishes private respondents' propensity for
of Court and existing circulars, shall be strictly complied with in the forum shopping. We lay the premise that the certification against
filing of complaints, petitions, applications or other initiatory pleadings forum shopping must be executed by the plaintiff or principal party,
in all courts and agencies other than the Supreme Court and the Court and not by his counsel.31 Hence, one can deduce that the certification is
of Appeals and shall be subject to the sanctions provided hereunder. a peculiar personalrepresentation on the part of the principal party, an
assurance given to the court or other tribunal that there are no other
1. The plaintiff, petitioner, applicant or principal part seeking relief in pending cases involving basically the same parties, issues and causes
the complaint, petition, application or other initiatory of action. In the case at bar, private respondents' litany of omissions
pleading shall certify under oath in such original pleading, or in a range from failing to submit the required certification against forum
sworn certification annexed thereto and simultaneously filed therewith, shopping to filing a false certification, and then to forum shopping
to the truth of the following facts and undertakings: (a) he has not itself. First, the petition filed before the COSLAP conspicuously lacked
theretofore commenced any other action or proceeding involving the a certification against forum shopping. Second, it does not appear from
the record that the ASSOCIATION informed Branch 4 of the Regional
same issues in the Supreme Court, the Court of Appeals, or any other
tribunal or agency; (b) to the best of his knowledge, no such action or Trial Court of Baguio City before which Civil Case No. 3316-R was
pending, that another action, Civil Case No. 3382-R, was filed before
proceedings is pending in the Supreme Court, the Court of Appeals, or
any other tribunal or agency; (c) if there is any such action or Branch 61 of the same court. Another group of homeless residents of
proceeding which is either pending or may have been terminated, he Dominican Hill, the LAND REFORM BENEFICIARIES
must state the status thereof; and (d) if he should thereafter learn that a ASSOCIATION, INC. initiated the latter case. The aforesaid plaintiff,
similar action or proceeding has been filed or is pending before the however, does not hesitate to admit that it filed the second case in
Supreme Court, the Court of Appeals or any other tribunal or agency, representation of private respondent, as one of its affiliates. In the
he undertakes to report that fact within five (5) days therefrom to the same manner, the certification against forum shopping accompanying
court or agency wherein the original pleading and sworn certification the complaint in Civil Case No. 3382-R does not mention the pendency
contemplated herein have been filed. of Civil Case No. 3316-R. In fact, the opposite assurance was given,
that there was no action pending before any other tribunal. Another
transgression is that both branches of the trial court do not appear to
The complaint and other initiatory pleadings referred to and subject of have been notified of the filing of the subject COSLAP Case No. 98-
this Circular are the original civil complaint, counterclaim, cross-claim, 253.
third (fourth, etc.) party complaint, or complaint-in-intervention,
petition, or application wherein a party asserts his claim for relief.
It is evident from the foregoing facts that private respondents, in filing
multiple petitions, have mocked our attempts to eradicate forum
2. Any violation of this Circular shall be a cause for the dismissal of shopping and have thereby upset the orderly administration of justice.
the complaint, petition, application or other initiatory pleading, upon They sought recourse from three (3) different tribunals in order to
motion and after hearing. However, any clearly willful and deliberate obtain the writ of injunction they so desperately desired. "The willful
forum shopping by any other party and his counsel through the filing of attempt by private respondents to obtain a preliminary injunction in
multiple complaints or other initiatory pleadings to obtain favorable another court after it failed to acquire the same from the original court
action shall be a ground for the summary dismissal thereof and shall constitutes grave abuse of the judicial process."32
constitute contempt of court. Furthermore, the submission of a false
certification or non-compliance with the undertakings therein, as
provided in Paragraph 1 hereof, shall constitute indirect contempt of In this connection, we expounded on forum shopping in Viva
court, without prejudice to disciplinary proceedings against the counsel Productions, Inc. v. Court of Appeals33 that:
and the filing of a criminal action against the part. [emphasis supplied]
Private respondent's intention to engage in forum shopping becomes
xxx - xxx - xxx manifest with undoubted clarity upon the following considerations.
Notably, if not only to ensure the issuance of an injunctive relief, the
significance of the action for damages before the Makati court would
The said Administrative Circular's use of the auxiliary verb "shall" be nil. What damages against private respondent would there be to
imports "an imperative obligation . . . inconsistent with the idea of speak about if the Parañaque court already enjoins the performance of
discretion."28 Hence, compliance therewith is mandatory.29 the very same act complained of in the Makati court? Evidently, the
action for damages is premature if not for the preliminary injunctive
It bears stressing that there is a material distinction between the relief sought. Thus, we find grave abuse of discretion on the part of
requirement of submission of the certification against forum shopping the Makati court, being a mere co-equal of the Parañaque court, in not
from the undertakings stated therein. Accordingly, giving due deference to the latter before which the issue of the alleged
violation of the sub-judice rule had already been raised and submitted.
In such instance, the Makati court, if it was wary of dismissing the
x x x [f]ailure to comply with this requirement cannot be excused by action outrightly under Administrative Circular No. 04-94, should
the fact that plaintiff is not guilty of forum shopping. The Court of have, at least, ordered the consolidation of its case with that of
Appeals, therefore, erred in concluding that Administrative Circular the Parañaque court, which had first acquired jurisdiction over the
No. 04-94 did not apply to private respondent's case merely because related case x x x, or it should have suspended the proceedings until
her complaint was not based on petitioner's cause of action. The the Parañaque court may have ruled on the issue x x x.
Circular applies to any complaint, petition, application, or other
initiatory pleading, regardless of whether the party filing it has actually
committed forum shopping. Every party filing a complaint or any other xxx - xxx - xxx

16 ADMIN LAW CASES 0901

Thus, while we might admit that the causes of action before the Makati
courtand the Parañaque court are distinct, and that private respondent
cannot seek civil indemnity in the contempt proceedings, the same
being in the nature of criminal contempt, we nonetheless cannot ignore
private respondent's intention of seeking exactly identical reliefs when
it sought the preliminary relief of injunction in the Makati court. As
earlier indicated, had private respondent been completely in good faith
there would have been no hindrance in filing the action for damages
with the regional trial court of Parañaque and having it consolidated
with the contempt proceedings before Branch 274, so that the same
issue on the alleged violation of the sub judicerule will not have to be
passed upon twice, and there would be no possibility of having two
courts of concurrent jurisdiction making two conflicting resolutions.

Yet from another angle, it may be said that when the Parañaque
courtacquired jurisdiction over the said issue, it excluded all other
courts of concurrent jurisdiction from acquiring jurisdiction over the
same. To hold otherwise would be to risk instances where courts of
concurrent jurisdiction might have conflicting orders. This will create
havoc and result in an extremely disordered administration of justice.
Therefore, even on the assumption that the Makati court may acquire
jurisdiction over the subject matter of the action for damages, without
prejudice to the application of Administrative Circular No. 04-94, it
cannot nonetheless acquire jurisdiction over the issue of whether or not
petitioner has violated the sub judice rule. At best, the Makati
court may hear the case only with respect to the alleged injury suffered
by private respondent after the Parañaque court shall have ruled
favorably on the said issue.

We also noted several indications of private respondents' bad faith. The

complaint filed in Civil Case No. 3316-R was prepared by the
ASSOCIATION's counsel, Atty. Conrado Villamor Catral, Jr. whereas
the complaint filed in Civil Case No. 3382-R was signed by a different
lawyer, Atty. Thomas S. Tayengco. With regard to the petition filed
with the COSLAP, the same was signed by private respondents
individually. As to the latter case, we noted that the petition itself could
not have been prepared by ordinary laymen, inasmuch as it exhibits
familiarity with statutory provisions and legal concepts, and is written
in a lawyerly style.

In the same manner, the plaintiffs in the three (3) different cases were
made to appear as dissimilar: in Civil Case No. 3316-R, the plaintiff
was ASSOCIATION of which private respondent Mario Padilan was
head, while the plaintiff in Civil Case No. 3382-R was the
BENEFICIARIES. Before the COSLAP, private respondents
themselves were the petitioners, led again by Padilan.34 Private
respondents also attempted to vary their causes of action: in Civil Case
No. 3382-R and COSLAP Case No. 98-253, they seek the annulment
of the Memorandum of Agreement executed by and among UNITED,
the PMS, and HIGC as well as the transfer certificates of title
accordingly issued to petitioner. All three (3) cases sought to enjoin the
demolition of private respondents' houses.

It has been held that forum shopping is evident where the elements
of litis pendentia or res judicata are present. Private respondents'
subterfuge comes to naught, for the effects of res judicata or litis
pendentia may not be avoided by varying the designation of the parties
or changing the form of the action or adopting a different mode of
presenting one's case.35

In view of the foregoing, all that remains to be done is the imposition

of the proper penalty. A party's willful and deliberate act of forum
shopping is punishable by summary dismissal of the actions
filed.36 The summary dismissal of both COSLAP Case No. 98-253 and
Civil Case No. 3316-R is therefore warranted under the premises. We
shall refrain from making any pronouncement on Civil Case No. 3382-
R, the dismissal of which was elevated on appeal to the Court of
Appeals where it is still pending.

WHEREFORE, the petition is hereby GRANTED. The status

quo order dated September 29, 1998 issued in COSLAP Case No. 98-
253 by respondent Commission On The Settlement Of Land Problems
(COSLAP) is hereby SET ASIDE; and the petition filed in COSLAP
Case No. 98-253 and the complaint in Civil Case No. 3316-R are
hereby DISMISSED for lack of jurisdiction and forum shopping. Costs
against private respondents.

SO ORDERED.
17 ADMIN LAW CASES 0901
4. Beja. Sr. vs. Court of Appeals G.R. No. 97149 31 March 1992
FACTS: Fidencio Beja Sr. an employee of Philippine ports authority,
hired as Arrastre supervisor in 1975. and later on appointed as terminal
supervisor in 1988. On October 21, 1988, the General Manager,
Rogelio A. Dayan filed administrative case against Beja Sr. and
Villaluz for grave dishonesty. Grave misconduct willful violation of
reasonable office rules and regulations and conduct prejudicial to the
best interest of the service. Consequently they were preventively
suspended for the charges. After preliminary investigation conducted
by the district attorney for region X, administrative case no. 11-04-88
was considered closed for lack of merit. On December 13, 1988
another administrative case was filed against Beja by the PPA manager
also for dishonesty grave misconduct violation of office rules and
regulations, conduct prejudicial to the best interest of the service and
for being notoriously undesirable. Beja was also placed under
preventive suspension pursuant to sec. 412 of PD No. 807. The case
was redocketed as administrative case n o. PPA-AAB-1-049-89 and
thereafter, the PPA indorsed it to the AAB for appropriate action. The
AAB proceeded to hear the case and gave Beja an opportunity to
present evidence. However, on February 20, 1989, Beja filed petition
for certiorari with preliminary injunction before the Regional Trial
Court of Misamis Oriental. Two days later, he filed with the ABB a
manifestation and motion to suspend the hearing of administrative case
no. PPA-AAB-1-049-89 on account of the pendency of the certiorari
proceeding before the court. AAB denied the motion and continued
with the hearing of the administrative case. Thereafter, Beja moved for
the dismissal of the certiorari case and proceeded to file before the
Court for a petition for certiorari with preliminary injunction and/or
temporary restraining order.

18 ADMIN LAW CASES 0901

ISSUE: Wether or not the Administrative Action Board of DOTC has General Manager of the Philippine Ports Authority (PPA), an agency
jurisdiction over administrative cases involving personnel below the attached to the said Department.
rank of Assistant General Manager of the Philippine Ports Authority,
an attached agency of DOTC. Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as
HELD: The PPA General Manager is the disciplining authority who
arrastre supervisor in 1975. He became Assistant Port Operations
may, by himself and without the approval of the PPA Board of Officer in 1976 and Port Operations Officer in 1977. In February 1988,
Directors, subject a respondent in an administrative case to preventive as a result of the reorganization of the PPA, he was appointed Terminal
suspension. His disciplining powers are sanctioned not only by Sec.8 Supervisor.
of PD no. 857 but also by Sec. 37 of PD no. 807 granting the heads of
agencies the “Jurisdiction to investigate and decide matters involving
disciplinary actions against officers and employees in the PPA. With On October 21, 1988, the PPA General Manager, Rogelio A. Dayan,
respect to the issue, the Court qualifiedly rules in favor of the filed Administrative Case No. 11-04-88 against petitioner Beja and
petitioner. The PPA was created through PD no. 505 dated July 1974. Hernando G. Villaluz for grave dishonesty, grave misconduct, willful
Under the Law, the corporate powers of the PPA were vested in a violation of reasonable office rules and regulations and conduct
governing Board of Directors known as the Philippine Ports Authority prejudicial to the best interest of the service. Beja and Villaluz
Council. Sec. 5(i) of the same decree gave the council the power “to allegedly erroneously assessed storage fees resulting in the loss of
appoint, discipline and remove, and determine the composition of the P38,150.77 on the part of the PPA. Consequently, they were
technical staff of the authority and other personnel”. On December 23, preventively suspended for the charges. After a preliminary
1975, PD no. 505 was substituted by PD no. 857 sec. 4(a) thereof investigation conducted by the district attorney for Region X,
created the Philippine Ports Authority which would be attached to the Administrative Case No. 11-04-88 was "considered closed for lack of
then Department of Public Works, Transportation and Communication. merit."
When Executive order no. 125 dated January 30, 1987 reorganizing the
Ministry of Transportation and Communication was issued, the PPA On December 13, 1988, another charge sheet, docketed as
retained its attached status. Administrative Code of 1987 classiffied Administrative Case No. 12-01-88, was filed against Beja by the PPA
PPA as an attached agency to the DOTC. Book IV of the General Manager also for dishonesty, grave misconduct, violation of
Administrative Code of 1987, the other two being supervision and reasonable office rules and regulations, conduct prejudicial to the best
control and administrative supervision, “Attachment” is defined as the interest of the service and for being notoriously undesirable. The
“lateral relationship between the department or its equivalent and the charge consisted of six (6) different specifications of administrative
attached agency or corporation for purposes of policy and program offenses including fraud against the PPA in the total amount of
coordination”. An attached agency has a larger measure of P218,000.00. Beja was also placed under preventive suspension
independence from the Department to which it is attached than one pursuant to Sec. 41 of P.D. No. 807.
which is under departmental supervision and control or administrative
supervision. This is borne out by the “lateral relationship” between the
Department and the attached agency. The attachment is merely for The case was redocketed as Administrative Case No. PPA-AAB-1-
policy and program coordination.” With respect to administrative 049-89 and thereafter, the PPA general manager indorsed it to the AAB
matters, the independence of an attached agency from the department for "appropriate action." At the scheduled hearing, Beja asked for
control and supervision is furthermore reinforced by the fact that even continuance on the ground that he needed time to study the charges
an agency under a Department’s administrative supervision is free against him. The AAB proceeded to hear the case and gave Beja an
from Departmental interference with respect to appointments and other opportunity to present evidence. However, on February 20, 1989, Beja
personnel actions “ in accordance with the decentralization of filed a petition for certiorari with preliminary injunction before the
personnel functions” under the administrative Code of 1987. The Law Regional Trial Court of Misamis Oriental. 2 Two days later, he filed
impliedly grants the general Manager with the approval of the PPA with the AAB a manifestation and motion to suspend the hearing of
board of Directors the power to investigate its personnel below the Administrative Case No. PPA-AAB-1-049-89 on account of the
rank of Assistant Manager who may be charged with an administrative pendency of the certiorari proceeding before the court. AAB denied
offense. During such investigation, the PPA General Manager, may the motion and continued with the hearing of the administrative case.
subject the employee concerned to preventive suspension. The
investigation should be conducted in accordance with the procedure set Thereafter, Beja moved for the dismissal of the certiorari case below
out in Sec. 38 of PD no. 807. The Decision of the Court of Appeal is and proceeded to file before this Court a petition for certiorari with
AFFIRMED as so far as it upholds the power of the PPA General preliminary injunction and/or temporary restraining order. The case
Manager to to subject petitioner to preventive suspension and was docketed as G.R. No. 87352 captioned "Fidencio Y. Beja v. Hon.
REVERSED insofar as it validates the jurisdiction of the DOTC and/or Reinerio 0. Reyes, etc., et al." In the en banc resolution of March 30,
the AAB to act on administrative case no. PPA –AAB-1-049-89. The 1989, this Court referred the case to the Court of Appeals for
AAB decision in said cased is hereby declared NULL and VOID and "appropriate action." 3 G.R. No. 87352 was docketed in the Court of
the case is REMANDED to the PPA whose General Manager shall Appeals as CA-G.R. SP No. 17270.
conduct with dispatch its reinvestigation
Meanwhile, a decision was rendered by the AAB in Administrative
Case No. PPA-AAB-049-89. Its dispositive portion reads:
G.R. No. 97149 March 31, 1992
WHEREFORE, judgment is hereby rendered,
FIDENCIO Y. BEJA, SR., petitioner, adjudging the following, namely:
vs.
COURT OF APPEALS, HONORABLE REINERIO O. REYES, in
his capacity as Secretary of the Department of Transportation and a) That respondents Geronimo Beja, Jr. and
Communications; COMMODORE ROGELIO A. DAYAN, in his Hernando Villaluz are exonerated from the charge
capacity as General Manager of the Philippine Ports Authority; against them;
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; b) That respondent Fidencio Y. Beja be dismissed
and JUSTICE ONOFRE A. VILLALUZ, in his capacity as from the service;
Chairman of the Administrative Action Board, DOTC, respondents.
c) That his leave credits and retirement benefits
are declared forfeited;

ROMERO, J.: d) That he be disqualified from re-employment in

the government service;
The instant petition for certiorari questions the jurisdiction of the
Secretary of the Department of Transportation and Communications e) That his eligibility is recommended to be
(DOTC) and/or its Administrative Action Board (AAB) over cancelled.
administrative cases involving personnel below the rank of Assistant

19 ADMIN LAW CASES 0901

 Pasig, Metro Manila, February 28, 1989. matters involving disciplinary actions against officers and employees"
in the PPA.
On December 10, 1990, after appropriate proceedings, the Court of
Appeals also rendered a decision 4 in CA-G.R. SP No. 17270 Parenthetically, the period of preventive suspension is limited. It may
dismissing the petition for certiorari for lack of merit. Hence, Beja be lifted even if the disciplining authority has not finally decided the
elevated the case back to this Court through an "appeal administrative case provided the ninety-day period from the effectivity
by certiorari with preliminary injunction and/or temporary restraining of the preventive suspension has been exhausted. The employee
order." concerned may then be reinstated. 8 However, the said ninety-day
period may be interrupted. Section 42 of P.D. No. 807 also mandates
We find the pleadings filed in this case to be sufficient bases for that any fault, negligence or petition of a suspended employee may not
arriving at a decision and hence, the filing of memoranda has been be considered in the computation of the said period. Thus, when a
dispensed with. suspended employee obtains from a court of justice a restraining order
or a preliminary injunction inhibiting proceedings in an administrative
case, the lifespan of such court order should be excluded in the
In his petition, Beja assails the Court of Appeals for having "decided reckoning of the permissible period of the preventive suspension. 9
questions of substance in a way probably not in accord with law or
with the applicable decisions" of this Court. 5 Specifically, Beja
contends that the Court of Appeals failed to declare that: (a) he was With respect to the issue of whether or not the DOTC Secretary and/or
denied due process; (b) the PPA general manager has no power to issue the AAB may initiate and hear administrative cases against PPA
a preventive suspension order without the necessary approval of the Personnel below the rank of Assistant General Manager, the
PPA board of directors; (c) the PPA general manager has no power to Court qualifiedly rules in favor of petitioner.
refer the administrative case filed against him to the DOTC-AAB, and
(d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC- The PPA was created through P.D. No. 505 dated July 11, 1974. Under
AAB itself as an adjudicatory body, have no jurisdiction to try the that Law, the corporate powers of the PPA were vested in a governing
administrative case against him. Simply put, Beja challenges the Board of Directors known as the Philippine Port Authority Council.
legality of the preventive suspension and the jurisdiction of the DOTC Sec. 5(i) of the same decree gave the Council the power "to appoint,
Secretary and/or the AAB to initiate and hear administrative cases discipline and remove, and determine the composition of the technical
against PPA personnel below the rank of Assistant General Manager. staff of the Authority and other personnel."

Petitioner anchors his contention that the PPA general manager cannot On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857,
subject him to a preventive suspension on the following provision of See. 4(a) thereof created the Philippine Ports Authority which would
Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the PPA: be "attached" to the then Department of Public Works, Transportation
and Communication. When Executive Order No. 125 dated January 30,
(d) the General Manager shall, subject to the 1987 reorganizing the Ministry of Transportation and Communications
approval of the Board, appoint and remove was issued, the PPA retained its "attached" status. 10 Even Executive
personnel below the rank of Assistant General Order No. 292 or the Administrative Code of 1987 classified the PPA
Manager. (Emphasis supplied.) as an agency "attached" to the Department of Transportation and
Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of
the same Code provides that the agencies attached to the DOTC "shall
Petitioner contends that under this provision, the PPA Board of continue to operate and function in accordance with the respective
Directors and not the PPA General Manager is the "proper disciplining charters or laws creating them, except when they conflict with this
authority. 6 Code."

As correctly observed by the Solicitor General, the petitioner Attachment of an agency to a Department is one of the three
erroneously equates "preventive suspension" as a remedial measure administrative relationships mentioned in Book IV, Chapter 7 of the
with "suspension" as a penalty for administrative dereliction. The Administrative Code of 1987, the other two being supervision and
imposition of preventive suspension on a government employee control and administrative supervision. "Attachment" is defined in Sec.
charged with an administrative offense is subject to the following 38 thereof as follows:
provision of the Civil Service Law, P.D. No. 807:
(3) Attachment. — (a) This refers to the lateral
Sec. 41. Preventive Suspension. — The proper relationship between the Department or its
disciplining authority may preventively suspend equivalent and the attached agency or
any subordinate officer or employee under his corporation for purposes of policy and program
authority pending an investigation, if the charge coordination. The coordination shall be
against such officer or employee involves accomplished by having the department
dishonesty, oppression or grave misconduct, or represented in the governing board of the attached
neglect in the performance of duty, or if there are agency or corporation, either as chairman or as a
reasons to believe that the respondent is guilty of member, with or without voting rights, if this is
charges which would warrant his removal from permitted by the charter; having the attached
the service. corporation or agency comply with a system of
periodic reporting which shall reflect the progress
Imposed during the pendency of an administrative investigation, of programs and projects; and having the
preventive suspension is not a penalty in itself. It is merely a measure department or its equivalent provide general
of precaution so that the employee who is charged may be separated, policies through its representative in the board,
for obvious reasons, from the scene of his alleged misfeasance while which shall serve as the framework for the
the same is being investigated. 7 Thus, preventive suspension is distinct internal policies of the attached corporation or
from the administrative penalty of removal from office such as the one agency;
mentioned in Sec. 8(d) of P.D. No 857. While the former may be
imposed on a respondent during the investigation of the charges against (b) Matters of day-to-day administration or all
him, the latter is the penalty which may only be meted upon him at the those pertaining to internal operations shall he left
termination of the investigation or the final disposition of the case. to the discretion or judgment of the executive
officer of the agency or corporation. In the event
The PPA general manager is the disciplining authority who may, by that the Secretary and the head of the board or the
himself and without the approval of the PPA Board of Directors, attached agency or corporation strongly disagree
subject a respondent in an administrative case to preventive on the interpretation and application of policies,
suspension. His disciplinary powers are sanctioned, not only by Sec. 8 and the Secretary is unable to resolve the
of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 disagreement, he shall bring the matter to the
granting heads of agencies the "jurisdiction to investigate and decide President for resolution and direction;

20 ADMIN LAW CASES 0901

 (c) Government-owned or controlled corporations Although the foregoing section does not expressly provide for a
attached to a department shall submit to the mechanism for an administrative investigation of personnel, by vesting
Secretary concerned their audited financial the power to remove erring employees on the General Manager, with
statements within sixty (60) days after the close of the approval of the PPA Board of Directors, the law impliedly grants
the fiscal year; and said officials the power to investigate its personnel below the rank of
Assistant Manager who may be charged with an administrative offense.
(d) Pending submission of the required financial During such investigation, the PPA General Manager, as earlier stated,
statements, the corporation shall continue to may subject the employee concerned to preventive suspension. The
operate on the basis of the preceding year's budget investigation should be conducted in accordance with the procedure set
until the financial statements shall have been out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts
submitted. Should any government-owned or may the PPA General Manager impose the proper penalty in
accordance with law. It is the latter action which requires the approval
controlled corporation incur an operation deficit
at the close of its fiscal year, it shall be subject to of the PPA Board of Directors. 14
administrative supervision of the department; and
the corporation's operating and capital budget From an adverse decision of the PPA General Manager and the Board
shall be subject to the department's examination, of Directors, the employee concerned may elevate the matter to the
review, modification and approval. (emphasis Department Head or Secretary. Otherwise, he may appeal directly to
supplied.) the Civil Service Commission. The permissive recourse to the
Department Secretary is sanctioned by the Civil Service Law (P.D. No.
807) under the following provisions:
An attached agency has a larger measure of independence from the
Department to which it is attached than one which is under
departmental supervision and control or administrative supervision. Sec. 37. Disciplinary Jurisdiction. — (a) The
This is borne out by the "lateral relationship" between the Department Commission shall decide upon appeal all
and the attached agency. The attachment is merely for "policy and administrative disciplinary cases involving the
program coordination." With respect to administrative matters, the imposition of a penalty of suspension for more
independence of an attached agency from Departmental control and than thirty days, or fine in an amount exceeding
supervision is further reinforced by the fact that even an agency under thirty days salary, demotion in rank or salary or
a Department's administrative supervision is free from Departmental transfer, removal or dismissal from office. A
interference with respect to appointments and other personnel actions complaint may be filed directly with the
"in accordance with the decentralization of personnel functions" under Commission by a private citizen against a
the Administrative Code of 1987. 11 Moreover, the Administrative government official or employee in which case it
Code explicitly provides that Chapter 8 of Book IV on supervision and may hear and decide the case or it may deputize
control shall not apply to chartered institutions attached to a any department or agency or official or group of
Department. 12 officials to conduct the investigation. The results
of the investigation shall be submitted to the
Hence, the inescapable conclusion is that with respect to the Commission with recommendation as to the
management of personnel, an attached agency is, to a certain extent, penalty to be imposed or other action to be taken.
free from Departmental interference and control. This is more
explicitly shown by P.D. No. 857 which provides: (b) The heads of departments, agencies and
instrumentalities, provinces, cities and
Sec. 8. Management and Staff. — a) The municipalities shall have jurisdiction to
President shall, upon the recommendation of the investigate and decide matters involving
Board, appoint the General Manager and the disciplinary action against officers and employees
Assistant General Managers. under their jurisdiction. The decisions shall be
final in case the penalty imposed is suspension for
not more than thirty days or fine in an amount not
(b) All other officials and employees of the exceeding thirty days' salary. In case the decision
Authority shall be selected and appointed on the rendered by a bureau or office head is appealable
basis of merit and fitness based on a to the Commission, the same may be initially
comprehensive and progressive merit system to appealed to the department and finally to the
be established by the Authority immediately upon Commission and pending appeal, the same shall
its organization and consistent with Civil Service be executory except when the penalty is removal,
rules and regulations. The recruitment, transfer, in which case the same shall be executory only
promotion, and dismissal of all personnel of the after confirmation by the department head.
Authority, including temporary workers, shall be
governed by such merit system.
xxx xxx xxx

(c) The General Manager shall, subject to the

(Emphasis supplied.)
approval of the Board, determine the staffing
pattern and the number of personnel of the
Authority, define their duties and responsibilities, It is, therefore, clear that the transmittal of the complaint by the PPA
and fix their salaries and emoluments. For General Manager to the AAB was premature. The PPA General
professional and technical positions, the General Manager should have first conducted an investigation, made the proper
Manager shall recommend salaries and recommendation for the imposable penalty and sought its approval by
emoluments that are comparable to those of the PPA Board of Directors. It was discretionary on the part of the
similar positions in other government-owned herein petitioner to elevate the case to the then DOTC Secretary Reyes.
corporations, the provisions of existing rules and Only then could the AAB take jurisdiction of the case.
regulations on wage and position classification
notwithstanding. The AAB, which was created during the tenure of Secretary Reyes
under Office Order No. 88-318 dated July 1, 1988, was designed to act,
(d) The General Manager shall, subject to the decide and recommend to him "all cases of administrative malfeasance,
approval by the Board, appoint and remove irregularities, grafts and acts of corruption in the Department."
personnel below the rank of Assistant General Composed of a Chairman and two (2) members, the AAB came into
Manager. being pursuant to Administrative Order No. 25 issued by the President
on May 25, 1987. 15 Its special nature as a quasi-judicial administrative
body notwithstanding, the AAB is not exempt from the observance of
xxx xxx xxx
due process in its proceedings. 16 We are not satisfied that it did so in
this case the respondents protestation that petitioner waived his right to
(emphasis supplied.) be heard notwithstanding. It should be observed that petitioner was
21 ADMIN LAW CASES 0901
precisely questioning the AAB's jurisdiction when it sought judicial
recourse.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED

insofar as it upholds the power of the PPA General Manager to subject
petitioner to preventive suspension and REVERSED insofar as it
validates the jurisdiction of the DOTC and/or the AAB to act on
Administrative Case No. PPA-AAB-1-049-89 and rules that due
process has been accorded the petitioner.

The AAB decision in said case is hereby declared NULL and VOID
and the case in REMANDED to the PPA whose General Manager shall
conduct with dispatch its reinvestigation.

The preventive suspension of petitioner shall continue unless after a

determination of its duration, it is found that he had served the total of
ninety (90) days in which case he shall be reinstated immediately.

SO ORDERED.

22 ADMIN LAW CASES 0901

Holy Spirit Homeowners Association v. Defensor or a temporary restraining order.
Administrative agencies possess quasi-legislative or rule-making
FACTS: powers and quasi-judicial or administrative adjudicatory powers.
Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a Quasi-legislative or rule-making power is the power to make rules and
homeowners association from the West Side of the NGC. It is regulations which results in delegated legislation that is within the
represented by its president, Nestorio F. Apolinario, Jr., who is a co- confines of the granting statute and the doctrine of non-delegability and
petitioner in his own personal capacity and on behalf of the association. separability of powers.
Named respondents are the ex-officio members of the National In questioning the validity or constitutionality of a rule or regulation
Government Center Administration Committee (Committee). At the issued by an administrative agency, a party need not exhaust
filing of the instant petition, the Committee was composed of Secretary administrative remedies before going to court. This principle, however,
Michael Defensor, Chairman of the Housing and Urban Development applies only where the act of the administrative agency concerned was
Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, General performed pursuant to its quasi-judicial function, and not when the
Manager of the National Housing Authority (NHA), Mr. Percival assailed act pertained to its rule-making or quasi-legislative power.
Chavez, Chairman of the Presidential Commission for Urban Poor The assailed IRR was issued pursuant to the quasi-legislative power of
(PCUP), Mayor Feliciano Belmonte of Quezon City, Secretary Elisea the Committee expressly authorized by R.A. No. 9207. The petition
Gozun of the Department of Environment and Natural Resources rests mainly on the theory that the assailed IRR issued by the
(DENR), and Secretary Florante Soriquez of the Department of Public Committee is invalid on the ground that it is not germane to the object
Works and Highways (DPWH). and purpose of the statute it seeks to implement. Where what is
Prior to the passage of R.A. No. 9207, a number of presidential assailed is the validity or constitutionality of a rule or regulation issued
issuances authorized the creation and development of what is now by the administrative agency in the performance of its quasi-legislative
known as the National Government Center (NGC). function, the regular courts have jurisdiction to pass upon the same.
Presidential issuances: Since the regular courts have jurisdiction to pass upon the validity of
President Ferdinand Marcos - Proclamation No. 1826, reserving a the assailed IRR issued by the Committee in the exercise of its quasi-
parcel of land in Constitution Hills, Quezon City, covering a little over legislative power, the judicial course to assail its validity must follow
440 hectares as a national government site to be known as the NGC. the doctrine of hierarchy of courts. Although the Supreme Court, Court
President Corazon Aquino - Proclamation No. 137, excluding 150 of of Appeals and the Regional Trial Courts have concurrent jurisdiction
the 440 hectares of the reserved site from the coverage of Proclamation to issue writs of certiorari, prohibition, mandamus, quo warranto,
No. 1826 and authorizing instead the disposition of the excluded habeas corpus and injunction, such concurrence does not give the
portion by direct sale to the bona fide residents therein. petitioner unrestricted freedom of choice of court forum.
President Fidel Ramos - Proclamation No. 248, authorizing the vertical
development of the excluded portion to maximize the number of
families who can effectively become beneficiaries of the governments
G.R. No. 163980 August 3, 2006
socialized housing program.
President Gloria Macapagal-Arroyo signed into law R.A. No. 9207
(NGC Housing and Land Utilization Act of 2003) HOLY SPIRIT HOMEOWNERS ASSOCIATION, INC. and
In accordance with Section 5 of R.A. No. 9207, the Committee NESTORIO F. APOLINARIO, in his personal capacity and as
formulated the Implementing Rules and Regulations (IRR) of R.A. No. President of Holy Spirit Homeowners Association, Inc., Petitioners,
9207. Petitioners subsequently filed the instant petition. vs.
Contentions: SECRETARY MICHAEL DEFENSOR, in his capacity as
The OSG claims that the instant petition for prohibition is an improper Chairman of the Housing and Urban Development Coordinating
remedy because the writ of prohibition does not lie against the exercise Council (HUDCC), ATTY. EDGARDO PAMINTUAN, in his
of a quasi-legislative function. Since in issuing the questioned IRR of capacity as General Manager of the National Housing Authority
R.A. No. 9207, the Committee was not exercising judicial, quasi- (NHA), MR. PERCIVAL CHAVEZ, in his capacity as Chairman
judicial or ministerial function, which is the scope of a petition for of the PresidentialCommission for the Urban Poor (PCUP),
prohibition under Section 2, Rule 65 of the 1997 Rules of Civil MAYOR FELICIANO BELMONTE, in his capacity as Mayor of
Procedure, the instant prohibition should be dismissed outright, the Quezon City, SECRETARY ELISEA GOZUN, in her capacity as
OSG contends. For their part, respondent Mayor of Quezon City and Secretary of the Department of Environment and Natural
respondent NHA contend that petitioners violated the doctrine of Resources (DENR) and SECRETARY FLORENTE SORIQUEZ,
hierarchy of courts in filing the instant petition with this Court and not in his capacity as Secretary of the Department of Public Works
with the Court of Appeals, which has concurrent jurisdiction over a and Highways (DPWH) as ex-officio members of the NATIONAL
petition for prohibition. GOVERNMENT CENTER ADMINISTRATION
ISSUE: COMMITTEE, Respondents.
Whether or not a petition for prohibition is not the properremedy to
assail an IRR issued in the exercise of a quasi-legislativefunction DECISION
(YES)
HELD:
YES. A petition for prohibition is also not the proper remedy to assail TINGA, J.:
an IRR issued in the exercise of a quasi-legislative function.
Prohibition is an extraordinary writ directed against any tribunal, The instant petition for prohibition under Rule 65 of the 1997 Rules of
corporation, board, officer or person, whether exercising judicial, Civil Procedure, with prayer for the issuance of a temporary restraining
quasi-judicial or ministerial functions, ordering said entity or person to order and/or writ of preliminary injunction, seeks to prevent
desist from further proceedings when said proceedings are without or respondents from enforcing the implementing rules and regulations
in excess of said entitys or persons jurisdiction, or are accompanied (IRR) of Republic Act No. 9207, otherwise known as the "National
with grave abuse of discretion, and there is no appeal or any other Government Center (NGC) Housing and Land Utilization Act of
plain, speedy and adequate remedy in the ordinary course of law. 2003."
Prohibition lies against judicial or ministerial functions, but not against
legislative or quasi-legislative functions. Generally, the purpose of a
writ of prohibition is to keep a lower court within the limits of its Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a
jurisdiction in order to maintain the administration of justice in orderly homeowners association from the West Side of the NGC. It is
channels. Prohibition is the proper remedy to afford relief against represented by its president, Nestorio F. Apolinario, Jr., who is a co-
usurpation of jurisdiction or power by an inferior court, or when, in the petitioner in his own personal capacity and on behalf of the association.
exercise of jurisdiction in handling matters clearly within its
cognizance the inferior court transgresses the bounds prescribed to it Named respondents are the ex-officio members of the National
by the law, or where there is no adequate remedy available in the Government Center Administration Committee (Committee). At the
ordinary course of law by which such relief can be obtained. Where the filing of the instant petition, the Committee was composed of Secretary
principal relief sought is to invalidate an IRR, petitioners remedy is an Michael Defensor, Chairman of the Housing and Urban Development
ordinary action for its nullification, an action which properly falls Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, General
under the jurisdiction of the Regional Trial Court. In any case, Manager of the National Housing Authority (NHA), Mr. Percival
petitioners allegation that respondents are performing or threatening to Chavez, Chairman of the Presidential Commission for Urban Poor
perform functions without or in excess of their jurisdiction may (PCUP), Mayor Feliciano Belmonte of Quezon City, Secretary Elisea
appropriately be enjoined by the trial court through a writ of injunction Gozun of the Department of Environment and Natural Resources
23 ADMIN LAW CASES 0901
(DENR), and Secretary Florante Soriquez of the Department of Public AND VOID FOR BEING INCONSISTENT WITH THE LAW IT
Works and Highways (DPWH). SEEKS TO IMPLEMENT.

Prior to the passage of R.A. No. 9207, a number of presidential WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND
issuances authorized the creation and development of what is now 3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC
known as the National Government Center (NGC). ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL
GOVERNMENT CENTER (NGC) HOUSING AND LAND
On March 5, 1972, former President Ferdinand Marcos issued UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL
AND VOID FOR BEING ARBITRARY, CAPRICIOUS AND
Proclamation No. 1826, reserving a parcel of land in Constitution Hills,
Quezon City, covering a little over 440 hectares as a national WHIMSICAL. 5
government site to be known as the NGC. 1
First, the procedural matters.
On August 11, 1987, then President Corazon Aquino issued
Proclamation No. 137, excluding 150 of the 440 hectares of the The Office of the Solicitor General (OSG) argues that petitioner
reserved site from the coverage of Proclamation No. 1826 and Association cannot question the implementation of Section 3.1 (b.2)
authorizing instead the disposition of the excluded portion by direct and Section 3.2 (c.1) since it does not claim any right over the NGC
sale to the bona fide residents therein. 2 East Side. Section 3.1 (b.2) provides for the maximum lot area that
may be awarded to a resident-beneficiary of the NGC East Side, while
In view of the rapid increase in population density in the portion Section 3.2 (c.1) imposes a lot price escalation penalty to a qualified
excluded by Proclamation No. 137 from the coverage of Proclamation beneficiary who fails to execute a contract to sell within the prescribed
No. 1826, former President Fidel Ramos issued Proclamation No. 248 period. 6 Also, the OSG contends that since petitioner association is not
on September 7, 1993, authorizing the vertical development of the the duly recognized people’s organization in the NGC and since
excluded portion to maximize the number of families who can petitioners not qualify as beneficiaries, they cannot question the
effectively become beneficiaries of the government’s socialized manner of disposition of lots in the NGC. 7
housing program. 3
"Legal standing" or locus standi has been defined as a personal and
On May 14, 2003, President Gloria Macapagal-Arroyo signed into law substantial interest in the case such that the party has sustained or will
R.A. No. 9207. Among the salient provisions of the law are the sustain direct injury as a result of the governmental act that is being
following: challenged…. The gist of the question of standing is whether a party
alleges "such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of
Sec. 2. Declaration of Policy. – It is hereby declared the policy of the issues upon which the court depends for illumination of difficult
State to secure the land tenure of the urban poor. Toward this end, constitutional questions." 8
lands located in the NGC, Quezon City shall be utilized for housing,
socioeconomic, civic, educational, religious and other purposes.
Petitioner association has the legal standing to institute the instant
petition, whether or not it is the duly recognized association of
Sec. 3. Disposition of Certain Portions of the National Government homeowners in the NGC. There is no dispute that the individual
Center Site to Bona Fide Residents. – Proclamation No. 1826, Series of members of petitioner association are residents of the NGC. As such
1979, is hereby amended by excluding from the coverage thereof, 184 they are covered and stand to be either benefited or injured by the
hectares on the west side and 238 hectares on the east side of enforcement of the IRR, particularly as regards the selection process of
Commonwealth Avenue, and declaring the same open for disposition beneficiaries and lot allocation to qualified beneficiaries. Thus,
to bona fide residents therein: Provided, That the determination of petitioner association may assail those provisions in the IRR which it
the bona fide residents on the west side shall be based on the census believes to be unfavorable to the rights of its members. Contrary to the
survey conducted in 1994 and the determination of the bona OSG’s allegation that the failure of petitioner association and its
fide residents on the east side shall be based on the census survey members to qualify as beneficiaries effectively bars them from
conducted in 1994 and occupancy verification survey conducted in questioning the provisions of the IRR, such circumstance precisely
2000: Provided, further, That all existing legal agreements, programs operates to confer on them the legal personality to assail the IRR.
and plans signed, drawn up or implemented and actions taken, Certainly, petitioner and its members have sustained direct injury
consistent with the provisions of this Act are hereby adopted. arising from the enforcement of the IRR in that they have been
disqualified and eliminated from the selection process. While it is true
Sec. 4. Disposition of Certain Portions of the National Government that petitioners claim rights over the NGC West Side only and thus
Center Site for Local Government or Community Facilities, cannot be affected by the implementation of Section 3.1 (b.2), which
Socioeconomic, Charitable, Educational and Religious Purposes. – refers to the NGC East Side, the rest of the assailed provisions of the
Certain portions of land within the aforesaid area for local government IRR, namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the
or community facilities, socioeconomic, charitable, educational and disposition of lots in the West Side itself or all the lots in the NGC.
religious institutions are hereby reserved for disposition for such
purposes: Provided, That only those institutions already operating and We cannot, therefore, agree with the OSG on the issue of locus standi.
with existing facilities or structures, or those occupying the land may The petition does not merit dismissal on that ground.
avail of the disposition program established under the provisions this
Act; Provided, further, That in ascertaining the specific areas that may
be disposed of in favor of these institutions, the existing site allocation There are, however, other procedural impediments to the granting of
shall be used as basis therefore: Provided, finally. That in determining the instant petition. The OSG claims that the instant petition for
the reasonable lot allocation of such institutions without specific lot prohibition is an improper remedy because the writ of prohibition does
allocations, the land area that may be allocated to them shall be based not lie against the exercise of a quasi-legislative function. 9 Since in
issuing the questioned IRR of R.A. No. 9207, the Committee was not
on the area actually used by said institutions at the time of effectivity
of this Act. (Emphasis supplied.) exercising judicial, quasi-judicial or ministerial function, which is the
scope of a petition for prohibition under Section 2, Rule 65 of the 1997
Rules of Civil Procedure, the instant prohibition should be dismissed
In accordance with Section 5 of R.A. No. 9207, 4 the Committee outright, the OSG contends. For their part, respondent Mayor of
formulated the Implementing Rules and Regulations (IRR) of R.A. No. Quezon City 10 and respondent NHA 11 contend that petitioners
9207 on June 29, 2004. Petitioners subsequently filed the instant violated the doctrine of hierarchy of courts in filing the instant petition
petition, raising the following issues: with this Court and not with the Court of Appeals, which has
concurrent jurisdiction over a petition for prohibition.
WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND
3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC The cited breaches are mortal. The petition deserves to be spurned as a
ACT NO. 9207, OTHERWISE KNOWN AS "NATIONAL consequence.
GOVERNMENT CENTER (NGC) HOUSING AND LAND
UTILIZATION ACT OF 2003" SHOULD BE DECLARED NULL

24 ADMIN LAW CASES 0901

Administrative agencies possess quasi-legislative or rule-making under the jurisdiction of the Regional Trial Court. In any case,
powers and quasi-judicial or administrative adjudicatory powers. petitioners’ allegation that "respondents are performing or threatening
Quasi-legislative or rule-making power is the power to make rules and to perform functions without or in excess of their jurisdiction" may
regulations which results in delegated legislation that is within the appropriately be enjoined by the trial court through a writ of injunction
confines of the granting statute and the doctrine of non-delegability and or a temporary restraining order.
separability of powers. 12
In a number of petitions, 24 the Court adequately resolved them on
In questioning the validity or constitutionality of a rule or regulation other grounds without adjudicating on the constitutionality issue when
issued by an administrative agency, a party need not exhaust there were no compelling reasons to pass upon the same. In like
administrative remedies before going to court. This principle, however, manner, the instant petition may be dismissed based on the foregoing
applies only where the act of the administrative agency concerned was procedural grounds. Yet, the Court will not shirk from its duty to rule
performed pursuant to its quasi-judicial function, and not when the on the merits of this petition to facilitate the speedy resolution of this
assailed act pertained to its rule-making or quasi-legislative power. 13 case. In proper cases, procedural rules may be relaxed or suspended in
the interest of substantial justice. And the power of the Court to except
The assailed IRR was issued pursuant to the quasi-legislative power of a particular case from its rules whenever the purposes of justice require
it cannot be questioned. 25
the Committee expressly authorized by R.A. No. 9207. The petition
rests mainly on the theory that the assailed IRR issued by the
Committee is invalid on the ground that it is not germane to the object Now, we turn to the substantive aspects of the petition. The outcome,
and purpose of the statute it seeks to implement. Where what is however, is just as dismal for petitioners.
assailed is the validity or constitutionality of a rule or regulation issued
by the administrative agency in the performance of its quasi-legislative Petitioners assail the following provisions of the IRR:
function, the regular courts have jurisdiction to pass upon the same. 14

Section 3. Disposition of Certain portions of the NGC Site to the

Since the regular courts have jurisdiction to pass upon the validity of bonafide residents
the assailed IRR issued by the Committee in the exercise of its quasi-
legislative power, the judicial course to assail its validity must follow
the doctrine of hierarchy of courts. Although the Supreme Court, Court 3.1. Period for Qualification of Beneficiaries
of Appeals and the Regional Trial Courts have concurrent jurisdiction
to issue writs of certiorari, prohibition, mandamus, quo xxxx
warranto, habeas corpus and injunction, such concurrence does not
give the petitioner unrestricted freedom of choice of court forum. 15
(a.4) Processing and evaluation of qualifications shall be based on the
Code of Policies and subject to the condition that a beneficiary is
True, this Court has the full discretionary power to take cognizance of qualified to acquire only one (1) lot with a minimum of 36 sq. m. and
the petition filed directly with it if compelling reasons, or the nature maximum of 54 sq. m. and subject further to the availability of lots.
and importance of the issues raised, so warrant. 16 A direct invocation
of the Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor, xxxx
clearly and specifically set out in the petition. 17
(b.2) Applications for qualification as beneficiary shall be processed
In Heirs of Bertuldo Hinog v. Melicor, 18 the Court said that it will not and evaluated based on the Code of Policies including the minimum
entertain direct resort to it unless the redress desired cannot be obtained and maximum lot allocation of 35 sq. m. and 60 sq. m.
in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious xxxx
implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction. 19 A
perusal, however, of the petition for prohibition shows no compelling, 3.2. Execution of the Contract to Sell
special or important reasons to warrant the Court’s taking cognizance
of the petition in the first instance. Petitioner also failed to state any (a) Westside
reason that precludes the lower courts from passing upon the validity
of the questioned IRR. Moreover, as provided in Section 5, Article VIII
(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS)
of the
within sixty (60) days from the effectivity of the IRR in order to avail
of the lot at P700.00 per sq. m.
Constitution, 20 the Court’s power to evaluate the validity of an
implementing rule or regulation is generally appellate in nature. Thus,
xxxx
following the doctrine of hierarchy of courts, the instant petition should
have been initially filed with the Regional Trial Court.
(c) for both eastside and westside
A petition for prohibition is also not the proper remedy to assail an IRR
issued in the exercise of a quasi-legislative function. Prohibition is an (c.1) Qualified beneficiaries who failed to execute CTS on the deadline
extraordinary writ directed against any tribunal, corporation, board, set in item a.1 above in case of westside and in case of eastside six (6)
officer or person, whether exercising judicial, quasi-judicial or months after approval of the subdivision plan shall be subjected to lot
ministerial functions, ordering said entity or person to desist from price escalation.
further proceedings when said proceedings are without or in excess of
said entity’s or person’s jurisdiction, or are accompanied with grave The rate shall be based on the formula to be set by the National
abuse of discretion, and there is no appeal or any other plain, speedy Housing Authority factoring therein the affordability criteria. The new
and adequate remedy in the ordinary course of law. 21 Prohibition lies rate shall be approved by the NGC-Administration Committee (NGC-
against judicial or ministerial functions, but not against legislative or AC).
quasi-legislative functions. Generally, the purpose of a writ of
prohibition is to keep a lower court within the limits of its jurisdiction
in order to maintain the administration of justice in orderly Petitioners contend that the aforequoted provisions of the IRR are
channels. 22 Prohibition is the proper remedy to afford relief against constitutionally infirm as they are not germane to and/or are in conflict
usurpation of jurisdiction or power by an inferior court, or when, in the with the object and purpose of the law sought to be implemented.
exercise of jurisdiction in handling matters clearly within its
cognizance the inferior court transgresses the bounds prescribed to it First. According to petitioners, the limitation on the areas to be
by the law, or where there is no adequate remedy available in the awarded to qualified beneficiaries under Sec. 3.1 (a.4) and (b.2) of the
ordinary course of law by which such relief can be obtained. 23 Where IRR is not in harmony with the provisions of R.A. No. 9207, which
the principal relief sought is to invalidate an IRR, petitioners’ remedy mandates that the lot allocation to qualified beneficiaries shall be based
is an ordinary action for its nullification, an action which properly falls
25 ADMIN LAW CASES 0901
on the area actually used or occupied by bona fide residents without of beneficiaries, the selling price of the lots, the terms and conditions
limitation to area. The argument is utterly baseless. governing the sale and other key particulars necessary to implement the
objective of the law. These details are purposely omitted from the
The beneficiaries of lot allocations in the NGC may be classified into statute and their determination is left to the discretion of the Committee
because the latter possesses special knowledge and technical expertise
two groups, namely, the urban poor or the bona fide residents within
the NGC site and certain government institutions including the local over these matters.
government. Section 3, R.A. No. 9207 mandates the allocation of
additional property within the NGC for disposition to its bona The Committee’s authority to fix the selling price of the lots may be
fide residents and the manner by which this area may be distributed to likened to the rate-fixing power of administrative agencies. In case of a
qualified beneficiaries. Section 4, R.A. No. 9207, on the other hand, delegation of rate-fixing power, the only standard which the legislature
governs the lot disposition to government institutions. While it is true is required to prescribe for the guidance of the administrative authority
that Section 4 of R.A. No. 9207 has a proviso mandating that the lot is that the rate be reasonable and just. However, it has been held that
allocation shall be based on the land area actually used or occupied at even in the absence of an express requirement as to reasonableness,
the time of the law’s effectivity, this proviso applies only to this standard may be implied. 29 In this regard, petitioners do not even
institutional beneficiaries consisting of the local government, claim that the selling price of the lots is unreasonable.
socioeconomic, charitable, educational and religious institutions which
do not have specific lot allocations, and not to the bona fide residents The provision on the price escalation clause as a penalty imposed to a
of NGC. There is no proviso which even hints that a bona fide resident
beneficiary who fails to execute a contract to sell within the prescribed
of the NGC is likewise entitled to the lot area actually occupied by period is also within the Committee’s authority to formulate guidelines
him.
and policies to implement R.A. No. 9207. The Committee has the
power to lay down the terms and conditions governing the disposition
Petitioners’ interpretation is also not supported by the policy of R.A. of said lots, provided that these are reasonable and just. There is
No. 9207 and the prior proclamations establishing the NGC. The nothing objectionable about prescribing a period within which the
government’s policy to set aside public property aims to benefit not parties must execute the contract to sell. This condition can ordinarily
only the urban poor but also the local government and various be found in a contract to sell and is not contrary to law, morals, good
government institutions devoted to socioeconomic, charitable, customs, public order, or public policy.
educational and
Third. Petitioners also suggest that the adoption of the assailed IRR
religious purposes. 26 Thus, although Proclamation No. 137 authorized suffers from a procedural flaw. According to them the IRR was
the sale of lots to bona fide residents in the NGC, only a third of the adopted and concurred in by several representatives of people’s
entire area of the NGC was declared open for disposition subject to the organizations contrary to the express mandate of R.A. No. 9207 that
condition that those portions being used or earmarked for public or only two representatives from duly recognized peoples’ organizations
quasi-public purposes would be excluded from the housing program must compose the NGCAC which promulgated the assailed IRR. It is
for NGC residents. The same policy of rational and optimal land use worth noting that petitioner association is not a duly recognized
can be read in Proclamation No. 248 issued by then President Ramos. people’s organization.
Although the proclamation recognized the rapid increase in the
population density in the NGC, it did not allocate additional property
In subordinate legislation, as long as the passage of the rule or
within the NGC for urban poor housing but instead authorized the regulation had the benefit of a hearing, the procedural due process
vertical development of the same 150 hectares identified previously by
requirement is deemed complied with. That there is observance of
Proclamation No. 137 since the distribution of individual lots would more than the minimum requirements of due process in the adoption of
not adequately provide for the housing needs of all the bona the questioned IRR is not a ground to invalidate the same.
fide residents in the NGC.

In sum, the petition lacks merit and suffers from procedural

In addition, as provided in Section 4 of R.A. No. 9207, the institutional deficiencies.
beneficiaries shall be allocated the areas actually occupied by them;
hence, the portions intended for the institutional beneficiaries is fixed
and cannot be allocated for other non-institutional beneficiaries. Thus, WHEREFORE, the instant petition for prohibition is DISMISSED.
the areas not intended for institutional beneficiaries would have to be Costs against petitioners.
equitably distributed among the bona fide residents of the NGC. In
order to accommodate all qualified residents, a limitation on the area to SO ORDERED.
be awarded to each beneficiary must be fixed as a necessary
consequence.

Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the
selling rate of a lot at P700.00 per sq. m., R.A. No. 9207 does not
provide for the price. They add Sec. 3.2 (c.1) penalizes a beneficiary
who fails to execute a contract to sell within six (6) months from the
approval of the subdivision plan by imposing a price escalation, while
there is no such penalty imposed by R.A. No. 9207. Thus, they
conclude that the assailed provisions conflict with R.A. No. 9207 and
should be nullified. The argument deserves scant consideration.

Where a rule or regulation has a provision not expressly stated or

contained in the statute being implemented, that provision does not
necessarily contradict the statute. A legislative rule is in the nature of
subordinate legislation, designed to implement a primary legislation by
providing the details thereof. 27 All that is required is that the regulation
should be germane to the objects and purposes of the law; that the
regulation be not in contradiction to but in conformity with the
standards prescribed by the law. 28

In Section 5 of R.A. No. 9207, the Committee is granted the power to

administer, formulate guidelines and policies, and implement the
disposition of the areas covered by the law. Implicit in this authority
and the statute’s objective of urban poor housing is the power of the
Committee to formulate the manner by which the reserved property
may be allocated to the beneficiaries. Under this broad power, the
Committee is mandated to fill in the details such as the qualifications
26 ADMIN LAW CASES 0901
LAND BANK OF THE PHILIPPINES vs COURT OF APPEALS behalf of the landowner as compensation for his property because, as
G.R. No. 118712 October 6, 1995 heretofore discussed, Section 16(e) of RA 6657 is very specific that the
FACTS: deposit must be made only in "cash" or in "LBP bonds". In the same
Private respondents are landowners whose landholdings were acquired vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54
by the DAR and subjected to transfer schemes to qualified because these implementing regulations cannot outweigh the clear
beneficiaries under the Comprehensive Agrarian Reform Law (CARL, provision of the law. Respondent court therefore did not commit any
Republic Act No. 6657). error in striking down Administrative Circular No. 9 for being null and
Aggrieved by the alleged lapses of the DAR and the Landbank with void.
respect to the valuation and payment of compensation for their land
pursuant to the provisions of RA 6657, private respondents questioned
the validity of DAR Administrative Order No. 6, Series of 1992 and
G.R. No. 118712 October 6, 1995
DAR Administrative Order No. 9, Series of 1990, and sought to
compel the DAR to expedite the pending summary administrative
proceedings to finally determine the just compensation of their LAND BANK OF THE PHILIPPINES, petitioner,
properties, and the Landbank to deposit in cash and bonds the amounts vs.
respectively "earmarked", "reserved" and "deposited in trust accounts" COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO
for private respondents, and to allow them to withdraw the same. F. SANTIAGO, AGRICULTURAL MANAGEMENT &
Private respondents argued that Administrative Order No. 9, Series of DEVELOPMENT CORP., respondents.
1990 was issued without jurisdiction and with grave abuse of discretion
because it permits the opening of trust accounts by the Landbank, in G.R. No. 118745 October 6, 1995
lieu of depositing in cash or bonds in an accessible bank designated by
the DAR, the compensation for the land before it is taken and the titles
are cancelled as provided under Section 16(e) of RA 6657. Private DEPARTMENT OF AGRARIAN REFORM, represented by the
respondents also assail the fact that the DAR and the Landbank merely Secretary of Agrarian Reform, petitioner,
"earmarked", "deposited in trust" or "reserved" the compensation in vs.
their names as landowners despite the clear mandate that before taking COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO
possession of the property, the compensation must be deposited in cash F. SANTIAGO, AGRICULTURAL MANAGEMENT &
or in bonds. DEVELOPMENT CORP., ET AL., respondents.
Petitioner DAR, however, maintained that Administrative Order No. 9
is a valid exercise of its rule-making power pursuant to Section 49 of
RA 6657. Moreover, the DAR maintained that the issuance of the
"Certificate of Deposit" by the Landbank was a substantial compliance
with Section 16(e) of RA 6657 and the ruling in the case of
Association of Small Landowners in the Philippines, Inc., et al. vs. FRANCISCO, R., J.:
Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989
(175 SCRA 343). It has been declared that the duty of the court to protect the weak and
For its part, petitioner Landbank declared that the issuance of the the underprivileged should not be carried out to such an extent as deny
Certificates of Deposits was in consonance with Circular Nos. 29, 29-A justice to the landowner whenever truth and justice happen to be on his
and 54 of the Land Registration Authority where the words side.1 As eloquently stated by Justice Isagani Cruz:
"reserved/deposited" were also used.
On October 20, 1994, the respondent court rendered the assailed
. . . social justice — or any justice for that matter
decision in favor of private respondents.
— is for the deserving, whether he be a
ISSUES:
millionaire in his mansion or a pauper in his
Whether or not the respondent Court of Appeals committed grave
hovel. It is true that, in case of reasonable doubt,
abuse of discretion when if ruled that Administrative Order No. 9 is
we are called upon to tilt the balance in favor of
null and void.
the poor, to whom the Constitution fittingly
HELD: NO.
extends its sympathy and compassion. But never
Section 16(e) of RA 6657 provides as follows “Upon receipt by the
is it justified to prefer the poor simply because
landowner of the corresponding payment or, in case of rejection or no
they are poor, or to reject the rich simply because
response from the landowner, upon the deposit with an accessible bank
they are rich, for justice must always be served,
designated by the DAR of the compensation in cash or in LBP bonds in
for poor and rich alike, according to the mandate
accordance with this Act, the DAR shall take immediate possession of
of the law.2
the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines.” In this agrarian dispute, it is once more imperative that the aforestated
It is very explicit therefrom that the deposit must be made only in principles be applied in its resolution.
"cash" or in "LBP bonds". Nowhere does it appear nor can it be
inferred that the deposit can be made in any other form. If it were the Separate petitions for review were filed by petitioners Department of
intention to include a "trust account" among the valid modes of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the
deposit, that should have been made express, or at least, qualifying Philippines (G.R. No. 118712) following the adverse ruling by the
words ought to have appeared from which it can be fairly deduced that Court of Appeals in CA-G.R. SP No. 33465. However, upon motion
a "trust account" is allowed. In sum, there is no ambiguity in Section filed by private respondents, the petitions were ordered consolidated.3
16(e) of RA 6657 to warrant an expanded construction of the term
"deposit".
Action of an administrative agency may be disturbed or set aside by the Petitioners assail the decision of the Court of Appeals promulgated on
judicial department if there is an error of law, a grave abuse of power October 20, 1994, which granted private respondents' Petition
or lack of jurisdiction or grave abuse of discretion clearly conflicting for Certiorari and Mandamus and ruled as follows:
with either the letter or the spirit of a legislative enactment. In this
regard, it must be stressed that the function of promulgating rules and WHEREFORE, premises considered, the Petition
regulations may be legitimately exercised only for the purpose of for Certiorari and Mandamus is hereby
carrying the provisions of the law into effect. The power of GRANTED:
administrative agencies is thus confined to implementing the law or
putting it into effect. Corollary to this is that administrative regulations
cannot extend the law and amend a legislative enactment, for settled is a) DAR Administrative
the rule that administrative regulations must be in harmony with the Order No. 9, Series of 1990
provisions of the law. And in case there is a discrepancy between the is
basic law and an implementing rule or regulation, it is the former that declared null and void insofa
prevails. r as it provides for the
In the present suit, the DAR clearly overstepped the limits of its power opening of trust accounts in
to enact rules and regulations when it issued Administrative Circular lieu of deposits in cash or
No. 9. There is no basis in allowing the opening of a trust account in bonds;

27 ADMIN LAW CASES 0901

 b) Respondent Landbank is As found by respondent court , the following are undisputed:
ordered
to immediately deposit —
Petitioner Pedro Yap alleges that "(o)n 4
not merely "earmark", September 1992 the transfer certificates of title
"reserve" or "deposit in
(TCTs) of petitioner Yap were totally cancelled
trust" — with an accessible by the Registrar of Deeds of Leyte and were
bank designated by transferred in the names of farmer beneficiaries
respondent DAR in the collectively, based on the request of the DAR
names of the following together with a certification of the Landbank that
petitioners the following the sum of P735,337.77 and P719,869.54 have
amounts in cash and in been earmarked for Landowner Pedro L. Yap for
government financial
the parcels of lands covered by TCT Nos. 6282
instruments — within the and 6283, respectively, and issued in lieu thereof
parameters of Sec. 18 (1) of
TC-563 and TC-562, respectively, in the names of
RA 6657: listed beneficiaries (ANNEXES "C" & "D")
without notice to petitioner Yap and without
P 1,455,207.31 Pedro L. Yap complying with the requirement of Section 16 (e)
of RA 6657 to deposit the compensation in cash
P 135,482.12 Heirs of and Landbank bonds in an accessible bank.
(Rollo, p. 6).
Emiliano Santiago

The above allegations are not disputed by any of

P 15,914,127.77
AMADCOR; the respondents.

c) The DAR-designated Petitioner Heirs of Emiliano Santiago allege that

the heirs of Emiliano F. Santiago are the owners
bank is ordered to allow the
petitioners to withdraw the of a parcel of land located at Laur, NUEVA
ECIJA with an area of 18.5615 hectares covered
above-deposited amounts
without prejudice to the final by TCT No. NT-60359 of the registry of Deeds of
determination of just Nueva Ecija, registered in the name of the late
compensation by the proper Emiliano F. Santiago; that in November and
authorities; and December 1990, without notice to the petitioners,
the Landbank required and the beneficiaries
executed Actual tillers Deed of Undertaking
d) Respondent DAR is (ANNEX "B") to pay rentals to the LandBank for
ordered to the use of their farmlots equivalent to at least 25%
1) immediately conduct sum of the net harvest; that on 24 October 1991 the
mary administrative DAR Regional Director issued an order directing
proceedings to determine the the Landbank to pay the landowner directly or
just compensation for the through the establishment of a trust fund in the
lands of the petitioners amount of P135,482.12, that on 24 February
giving the petitioners 15 1992, the Landbank reserved in trust P135,482.12
days from notice within in the name of Emiliano F. Santiago. (ANNEX
which to submit evidence "E"; Rollo,
and to 2) decide the p. 7); that the beneficiaries stopped paying rentals
cases within 30 days after to the landowners after they signed the Actual
they are submitted for Tiller's Deed of Undertaking committing
decision.4 themselves to pay rentals to the LandBank (Rollo,
p. 133).
Likewise, petitioners seek the reversal of the Resolution
dated January 18, 1995,5 denying their motion for The above allegations are not disputed by the
reconsideration. respondents except that respondent Landbank
claims 1) that it was respondent DAR, not
Private respondents are landowners whose landholdings were acquired Landbank which required the execution of Actual
by the DAR and subjected to transfer schemes to qualified Tillers Deed of Undertaking (ATDU, for brevity);
beneficiaries under the Comprehensive Agrarian Reform Law (CARL, and 2) that respondent Landbank, although armed
Republic Act No. 6657). with the ATDU, did not collect any amount as
rental from the substituting beneficiaries (Rollo,
p. 99).
Aggrieved by the alleged lapses of the DAR and the
Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA Petitioner Agricultural Management and
6657, private respondents filed with this Court a Petition Development Corporation (AMADCOR, for
for Certiorari and Mandamus with prayer for preliminary brevity) alleges — with respect to its properties
mandatory injunction. Private respondents questioned the located in San Francisco, Quezon — that the
validity of DAR Administrative Order No. 6, Series of properties of AMADCOR in San Francisco,
19926 and DAR Administrative Order No. 9, Series of Quezon consist of a parcel of land covered by
1990,7 and sought to compel the DAR to expedite the TCT No. 34314 with an area of 209.9215 hectares
pending summary administrative proceedings to finally and another parcel covered by TCT No. 10832
determine the just compensation of their properties, and the with an area of 163.6189 hectares; that a summary
Landbank to deposit in cash and bonds the amounts administrative proceeding to determine
respectively "earmarked", "reserved" and "deposited in trust compensation of the property covered by TCT
accounts" for private respondents, and to allow them to No. 34314 was conducted by the DARAB in
withdraw the same. Quezon City without notice to the landowner; that
a decision was rendered on 24 November 1992
(ANNEX "F") fixing the compensation for the
Through a Resolution of the Second Division dated February 9, 1994, parcel of land covered by TCT No. 34314 with an
this Court referred the petition to respondent Court of Appeals for area of 209.9215 hectares at P2,768,326.34 and
proper determination and disposition. ordering the Landbank to pay or establish a trust
account for said amount in the name of
28 ADMIN LAW CASES 0901
 AMADCOR; and that the trust account in the merely exercised its power to promulgate rules and regulations in
amount of P2,768,326.34 fixed in the decision implementing the declared policies of RA 6657.
was established by adding P1,986,489.73 to the
first trust account established on 19 December The contention is untenable. Section 16(e) of RA 6657 provides as
1991 (ANNEX "G"). With respect to petitioner
follows:
AMADCOR's property in Tabaco, Albay, it is
alleged that the property of AMADCOR in
Tabaco, Albay is covered by TCT No. T-2466 of Sec. 16. Procedure for Acquisition of Private
the Register of Deeds of Albay with an area of Lands —
1,629.4578 hectares'; that emancipation patents
were issued covering an area of 701.8999 hectares xxx xxx xxx
which were registered on 15 February 1988 but
no action was taken thereafter by the DAR to fix
the compensation for said land; that on 21 April (e) Upon receipt by the landowner of the
1993, a trust account in the name of AMADCOR corresponding payment or, in case of rejection or
was established in the amount of P12,247,217.83', no response from the landowner, upon the deposit
three notices of acquisition having been with an accessible bank designated by the DAR of
previously rejected by AMADCOR. (Rollo, pp. 8- the compensation in cash or in LBP bonds in
9) accordance with this Act, the DAR shall take
immediate possession of the land and shall
request the proper Register of Deeds to issue a
The above allegations are not disputed by the Transfer Certificate of Title (TCT) in the name of
respondents except that respondent Landbank the Republic of the Philippines. . . . (emphasis
claims that petitioner failed to participate in the supplied)
DARAB proceedings (land valuation case)
despite due notice to it (Rollo, p. 100).8
It is very explicit therefrom that the deposit must be made only in
"cash" or in "LBP bonds". Nowhere does it appear nor can it be
Private respondents argued that Administrative Order No. 9, Series of inferred that the deposit can be made in any other form. If it were the
1990 was issued without jurisdiction and with grave abuse of discretion intention to include a "trust account" among the valid modes of
because it permits the opening of trust accounts by the Landbank, in deposit, that should have been made express, or at least, qualifying
lieu of depositing in cash or bonds in an accessible bank designated by words ought to have appeared from which it can be fairly deduced that
the DAR, the compensation for the land before it is taken and the titles a "trust account" is allowed. In sum, there is no ambiguity in Section
are cancelled as provided under Section 16(e) of RA 6657. 9 Private 16(e) of RA 6657 to warrant an expanded construction of the term
respondents also assail the fact that the DAR and the Landbank merely "deposit".
"earmarked", "deposited in trust" or "reserved" the compensation in
their names as landowners despite the clear mandate that before taking
possession of the property, the compensation must be deposited in cash The conclusive effect of administrative construction is not absolute.
or in bonds. 10 Action of an administrative agency may be disturbed or set aside by the
judicial department if there is an error of law, a grave abuse of power
or lack of jurisdiction or grave abuse of discretion clearly conflicting
Petitioner DAR, however, maintained that Administrative Order No. 9 with either the letter or the spirit of a legislative enactment. 18 In this
is a valid exercise of its rule-making power pursuant to Section 49 of regard, it must be stressed that the function of promulgating rules and
RA 6657.11 Moreover, the DAR maintained that the issuance of the regulations may be legitimately exercised only for the purpose of
"Certificate of Deposit" by the Landbank was a substantial compliance carrying the provisions of the law into effect. The power of
with Section 16(e) of RA 6657 and the ruling in the case of Association administrative agencies is thus confined to implementing the law or
of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary putting it into effect. Corollary to this is that administrative regulations
of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343).12 cannot extend
the law and amend a legislative enactment,19 for settled is the rule that
For its part, petitioner Landbank declared that the issuance of the administrative regulations must be in harmony with the provisions of
Certificates of Deposits was in consonance with Circular Nos. 29, 29-A the law. And in case there is a discrepancy between the basic law and
and 54 of the Land Registration Authority where the words an implementing rule or regulation, it is the former that prevails. 20
"reserved/deposited" were also used.13
In the present suit, the DAR clearly overstepped the limits of its power
On October 20, 1994, the respondent court rendered the assailed to enact rules and regulations when it issued Administrative Circular
decision in favor of private respondents.14Petitioners filed a motion for No. 9. There is no basis in allowing the opening of a trust account in
reconsideration but respondent court denied the same.15 behalf of the landowner as compensation for his property because, as
heretofore discussed, Section 16(e) of RA 6657 is very specific that the
deposit must be made only in "cash" or in "LBP bonds". In the same
Hence, the instant petitions. vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54
because these implementing regulations cannot outweigh the clear
On March 20, 1995, private respondents filed a motion to dismiss the provision of the law. Respondent court therefore did not commit any
petition in G.R. No. 118745 alleging that the appeal has no merit and is error in striking down Administrative Circular No. 9 for being null and
merely intended to delay the finality of the appealed decision. 16 The void.
Court, however, denied the motion and instead required the
respondents to file their comments.17 Proceeding to the crucial issue of whether or not private respondents
are entitled to withdraw the amounts deposited in trust in their behalf
Petitioners submit that respondent court erred in (1) declaring as null pending the final resolution of the cases involving the final valuation of
and void DAR Administrative Order No. 9, Series of 1990, insofar as it their properties, petitioners assert the negative.
provides for the opening of trust accounts in lieu of deposit in cash or
in bonds, and (2) in holding that private respondents are entitled as a The contention is premised on the alleged distinction between the
matter of right to the immediate and provisional release of the amounts
deposit of compensation under Section 16(e) of RA 6657 and payment
deposited in trust pending the final resolution of the cases it has filed of final compensation as provided under Section 18 21 of the same law.
for just compensation.
According to petitioners, the right of the landowner to withdraw the
amount deposited in his behalf pertains only to the final valuation as
Anent the first assignment of error, petitioners maintain that the word agreed upon by the landowner, the DAR and the LBP or that adjudged
"deposit" as used in Section 16(e) of RA 6657 referred merely to the by the court. It has no reference to amount deposited in the trust
act of depositing and in no way excluded the opening of a trust account account pursuant to Section 16(e) in case of rejection by the landowner
as a form of deposit. Thus, in opting for the opening of a trust account because the latter amount is only provisional and intended merely to
as the acceptable form of deposit through Administrative Circular No. secure possession of the property pending final valuation. To further
9, petitioner DAR did not commit any grave abuse of discretion since it bolster the contention petitioners cite the following pronouncements in
29 ADMIN LAW CASES 0901
the case of "Association of Small Landowners in the Phil. Inc. vs. property for which he should be fairly and immediately compensated.
Secretary of Agrarian Reform".22 Fittingly, we reiterate the cardinal rule that:

The last major challenge to CARP is that the . . . within the context of the State's inherent
landowner is divested of his property even before power of eminent domain, just compensation
actual payment to him in full of just means not only the correct determination of the
compensation, in contravention of a well-accepted amount to be paid to the owner of the land but
principle of eminent domain. also the payment of the land within a reasonable
time from its taking. Without prompt
xxx xxx xxx payment, compensation cannot be considered
"just" for the property owner is made to suffer the
consequence of being immediately deprived of his
The CARP Law, for its part conditions the land while being made to wait for a decade or
transfer of possession and ownership of the land more before actually receiving the amount
to the government on receipt by the landowner of necessary to cope with his loss. 24 (Emphasis
the corresponding payment or the deposit by the supplied)
DAR of the compensation in cash or LBP bonds
with an accessible bank. Until then, title also
remains with the landowner. No outright change The promulgation of the "Association" decision endeavored to remove
of ownership is contemplated either. all legal obstacles in the implementation of the Comprehensive
Agrarian Reform Program and clear the way for the true freedom of the
farmer.25 But despite this, cases involving its implementation continue
xxx xxx xxx to multiply and clog the courts' dockets. Nevertheless, we are still
optimistic that the goal of totally emancipating the farmers from their
Hence the argument that the assailed measures bondage will be attained in due time. It must be stressed, however, that
violate due process by arbitrarily transferring title in the pursuit of this objective, vigilance over the rights of the
before the land is fully paid for must also be landowners is equally important because social justice cannot be
rejected. invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.26
Notably, however, the aforecited case was used by respondent court in
discarding petitioners' assertion as it found that: WHEREFORE, the foregoing premises considered, the petition is
hereby DENIED for lack of merit and the appealed decision is
AFFIRMED in toto.
. . . despite the "revolutionary" character of the
expropriation envisioned under RA 6657 which
led the Supreme Court, in the case of Association SO ORDERED.
of Small Landowners in the Phil. Inc. vs.
Secretary of Agrarian Reform (175 SCRA 343),
to conclude that "payments of the just
compensation is not always required to be made
fully in money" — even as the Supreme Court
admits in the same case "that the traditional
medium for the payment of just compensation is
money and no other" — the Supreme Court in
said case did not abandon the "recognized rule . .
. that title to the property expropriated shall pass
from the owner to the expropriator only upon full
payment of the just compensation." 23 (Emphasis
supplied)

We agree with the observations of respondent court. The ruling in the

"Association" case merely recognized the extraordinary nature of the
expropriation to be undertaken under RA 6657 thereby allowing a
deviation from the traditional mode of payment of compensation and
recognized payment other than in cash. It did not, however, dispense
with the settled rule that there must be full payment of just
compensation before the title to the expropriated property is
transferred.

The attempt to make a distinction between the deposit of compensation

under Section 16(e) of RA 6657 and determination of just
compensation under Section 18 is unacceptable. To withhold the right
of the landowners to appropriate the amounts already deposited in their
behalf as compensation for their properties simply because they
rejected the DAR's valuation, and notwithstanding that they have
already been deprived of the possession and use of such properties, is
an oppressive exercise of eminent domain. The irresistible
expropriation of private respondents' properties was painful enough for
them. But petitioner DAR rubbed it in all the more by withholding that
which rightfully belongs to private respondents in exchange for the
taking, under an authority (the "Association" case) that is, however,
misplaced. This is misery twice bestowed on private respondents,
which the Court must rectify.

Hence, we find it unnecessary to distinguish between provisional

compensation under Section 16(e) and final compensation under
Section 18 for purposes of exercising the landowners' right to
appropriate the same. The immediate effect in both situations is the
same, the landowner is deprived of the use and possession of his

30 ADMIN LAW CASES 0901

Commissioner of Internal Revenue v. Court of Appeals, G.R. No. Held:
108358, January 20, 1995 Yes. The Court held that that A.O. No. 308 involves a subject that is
Facts: not appropriate to be covered by an administrative order.
On 22 August 1986, during the period when the President of the Administrative power is concerned with the work of applying policies
Republic still wielded legislative powers, Executive Order No. 41 was and enforcing orders as determined by proper governmental organs. 21
promulgated declaring a one-time tax amnesty on unpaid income taxes, It enables the President to fix a uniform standard of administrative
later amended to include estate and donor's taxes and taxes on business, efficiency and check the official conduct of his agents. 22 To this end,
for the taxable years 1981 to 1985. he can issue administrative orders, rules and regulations.
Availing itself of the amnesty, R.O.H. Auto Products Philippines, Inc., An administrative order is an ordinance issued by the President which
filed Tax Amnesty Return, and paid the corresponding amnesty taxes relates to specific aspects in the administrative operation of
due. Prior to this availment, petitioner Commissioner of Internal government. It must be in harmony with the law and should be for the
Revenue, assessed the R.O.H. Auto Products Philippines, Inc., for of implementing the law and carrying out the legislative policy. 24 We
deficiency income and business taxes for its fiscal years ended 30 reject the argument that A.O. No. 308 implements the legislative policy
September 1981and 30 September 1982 in an aggregate amount of of the Administrative Code of 1987. The Code is a general law and
P1,410,157.71. The taxpayer wrote back to state that since it had been "incorporates in a unified document the major structural, functional and
able to avail itself of the tax amnesty, the deficiency tax notice should procedural principles of governance." 25 and "embodies changes in
forthwith be cancelled and withdrawn. The request was denied on the administrative structure and procedures designed to serve the people."
ground that Revenue Memorandum Order No. 4-87, dated 09 February It cannot be simplistically argued that A.O. No. 308 merely
1987, implementing Executive Order No. 41, had construed the implements the Administrative Code of 1987. It establishes for the first
amnesty coverage to include only assessments issued by the Bureau of time a National Computerized Identification Reference System. Such a
Internal Revenue after the promulgation of the executive order on 22 System requires a delicate adjustment of various contending state
August 1986 and not to assessments theretofore made. policies - the primacy of national security, the extent of privacy interest
Issue: Whether the respondent pay the tax deficiency. (NO) against dossier-gathering by government, the choice of policies, etc.
Holding:
The authority of the Minister of Finance (now the Secretary of
Finance), in conjunction with the Commissioner of Internal Revenue, G.R. No. 108358 January 20, 1995
to promulgate all needful rules and regulations for the effective
enforcement of internal revenue laws cannot be controverted. Neither
can it be disputed that such rules and regulations, as well as COMMISSIONER OF INTERNAL REVENUE, petitioner,
administrative opinions and rulings, ordinarily should deserve weight vs.
and respect by the courts. Much more fundamental than either of the THE HON. COURT OF APPEALS, R.O.H. AUTO PRODUCTS
above, however, is that all such issuances must not override, but must PHILIPPINES, INC. and THE HON. COURT OF TAX
remain consistent and in harmony with, the law they seek to apply and APPEALS, respondents.
implement. Administrative rules and regulations are intended to carry
out, neither to supplant nor to modify, the law.
The period of the amnesty was later extended to 05 December 1986
from 31 October 1986 by Executive Order No. 54, dated 04 November
1986, and, its coverage expanded, under Executive Order No. 64, dated VITUG, J.:
17 November 1986, to include estate and donors taxes and taxes on
business. On 22 August 1986, during the period when the President of the
If, as the Commissioner argues, Executive Order No. 41 had not been Republic still wielded legislative powers, Executive Order No. 41 was
intended to include 1981-1985 tax liabilities already assessed promulgated declaring a one-time tax amnesty on unpaid income taxes,
(administratively) prior to 22 August 1986, the law could have simply later amended to include estate and donor's taxes and taxes on business,
so provided in its exclusionary clauses. It did not. The conclusion is for the taxable years 1981 to 1985.
unavoidable, and it is that the executive order has been designed to be
in the nature of a general grant of tax amnesty subject only to the cases
specifically excepted by it. Availing itself of the amnesty, respondent R.O.H. Auto Products
It might not be amiss to recall that the taxable periods covered by the Philippines, Inc., filed, in October 1986 and November 1986, its Tax
amnesty include the years immediately preceding the 1986 revolution Amnesty Return No. 34-F-00146-41 and Supplemental Tax Amnesty
during which time there had been persistent calls, all too vivid to be Return No. 34-F-00146-64-B, respectively, and paid the corresponding
easily forgotten, for civil disobedience, most particularly in the amnesty taxes due.
payment of taxes, to the martial law regime. It should be
understandable then that those who ultimately took over the reigns of Prior to this availment, petitioner Commissioner of Internal Revenue,
government following the successful revolution would promptly in a communication received by private respondent on 13 August 1986,
provide for a broad, and not a confined, tax amnesty. assessed the latter deficiency income and business taxes for its fiscal
22BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, years ended 30 September 1981 and 30 September 1982 in an
ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO aggregate amount of P1,410,157.71. The taxpayer wrote back to state
HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR that since it had been able to avail itself of the tax amnesty, the
SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD OF deficiency tax notice should forthwith be cancelled and withdrawn.
THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE The request was denied by the Commissioner, in his letter of 22
COMMISSION ON AUDIT, respondents . G.R. No. 127685 July 23, November 1988, on the ground that Revenue Memorandum Order No.
1998 4-87, dated 09 February 1987, implementing Executive Order No. 41,
Facts: had construed the amnesty coverage to include only assessments issued
Petitioner Ople prays that we invalidate Administrative Order No. 308 by the Bureau of Internal Revenue after the promulgation of the
entitled "Adoption of a National Computerized Identification executive order on 22 August 1986 and not to assessments theretofore
Reference System" on two important constitutional grounds, viz: one, made. The invoked provisions of the memorandum order read:
it is a usurpation of the power of Congress to legislate.
Petitioner contends among others that THE ESTABLISNMENT OF A
TO: All Internal Revenue Officers and Others
NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE
Concerned:
SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF
A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE
PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL 1.0. To give effect and substance to the immunity
USURPATION OF THE LEGISLATIVE POWERS OF THE provisions of the tax amnesty under Executive
CONGRESS OF THE REPUBLIC OF THE PHILIPPINES. Order No. 41, as expanded by Executive Order
In response, respondents argued that A.O. NO. 308 [1996] WAS No. 64, the following instructions are hereby
ISSUED WITHIN THE EXECUTIVE AND ADMINISTRATIVE issued:
POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON
THE LEGISLATIVE POWERS OF CONGRESS; xxx xxx xxx
Issue:
Whether or not A.O 308 is a usurpation of legislative powers of the
Congress?
31 ADMIN LAW CASES 0901
 1.02. A certification by the Tax Amnesty persons otherwise guilty of evasion or violation of
Implementation Officer of the fact of availment of a revenue or tax law, partakes of an absolute
the said tax amnesty shall be a sufficient basis for: forgiveness or waiver by the Government of its
right to collect what otherwise would be due it,
and in this sense, prejudicial thereto, particularly
xxx xxx xxx
to give tax evaders, who wish to relent and are
willing to reform a chance to do so and thereby
1.02.3. In appropriate cases, the become a part of the new society with a clean
cancellation/withdrawal of assessment notices slate. (Republic vs. Intermediate Appellate Court.
and letters of demand issued after August 21, 196 SCRA 335, 340 [1991] citing Commissioner
1986 for the collection of income, business, estate of Internal Revenue vs. Botelho Shipping Corp.,
or donor's taxes due during the same taxable 20 SCRA 487) To follow [the restrictive
years.1 (Emphasis supplied) application of Revenue Memorandum Order No.
4-87 pressed by petitioner Commissioner would
Private respondent appealed the Commissioner's denial to the Court of be to work against the raison d'etre of E.O. 41, as
Tax Appeals. Ruling for the taxpayer, the tax court said: amended, i.e., to raise government revenues by
encouraging taxpayers to declare their untaxed
income and pay the tax due thereon. (E.O. 41,
Respondent (herein petitioner Commissioner) first paragraph)]3
failed to present any case or law which proves
that an assessment can withstand or negate the
force and effects of a tax amnesty. This burden of In this petition for review, the Commissioner raises these related
proof on the petitioner (herein respondent issues:
taxpayer) was created by the clear and express
terms of the executive order's intention — 1. WHETHER OR NOT REVENUE MEMORANDUM
qualified availers of the amnesty may pay an ORDER NO. 4-87, PROMULGATED TO IMPLEMENT
amnesty tax in lieu of said unpaid taxes which are E.O. NO. 41, IS VALID;
forgiven (Section 2, Section 5, Executive Order
No. 41, as amended). More specifically, the plain
2. WHETHER OR NOT SAID DEFICIENCY
provisions in the statute granting tax amnesty for
unpaid taxes for the period January 1, 1981 to ASSESSMENTS IN QUESTION WERE EXTINGUISHED
December 31, 1985 shifted the burden of proof on BY REASON OR PRIVATE RESPONDENT'S
respondent to show how the issuance of an AVAILMENT OF EXECUTIVE ORDER NO. 41 AS
assessment before the date of the promulgation of AMENDED BY EXECUTIVE ORDER NO. 64;
the executive order could have a reasonable
relation with the objective periods of the amnesty, 3. WHETHER OR NOT PRIVATE RESPONDENT HAS
so as to make petitioner still answerable for a tax OVERCOME THE PRESUMPTION OF VALIDITY OF
liability which, through the statute, should have ASSESSMENTS.4
been erased with the proper availment of the
amnesty. The authority of the Minister of Finance (now the Secretary of
Finance), in conjunction with the Commissioner of Internal Revenue,
Additionally, the exceptions enumerated in to promulgate all needful rules and regulations for the effective
Section 4 of Executive Order No. 41, as amended, enforcement of internal revenue laws cannot be controverted. Neither
do not indicate any reference to an assessment or can it be disputed that such rules and regulations, as well as
pending investigation aside from one arising from administrative opinions and rulings, ordinarily should deserve weight
information furnished by an informer. . . . Thus, and respect by the courts. Much more fundamental than either of the
we deem that the rule in Revenue Memorandum above, however, is that all such issuances must not override, but must
Order No. 4-87 promulgating that only remain consistent and in harmony with, the law they seek to apply and
assessments issued after August 21, 1986 shall be implement. Administrative rules and regulations are intended to carry
abated by the amnesty is beyond the out, neither to supplant nor to modify, the law.
contemplation of Executive Order No. 41, as
amended.2 The real and only issue is whether or not the position taken by the
Commissioner coincides with the meaning and intent of executive
On appeal by the Commissioner to the Court of Appeals, the decision Order No. 41.
of the tax court was affirmed. The appellate court further observed:
We agree with both the court of Appeals and court of Tax Appeals that
In the instant case, examining carefully the words Executive Order No. 41 is quite explicit and requires hardly anything
used in Executive Order No. 41, as amended, we beyond a simple application of its provisions. It reads:
find nothing which justifies petitioner
Commissioner's ground for denying respondent Sec. 1. Scope of Amnesty. — A one-time tax
taxpayer's claim to the benefits of the amnesty amnesty covering unpaid income taxes for the
law. Section 4 of the subject law enumerates, in years 1981 to 1985 is hereby declared.
no uncertain terms, taxpayers who may not avail
of the amnesty granted,. . . .
Sec. 2. Conditions of the Amnesty. — A taxpayer
who wishes to avail himself of the tax amnesty
Admittedly, respondent taxpayer does not fall shall, on or before October 31, 1986;
under any of the . . . exceptions. The added
exception urged by petitioner Commissioner
based on Revenue Memorandum Order No. 4-87, a) file a sworn statement
further restricting the scope of the amnesty clearly declaring his net worth as of
amounts to an act of administrative legislation December 31, 1985;
quite contrary to the mandate of the law which the
regulation ought to implement. b) file a certified true copy
of his statement declaring his
xxx xxx xxx net worth as of December
31, 1980 on record with the
Bureau of Internal Revenue,
Lastly, by its very nature, a tax amnesty, being a or if no such record exists,
general pardon or intentional overlooking by the file a statement of said net
State of its authority to impose penalties on
32 ADMIN LAW CASES 0901
 worth therewith, subject to xxx xxx xxx
verification by the Bureau of
Internal Revenue;
Sec. 9. The Minister of finance, upon the
recommendation of the Commissioner of Internal
c) file a return and pay a tax Revenue, shall promulgate the necessary rules and
equivalent to ten per cent regulations to implement this Executive Order.
(10%) of the increase in net
worth from December 31, xxx xxx xxx
1980 to December 31,
1985: Provided, That in no
case shall the tax be less than Sec. 11. This Executive Order shall take effect
P5,000.00 for individuals immediately.
and P10,000.00 for judicial
persons. DONE in the City of Manila, this 22nd day of
August in the year of Our Lord, nineteen hundred
Sec. 3. Computation of Net Worth. — In and eighty-six.
computing the net worths referred to in Section 2
hereof, the following rules shall govern: The period of the amnesty was later extended to 05 December 1986
from 31 October 1986 by Executive Order No. 54, dated 04 November
a) Non-cash assets shall be 1986, and, its coverage expanded, under Executive Order No. 64, dated
valued at acquisition cost. 17 November 1986, to include estate and honors taxes and taxes on
business.
b) Foreign currencies shall
be valued at the rates of If, as the Commissioner argues, Executive Order No. 41 had not been
exchange prevailing as of the intended to include 1981-1985 tax liabilities already assessed
date of the net worth (administratively) prior to 22 August 1986, the law could have simply
statement. so provided in its exclusionary clauses. It did not. The conclusion is
unavoidable, and it is that the executive order has been designed to be
in the nature of a general grant of tax amnesty subject only to the
Sec. 4. Exceptions. — The following taxpayers cases specifically excepted by it.
may not avail themselves of the amnesty herein
granted:
It might not be amiss to recall that the taxable periods covered by the
amnesty include the years immediately preceding the 1986 revolution
a) Those falling under the during which time there had been persistent calls, all too vivid to be
provisions of Executive easily forgotten, for civil disobedience, most particularly in the
Order Nos. 1, 2 and 14; payment of taxes, to the martial law regime. It should be
understandable then that those who ultimately took over the reigns of
b) Those with income tax government following the successful revolution would promptly
cases already filed in Court provide for abroad, and not a confined, tax amnesty.
as of the effectivity hereof;
Relative to the two other issued raised by the Commissioner, we need
c) Those with criminal cases only quote from Executive Order No. 41 itself; thus:
involving violations of the
income tax already filed in Sec. 6. Immunities and Privileges. — Upon full
court as of the effectivity compliance with the conditions of the tax amnesty
filed in court as of the and the rules and regulations issued pursuant to
effectivity hereof; this Executive order, the taxpayer shall enjoy the
following immunities and privileges:
d) Those that have
withholding tax liabilities a) The taxpayer shall be
under the National Internal relieved of any income tax
Revenue Code, as amended, liability on any untaxed
insofar as the said liabilities
income from January 1,
are concerned; 1981 to December 31, 1985,
including increments thereto
e) Those with tax cases and penalties on account of
pending investigation by the the non-payment of the said
Bureau of Internal Revenue tax. Civil, criminal or
as of the effectivity hereof as administrative liability
a result of information arising from the non-
furnished under Section 316 payment of the said tax,
of the National Internal which are actionable under
Revenue Code, as amended; the National Internal
Revenue Code, as amended,
f) Those with pending cases are likewise deemed
involving unexplained or extinguished.
unlawfully acquired wealth
before the Sandiganbayan; b) The taxpayer's tax
amnesty declaration shall not
g) Those liable under Title be admissible in evidence in
Seven, Chapter Three all proceedings before
judicial, quasi-judicial or
(Frauds, Illegal Exactions
and Transactions) and administrative bodies, in
which he is a defendant or
Chapter Four (Malversation
of Public Funds and respondent, and the same
Property) of the Revised shall not be examined,
Penal Code, as amended. inquired or looked into by
33 ADMIN LAW CASES 0901
 any person, government
official, bureau or office.

c) The books of account and

other records of the taxpayer
for the period from January
1, 1981 to December 31,
1985 shall not be examined
for income tax
purposes: Provided, That the
Commissioner of Internal
Revenue may authorize in
writing the examination of
the said books of accounts
and other records to verify
the validity or correctness of
a claim for grant of any tax
refund, tax credit (other than
refund on credit of withheld
taxes on wages), tax
incentives, and/or
exemptions under existing
laws.

There is no pretension that the tax amnesty returns and due payments
made by the taxpayer did not conform with the conditions expressed in
the amnesty order.

WHEREFORE, the decision of the court of Appeals, sustaining that of

the court of Tax Appeals, is hereby AFFIRMED in toto. No costs.

SO ORDERED.

34 ADMIN LAW CASES 0901

Manila Jockey Club, Inc. v. Court of Appeals, G.R. No. 103533, The pertinent facts on record are as follows:
December 15, 1998
Facts:
On June 18, 1948, Congress approved Republic Act No. 309, entitled
Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club, Inc. "An Act to Regulate Horse-Racing in the Philippines." This Act
(PRCI) were granted franchises to operate race tracks for horse racing
consolidated all existing laws and amended inconsistent provisions
by virtue of RA 6631 and 6632. They were allowed to hold horse races relative to horse racing. It provided for the distribution of gross receipts
with bets on Saturdays, Sundays and some official holidays, and from the sale of betting tickets, but is silent on the allocation of so-
allocation of "breakages" to specified beneficiaries were provided. called "breakages." Thus the practice, according to the petitioners, was
Later, the Philippine Racing Commission (PHILRACOM) was created to use the "breakages" for the anti-bookies drive and other sales
and it was given exclusive jurisdiction over every aspect of the conduct promotions activities of the horse racing clubs.
of horse racing including the scheduling of races. When races were
scheduled on Wednesdays, PHILRACOM opined that the "breakages"
on said day belonged to the racing clubs concerned. Later, On October 23, 1992, petitioners, Manila Jockey Club, Inc. (MJCI) and
PHILRACOM also authorized the holding of races on Thursdays and Philippine Racing Club, Inc. (PRCI), were granted franchises to
on Tuesdays. These mid-week races are in addition to those mentioned operate and maintain race tracks for horse racing in the City of Manila
in RA 6631 and 6632. Likewise, petitioners allocated the "breakages" and the Province of Rizal by virtue of Republic Act Nos. 6631 and
from these races for their own uses. Later, EO 88 and 89 were issued 6632, respectively, and allowed to hold horse races, with bets, on the
amending percentage allocation of RA 6631 and 6632. PHILRACOM following dates:
asked the Office of the President which agency is entitled to dispose of
the proceeds of the "breakages" derived from the Tuesday and . . . Saturdays, Sundays and official holidays of
Wednesday races. The Office of the President, replied that the the year, excluding Thursday and Fridays of the
disposition of the breakages rightfully belongs to PHILRACOM, not Holy Week, June twelfth, commonly known as
only those derived from the Saturday, Sunday and holiday races, but Independence Day, Election Day and December
also from the Tuesday and Wednesday races in accordance with the thirtieth, commonly known as Rizal Day.
distribution scheme prescribed in the EOs. PHILRACOM thus
demanded from MJCI and PRCI its share in the "breakages" of mid-
week races and proof of remittances to other legal beneficiaries as
provided under the franchise laws.
Issue: Who are the rightful beneficiaries of the breakages derived from
mid-week races?
Holding:
Franchise laws are privileges conferred by the government on
corporations to do that "which does not belong to the citizens of the
country generally by common right". As a rule, a franchise springs
from contracts between the sovereign power and the private
corporation for purposes of individual advantage as well as public
benefit. Thus, a franchise partakes of a double nature and character. In
so far as it affects or concerns the public, it is public juris and subject
to governmental control. The legislature may prescribe the conditions
and terms upon which it may be held, and the duty of grantee to the
public exercising it.
As grantees of a franchise, petitioners derive their existence from the
same. Petitioners' operations are governed by all existing rules relative
to horse racing provided they are not inconsistent with each other and
could be reasonably harmonized. Therefore, the applicable laws are
R.A. 309, as amended, R.A. 663l and 6632, as amended by E.O. 88 and
89, P.D. 420 and the orders issued by PHILRACOM. Consequently,
every statute should be construed in such a way that will harmonize it
with existing laws. This principle is expressed in the legal maxim . . . Saturday, Sundays, and official holiday of the
"interpretare et concordare leges legibus est optimus interpretandi", year, except on those official holidays where the
that is, to interpret and to do it in such a way as to harmonize laws with law expressly provides that no horse races are to
laws is the best method of interpretation. be held. The grantee may also conduct races on
A reasonable reading of the horse racing laws favors the determination the eve of any public holiday to start not earlier
that the entities enumerated in the distribution scheme provided under than five-thirty (5:30) o'clock in the afternoon but
R.A. Nos. 6631 and 6632, as amended by Executive Orders 88 and 89, not to exceed five days a year.
are the rightful beneficiaries of breakages from mid-week races.
Petitioners should therefore remit the proceeds of breakages to those
benefactors designated by the aforesaid laws.

Said laws carried provisions on the allocation of "breakages" to

G.R. No. 103533 December 15, 1998 beneficiaries as follows:

MANILA JOCKEY CLUB, INC. AND PHILIPPINE RACING Provincial or city hospitals 25%
CLUB, INC., petitioners,
vs. Rehabilitation of drug addicts 25% 50%
THE COURT OF APPEALS AND PHILIPPINE RACING
COMMISSION, respondents.
For the benefit of Philippine

Amateur Athletes Federation 50% 25%

QUISUMBING, J.:
Charitable institutions 25%

This is a Petition for Review on Certiorari seeking the reversal of the

On March 20, 1974, Presidential Decree No. 420 was issued creating
decision1 of the Court of Appeals in CA-G.R. SP No. 25251 dated
the Philippine Racing Commission (PHILRACOM), giving it exclusive
September 17, 1991 and the resolution2 dated January 8, 1992, which
jurisdiction and control over every aspect of the conduct of horse
denied the motion for reconsideration. At issue here is the control and
racing, including the framing and scheduling of races. 6 By virtue of
disposition of "breakages" 3 in connection with the conduct of horse-
this power, the PHILRACOM authorized the holding of races on
racing.
Wednesdays starting on December 22, 1976.7

35 ADMIN LAW CASES 0901

In connection with the new schedule of races, petitioners made a joint 15, 1984 up to December 31,
query regarding the ownership of breakages accumulated during 1984; and
Wednesday races. In response to the query, PHILRACOM rendered its
opinion in a letter dated September 20, 1978. It declared that the 3) PHILRACOM's share in
breakages belonged to the racing clubs concerned, to wit:
the breakages derived from
Tuesday racing for the
We find no further need to dissect the provisions period starting January 15,
of P.D. 420 to come to a legal conclusion. As can 1985 up to December, 1986.
be clearly seen from the foregoing discussion and
based on the established precedents, there can be 4) Kindly furnish the
no doubt that the breakage of Wednesday races Commission with the
shall belong to the racing club concerned. 8 breakdown of all breakages
derived from Tuesday,
Consequently, the petitioners allocated the proceeds of Thursdays and Wednesdays
breakages for their own business purpose: racing that you have remitted
to the legal beneficiaries. 12
Thereafter, PHILRACOM authorized the holding of races on
Thursdays from November 15, 1984 to December 31, 1984 and on On June 16, 1987, petitioners MJCI and PRCI sought
Tuesdays since January 15, 1985 up to the present. These mid-week reconsideration 13 of the May 21, 1987 opinion of then Deputy
races are in addition to those days specifically mentioned in R.A. 6631 Executive Secretary Macaraig, but the same was denied by the Office
and R.A. 6632. Likewise, petition allocated the breakages from these of the President in its letter dated April 11, 1988. 14
races for their own uses.
On April 25, 1988, PHILRACOM wrote another letter 15 to the
On December 16, 1986 President Corazon Aquino amended certain petitioners MJCI and PRCI seeking the remittance of its share in the
provisions Sec. 4 of R.A. 8631 and Sec. 6 of R.A. 6632 through breakages. Again, on June 13, 1990, PHILRACOM reiterated its
Executive Orders No. 88 and 89. Under these Executive Orders, previous demand embodied in its letter of April 25, 1 988. 16
breakages were allocated to beneficiaries, as follows:
Petitioners ignored said demand. Instead, they filed a Petition for
Rehabilitation of drug addicts 25% 50% Declaratory Relief before the Regional Trial Court, Branch 150 of
Makati, on the ground that there is a conflict between the previous
For the benefit of Philippine opinion of PHILRACOM dated September 20, 1978 and the present
position of PHILRACOM, as declared and affirmed by the Office of
the President in its letters dated May 21, 1987 and April 11, 1988.
Racing Commission 50% 25% Petitioners averred that there was an "actual controversy" between the
parties, which should be resolved.
Charitable institutions 25%
On March 11, 1991, the trial court rendered judgment, disposing as
On April 23, 1987, PHILRACOM itself addressed a query to the follows:
Office of the President asking which agency is entitled to dispose of
the proceeds of the "breakages" derived from the Tuesday and WHEREFORE, and in view of all the foregoing
Wednesday races. considerations, the Court hereby declares and
decides as follows:
In a letter dated May 21, 1987, the Office of the President, through
then Deputy Executive Secretary Catalino Macaraig, Jr., replied that a) Executive Orders Nos. 88
"the disposition of the breakages rightfully belongs to PHILRACOM, and 89 do not and cannot
not only those derived from the Saturday, Sunday and holiday races, cover the disposition and
but also from the Tuesday and Wednesday races in accordance with the allocation of mid-week
distribution scheme prescribed in said Executive Orders". 11 races, particularly those
authorized to be held during
Controversy arose when herein respondent PHILRACOM, sent a series Tuesdays, Wednesdays and
of demand letters to petitioners MJCI and PRCI, requesting its share in those which are not
the "breakages" of mid-week-races and proof of remittances to other authorized under Republic
legal beneficiaries as provided under the franchise laws. On June 8, Acts 6631 and 6632; and
1987, PHILRACOM sent a letter of demand to petitioners MJCI and
PRCI asking them to remit PHILRACOM's share in the "breakages" b) The ownership by the
derived from the Tuesday, Wednesday and Thursday races in this wise: Manila Jockey Club, Inc.
and the Philippine Racing
xxx xxx xxx Club, Inc. of the breakages
they derive from mid-week
races shall not be disturbed,
Pursuant to Board Resolution dated December 21, with the reminder that the
1986, and Executive Order Nos. 88 and 89 series breakages should be strictly
of 1986, and the authority given by the Office of and wholly utilized for the
the President dated May 21, 1987, please remit to purpose for which ownership
the Commission the following: thereof has been vested upon
said racing entities.
1) PHILRACOM's share in
the breakages derived SO ORDERED. 17
from Wednesday racing for
the period starting December
22, 1976 up to the December Dissatisfied, respondent PHILRACOM filed a Petition
31, 1986. for Certiorari with prayer for the issuance of a writ of preliminary
injunction before this Court, raising the lone question of whether or not
E.O. Nos. 88 and 89 cover breakages derived from the mid-week races.
2) PHILRACOM's share in However, we referred the case to the Court of Appeals, which
the breakages derived from eventually reversed the decision of the trial court, and ruled as follows:
Thursday racing for the
period starting November
36 ADMIN LAW CASES 0901
 xxx xxx xxx SO ORDERED. 20

The decision on the part of PHILRACOM to Consequent to the aforequoted adverse decision, petitioners MJCI and
authorize additional racing days had the effect of PRCI filed this petition for review under Rule 45.
widening the scope of Section 5 of RA 6631 and
Section 7 of RA 6632. Consequently, private The main issue brought by the parties for the Court's resolution is: Who
respondents derive their privilege to hold races on
are the rightful beneficiaries of the breakages derived from mid-week
the designated days not only their franchise acts races? This issue also carries an ancillary question: assuming
but also from the order issued by the
PHILRACOM is entitled to the mid-week breakages under the law,
PHILRACOM. No provision of law became should the petitioners remit the money from the time the mid-week
inconsistent with the passage of the Order races started, or only upon the promulgation of E.O. Nos. 88 and 89?
granting additional racing days. Neither was there
a special provision set to govern those mid-week
races. The reason is simple. There was no need Petitioners assert that franchise laws should be construed to apply the
for any new provisions because there are enough distribution scheme specifically and exclusively to the racing days
general provisions to cover them. The provisions enumerated in Sec. 5 of R.A. 6631, and Sec. 7 of R.A. 6632. They
on the disposition and allocation of breakages claim that disposition of breakages under these laws should be limited
being general in character apply to breakages to races conducted on "all Saturdays, Sundays, and official holidays of
derived on any racing day. 18 the year, except, on those official holidays where the law expressly
provides that no horse races are to be held", hence, there is no doubt
that the breakages of Wednesday races shall belong to the racing clubs
xxx xxx xxx concerned. 21 They even advance the view that "where a statute by its
terms is expressly limited to certain matters, it may not by
WHEREFORE, based on the foregoing analysis interpretation or construction be extended to other matters" 22
and interpretation of the laws in question, the
judgment of the trial court is hereby SET ASIDE. However, respondent PHILRACOM contends that R.A. Nos. 6631 and
Decision is hereby rendered:
6632 are laws intended primarily to grant petitioners their respective
franchises to construct, operate, and maintain a race track for horse
1. declaring Section 4 of RA 6631 as amended by racing. 23 When PHILRACOM added mid-week races, the franchises
E.O. 89 and Section 6 of RA 6632 as amended by given to the petitioners remained the same. Logically, what applies to
E.O. 88 to cover the disposition and allocation of races authorized under Republic Act Nos. 6631 and 6632 should also
breakages derived on all races conducted by apply to races additionally authorized by PHILRACOM, namely mid-
private respondents on any racing day, whether as week races, because these are general provisions which apply general
provided for under Section 4 of RA 6631 or rues and procedures governing the operation of the races.
Section 6 of RA 6632 or as ordered by Consequently, if the authorized racing days are extended, these races
PHILRACOM in the exercise of its powers under must therefore be governed by the same rules and provisions generally
P.D. 420; provided therein.

2. ordering private respondent to remit to We find petitioners' position on the main issue lacking in merit and far
PHILRACOM its share under E.O. 88 and E.O. from persuasive.
89 derived from races held on Tuesday,
Wednesdays, Thursday as authorized by Franchise laws are privileges 24 conferred by the government on
PHILRACOM. corporations to do that "which does not belong to the citizens of the
country generally by common right". 25 As a rule, a franchise springs
SO ORDERED. 19 from contracts between the sovereign power and the private
corporation for purposes of individual advantage as well as public
Petitioners filed a motion for reconsideration, but it was denied for lack benefit. 26 Thus, a franchise partakes of a double nature and
of merit, with respondent Court of Appeals further declaring that: character. 27 In so far as it affects or concerns the public, it is public
juris and subject to governmental control. 28 The legislature may
prescribe the conditions and terms upon which it may be held, and the
xxx xxx xxx duty of grantee to the public exercising it. 29

In so far as the prospective application of As grantees of a franchise, petitioners derive their existence from the
Executive Orders Nos. 88 and 89 is concerned. same. Petitioners' operations are governed by all existing rules relative
We have no disagreement with the respondents. to horse racing provided they are not inconsistent with each other and
Since PHILRACOM became the beneficiary of could be reasonably harmonized. Therefore, the applicable laws are
the breakages only upon effectivity of Executive R.A. 309, as amended, R.A. 6631 and 6632, as amended by E.O. 88
Order Nos. 88 and 89, it is therefore entitled to and 89, P.D. 420 and the orders issued PHILRACOM. Consequently,
such breakages from December 16, 1986 when every statute should be construed in such a way that will harmonize it
said Executive Orders were issued. However, we with existing laws. This principle is expressed in the legal maxim
do not concede that respondents are entitled to "interpretare et concordare leges legibus est optimus interpretandi",
breakages prior to December 16, 1986 because it that is, to interpret and to do it in such a way as to harmonize laws with
is clear that the applicable laws from 1976 to laws is the best method of interpretation. 30
December 16, 1986 were R.A. 6631 and R.A.
6632, which specifically apportion the breakages
to specified beneficiaries among which was the A reasonable reading of the horse racing laws favors the determination
PAAF, a government agency. Since respondents that the entities enumerated in the distribution scheme provided under
admit that PHILRACOM (Petitioner) was merely R.A. Nos. 6631 and 6632, as amended by Executive Orders 88 and 89,
placed in lieu of PAAF as beneficiary/recipient of are the rightful beneficiaries of breakages from mid-week races.
Petitioners should therefore remit the proceeds of breakages to those
breakages, then whatever breakages was due to
PAAF as one of the beneficiaries under R.A. Nos. benefactors designated by the aforesaid laws.
6631 and 6632 accrued to or should belong to
PHILRACOM as successor to the defunct PAAF. The holding of horse races on Wednesdays is in addition to the existing
schedule of races authorized by law. Since this new schedule became
Finding the Motion for Reconsideration without part of R.A. 6631 and 6632 the set of procedures in the franchise laws
applicable to the conduct of horse racing business must likewise be
merit, and for reasons indicated, the Motion is
denied. applicable to Wednesday or other mid-week races. A fortiori, the
granting of the mid-week races does not require another legislative act
to reiterate the manner of allocating the proceeds of betting tickets.
37 ADMIN LAW CASES 0901
Neither does the allocation of breakages under the same provision need could not be estopped by a mistake committed by its officials or
to be isolated to construe another distribution scheme. No law can be agents. 33 Well-settled also is the rule that the erroneous application of
viewed in a condition of isolation or as the beginning of a new legal the law by public officers does not prevent a subsequent correct
system. 31 A supplemental law becomes an addition to the existing application of the law. 34 Although there was an initial interpretation of
statutes, or a section thereof; and its effect is not to change in any way the law by PHILRACOM, a court of law could not be precluded from
the provisions of the latter but merely to extend the operation thereof, setting that interpretation aside if later on it is shown to be
or give additional power to enforce its provisions, as the case may be. inappropriate.
In enacting a particular statute, legislators are presumed to have full
knowledge and to taken full cognizance of the existing laws on the Moreover, the detrimental consequences of depriving the city hospitals
same subject or those relating thereto. and other institutions of the funds needed for rehabilitation of drug
dependents and other patients are all too obvious. It goes without
Proceeding to the subsidiary issue, the period for the remittance of saying that the allocation of breakages in favor of said institutions is a
breakages to the beneficiaries should have commenced from the time policy decision in pursuance of social development goals worthy of
PHILRACOM authorized the holding of mid-week races because R.A. judicial approbation.
Nos. 6631 and 6632 were ready in effect then. The petitioners contend
that they cannot be held retroactively liable to respondent
Nor could we be oblivious to the reality that horse racing although
PHILRACOM for breakages prior to the effectivity of E.O. Nos. 88 authorized by law is still a form of gambling. Gambling is essentially
and 89. They assert that the real intent behind E.O. Nos. 88 and 89 was
antagonistic to the aims of enhancing national productivity and self-
to favor the respondent PHILRACOM anew with the benefits which reliance. 35 For this reason, legislative franchises impose limitations on
formerly had accrued in favor of Philippine Amateur Athletic
horse racing and betting. Petitioner's contention that a gambling
Federation (PAAF). They opine that since laws operate prospectively franchise is a public contract protected by the Constitutional provision
unless the legislator intends to give them retroactive effect, the accrual on non-impairment of contract could not be left unqualified. For as
of these breakages should start on December 16, 1986, the date of well said in Lim vs. Pacquing: 36
effectivity of E.O. Nos. 88 and 89. 32 Now, even if one of the
benefactors of breakages, the PAAF, as provided by R.A. 6631 and
6632 had ceased operation, it is still not proper for the petitioners to . . . it should be remembered that a franchise is
presume that they were entitled to PAAF's share. When the petitioners not in the strict sense a simple contract but rather
mistakenly appropriated the breakages for themselves, they became the it is, more importantly, a mere privilege specially
implied trustees for those legally entitled to the proceeds. This is in in matters which are within the government's
consonance with Article 1456 of the Civil Code, which provides that: power to regulate and even prohibit through the
exercise of the police power. Thus, a gambling
franchise is always subject to the exercise of
Art. 1456 — If property is acquired through police power for the public welfare. 37
mistake or fraud, the person obtaining it is, by
force of law, considered a trustee of an implied
trust for the benefit of the person from whom the That is why we need to stress anew that a statute which authorizes a
property comes. gambling activity or business should be strictly construed, and every
reasonable doubt be resolved so as to limit rather than expand the
powers and rights claimed by franchise holders under its authority. 38
The petitioners should have properly set aside amount for the defunct
PAAF, until an alternative beneficiary was designated, which as
subsequently provided for by Executive Order Nos. 88 and 89, is WHEREFORE, there being no reversible error, the appealed decision
PHILRACOM: and the resolution of the respondent Court of Appeals in CA-G.R. SP
No. 25251, are hereby AFFIRMED, and the instant petition is hereby
DENIED for lack of merit.
xxx xxx xxx

Costs against petitioners.

Secs. 2 — All the cash balances and accumulated
amounts corresponding to the share of the
Philippine Amateur Athletic Federation/Ministry SO ORDERED.
of Youth and Sports Development, pursuant to
Section 6 of Republic Act No. 6632, not remitted
by the Philippine Racing Club, Inc./Manila
Jockey Club Inc., are hereby transferred to the
Philippine Racing Commission to be constituted
into a TRUST FUND to be used exclusively for
the payment of additional prizes for races
sponsored by the Commission and for necessary
outlays and other expenses relative to horse-
breeding activities of the National Stud Farm. . . .
. . . [E.O. No. 88]

xxx xxx xxx

Sec. 2. Any provision of law to the contrary

notwithstanding, all cash balances and
accumulated amounts corresponding to the share
of the Philippine Amateur Athletic
Federation/Ministry of Youth and Sports
Development, pursuant to Republic Act No. 6631,
not remitted by the Manila Jockey Club, Inc., are
hereby constituted into a TRUST FUND to be
used exclusively for the payment of additional
prizes for races sponsored by the Philippine
Racing Commission and for the necessary capital
outlays and other expenses relative to horse-
breeding activities of the National Stud Farm. . . .
. . . . [E.O. No. 89]

While herein petitioners might have relied on a prior opinion issued by

an administrative body, the well-entrenched principle is that the State
38 ADMIN LAW CASES 0901
Public Schools District Supervisors Association v. Hon. Edilberto benefits to District Supervisors compared to salaries and benefits
de Jesus GR No. 157286 received by the School Principals – which position is lower in the
16 June 2006 hierarchy of positions as prepared by the Department of Education and
FACTS the Department of Budget and Management. School Principals and
This is a Petition for Prohibition with prayer for temporary restraining District Supervisors enjoy the same level of Salary Grade even if the
order and/or preliminary injunction filed by the Public Schools District latter position is considered as a promotion and enjoys a higher level of
Supervisor Association (PSDSA) seeking to declare as unconstitutional position than that of the position of School Principals.17
Rule IV, Section 4.3; Rule V, Sections 5.1 and the second paragraph of The PSDSA thus requested the DepEd Secretary to call an immediate
Section 5.2; and Rule VI, Section 6.2, paragraph 11 of Department of consultation with the district supervisors nationwide through a
Education Order No. 1, Series of 2003. The petition likewise seeks to convention, and their valid inputs be considered in formulating the
compel, by way of a writ of mandamus, the Department of Education, rules and regulations to be urged by the DepEd. However, the
Culture, and Sports (DECS) and the Department of Budget and Secretary failed to reply. Thus, the IBP reiterated the concerns raised
Management (DBM) to upgrade the salary grade level of the district by the PSDSA in a Letter18 to the DepEd dated April 15, 2002.
supervisors from Salary Grade (SG) 19 to SG 24. On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued
Ever since the Department of Education (DepEd) was founded decades DECS Office Order No. 1, which constitutes the Implementing Rules
ago, its management had been so centralized in the Manila office. and Regulations (IRR) of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV
Schools in the national, regional, and division levels merely followed of the IRR provide:
and implemented the orders and memoranda issued by the Education
Secretary. Due to the evolution of the learning process and the onset of SECTION 4.1. The Schools Division Superintendent. – A division
information technology, there was a need for a radical change in the shall consist of a province or city which shall have a schools division
governance of the DepEd. Thus, a study on how to improve the superintendent. There shall be at least one assistant schools division
management of the Department was conducted, and one of the superintendent and office staff for programs promotion, planning,
proposals was the abolition of the office of the district supervisor.
administrative, fiscal, legal, ancillary, and other support services.
Republic Act No. 9155, otherwise known as the "Governance of Basic
Education Act 2001," became a law on August 11, 2001, in accordance
with Section 27(1), Article VI of the Constitution. Under the law, each SECTION 4.2. Authority, Accountability, and Responsibility of the
regional office shall have a director, an assistant director, and an office Schools Division Superintendent. – Consistent with the national
staff for program promotion and support, planning, administrative and educational policies, plans, and standards, the schools division
fiscal services.5 The regional director was given the authority to hire, superintendents shall have authority, accountability, and responsibility
place and evaluate all employees in the regional office except for the for the following:
position of assistant director,6 as well as the authority, accountability, 1) Developing and implementing division education development
and responsibility to determine the organization component of the plans;
divisions and districts, and approve the staffing pattern of all 2) Planning and managing the effective and efficient performance of all
employees therein;7 evaluate all division superintendents and assistant personnel, physical, and fiscal resources of the division, including
division superintendents in the region;8 and other functions as may be professional staff development;
assigned by the proper authorities.9 3) Hiring, placing, and evaluating all division supervisors and schools
A division, on the other hand, is headed by a schools division district supervisors as well as all employees in the division, both
superintendent with the following responsibilities, among others: to teaching and non-teaching personnel, including school heads, except
supervise the operations of all public and private elementary, for the assistant division superintendents;
secondary, and integrated schools, and learning centers;10 to hire, 4) Monitoring the utilization of funds provided by the national
place and evaluate all division supervisors and schools district government and the local government units to the schools and learning
supervisors as well as all employees in the divisions, both teaching and centers;
non-teaching personnel, including school heads, except for the assistant 5) Ensuring compliance of quality standards for basic education
division superintendent;11 and perform other functions as may be programs and for this purpose strengthening the role of division
assigned by proper authorities.12 supervisors as subject area specialists;
The office of the schools district supervisor has been retained under the 6) Promoting awareness of, and adherence by, all schools and learning
law. Each district is headed by a school district supervisor and an centers to accreditation standards prescribed by the Secretary of
office staff for program promotion. However, the responsibilities of the Education;
schools district supervisor are limited to the following: (1) providing 7) Supervising the operations of all public and private elementary,
professional and instructional advice and support to the school heads secondary, and integrated schools, and learning centers; and
and teachers/facilitators of schools and learning centers in the district 8) Performing such other functions as may be assigned by the
or cluster thereof; (2) curricula supervision; and (3) performing such Secretary and/or Regional Director.
other functions as may be assigned by proper authorities. The schools
district supervisors have no administrative, management, control or SECTION 4.3. Appointing and Disciplinary Authority of the Schools
supervisory functions over the schools and learning centers within their Division Superintendent. – The schools district superintendent shall
respective districts.13 appoint the division supervisors and school district supervisors as well
Before the DepEd could issue the appropriate implementing rules and as all employees in the division, both teaching and non-teaching
regulations, petitioner sought the legal assistance of the Integrated Bar personnel, including school heads, except for the assistant schools
of the Philippines (IBP) National Committee on Legal Aid to make division superintendent, subject to the civil service laws, rules and
representations for the resolution of the following administrative regulations, and the policies and guidelines to be issued by the
issues: Secretary of Education for the purpose.
1. Restoration of the functions, duties, responsibilities, benefits, The schools division superintendent shall have disciplinary authority
prerogatives, and position level of Public Schools District Supervisors. only over the non-teaching personnel under his jurisdiction.
2. Upgrading of Salary Grade level of Public Schools District Such exercise of disciplinary authority by the schools division
Supervisors from Salary Grade Level 19 to Salary Grade Level 24 superintendent over the non-teaching personnel shall be subject to the
under DBM Circular No. 36, otherwise known as the Compensation civil service laws, rules and regulations, and procedures and guidelines
and Position Classification Rules and Regulation.16 to be issued by the Secretary of Education relative to this matter.
In a Letter dated March 1, 2002 addressed to then DepEd Secretary The Regional Director shall continue exercising disciplinary authority
Raul Roco, the IBP stated that, per its review of the documents over the teaching personnel insofar as the latter are covered by specific
submitted by the PSDSA, it found the latter’s position valid and legal, and exclusive disciplinary provisions under the Magna Carta for Public
to wit: School Teachers (R.A. No. 4670).
First: The basis for the abolition of the position of District Supervisors Sections 5.1 and 5.2, Rule V of the IRR, in turn, provide:
under the Attrition Law and DECS Department Order No. 110, Series SECTION 5.1. The Schools District Supervisor. – A school district
of 1991 is no longer valid and rendered moot and academic due to shall have a school district supervisor and office staff for program
issuance of DECS Department Order No. 22, Series of 1996 and the promotion.
passage by Congress of the Philippines of Republic Act No. 9155, The schools district supervisor shall primarily perform staff functions
otherwise known as the Basic Education Governance Act of 2000. and shall not exercise administrative supervision over school
Under R.A. 9155, school districts are mandated to be maintained and principals, unless specifically authorized by the proper authorities. The
responsibilities of Public School’s Districts Supervisors have been main focus of his/her functions shall be instructional and curricula
clearly defined. supervision aimed at raising academic standards at the school level.
Second: There is a clear case of discrimination of grant of salaries and The schools district supervisor shall be specifically responsible for:
39 ADMIN LAW CASES 0901
1) Providing professional and instructional advice and support to the Department of Education Order No. 1, Series of 2003 are constitutional
school heads and teachers/facilitators of schools and learning centers in
the district or cluster thereof; HELD
2) Curricula supervision; and 1. NO. It must be stressed that the power of administrative officials to
3) Performing such other functions as may be assigned by the promulgate rules in the implementation of a statute is necessarily
Secretary, Regional Directors, and Schools Division Superintendents limited to what is provided for in the legislative enactment. The
where they belong. implementing rules and regulations of a law cannot extend the law or
expand its coverage, as the power to amend or repeal a statute is vested
The schools district supervisor being mentioned in this section shall in the legislature. It bears stressing, however, that administrative bodies
refer to a public schools district supervisor. are allowed under their power of subordinate legislation to implement
SECTION 5.2. The School District. – A school district already existing the broad policies laid down in a statute by “filling in” the details. All
at the time of the passage of this Act shall be maintained. However, an that is required is that the regulation be germane to the objectives and
additional school district may be established by the regional director purposes of the law; that the regulation does not contradict but
based on criteria set by the Secretary and on the recommendation of the conforms to the standards prescribed by law.
schools division superintendent. For this purpose, the Secretary of Here, the assailed IRR provisions merely reiterated and implemented
Education shall set standards and formulate criteria as basis of the the related provisions of RA 9155. Under the law, a division
Regional Directors of the establishment of an additional school district. superintendent has the authority and responsibility to hire, place, and
On March 13, 2003, the PSDSA, the national organization of about evaluate all division supervisors and district supervisors as well as all
1,800 public school district supervisors of the DepEd, in behalf of its employees in the division, both teaching and non-teaching personnel,
officers and members, filed the instant petition for prohibition and including school heads. A school head is a person responsible for the
mandamus. administrative and instructional supervision of the schools or cluster of
I. THE ACT OF THE DEPARTMENT OF EDUCATION IN schools. The division superintendent, on the other hand, supervises the
REMOVING PETITIONERS’ ADMINISTRATIVE SUPERVISION operation of all public and private elementary, secondary, and
OVER ELEMENTARY SCHOOLS AND ITS PRINCIPALS integrated schools and learning centers.
(SCHOOL HEADS) WITHIN HIS/HER DISTRICT AND Administrative supervision means “overseeing or the power or
CONVERTING HIS/HER ADMINISTRATIVE FUNCTION TO authority of an officer to see that their subordinate officers perform
THAT OF PERFORMING STAFF FUNCTION FOR THE DIVISION their duties. If the latter fails or neglects to fulfill them, the former may
OFFICE PER SECTION 5.1 RULE V OF THE IMPLEMENTING take such action or steps as prescribed by law to make them perform
RULES AND REGULATIONS OF REPUBLIC ACT 9155 (DEPED their duties.”
ORDER NO. 1, SERIES OF 2003) IS A GROSS VIOLATION OF We have reviewed the IRR and find that Section 4.3 of Rule IV, and
REPUBLIC ACT 9155 – THE GOVERNANCE OF BASIC Sections 5.1 and 5.2 of Rule V are valid. The provisions merely
EDUCATION ACT OF 2001. reiterate and implement the related provisions of R.A. No. 9155. Under
the law, a division superintendent has the authority and responsibility
II. THE IMPLEMENTING RULES AND REGULATION OF to hire, place, and evaluate all division supervisors and district
REPUBLIC ACT 9155 AS PROMULGATED UNDER DEPED supervisors as well as all employees in the division, both teaching and
ORDER NO. 1, SERIES OF 2003 EXPANDED THE LAW AND non-teaching personnel, including school heads.28 A school head is a
INCLUDED PROVISIONS WHICH ARE DIAMETRICALLY person responsible for the administrative and instructional supervision
OPPOSED TO THE LETTER AND SPIRIT OF THE SUBJECT of the schools or cluster of schools.29 The division superintendent, on
LAW. the other hand, supervises the operation of all public and private
elementary, secondary, and integrated schools and learning centers.30
III. THE DOWNGRADING OF SALARY GRADE LEVEL OF THE A plain reading of the law will show that the schools district
PUBLIC SCHOOLS DISTRICT SUPERVISOR OR THE NEGLECT supervisors have no administrative supervision over the school heads;
OR REFUSAL OF THE DEPARTMENT OF EDUCATION AND their responsibility is limited to those enumerated in Section 7(D) of
THE DEPARTMENT OF BUDGET AND MANAGEMENT TO R.A. No. 9155, to wit:
UPGRADE THE SALARY GRADE LEVEL OF PUBLIC SCHOOLS (1) Providing professional and instructional advice and support to the
DISTRICT TO A RESPECTABLE LEVEL OF SALARY GRADE school heads and teachers/facilitators of schools and learning centers in
HIGHER THAN THAT OF THE PRINCIPALS – DESPITE CLEAR the district or cluster thereof;
INTENTION OF R.A. 9155 TO RETAIN THE POSITION OF PSDS (2) Curricula supervision; and
IN THE HIERARCHY OF ADMINISTRATIVE MANAGERS AND (3) Performing such other functions as may be assigned by proper
OFFICERS OF THE DEPARTMENT OF EDUCATION – IS authorities.
UNCONSTITUTIONAL AND ILLEGAL. As gleaned from the Senate deliberations on Senate Bill No. 2191, the
district supervisors were divested of any administrative supervision
Before the DepEd could issue the appropriate implementing rules and over elementary and public high schools. The Senate resolved to vest
regulations, petitioner PSDSA sought the legal assistance of the the same in the division superintendents, and the Lower House
Integrated Bar of the PH National Committee on Legal Aid to make concurred. Senator Rene Cayetano proposed that the traditional
representations for the resolution of the following administrative function of the school supervisors of exercising administrative
issues: (1) restoration of the functions, duties, responsibilities, benefits, supervision over the elementary and public high schools be maintained.
prerogatives and position level of Public School District Supervisors; Thus, under R.A. No. 9155, administrative supervision over school
and (2) upgrading of Salary Grade Level of Public Schools District heads is not one of those responsibilities conferred on district
Supervisors from alary Grade Level 19 to Salary Grade 24. supervisors.
DepEd Secretary Edilberto C. De Jesus thereafter issued DECS Office 2. YES. A plain reading of the law will show that the schools district
Order No. 1 which constitutes the Implementing Rules and Regulations supervisors have no administrative supervision over the school heads;
of RA 9155. PSDSA filed a petition for prohibition and mandamus their responsibility is limited to those enumerated in Section 7(D) of
alleging that the act of the DepEd in removing the petitioners’ R.A. No. 9155, to wit:
administrative supervision over elementary schools and its principals a) Providing professional and instructional advice and support to the
within his/her district and converting his/her administrative function to school heads and teachers/facilitators of schools and learning centers in
that of performing staff for the division is a gross violation of RA the district or cluster thereof;
9155. Furthermore, petitioners also allege that the IRR of RA 9155 b) Curricula supervision; and
expanded and included provisions which are diametrically opposed to c) Performing such other functions as may be assigned by proper
the letter and spirit of the subject law. They argue that the said law authorities.
should be read in harmony with the existing educational laws.
Ultimately, petitioners allege that by the implementation of the IRR It is a settled rule of statutory construction that the express mention of
they are stripped off of their administrative functions. one person, thing, act, or consequence excludes all others. This rule is
ISSUES expressed in the familiar maxim expressio unius est exclusio alterius.
1. Whether DECS Office Order No. 1 issued by DepEd expanded RA Where a statute, by its terms, is expressly limited to certain matters, it
9155 may not, by interpretation or construction, be extended to others. The
2. Whether the District Supervisor shall not exercise administrative rule proceeds from the premise that the legislature would not have
supervision over the Elementary School Principals (ESPs) and made specified enumerations in a statute had the intention been not to
Secondary School Principals (SSPs) restrict its meaning and to confine its terms to those expressly
3. Whether Rule IV, Section 4.3; Rule V, Sections 5.1 and the second mentioned.
paragraph of Section 5.2; and Rule VI, Section 6.2, paragraph 11 of
40 ADMIN LAW CASES 0901
The court reviewed the IRR and found that Section 4.3 of Rule IV, and Then Senator Tessie Aquino-Oreta, the Chairman of the Committee on
Sections 5.1 and 5.2 of Rule V are valid. The provisions merely Education, authored Senate Bill No. 2191, the thrust of which was to
reiterate and implement the related provisions of R.A. No. 9155. Under change the existing management style and focus on the schools where
the law, a division superintendent has the authority and responsibility the teaching-learning process occurs. The bill was intended to highlight
to hire, place, and evaluate all division supervisors and district shared governance in the different levels in the DECS hierarchy and
supervisors as well as all employees in the division, both teaching and establish authority, accountability, and responsibility for achieving
non-teaching personnel, including school heads. A school head is a higher learning outcomes. While the governance of basic education
person responsible for the administrative and instructional supervision would begin at the national level, the field offices (regions, divisions,
of the schools or cluster of schools. The division superintendent, on the schools, and learning centers) would translate the policy into programs,
other hand, supervises the operation of all public and private projects, and services to fit local needs.2 The national level was
elementary, secondary, and integrated schools and learning centers. likewise to be tasked to define the roles and responsibilities of, and
provide resources to the field offices which would implement
educational programs, projects, and services in communities they
serve.3 At the forefront would be the DepEd Secretary, vested with the
G.R. No. 157286 June 16, 2006 overall authority and supervision over the operations of the department
on the national, regional, division, and schools district level.4

THE PUBLIC SCHOOLS DISTRICT SUPERVISORS

Republic Act No. 9155, otherwise known as the "Governance of Basic
ASSOCIATION (PSDSA), its officers, to wit: DR. ANILLA A.
Education Act 2001," became a law on August 11, 2001, in accordance
CALAMBA, President; DR. CARMELITA L. PALABAY, Gen.
with Section 27(1), Article VI of the Constitution. Under the law, each
Vice-President; MS. ESTELITA R. REYES, Board Secretary; DR.
regional office shall have a director, an assistant director, and an office
THELMA A. GALANG, Asst. Board Secretary; MR. FERNANDO
staff for program promotion and support, planning, administrative and
LAVITA, Treasurer; MS. LITA DIONISIO, Asst. Treasurer; MS.
fiscal services.5 The regional director was given the authority to hire,
ROSELILY PADRE, Auditor; MR. ROMAN CALICDAN, Asst.
place and evaluate all employees in the regional office except for the
Auditor; MR. TOMO-AY, MR. OSCAR PEÑAFLORIDA, Bus.
position of assistant director,6 as well as the authority, accountability,
Managers; DR. ANTONETTE ANG, DR. MAGNITA
and responsibility to determine the organization component of the
LABRADOR, P.R.O.’S; MR. BONIFACIO MIGUEL (Region I),
divisions and districts, and approve the staffing pattern of all
MR. JOSE CALAGUI (Region II), DR. REYNALDO SAGUM
employees therein;7 evaluate all division superintendents and assistant
(Region III), MR. RUBEN PANAHON (Region IV), MR. OSCAR
division superintendents in the region;8 and other functions as may be
BARBA (Region V), MS. IRMA GANELA (Region VI), DR.
assigned by the proper authorities.9
ERLINDA NAPULI (Region VII), DR. PONCIANO GABIETA
(Region VIII), MR. FEDERICO FIDEL (Region IX),
[Link] V. RODRIGUEZ (Region X), MS. EDWINA A division, on the other hand, is headed by a schools division
ALAG (Region XI), MR. DOMINADOR ATAM (Region XII), MS. superintendent with the following responsibilities, among others: to
CONSUELO VELASCO (NCR), MR. VICTORINO AGMATA supervise the operations of all public and private elementary,
(CAR), MS. NATIVIDAD SALASAB (ARMM-CARAGA), All secondary, and integrated schools, and learning centers;10 to hire, place
PSDSA Vice-Presidents for their respective Regions: DR. LOLITA and evaluate all division supervisors and schools district supervisors as
CABANAYAN, MR. CICERO AKLANG, DR. RUSTICO well as all employees in the divisions, both teaching and non-teaching
OCAMPO, MR. ROMEO SANTOS, MR. EMMANUEL CAMA, personnel, including school heads, except for the assistant division
MR. ROMEO TUMAOB, MR. JOVENCIO MENDOZA, MR. superintendent;11 and perform other functions as may be assigned by
ALEJANDRO BARING, JR., MS. BERNARDITA APOSTOL, proper authorities.12
MS. LORETA MACALUDAS, DR. MYRNA LYN MARACON,
MS. ELIZABETH SAN DIEGO, SITH HINDRON DAMMANG, The office of the schools district supervisor has been retained under the
MS. IMMACULADA BRINGAS, and MS. GLORIA DERECHO, law. Each district is headed by a school district supervisor and an
all members of the PSDSA Board of Directors, in their own behalf office staff for program promotion. However, the responsibilities of the
as current District Supervisors and IN REPRESENTATION OF schools district supervisor are limited to the following: (1) providing
ALL DISTRICT SUPERVISORS OF THE DEPARTMENT OF professional and instructional advice and support to the school heads
EDUCATION, Petitioners, and teachers/facilitators of schools and learning centers in the district
vs. or cluster thereof; (2) curricula supervision; and (3) performing such
HON. EDILBERTO C. DE JESUS, Department Secretary, THE other functions as may be assigned by proper authorities. The schools
DEPARTMENT OF EDUCATION, and THE DEPARTMENT OF district supervisors have no administrative, management, control or
BUDGET AND MANAGEMENT, Respondents. supervisory functions over the schools and learning centers within their
respective districts.13
DECISION
On the school level, an Elementary School Principal (ESP) was
CALLEJO, SR., J.: designated as school head for all public elementary schools; and a
Secondary School Principal (SSP) for high schools or a cluster
This is a Petition for Prohibition with prayer for temporary restraining thereof.14 The ESP and the SSP serve as both instructional leaders and
order and/or preliminary injunction filed by the Public Schools District administrative managers with the following authority, accountability
Supervisor Association (PSDSA) seeking to declare as unconstitutional and responsibility:
Rule IV, Section 4.3; Rule V, Sections 5.1 and the second paragraph of
Section 5.2; and Rule VI, Section 6.2, paragraph 11 of Department of (7) Administering and managing all personnel, physical, and
Education Order No. 1, Series of 2003. The petition likewise seeks to fiscal resources of the school;
compel, by way of a writ of mandamus, the Department of Education,
Culture, and Sports (DECS) and the Department of Budget and (8) Recommending the staffing complement of the school
Management (DBM) to upgrade the salary grade level of the district
based on its needs;
supervisors from Salary Grade (SG) 19 to SG 24.

(9) Encouraging staff development;

The Antecedents

xxxx
Ever since the Department of Education (DepEd)1 was founded
decades ago, its management had been so centralized in the Manila
office. Schools in the national, regional, and division levels merely (11) Accepting donations, gifts, bequests, and grants for the
followed and implemented the orders and memoranda issued by the purpose of upgrading teachers’/learning facilitators’
Education Secretary. Due to the evolution of the learning process and competencies, improving and expanding school facilities,
the onset of information technology, there was a need for a radical and providing instructional materials and equipment. Such
change in the governance of the DepEd. Thus, a study on how to donations or grants must be reported to the appropriate
improve the management of the Department was conducted, and one of district supervisors and division superintendents; and
the proposals was the abolition of the office of the district supervisor.
41 ADMIN LAW CASES 0901
 (12) Performing such other functions as may be assigned by 2) Planning and managing the effective and efficient
proper authorities.15 performance of all personnel, physical, and fiscal resources
of the division, including professional staff development;
Under Section 14 of the law, the DepEd Secretary is mandated to
"promulgate the implementing rules and regulations within ninety (90) 3) Hiring, placing, and evaluating all division supervisors
days after the approval of the Act, provided that the principle of shared and schools district supervisors as well as all employees in
governance shall be fully implemented within two (2) years" after such the division, both teaching and non-teaching personnel,
approval. including school heads, except for the assistant division
superintendents;
Before the DepEd could issue the appropriate implementing rules and
regulations, petitioner sought the legal assistance of the Integrated Bar 4) Monitoring the utilization of funds provided by the
of the Philippines (IBP) National Committee on Legal Aid to make national government and the local government units to the
representations for the resolution of the following administrative schools and learning centers;
issues:
5) Ensuring compliance of quality standards for basic
1. Restoration of the functions, duties, responsibilities, education programs and for this purpose strengthening the
benefits, prerogatives, and position level of Public Schools role of division supervisors as subject area specialists;
District Supervisors.
6) Promoting awareness of, and adherence by, all schools
2. Upgrading of Salary Grade level of Public Schools and learning centers to accreditation standards prescribed by
District Supervisors from Salary Grade Level 19 to Salary the Secretary of Education;
Grade Level 24 under DBM Circular No. 36, otherwise
known as the Compensation and Position Classification
7) Supervising the operations of all public and private
Rules and Regulation.16 elementary, secondary, and integrated schools, and learning
centers; and
In a Letter dated March 1, 2002 addressed to then DepEd Secretary
Raul Roco, the IBP stated that, per its review of the documents
8) Performing such other functions as may be assigned by
submitted by the PSDSA, it found the latter’s position valid and legal, the Secretary and/or Regional Director.
to wit:

SECTION 4.3. Appointing and Disciplinary Authority of the Schools

First: The basis for the abolition of the position of District Supervisors
Division Superintendent. – The schools district superintendent shall
under the Attrition Law and DECS Department Order No. 110, Series appoint the division supervisors and school district supervisors as well
of 1991 is no longer valid and rendered moot and academic due to as all employees in the division, both teaching and non-teaching
issuance of DECS Department Order No. 22, Series of 1996 and the personnel, including school heads, except for the assistant schools
passage by Congress of the Philippines of Republic Act No. 9155, division superintendent, subject to the civil service laws, rules and
otherwise known as the Basic Education Governance Act of 2000. regulations, and the policies and guidelines to be issued by the
Under R.A. 9155, school districts are mandated to be maintained and Secretary of Education for the purpose.
responsibilities of Public School’s Districts Supervisors have been
clearly defined.
The schools division superintendent shall have disciplinary authority
only over the non-teaching personnel under his jurisdiction.
Second: There is a clear case of discrimination of grant of salaries and
benefits to District Supervisors compared to salaries and benefits
received by the School Principals – which position is lower in the Such exercise of disciplinary authority by the schools division
hierarchy of positions as prepared by the Department of Education and superintendent over the non-teaching personnel shall be subject to the
the Department of Budget and Management. School Principals and civil service laws, rules and regulations, and procedures and guidelines
District Supervisors enjoy the same level of Salary Grade even if the to be issued by the Secretary of Education relative to this matter.
latter position is considered as a promotion and enjoys a higher level of
position than that of the position of School Principals.17 The Regional Director shall continue exercising disciplinary authority
over the teaching personnel insofar as the latter are covered by specific
The PSDSA thus requested the DepEd Secretary to call an immediate and exclusive disciplinary provisions under the Magna Carta for Public
consultation with the district supervisors nationwide through a School Teachers (R.A. No. 4670).19
convention, and their valid inputs be considered in formulating the
rules and regulations to be urged by the DepEd. However, the Sections 5.1 and 5.2, Rule V of the IRR, in turn, provide:
Secretary failed to reply. Thus, the IBP reiterated the concerns raised
by the PSDSA in a Letter18 to the DepEd dated April 15, 2002.
SECTION 5.1. The Schools District Supervisor. – A school district
shall have a school district supervisor and office staff for program
On January 6, 2003, DepEd Secretary Edilberto C. De Jesus issued promotion.
DECS Office Order No. 1, which constitutes the Implementing Rules
and Regulations (IRR) of R.A. No. 9155. Sections 4.1 to 4.3, Rule IV
of the IRR provide: The schools district supervisor shall primarily perform staff functions
and shall not exercise administrative supervision over school
principals, unless specifically authorized by the proper authorities. The
SECTION 4.1. The Schools Division Superintendent. – A division main focus of his/her functions shall be instructional and curricula
shall consist of a province or city which shall have a schools division supervision aimed at raising academic standards at the school level.
superintendent. There shall be at least one assistant schools division
superintendent and office staff for programs promotion, planning,
administrative, fiscal, legal, ancillary, and other support services. The schools district supervisor shall be specifically responsible for:

SECTION 4.2. Authority, Accountability, and Responsibility of the 1) Providing professional and instructional advice and
Schools Division Superintendent. – Consistent with the national support to the school heads and teachers/facilitators of
educational policies, plans, and standards, the schools division schools and learning centers in the district or cluster thereof;
superintendents shall have authority, accountability, and responsibility
for the following: 2) Curricula supervision; and

1) Developing and implementing division education 3) Performing such other functions as may be assigned by
development plans; the Secretary, Regional Directors, and Schools Division
Superintendents where they belong.
42 ADMIN LAW CASES 0901
The schools district supervisor being mentioned in this section shall that the administrative supervisory powers can be withdrawn from a
refer to a public schools district supervisor. district supervisor without any reason at all, a provision which has no
basis in the enabling law.
SECTION 5.2. The School District. – A school district already existing
at the time of the passage of this Act shall be maintained. However, an Petitioners further contend that the DepEd has no authority to
additional school district may be established by the regional director incorporate its plan of downgrading the position of district supervisor,
based on criteria set by the Secretary and on the recommendation of the that is, from being an administrator of a particular district office to a
schools division superintendent. For this purpose, the Secretary of position performing a staff function, to exercise administrative
Education shall set standards and formulate criteria as basis of the supervision over the school principals only when specifically
Regional Directors of the establishment of an additional school authorized by proper authorities. Petitioners insist that respondent
district.20 Education Secretary was focused on removing the level of
management in the district office, such that the IRR empower school
On March 13, 2003, the PSDSA, the national organization of about heads (principals) to have administrative and instructional supervision
1,800 public school district supervisors of the DepEd, in behalf of its of school or cluster of schools, while supervision of all public and
officers and members, filed the instant petition for prohibition and private elementary, secondary, and integrated schools and learning
centers was given to the division office.
mandamus, alleging that:

I. THE ACT OF THE DEPARTMENT OF EDUCATION IN Petitioners further insist that respondent Education Secretary failed to
REMOVING PETITIONERS’ ADMINISTRATIVE SUPERVISION consider the fact that R.A. No. 9155 strengthened the district office as
OVER ELEMENTARY SCHOOLS AND ITS PRINCIPALS a mid-level administrative field office of the DepEd. The law even
(SCHOOL HEADS) WITHIN HIS/HER DISTRICT AND mandates to allow the district supervisor to have an office staff for
program promotion in the district office. Apart from the current
CONVERTING HIS/HER ADMINISTRATIVE FUNCTION TO
THAT OF PERFORMING STAFF FUNCTION FOR THE DIVISION administrative functions inherent in the district office, DECS Service
Manual 2000 vested additional specific functions to the district offices,
OFFICE PER SECTION 5.1 RULE V OF THE IMPLEMENTING
RULES AND REGULATIONS OF REPUBLIC ACT 9155 (DEPED to provide professional and instructional advice and support to the
ORDER NO. 1, SERIES OF 2003) IS A GROSS VIOLATION OF school heads and teachers/facilitators of schools and learning centers in
REPUBLIC ACT 9155 – THE GOVERNANCE OF BASIC the district, as well as curricula supervision.
EDUCATION ACT OF 2001.
Petitioners posit that R.A. No. 9155 did not, in anyway, allow or
II. THE IMPLEMENTING RULES AND REGULATION OF authorize the reorganization of the entire DepEd; it never reduced the
REPUBLIC ACT 9155 AS PROMULGATED UNDER DEPED position, rank, classification, and salary grade level of district
ORDER NO. 1, SERIES OF 2003 EXPANDED THE LAW AND supervisors, nor abolished the district offices which are responsible for
INCLUDED PROVISIONS WHICH ARE DIAMETRICALLY the administration and management of elementary schools within its
OPPOSED TO THE LETTER AND SPIRIT OF THE SUBJECT jurisdiction. It did not remove from the district supervisors the function
of administrative supervision over schools within their respective
LAW.
areas. In fact, petitioners insist, what the law did was to give the district
supervisor additional responsibility of providing professional and
III. THE DOWNGRADING OF SALARY GRADE LEVEL OF THE instructional advice and support to the school heads and
PUBLIC SCHOOLS DISTRICT SUPERVISOR OR THE NEGLECT teachers/facilitators of schools and learning centers in the district or
OR REFUSAL OF THE DEPARTMENT OF EDUCATION AND cluster thereof.
THE DEPARTMENT OF BUDGET AND MANAGEMENT TO
UPGRADE THE SALARY GRADE LEVEL OF PUBLIC SCHOOLS
DISTRICT TO A RESPECTABLE LEVEL OF SALARY GRADE Petitioners point out that under Section 4.3, paragraph (b), Rule IV of
the IRR, the schools division superintendent was given the power to
HIGHER THAN THAT OF THE PRINCIPALS – DESPITE CLEAR
INTENTION OF R.A. 9155 TO RETAIN THE POSITION OF PSDS appoint the division supervisors and schools district supervisor and
IN THE HIERARCHY OF ADMINISTRATIVE MANAGERS AND other employees subject to civil service laws, rules, and regulations,
OFFICERS OF THE DEPARTMENT OF EDUCATION – IS and the policies and guidelines to be issued by the Secretary of
UNCONSTITUTIONAL AND ILLEGAL.21 Education for the purpose. On the other hand, the school division
superintendent shall have disciplinary authority only over the non-
teaching personnel under his jurisdiction. Such exercise of disciplinary
Petitioners maintain that the questioned provisions of the IRR are authority by the schools division superintendent over the non-teaching
invalid because they "extended or expanded and modified" the personnel shall be subject to civil service laws, rules, and regulations,
provisions of R.A. No. 9155. They argue that the said law should be and procedures and guidelines to be issued by the Secretary of
read in harmony with other "existing educational laws" which it did not Education relative to this matter. The regional director shall continue
specifically repeal, such as Batas Pambansa Blg. 232, otherwise known exercising disciplinary authority over the teaching personnel in so far
as "The Education Act of 1982," as amended by R.A. No. 7798; R.A. as the latter are covered by specific and exclusive disciplinary
No. 4670, otherwise known as the "Magna Charta for Public School provisions under the Magna Carta for Public School Teachers (R.A.
Teachers"; and R.A. No. 7784 captioned "An Act to Strengthen 4670).
Teacher Education in the Philippines by Establishing Centers of
Excellence, Creating a Teacher Education Council for the Purpose,
Appropriating Funds Therefore, and for Other Purposes." Petitioners posit that this grant of disciplining authority to the regional
director for teaching personnel who commit violations of laws, rules,
and regulations is definitely not provided for in R.A. No. 9155. The
Petitioners assert that under Section 7(D) of R.A. No. 9155, the district division superintendent was given the power not only to hire and
offices of the DepEd are intended as field offices where the district appoint the division supervisors, district supervisors, school heads, or
supervisors can assist the ESPs and teachers/learning facilitators within principals as well as employees in the division, both teaching and non-
their district as experienced educational managers. Thus, the district teaching positions. However, when it comes to disciplining officers
supervisors were not divested of the inherent administrative functions and teaching personnel who commit infractions or violations of law,
to manage and oversee the schools within their respective districts, rules, and regulations of the DepEd, the exercise of such disciplining
including their subordinates. They emphasize that the law provides an authority is lodged in the hands of the regional director. Petitioners
"office staff for program promotion" in the school districts, which point out that the power to hire teachers is in the hands of the division
would be of no use if the office has no administrative supervision over superintendent; principles of administrative rules and procedure
schools within its respective districts. provide that the authority to hire and appoint carries with it the
authority to discipline and fire the hired and appointed personnel
Petitioners assert that under the IRR, the schools district supervisors particularly if the law is silent thereon. Since the division
primarily perform staff functions and shall not exercise administrative superintendent has the authority to hire teaching personnel within its
supervision over school principals, unless specifically authorized by division, he/she should also take the responsibility of disciplining
the proper authorities. Thus, under the IRR, the exercise of erring teachers and employees. If the set-up of placing the power of
administrative supervision over school principals was made hiring and power to discipline or fire an errant personnel is separated or
discretionary and subject to the whims and caprices of "the proper divided between two offices of the DepEd, the proliferation of
authorities." The logical inference of this provision, petitioners aver, is
43 ADMIN LAW CASES 0901
"palakasan" or "bata-bata" system will flourish, to the detriment of the We have reviewed the IRR and find that Section 4.3 of Rule IV, and
public education system and public service. Sections 5.1 and 5.2 of Rule V are valid. The provisions merely
reiterate and implement the related provisions of R.A. No. 9155. Under
Petitioners also point out that under Section 7(E)(11) of R.A. No. 9155, the law, a division superintendent has the authority and responsibility
to hire, place, and evaluate all division supervisors and district
school heads are authorized to accept gifts, donations, bequests, and
grants for the purpose of upgrading teacher’s/learning facilitator’s supervisors as well as all employees in the division, both teaching and
competencies, improving and expanding school facilities and providing non-teaching personnel, including school heads.28 A school head is a
instructional materials and equipment, which, in turn, shall be reported person responsible for the administrative and instructional supervision
to the appropriate district supervisors and division superintendents. of the schools or cluster of schools.29 The division superintendent, on
However, under Section 6.2(11), Rule VI of the IRR, on the authority, the other hand, supervises the operation of all public and private
accountability, and responsibility of school heads, district supervisors elementary, secondary, and integrated schools and learning centers. 30
were deleted as one of the administrative officers to whom such
reporting is to be made. Petitioners conclude that to the extent that the Administrative supervision means "overseeing or the power or
division superintendents are not mandated to report donations and authority of an officer to see that their subordinate officers perform
grants to district supervisors, the IRR is void. their duties. If the latter fails or neglects to fulfill them, the former may
take such action or steps as prescribed by law to make them perform
On their plea for mandamus, petitioners pray that the Court compel the their duties."31
DepEd and the DBM to upgrade their present salary grade. They claim
that the position of an ESP is already classified as SG 21, which is A plain reading of the law will show that the schools district
higher by two grades than that of district supervisors, SG 19. supervisors have no administrative supervision over the school heads;
Considering their higher position in the department’s pecking order, their responsibility is limited to those enumerated in Section 7(D) of
vis-à-vis that of the ESPs, petitioners opine that to rectify the present R.A. No. 9155, to wit:
grade-level distortion, their salary grade should be upgraded to SG
24.22
(1) Providing professional and instructional advice and
support to the school heads and teachers/facilitators of
For its part, the Office of the Solicitor General (OSG) avers that a schools and learning centers in the district or cluster thereof;
perusal of Section 7(D) of R.A. No. 9155 shows that the district
supervisor has limited responsibilities, and that the power to exercise
(2) Curricula supervision; and
administrative supervision over the ESPs is not covered by any of
those responsibilities. The Education Secretary is the disciplining
authority in the DepEd, with the regional directors acting as the (3) Performing such other functions as may be assigned by
disciplining authority in their respective regions. proper authorities.

As to petitioners’ gripe that the IRR deleted district supervisors from As gleaned from the Senate deliberations on Senate Bill No. 2191, the
among those school heads who should report when "[a]ccepting district supervisors were divested of any administrative supervision
donations, gifts, bequests, and grants for the purpose of upgrading over elementary and public high schools. The Senate resolved to vest
teachers’/learning facilitators’ competencies, improving and expanding the same in the division superintendents, and the Lower House
school facilities, and providing instructional materials and equipment," concurred. Senator Rene Cayetano proposed that the traditional
the OSG avers that this reportorial function is "directory" and merely function of the school supervisors of exercising administrative
for "convenience." supervision over the elementary and public high schools be maintained.
However, Senator Tessie Aquino-Oreta, the Chairperson of the Senate
Committee on Education and the Sponsor of the Bill, objected to such
Anent petitioners’ grievance on their alleged stagnant salary grade proposal:
level, the OSG points out that the same is "already provided for under
FY 2003 GAA, [thus], petitioners’ complaint against the non-increase
of their SG level is already moot and academic." The OSG also The President:
emphasizes that the upgrading of the ESP’s salary grade over the
petitioners is not violative of petitioners’ right to equal protection of Why do we not say AND SHALL NOT BE INCLUDED?
the law, since "district supervisors and ESPs are not similarly situated."
Senator Cayetano:
In reply, petitioners contend that the upgrading of the salary grade level
of district supervisors to SG 21 is an admission by the DepEd and by
the DBM of the validity of their demand to increase their salary grade Yes, better yet, Mr. President. I thank the Chair for that amendment.
to a respectable SG 24.
The President:
The petition is partially granted.
All right. Can we approve that? The sponsor accepts the amendment, I
It must be stressed that the power of administrative officials to assume.
promulgate rules in the implementation of a statute is necessarily
limited to what is provided for in the legislative enactment.23 The Senator Aquino-Oreta:
implementing rules and regulations of a law cannot extend the law or
expand its coverage, as the power to amend or repeal a statute is vested
in the legislature.24 It bears stressing, however, that administrative Yes, Mr. President.
bodies are allowed under their power of subordinate legislation to
implement the broad policies laid down in a statute by "filling in" the The President:
details. All that is required is that the regulation be germane to the
objectives and purposes of the law; that the regulation does not
Is there any objection from the floor? (Silence) There being none, the
contradict but conforms with the standards prescribed by
amendment is approved.
law.25 Moreover, as a matter of policy, this Court accords great respect
to the decisions and/or actions of administrative authorities not only
because of the doctrine of separation of powers but also for their Senator Cayetano:
presumed knowledgeability and expertise in the enforcement of laws
and regulations entrusted to their jurisdiction. 26 The rationale for this Thank you, Mr. President.
rule relates not only to the emergence of the multifarious needs of a
modern or modernizing society and the establishment of diverse
administrative agencies for addressing and satisfying those needs; it In line 17, it ends with the conjunction "and." I would like to propose
also relates to the accumulation of experience and growth of an amendment by inserting a new paragraph (b). This is, of course, the
specialized capabilities by the administrative agency charged with duties and responsibilities of schools district supervisors. It is to
implementing a particular statute.27
44 ADMIN LAW CASES 0901
SUPERVISE SCHOOL PRINCIPALS IN THE DISTRICT, because the curriculum because in the administration of the affairs of the
right now, this is exactly their job. school, we are saying that the principal knows best how to administer
or how to run the school better. And so, we are saying here that school
Again, the reality is, there are efforts to minimize, if not remove, the supervisors will be there contrary to the view of that ADB study. We
will maintain them, but the focus of the school supervisors will be on
principal function of school supervisors, which is to supervise school
principals in the district. I just want it to be there to ensure that their the curriculum of the schools.
primary functions remain as such.
Senator Cayetano:
Therefore, what appears as paragraph (b) in line 18 will now be
subparagraph (c). Mr. President, again I thank the lady senator. But again let us look at
who supervisors of schools are. Supervisors of schools once upon a
The President: time were all school principals. They rose from the ranks, that is why
they are fully aware of the administrative as well as the instructional
capability of the principals now who are under them. To remove their
What does the sponsor say? right to supervise, – now it is the ADB, I am correct, the lady senator is
correct because as I said I was not sure – to remove this traditional
Senator Aquino-Oreta: function would really render the supervisors practically without
anything to do. That is why they are now being justified that
henceforth there will be no principals that will be promoted as school
Mr. President, may I just explain. There are two school supervisors. supervisors because when the school supervisors reach the age of
One is for the academic function and the other is for the administrative retirement and retire, no principals shall be promoted to that level. But
function. As such, if these two supervisors will dictate to the principals, these school supervisors now, Mr. President, were once upon a time in
then our thrust in reducing the level of bureaucracy might not be met. their professional lives principals, and they know best how the schools
Also, the thrust of this governance bill really is to flesh out the should be run – administratively and instructionally. That is the reason
importance of the school as the heart of education here. In that heart, for that, Mr. President.
we have the teacher, the student, and the school head.
The President:
What we are trying to do here is to bring to the forefront the school
itself. In fact, right now, there is a move in the DECS to do away with
the school supervisor in charge of administrative and leave that What does the sponsor say?
function to the principal. If the principal, the school head will be
dictated upon by these two school supervisors, we might not be able to Senator Cayetano:
achieve what we want to do here – putting to the forefront the school
itself. Meaning, putting to the forefront the school head, the teacher,
and the student. So, may I ask the sponsor to accept this, Mr. President.

Senator Aquino-Oreta:
Senator Cayetano:

Mr. President, what was the amendment?

Mr. President, I would like to thank the sponsor for that enlightenment.
That is precisely my point.
Senator Cayetano:
Not too long ago, I was a speaker before the school supervisors all over
the land. One of the points that they complained about was, in most To insert a new paragraph, paragraph (b) in line 18, which states:
cases, their job to supervise school principals is now being removed or SUPERVISE SCHOOL PRINCIPALS IN THE DISTRICT.
have been removed simply because – and I may be inaccurate here –
the Japanese government – I know it is a foreign government that The President:
funded a study of the organizational setup of the DECS – has
recommended the abolition of school supervisors.
May I suggest, THE SUPERVISION OF SCHOOL PRINCIPALS IN
THE DISTRICT, because –
This is the reason this representation would like to ensure that the
traditional function of the school supervisors, among which is to
supervise school principals, remain as such. What is good for the Senator Cayetano:
Japanese education is not necessarily good for the Philippines. This
representation knows that this is precisely one of the complaints of the Yes, Mr. President.
school supervisors.
The President:
The lady sponsor admitted that, indeed, there is an effort to phase out
the school supervisors. That is precisely my point, Mr. President. I do
not want the school supervisors to be phased out simply because a – the antecedent for that is, "The schools district supervisor shall be
foreign government which funded the study of our education has responsible for."
suggested it.
Senator Cayetano:
The President:
That is right, Mr. President. Supervision, yes.
What does the sponsor say?
The President:
Senator Aquino-Oreta:
What does the sponsor say?
Mr. President, actually, it is not Japanese. It is an ADB proposal to the
DECS. The DECS had a study made on how to improve the Senator Aquino-Oreta:
management order of the DECS. That was one of the proposals. They
gave three proposals. One of them was to take out the school
supervisors. Mr. President, may I have one minute?

But precisely, Mr. President, we are not doing that, we are not taking SUSPENSION OF SESSION
them out. What we are saying is for the school supervisor to focus on
45 ADMIN LAW CASES 0901
Senator Tatad: Senator Cayetano:

Mr. President, I move that we suspend the session for one minute. Just that, Mr. President.

The President: Senator Tatad:

Is there any objection? (Silence) There being none, the session is Put a semicolon (;).
suspended for one minute.
Senator Cayetano:
It was 5:33 p.m.
And because of that, line 18 which is paragraph (b), should now be
RESUMPTION OF SESSION paragraph (c).

At 5:43 p.m., the session was resumed. The President:

The President: What does the sponsor say?

The session is resumed. Senator Aquino-Oreta:

SUSPENSION OF CONSIDERATION OF S. NO. 2191 The amendment is accepted, Mr. President. (Underscoring supplied)33

Senator Tatad: Thus, under R.A. No. 9155, administrative supervision over school
heads is not one of those responsibilities conferred on district
Mr. President, we are still trying to find a way out of these conflicting supervisors.
points of view on the role of the supervisor. To allow the parties to
have a little more time to work on this, I move that we suspend It is a settled rule of statutory construction that the express mention of
consideration of Senate Bill No. 2191. (Underscoring supplied)32 one person, thing, act, or consequence excludes all others. This rule is
expressed in the familiar maxim expressio unius est exclusio alterius.
When the session resumed, Senator Cayetano no longer pursued his Where a statute, by its terms, is expressly limited to certain matters, it
proposed amendment, and moved instead that the same be amended to may not, by interpretation or construction, be extended to others. The
rule proceeds from the premise that the legislature would not have
read "Curricula Supervision." The Senate approved the proposal of the
Senator: made specified enumerations in a statute had the intention been not to
restrict its meaning and to confine its terms to those expressly
mentioned.34
The President:
It is not surprising that Senator Aquino-Oreta maintained her position
The session is resumed. Senator Cayetano is recognized. that district supervisors should not have administrative control or even
supervision over ESPs and SSPs. As early as 1990, the DECS had
CAYETANO AMENDMENT adopted the policy that, effective January 1, 1991, the positions of
district supervisors and division supervisors would be gradually phased
out by not filling-up these positions as they become vacant.35 On
Senator Cayetano: September 17, 1991, then DECS Secretary Isidro Cariño issued DECS
Order No. 110, Series of 1991, declaring that, to foster better
Thank you, Mr. President. considerations and articulation of progress in the elementary level, all
elementary school principals shall report directly to the school division
superintendents. In his Order dated June 22, 1994, then DECS
With the permission of the lady senator, after consulting her and the Secretary Armand V. Fabella declared that DECS Order No. 110 shall
Majority Leader, I would like to propose an amendment by rewording remain in effect, with the recommendation that, in order to facilitate
the original amendment I was proposing last night. The reworded the phase-out of district supervisor positions, incumbent district
proposed amendment would be like this: CURRICULA supervisors were encouraged to transfer to vacant division supervisor
SUPERVISION. positions, provided they meet the qualification standards for such
positions.36 For his part, in his DECS Order No. 22, Series of 1996,
The President: DECS Secretary Ricardo T. Gloria restored the district supervisor
positions but only on a selective basis and subject to the following
guidelines:
That would be on what page?

a) Schools superintendents, with the concurrence/approval

Senator Cayetano:
of their regional directors, may have the option to restore the
position in selected districts after a careful evaluation of
That would be on page 10, line 17, as a new paragraph (b). need. For this purpose, the number of schools and their
geographical location and distance for effective monitoring,
The President: the availability of regular transportation, urban-rural setting,
etc., should be considered in the decision.

And how will it read?

b) The role of the district supervisor as an instructional
leader and resource for teachers, rather than merely as an
Senator Cayetano: administrative supervisor, should be emphasized in their
functions and duties.
CURRICULA SUPERVISION.
c) In the event of restoration and appointment of the position
The President: in a particular district, the school superintendent shall ensure
that the system of field supervision previous to the issuance
of DECS Orders No. 110, s. 1991 and No. 41, s. 1994 shall,
Just that? likewise, be restored. Correspondingly, the designation of

46 ADMIN LAW CASES 0901

 coordinating principals in affected districts shall be Section 7 of RA 9155, on School District Level, pertinently provides
withdrawn. that "a school district shall have a school district supervisor and an
office staff for program promotion," and that the schools district
d) Should a division office opt not to restore some or all supervisor shall be responsible for: (1) "(p)roviding professional and
instructional advice and support to the school heads and
district supervisor positions, the funds for such positions
may be used to create new positions or upgrade existing teachers/facilitators of schools and learning centers in the district [or]
positions, subject to the approval of the Department of cluster thereof;" (2) "(c)urricula supervision;" and, (3) "(p)erforming
Budget and Management. such other functions as may be assigned by the proper authorities."

e) Considering that a number of vacated district supervisor A perusal of Section 7 shows that the District Supervisor has limited
positions in some divisions may have been converted to responsibilities, and that the power to exercise administrative
other positions and/or otherwise phased out since 1991, supervision over the ESPs is not covered by responsibility nos. 1 and 2.
appointments of district supervisors shall be issued by Neither is that power covered by the directive that the District
regional directors only upon verification from the Supervisor shall have an office staff for program promotion. The only
Department of Budget and Management that the said logical conclusion, therefore, that can be derived from the aforesaid
enumeration of responsibilities is that the District Supervisor may only
position may be filled.
exercise administrative supervision over ESPs when such function is
assigned by proper authorities. And, since the DepEd Secretary
It is enjoined that regional directors and schools superintendents shall specifically declared through the IRR of RA 9155, that the District
exert special effort to ensure that the implementation of this Order shall Supervisor shall not exercise administrative supervision over the ESPs,
be harmonious and conducive to field supervision.37 unless otherwise authorized, petitioners cannot complain against the
said declaration. On this score, it is settled that the intent of the statute
Under DECS Order No. 36, Series of 1998 issued by DECS Secretary is the law (Philippine National Bank v. Office of the President, 252
Erlinda C. Pefianco, the positions of district supervisors were restored SCRA 5 [1996]). In the absence of legislative intent to the contrary,
to their original status as a supervisory level in the DECS words and phrases used in a statute should be given their plain,
administrative hierarchy subject to the following guidelines: ordinary and common usage meaning (Mustang Lumber, Inc. v. Court
of Appeals, 257 SCRA 430 [1996]).
1.1 The positions of Education and District Supervisors are hereby
restored to their original status as a supervisory level in the DECS Needless to say, Section 7, on Division Level, further provides that the
administrative hierarchy, subject to the following guidelines: School Division Superintendent shall have authority, accountability
and responsibility for, among others, "(s)upervising the operation of all
public and private elementary, secondary and integrated schools, and
1.1.1 The functions of a district supervisor as an learning centers." To claim, therefore, that the District Supervisor has
instructional leader and resource person for teachers should administrative supervision over the ESPs would also violate the above-
be emphasized. quoted provision.41

In the event of restoration and appointment of public schools district The Court likewise declares that the last paragraph of Section 4.3 of
supervisor, the designation of the coordinating principal shall be the IRR, stating that the regional director shall continue exercising
withdrawn. disciplinary authority over the teaching personnel insofar as the latter
are covered by specific and exclusive disciplinary provisions under
Appointment of district supervisors shall be issued by regional R.A. No. 4670 ("Magna Carta for Public School Teachers") does not
directors only upon verification from the Department of Budget and contravene R.A. No. 9155. Indeed, the IRR merely reiterates the DECS
Management that the positions still exist since a number of vacated Rules of Procedure, DECS Order No. 33, issued on March 30, 1999 by
district supervisor positions in some divisions may have been the DepEd Secretary, and R.A. No. 4670 which was approved on June
converted to other positions and/or otherwise phased out since 1991. 38 18, 1966, and pursuant to Section 7, Chapter II, Book IV of the 1987
Administrative Code, which provides that the DepEd Secretary is
empowered to
However, as already stated, the Senate resolved to maintain the
positions of district supervisors but limited their responsibilities only to
those enumerated in Section 7(D) of R.A. No. 9155 to conform to the a. Promulgate rules and regulations necessary to carry out
basic thrust and objectives of the law. Far from strengthening the office department objectives, policies, functions, plans, programs,
of the district supervisors as a mid-head field office of the DepEd, the and projects; and
law limited the authority and responsibility attached to such position.
b. Promulgate administrative issuances necessary for the
While it is true that the district supervisor is given a support staff for efficient administration of the offices under the Secretary
program promotion, it cannot thereby be implied that he/she likewise and for execution of the laws relative thereto.
has administrative supervision over ESPs and SSPs. Such a
construction has no basis in law and in fact. Indeed, such a construction Additionally, the IRR was issued by the DepEd Secretary pursuant to
of the statute defeats the very purpose of the law. Section 7(A)(1) of R.A. No. 9155, which mandates that the Secretary
formulate national educational policies and enhance the employment
It is a basic precept that the intent of the legislature is the controlling status, professional competence, welfare, and working conditions of all
factor in the interpretation of the statute. The particular words, clauses, the DepEd personnel.42
and phrases should not be studied as detached and isolated expression,
but the whole and every part of the statute must be considered in fixing We agree that R.A. No. 9155 does not provide who has disciplinary
the meaning of any of its parts and in order to produce a harmonious authority over the teaching personnel of the DepEd. However, under
whole.39 Section 3, Chapter III of DECS Order No. 33, Series of 1999,
otherwise known as the 1999 DECS Rules of Procedure, the
Besides, Congress enumerated the duties and responsibilities of a disciplining authority in the DECS is the DepEd Secretary, with the
district supervisor. Congress would not have made specific regional directors acting as such in their respective regions except
enumerations in a statute if it had the intention not to restrict or limit its those appointed by the President.43
meaning and confine its terms only to those expressly enumerated.
Courts may not, in the guise of interpretation, enlarge the scope of a The officers and employees referred to in the Rules of Procedure
statute and include situations not provided nor intended by Congress. 40 include teachers who, under R.A. No. 4670, shall mean:

The submission of the OSG, that the schools district supervisors have x x x all persons engaged in classroom teaching, in any level of
the administrative supervision over school heads, is more in accord instruction, on full-time basis, including guidance counselors, school
with the law, to wit: librarians, industrial arts, or vocational instructors, and all other
persons performing supervisory and/or administrative functions in all
47 ADMIN LAW CASES 0901
schools, colleges and universities operated by the Government or its mandamus mandating respondents to increase their salary grade from
political subdivisions; but shall not include school nurses, school SG 19 to 24, the same is premature.
physicians, school dentists, and other school employees.
There is no showing in the petition that, before filing their petition,
A division superintendent of schools is not a disciplining authority over petitioners sought an adjustment of level of their salary grade from SG
teachers, whether under R.A. No. 4670 or under the DECS Rules of 19 to SG 21 before respondents or the Civil Service Commission.
Procedure. In fact, under Section 2, Chapter VII of such Rules of Section 17 of Presidential Decree No. 985, as amended by Section 14
Procedure, a division superintendent is a chairperson of the of R.A. No. 6758, otherwise known as the Salary Standardization Law,
investigating committee over formal complaints filed against such provides:
teachers:
Sec. 17. Powers and Functions. – The Budget Commission (now
a) When the respondent is an elementary or secondary school teacher, Department of Budget and Management), principally through the
head teacher, principal, district supervisor/chair/coordinator or OCPC (now CPCB, Compensation and Position Classification Board)
Education Supervisor I – shall, in addition to those provided under other Sections of this Decree,
have the following powers and functions:
(1) The schools division superintendent or his or her duly
authorized representative, as chairperson; a. Administer the compensation and position classification system
established herein and revise it as necessary;
(2) The duly authorized representative of the school, district,
or division teacher’s organization, as member; and xxxx

(3) The division supervisor for elementary or secondary f. Certify classification actions and changes in class or grade of
education where the respondent belongs, as member. positions whenever the facts warrant, such certification to be binding
on administrative, certifying, payroll, disbursing, accounting and
auditing officers of the national government and government-owned or
The foregoing rule is based on Section 9 of R.A. No. 4670 which
reads: controlled corporations and financial institutions.

Sec. 9. Administrative Charges. Administrative charges against a Sections 10 and 11 of R.A. No. 9155 provide:
teacher shall be heard initially by a committee composed of the
corresponding School Superintendent of the Division or a duly SEC. 10. The Secretary of Education and the Secretary of Budget and
authorized representative who should, at least, have the rank of a Management shall, within ninety (90) days from the approval of this
division supervisor, where the teacher belongs, as chairman, a Act, jointly promulgate the guidelines on the allocation, distribution,
representative of the local or, in its absence, any existing provincial or and utilization of resources provided by the national government for
national teacher’s organization and a supervisor of the Division, the the field offices, taking into consideration the uniqueness of the
last two to be designated by the Director of Public Schools. The working conditions of the teaching service.
committee shall submit its findings and recommendations to the
Director of Public Schools within thirty days from the termination of The Secretary of the Department of Education shall ensure that
the hearings: Provided, however, That where the school superintendent resources appropriated for the field offices are adequate and that
is the complainant or an interested party, all the members of the resources for school personnel, school desks, and textbooks and other
committee shall be appointed by the Secretary of Education. instructional materials intended are allocated directly and released
immediately by the Department of Budget and Management to said
Anent the issue on reporting of acceptance of donations, Section offices.
7(E)(11) of R.A. No. 9155 provides:
SEC. 11. The Secretary of the Department of Education, subject to
(11) Accepting donations, gifts, bequests, and grants for the purpose of civil service laws and regulations, shall issue appropriate personnel
upgrading teachers’/learning facilitators’ competencies, improving and policy rules and regulations that will best meet the requirements of the
expanding school facilities, and providing instructional materials and teaching profession taking into consideration the uniqueness of the
equipment. Such donations or grants must be reported to the working conditions of the teaching service.
appropriate district supervisors and division superintendents. (emphasis
supplied) And insofar as the salary system for teaching positions is concerned,
Section 14 provides:
However, Section 6.2(11), Rule VI of the IRR provides that:
SEC. 14. The Salary System for Teaching Position. – The salary grade
(11) Accepting donations, gifts, bequests, and grants in accordance of a teacher shall be determined in accordance with the following:
with existing laws and policy of the Department for the purpose of
upgrading teachers’/learning facilitators’ competencies, improving and a. The Teachers’ Preparation Pay Schedule shall be prepared
expanding school facilities, and providing instructional materials and by the Commission in consultation with the Department of
equipment. Such donations or grants must be reported to the division Education and Culture. Under this system, the teacher's
superintendents. (emphasis supplied) academic or educational preparation, teaching experience in
both private and public schools, and extra-curricular
We agree with petitioners’ contention that, under the law, donations activities for professional growth, shall be considered in
and grants must be reported to the appropriate district supervisors and pursuance of the principle of 'equal pay for equal training
not only to the division superintendents. The use in the law of the word and experience.'
"must" is an expression of the mandatory nature of the reporting of
donations and grants to district supervisors. The reason for the xxxx
provision is that such grants and donations which are intended to
upgrade teachings/learning facilitators’ competencies, improve and
expand school facilities, and provide instructional materials and d. The Budget Commission, in coordination and consultation
equipment will assist the school district supervisors in the performance with the Department of Education and Culture and the Civil
of their duties and responsibilities under Section 7(D) of R.A. No. Service Commission may, when future needs require,
9155, and submit appropriate recommendations to the proper modify, change or otherwise improve on the salary system
administrative officers. herein established for the teaching and closely related
occupations, any change that may be made as provided
herein shall become part of the implementing rules of this
On petitioner’s plaint of the failure of respondents to upgrade their Decree to be issued by the Budget Commission upon prior
salary grade level to at most SG 21, and for the issuance of the writ of approval by the President.
48 ADMIN LAW CASES 0901
Moreover, the issue of whether or not respondents should be compelled For CY 2004, the same shall be charged against the lump sum
to adjust upwards the salary grade of petitioners to SG 21 has become appropriation for the purpose that may be included in the 2004 budget.
moot and academic, because, on November 3, 2003, the DepEd and the
DBM issued Joint Circular No. 1, Series of 2003 containing the 7.0 POST-AUDIT
guidelines in the implementation of the Salary Upgrading for District
and Education Supervisors, to wit:
Any salary adjustment paid under this Circular shall be subject to post-
audit by the DBM – ROs concerned. Any payments thereof which are
4.0 GUIDELINES not in accordance herewith shall be adjusted accordingly.

4.1 To maintain the previous salary grade relationships 8.0 CONTRIBUTIONS

under RA No. 6758 among the PSDS and ES I, on the one
hand, and Elementary School Principal (ESP) IV and
Secondary School Principal (SSP) II, on the other hand, and The salary adjustments authorized herein are subject to the mandatory
to preserve the consistency in the salary grade relationships requirements for life and retirement premiums, and health insurance
of said positions, the following are hereby authorized: premiums.

4.1.1 Upgrading of the PSDS and ES I positions 9.0 SAVING CLAUSE

from SG-19 to SG-20 in July 2003 and to SG-21
in July 2004; Conflicts arising from the implementation of the provisions of this
Circular shall be resolved by the Department of Education, upon prior
4.1.2 Upgrading of the ES II positions by two (2) consultation with the Department of Budget and Management.
salary grades from SG-20 to SG-21 in July 2003
and to SG-22 in July 2004; 10.0 EFFECTIVITY

4.1.3 A one-step salary adjustment to incumbents This Circular Letter shall take effect on July 1, 2003.
of ES III positions starting July 2003 and another
one-step salary adjustment starting July 2004;
IN VIEW OF ALL THE FOREGOING, the petition for prohibition is
PARTIALLY GRANTED. Joint Circular No. 1, Series of 2003 is
4.1.4 A one-step salary adjustment to incumbents declared valid, except Section 6.2(11), Rule VI thereof which provides
of CES positions starting July 2003 and another that "donations or grants shall be reported only to the division
one-step salary adjustment starting July 2004. superintendents." Such donations or grants must also be reported to the
appropriate school district supervisors, as mandated by Republic Act
4.2 Attached herewith is Annex A containing the summary No. 9155. Petitioners’ prayer for the issuance of a writ of mandamus is
of the guidelines for the salary upgrading of positions DENIED for lack of merit. No costs.
authorized herein.
SO ORDERED.
5.0 SALARY RULES

5.1 For purposes of the salary upgrading herein authorized,

the basic salary of the employee concerned shall be adjusted
as follows:

5.1.1 Effective July 1, 2003 – at the same salary

step of his assigned salary grade as of June 30,
2003 (Illustrative Example A) adopting the Salary
Schedule prescribed under National Budget
Circular (NBC) No. 474 (Annex B);

5.1.2 Effective July 1, 2004 – at the same salary

step of his assigned salary grade as of June 30,
2004 (Illustrative Example A) adopting the Salary
Schedule prescribed under National Budget
Circular (NBC) No. 474 (Annex B).

5.2 The transition allowance as defined in 3.2 being received

by the PSDS and ES, if any, shall be considered as advance
entitlement of the salary increase herein authorized.
(Illustrative Examples B and C)

5.3 No step adjustment shall be granted to incumbents of

positions whose salary already falls at or exceeds the
maximum step (eighth step) of the salary grade allocation of
their positions. (Illustrative Example D)

5.4 The herein salary increases shall be effected through the

issuance of a Notice of Salary Adjustment (NOSA) by the
duly authorized official. (Annex C)

6.0 FUNDING SOURCE

The amounts necessary to implement the salary adjustments authorized

herein shall be charged against the Nationwide lump sum appropriation
for the purpose amounting to fifty million pesos (P50,000,000) in the
DepEd’s budget in RA 9206, the CY 2003 General Appropriations Act.
49 ADMIN LAW CASES 0901
ECHEGARAY vs. SEC. OF JUSTICE BUT SECTION 19 OF THE RULES AND REGULATIONS TO
(LEO ECHEGARAY y PILO vs. THE SECRETARY OF IMPLEMENT R.A. NO. 8177 IS INVALID.
JUSTICE and THE DIRECTOR OF THE BUREAU OF A careful reading of R.A. No. 8177 would show that there is no undue
CORRECTIONS, THE EXECUTIVE JUDGE OF THE delegation of legislative power from the Secretary of Justice to the
REGIONAL TRIAL COURT OF QUEZON CITY AND THE Director of the Bureau of Corrections for the simple reason that under
PRESIDING JUDGE OF REGIONAL TRIAL COURT OF the Administrative Code of 1987, the Bureau of Corrections is a mere
QUEZON CITY, BRANCH 104) constituent unit of the Department of Justice. Further, the Department
G.R. No. 132601 October 12, 1998 of Justice is tasked, among others, to take charge of the "administration
FACTS: Sometime on June 25, 1996, petitioner was convicted for the of the correctional system." Hence, the import of the phraseology of
rape of his common law spouse’s ten year old daughter and was the law is that the Secretary of Justice should supervise the Director of
sentenced to death penalty. He filed a Motion for Reconsideration and the Bureau of Corrections in promulgating the Lethal Injection Manual,
Supplemental Motion for Reconsideration raising for the first time the in consultation with the Department of Health.
constitutionality of RA 7659 or “The Death Penalty Law”, and the The separation of powers is a fundamental principle in our system of
imposition of death penalty for the crime of rape. The motions were government. It obtains not through express provision but by actual
denied with the court finding no reason to declare it unconstitutional division in the framing of our Constitution. Each department of the
and pronouncing Congress compliant with the requirements for its government has exclusive cognizance of matters placed within its
imposition. jurisdiction, and is supreme within its own sphere. Corollary to the
In the meantime, Act 8177 was passed amending Art. 8 of the RPC as doctrine of separation of powers is the principle of non-delegation of
amended by Sec. 24 of RA 7659. The mode of execution was changed powers. "The rule is that what has been delegated, cannot be delegated
from electrocution to lethal injection. The Secretary of Justice or as expressed in a Latin maxim: potestas delegata non delegari
promulgated the rules and regulations to implement R.A 8177 and potest."
directed the Director of Bureau of Corrections to prepare the Lethal Empowering the Secretary of Justice in conjunction with the Secretary
Injection Manual. Petitioner filed a petition for prohibition, injunction of Health and the Director of the Bureau of Corrections, to promulgate
and TRO to enjoin the Secretary of Justice and Director of Bureau of rules and regulations on the subject of lethal injection is a form of
Prisons from carrying out the execution, contending that RA 8177 and delegation of legislative authority to administrative bodies.
its implementing rules are unconstitutional and void. The Executive The reason for delegation of authority to administrative agencies is the
Judge of the RTC of Quezon City and Presiding Judge of RTC Branch increasing complexity of the task of government requiring expertise as
104 were later impleaded to enjoin them from setting a date of well as the growing inability of the legislature to cope directly with the
execution. myriad problems demanding its attention. The growth of society has
In March 1998, the court required respondents to comment and ramified its activities and created peculiar and sophisticated problems
mandated the parties to maintain status quo. Petitioner filed a very that the legislature cannot be expected to attend to by itself.
urgent motion to clarify status quo and to request for TRO until Specialization even in legislation has become necessary. On many
resolution of the petition. The Solicitor General filed a comment on the problems involving day-to-day undertakings, the legislature may not
petition dismissing the claim that the RA in question is unconstitutional have the needed competence to provide the required direct and
and providing arguments in support of his contention. CHR filed a efficacious, not to say, specific solutions. These solutions may,
motion for Leave of Court to Intervene and appear as Amicus Curiae however, be expected from its delegates, who are supposed to be
alleging that the death penalty is cruel and degrading citing applicable experts in the particular fields assigned to them.
provisions and statistics showing how other countries have abolished
the death penalty and how some have become abolitionists in practice.
Petitioner filed a reply stating that lethal injection is cruel, degrading,
LEO ECHEGARAY, petitioner,
inhuman and violative of the International Covenant on Civil and vs.
Political Rights. SECRETARY OF JUSTICE, ET AL., respondents.
ISSUE 1: Whether R.A. 8117 and its implementing rules are violative
of the unconstitutional proscription against cruel, degrading and
inhuman punishment, violative of international treaty and obligations, RESOLUTION
discriminatory and an undue delegation of legislative powers.
ISSUE 2: Did the respondent Secretary unlawfully delegated the
legislative powers delegated to him under Republic Act No. 8177 to
respondent Director.
RULING 1: LETHAL INJECTION, NOT CRUEL, DEGRADING OR PUNO, J.:
INHUMAN PUNISHMENT UNDER SECTION 19, ARTICLE III OF
THE 1987 CONSTITUTION. For resolution are public respondents' Urgent Motion for
The main challenge to R.A. 8177 and its implementing rules is Reconsideration of the Resolution of this Court dated January 4, 1990
anchored on Article III, Section 19 (1) of the 1987 Constitution which temporarily restraining the execution of petitioner and Supplemental
proscribes the imposition of "cruel, degrading or inhuman" Motion to Urgent Motion for Reconsideration. It is the submission of
punishment. public respondents that:
"The counterpart of Section 19 (1) in the 1935 Constitution reads:
'Excessive fines shall not be imposed, nor cruel and inhuman
punishment inflicted.' xxx In the 1973 Constitution the phrase became 1. The Decision in this case having become final and
'cruel or unusual punishment.' The Bill of Rights Committee of the executory, its execution enters the exclusive ambit
1986 Constitutional Commission read the 1973 modification as of authority of the executive authority. The
prohibiting 'unusual' punishment even if not 'cruel.' It was thus seen as issuance of the TRO may be construed as
an obstacle to experimentation in penology. Consequently, the trenching on that sphere of executive authority;
Committee reported out the present text which prohibits 'cruel, 2. The issuance of the temporary restraining order . .
degrading or inhuman punishment' as more consonant with the . creates dangerous precedent as there will never
meaning desired and with jurisprudence on the subject." be an end to litigation because there is always a
Now it is well-settled in jurisprudence that the death penalty per se is possibility that Congress may repeal a law.
not a cruel, degrading or inhuman punishment. In the oft-cited case of 3. Congress had earlier deliberated extensively on
Harden v. Director of Prisons, this Court held that "[p]unishments are the death penalty bill. To be certain, whatever
cruel when they involve torture or a lingering death; but the question may now be raised on the Death Penalty
punishment of death is not cruel, within the meaning of that word as Law before the present Congress within the 6-
used in the constitution. It implies there something inhuman and month period given by this Honorable Court had
barbarous, something more than the mere extinguishment of in all probability been fully debated upon . . .
life."Would the lack in particularity then as to the details involved in 4. Under the time honored maxim lex futuro, judex
the execution by lethal injection render said law "cruel, degrading or praeterito, the law looks forward while the judge
inhuman"? The Court believes not. For reasons hereafter discussed, the looks at the past, . . . the Honorable Court in
implementing details of R.A. No. 8177 are matters which are properly issuing the TRO has transcended its power of
left to the competence and expertise of administrative officials. judicial review.
RULING 2: No. THERE IS NO UNDUE DELEGATION OF 5. At this moment, certain
LEGISLATIVE POWER IN R.A. NO. 8177 TO THE SECRETARY OF circumstances/supervening events transpired to
JUSTICE AND THE DIRECTOR OF BUREAU OF CORRECTIONS, the effect that the repeal or modification of the

50 ADMIN LAW CASES 0901

 law imposing death penalty has become nil, to unconstitutional; but
wit: GRANTED insofar as
Sections 17 and 19 of the
a. The public pronouncement of President Rules and Regulations to
Implement Republic Act No.
Estrada that he will veto any law
imposing the death penalty involving 8177 are concerned, which
heinous crimes. are hereby declared
b. The resolution of Congressman INVALID because (a)
Golez, et al., that they are against the Section 17 contravenes
repeal of the law; Article 83 of the Revised
c. The fact that Senator Roco's resolution Penal Code, as amended by
Section 25 of Republic Act
to repeal the law only bears his
signature and that of Senator Pimentel. No. 7659; and (b) Section 19
fails to provide for review
and approval of the Lethal
In their Supplemental Motion to Urgent Motion for Reconsideration, Injection Manual by the
public respondents attached a copy of House Resolution No. 629 Secretary of Justice, and
introduced by Congressman Golez entitled "Resolution expressing the unjustifiably makes the
sense of the House of Representative to reject any move to review manual confidential, hence
Republic Act No. 7659 which provided for the re-imposition of death unavailable to interested
penalty, notifying the Senate, the Judiciary and the Executive parties including the
Department of the position of the House of Representative on this accused/convict and counsel.
matter, and urging the President to exhaust all means under the law to Respondents are hereby
immediately implement the death penalty law." The Resolution was enjoined from enforcing and
concurred in by one hundred thirteen (113) congressman. implementing Republic Act
No. 8177 until the aforesaid
In their Consolidated Comment, petitioner contends: (1) the stay order. Sections 17 and 19 of the
. . is within the scope of judicial power and duty and does not trench on Rules and Regulations to
executive powers nor on congressional prerogatives; (2) the exercise Implement Republic Act No.
by this Court of its power to stay execution was reasonable; (3) the 8177 are appropriately
Court did not lose jurisdiction to address incidental matters involved or amended, revised and/or
arising from the petition; (4) public respondents are estopped from corrected in accordance with
challenging the Court's jurisdiction; and (5) there is no certainty that this Decision.
the law on capital punishment will not be repealed or modified until
Congress convenes and considers all the various resolutions and bills SO ORDERED.
filed before it.
and that the same has,
Prefatorily, the Court likes to emphasize that the instant motions on November 6, 1988 become final and executory
concern matters that are not incidents in G.R. No. 117472, where the and is hereby recorded in the Book of Entries of
death penalty was imposed on petitioner on automatic review of his Judgment.
conviction by this Court. The instant motions were filed in this case,
G.R. No. 132601, where the constitutionality of R.A. No. 8177 (Lethal
Injection Law) and its implementing rules and regulations was assailed Manila, Philippine.
by petitioner. For this reason, the Court in its Resolution of January 4,
1999 merely noted the Motion to Set Aside of Rodessa "Baby" R.
Echegaray dated January 7, 1999 and Entry of Appearance of her
counsel dated January 5, 1999. Clearly, she has no legal standing to
intervene in the case at bar, let alone the fact that the interest of the
State is properly represented by the Solicitor General.

We shall now resolve the basic issues raised by the public respondents.

First. We do not agree with the sweeping submission of the public

respondents that this Court lost its jurisdiction over the case at bar and
hence can no longer restrain the execution of the petitioner. Obviously,
public respondents are invoking the rule that final judgments can no
longer be altered in accord with the principle that "it is just as
important that there should be a place to end as there should be a place
to begin litigation." 1 To start with, the Court is not changing even a
comma of its final Decision. It is appropriate to examine with precision
the metes and bounds of the Decision of this Court that became final.
These metes and bounds are clearly spelled out in the Entry of
Judgment in this case, viz:

ENTRY OF JUDGMENT

This is to certify that on October 12, 1998 a

decision rendered in the above-entitled case was
filed in this Office, the dispositive part of which
reads as follows:

WHEREFORE, the petition

is DENIED insofar as
petitioner seeks to declare
the assailed statute (Republic
Act No. 8177) as
51 ADMIN LAW CASES 0901
 judgment has become final for the purpose of
enforcement of judgment;D the latter terminates
when the judgment becomes
I final. 4 . . . For after
the judgment has become M final facts and
circumstances may transpire
A which can render the
5
execution unjust or impossible.
I
S
I has long been rejected
In truth, the arguments of the Solicitor General
P
by this Court. As aptly pointed out by the petitioner, as early as 1915,
this Court has unequivocably ruled in the case of Director of Prisons v.
Judge of First Instance, 6 viz: A
c
This Supreme Court has t repeatedly declared in
various decisions, which i constitute jurisprudence
on the subject, that inncriminal cases, after the
g
sentence has been pronounced and the period for
reopening the same cannot change or alter its
C
judgment, as its jurisdiction has terminated . . .
When in cases of appeal h or review the cause has
i
been returned thereto for execution, in the event
e affirmed, it performs a
that the judgment has been
f the proper order. But it
ministerial duty in issuing
does not follow from this cessation of functions
on the part of the court J with reference to the
ending of the cause that u the judicial authority
terminates by having thend passed completely to
the Executive. The particulars
i of the execution
itself, which are certainly
c not always included in
the judgment and writ of i execution, in any event
are absolutely under the a control of the judicial
authority, while the executive
l has no power over
the person of the convict except to provide for
carrying out of the penalty
R and to pardon.
e
c
Getting down to the solution of the question in the
o of execution of a capital
case at bar, which is that
r
sentence, it must be accepted as a hypothesis that
postponement of the date d can be requested. There
can be no dispute on thiss point. It is a well-known
principle that notwithstanding the order of
O nature thereof on the
execution and the executory
f
date set or at the proper time, the date therefor can
f
be postponed, even in sentences of death. Under
i
the common law this postponement can be
ordered in three ways:c (1) By command of the
e
King; (2) by discretion (arbitrio) of the court; and
(3) by mandate of the law. It is sufficient to state
The records will show that before the Entry of Judgment, the Secretary this principle of the common law to render
of Justice, the Honorable Serafin Cuevas, filed with this Court on impossible that assertion in absolute terms that
October 21, 1998 a Compliance where he submitted the Amended after the convict has once been placed in jail the
Rules and Regulations implementing R.A. No. 8177 in compliance trial court can not reopen the case to investigate
with our Decision. On October 28, 1998, Secretary Cuevas submitted a the facts that show the need for postponement. If
Manifestation informing the Court that he has caused the publication of one of the ways is by direction of the court, it is
the said Amended Rules and Regulations as required by the acknowledged that even after the date of the
Administrative Code. It is crystalline that the Decision of this Court execution has been fixed, and notwithstanding the
that became final and unalterable mandated: (1) that R.A. No. 8177 is general rule that after the (court) has performed
not unconstitutional; (2) that sections 17 and 19 of the Rules and its ministerial duty of ordering the execution . . .
Regulations to Implement R.A. No. 8177 are invalid, and (3) R.A. No. and its part is ended, if however a circumstance
8177 cannot be enforced and implemented until sections 17 and 19 of arises that ought to delay the execution, and there
the Rules and Regulations to Implement R.A. No. 8177 are amended. It is an imperative duty to investigate the emergency
is also daylight clear that this Decision was not altered a whit by this and to order a postponement. Then the question
Court. Contrary to the submission of the Solicitor General, the rule on arises as to whom the application for postponing
finality of judgment cannot divest this Court of its jurisdiction to the execution ought to be addressed while the
execute and enforce the same judgment. Retired Justice Camilo circumstances is under investigation and so to
Quiason synthesized the well established jurisprudence on this issue as who has jurisdiction to make the investigation.
follows: 2
The power to control the execution of its decision is an essential aspect
xxx xxx xxx of jurisdiction. It cannot be the subject of substantial subtraction for
our Constitution 7 vests the entirety of judicial power in one Supreme
the finality of a judgment does not mean that the Court and in such lower courts as may be established by law. To be
Court has lost all its powers nor the case. By the sure, the important part of a litigation, whether civil or criminal, is the
process of execution of decisions where supervening events may
finality of the judgment, what the court loses is its
jurisdiction to amend, modify or alter the same. change the circumstance of the parties and compel courts to intervene
and adjust the rights of the litigants to prevent unfairness. It is because
Even after the judgment has become final the
court retains its jurisdiction to execute and of these unforseen, supervening contingencies that courts have been
enforce it. 3 There is a difference between the conceded the inherent and necessary power of control of its processes
jurisdiction of the court to execute its judgment and orders to make them conformable to law and justice. 8 For this
and its jurisdiction to amend, modify or alter the purpose, Section 6 of Rule 135 provides that "when by law jurisdiction
same. The former continues even after the is conferred on a court or judicial officer, all auxiliary writs, processes

52 ADMIN LAW CASES 0901

and other means necessary to carry it into effect may be employed by or supplemented by the Batasang Pambansa . . . ." More completely,
such court or officer and if the procedure to be followed in the exercise Section 5(2)5 of its Article X provided:
of such jurisdiction is not specifically pointed out by law or by these
rules, any suitable process or mode of proceeding may be adopted xxx xxx xxx
which appears conformable to the spirit of said law or rules." It bears
repeating that what the Court restrained temporarily is the execution of
its own Decision to give it reasonable time to check its fairness in light Sec.5. The Supreme Court
of supervening events in Congress as alleged by petitioner. The Court, shall have the following
contrary to popular misimpression, did not restrain the effectivity of a powers.
law enacted by Congress.1âwphi1.nêt
xxx xxx xxx
The more disquieting dimension of the submission of the public
respondents that this Court has no jurisdiction to restrain the execution (5) Promulgate rules concerning pleading,
of petitioner is that it can diminish the independence of the judiciary. practice, and procedure in all courts, the
Since the implant of republicanism in our soil, our courts have been admission to the practice of law, and the
conceded the jurisdiction to enforce their final decisions. In accord integration of the Bar, which, however, may
with this unquestioned jurisdiction, this Court promulgated rules be repealed, altered, or supplemented by the
concerning pleading, practice and procedure which, among others, Batasang Pambansa. Such rules shall provide
spelled out the rules on execution of judgments. These rules are all a simplified and inexpensive procedure for the
predicated on the assumption that courts have the inherent, necessary speedy disposition of cases, shall be uniform
and incidental power to control and supervise the process of execution for all courts of the same grade, and shall not
of their decisions. Rule 39 governs execution, satisfaction and effects diminish, increase, or modify substantive
of judgments in civil cases. Rule 120 governs judgments in criminal rights.
cases. It should be stressed that the power to promulgate rules of
pleading, practice and procedure was granted by our Constitutions to
this Court to enhance its independence, for in the words of Justice Well worth noting is that the 1973 Constitution further strengthened
Isagani Cruz "without independence and integrity, courts will lose that the independence of the judiciary by giving to it the additional power
popular trust so essential to the maintenance of their vigor as to promulgate rules governing the integration of the Bar. 13
champions of justice." 9 Hence, our Constitutions continuously vested
this power to this Court for it enhances its independence. Under the The 1987 Constitution molded an even stronger and more independent
1935 Constitution, the power of this Court to promulgate rules judiciary. Among others, it enhanced the rule making power of this
concerning pleading, practice and procedure was granted but it Court. Its Section 5(5), Article VIII provides:
appeared to be co-existent with legislative power for it was subject to
the power of Congress to repeal, alter or supplement. Thus, its Section
13, Article VIII provides: xxx xxx xxx

Sec.13. The Supreme Court shall have the power Sec. 5. The Supreme Court
to promulgate rules concerning pleading, practice shall have the following
and procedure in all courts, and the admission to powers:
the practice of law. Said rules shall be uniform for
all courts of the same grade and shall not xxx xxx xxx
diminish, increase, or modify substantive rights.
The existing laws on pleading, practice and
(5) Promulgate rules concerning the protection and
procedure are hereby repealed as statutes, and are
enforcement of constitutional rights, pleading,
declared Rules of Court, subject to the power of
practice and procedure in all courts, the admission to
the Supreme Court to alter and modify the same.
the practice of law, the Integrated Bar, and legal
The Congress have the power to repeal, alter or
assistance to the underprivileged. Such rules shall
supplement the rules concerning pleading,
provide a simplified and inexpensive procedure for
practice and procedure, and the admission to the
the speedy disposition of cases, shall be uniform for
practice of law in the Philippines.
all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of
The said power of Congress, however, is not as absolute as it may procedure of special courts and quasi-judicial bodies
appear on its surface. In In re Cunanan 10Congress in the exercise of its shall remain effective unless disapproved by the
power to amend rules of the Supreme Court regarding admission to the Supreme Court.
practice of law, enacted the Bar Flunkers Act of 1953 11 which
considered as a passing grade, the average of 70% in the bar
The rule making power of this Court was expanded. This Court for the
examinations after July 4, 1946 up to August 1951 and 71% in the
first time was given the power to promulgate rules concerning the
1952 bar examinations. This Court struck down the law as
protection and enforcement of constitutional rights. The Court was also
unconstitutional. In his ponencia, Mr. Justice Diokno held that " . . . the
granted for the first time the power to disapprove rules of procedure of
disputed law is not a legislation; it is a judgment — a judgment
special courts and quasi-judicial bodies. But most importantly, the
promulgated by this Court during the aforecited years affecting the bar
1987 Constitution took away the power of Congress to repeal, alter, or
candidates concerned; and although this Court certainly can revoke
supplement rules concerning pleading, practice and procedure. In fine,
these judgments even now, for justifiable reasons, it is no less certain
the power to promulgate rules of pleading, practice and procedure is no
that only this Court, and not the legislative nor executive department,
longer shared by this Court with Congress, more so with the Executive.
that may do so. Any attempt on the part of these department would be a
If the manifest intent of the 1987 Constitution is to strengthen the
clear usurpation of its function, as is the case with the law in
independence of the judiciary, it is inutile to urge, as public
question." 12The venerable jurist further ruled: "It is obvious, therefore,
respondents do, that this Court has no jurisdiction to control the
that the ultimate power to grant license for the practice of law belongs
process of execution of its decisions, a power conceded to it and which
exclusively to this Court, and the law passed by Congress on the matter
it has exercised since time immemorial.
is of permissive character, or as other authorities say, merely to fix the
minimum conditions for the license." By its ruling, this Court qualified
the absolutist tone of the power of Congress to "repeal, alter or To be sure, it is too late in the day for public respondents to assail the
supplement the rules concerning pleading, practice and procedure, and jurisdiction of this Court to control and supervise the implementation
the admission to the practice of law in the Philippines. of its decision in the case at bar. As aforestated, our Decision became
final and executory on November 6, 1998. The records reveal that after
November 6, 1998, or on December 8, 1998, no less than the Secretary
The ruling of this Court in In re Cunanan was not changed by the 1973
of Justice recognized the jurisdiction of this Court by filing a
Constitution. For the 1973 Constitution reiterated the power of this
Manifestation and Urgent Motion to compel the trial judge, the
Court "to promulgate rules concerning pleading, practice and
Honorable Thelma A. Ponferrada, RTC, Br. 104, Quezon City to
procedure in all courts, . . . which, however, may be repealed, altered
provide him ". . . a certified true copy of the Warrant of Execution
53 ADMIN LAW CASES 0901
dated November 17, 1998 bearing the designated execution day of 110 [1937]) in the absence
death convict Leo Echegaray and allow (him) to reveal or announce the of a precise date to reckon
contents thereof, particularly the execution date fixed by such trial with. The exercise of such
court to the public when requested." The relevant portions of the clemency power, at this
Manifestation and Urgent Motion filed by the Secretary of Justice time, might even work to the
beseeching this Court "to provide the appropriate relief" state: prejudice of the convict and
defeat the purpose of the
xxx xxx xxx Constitution and the
applicable statute as when
the date at execution set by
5. Instead of filing a the President would be
comment on Judge earlier than that designated
Ponferrada's Manifestation by the court.
however, herein respondent
is submitting the instant
Manifestation and Motion 8. Moreover, the deliberate
non-disclosure of
(a) to stress, inter alia, that
the non-disclosure of the information about the date of
execution to herein
date of execution deprives
herein respondent of vital respondent and the public
violates Section 7, Article III
information necessary for
the exercise of his statutory (Bill of Rights) and Section
powers, as well as renders 28, Article II (Declaration of
nugatory the constitutional Principles and State Policies)
guarantee that recognizes the of the 1987 Philippine
people's right to information Constitution which read:
of public concern, and (b) to
ask this Honorable Court to Sec. 7. The right of the
provide the appropriate people to information on
relief. matters of public concern
shall be recognized. Access
to official records, and to
6. The non-disclosure of the
date of execution deprives documents and papers
pertaining to official acts,
herein respondent of vital
information necessary for transactions, or decisions, as
the exercise of his power of well as to government
supervision and control over research data used as basis
the Bureau of Corrections for policy development shall,
pursuant to Section 39, be afforded the citizen,
Chapter 8, Book IV of the subject to such limitations as
Administrative Code of may beprovided by law.
1987, in relation to Title III,
Book IV of such Sec. 28. Subject to
Administrative Code, insofar reasonable conditions
as the enforcement of prescribed by law, the State
Republic Act No. 8177 and adopts and implements a
the Amended Rules and policy of full public
Regulations to Implement disclosure of all transactions
Republic Act No. 8177 is involving public interest.
concerned and for the
discharge of the mandate of 9. The "right to information"
seeing to it that laws and provision is self-executing. It
rules relative to the supplies "the rules by means
execution of sentence are of which the right to
faithfully observed. information may be enjoyed
(Cooley, A Treatise on the
7. On the other hand, the Constitutional Limitations,
willful omission to reveal the 167 [1972]) by guaranteeing
information about the the right and mandating the
precise day of execution duty to afford access to
limits the exercise by the sources of information.
President of executive Hence, the fundamental right
clemency powers pursuant to therein recognized may be
Section 19, Article VII asserted by the people upon
(Executive Department) of the ratification of the
the 1987 Philippine Constitution without need
Constitution and Article 81 for any ancillary act of the
of the Revised Penal Code, Legislature (Id., at p. 165)
as amended, which provides What may be provided for
that the death sentence shall by the Legislature are
be carried out "without reasonable conditions and
prejudice to the exercise by limitations upon the access
the President of his to be afforded which must,
executive powers at all of necessity, be consistent
times." (Emphasis supplied) with the declared State
For instance, the President policy of full public
cannot grant reprieve, i.e., disclosure of all transactions
postpone the execution of a involving public interest
sentence to a day certain (Constitution, Art. II, Sec.
(People v. Vera, 65 Phil. 56, 28). However, it cannot be

54 ADMIN LAW CASES 0901

 overemphasized that accused after his final conviction is to violate the principle of co-equal
whatever limitation may be and coordinate powers of the three branches of our government.
prescribed by the
Legislature, the right and the III
duty under Art. III, Sec. 7
have become operative and
enforceable by virtue of the Third. The Court's resolution temporarily restraining the execution of
adoption of the New petitioner must be put in its proper perspective as it has been
Charter." (Decision of the grievously distorted especially by those who make a living by vilifying
Supreme Court En Banc in courts. Petitioner filed his Very Urgent Motion for Issuance of TRO on
Legaspi v. Civil Service December 28, 1998 at about 11:30 p.m. He invoked several
Commission, 150 SCRA grounds, viz: (1) that his execution has been set on January 4, the first
530, 534-535 [1987]. working day of 1999; (b) that members of Congress had either sought
for his executive clemency and/or review or repeal of the law
authorizing capital punishment; (b.1) that Senator Aquilino Pimentel's
The same motion to compel Judge Ponferrada to reveal the date of resolution asking that clemency be granted to the petitioner and that
execution of petitioner Echegaray was filed by his counsel, Atty.
capital punishment be reviewed has been concurred by thirteen (13)
Theodore Te, on December 7, 1998. He invoked his client's right to other senators; (b.2) Senate President Marcelo Fernan and Senator
due process and the public's right to information. The Solicitor
Miriam S. Defensor have publicly declared they would seek a review
General, as counsel for public respondents, did not oppose petitioner's of the death penalty law; (b.3) Senator Paul Roco has also sought the
motion on the ground that this Court has no more jurisdiction over the
repeal of capital punishment, and (b.4) Congressman Salacrib Baterina,
process of execution of Echegaray. This Court granted the relief prayed Jr., and thirty five (35) other congressmen are demanding review of the
for by the Secretary of Justice and by the counsel of the petitioner in its same law.
Resolution of December 15, 1998. There was not a whimper of protest
from the public respondents and they are now estopped from
contending that this Court has lost its jurisdiction to grant said relief. When the Very Urgent Motion was filed, the Court was already in its
The jurisdiction of this Court does not depend on the convenience of traditional recess and would only resume session on January 18, 1999.
litigants. Even then, Chief Justice Hilario Davide, Jr. called the Court to a
Special Session on January 4, 1991 17 at 10. a.m. to deliberate on
petitioner's Very Urgent Motion. The Court hardly had five (5) hours to
II resolve petitioner's motion as he was due to be executed at 3 p.m. Thus,
the Court had the difficult problem of resolving whether petitioner's
Second. We likewise reject the public respondents' contention that the allegations about the moves in Congress to repeal or amend the Death
"decision in this case having become final and executory, its execution Penalty Law are mere speculations or not. To the Court's majority,
enters the exclusive ambit of authority of the executive department . . .. there were good reasons why the Court should not immediately dismiss
By granting the TRO, the Honorable Court has in effect granted petitioner's allegations as mere speculations and surmises. They noted
reprieve which is an executive function." 14 Public respondents cite as that petitioner's allegations were made in a pleading under oath and
their authority for this proposition, Section 19, Article VII of the were widely publicized in the print and broadcast media. It was also of
Constitution which reads: judicial notice that the 11th Congress is a new Congress and has no
less than one hundred thirty (130) new members whose views on
capital punishment are still unexpressed. The present Congress is
Except in cases of impeachment, or as
otherwise provided in this Constitution, the therefore different from the Congress that enacted the Death Penalty
President may grant reprieves, commutations, and Law (R.A. No. 7659) and the Lethal Injection Law (R.A. No. 8177). In
pardons, and remit fines and forfeitures after contrast, the Court's minority felt that petitioner's allegations lacked
conviction by final judgment. He shall also have clear factual bases. There was hardly a time to verify petitioner's
the power to grant amnesty with the concurrence allegations as his execution was set at 3 p.m. And verification from
of a majority of all the members of the Congress. Congress was impossible as Congress was not in session. Given these
constraints, the Court's majority did not rush to judgment but took an
extremely cautious stance by temporarily restraining the execution of
The text and tone of this provision will not yield to the interpretation petitioner. The suspension was temporary — "until June 15, 1999,
suggested by the public respondents. The provision is simply the coeval with the constitutional duration of the present regular session of
source of power of the President to grant reprieves, commutations, and Congress, unless it sooner becomes certain that no repeal or
pardons and remit fines and forfeitures after conviction by final modification of the law is going to be made." The extreme caution
judgment. It also provides the authority for the President to grant taken by the Court was compelled, among others, by the fear that any
amnesty with the concurrence of a majority of all the members of the error of the Court in not stopping the execution of the petitioner will
Congress. The provision, however, cannot be interpreted as denying preclude any further relief for all rights stop at the graveyard. As life
the power of courts to control the enforcement of their decisions after was at, stake, the Court refused to constitutionalize haste and the
their finality. In truth, an accused who has been convicted by final hysteria of some partisans. The Court's majority felt it needed the
judgment still possesses collateral rights and these rights can be certainty that the legislature will not petitioner as alleged by his
claimed in the appropriate courts. For instance, a death convict who counsel. It was believed that law and equitable considerations demand
become insane after his final conviction cannot be executed while in a no less before allowing the State to take the life of one its citizens.
state of insanity. 15 As observed by Antieau, "today, it is generally
assumed that due process of law will prevent the government from
The temporary restraining order of this Court has produced its desired
executing the death sentence upon a person who is insane at the time of
execution." 16 The suspension of such a death sentence is undisputably result, i.e., the crystallization of the issue whether Congress is disposed
to review capital punishment. The public respondents, thru the
an exercise of judicial power. It is not a usurpation of the presidential
power of reprieve though its effects is the same — the temporary Solicitor General, cite posterior events that negate beyond doubt the
suspension of the execution of the death convict. In the same vein, it possibility that Congress will repeal or amend the death penalty law.
cannot be denied that Congress can at any time amend R.A. No. 7659 He names these supervening events as follows:
by reducing the penalty of death to life imprisonment. The effect of
such an amendment is like that of commutation of sentence. But by no xxx xxx xxx
stretch of the imagination can the exercise by Congress of its plenary
power to amend laws be considered as a violation of the power of the a. The public pronouncement of President Estrada
President to commute final sentences of conviction. The powers of the that he will veto any law imposing the death
Executive, the Legislative and the Judiciary to save the life of a death penalty involving heinous crimes.
convict do not exclude each other for the simple reason that there is no b. The resolution of Congressman Golez, et al., that
higher right than the right to life. Indeed, in various States in the they are against the repeal of the law;
United States, laws have even been enacted expressly granting courts c. The fact that Senator Roco's resolution to repeal
the power to suspend execution of convicts and their constitutionality
the law only bears his signature and that of
has been upheld over arguments that they infringe upon the power of Senator Pimentel. 18
the President to grant reprieves. For the public respondents therefore to
contend that only the Executive can protect the right to life of an
55 ADMIN LAW CASES 0901
In their Supplemental Motion to Urgent Motion for Reconsideration,
the Solicitor General cited House Resolution No. 629 introduced by
Congressman Golez entitled "Resolution expressing the sense of the
House of Representatives to reject any move to review R.A. No. 7659
which provided for the reimposition of death penalty, notifying the
Senate, the Judiciary and the Executive Department of the position of
the House of Representative on this matter and urging the President to
exhaust all means under the law to immediately implement the death
penalty law." The Golez resolution was signed by 113 congressman as
of January 11, 1999. In a marathon session yesterday that extended up
3 o'clock in the morning, the House of Representative with minor, the
House of Representative with minor amendments formally adopted the
Golez resolution by an overwhelming vote. House Resolution No. 25
expressed the sentiment that the House ". . . does not desire at this time
to review Republic Act 7659." In addition, the President has stated that
he will not request Congress to ratify the Second Protocol in review of
the prevalence of heinous crimes in the country. In light of these
developments, the Court's TRO should now be lifted as it has served its
legal and humanitarian purpose.

A last note. In 1922, the famous Clarence Darrow predicted that ". . .
the question of capital punishment had been the subject of endless
discussion and will probably never be settled so long as men believe in
punishment." 19 In our clime and time when heinous crimes continue to
be unchecked, the debate on the legal and moral predicates of capital
punishment has been regrettably blurred by emotionalism because of
the unfaltering faith of the pro and anti-death partisans on the right and
righteousness of their postulates. To be sure, any debate, even if it is no
more than an exchange of epithets is healthy in a democracy. But when
the debate deteriorates to discord due to the overuse of words that
wound, when anger threatens to turn the majority rule to tyranny, it is
the especial duty of this Court to assure that the guarantees of the Bill
of Rights to the minority fully hold. As Justice Brennan reminds us ". .
. it is the very purpose of the Constitution — and particularly the Bill
of Rights — to declare certain values transcendent, beyond the reach of
temporary political majorities." 20 Man has yet to invent a better
hatchery of justice than the courts. It is a hatchery where justice will
bloom only when we can prevent the roots of reason to be blown away
by the winds of rage. The flame of the rule of law cannot be ignited by
rage, especially the rage of the mob which is the mother of unfairness.
The business of courts in rendering justice is to be fair and they can
pass their litmus test only when they can be fair to him who is
momentarily the most hated by society. 21

IN VIEW WHEREOF, the Court grants the public respondents' Urgent

Motion for Reconsideration and Supplemental Motion to Urgent
Motion for Reconsideration and lifts the Temporary Restraining Order
issued in its Resolution of January 4, 1999.

The Court also orders respondent trial court judge (Hon. Thelma A.
Ponferrada, Regional Trial Court, Quezon City, Branch 104) to set
anew the date for execution of the convict/petitioner in accordance
with applicable provisions of law and the Rules of Court, without
further delay.

SO ORDERED.

56 ADMIN LAW CASES 0901

DE JESUS, ET AL VS. COA GR No. 109023 12 August 1998 The pivotal issue raised in this petition is whether or not the petitioners
DOCTRINE: Interpretative regulations and those merely internal in are entitled to the payment of honoraria which they were receiving
nature, that is, regulating only the personnel of the administrative prior to the effectivity of Rep. Act 6758.
agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions issued by
Petitioners are employees of the Local Water Utilities Administration
administrative superiors concerning the rules or guidelines to be (LWUA). Prior to July 1, 1989, they were receiving honoraria as
followed by their subordinates in the performance of their duties. designated members of the LWUA Board Secretariat and the Pre-
FACTS: Petitioners(De Jesus) are employees of the Local Water Qualification, Bids and Awards Committee.
Utilities Administration (LWUA). Prior to July 1, 1989, they were
receiving honoraria as designated members of the LWUA Board
Secretariat and the Pre-Qualification, Bids and Awards Committee. On July 1, 1989, Republic Act No. 6758 (Rep. Act 6758), entitled "An
Upon the enactment of Republic Act No. 6758 (Rep. Act 6758), Act Prescribing A Revised Compensation and Position Classification
entitled "An Act Prescribing A Revised Compensation and Position System in the Government and For Other Purposes", took effect.
Classification System in the Government and For Other Purposes", Section 12 of said law provides for the consolidation of allowances and
some allowances and compensatoons were consolidated with the additional compensation into standardized salary rates. Certain
standardized salary rates of government employees. The Department of additional compensations, however, were exempted from
Budget and Management (DBM) issued Corporate Compensation consolidation.
Circular No. 10 (DBM-CCC No. 10), discontinuing without
qualification effective November 1, 1989, all allowances and fringe Sec. 12. Rep. Act 6758, reads —
benefits granted on top of basic salary. Complyinh therewith,the
assigned COA Leonardo Jamoralin, as corporate auditor, disallowed on
post audit, the payment of honoraria to the herein petitioners. Sec. 12. — Consolidation of Allowances and
Pet. Argument: 1. That the DBM Circular is repugnant to the law it Compensation. — Allowances, except for
seeks to implement since RA 6758 authorizes payment of allowances representation and transportation allowances;
and compensation not included in the standardized salary. 2. And it is clothing and laundry allowances; subsistense
without force and effect because it was not published in the Official allowance of marine officers and crew on board
Gazette; petitioners stressed. government vessels and hospital personnel;
hazard pay: allowances of foreign services
personnel stationed abroad; and such other
COA Argument: 1. COA, on the other hand, pointed out that to allow additional compensation not otherwise specified
honoraria without statutory, presidential or DBM authority, as in this herein as may be determined by the DBM, shall
case, would run counter to Sec. 8, Article IX-B of the Constitution be deemed included in the standardized salary
which proscribes payment of "additional or double compensation, rules herein prescribed. Such other additional
unless specifically authorized by law." 2. DBM-CCC No. 10 need not compensation, whether in cash or in kind, being
be published for it is merely an interpretative regulation of a law received by incumbents as of July 1, 1989 no
already published. integrated into the standardized salary rates shall
continue to be authorized.1 (Emphasis supplied)
The Court first ruled on the 2nd argument since it is determinative of
whether it should still tackle the 1st argumet of the parties. To implement Rep. Act 6758, the Department of Budget and
ISSUE: Whether DBM CCC No 10 is legally effective despite lack of Management (DBM) issued Corporate Compensation Circular No. 10
publication. (DBM-CCC No. 10), discontinuing without qualification effective
HELD: NO. Following the doctrine enunciated in Tanada, publication November 1, 1989, all allowances and fringe benefits granted on top of
in the Official Gazette or in a newspaper of general circulation in the basic salary.
Philippines is required since DBM-CCC No. 10 is in the nature of an
administrative circular the purpose of which is to enforce or implement
an existing law. Stated differently, to be effective and enforceable, Paragraph 5.6 of DBM-CCC No. 10 provides:
DBM-CCC No. 10 must go through the requisite publication in the
Official Gazette or in a newspaper of general circulation in the Payment of other allowances fringe benefits and
Philippines. the government officials and employees concerned should all other forms of compensation granted on top of
be apprised and alerted by the publication of subject circular in the basic salary, whether in cash or in kind, . . . shall
Official Gazette or in a newspaper of general circulation in the be discontinued effective November 1, 1989.
Philippines — to the end that they be given amplest opportunity to Payment made for such allowances fringe benefits
voice out whatever opposition they may have, and to ventilate their after said date shall be considered as illegal
stance on the matter. disbursement of public funds.2
Note: Tanada vs. Tuvera enumerate those that need and need not be
published.
Needs publication: statutes ( local or private law), presidential decree Pursuant to the aforesaid Law and Circular, respondent Leonardo
and executive orders, charter of a city. Jamoralin, as corporate auditor, disallowed on post audit, the payment
of honoraria to the herein petitioners.

Need not be published are: Interpretative regulations and those merely

internal in nature, that is, regulating only the personnel of the Aggrieved, petitioners appealed to the COA, questioning the validity
administrative agency and not the public, need not be published. and enforceability of DBM-CCC No. 10. More specifically, petitioners
Neither is publication required of the so-called letters of instructions contend that DBM-CCC No. 10 is inconsistent with the provisions of
issued by administrative superiors concerning the rules or guidelines to Rep. Act 6758 (the law it is supposed to implement) and, therefore,
be followed by their subordinates in the performance of their duties. void. And it is without force and effect because it was not published in
the Official Gazette; petitioners stressed.

G.R. No. 109023 August 12, 1998

In its decision dated January 29, 1993, the COA upheld the validity and
effectivity of DBM-CCC No. 10 and sanctioned the disallowance of
RODOLFO S. DE JESUS, EDELWINA DE PARUNGAO, VENUS petitioners' honoraria.3
M. POZON AND other similarly situated personnel of the LOCAL
WATER UTILITIES ADMINISTRATION (LWUA), petitioners,
vs. Undaunted, petitioners found their way to this court via the present
COMMISSION ON AUDIT AND LEONARDO L. JAMORALIN petition, posing the questions:
in his capacity as COA-LWUA Corporate Auditor, respondents.
(1) Whether or not par. 5.6 of DBM-CCC No. 10
can supplant or negate the express provisions of
Sec. 12 of Rep. Act 6758 which it seeks to
implement; and

PURISIMA, J.:
57 ADMIN LAW CASES 0901
 (2) Whether or not DBM-CCC No. 10 is legally Covered by this rule are presidential decrees and
effective despite its lack of publication in the executive orders promulgated by the President in
Official Gazette. the exercise of legislative powers whenever the
same are validly delegated by the legislature or, at
present, directly conferred by the Constitution.
Petitioners are of the view that par. 5.6 of DBM-CCC No. 10
prohibiting fringe benefits and allowances effective November 1, 1989, Administrative rules and regulations must also be
is violative of Sec. 12 of Rep. Act 6758 which authorizes payment of published if their purpose is to enforced or
additional compensation not integrated into the standardized salary implement existing law pursuant to a valid
which incumbents were enjoying prior to July 1, 1989. delegation.

To buttress petitioners' stance, the Solicitor General presented a Interpretative regulations and those merely
Manifestation and Motion in Lieu of Comment, opining that Sec. 5.6 of internal in nature, that is, regulating only the
DBM-CCC No. 10 is a nullity for being inconsistent with and personnel of the administrative agency and not the
repugnant to the very law it is intended to implement. The Solicitor public, need not be published. Neither is
General theorized, that: publication required of the so-called letters of
instructions issued by administrative superiors
concerning the rules or guidelines to be followed
. . . following the settled principle that by their subordinates in the performance of their
implementing rules must necessarily adhere to duties.
and not depart from the provisions of the statute it
seeks to implement, it is crystal clear that Section
5.6 of DBM-CCC No. 10 is a patient nullity. An Accordingly, even the charter of a city must be
published notwithstanding that it applies to only
implementing rule can only be declared valid if it
is in harmony with the provision of the legislative one portion of the national territory and directly
affects only the inhabitants of that place. All
act and for the sole purpose of carrying into effect
its general provisions. When an implementing presidential decrees must be published, including,
rule is inconsistent or repugnant to the provision even, say those naming a public place after a
of the statute it seeks to interpret, the mandate of favored individual or exempting him from a
the statute must prevail and must be followed. 4 certain prohibitions or requirements. The circulars
issued by the Monetary Board must be published
if they are meant not merely interpret but to "fill
Respondent COA, on the other hand, pointed out that to allow in details" of the Central Bank Act which that
honoraria without statutory, presidential or DBM authority, as in this body supposed to enforce. (Emphasis ours)
case, would run counter to Sec. 8, Article IX-B of the Constitution
which proscribes payment of "additional or double compensation,
unless specifically authorized by law." Therefore, the grant of The same ruling was reiterated in the case of Philippine
Association of Service Exporters, Inc. vs. Torres, 212 SCRA
honoraria or like allowances requires a specific legal or statutory
authority. And DBM-CCC No. 10 need not be published for it is 299 [1992].
merely an interpretative regulation of a law already published 5; COA
concluded. On the need for publication of subject DBM-CCC No. 10, we rule in
the affirmative. Following the doctrine enunciated
In his Motion for Leave to intervene, the DBM Secretary asserted that in Tanada, publication in the Official Gazette or in a newspaper of
general circulation in the Philippines is required since DBM-CCC No.
the honoraria in question are considered included in the basic salary,
for the reason that they are not listed as exceptions under Sec. 12 of 10 is in the nature of an administrative circular the purpose of which is
to enforce or implement an existing law. Stated differently, to be
Rep. Act 6758.
effective and enforceable, DBM-CCC No. 10 must go through the
requisite publication in the Official Gazette or in a newspaper of
Before resolving the other issue — whether or not Paragraph 5.6 of general circulation in the Philippines.
DBM-CCC No. 10 can supplant or negate the pertinent provisions of
Rep. Act 6758 which it seeks to implement, we have to tackle first the
other question whether or not DBM-CCC No. 10 has legal force and In the present case under scrutiny, it is decisively clear that DBM-CCC
effect notwithstanding the absence of publication thereof in the Official No. 10, which completely disallows payment of allowances and other
Gazette. This should take precedence because should we rule that additional compensation to government officials and employees,
publication in the Official Gazette or in a newspaper of general starting November 1, 1989, is not a mere interpretative or internal
circulation in the Philippines 6 is sine qua non to the effectiveness or regulation. It is something more than that. And why not, when it tends
enforceability of DBM-CCC No. 10, resolution of the first issue to deprive government workers of their allowances and additional
posited by petitioner would not be necessary. compensation sorely needed to keep body and soul together. At the
very least, before the said circular under attack may be permitted to
substantially reduce their income, the government officials and
The applicable provision of law requiring publication in the Official employees concerned should be apprised and alerted by the publication
Gazette is found in Article 2 of the New Civil Code of the Philippines, of subject circular in the Official Gazette or in a newspaper of general
which reads: circulation in the Philippines — to the end that they be given amplest
opportunity to voice out whatever opposition they may have, and to
Art. 2. Laws shall take effect after fifteen days ventilate their stance on the matter. This approach is more in keeping
following the completion of their publications in with democratic precepts and rudiments of fairness and transparency.
the Official Gazette, unless it is otherwise
provided. This code shall take effect one year In light of the foregoing disquisition on the ineffectiveness of DBM-
after such publication. CCC No. 10 due to its non-publication in the Official Gazette or in a
newspaper of general circulation in the country, as required by law,
In Tanada v. Tuvera, 146 SCRA 453, 454, this Court succinctly resolution of the other issue at bar is unnecessary.
construed the aforecited provision of law in point, thus:
WHEREFORE, the Petition is hereby GRANTED, the assailed
We hold therefore that all statutes, including those Decision of respondent Commission on Audit is SET ASIDE, and
of local application and privates laws, shall be respondents are ordered to pass on audit the honoraria of petitioners.
published as a condition for their effectivity, No pronouncement as to costs.
which shall begin after fifteen days after
publication unless a different effectivity date is SO ORDERED.
fixed by the legislature.

58 ADMIN LAW CASES 0901

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. G.R. No. 119761 August 29, 1996
HON. COURT OF APPEALS, HON. COURT OF TAX APPEALS
and FORTUNE TOBACCO CORPORATION, respondents. G.R.
COMMISSIONER OF INTERNAL REVENUE, petitioner,
No. 119761 August 29, 1996 vs.
VITUG, J.:p
HON. COURT OF APPEALS, HON. COURT OF TAX APPEALS
Facts and FORTUNE TOBACCO CORPORATION, respondents.
As a manufacturer of various brands of cigarettes, Fortune Tobacco
Corporation was issued separate certificates of trademark registration
over “Champion”, “Hope”, and “More” by the Philippine Patent
Office. In a letter, the Commissioner of Internal Revenue stated that
the initial position of the government was to include “Champion”, VITUG, J.:p
“Hope”, and “More” to the list of foreign brands. However, due to the
change of names from “Hope” to “Hope Luxury” and “More” to
“Premium More”; and due to a proof submitted to the BIR that The Commissioner of Internal Revenue ("CIR") disputes the decision,
Champion is an original brand by Fortune, said brands were listed as dated 31 March 1995, of respondent Court of Appeals 1 affirming the
locally manufactured not bearing foreign brands. As such, the brands 10th August 1994 decision and the 11th October 1994 resolution of the
were subject to ad valorem tax. Later on, RA 7654 was enacted, Court of Tax Appeals 2 ("CTA") in C.T.A. Case No. 5015, entitled
affecting the taxation on locally manufactured cigarettes. "Fortune Tobacco Corporation vs. Liwayway Vinzons-Chato in her
A month after the enactment of the RA, Revenue Memorandum capacity as Commissioner of Internal Revenue."
Circular 37-93 was released, explaining that as locally manufactured
cigarettes with a foreign brand, “Hope”, “More”, and “Champion” are The facts, by and large, are not in dispute.
subject to 55% ad valorem tax. Fortune filed a petition for review with
the CTA. The CTA ruled in favor of Fortune. The CIR then filed a
petition for review with the CA, the CA affirmed the decision of the Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the
CTA. In the present Petition, the Solicitor General, for the CIR, argues manufacture of different brands of cigarettes.
that as an interpretative ruling or opinion, RMC 37-93 may take effect
even without publication. On various dates, the Philippine Patent Office issued to the corporation
Issue separate certificates of trademark registration over "Champion,"
W/N RMC 37-93 may take effect without publication? "Hope," and "More" cigarettes. In a letter, dated 06 January 1987, of
Held then Commissioner of Internal Revenue Bienvenido A. Tan, Jr., to
No, RMC 37-93 may not take effect without publication. Deputy Minister Ramon Diaz of the Presidential Commission on Good
Government, "the initial position of the Commission was to classify
RMC 97-93 does not merely interpret RA 7654, rather it places “Hope 'Champion,' 'Hope,' and 'More' as foreign brands since they were listed
Luxury”, “Premium More”, and “Champion” under the category of in the World Tobacco Directory as belonging to foreign companies.
locally manufactured bearing foreign brands. Without RMC 37-93, RA However, Fortune Tobacco changed the names of 'Hope' to
7654 would not affect the taxation of said brands. 'Hope Luxury' and 'More' to 'Premium More,' thereby removing the
said brands from the foreign brand category. Proof was also submitted
to the Bureau (of Internal Revenue ['BIR']) that 'Champion' was an
original Fortune Tobacco Corporation register and therefore a local
brand." 3 Ad Valorem taxes were imposed on these brands, 4 at the
following rates:

BRAND AD VALOREM TAX RATE

E.O. 22 and E.O. 273 RA 6956
06-23-86 07-25-87 06-18-90
07-01-86 01-01-88 07-05-90

Hope Luxury M. 100's

Sec. 142, (c), (2) 40% 45%
Hope Luxury M. King
Sec. 142, (c), (2) 40% 45%
More Premium M. 100's
Sec. 142, (c), (2) 40% 45%
More Premium International
Sec. 142, (c), (2) 40% 45%
Champion Int'l. M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. 100's
Sec. 142, (c), (2) 40% 45%
Champion M. King
Sec. 142, (c), last par. 15% 20%
Champion Lights
Sec. 142, (c), last par. 15% 20% 5

A bill, which later became Republic Act ("RA") No.

7654, 6 was enacted, on 10 June 1993, by the legislature and
signed into law, on 14 June 1993, by the President of the
Philippines. The new law became effective on 03 July 1993.
It amended Section 142(c)(1) of the National Internal
Revenue Code ("NIRC") to read; as follows:

Sec. 142. Cigars and Cigarettes. —

xxx xxx xxx

(c) Cigarettes packed by machine. — There shall

be levied, assessed and collected on cigarettes
packed by machine a tax at the rates prescribed

59 ADMIN LAW CASES 0901

 below based on the constructive manufacturer's by its owner to the local
wholesale price or the actual manufacturer's manufacturer. Whenever it
wholesale price, whichever is higher: has to be determined
whether or not a cigarette
bears a foreign brand, the
(1) On locally manufactured cigarettes which
are currently classified and taxed at fifty-five listing of brands
percent (55%) or the exportation of which is not manufactured in foreign
authorized by contract or otherwise, fifty-five countries appearing in the
(55%) provided that the minimum tax shall not be current World Tobacco
less than Five Pesos (P5.00) per pack. Directory shall govern.

(2) On other locally manufactured cigarettes, Under the foregoing, the test for imposition of the
forty-five percent (45%) provided that the 55% ad valorem tax on cigarettes is that the
minimum tax shall not be less than Three Pesos locally manufactured cigarettes bear a foreign
(P3.00) per pack. brand regardless of whether or not the right to use
or title to the foreign brand was sold or transferred
by its owner to the local manufacturer. The brand
xxx xxx xxx must be originally owned by a foreign
manufacturer or producer. If ownership of the
When the registered manufacturer's wholesale cigarette brand is, however, not definitely
price or the actual manufacturer's wholesale price determinable, ". . . the listing of brands
whichever is higher of existing brands of manufactured in foreign countries appearing in
cigarettes, including the amounts intended to the current World Tobacco Directory shall
cover the taxes, of cigarettes packed in twenties govern. . . ."
does not exceed Four Pesos and eighty centavos
(P4.80) per pack, the rate shall be twenty percent "HOPE" is listed in the World Tobacco Directory
(20%). 7 (Emphasis supplied) as being manufactured by (a) Japan Tobacco,
Japan and (b) Fortune Tobacco, Philippines.
About a month after the enactment and two (2) "MORE" is listed in the said directory as being
days before the effectivity of RA 7654, Revenue manufactured by: (a) Fills de Julia Reig, Andorra;
Memorandum Circular No. 37-93 ("RMC 37-93"), was (b) Rothmans, Australia; (c) RJR-Macdonald
issued by the BIR the full text of which expressed: Canada; (d) Rettig-Strenberg, Finland; (e)
Karellas, Greece; (f) R.J. Reynolds, Malaysia; (g)
Rothmans, New Zealand; (h) Fortune Tobacco,
REPUBLIKA NG PILIPINAS Philippines; (i) R.J. Reynolds, Puerto Rico; (j)
KAGAWARAN NG PANANALAPI R.J. Reynolds, Spain; (k) Tabacalera, Spain; (l)
KAWANIHAN NG RENTAS INTERNAS R.J. Reynolds, Switzerland; and (m) R.J.
Reynolds, USA. "Champion" is registered in the
said directory as being manufactured byJ (a)
Commonwealth Bangladesh; (b) Sudan, Brazil; u
(c) Japan Tobacco, Japan; (d) Fortune Tobacco,
l
Philippines; (e) Haggar, Sudan; and (f) Tabacy
Reunies, Switzerland.
1
,
Since there is no showing who among the above-
listed manufacturers of the cigarettes bearing the
1 it
said brands are the real owner/s thereof, then
9
follows that the same shall be considered foreign
brand for purposes of determining the 9 ad
valorem tax pursuant to Section 142 of3 the
National Internal Revenue Code. As held in BIR
REVENUE MEMORANDUM CIRCULAR NO. 37-93 Ruling No. 410-88, dated August 24, 1988, "in
cases where it cannot be established or there is
dearth of evidence as to whether a brand is
SUBJECT: Reclassification of Cigarettes Subject foreign or not, resort to the World Tobacco
to Excise Tax Directory should be made."

TO: All Internal Revenue Officers and Others In view of the foregoing, the aforesaid brands of
Concerned. cigarettes, viz: "HOPE," "MORE" and
"CHAMPION" being manufactured by Fortune
In view of the issues raised on whether "HOPE," Tobacco Corporation are hereby considered
"MORE" and "CHAMPION" cigarettes which are locally manufactured cigarettes bearing a foreign
locally manufactured are appropriately considered brand subject to the 55% ad valorem tax on
as locally manufactured cigarettes bearing a cigarettes.
foreign brand, this Office is compelled to review
the previous rulings on the matter. Any ruling inconsistent herewith is revoked or
modified accordingly.
Section 142 (c)(1) National Internal Revenue
Code, as amended by R.A. No. 6956, provides:

On locally manufactured
cigarettes bearing a foreign
brand, fifty-five percent
(55%) Provided, That this
rate shall apply regardless of
whether or not the right to
use or title to the foreign
brand was sold or transferred

60 ADMIN LAW CASES 0901

 SO ORDERED. Y 9
W
A
In its resolution, dated 11 October 1994, the CTA dismissed
Y for reconsideration.
for lack of merit the motion
V
The CIR forthwith filedI a petition for review with the Court
of Appeals, questioning N the CTA's 10th August 1994
decision and 11th October Z 1994 resolution. On 31 March
1993, the appellate court's
O Special Thirteenth Division
affirmed in all respects the
N assailed decision and resolution.
S
- Solicitor General argues: That —
In the instant petition, the
C
H
A I. RMC 37-93 IS A
T RULING OR OPINION OF
O THE COMMISSIONER OF
INTERNAL REVENUE
C INTERPRETING THE
o PROVISIONS OF THE
m TAX CODE.
m
i II. BEING AN
s INTERPRETATIVE
s RULING OR OPINION,
i THE PUBLICATION OF
o RMC 37-93, FILING OF
n COPIES THEREOF WITH
e THE UP LAW CENTER
r AND PRIOR HEARING
ARE NOT NECESSARY
On 02 July 1993, at about 17:50 hours, BIR Deputy TO ITS VALIDITY,
Commissioner Victor A. Deoferio, Jr., sent via telefax a EFFECTIVITY AND
copy of RMC 37-93 to Fortune Tobacco but it was ENFORCEABILITY.
addressed to no one in particular. On 15 July 1993, Fortune
Tobacco received, by ordinary mail, a certified xerox copy III. PRIVATE
of RMC 37-93. RESPONDENT IS
DEEMED TO HAVE BEEN
In a letter, dated 19 July 1993, addressed to the appellate NOTIFIED OR RMC 37-93
division of the BIR, Fortune Tobacco requested for a review, ON JULY 2, 1993.
reconsideration and recall of RMC 37-93. The request was
denied on 29 July 1993. The following day, or on 30 July IV. RMC 37-93 IS NOT
1993, the CIR assessed Fortune Tobacco for ad valorem tax DISCRIMINATORY
deficiency amounting to P9,598,334.00. SINCE IT APPLIES TO
ALL LOCALLY
On 03 August 1993, Fortune Tobacco filed a petition for MANUFACTURED
review with the CTA. 8 CIGARETTES
SIMILARLY SITUATED
AS "HOPE," "MORE" AND
On 10 August 1994, the CTA upheld the position of Fortune "CHAMPION"
Tobacco and adjudged: CIGARETTES.

WHEREFORE, Revenue Memorandum Circular V. PETITIONER WAS

No. 37-93 reclassifying the brands of NOT LEGALLY
cigarettes, viz: "HOPE," "MORE" and PROSCRIBED FROM
"CHAMPION" being manufactured by Fortune RECLASSIFYING "HOPE,"
Tobacco Corporation as locally manufactured "MORE" AND
cigarettes bearing a foreign brand subject to the "CHAMPION"
55% ad valorem tax on cigarettes is found to be CIGARETTES BEFORE
defective, invalid and unenforceable, such that THE EFFECTIVITY OF
when R.A. No. 7654 took effect on July 3, 1993, R.A. NO. 7654.
the brands in question were not CURRENTLY
CLASSIFIED AND TAXED at 55% pursuant to
Section 1142(c)(1) of the Tax Code, as amended VI. SINCE RMC 37-93 IS
by R.A. No. 7654 and were therefore still AN INTERPRETATIVE
classified as other locally manufactured cigarettes RULE, THE INQUIRY IS
and taxed at 45% or 20% as the case may be. NOT INTO ITS VALIDITY,
EFFECTIVITY OR
ENFORCEABILITY BUT
Accordingly, the deficiency ad valorem tax INTO ITS CORRECTNESS
assessment issued on petitioner Fortune Tobacco OR PROPRIETY; RMC 37-
Corporation in the amount of P9,598,334.00, 93 IS CORRECT. 10
exclusive of surcharge and interest, is hereby
canceled for lack of legal basis.
In fine, petitioner opines that RMC 37-93 is merely an
interpretative ruling of the BIR which can thus become
Respondent Commissioner of Internal Revenue is effective without any prior need for notice and hearing, nor
hereby enjoined from collecting the deficiency tax publication, and that its issuance is not discriminatory since
assessment made and issued on petitioner in it would apply under similar circumstances to all locally
relation to the implementation of RMC No. 37-93. manufactured cigarettes.
61 ADMIN LAW CASES 0901
 The Court must sustain both the appellate court and the tax cigarettes not bearing foreign brand subject to 45% ad
court. valorem tax. Hence, without RMC 37-93, the enactment of
RA 7654, would have had no new tax rate consequence on
Petitioner stresses on the wide and ample authority of the private respondent's products. Evidently, in order to place
"Hope Luxury," "Premium More," and "Champion"
BIR in the issuance of rulings for the effective
implementation of the provisions of the National Internal cigarettes within the scope of the amendatory law and
Revenue Code. Let it be made clear that such authority of subject them to an increased tax rate, the now disputed RMC
the Commissioner is not here doubted. Like any other 37-93 had to be issued. In so doing, the BIR not simply
government agency, however, the CIR may not disregard intrepreted the law; verily, it legislated under its quasi-
legal requirements or applicable principles in the exercise of legislative authority. The due observance of the
its quasi-legislative powers. requirements of notice, of hearing, and of publication should
not have been then ignored.

Let us first distinguish between two kinds of administrative

issuances — a legislative rule and an interpretative rule. Indeed, the BIR itself, in its RMC 10-86, has observed and
provided:

In Misamis Oriental Association of Coco Traders,

Inc., vs. Department of Finance Secretary, 11 the Court RMC NO. 10-86
expressed: Effectivity of Internal Revenue Rules and
Regulations

. . . a legislative rule is in the nature of

subordinate legislation, designed to implement a It has been observed that one of the problem areas
primary legislation by providing the details bearing on compliance with Internal Revenue Tax
thereof . In the same way that laws must have the rules and regulations is lack or insufficiency of
benefit of public hearing, it is generally required due notice to the tax paying public. Unless there
that before a legislative rule is adopted there must is due notice, due compliance therewith may not
be reasonably expected. And most importantly,
be hearing. In this connection, the Administrative
Code of 1987 provides: their strict enforcement could possibly suffer from
legal infirmity in the light of the constitutional
provision on "due process of law" and the essence
Public Participation. — If not otherwise required of the Civil Code provision concerning effectivity
by law, an agency shall, as far as practicable, of laws, whereby due notice is a basic
publish or circulate notices of proposed rules and requirement (Sec. 1, Art. IV, Constitution; Art. 2,
afford interested parties the opportunity to submit New Civil Code).
their views prior to the adoption of any rule.
In order that there shall be a just enforcement of
(2) In the fixing of rates, no rule or final order rules and regulations, in conformity with the basic
shall be valid unless the proposed rates shall have element of due process, the following procedures
been published in a newspaper of general are hereby prescribed for the drafting, issuance
circulation at least two (2) weeks before the first and implementation of the said Revenue Tax
hearing thereon. Issuances:

(3) In case of opposition, the rules on contested (1) This Circular shall apply
cases shall be observed. only to (a) Revenue
Regulations; (b) Revenue
In addition such rule must be published. On the Audit Memorandum Orders;
other hand, interpretative rules are designed to and (c) Revenue
provide guidelines to the law which the Memorandum Circulars and
administrative agency is in charge of enforcing. 12 Revenue Memorandum
Orders bearing on internal
revenue tax rules and
It should be understandable that when an administrative rule regulations.
is merely interpretative in nature, its applicability needs
nothing further than its bare issuance for it gives no real
consequence more than what the law itself has already (2) Except when the law
prescribed. When, upon the other hand, the administrative otherwise expressly
rule goes beyond merely providing for the means that can provides, the aforesaid
facilitate or render least cumbersome the implementation of internal revenue tax
the law but substantially adds to or increases the burden of issuances shall not begin to
those governed, it behooves the agency to accord at least to be operative until after due
those directly affected a chance to be heard, and thereafter to notice thereof may be fairly
be duly informed, before that new issuance is given the force presumed.
and effect of law.
Due notice of the said
A reading of RMC 37-93, particularly considering the issuances may be fairly
circumstances under which it has been issued, convinces us presumed only after the
that the circular cannot be viewed simply as a corrective following procedures have
measure (revoking in the process the previous holdings of been taken;
past Commissioners) or merely as construing Section
142(c)(1) of the NIRC, as amended, but has, in fact and most xxx xxx xxx
importantly, been made in order to place "Hope Luxury,"
"Premium More" and "Champion" within the classification
of locally manufactured cigarettes bearing foreign brands (5) Strict compliance with
and to thereby have them covered by RA 7654. Specifically, the foregoing procedures is
enjoined. 13
the new law would have its amendatory provisions applied
to locally manufactured cigarettes which at the time of its
effectivity were not so classified as bearing foreign brands. Nothing on record could tell us that it was either impossible
Prior to the issuance of the questioned circular, "Hope or impracticable for the BIR to observe and comply with the
Luxury," "Premium More," and "Champion" cigarettes were above requirements before giving effect to its questioned
in the category of locally manufactured circular.
62 ADMIN LAW CASES 0901
 Not insignificantly, RMC 37-93 might have likewise (b) "WINNER" is listed as
infringed on uniformity of taxation. being manufactured by
Alpha Tobacco, Bangladesh;
Article VI, Section 28, paragraph 1, of the 1987 Constitution Nangyang, Hongkong; Joo
Lan, Malaysia; Pakistan
mandates taxation to be uniform and equitable. Uniformity
requires that all subjects or objects of taxation, similarly Tobacco Co., Pakistan;
situated, are to be treated alike or put on equal footing both Premier Tobacco, Pakistan
in privileges and liabilities. 14 Thus, all taxable articles or and Haggar, Sudan (Exhibit
kinds of property of the same class must be taxed at the "U-4"). 17
same rate 15 and the tax must operate with the same force
and effect in every place where the subject may be found. The court quoted at length from the transcript of the hearing
conducted on 10 August 1993 by the Committee on Ways
Apparently, RMC 37-93 would only apply to "Hope and Means of the House of Representatives; viz:
Luxury," "Premium More" and "Champion" cigarettes and,
unless petitioner would be willing to concede to the THE CHAIRMAN. So you have specific
submission of private respondent that the circular should, as information on Fortune Tobacco alone. You don't
in fact my esteemed colleague Mr. Justice Bellosillo so have specific information on other tobacco
expresses in his separate opinion, be manufacturers. Now, there are other brands which
considered adjudicatory in nature and thus violative of due are similarly situated. They are locally
process following the Ang Tibay 16 doctrine, the measure manufactured bearing foreign brands. And may I
suffers from lack of uniformity of taxation. In its decision, enumerate to you all these brands, which are also
the CTA has keenly noted that other cigarettes bearing listed in the World Tobacco Directory . . . Why
foreign brands have not been similarly included within the were these brand not reclassified at 55 if your
scope of the circular, such as — want to give a level playing filed to foreign
manufacturers?
1. Locally manufactured by ALHAMBRA
INDUSTRIES, INC. MS. CHATO. Mr. Chairman, in fact, we have
already prepared a Revenue Memorandum
(a) "PALM TREE" is listed Circular that was supposed to come after RMC
as manufactured by office of No. 37-93 which have really named specifically
Monopoly, Korea (Exhibit the list of locally manufactured cigarettes bearing
"R") a foreign brand for excise tax purposes and
includes all these brands that you mentioned at 55
percent except that at that time, when we had to
2. Locally manufactured by LA SUERTE CIGAR come up with this, we were forced to study the
and CIGARETTE COMPANY brands of Hope, More and Champion because we
were given documents that would indicate the that
(a) "GOLDEN KEY" is these brands were actually being claimed or
listed being manufactured by patented in other countries because we went by
United Tobacco, Pakistan Revenue Memorandum Circular 1488 and we
(Exhibit "S") wanted to give some rationality to how it came
about but we couldn't find the rationale there. And
we really found based on our own interpretation
(b) "CANNON" is listed as that the only test that is given by that existing law
being manufactured by would be registration in the World Tobacco
Alpha Tobacco, Bangladesh Directory. So we came out with this proposed
(Exhibit "T") revenue memorandum circular which we
forwarded to the Secretary of Finance except that
3. Locally manufactured by LA PERLA at that point in time, we went by the Republic Act
INDUSTRIES, INC. 7654 in Section 1 which amended Section 142, C-
1, it said, that on locally manufactured cigarettes
which are currently classified and taxed at 55
(a) "WHITE HORSE" is percent. So we were saying that when this law
listed as being manufactured took effect in July 3 and if we are going to come
by Rothman's, Malaysia up with this revenue circular thereafter, then I
(Exhibit "U") think our action would really be subject to
question but we feel that . . . Memorandum
(b) "RIGHT" is listed as Circular Number 37-93 would really cover even
being manufactured by similarly situated brands. And in fact, it was really
SVENSKA, Tobaks, Sweden because of the study, the short time that we were
(Exhibit "V-1") given to study the matter that we could not
include all the rest of the other brands that would
have been really classified as foreign brand if we
4. Locally manufactured by MIGHTY
went by the law itself. I am sure that by the
CORPORATION
reading of the law, you would without that ruling
by Commissioner Tan they would really have
(a) "WHITE HORSE" is been included in the definition or in the
listed as being manufactured classification of foregoing brands. These brands
by Rothman's, Malaysia that you referred to or just read to us and in fact
(Exhibit "U-1") just for your information, we really came out with
a proposed revenue memorandum circular for
5. Locally manufactured by STERLING those brands. (Emphasis supplied)
TOBACCO CORPORATION
(Exhibit "FF-2-C," pp. V-5 TO V-6, VI-1 to VI-
(a) "UNION" is listed as 3).
being manufactured by
Sumatra Tobacco, Indonesia xxx xxx xxx
and Brown and Williamson,
USA (Exhibit "U-3")
63 ADMIN LAW CASES 0901
 MS. CHATO. . . . But I do agree with you now The SC also outlined that administrative bodies, like the CIR, although
that it cannot and in fact that is why I felt that we . not strictly bound by the Rules of Court must also make sure that they
. . I wanted to come up with a more extensive comply to the requirements of due process. For administrative bodies,
coverage and precisely why I asked that revenue due process can be complied with by observing the following:
memorandum circular that would cover all those (1) The right to a hearing which includes the right of the party
similarly situated would be prepared but because interested or affected to present his own case and submit evidence in
of the lack of time and I came out with a study of support thereof.
RA 7654, it would not have been possible to really (2) Not only must the party be given an opportunity to present his case
come up with the reclassification or the proper and to adduce evidence tending to establish the rights which he asserts
classification of all brands that are listed there. . but the tribunal must consider the evidence presented.
. (emphasis supplied) (Exhibit "FF-2d," page IX- (3) While the duty to deliberate does not impose the obligation to
1) decide right, it does imply a necessity which cannot be disregarded,
namely, that of having something to support its decision. A decision
with absolutely nothing to support it is a nullity, a place when directly
xxx xxx xxx
attached.
(4) Not only must there be some evidence to support a finding or
HON. DIAZ. But did you not consider that there conclusion but the evidence must be “substantial.” Substantial
are similarly situated? evidence is more than a mere scintilla It means such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.
MS. CHATO. That is precisely why, Sir, after we (5) The decision must be rendered on the evidence presented at the
have come up with this Revenue Memorandum hearing, or at least contained in the record and disclosed to the parties
Circular No. 37-93, the other brands came about affected.
the would have also clarified RMC 37-93 by I (6) The administrative body or any of its judges, therefore, must act on
was saying really because of the fact that I was its or his own independent consideration of the law and facts of the
just recently appointed and the lack of time, the controversy, and not simply accept the views of a subordinate in
period that was allotted to us to come up with the arriving at a decision.
right actions on the matter, we were really caught (7) The administrative body should, in all controversial questions,
by the July 3 deadline. But in fact, We have render its decision in such a manner that the parties to the proceeding
already prepared a revenue memorandum can know the various issues involved, and the reasons for the decisions
circular clarifying with the other . . . does not yet, rendered. The performance of this duty is inseparable from the
would have been a list of locally manufactured authority conferred upon it.
cigarettes bearing a foreign brand for excise tax
purposes which would include all the other The legislation which created the Court of Industrial Relations and
brands that were mentioned by the Honorable under which it acts is new. The failure to grasp the fundamental issue
Chairman. (Emphasis supplied) (Exhibit "FF-2- involved is not entirely attributable to the parties adversely affected by
d," par. IX-4). 18 the result. Accordingly, the motion for a new trial should be and the
same is hereby granted, and the entire record of this case shall be
All taken, the Court is convinced that the hastily promulgated RMC remanded to the Court of Industrial Relations, with instruction that it
37-93 has fallen short of a valid and effective administrative issuance. reopen the case, receive all such evidence as may be relevant and
otherwise proceed in accordance with the requirements set forth
hereinabove.
WHEREFORE, the decision of the Court of Appeals, sustaining that of
the Court of Tax Appeals, is AFFIRMED. No costs.

SO ORDERED.
G.R. No. L-46496 February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and ANG TIBAY, represented by TORIBIO TEODORO, manager and
propietor, and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners, vs. THE NATIONAL WORKERS BROTHERHOOD, petitioners,
COURT OF INDUSTRIAL RELATIONS and NATIONAL vs.
LABOR UNION, INC., respondents. THE COURT OF INDUSTRIAL RELATIONS and NATIONAL
G.R. No. L-46496 February 27, 1940 LABOR UNION, INC., respondents.
FACTS:
Teodoro Toribio owns and operates Ang Tibay, a leather company Office of the Solicitor-General Ozaeta and Assistant Attorney
which supplies the Philippine Army. Due to alleged shortage of leather, Barcelona for the Court of Industrial Relations.
Toribio caused the lay off of a number of his employees. However, the Antonio D. Paguia for National Labor Unon.
National Labor Union, Inc. (NLU) questioned the validity of said lay Claro M. Recto for petitioner "Ang Tibay".
off as it averred that the said employees laid off were members of NLU Jose M. Casal for National Workers' Brotherhood.
while no members of the rival labor union (National Worker’s
Brotherhood) were laid off. NLU claims that NWB is a company
dominated union and Toribio was merely busting NLU. LAUREL, J.:
The case reached the Court of Industrial Relations (CIR) where Toribio
and NWB won. Eventually, NLU went to the Supreme Court invoking The Solicitor-General in behalf of the respondent Court of Industrial
its right for a new trial on the ground of newly discovered evidence. Relations in the above-entitled case has filed a motion for
The Supreme Court agreed with NLU. The Solicitor General, arguing reconsideration and moves that, for the reasons stated in his motion, we
for the CIR, filed a motion for reconsideration. reconsider the following legal conclusions of the majority opinion of
ISSUE: Whether or not the National Labor Union, Inc. is entitled to a this Court:
new trial.
HELD: Yes. The records show that the newly discovered evidence or 1. Que un contrato de trabajo, asi individual como colectivo,
documents obtained by NLU, which they attached to their petition with sin termino fijo de duracion o que no sea para una
the SC, were evidence so inaccessible to them at the time of the trial determinada, termina o bien por voluntad de cualquiera de
that even with the exercise of due diligence they could not be expected las partes o cada vez que ilega el plazo fijado para el pago de
to have obtained them and offered as evidence in the Court of los salarios segun costumbre en la localidad o cunado se
Industrial Relations. Further, the attached documents and exhibits are termine la obra;
of such far-reaching importance and effect that their admission would
necessarily mean the modification and reversal of the judgment
rendered (said newly obtained records include books of 2. Que los obreros de una empresa fabril, que han celebrado
business/inventory accounts by Ang Tibay which were not previously contrato, ya individual ya colectivamente, con ell, sin tiempo
accessible but already existing). fijo, y que se han visto obligados a cesar en sus tarbajos por
64 ADMIN LAW CASES 0901
 haberse declarando paro forzoso en la fabrica en la cual Labor Union, Inc., we are of the opinion that it is not necessary to pass
tarbajan, dejan de ser empleados u obreros de la misma; upon the motion for reconsideration of the Solicitor-General. We shall
proceed to dispose of the motion for new trial of the respondent labor
3. Que un patrono o sociedad que ha celebrado un contrato union. Before doing this, however, we deem it necessary, in the interest
of orderly procedure in cases of this nature, in interest of orderly
colectivo de trabajo con sus osbreros sin tiempo fijo de
duracion y sin ser para una obra determiminada y que se procedure in cases of this nature, to make several observations
niega a readmitir a dichos obreros que cesaron como regarding the nature of the powers of the Court of Industrial Relations
consecuencia de un paro forzoso, no es culpable de practica and emphasize certain guiding principles which should be observed in
injusta in incurre en la sancion penal del articulo 5 de la Ley the trial of cases brought before it. We have re-examined the entire
No. 213 del Commonwealth, aunque su negativa a readmitir record of the proceedings had before the Court of Industrial Relations
se deba a que dichos obreros pertenecen a un determinado in this case, and we have found no substantial evidence that the
exclusion of the 89 laborers here was due to their union affiliation or
organismo obrero, puesto que tales ya han dejado deser
empleados suyos por terminacion del contrato en virtud del activity. The whole transcript taken contains what transpired during the
hearing and is more of a record of contradictory and conflicting
paro.
statements of opposing counsel, with sporadic conclusion drawn to suit
their own views. It is evident that these statements and expressions of
The respondent National Labor Union, Inc., on the other hand, prays views of counsel have no evidentiary value.
for the vacation of the judgement rendered by the majority of this
Court and the remanding of the case to the Court of Industrial
Relations for a new trial, and avers: The Court of Industrial Relations is a special court whose functions are
specifically stated in the law of its creation (Commonwealth Act No.
103). It is more an administrative than a part of the integrated judicial
1. That Toribio Teodoro's claim that on September 26, 1938, system of the nation. It is not intended to be a mere receptive organ of
there was shortage of leather soles in ANG TIBAY making the Government. Unlike a court of justice which is essentially passive,
it necessary for him to temporarily lay off the members of acting only when its jurisdiction is invoked and deciding only cases
the National Labor Union Inc., is entirely false and that are presented to it by the parties litigant, the function of the Court
unsupported by the records of the Bureau of Customs and of Industrial Relations, as will appear from perusal of its organic law,
the Books of Accounts of native dealers in leather. is more active, affirmative and dynamic. It not only exercises judicial
or quasi-judicial functions in the determination of disputes between
2. That the supposed lack of leather materials claimed by employers and employees but its functions in the determination of
Toribio Teodoro was but a scheme to systematically prevent disputes between employers and employees but its functions are far
the forfeiture of this bond despite the breach of his more comprehensive and expensive. It has jurisdiction over the entire
CONTRACT with the Philippine Army. Philippines, to consider, investigate, decide, and settle any question,
matter controversy or dispute arising between, and/or affecting
employers and employees or laborers, and regulate the relations
3. That Toribio Teodoro's letter to the Philippine Army between them, subject to, and in accordance with, the provisions of
dated September 29, 1938, (re supposed delay of leather Commonwealth Act No. 103 (section 1). It shall take cognizance or
soles from the States) was but a scheme to systematically purposes of prevention, arbitration, decision and settlement, of any
prevent the forfeiture of this bond despite the breach of his industrial or agricultural dispute causing or likely to cause a strike or
CONTRACT with the Philippine Army. lockout, arising from differences as regards wages, shares or
compensation, hours of labor or conditions of tenancy or employment,
4. That the National Worker's Brotherhood of ANG TIBAY between landlords and tenants or farm-laborers, provided that the
is a company or employer union dominated by Toribio number of employees, laborers or tenants of farm-laborers involved
Teodoro, the existence and functions of which are illegal. exceeds thirty, and such industrial or agricultural dispute is submitted
(281 U.S., 548, petitioner's printed memorandum, p. 25.) to the Court by the Secretary of Labor or by any or both of the parties
to the controversy and certified by the Secretary of labor as existing
and proper to be by the Secretary of Labor as existing and proper to be
5. That in the exercise by the laborers of their rights to dealth with by the Court for the sake of public interest. (Section
collective bargaining, majority rule and elective 4, ibid.) It shall, before hearing the dispute and in the course of such
representation are highly essential and indispensable. hearing, endeavor to reconcile the parties and induce them to settle the
(Sections 2 and 5, Commonwealth Act No. 213.) dispute by amicable agreement. (Paragraph 2, section 4, ibid.) When
directed by the President of the Philippines, it shall investigate and
6. That the century provisions of the Civil Code which had study all industries established in a designated locality, with a view to
been (the) principal source of dissensions and continuous determinating the necessity and fairness of fixing and adopting for such
civil war in Spain cannot and should not be made applicable industry or locality a minimum wage or share of laborers or tenants, or
in interpreting and applying the salutary provisions of a a maximum "canon" or rental to be paid by the "inquilinos" or tenants
modern labor legislation of American origin where the or less to landowners. (Section 5, ibid.) In fine, it may appeal to
industrial peace has always been the rule. voluntary arbitration in the settlement of industrial disputes; may
employ mediation or conciliation for that purpose, or recur to the more
effective system of official investigation and compulsory arbitration in
7. That the employer Toribio Teodoro was guilty of unfair
order to determine specific controversies between labor and capital
labor practice for discriminating against the National Labor
industry and in agriculture. There is in reality here a mingling of
Union, Inc., and unjustly favoring the National Workers'
executive and judicial functions, which is a departure from the rigid
Brotherhood.
doctrine of the separation of governmental powers.

8. That the exhibits hereto attached are so inaccessible to the

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No.
respondents that even with the exercise of due diligence they
46673, promulgated September 13, 1939, we had occasion to joint out
could not be expected to have obtained them and offered as
that the Court of Industrial Relations et al., G. R. No. 46673,
evidence in the Court of Industrial Relations.
promulgated September 13, 1939, we had occasion to point out that the
Court of Industrial Relations is not narrowly constrained by technical
9. That the attached documents and exhibits are of such far- rules of procedure, and the Act requires it to "act according to justice
reaching importance and effect that their admission would and equity and substantial merits of the case, without regard to
necessarily mean the modification and reversal of the technicalities or legal forms and shall not be bound by any
judgment rendered herein. technicalities or legal forms and shall not be bound by any technical
rules of legal evidence but may inform its mind in such manner as it
The petitioner, Ang Tibay, has filed an opposition both to the motion may deem just and equitable." (Section 20, Commonwealth Act No.
for reconsideration of the respondent National Labor Union, Inc. 103.) It shall not be restricted to the specific relief claimed or demands
made by the parties to the industrial or agricultural dispute, but may
include in the award, order or decision any matter or determination
In view of the conclusion reached by us and to be herein after stead which may be deemed necessary or expedient for the purpose of
with reference to the motion for a new trial of the respondent National settling the dispute or of preventing further industrial or agricultural
65 ADMIN LAW CASES 0901
disputes. (section 13, ibid.) And in the light of this legislative policy, against them. It should not, however, detract from their duty
appeals to this Court have been especially regulated by the rules actively to see that the law is enforced, and for that purpose,
recently promulgated by the rules recently promulgated by this Court to use the authorized legal methods of securing evidence and
to carry into the effect the avowed legislative purpose. The fact, informing itself of facts material and relevant to the
however, that the Court of Industrial Relations may be said to be free controversy. Boards of inquiry may be appointed for the
from the rigidity of certain procedural requirements does not mean that purpose of investigating and determining the facts in any
it can, in justifiable cases before it, entirely ignore or disregard the given case, but their report and decision are only advisory.
fundamental and essential requirements of due process in trials and (Section 9, Commonwealth Act No. 103.) The Court of
investigations of an administrative character. There are primary rights Industrial Relations may refer any industrial or agricultural
which must be respected even in proceedings of this character: dispute or any matter under its consideration or advisement
to a local board of inquiry, a provincial fiscal. a justice of the
peace or any public official in any part of the Philippines for
(1) The first of these rights is the right to a hearing, which
includes the right of the party interested or affected to investigation, report and recommendation, and may delegate
to such board or public official such powers and functions as
present his own case and submit evidence in support thereof.
In the language of Chief Hughes, in Morgan v. U.S., 304 the said Court of Industrial Relations may deem necessary,
U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and but such delegation shall not affect the exercise of the Court
property of the citizen shall be protected by the rudimentary itself of any of its powers. (Section 10, ibid.)
requirements of fair play.
(6) The Court of Industrial Relations or any of its judges,
therefore, must act on its or his own independent
(2) Not only must the party be given an opportunity to
present his case and to adduce evidence tending to establish consideration of the law and facts of the controversy, and
the rights which he asserts but the tribunal must consider the not simply accept the views of a subordinate in arriving at a
evidence presented. (Chief Justice Hughes in Morgan v. U.S. decision. It may be that the volume of work is such that it is
298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the literally Relations personally to decide all controversies
language of this court in Edwards vs. McCoy, 22 Phil., 598, coming before them. In the United States the difficulty is
"the right to adduce evidence, without the corresponding solved with the enactment of statutory authority authorizing
examiners or other subordinates to render final decision,
duty on the part of the board to consider it, is vain. Such
right is conspicuously futile if the person or persons to with the right to appeal to board or commission, but in our
case there is no such statutory authority.
whom the evidence is presented can thrust it aside without
notice or consideration."
(7) The Court of Industrial Relations should, in all
(3) "While the duty to deliberate does not impose the controversial questions, render its decision in such a manner
that the parties to the proceeding can know the various
obligation to decide right, it does imply a necessity which
cannot be disregarded, namely, that of having something to issues involved, and the reasons for the decision rendered.
support it is a nullity, a place when directly attached." The performance of this duty is inseparable from the
(Edwards vs. McCoy, supra.) This principle emanates from authority conferred upon it.
the more fundamental is contrary to the vesting of unlimited
power anywhere. Law is both a grant and a limitation upon In the right of the foregoing fundamental principles, it is sufficient to
power. observe here that, except as to the alleged agreement between the Ang
Tibay and the National Worker's Brotherhood (appendix A), the record
(4) Not only must there be some evidence to support a is barren and does not satisfy the thirst for a factual basis upon which
finding or conclusion (City of Manila vs. Agustin, G.R. No. to predicate, in a national way, a conclusion of law.
45844, promulgated November 29, 1937, XXXVI O. G.
1335), but the evidence must be "substantial." (Washington, This result, however, does not now preclude the concession of a new
Virginia and Maryland Coach Co. v. national labor Relations trial prayed for the by respondent National Labor Union, Inc., it is
Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. alleged that "the supposed lack of material claimed by Toribio Teodoro
965.) It means such relevant evidence as a reasonable mind was but a scheme adopted to systematically discharged all the members
accept as adequate to support a conclusion." (Appalachian of the National Labor Union Inc., from work" and this avernment is
Electric Power v. National Labor Relations Board, 4 Cir., 93 desired to be proved by the petitioner with the "records of the Bureau
F. 2d 985, 989; National Labor Relations Board v. of Customs and the Books of Accounts of native dealers in leather";
Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston- that "the National Workers Brotherhood Union of Ang Tibay is a
Stillwater Knitting Co. v. National Labor Relations Board, 2 company or employer union dominated by Toribio Teodoro, the
Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the existence and functions of which are illegal." Petitioner further alleges
rules of evidence prevailing in courts of law and equity shall under oath that the exhibits attached to the petition to prove his
not be controlling.' The obvious purpose of this and similar substantial avernments" are so inaccessible to the respondents that even
provisions is to free administrative boards from the within the exercise of due diligence they could not be expected to have
compulsion of technical rules so that the mere admission of obtained them and offered as evidence in the Court of Industrial
matter which would be deemed incompetent inn judicial Relations", and that the documents attached to the petition "are of such
proceedings would not invalidate the administrative order. far reaching importance and effect that their admission would
(Interstate Commerce Commission v. Baird, 194 U.S. 25, necessarily mean the modification and reversal of the judgment
44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate rendered herein." We have considered the reply of Ang Tibay and its
Commerce Commission v. Louisville and Nashville R. Co., arguments against the petition. By and large, after considerable
227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United discussions, we have come to the conclusion that the interest of justice
States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 would be better served if the movant is given opportunity to present at
Law. ed. 624.) But this assurance of a desirable flexibility in the hearing the documents referred to in his motion and such other
administrative procedure does not go far as to justify orders evidence as may be relevant to the main issue involved. The legislation
without a basis in evidence having rational probative force. which created the Court of Industrial Relations and under which it acts
Mere uncorroborated hearsay or rumor does not constitute is new. The failure to grasp the fundamental issue involved is not
substantial evidence. (Consolidated Edison Co. v. National entirely attributable to the parties adversely affected by the result.
Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Accordingly, the motion for a new trial should be and the same is
Adv. Op., p. 131.)" hereby granted, and the entire record of this case shall be remanded to
the Court of Industrial Relations, with instruction that it reopen the
(5) The decision must be rendered on the evidence presented case, receive all such evidence as may be relevant and otherwise
proceed in accordance with the requirements set forth hereinabove. So
at the hearing, or at least contained in the record and
disclosed to the parties affected. (Interstate Commence ordered.
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185,
57 Law. ed. 431.) Only by confining the administrative
tribunal to the evidence disclosed to the parties, can the
latter be protected in their right to know and meet the case
66 ADMIN LAW CASES 0901
JESUS C. OCAMPO vs. OFFICE OF THE OMBUDSMAN G.R. No. The facts are as follows:
114683, January 18, 2000
Petitioner is the Training Coordinator of NIACONSULT, INC., a
Fact: Petitioner is the Training Coordinator of NIACONSULT, INC., a subsidiary of the National Irrigation Administration.
subsidiary of the National Irrigation Administration. K.N. Paudel of
the Agricultural Development Bank of Nepal (ADBN) Mote a letter to
NIACONSULT requesting a training proposal on small-scale On March 21, 1988, K.N. Paudel of the Agricultural Development
community irrigation development. Petitioner as the training Bank of Nepal (ADBN) Mote a letter to NIACONSULT requesting a
coordinator of the NIACONSULT, sent a letter-proposal requested by training proposal on small-scale community irrigation development.3
ABDN. Another letter was sent by petitioner on January 31, 1989 to
Dr. Peiter Roeloffs of ADBN confirming the availability of On November 17, 1988, petitioner as the training coordinator of the
NIACONSULT to conduct the training program and formally NIACONSULT, sent a letter-proposal requested by ABDN.4 Another
requesting advance payment of thirty (30%) percent of the training fee letter was sent by petitioner on January 31, 1989 to Dr. Peiter Roeloffs
in the amount of US $9,600.00 or P204,960.00. NIACONSULT of ADBN confirming the availability of NIACONSULT to conduct the
conducted the training program for six Nepalese Junior Engineers from training program and formally requesting advance payment of thirty
February 6 to March 7, 1989. ADBN, thru its representative, Deutsche (30%) percent of the training fee5 in the amount of US $9,600.00 or
Gesselschaft Technische Zusummenarbeit (GTZ) Gmbh Technical P204,960.00.
Cooperation of the Federal Republic of Germany paid to the petitioner
the agreed training fee in two installments of P61,488.00 and P143,
NIACONSULT conducted the training program for six Nepalese
472.00. On April 1, 1991, NIACONSULT, through its president, Junior Engineers from February 6 to March 7, 1989. 6 ADBN, thru its
Wilfredo S. Tiongco, wrote a letter to petitioner demanding the turn-
representative, Deutsche Gesselschaft Technische Zusummenarbeit
over of the total training fee paid by ADBN which petitioner (GTZ) Gmbh Technical Cooperation of the Federal Republic of
personally received. Despite receipt of the letter, petitioner failed to
Germany paid to the petitioner the agreed training fee in two
remit the said amount prompting NIACONSULT through its president,
installments of P61,488.00 and P143, 472.00.7
Maximino Eclipse, to file an administrative case before respondent
OMBUDSMAN for serious misconduct and/or fraud or willful breach
of trust. On April 1, 1991, NIACONSULT, through its president, Wilfredo S.
Tiongco, wrote a letter to petitioner demanding the turn-over of the
total training fee paid by ADBN which petitioner personally
While the case is pending, petitioner filed a Manifestation on May 24, received.8 Despite receipt of the letter, petitioner failed to remit the said
1997 stating that the criminal complaint for estafa and falsification amount prompting NIACONSULT through its president, Maximino
filed against him based on the same facts or incidents which gave rise Eclipse, to file an administrative case before respondent
to the administrative case, was dismissed by the Regional Trial Court OMBUDSMAN for serious misconduct and/or fraud or willful breach
on February 24, 1997. With the dismissal of the criminal case, of trust.9
petitioner manifests that the administrative case can no longer stand on
its own and therefore should be dismissed. Finding enough basis to proceed with the administrative case, the
Administrative Adjudication Bureau of the respondent
OMBUDSMAN, on February 17, 1992, issued an order 10 requiring
Issue: Whether the dismissal of the Petitioner’s of the Criminal Case petitioner to file his counter-affidavit within ten (10) days from receipt
warrants dismissal of the Criminal Case? with a caveat that failure to file the same would be deemed a waiver of
his right to present evidence. Despite notice, petitioner failed to comply
with the said order.
Held: No, The dismissal of the criminal case will not foreclose
administrative action filed against petitioner or give him a clean bill of A year later, or on March 17, 1993, respondent OMBUDSMAN issued
health in all respects. The Regional Trial Court, in dismissing the another order11 giving petitioner another chance to file his counter-
criminal complaint, was simply saying that the prosecution was unable affidavit and controverting evidence. Again, petitioner failed. Thus, on
to prove the guilt of petitioner beyond reasonable doubt, a condition April 14, 1993, private respondent was required to appear before the
sine qua non for conviction. The lack or absence of proof beyond OMBUDSMAN to present evidence to support its complaint. 12
reasonable doubt does not mean an absence of any evidence
whatsoever for there is another class of evidence which, though
insufficient to establish guilt beyond reasonable doubt, is adequate in Thereafter, on November 18, 1993, respondent OMBUDSMAN issued
civil cases; this is preponderance of evidence. Then too, there is the the assailed Resolution, the decretal portion of which reads:
“substantial evidence” rule in administrative proceedings which merely
requires such relevant evidence as a reasonable mind might accept as Withal, for such dishonesty, untrustworthiness, and conduct
adequate to support a conclusion.18 Thus, considering the difference in prejudicial to the service as established by overwhelming
the quantum of evidence, as well as the procedure followed and the evidences, it is respectfully recommended that respondent
sanctions imposed in criminal and administrative proceedings, the Jesus C. Ocampo be discharged from the service, with
findings and conclusions in one should not necessarily be binding on forfeiture of benefits and special perpetual disqualification
the other. to hold office in the government or any government-owned
or controlled corporation; without prejudice to any civil
action NIACONSULT, Inc., may institute to recover the
G.R. No. 114683 January 18, 2000 amount so retained by the respondent.

JESUS C. OCAMPO, petitioner, SO ORDERED.13

vs.
OFFICE OF THE OMBUDSMAN and MAXIMO On February 16, 1994 petitioner moved for reconsideration and to re-
ECLIPSE, respondents.
open the case claiming that he was denied due process in that the
administrative case was resolved on the basis of the complainant's
BUENA, J.: evidences, without affording him the opportunity to file a counter-
affidavit and to present his evidence. Petitioner likewise contends that
This petition for certiorari seeks to nullify the Resolutions of the he was not given access to the records of the subject transaction vital to
Ombudsman in OMB-Adm-0-92-0020 dated November 18, 19931 and his defense and in the preparation of his counter-affidavit despite his
February 28, 19942 which dismissed petitioner from the service, with verbal requests to the graft investigator.14
forfeiture of benefits and special perpetual disqualification to hold
office in the government or any government-owned or controlled The respondent OMBUDSMAN denied the motion on February 28,
corporation, and which denied the motion for reconsideration thereof, 1994.15
respectively.

67 ADMIN LAW CASES 0901

Aggrieved, petitioner filed the instant petition basically reiterating his the reception of private respondent's evidence. As such, he could not
arguments in his motion for reconsideration. have been expected to appear at the ex-parte hearing.

We gave due course to the petition and required the parties to submit With regard to the petitioner's claim that he made requests for the
their respective memoranda. production of the documents alleged to be material to his defense, the
record is bereft of any proof of such requests. If it were true that the
graft investigator did not act on such requests, petitioner should have
While the case is pending, petitioner filed a Manifestation on May 24,
199716 stating that the criminal complaint for estafa and falsification filed the proper motion before the respondent OMBUDSMAN for the
production of the documents or to compel the respondent complainant
filed against him based on the same facts or incidents which gave rise
to the administrative case, was dismissed by the Regional Trial Court to produce whatever record necessary for his defense. Petitioner did
on February 24, 1997. With the dismissal of the criminal case, not. It was only after the respondent OMBUDSMAN issued the
petitioner manifests that the administrative case can no longer stand on assailed resolution of November 18, 1993 that he bewailed the alleged
its own and therefore should be dismissed.17 failure of respondent's graft investigator to require the production of
the records of the subject transaction.

Such manifestation is not well taken.

The record of this case indisputably shows that petitioner is guilty of
dishonesty and conduct prejudicial to the government when he failed to
The dismissal of the criminal case will not foreclose administrative remit the payment of the training program conducted by
action filed against petitioner or give him a clean bill of health in all NIACONSULT. The evidence presented sufficiently established that
respects. The Regional Trial Court, in dismissing the criminal petitioner received the payments of ADBN through its representative,
complaint, was simply saying that the prosecution was unable to prove GTZ, Philippines the amount of US $9,600.00 and that he failed to
the guilt of petitioner beyond reasonable doubt, a condition sine qua account this and remit the same to the corporation. All these acts
non for conviction. The lack or absence of proof beyond reasonable constitute dishonesty and untrustworthiness.
doubt does not mean an absence of any evidence whatsoever for there
is another class of evidence which, though insufficient to establish guilt
beyond reasonable doubt, is adequate in civil cases; this is WHEREFORE, the petition is hereby DENIED for lack of merit. The
assailed Resolutions of the respondent OMBUDSMAN are hereby
preponderance of evidence. Then too, there is the "substantial
evidence" rule in administrative proceedings which merely requires AFFIRMED.
such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.18 Thus, considering the difference in the SO ORDERED.
quantum of evidence, as well as the procedure followed and the
sanctions imposed in criminal and administrative proceedings, the
findings and conclusions in one should not necessarily be binding on
the other.19

Going now to the crux of the controversy, petitioner asserts that he was
denied the opportunity to be heard.

The essence of due process is an opportunity to be heard. One may be

heard, not solely by verbal presentation but also, and perhaps even
many times more creditably and practicable than oral argument,
through pleadings. In administrative proceedings, moreover, technical
rules of procedure and evidence are not strictly applied; administrative
due process cannot be fully equated to due process in its strict judicial
sense.20

Petitioner has been amply accorded the opportunity to be heard. He

was required to answer the complaint against him. In fact, petitioner
was given considerable length of time to submit his counter-affidavit.
It took more than one year from February 17, 1992 before petitioner
was considered to have waived his right to file his counter-affidavit
and the formal presentation of the complainant's evidence was set. The
March 17, 1993 order was issued to give the petitioner a last chance to
present his defense, despite the private respondent's objections. But
petitioner failed to comply with the second order.1âwphi1.nêt

Thus, petitioner's failure to present evidence is solely of his own

making and cannot escape his own remissness by passing the blame on
the graft investigator. While the respondent OMBUDSMAN has
shown forbearance, petitioner has not displayed corresponding
vigilance. He therefore cannot validly claim that his right to due
process was violated. We need only to reiterate that a party who
chooses not to avail of the opportunity to answer the charges cannot
complain of a denial of due process.21

Petitioner's claim that he was not given any notice of the order
declaring him to have waived his right to file his counter-affidavit and
of allowing the private respondent to present evidence ex-parte is
unmeritorious.

The orders of respondent OMBUDSMAN requiring petitioner to

submit his counter-affidavit and which was admittedly received by the
latter explicitly contain a warning that if no counter-affidavit was filed
within the given period, a waiver would be considered and the
administrative proceedings shall continue according to the rules. Thus,
respondent OMBUDSMAN need not issue another order notifying
petitioner that he has waived his right to file a counter-affidavit. In the
same way, petitioner need not be notified of the ex-parte hearing for
68 ADMIN LAW CASES 0901
CIVIL SERVICE COMMISSION vs. COURT OF APPEALS G.R. violation of COA Circular 90-331 dated May 3, 1990 putting public
No. 161086, November 24, 2006 funds to become idle and depriving the municipality of using the same
to a more productive endeavor for the benefit of the people."1
Fact: In response to an anonymous complaint alleging that certain
municipal officials and employees of the municipal government of One of the municipal officers and employees to whom loans were
Infanta, Pangasinan had incurred cash shortages and committed graft extended was Municipal Accountant Luzviminda M. Maniago
and corruption, the Commission on Audit (COA) ordered the conduct (Luzviminda) who, at the time the audit was conducted, had an
of a fraud audit. Following the conduct of an audit, the audit team outstanding loan balance of ₱17,2002but which she had fully paid by
submitted a “Fraud Audit Report” finding, among other things, that the the time the audit report was submitted.
Municipal Treasurer granted various loans to Municipal Officers and
Employees amounting to ₱993,686.09 “in violation of COA Circular
putting public funds to become idle and depriving the municipality of Celso M. Manuel (Manuel), a resident of Barangay Patima, Infanta,
using the same to a more productive endeavor for the benefit of the later filed a complaint against Luzviminda before the Office of the
people.” One of the municipal officers and employees to whom loans Mayor for violation of Republic Act No. 6713 (Code of Conduct and
were extended was Municipal Accountant Luzviminda M. Maniago Ethical Standards for Public Officials and Employees) in connection
(Luzviminda) who, at the time the audit was conducted, had an with the grant to her of the loan. In her Answer, Luzviminda claimed
outstanding loan balance which she had fully paid by the time the audit that the loan was extended to her by the Municipal Treasurer in the
report was submitted. Manuel, later filed a complaint against latter’s personal capacity.
Luzviminda before the Office of the Mayor for violation of Republic
Act No. 6713 (Code of Conduct and Ethical Standards for Public The then Acting Mayor Charlito M. Kho, by Resolution dated
Officials and Employees) in connection with the grant to her of the September 20, 2000, found Luzviminda guilty of Grave Misconduct on
loan. In her Answer, Luzviminda claimed that the loan was extended to the basis of the "Fraud Audit Report"3 and dismissed her from the
her by the Municipal Treasurer in the latter’s personal capacity. The service.
then Acting Mayor Charlito M. Kho, by Resolution, found Luzviminda
guilty of Grave Misconduct on the basis of the “Fraud Audit Report”
On Luzviminda’s appeal, the Civil Service Commission (CSC)
and dismissed her from the service. On Luzviminda’s appeal, the Civil
modified Acting Mayor Kho’s resolution, finding her guilty only of
Service Commission (CSC) modified Acting Mayor Kho’s resolution,
Conduct Grossly Prejudicial to the Best Interest of the Service and
finding her guilty only of Conduct Grossly Prejudicial to the Best
accordingly modifying the penalty to suspension of one year. 4 Her
Interest of the Service and accordingly modifying the penalty to
motion for reconsideration having been denied,5 Luzviminda filed with
suspension of one year.4 Her motion for reconsideration having been
the Court of Appeals a petition for certiorari.
denied, Luzviminda filed with the Court of Appeals a petition for
certiorari. The Court of Appeals reversed the CSC decision and
ordered the reinstatement of Luzviminda, The CSC’s Motion for The Court of Appeals, noting that Luzviminda’s remedy should have
Reconsideration was denied, hence, it filed the instant Petition for been to file a petition for review under Rule 43 instead of certiorari,
Review on Certiorari, Hence this Case nevertheless held that a rigid application of the Rules would result in a
manifest failure or miscarriage of justice6 and accordingly gave her
petition due course.
Issue: Whether the absence of a hearing did not deprive Petitioner of
due process? By Decision7 of June 18, 2003, the Court of Appeals reversed the CSC
decision and ordered the reinstatement of Luzviminda, ratiocinating as
follows, quoted verbatim:
Held: No, Due process, as a constitutional precept, does not always
and in all situations require a trial-type proceeding. Due process is
The CSC, in partially sustaining the findings of Acting Mayor Kho of
satisfied when a person is notified of the charge against him and given
Infanta, acted arbitrarily, carelessly and unreasonably.1âwphi1 Its only
an opportunity to explain or defend himself. In administrative
bases are the Fraud Audit Report conducted during the period [of]
proceedings, the filing of charges and giving reasonable opportunity August 17, 1998 to September 16, 1998 and the letter-complaint of one
for the person so charged to answer the accusations against him
Cesar Manuel dated August 28, 2000.
constitute the minimum requirements of due process. As long as a
party was given the opportunity to defend his interests in due course,
he was not denied due process The essence of due process is an In the Fraud Audit Report, it was not established, neither was there any
opportunity to be heard. One may be heard, not solely by verbal mention that part of the cash shortage in the cash accountability of the
presentation but also, and perhaps even many times more creditably Municipal Treasurer was the amount of P17,200.00 which was
and practicable than oral argument, through pleadings. In petitioner’s personal loan from said Municipal Treasurer. It is
administrative proceedings, moreover, technical rules of procedure and emphasized that the cash shortage of the Municipal Treasurer was a
evidence are not strictly applied; administrative due process cannot be whopping [sic] P1,487,107.40. Even assuming that said amount of
fully equated to due process in its strict judicial sense. P17,200.00 which petitioner personally borrowed from the Municipal
Treasurer came from the public funds, the latter is solely responsible
therefor, as there was never an iota of evidence to show that petitioner
G.R. No. 161086 November 24, 2006 opted to borrow from the public funds.

CIVIL SERVICE COMMISSION, Petitioner, On the basis of the Fraud Audit Report of 1998, a number of municipal
vs. officials and employees were charged before the Office of the
COURT OF APPEALS,* Respondent. Ombudsman, however, only the Municipal Mayor and the Municipal
Treasurer were indicted. The petitioner, who is the Municipal
Accountant, and the other employees were not found liable by the
DECISION Office of the Ombudsman. After being cleared of [sic] the
Ombudsman, and after two (2) long years or on August 28, 2000, one
CARPIO MORALES, J.: Cesar Manuel, a resident of Infanta, Pangasinan, whose motive for
filing said complaint was not ascertained, filed the complaint against
petitioner using as basis the 1998 Fraud Audit Report. Except from the
In response to an anonymous complaint alleging that certain municipal self-serving allegations of complainant Cesar Manuel, no evidence was
officials and employees of the municipal government of Infanta, presented to support his allegations against petitioner.
Pangasinan had incurred cash shortages and committed graft and
corruption, the Commission on Audit (COA) Regional Office No. 1 in
San Fernando City, La Union ordered the conduct of a fraud audit. xxxx

Following the conduct of an audit from August 17, 1998 to September Thus, said Fraud Audit Report could not be a basis for indicting
30, 1998, the audit team submitted a "Fraud Audit Report" finding, petitioner of Conduct Grossly Prejudicial to the Best Interest of the
among other things, that the Municipal Treasurer granted various loans Service and Dishonesty. When there is possibility of abuse occurs [sic]
to Municipal Officers and Employees amounting to ₱993,686.09 "in against the recognition of the existence of power, it is the time for this
69 ADMIN LAW CASES 0901
Court to exercise its naysaying function. Factual findings of process. As long as a party was given the opportunity to defend his
administrative agencies are not infallible and will be set aside when interests in due course, he was not denied due process.19 (Emphasis and
they fail the test of arbitrariness, or upon proof of gross abuse of underscoring supplied)
discretion, fraud, or error of law.
The essence of due process is an opportunity to be heard. One may
x x x x8 (Underscoring supplied) be heard, not solely by verbal presentation but also, and perhaps
even many times more creditably and practicable than oral
The CSC’s Motion for Reconsideration was denied,9 hence, it filed the argument, through pleadings. In administrative proceedings,
moreover, technical rules of procedure and evidence are not strictly
instant Petition for Review on Certiorari10raising issues which are
synthesized as follows: applied; administrative due process cannot be fully equated to due
process in its strict judicial sense.20(Emphasis and underscoring
supplied)
1. WHETHER THE COURT OF APPEALS ERRED
IN GRANTING LUZVIMINDA’S PETITION FOR
CERTIORARI UNDER RULE 65 DESPITE THE Finally, Luzviminda’s claim of payment does not help her for, as the
AVAILABILITY OF APPEAL UNDER RULE 43 OF THE CSC held,
REVISED RULES OF COURT; and
x x x [Luzviminda’s] having obtained a loan for her personal use out of
2. WHETHER THERE IS SUBSTANTIAL EVIDENCE TO municipal funds, through the active intercession of the Municipal
HOLD LUZVIMINDA GUILTY OF CONDUCT Treasurer, cannot be countenanced. Although already paid in full, said
GROSSLY PREJUDICIAL TO THE BEST INTEREST OF loan resulted in the diversion of municipal funds for purposes other
THE SERVICE.11 than what the amount was supposed to be appropriated for in the
municipality. Thus, public service was prejudiced. x x
x21 (Underscoring supplied)
Under Rule 65 of the Rules of Court, certiorari may only be availed of
when any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or WHEREFORE, the petition is GRANTED. The challenged decision
with grave abuse of discretion amounting to lack or excess of of the Court of Appeals is REVERSED and SET ASIDE. Resolutions
jurisdiction, and there is no appeal, nor any plain, speedy, and No. 01-1065 and 02-0152 dated June 26, 2001 and January 29, 2001,
adequate remedy in the ordinary course of law. respectively, of the Civil Service Commission are REINSTATED.

It is gathered that Luzviminda had up to February 20, 2002 to file a SO ORDERED.

petition for review before the appellate court. On April 22, 2002, she
filed a Motion for Extension of Time to File Petition for Certiorari
which the appellate court granted, and she eventually filed her Petition
for Certiorari.

A special civil action for certiorari is, however, a limited form of

review which cannot be used as a substitute for lost or lapsed remedy
of appeal. The availability to Luzviminda of the remedy of a petition
for review under Rule 43 of the Rules of Court foreclosed her right to
resort to certiorari.12

At any rate, Luzviminda’s petition before the appellate court did not
justify a relaxation of the Rules.

It bears noting that an audit team of the COA Regional Office

interviewed the Municipal Treasurer herself,13following which it
confirmed that the amount of loan granted to Luzviminda, not to
mention those granted to others in the form of vales, chits, and "I Owe
You’s,"14 formed part of the "cash shortage" of the Municipal
Treasurer.

And it bears noting too that the decision of Acting Mayor Kho, which
the CSC affirmed, was based not only on the Fraud Audit Report, but
also on Luzviminda’s Answer to the complaint of Manuel wherein she
did not deny having secured a loan,15 her only defense being that the
loan did not involve public funds, which defense does not deserve
consideration in the absence of any iota of proof thereof.1âwphi1

As for Luzviminda’s challenge to the decision of the acting mayor as

having been rendered without hearing Manuel’s complaint, the same
fails.

The absence of a hearing16 did not deprive Luzviminda of due process.

She was given the opportunity to file, and she did file, an Answer 17 to
Manuel’s complaint against her. She was also afforded the opportunity
to appeal to the CSC from the September 20, 2000 Resolution of
Acting Mayor Kho.18

Due process, as a constitutional precept, does not always and in all

situations require a trial-type proceeding. Due process is satisfied
when a person is notified of the charge against him and given an
opportunity to explain or defend himself. In administrative
proceedings, the filing of charges and giving reasonable
opportunity for the person so charged to answer the accusations
against him constitute the minimum requirements of due

70 ADMIN LAW CASES 0901

PHILIPPINE BANK OF COMMUNICATIONS vs. IN VIEW OF ALL, THE FOREGOING, the
COMMISSIONER OF INTERNAL REVENUE G.R. No. 112024, instant petition for review, is DENIED due
January 28, 1999 course. The Decision of the Court of Tax Appeals
dated May 20, 1993 and its resolution dated July
Fact: Petitioner, Philippine Bank of Communications (PBCom), a 20, 1993, are hereby AFFIRMED in toto.
commercial banking corporation duly organized under Philippine laws,
filed its quarterly income tax returns for the first and second quarters of SO ORDERED.4
1985, reported profits, and paid the total income tax of P5,016,954.00.
The taxes due were settled by applying PBCom’s tax credit memos and
accordingly, the Bureau of Internal Revenue (BIR) issued Tax Debit The Court of Tax Appeals earlier ruled as follows:
Memo Nos. 0746-85 and 0747-85 for P3,401,701.00 and
P1,615,253.00, respectively. Subsequently, however, PBCom suffered WHEREFORE, Petitioner's claim for refund/tax
losses so that when it filed its Annual Income Tax Returns for the year- credits of overpaid income tax for 1985 in the
ended December 31, 1986, the petitioner likewise reported a net loss of amount of P5,299,749.95 is hereby denied for
P14,129,602.00, and thus declared no tax payable for the year. But having been filed beyond the reglementary period.
during these two years, PBCom earned rental income from leased The 1986 claim for refund amounting to
properties. The lessees withheld and remitted to the BIR withholding P234,077.69 is likewise denied since petitioner
creditable taxes of P282,795.50 in 1985 and P234,077.69 in 1986. On has opted and in all likelihood automatically
August 7, 1987, petitioner requested the Commissioner of Internal credited the same to the succeeding year. The
Revenue, among others, for a tax credit of P5,016,954.00 representing petition for review is dismissed for lack of merit.
the overpayment of taxes in the first and second quarters of 1985.
Thereafter, on July 25, 1988, petitioner filed a claim for refund of SO ORDERED.5
creditable taxes withheld by their lessees from property rentals in 1985
for P282,795.50 and in 1986 for P234,077.69. On May 20, 1993, the
CTA rendered a decision which, as stated on the outset, denied the The facts on record show the antecedent circumstances pertinent to this
request of petitioner for a tax refund or credit in the sum amount of case.
P5,299,749.95, on the ground that it was filed beyond the two-year
reglementary period provided for by law. The petitioner’s claim for Petitioner, Philippine Bank of Communications (PBCom), a
refund in 1986 amounting to P234,077.69 was likewise denied on the commercial banking corporation duly organized under Philippine laws,
assumption that it was automatically credited by PBCom against its tax filed its quarterly income tax returns for the first and second quarters of
payment in the succeeding year. On June 22, 1993, petitioner filed a 1985, reported profits, and paid the total income tax of P5,016,954.00.
Motion for Reconsideration of the CTA’s decision but the same was The taxes due were settled by applying PBCom's tax credit memos and
denied due course for lack of merit. Thereafter, PBCom filed a petition accordingly, the Bureau of Internal Revenue (BIR) issued Tax Debit
for review of said decision and resolution of the CTA with the Court of Memo Nos. 0746-85 and 0747-85 for P3,401,701.00 and
Appeals. However on September 22, 1993, the Court of Appeals P1,615,253.00, respectively.
affirmed in toto the CTA’s resolution dated July 20, 1993. Hence this
petition.
Subsequently, however, PBCom suffered losses so that when it filed its
Annual Income Tax Returns for the year-ended December 31, 1986,
Issue: Whether the Circular issued by the BIR which is Inconsistent or the petitioner likewise reported a net loss of P14,129,602.00, and thus
Contrary to the Statutes can be enforced? declared no tax payable for the year.

But during these two years, PBCom earned rental income from leased
Held: No, When the Acting Commissioner of Internal Revenue issued properties. The lessees withheld and remitted to the BIR withholding
RMC, changing the prescriptive period of two years to ten years on creditable taxes of P282,795.50 in 1985 and P234,077.69 in 1986.
claims of excess quarterly income tax payments, such circular created a
clear inconsistency with the provision of Sec. 230 of 1977 NIRC. In so On August 7, 1987, petitioner requested the Commissioner of Internal
doing, the BIR did not simply interpret the law; rather it legislated Revenue, among others, for a tax credit of P5,016,954.00 representing
guidelines contrary to the statute passed by Congress. It bears repeating the overpayment of taxes in the first and second quarters of 1985.
that Revenue memorandum-circulars are considered administrative
rulings (in the sense of more specific and less general interpretations of
tax laws) which are issued from time to time by the Commissioner of Thereafter, on July 25, 1988, petitioner filed a claim for refund of
Internal Revenue. It is widely accepted that the interpretation placed creditable taxes withheld by their lessees from property rentals in 1985
upon a statute by the executive officers, whose duty is to enforce it, is for P282,795.50 and in 1986 for P234,077.69.
entitled to great respect by the courts. Nevertheless, such interpretation
is not conclusive and will be ignored if judicially found to be Pending the investigation of the respondent Commissioner of Internal
erroneous. Thus, courts will not countenance administrative issuances Revenue, petitioner instituted a Petition for Review on November 18,
that override, instead of remaining consistent and in harmony with the 1988 before the Court of Tax Appeals (CTA). The petition was
law they seek to apply and implement. docketed as CTA Case No. 4309 entitled: "Philippine Bank of
Communications vs. Commissioner of Internal Revenue."

G.R. No. 112024 January 28, 1999

The losses petitioner incurred as per the summary of petitioner's claims
for refund and tax credit for 1985 and 1986, filed before the Court of
PHILIPPINE BANK OF COMMUNICATIONS, petitioner, Tax Appeals, are as follows:
vs.
COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX
1985 1986
APPEALS and COURT OF APPEALS, respondent.

——— ———

Net Income (Loss) (P25,317,288.00)

QUISUMBING, J.:
(P14,129,602.00)

This petition for review assails the Resolution 1 of the Court of Appeals
Tax Due NIL NIL
dated September 22, 1993 affirming the Decision2 and a Resolution 3 of
the Court Of Tax Appeals which denied the claims of the petitioner for
tax refund and tax credits, and disposing as follows: Quarterly tax.

Payments Made 5,016,954.00 —

71 ADMIN LAW CASES 0901
 Tax Withheld at Source 282,795.50 234,077.69 refund or tax credits for the excess quarterly income tax with the BIR
within ten (10) years under Article 1144 of the Civil Code. The
pertinent portions of the circular reads:
———————— ———————

Excess Tax Payments P5,299,749.50* REVENUE MEMORANDUM CIRCULAR NO.

P234,077.69 7-85

=============== ============= SUBJECT: PROCESSING OF REFUND

OR TAX CREDIT OF EXCESS
CORPORATE INCOME TAX
* CTA's decision reflects RESULTING FROM THE FILING OF
PBCom's 1985 tax claim as THE FINAL ADJUSTMENT RETURN.
P5,299,749.95. A forty five
centavo difference was
noted. TO: All Internal Revenue Officers and Others
Concerned.

On May 20, 1993, the CTA rendered a decision which, as stated on the
outset, denied the request of petitioner for a tax refund or credit in the Sec. 85 And 86 Of the National Internal Revenue
sum amount of P5,299,749.95, on the ground that it was filed beyond Code provide:
the two-year reglementary period provided for by law. The petitioner's
claim for refund in 1986 amounting to P234,077.69 was likewise xxx xxx xxx
denied on the assumption that it was automatically credited by PBCom
against its tax payment in the succeeding year. The foregoing provisions are implemented by
Section 7 of Revenue Regulations Nos. 10-77
On June 22, 1993, petitioner filed a Motion for Reconsideration of the which provide;
CTA's decision but the same was denied due course for lack of merit. 6
xxx xxx xxx
Thereafter, PBCom filed a petition for review of said decision and
resolution of the CTA with the Court of Appeals. However on It has been observed, however, that because of the
September 22, 1993, the Court of Appeals affirmed in toto the CTA's excess tax payments, corporations file claims for
resolution dated July 20, 1993. Hence this petition now before us. recovery of overpaid income tax with the Court of
Tax Appeals within the two-year period from the
The issues raised by the petitioner are: date of payment, in accordance with sections 292
and 295 of the National Internal Revenue Code. It
I. Whether taxpayer PBCom is obvious that the filing of the case in court is to
— which relied in good faith preserve the judicial right of the corporation to
on the formal assurances of claim the refund or tax credit.
BIR in RMC No. 7-85 and
did not immediately file with It should he noted, however, that this is not a case
the CTA a petition for of erroneously or illegally paid tax under the
review asking for the provisions of Sections 292 and 295 of the Tax
refund/tax credit of its 1985- Code.
86 excess quarterly income
tax payments — can be
In the above provision of the Regulations the
prejudiced by the subsequent corporation may request for the refund of the
BIR rejection, applied
overpaid income tax or claim for automatic tax
retroactivity, of its credit. To insure prompt action on corporate
assurances in RMC No. 7-85 annual income tax returns showing refundable
that the prescriptive period amounts arising from overpaid quarterly income
for the refund/tax credit of taxes, this Office has promulgated Revenue
excess quarterly income tax Memorandum Order No. 32-76 dated June 11,
payments is not two years 1976, containing the procedure in processing said
but ten (10).7
returns. Under these procedures, the returns are
merely pre-audited which consist mainly of
II. Whether the Court of checking mathematical accuracy of the figures of
Appeals seriously erred in the return. After which, the refund or tax credit is
affirming the CTA decision granted, and, this procedure was adopted to
which denied PBCom's facilitate immediate action on cases like this.
claim for the refund of
P234,077.69 income tax In this regard, therefore, there is no need to file
overpaid in 1986 on the
petitions for review in the Court of Tax Appeals
mere speculation, without in order to preserve the right to claim refund or
proof, that there were taxes tax credit the two year period. As already stated,
due in 1987 and that PBCom actions hereon by the Bureau are immediate after
availed of tax-crediting that only a cursory pre-audit of the income tax returns.
year.8 Moreover, a taxpayer may recover from the
Bureau of Internal Revenue excess income tax
Simply stated, the main question is: Whether or not the Court of paid under the provisions of Section 86 of the Tax
Appeals erred in denying the plea for tax refund or tax credits on the Code within 10 years from the date of payment
ground of prescription, despite petitioner's reliance on RMC No. 7-85, considering that it is an obligation created by law
changing the prescriptive period of two years to ten years? (Article 1144 of the Civil Code).9 (Emphasis
supplied.)
Petitioner argues that its claims for refund and tax credits are not yet
barred by prescription relying on the applicability of Revenue Petitioner argues that the government is barred from asserting a
Memorandum Circular No. 7-85 issued on April 1, 1985. The circular position contrary to its declared circular if it would result to injustice to
states that overpaid income taxes are not covered by the two-year taxpayers. Citing ABS CBN Broadcasting Corporation vs. Court of Tax
prescriptive period under the tax Code and that taxpayers may claim Appeals 10 petitioner claims that rulings or circulars promulgated by the
72 ADMIN LAW CASES 0901
Commissioner of Internal Revenue have no retroactive effect if it national internal revenue tax hereafter alleged to
would be prejudicial to taxpayers, In ABS-CBN case, the Court held have been erroneously or illegally assessed or
that the government is precluded from adopting a position inconsistent collected, or of any penalty claimed to have been
with one previously taken where injustice would result therefrom or collected without authority, or of any sum alleged
where there has been a misrepresentation to the taxpayer. to have been excessive or in any manner
wrongfully collected, until a claim for refund or
Petitioner contends that Sec. 246 of the National Internal Revenue credit has been duly filed with the Commissioner;
Code explicitly provides for this rules as follows: but such suit or proceeding may be maintained,
whether or not such tax, penalty, or sum has been
paid under protest or duress.
Sec. 246 Non-retroactivity of rulings— Any
revocation, modification or reversal of any of the
rules and regulations promulgated in accordance In any case, no such suit or proceedings shall
with the preceding section or any of the rulings or begun after the expiration of two years from the
circulars promulgated by the Commissioner shall date of payment of the tax or penalty regardless of
not be given retroactive application if the any supervening cause that may arise after
payment; Provided however, That the
revocation, modification or reversal will be
prejudicial to the taxpayers except in the Commissioner may, even without a written claim
therefor, refund or credit any tax, where on the
following cases:
face of the return upon which payment was made,
such payment appears clearly to have been
a). where the taxpayer deliberately erroneously paid. (Emphasis supplied)
misstates or omits material facts from his
return or in any document required of
him by the Bureau of Internal Revenue; The rule states that the taxpayer may file a claim for refund or credit
with the Commissioner of Internal Revenue, within two (2) years after
payment of tax, before any suit in CTA is commenced. The two-year
b). where the facts subsequently prescriptive period provided, should be computed from the time of
gathered by the Bureau of Internal filing the Adjustment Return and final payment of the tax for the year.
Revenue are materially different from
the facts on which the ruling is based;
In Commissioner of Internal Revenue vs. Philippine American Life
Insurance Co., 15 this Court explained the application of Sec. 230 of
c). where the taxpayer acted in bad faith. 1977 NIRC, as follows:

Respondent Commissioner of Internal Revenue, through Solicitor Clearly, the prescriptive period of two years
General, argues that the two-year prescriptive period for filing tax should commence to run only from the time that
cases in court concerning income tax payments of Corporations is the refund is ascertained, which can only be
reckoned from the date of filing the Final Adjusted Income Tax Return, determined after a final adjustment return is
which is generally done on April 15 following the close of the calendar accomplished. In the present case, this date is
year. As precedents, respondent Commissioner cited cases which April 16, 1984, and two years from this date
adhered to this principle, to wit ACCRA Investments Corp. vs. Court of would be April 16, 1986. . . . As we have earlier
Appeals, et al., 11 and Commissioner of Internal Revenue vs. TMX said in the TMX Sales case, Sections
Sales, Inc., et al.. 12 Respondent Commissioner also states that since 68. 16 69, 17 and 70 18 on Quarterly Corporate
the Final Adjusted Income Tax Return of the petitioner for the taxable Income Tax Payment and Section 321 should be
year 1985 was supposed to be filed on April 15, 1986, the latter had considered in conjunction with it 19
only until April 15, 1988 to seek relief from the court. Further,
respondent Commissioner stresses that when the petitioner filed the
When the Acting Commissioner of Internal Revenue issued RMC 7-85,
case before the CTA on November 18, 1988, the same was filed
beyond the time fixed by law, and such failure is fatal to petitioner's changing the prescriptive period of two years to ten years on claims of
excess quarterly income tax payments, such circular created a clear
cause of action.
inconsistency with the provision of Sec. 230 of 1977 NIRC. In so
doing, the BIR did not simply interpret the law; rather it legislated
After a careful study of the records and applicable jurisprudence on the guidelines contrary to the statute passed by Congress.
matter, we find that, contrary to the petitioner's contention, the
relaxation of revenue regulations by RMC 7-85 is not warranted as it
disregards the two-year prescriptive period set by law. It bears repeating that Revenue memorandum-circulars are considered
administrative rulings (in the sense of more specific and less general
interpretations of tax laws) which are issued from time to time by the
Basic is the principle that "taxes are the lifeblood of the nation." The Commissioner of Internal Revenue. It is widely accepted that the
primary purpose is to generate funds for the State to finance the needs interpretation placed upon a statute by the executive officers, whose
of the citizenry and to advance the common weal. 13 Due process of duty is to enforce it, is entitled to great respect by the courts.
law under the Constitution does not require judicial proceedings in tax Nevertheless, such interpretation is not conclusive and will be ignored
cases. This must necessarily be so because it is upon taxation that the if judicially found to be erroneous. 20 Thus, courts will not countenance
government chiefly relies to obtain the means to carry on its operations administrative issuances that override, instead of remaining consistent
and it is of utmost importance that the modes adopted to enforce the and in harmony with the law they seek to apply and implement. 21
collection of taxes levied should be summary and interfered with as
little as possible. 14
In the case of People vs. Lim, 22 it was held that rules and regulations
issued by administrative officials to implement a law cannot go beyond
From the same perspective, claims for refund or tax credit should be the terms and provisions of the latter.
exercised within the time fixed by law because the BIR being an
administrative body enforced to collect taxes, its functions should not
be unduly delayed or hampered by incidental matters. Appellant contends that Section 2 of FAO No. 37-
1 is void because it is not only inconsistent with
but is contrary to the provisions and spirit of Act.
Sec. 230 of the National Internal Revenue Code (NIRC) of 1977 (now No 4003 as amended, because whereas the
Sec. 229, NIRC of 1997) provides for the prescriptive period for filing prohibition prescribed in said Fisheries Act was
a court proceeding for the recovery of tax erroneously or illegally for any single period of time not exceeding five
collected, viz.: years duration, FAO No 37-1 fixed no period, that
is to say, it establishes an absolute ban for all
Sec. 230. Recovery of tax erroneously or illegally time. This discrepancy between Act No. 4003 and
collected. — No suit or proceeding shall be FAO No. 37-1 was probably due to an oversight
maintained in any court for the recovery of any on the part of Secretary of Agriculture and
Natural Resources. Of course, in case of
73 ADMIN LAW CASES 0901
 discrepancy, the basic Act prevails, for the reason against the estimated quarterly income tax liabilities for the quarters of
that the regulation or rule issued to implement a the succeeding taxable year.
law cannot go beyond the terms and provisions of
the The corporation must signify in its annual corporate adjustment return
latter. . . . In this connection, the attention of the
(by marking the option box provided in the BIR form) its intention,
technical men in the offices of Department Heads whether to request for a refund or claim for an automatic tax credit for
who draft rules and regulation is called to the the succeeding taxable year. To ease the administration of tax
importance and necessity of closely following the collection, these remedies are in the alternative, and the choice of one
terms and provisions of the law which they precludes the other.
intended to implement, this to avoid any possible
misunderstanding or confusion as in the present
case.23 As stated by respondent Court of Appeals:

Further, fundamental is the rule that the State cannot be put in estoppel Finally, as to the claimed refund of income tax
by the mistakes or errors of its officials or agents. 24 As pointed out by over-paid in 1986 — the Court of Tax Appeals,
the respondent courts, the nullification of RMC No. 7-85 issued by the after examining the adjusted final corporate
Acting Commissioner of Internal Revenue is an administrative annual income tax return for taxable year 1986,
interpretation which is not in harmony with Sec. 230 of 1977 NIRC. found out that petitioner opted to apply for
for being contrary to the express provision of a statute. Hence, his automatic tax credit. This was the basis used (vis-
interpretation could not be given weight for to do so would, in effect, avis the fact that the 1987 annual corporate tax
amend the statute. return was not offered by the petitioner as
evidence) by the CTA in concluding that
petitioner had indeed availed of and applied the
It is likewise argued that the Commissioner of automatic tax credit to the succeeding year, hence
Internal Revenue, after promulgating RMC No. 7-
it can no longer ask for refund, as to [sic] the two
85, is estopped by the principle of non- remedies of refund and tax credit are
retroactively of BIR rulings. Again We do not alternative. 30
agree. The Memorandum Circular, stating that a
taxpayer may recover the excess income tax paid
within 10 years from date of payment because this That the petitioner opted for an automatic tax credit in accordance with
is an obligation created by law, was issued by the Sec. 69 of the 1977 NIRC, as specified in its 1986 Final Adjusted
Acting Commissioner of Internal Revenue. On the Income Tax Return, is a finding of fact which we must respect.
other hand, the decision, stating that the taxpayer Moreover, the 1987 annual corporate tax return of the petitioner was
should still file a claim for a refund or tax credit not offered as evidence to contovert said fact. Thus, we are bound by
and corresponding petition fro review within the the findings of fact by respondent courts, there being no showing of
two-year prescription period, and that the gross error or abuse on their part to disturb our reliance thereon. 31
lengthening of the period of limitation on refund
from two to ten years would be adverse to public WHEREFORE, the, petition is hereby DENIED, The decision of the
policy and run counter to the positive mandate of Court of Appeals appealed from is AFFIRMED, with COSTS against
Sec. 230, NIRC, - was the ruling and judicial the petitioner.1âwphi1.nêt
interpretation of the Court of Tax Appeals.
Estoppel has no application in the case at bar
because it was not the Commissioner of Internal SO ORDERED.
Revenue who denied petitioner's claim of refund
or tax credit. Rather, it was the Court of Tax
Appeals who denied (albeit correctly) the claim
and in effect, ruled that the RMC No. 7-85 issued
by the Commissioner of Internal Revenue is an
administrative interpretation which is out of
harmony with or contrary to the express provision
of a statute (specifically Sec. 230, NIRC), hence,
cannot be given weight for to do so would in
effect amend the statute.25

Art. 8 of the Civil Code 26 recognizes judicial decisions, applying or

interpreting statutes as part of the legal system of the country. But
administrative decisions do not enjoy that level of recognition. A
memorandum-circular of a bureau head could not operate to vest a
taxpayer with shield against judicial action. For there are no vested
rights to speak of respecting a wrong construction of the law by the
administrative officials and such wrong interpretation could not place
the Government in estoppel to correct or overrule the
same. 27 Moreover, the non-retroactivity of rulings by the
Commissioner of Internal Revenue is not applicable in this case
because the nullity of RMC No. 7-85 was declared by respondent
courts and not by the Commissioner of Internal Revenue. Lastly, it
must be noted that, as repeatedly held by this Court, a claim for refund
is in the nature of a claim for exemption and should be construed
in strictissimi juris against the taxpayer.28

On the second issue, the petitioner alleges that the Court of Appeals
seriously erred in affirming CTA's decision denying its claim for
refund of P234,077.69 (tax overpaid in 1986), based on mere
speculation, without proof, that PBCom availed of the automatic tax
credit in 1987.

Sec. 69 of the 1977 NIRC 29 (now Sec. 76 of the 1997 NIRC) provides
that any excess of the total quarterly payments over the actual income
tax computed in the adjustment or final corporate income tax return,
shall either(a) be refunded to the corporation, or (b) may be credited
74 ADMIN LAW CASES 0901
FORTICH vs. CORONA G.R. No. 131457, April 24, 1998 second paragraph of Section 7 of AO 18, still the said motion should
not have been entertained considering that the first motion for
Facts: This case involves a 144-hectare land located at San Vicente, reconsideration was not seasonably filed, thereby allowing the
Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Decision of March 29, 1996 to lapse into finality. Thus, the act of the
Management and Development Corporation (NQSRMDC), one of the Office of the President in re-opening the case and substantially
petitioners. Pursuant to Section 20 of R.A. No. 7160, otherwise known modifying its March 29, 1996 Decision which had already become
as the Local Government Code, the Sangguniang Bayan of Sumilao, final and executory, was in gross disregard of the rules and basic legal
Bukidnon, on March 4, 1993, enacted Ordinance No. 24 converting or precept that accord finality to administrative determinations.
re-classifying 144 hectares of land in Bgy. San Vicente, said
Municipality, from agricultural to industrial/institutional with a view of
providing an opportunity to attract investors who can inject new
economic vitality, provide more jobs and raise the income of its
people. Notwithstanding the foregoing favorable recommendation,
however, on November 14, 1994, the DAR, thru Secretary Garilao,
invoking its powers to approve conversion of lands under Section 65 of
R.A. No. 6657, issued an Order denying the instant application for the
conversion of the subject land from agricultural to agro-industrial and,
instead, placed the same under the compulsory coverage of CARP and
directed the distribution thereof to all qualified beneficiaries. After a
careful evaluation of the petition vis-a-vis the grounds upon which the
denial thereof by Secretary Garilao was based, we find that the instant
application for conversion by the Municipality of Sumilao, Bukidnon is
impressed with merit. To be sure, converting the land in question from
agricultural to agro-industrial would open great opportunities for
employment and bring about real development in the area towards a
sustained economic growth of the municipality. On the other hand,
distributing the land to would-be beneficiaries (who are not even
tenants, as there are none) does not guarantee such benefits. In
pursuance of the spirit and intent of the said legal mandate and in view
of the favorable recommendations of the various government agencies,
the subject Order of Department of Agrarian Reform, was SET ASIDE,
DAR filed a motion for reconsideration of the OP decision which
having been filed beyond the reglementary period of fifteen (15) days.
The DAR filed a second motion for reconsideration of the June 23,
1997 Order of the President.

Some alleged farmer-beneficiaries began their hunger strike in front of

the DAR Compound in Quezon City to protest the OP Decision of
March 29, 1996. On October 10, 1997, some persons claiming to be
farmer-beneficiaries of the NQSRMDC property filed a motion for
intervention (styled as Memorandum In Intervention) in O.P. Case No.
96-C-6424, asking that the OP Decision allowing the conversion of the
entire 144-hectare property be set aside. President Fidel V. Ramos
then held a dialogue with the strikers and promised to resolve their
grievance within the framework of the law. He created an eight (8)-
man Fact Finding Task Force (FFTF) chaired by Agriculture Secretary
Salvador Escudero to look into the controversy and recommend
possible solutions to the problem. On November 7, 1997, the Office of
the President resolved the strikers’ protest by issuing the so-called
“Win/Win” Resolution penned by then Deputy Executive Secretary
Renato C. Corona. A copy of the “Win-Win” Resolution was received
by Governor Carlos O. Fortich of Bukidnon, Mayor Rey B. Baula of
Sumilao, Bukidnon, and NQSRMDC on November 24, 1997 28 and,
on December 4, 1997, they filed the present petition for certiorari,
prohibition (under Rule 65 of the Revised Rules of Court) and
injunction with urgent prayer for a temporary restraining order and/or
writ of preliminary injunction (under Rule 58, ibid.), against then
Deputy Executive Secretary Renato C. Corona and DAR Secretary
Ernesto D. Garilao. Hence this case.

Issue: Whether the Office of the president still have Jurisdiction when
it entertained the Second Motion for Reconsideration and became the
basis of the Win-Win Resolution?

Held: No, When the Office of the President issued the Order dated
June 23, 1997 declaring the Decision of March 29, 1996 final and
executory, as no one has seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to re-open the case,
more so modify its Decision. Having lost its jurisdiction, the Office of
the President has no more authority to entertain the second motion for
reconsideration filed by respondent DAR Secretary, which second
motion became the basis of the assailed “Win-Win” Resolution.
Section 7 of Administrative Order No. 18 and Section 4, Rule 43 of the
Revised Rules of Court mandate that only one (1) motion for
reconsideration is allowed to be taken from the Decision of March 29,
1996. And even if a second motion for reconsideration was permitted
to be filed in “exceptionally meritorious cases,” as provided in the

75 ADMIN LAW CASES 0901

G.R. No. 131457 April 24, 1998 Office (MARO) of Sumilao, Bukidnon, the Land Bank of the
Philippines (Land Bank), and their authorized representatives "to desist
from pursuing any activity or activities" concerning the subject land
HON. CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF
"until further orders."5
BUKIDNON, HON. REY B. BAULA, MUNICIPAL MAYOR OF
SUMILAO, BUKIDNON, NQSR MANAGEMENT AND
DEVELOPMENT CORPORATION, petitioners, 5. Despite the DARAB order of March 31, 1992, the DAR Regional
vs. Director issued a memorandum, dated May 21, 1992, directing the
HON. RENATO C. CORONA, DEPUTY EXECUTIVE Land Bank to open a trust account for P2.38 million in the name of
SECRETARY, HON. ERNESTO D. GARILAO, SECRETARY NQSRMDC and to conduct summary proceedings to determine the just
OF THE DEPARTMENT OF AGRARIAN compensation of the subject property. NQSRMDC objected to these
REFORM, respondents. moves and filed on June 9, 1992 an Omnibus Motion to enforce the
DARAB order of March 31, 1992 and to nullify the summary
proceedings undertaken by the DAR Regional Director and Land Bank
on the valuation of the subject property.

MARTINEZ, J.: 6. The DARAB, on October 22, 1992, acted favorably on the Omnibus
Motion by (a) ordering the DAR Regional Director and Land Bank "to
seriously comply with the terms of the order dated March 31, 1992;"
The dramatic and well-publicized hunger strike staged by some alleged (b) nullifying the DAR Regional Director's memorandum, dated May
farmer-beneficiaries in front of the Department of Agrarian Reform 21, 1992, and the summary proceedings conducted pursuant thereto;
compound in Quezon City on October 9, 1997 commanded nationwide and (c) directing the Land Bank "to return the claim folder of Petitioner
attention that even church leaders and some presidential candidates NQSRMDC's subject Property to the DAR until further orders." 6
tried to intervene for the strikers' "cause."
7. The Land Bank complied with the DARAB order and cancelled the
The strikers protested the March 29, 1996 Decision 1 of the Office of trust account it opened in the name of petitioner NQSRMDC. 7
the President (OP), issued through then Executive Secretary Ruben D.
Torres in OP Case No. 96-C-6424, which approved the conversion of a
one hundred forty-four (144)-hectare land from agricultural to agro- 8. In the meantime, the Provincial Development Council (PDC) of
industrial/institutional area. This led the Office of the President, Bukidnon, headed by Governor Carlos O. Fortich, passed Resolution
through then Deputy Executive Secretary Renato C. Corona, to issue No. 6,8 dated January 7, 1993, designating certain areas along
Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial
the so-called "Win-Win" Resolution 2 on November 7, 1997,
substantially modifying its earlier Decision after it had already become Zones where the subject property is situated.
final and executory. The said Resolution modified the approval of the
land conversion to agro-industrial area only to the extent of forty-four 9. What happened thereafter is well-narrated in the OP (TORRES)
(44) hectares, and ordered the remaining one hundred (100) hectares to Decision of March 29, 1996, pertinent portions of which we quote:
be distributed to qualified farmer-beneficiaries.
Pursuant to Section 20 of R.A. No. 7160,
But, did the "Win-Win" Resolution culminate in victory for all the otherwise known as the Local Government Code,
contending parties? the Sangguniang Bayan of Sumilao, Bukidnon, on
March 4, 1993, enacted Ordinance No. 24
converting or re-classifying 144 hectares of land
The above-named petitioners cried foul. They have come to this Court
urging us to annul and set aside the "Win-Win" Resolution and to in Bgy. San Vicente, said Municipality, from
agricultural to industrial/institutional with a view
enjoin respondent Secretary Ernesto D. Garilao of the Department of
Agrarian Reform from implementing the said Resolution. of providing an opportunity to attract investors
who can inject new economic vitality, provide
more jobs and raise the income of its people.
Thus, the crucial issue to be resolved in this case is: What is the legal
effect of the "Win-Win" Resolution issued by the Office of the
President on its earlier Decision involving the same subject matter, Parenthetically, under said section, 4th to 5th
which had already become final and executory? class municipalities may authorize the
classification of five percent (5%) of their
agricultural land area and provide for the manner
The antecedent facts of this controversy, as culled from the pleadings, of their utilization or disposition.
may be stated as follows:
On 12 October 1993, the Bukidnon Provincial
1. This case involves a 144-hectare land located at San Vicente, Land Use Committee approved the said
Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Ordinance. Accordingly, on 11 December 1993,
Management and Development Corporation (NQSRMDC), one of the the instant application for conversion was filed by
petitioners. The property is covered by a Transfer Certificate of Title Mr. Gaudencio Beduya in behalf of
No. 143713 of the Registry of Deeds of the Province of Bukidnon. NQSRMDC/BAIDA (Bukidnon Agro-Industrial
Development Association).
2. In 1984, the land was leased as a pineapple plantation to the
Philippine Packing Corporation, now Del Monte Philippines, Inc. Expressing support for the proposed project, the
(DMPI), a multinational corporation, for a period of ten (10) years Bukidnon Provincial Board, on the basis of a Joint
under the Crop Producer and Grower's Agreement duly annotated in Committee Report submitted by its Committee on
the certificate of title. The lease expired in April, 1994. Laws, Committee on Agrarian Reform and Socio-
Economic Committee approved, on 1 February
3. In October, 1991, during the existence of the lease, the Department 1994, the said Ordinance now docketed as
of Agrarian Reform (DAR) placed the entire 144-hectare property Resolution No. 94-95. The said industrial area, as
under compulsory acquisition and assessed the land value at P2.38 conceived by NQSRMDC (project proponent) is
million.4 supposed to have the following components:

4. NQSRMDC resisted the DAR's action. In February, 1992, it sought 1. Development Academy of Mindanao which
and was granted by the DAR Adjudication Board (DARAB), through constitutes following: Institute for Continuing
its Provincial Agrarian Reform Adjudicator (PARAD) in DARAB Higher Education; Institute for Livelihood
Case No. X-576, a writ of prohibition with preliminary injunction Science (Vocational and Technical School);
which ordered the DAR Region X Director, the Provincial Agrarian Institute for Agribusiness Research; Museum,
Reform Officer (PARO) of Bukidnon, the Municipal Agrarian Reform Library, Cultural Center, and Mindanao Sports

76 ADMIN LAW CASES 0901

 Development Complex which covers an area of 2. The land has long been covered by a Notice of
24 hectares; Compulsory Acquisition (NCA);

2. Bukidnon Agro-Industrial Park which consists 3. The existing policy on withdrawal or lifting on
of corn processing for corn oil, corn starch, areas covered by NCA is not applicable;
various corn products; rice processing for wine,
rice-based snacks, exportable rice; cassava
4. There is no clear and tangible compensation
processing for starch, alcohol and food delicacies; package arrangements for the beneficiaries;
processing plants, fruits and fruit products such as
juices; processing plants for vegetables processed
and prepared for market; cold storage and ice 5. The procedures on how the area was identified
plant; cannery system; commercial stores; public and reclassified for agro-industrial project has no
market; and abattoir needing about 67 hectares; reference to Memo Circular No. 54, Series of
1993, E.O. No. 72, Series of 1993, and E.O. No.
124, Series of 1993.
3. Forest development which includes open
spaces and parks for recreation, horse-back riding,
memorial and mini-zoo estimated to cover 33 A Motion for Reconsideration of the aforesaid
hectares; and Order was filed on January 9, 1995 by applicant
but the same was denied (in an Order dated June
7, 1995). 9
4. Support facilities which comprise the
construction of a 360-room hotel, restaurants,
dormitories and a housing project covering an 10. Thus, the DAR Secretary ordered the DAR Regional Director "to
area of 20 hectares. proceed with the compulsory acquisition and distribution of the
property." 10
The said NQSRMDC Proposal was, per
Certification dated January 4, 1995, adopted by 11. Governor Carlos O. Fortich of Bukidnon appealed" the order of
the Department of Trade and Industry, Bukidnon denial to the Office of the President and prayed for the
Provincial Office, as one of its flagship projects. conversion/reclassification of the subject land as the same would be
The same was likewise favorably recommended more beneficial to the people of Bukidnon.
by the Provincial Development Council of
Bukidnon; the municipal, provincial and regional 12. To prevent the enforcement of the DAR Secretary's order,
office of the DAR; the Regional Office (Region NQSRMDC, on June 29, 1995, filed with the Court of Appeals a
X) of the DENR (which issued an Environmental petition for certiorari, prohibition with preliminary
Compliance Certificate on June 5, 1995); the injunction, 12 docketed as CA-G.R. SP No. 37614.
Executive Director, signing "By Authority of
PAUL G. DOMINGUEZ," Office of the President
— Mindanao; the Secretary of DILG; and 13. Meanwhile, on July 25, 1995, the Honorable Paul G. Dominguez,
Undersecretary of DECS Wilfredo D. Clemente. then Presidential Assistant for Mindanao, after conducting an
evaluation of the proposed project, sent a memorandum 13 to the
President favorably endorsing the project with a recommendation that
In the same vein, the National Irrigation the DAR Secretary reconsider his decision in denying the application
Administration, Provincial Irrigation Office, of the province for the conversion of the land.
Bagontaas Valencia, Bukidnon, thru Mr. Julius S.
Maquiling, Chief, Provincial Irrigation Office,
interposed NO. OBJECTION to the proposed 14. Also, in a memorandum 14 to the President dated August 23, 1995,
conversion "as long as the development cost of the Honorable Rafael Alunan III, then Secretary of the Department of
the irrigation systems thereat which is P2,377.00 the Interior and Local Government (DILG), recommended the
per hectare be replenished by the developer . . . ." conversion of the subject land to industrial/institutional use with a
Also, the Kisolon-San Vicente Irrigators Multi request that the President "hold the implementation of the DAR order
Purpose Cooperative, San Vicente, Sumilao, to distribute the land in question."
Bukidnon, interposed no objection to the
proposed conversion of the land in question "as it 15. On October 23, 1995, the Court of Appeals, in CA-G.R. SP No.
will provide more economic benefits to the 37614, issued a Resolution 15 ordering the parties to observe status quo
community in terms of outside investments that pending resolution of the petition. At the hearing held in said case on
will come and employment opportunities that will October 5, 1995, the DAR, through the Solicitor General, manifested
be generated by the projects to be put up . . . . before the said court that the DAR was merely "in the processing stage
of the applications of farmers-claimants" and has agreed to respect
On the same score, it is represented that during status quo pending the resolution of the petition. 16
the public consultation held at the Kisolan
Elementary School on 18 March 1995 with 16. In resolving the appeal, the Office of the President, through then
Director Jose Macalindong of DAR Central Executive Secretary Ruben D. Torres, issued a Decision in OP Case
Office and DECS Undersecretary Clemente, the No. 96-C-6424, dated March 29, 1996, reversing the DAR Secretary's
people of the affected barangay rallied behind decision, the pertinent portions of which read:
their respective officials in endorsing the project.
After a careful evaluation of the petition vis-a-
Notwithstanding the foregoing favorable vis the grounds upon which the denial thereof by
recommendation, however, on November 14, Secretary Garilao was based, we find that the
1994, the DAR, thru Secretary Garilao, invoking instant application for conversion by the
its powers to approve conversion of lands under Municipality of Sumilao, Bukidnon is impressed
Section 65 of R.A. No. 6657, issued an Order with merit. To be sure, converting the land in
denying the instant application for the conversion question from agricultural to agro-industrial
of the subject land from agricultural to agro- would open great opportunities for employment
industrial and, instead, placed the same under the and bring about real development in the area
compulsory coverage of CARP and directed the towards a sustained economic growth of the
distribution thereof to all qualified beneficiaries municipality. On the other hand, distributing the
on the following grounds: land to would-be beneficiaries (who are not even
tenants, as there are none) does not guarantee
1. The area is considered as a prime agricultural such benefits.
land with irrigation facility;
77 ADMIN LAW CASES 0901
 Nevertheless, on the issue that the land is Culture and Sports (DECS) executed a Memorandum of Agreement
considered a prime agricultural land with whereby the former donated four (4) hectares from the subject land to
irrigation facility it maybe appropriate to mention DECS for the establishment of the NQSR High School. 18
that, as claimed by petitioner, while it is true that
there is, indeed, an irrigation facility in the area,
When NQSRMDC was about to transfer the title over the 4-hectare
the same merely passes thru the property (as a donated to DECS, it discovered that the title over the subject property
right of way) to provide water to the ricelands was no longer in its name. It soon found out that during the pendency
located on the lower portion thereof. The land of both the Petition for Certiorari, Prohibition, with Preliminary
itself, subject of the instant petition, is not Injunction it filed against DAR in the Court of Appeals and the appeal
irrigated as the same was, for several years, to the President filed by Governor Carlos O. Fortich, the DAR, without
planted with pineapple by the Philippine Packing giving just compensation, caused the cancellation of NQSRMDC's title
Corporation.
on August 11, 1995 and had it transferred in the name of the Republic
of the Philippines under TCT No. T-50264 19 of the Registry of Deeds
On the issue that the land has long been covered of Bukidnon. Thereafter, on September 25, 1995, DAR caused the
by a Notice of Compulsory Acquisition (NCA) issuance of Certificates of Land Ownership Award (CLOA) No.
and that the existing policy on withdrawal or 00240227 and had it registered in the name of 137 farmer-beneficiaries
lifting on areas covered by NCA is not applicable, under TCT No. AT-3536 20 of the Registry of Deeds of Bukidnon.
suffice it to state that the said NCA was declared
null and void by the Department of Agrarian 19. Thus, on April 10, 1997, NQSRMDC filed a complaint 21 with the
Reform Adjudication Board (DARAB) as early as
Regional Trial Court (RTC) of Malaybalay, Bukidnon (Branch 9),
March 1, 1992. Deciding in favor of NQSRMDC, docketed as Civil Case No. 2687-97, for annulment and cancellation of
the DARAB correctly pointed out that under title, damages and injunction against DAR and 141 others. The RTC
Section 8 of R.A. No. 6657, the subject property then issued a Temporary Restraining Order on April 30, 1997 22and a
could not validly be the subject of compulsory Writ of Preliminary Injunction on May 19, 1997, 23 restraining the
acquisition until after the expiration of the lease DAR and 141 others from entering, occupying and/or wresting from
contract with Del Monte Philippines, a Multi- NQSRMDC the possession of the subject land.
National Company, or until April 1994, and
ordered the DAR Regional Office and the Land
Bank of the Philippines, both in Butuan City, to 20. Meanwhile, on June 23, 1997, an Order 24 was issued by then
"desist from pursuing any activity or activities Executive Secretary Ruben D. Torres denying DAR's motion for
covering petitioner's land. reconsideration for having been filed beyond the reglementary period
of fifteen (15) days. The said order further declared that the March 29,
1996 OP decision had already become final and executory.
On this score, we take special notice of the fact
that the Quisumbing family has already
contributed substantially to the land reform 21. The DAR filed on July 11, 1997 a second motion for
program of the government, as follows: 300 reconsideration of the June 23, 1997 Order of the President.
hectares of rice land in Nueva Ecija in the 70's
and another 400 hectares in the nearby 22. On August 12, 1997, the said writ of preliminary injunction issued
Municipality of Impasugong, Bukidnon, ten(10) by the RTC was challenged by some alleged farmers before the Court
years ago, for which they have not received "just of Appeals through a petition for certiorari and prohibition, docketed
compensation" up to this time. as CA-G.R. SP No. 44905, praying for the lifting of the injunction and
for the issuance of a writ of prohibition from further trying the RTC
Neither can the assertion that "there is no clear case.
and tangible compensation package arrangements
for the beneficiaries' hold water as, in the first 23. On October 9, 1997, some alleged farmer-beneficiaries began their
place, there are no beneficiaries to speak about, hunger strike in front of the DAR Compound in Quezon City to protest
for the land is not tenanted as already stated. the OP Decision of March 29, 1996. On October 10, 1997, some
persons claiming to be farmer-beneficiaries of the NQSRMDC
Nor can procedural lapses in the manner of property filed a motion for intervention (styled as Memorandum In
identifying/reclassifying the subject property for Intervention) in O.P. Case No. 96-C-6424, asking that the OP Decision
agro-industrial purposes be allowed to defeat the allowing the conversion of the entire 144-hectare property be set
very purpose of the law granting autonomy to aside. 25
local government units in the management of their
local affairs. Stated more simply, the language of 24. President Fidel V. Ramos then held a dialogue with the strikers and
Section 20 of R.A. No. 7160, supra, is clear and promised to resolve their grievance within the framework of the law.
affords no room for any other interpretation. By He created an eight (8)-man Fact Finding Task Force (FFTF) chaired
unequivocal legal mandate, it grants local by Agriculture Secretary Salvador Escudero to look into the
government units autonomy in their local affairs controversy and recommend possible solutions to the problem. 26
including the power to convert portions of their
agricultural lands and provide for the manner of
their utilization and disposition to enable them to 25. On November 7, 1997, the Office of the President resolved the
attain their fullest development as self-reliant strikers' protest by issuing the so-called "Win/Win" Resolution penned
communities. by then Deputy Executive Secretary Renato C. Corona, the dispositive
portion of which reads:
WHEREFORE, in pursuance of the spirit and
intent of the said legal mandate and in view of the WHEREFORE, premises considered, the decision
favorable recommendations of the various of the Office of the President, through Executive
government agencies abovementioned, the subject Secretary Ruben Torres, dated March 29, 1996, is
Order, dated November 14, 1994 of the Hon. hereby MODIFIED as follows:
Secretary, Department of Agrarian Reform, is
hereby SET ASIDE and the instant application of 1. NQSRMDC's application for conversion is
NQSRMDC/BAIDA is hereby APPROVED. 17 APPROVED only with respect to the
approximately forty-four (44) hectare portion of
17. On May 20, 1996, DAR filed a motion for reconsideration of the the land adjacent to the highway, as
OP decision. recommended by the Department of Agriculture.

18. On September 11, 1996, in compliance with the OP decision of 2. The remaining approximately one hundred
March 29, 1996, NQSRMDC and the Department of Education, (100) hectares traversed by an irrigation canal and
78 ADMIN LAW CASES 0901
 found to be suitable for agriculture shall be (2) The petitioners failed to file a motion for reconsideration of the
distributed to qualified farmer-beneficiaries in assailed "Win-Win" Resolution before filing the present petition; and
accordance with RA 6657 or the Comprehensive
Agrarian Reform Law with a right of way to said (3) Petitioner NQSRMDC is guilty of forum-shopping.
portion from the highway provided in the portion
fronting the highway. For this purpose, the DAR
and other concerned government agencies are These are the preliminary issues which must first be resolved,
directed to immediately conduct the segregation including the incident on the motion for intervention filed by the
survey of the area, valuation of the property and alleged farmer-beneficiaries.
generation of titles in the name of the identified
farmer-beneficiaries. Anent the first issue, in order to determine whether the recourse of
petitioners is proper or not, it is necessary to draw a line between an
3. The Department of Agrarian Reform is hereby error of judgment and an error of jurisdiction. An error of judgment is
directed to carefully and meticulously determine one which the court may commit in the exercise of its jurisdiction, and
who among the claimants are qualified farmer- which error is reviewable only by an appeal. 35 On the other hand,
beneficiaries. an error of jurisdiction is one where the act complained of was issued
by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to
4. The Department of Agrarian Reform is hereby lack or in excess of jurisdiction. 36 This error is correctable only by the
further directed to expedite payment of just extraordinary writ of certiorari. 37
compensation to NQSRMDC for the portion of
the land to be covered by the CARP, including
other lands previously surrendered by It is true that under Rule 43, appeals from awards, judgments, final
NQSRMDC for CARP coverage. orders or resolutions of any quasi-judicial agency exercising quasi-
judicial functions, 38 including the Office of the President, 39 may be
taken to the Court of Appeals by filing a verified petition for
5. The Philippine National Police is hereby review 40 within fifteen (15) days from notice of the said judgment,
directed to render full assistance to the
final order or resolution, 41 whether the appeal involves questions of
Department of Agrarian Reform in the fact, of law, or mixed questions of fact and law. 42
implementation of this Order.

However, we hold that, in this particular case, the remedy prescribed in

We take note of the Memorandum in Intervention
Rule 43 is inapplicable considering that the present petition contains an
filed by 113 farmers on October 10, 1997 without allegation that the challenged resolution is "patently illegal" 43 and was
ruling on the propriety or merits thereof since it is
issued with "grave abuse of discretion" and "beyond his (respondent
unnecessary to pass upon it at this time. Secretary Renato C. Corona's) jurisdiction" 44 when said resolution
substantially modified the earlier OP Decision of March 29, 1996
SO ORDERED. 27 which had long become final and executory. In other words, the crucial
issue raised here involves an error of jurisdiction, not an error of
A copy of the "Win-Win" Resolution was received by Governor Carlos judgment which is reviewable by an appeal under Rule 43. Thus, the
O. Fortich of Bukidnon, Mayor Rey B. Baula of Sumilao, Bukidnon, appropriate remedy to annul and set aside the assailed resolution is an
and NQSRMDC on November 24, 1997 28 and, on December 4, 1997, original special civil action for certiorari under Rule 65, as what the
they filed the present petition for certiorari, prohibition (under Rule 65 petitioners have correctly done. The pertinent portion of Section 1
of the Revised Rules of Court) and injunction with urgent prayer for a thereof provides:
temporary restraining order and/or writ of preliminary injunction
(under Rule 58, ibid.), against then Deputy Executive Secretary Renato Sec. 1. Petition for certiorari. — When any
C. Corona and DAR Secretary Ernesto D. Garilao. tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
On December 12, 1997, a Motion For Leave To Intervene 29 was filed excess of its or his jurisdiction, or with grave
by alleged farmer-beneficiaries, through counsel, claiming that they are abuse of discretion amounting to lack or excess of
real parties in interest as they were "previously identified by jurisdiction, and there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary
respondent DAR as agrarian reform beneficiaries on the 144-hectare"
property subject of this case. The motion was vehemently course of law, a person aggrieved thereby may
file a verified petition in the proper court, alleging
opposed 30 by the petitioners.
the facts with certainty and praying that judgment
be rendered annulling or modifying the
In seeking the nullification of the "Win-Win" Resolution, the proceedings of such tribunal, board or officer, and
petitioners claim that the Office of the President was prompted to issue granting such incidental reliefs as law and justice
the said resolution "after a very well-managed hunger strike led by fake may require.
farmer-beneficiary Linda Ligmon succeeded in pressuring and/or
politically blackmailing the Office of the President to come up with
this purely political decision to appease the 'farmers,' by reviving and xxx xxx xxx
modifying the Decision of 29 March 1996 which has been declared
final and executory in an Order of 23 June 1997. . . ."31 Thus, The office of a writ of certiorari is restricted to truly
petitioners further allege, respondent then Deputy Executive Secretary extraordinary cases — cases in which the act of the lower
Renato C. Corona "committed grave abuse of discretion and acted court or quasi-judicial body is wholly void. 45
beyond his jurisdiction when he issued the questioned Resolution of 7
November 1997. . . ." 32 They availed of this extraordinary writ The aforequoted Section 1 of Rule 65 mandates that the person
of certiorari "because there is no other plain, speedy and adequate aggrieved by the assailed illegal act "may file a verified petition
remedy in the ordinary course of law."33 They never filed a motion for (for certiorari) in the proper court." The proper court where the
reconsideration of the subject Resolution "because (it) is patently petition must be filed is stated in Section 4 of the same Rule 65 which
illegal or contrary to law and it would be a futile exercise to seek a
reads:
reconsideration. . . ." 34

Sec. 4. Where petition filed. — The petition may

The respondents, through the Solicitor General, opposed the petition be filed not later than sixty (60) days from notice
and prayed that it be dismissed outright on the following grounds:
of the judgment, order or resolution sought to be
assailed in the Supreme Court or, if it relates to
(1) The proper remedy of petitioners should have been to file a petition the acts or omissions of a lower court or of a
for review directly with the Court of Appeals in accordance with Rule corporation, board, officer or person, in the
43 of the Revised Rules of Court; Regional Trial Court exercising jurisdiction over
the territorial area as defined by the Supreme
79 ADMIN LAW CASES 0901
 Court. It may also be filed in the Court of Appeals later, we find the assailed resolution wholly void and requiring the
whether or not the same is in aid of its appellate petitioners to file their petition first with the Court of Appeals would
jurisdiction, or in the Sandiganbayan if it is in aid only result in a waste of time and money.
of its jurisdiction. If it involves the acts or
omissions of a quasi-judicial agency, and unless
That the Court has the power to set aside its own rules in the higher
otherwise provided by law or these Rules, the interests of justice is well-entrenched, in our jurisprudence. We
petition shall be filed in and cognizable only by reiterate what we said in Piczon vs. Court of Appeals: 56
the Court of Appeals. (4a)

Be it remembered that rules of procedure are but

Under the above-qouted Section 4, the Supreme Court, Court of mere tools designed to facilitate the attainment of
Appeals and Regional Trial Court have original concurrent jurisdiction justice. Their strict and rigid application, which
to issue a writ of certiorari, 46 prohibition 47 and mandamus. 48 But the would result in technicalities that tend to frustrate
jurisdiction of these three (3) courts are also delineated in that, if the rather than promote substantial justice, must
challenged act relates to acts or omissions of a lower court or of a always be avoided. Time and again, this Court has
corporation, board, officer or person, the petition must be filed with the suspended its own rules and excepted a particular
Regional Trial Court which exercises jurisdiction over the territorial
case from their operation whenever the higher
area as defined by the Supreme Court. And if it involves the act or interests of justice so require. In the instant
omission of a quasi-judicial agency, the petition shall be filed only with
petition, we forego a lengthy disquisition of the
the Court of Appeals, unless otherwise provided by law or the Rules of proper procedure that should have been taken by
Court. We have clearly discussed this matter of concurrence of
the parties involved and proceed directly to the
jurisdiction in People vs. Cuaresma, et. al.,49 through now Chief merits of the case.
Justice Andres R. Narvasa, thus:

As to the second issue of whether the petitioners committed a fatal

. . . . This Court's original jurisdiction to issue
procedural lapse when they failed to file a motion for reconsideration
writs of certiorari (as well as of the assailed resolution before seeking judicial recourse, suffice it to
prohibition, mandamus, quo warranto, habeas state that the said motion is not necessary when the questioned
corpus and injunction) is not exclusive. It is resolution is a patent nullity, 57 as will be taken up later.
shared by this Court with Regional Trial Courts
(formerly Courts of First Instance), which may
issue the writ, enforceable in any part of their With respect to the third issue, the respondents claim that the filing by
respective regions. It is also shared by this Court, the petitioners of: (a) a petition for certiorari, prohibition with
and by the Regional Trial Court, with the Court of preliminary injunction (CA-G.R. SP No. 37614) with the Court of
Appeals (formerly, Intermediate Appellate Court), Appeals; (b) a complaint for annulment and cancellation of title,
although prior to the effectivity of Batas damages and injunction against DAR and 141 others (Civil Case No.
Pambansa Bilang 129 on August 14, 1981, the 2687-97) with the Regional Trial Court of Malaybalay, Bukidnon; and
latter's competence to issue the extraordinary (c) the present petition, constitute forum shopping.
writs was restricted to those "in aid of its appellate
jurisdiction." This concurrence of jurisdiction is We disagree.
not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which The rule is that:
application therefor will be directed. There is after
all a hierarchy of courts. That hierarchy is There is forum-shopping whenever, as a result of
determinative of the venue of appeals, and should an adverse opinion in one forum, a party seeks a
also serve as a general determinant of the favorable opinion (other than by appeal
appropriate forum for petitions for the or certiorari) in another. The principle applies not
extraordinary writs. A becoming regard for that only with respect to suits filed in the courts but
judicial hierarchy most certainly indicates that also in connection with litigation commenced in
petitions for the issuance of extraordinary writs the courts while an administrative proceeding is
against first level ("inferior") courts should be pending, as in this case, in order to defeat
filed with the Regional Trial Court, and those administrative processes and in anticipation of an
against the latter, with the Court of Appeals. unfavorable administrative ruling and a favorable
(Citations omitted) court ruling. This specially so, as in this case,
where the court in which the second suit was
But the Supreme Court has the full discretionary power to take brought, has no jurisdiction (citations omitted).
cognizance of the petition filed directly to it if compelling reasons, or
the nature and importance of the issues raised, warrant. This has been The test for determining whether a party violated
the judicial policy to be observed and which has been reiterated in the rule against forum shopping has been laid
subsequent cases, namely: 50 Uy vs. Contreras, et. al., 51 Torres down in the 1986 case of Buan vs. Lopez (145
vs. Arranz, 52 Bercero vs. De Guzman, 53 and Advincula vs. Legaspi, SCRA 34), . . . and that is, forum shopping exists
et. al. 54 As we have further stated in Cuaresma: where the elements of litis pendentia are present
or where a final judgment in one case will amount
. . . . A direct invocation of the Supreme Court's to res judicatain the other, as follows:
original jurisdiction to issue these writs should be
allowed only when there are special and important There thus exists between
reasons therefor, clearly and specifically set out in the action before this Court
the petition. This is established policy. It is a and RTC Case No. 86-36563
policy that is necessary to prevent inordinate identity of parties, or at least
demands upon the Court's time and attention such parties as represent the
which are better devoted to those matters within same interests in both
its exclusive jurisdiction, and to prevent further actions, as well as identity of
over-crowding of the Court's docket. rights asserted and relief
prayed for, the relief being
Pursuant to said judicial policy, we resolve to take primary jurisdiction founded on the same facts,
over the present petition in the interest of speedy justice 55 and to avoid and the identity on the two
future litigations so as to promptly put an end to the present preceding particulars is such
controversy which, as correctly observed by petitioners, has sparked that any judgment rendered
national interest because of the magnitude of the problem created by in the other action, will,
the issuance of the assailed resolution. Moreover, as will be discussed regardless of which party is
80 ADMIN LAW CASES 0901
 successful, amount to res It is further provided for in Section 9 that "The Rules of
adjudicata in the action Court shall apply in a suppletory character whenever
under consideration: all the practicable.
requisites, in fine, of auter
action pendant. 58
When the Office of the President issued the Order dated June 23, 1997
declaring the Decision of March 29, 1996 final and executory, as no
It is clear from the above-quoted rule that the petitioners are not guilty one has seasonably filed a motion for reconsideration thereto, the said
of forum shopping. The test for determining whether a party has Office had lost its jurisdiction to re-open the case, more so modify its
violated the rule against forum shopping is where a final judgment in Decision. Having lost its jurisdiction, the Office of the President has no
one case will amount to res adjudicata in the action under more authority to entertain the second motion for reconsideration filed
consideration. A cursory examination of the cases filed by the by respondent DAR Secretary, which second motion became the basis
petitioners does not show that the said cases are similar with each of the assailed "Win-Win" Resolution. Section 7 of Administrative
other. The petition for certiorari in the Court of Appeals sought the Order No. 18 and Section 4, Rule 43 of the Revised Rules of Court
nullification of the DAR Secretary's order to proceed with the mandate that only one (1) motion for reconsideration is allowed to be
compulsory acquisition and distribution of the subject property. On the taken from the Decision of March 29, 1996. And even if a second
other hand, the civil case in RTC of Malaybalay, Bukidnon for the motion for reconsideration was permitted to be filed in "exceptionally
annulment and cancellation of title issued in the name of the Republic meritorious cases," as provided in the second paragraph of Section 7 of
of the Philippines, with damages, was based on the following grounds: AO 18, still the said motion should not have been entertained
(1) the DAR, in applying for cancellation of petitioner NQSRMDC's considering that the first motion for reconsideration was not seasonably
title, used documents which were earlier declared null and void by the filed, thereby allowing the Decision of March 29, 1996 to lapse into
DARAB; (2) the cancellation of NQSRMDC's title was made without finality. Thus, the act of the Office of the President in re-opening the
payment of just compensation; and (3) without notice to NQSRMDC case and substantially modifying its March 29, 1996 Decision which
for the surrender of its title. The present petition is entirely different had already become final and executory, was in gross disregard of the
from the said two cases as it seeks the nullification of the assailed rules and basic legal precept that accord finalityto administrative
"Win-Win" Resolution of the Office of the President dated November determinations.
7, 1997, which resolution was issued long after the previous two cases
were instituted.
In San Luis, et al. vs. Court of Appeals, et al. 60 we held:

The fourth and final preliminary issue to be resolved is the motion for Since the decisions of both the Civil Service
intervention filed by alleged farmer-beneficiaries, which we have to Commission and the Office of the President had
deny for lack of merit. In their motion, movants contend that they are
long become final and executory, the same can no
the farmer-beneficiaries of the land in question, hence, are real parties longer be reviewed by the courts. It is well-
in interest. To prove this, they attached as Annex "I" in their motion a
established in our jurisprudence that the decisions
Master List of Farmer-Beneficiaries. Apparently, the alleged master list and orders of administrative agencies, rendered
was made pursuant to the directive in the dispositive portion of the pursuant to their quasi-judicial authority, have
assailed "Win-Win" Resolution which directs the DAR "to carefully upon their finality, the force and binding effect of
and meticulously determine who among the claimants are qualified a final judgment within the purview of the
farmer-beneficiaries." However, a perusal of the said document reveals doctrine of res judicata [Brillantes v. Castro, 99
that movants are those purportedly "Found Qualified and Phil. 497 (1956), Ipekdijna Merchandizing Co.,
Recommended for Approval." In other words, movants are Inc. v. Court of Tax Appeals, G.R. No. L-15430,
merely recommendee farmer-beneficiaries. September 30, 1963, 9 SCRA 72.] The rule of res
judicata which forbids the reopening of a matter
The rule in this jurisdiction is that a real party in interest is a party who once judicially determined by competent authority
would be benefited or injured by the judgment or is the party entitled to applies as well to the judicial and quasi-judicial
the avails of the suit. Real interest means a present substantial interest, acts of public, executive or administrative officers
as distinguished from a mere expectancy or a future, contingent, and boards acting within their jurisdiction as to
subordinate or consequential interest. 59 Undoubtedly, movants' interest the judgments of courts having general judicial
over the land in question is a mere expectancy. Ergo, they are not real powers [Brillantes v. Castro, supra at 503].
parties in interest.
The orderly administration of justice requires that the
Furthermore, the challenged resolution upon which movants based judgments/resolutions of a court or quasi-judicial body must reach a
their motion is, as intimated earlier, null and void. Hence, their motion point of finality set by the law, rules and regulations. The noble
for intervention has no leg to stand on. purpose is to write finis to disputes once and for all. 61 This is a
fundamental principle in our justice system, without which there would
Now to the main issue of whether the final and executory Decision no end to litigations. Utmost respect and adherence to this principle
dated March 29, 1996 can still be substantially modified by the "Win- must always be maintained by those who wield the power of
Win" Resolution. adjudication. Any act which violates such principle must immediately
be struck down.

We rule in the negative.

Therefore, the assailed "Win-Win" Resolution which substantially
modified the Decision of March 29, 1996 after it has attained finality,
The rules and regulations governing appeals to the Office of the is utterly void. Such void resolution, as aptly stressed by Justice
President of the Philippines are embodied in Administrative Order No. Thomas A. Street 62 in a 1918 case, 63 is "a lawless thing, which can be
18. Section 7 thereof provides: treated as an outlaw and slain at sight, or ignored wherever and
whenever it exhibits its head." 64
Sec. 7. Decisions/resolutions/orders of the Office
of the President shall, except as otherwise WHEREFORE, the present petition is hereby GRANTED. The
provided for by special laws, become final after challenged Resolution dated November 7, 1997, issued by the Office of
the lapse of fifteen (15) days from receipt of a the President in OP Case No. 96-C-6424, is hereby NULLIFIED and
copy thereof by the parties, unless a motion for SET ASIDE. The Motion For Leave To Intervene filed by alleged
reconsideration thereof is filed within such farmer-beneficiaries is hereby DENIED.
period.
No pronouncement as to costs.
Only one motion for reconsideration by any one
party shall be allowed and entertained, save in
exceptionally meritorious cases. (Emphasis ours). SO ORDERED.

81 ADMIN LAW CASES 0901

FELIPE YSMAEL, JR. & CO., INC., petitioner, vs. petitioner was .
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF Moreover, petitioner is precluded from availing of the benefits of a writ
ENVIRONMENT AND NATURAL RESOURCES, THE DIRECTOR of certiorari in the present case because he failed to file his petition
OF THE BUREAU OF FOREST DEVELOPMENT and TWIN within a reasonable period. The fact that petitioner failed to seasonably
PEAKS DEVELOPMENT AND REALTY CORPORATION, take judicial recourse to have the earlier administrative actions
respondents. G.R. No. 79538 October 18, 1990 reviewed by the courts through a petition for certiorari is prejudicial to
Facts: its cause. For although no specific time frame is fixed for the
Petitioner made the following allegations: institution of a special civil action for certiorari under Rule 65 of the
That on October 12, 1965, it entered into a timber license agreement Revised Rules of Court, the same must nevertheless be done within a
designated as TLA No. 87 with the Department of Agriculture and "reasonable time". The yardstick to measure the timeliness of a petition
Natural Resources for certiorari is the "reasonableness of the length of time that had
That on August 18, 1983, the Director of the Bureau of Forest expired from the commission of the acts complained of up to the
Development [hereinafter referred to as "Bureau"], Director Edmundo institution of the proceeding to annul the same"
Cortes, issued a memorandum order stopping all logging operations in Finally, there is a more significant factor which bars the issuance of a
Nueva Vizcaya and Quirino provinces, and cancelling the logging writ of certiorari in favor of petitioner and against public respondents
concession of petitioner and nine other forest concessionaires, pursuant herein. It is precisely this for which prevents the Court from departing
to presidential instructions and a memorandum order of the Minister of from the general application of the rules enunciated above.
Natural Resources Teodoro Pena. A long line of cases establish the basic rule that the courts will not
That after the cancellation of its timber license agreement, it interfere in matters which are addressed to the sound discretion of
immediately sent a letter addressed to then President Ferdinand Marcos government agencies entrusted with the regulation of activities coming
which sought reconsideration of the Bureau's directive, citing in under the special technical knowledge and training of such agencies.
support thereof its contributions to alleging that it was not given the More so where, as in the present case, the interests of a private logging
forest conservation and opportunity to be heard prior to the company are pitted against that of the public at large on the pressing
cancellation of its logging 531, but no operations (Annex "6" of the public policy issue of forest conservation. For this Court recognizes the
Petition; Rollo, pp. 50 favorable action was taken on this letter; wide latitude of discretion possessed by the government in determining
That barely one year thereafter, approximately one-half or 26,000 the appropriate actions to be taken to preserve and manage natural
hectares of the area formerly covered by TLA No. 87 was re-awarded resources, and the proper parties who should enjoy the privilege of
to Twin Peaks Development and Reality Corporation utilizing these resources.
Acting on petitioner's letter, the MNR through then Minister Ernesto
Maceda issued an order dated July 22, 1986 denying petitioner's In fine, the legal precepts highlighted in the foregoing discussion more
request. The Ministry ruled that a timber license was not a contract than suffice to justify the Court's refusal to interfere in the DENR
within the due process clause of the Constitution, but only a privilege
evaluation of timber licenses and permits issued under the previous
which could be withdrawn whenever public interest or welfare so regime, or to pre-empt the adoption of appropriate corrective measures
demands, and that petitioner was not discriminated against in view of
by the department.
the fact that it was among ten concessionaires whose licenses were
revoked in 1983
Petitioner moved for reconsideration. The MNR however denied this G.R. No. 79538 October 18, 1990
motion.
On November 26, 1986, petitioner's supplemental motion for FELIPE YSMAEL, JR. & CO., INC., petitioner,
reconsideration was likewise denied. Meanwhile, per MNR vs.
Administrative Order No. 54, series of 1986, issued on November26, THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY
1986, the logging ban in the province of Quirino was lifted. OF ENVIRONMENT AND NATURAL RESOURCES, THE
Petitioner subsequently appealed from the orders of the MNR to the DIRECTOR OF THE BUREAU OF FOREST DEVELOPMENT
Office of the President. In a resolution dated July 6, 1987, the Office of and TWIN PEAKS DEVELOPMENT AND REALTY
the President, acting through then Deputy Executive Secretary Catalino CORPORATION, respondents.
Macaraig, denied petitioner's appeal for lack of merit. The Office of the
President ruled that the appeal of petitioner was prematurely filed, the
matter not having been terminated in the MNR. Petitioner's motion for Tañada, Vivo & Tan for petitioner.
reconsideration was denied on August 14, 1987.
Hence, petitioner filed directly with this Court a petition for certiorari, Antonio E. Escober and Jurado Law Office for respondent Twin Peaks
with prayer for the issuance of a restraining order or writ of Development Corporation.
preliminary injunction
Issue:
Whether or not a writ of certiorari may be issued by the Court
Held:
The Court finds several factors which militate against the issuance of a COURTS, J.:
writ of certiorari in favor of petitioner.
Firstly, the refusal of public respondents herein to reverse final and
Soon after the change of government in February 1986, petitioner sent
executory administrative orders does not constitute grave abuse of
a letter dated March 17, 1986 to the Office of the President, and
discretion amounting to lack or excess of jurisdiction.
another letter dated April 2, 1986 to Minister Ernesto Maceda of the
It is an established doctrine in this jurisdiction that the decisions and
Ministry of Natural Resources [MNR], seeking: (1) the reinstatement
orders of administrative agencies have upon their finality, the force and
of its timber license agreement which was cancelled in August 1983
binding effect of a final judgment within the purview of the doctrine of
during the Marcos administration; (2) the revocation of TLA No. 356
res judicata. These decisions and orders are as conclusive upon the
which was issued to Twin Peaks Development and Realty Corporation
rights of the affected parties as though the same had been rendered by a
without public bidding and in violation of forestry laws, rules and
court of general jurisdiction. The rule of res judicata thus forbids the
regulations; and, (3) the issuance of an order allowing petitioner to take
reopening of a matter once determined by competent authority acting
possession of all logs found in the concession area [Annexes "6" and
within their exclusive jurisdiction.
"7" of the Petition; Rollo, pp. 54-63].
In the case at bar, petitioner's letters to the Office of the President and
the MNR [now the Department of Environment and Natural Resources
(DENR) dated March 17, 1986 and April 2, 1986, respectively, sought Petitioner made the following allegations:
the reconsideration of a memorandum order issued by the Bureau of
Forest Development which cancelled its timber license agreement in (a) That on October 12, 1965, it entered into a timber license
1983, as well as the revocation of TLA No. 356 subsequently issued by agreement designated as TLA No. 87 with the Department of
the Bureau to private respondents in 1984. Agriculture and Natural Resources, represented by then Secretary Jose
But as gleaned from the record, petitioner did not avail of its remedies Feliciano, wherein it was issued an exclusive license to cut, collect and
under the law, i.e. Section 8 of Pres. Dec. No.705 as amended, for remove timber except prohibited species within a specified portion of
attacking the validity of these administrative actions until after 1986. public forest land with an area of 54,920 hectares located in the
By the time petitioner sent its letter dated April 2, 1986 to the newly municipality of Maddela, province of Nueva Vizcaya * from October
appointed Minister of the MNR requesting reconsideration of the 12, 1965 until June 30, 1990;
above Bureau actions, these were already settled matters as far as
82 ADMIN LAW CASES 0901
(b) That on August 18, 1983, the Director of the Bureau of Forest itself, its established institutions and the liberty
Development [hereinafter referred to as "Bureau"], Director Edmundo and democratic way of life of its people.
Cortes, issued a memorandum order stopping all logging operations in
Nueva Vizcaya and Quirino provinces, and cancelling the logging xxx xxx xxx
concession of petitioner and nine other forest concessionaires, pursuant
to presidential instructions and a memorandum order of the Minister of
Natural Resources Teodoro Pena [Annex "5" of the Petition; Rollo, p. [Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-
49]; 67.]

(c) that on August 25, 1983, petitioner received a telegram from the Petitioner moved for reconsideration of the aforestated order
Bureau, the contents of which were as follows: reiterating, among others. its request that TLA No. 356 issued to
private respondent be declared null and void. The MNR however
denied this motion in an order dated September 15, 1986. stating in
PURSUANT TO THE INSTRUCTIONS OF
part:
THE PRESIDENT YOU ARE REQUESTED TO
STOP ALL LOGGING OPERATIONS TO
CONSERVE REMAINING FORESTS PLEASE xxx xxx xxx
CONDUCT THE ORDERLY PULL-OUT OF
LOGGING MACHINERIES AND EQUIPMENT Regarding [petitioner's] request that the award of
AND COORDINATE WITH THE RESPECTIVE a 26,000 hectare portion of TLA No. 87 to Twin
DISTRICT FORESTERS FOR THE Peaks Realty Development Corporation under
INVENTORY OF LOGS CUT PRIOR TO THIS TLA No. 356 be declared null and void, suffice it
ORDER THE SUBMISSION OF A to say that the Ministry is now in the process of
COMPLIANCE REPORT WITHIN THIRTY reviewing all contracts, permits or other form of
DAYS SHALL BE APPRECIATED — [Annex privileges for the exploration, development,
"4" of the Petition; Rollo, p. 48]; exploitation, or utilization of natural resources
entered into, granted, issued or acquired before
(d) That after the cancellation of its timber license agreement, it the issuance of Proclamation No. 3, otherwise
immediately sent a letter addressed to then President Ferdinand Marcos known as the Freedom Constitution for the
which sought reconsideration of the Bureau's directive, citing in purpose of amending, modifying or revoking
support thereof its contributions to alleging that it was not given the them when the national interest so requires.
forest conservation and opportunity to be heard prior to the
cancellation of its logging 531, but no operations (Annex "6" of the xxx xxx xxx
Petition; Rollo, pp. 50 favorable action was taken on this letter;
The Ministry, through the Bureau of Forest
(e) That barely one year thereafter, approximately one-half or 26,000 Development, has jurisdiction and authority over
hectares of the area formerly covered by TLA No. 87 was re-awarded all forest lands. On the basis of this authority, the
to Twin Peaks Development and Reality Corporation under TLA No. Ministry issued the order banning all logging
356 which was set to expire on July 31, 2009, while the other half was operations/activities in Quirino province, among
allowed to be logged by Filipinas Loggers, Inc. without the benefit of a others, where movant's former concession area is
formal award or license; and, located. Therefore, the issuance of an order
disallowing any person or entity from removing
(f) That the latter entities were controlled or owned by relatives or cut or uncut logs from the portion of TLA No. 87,
cronies of deposed President Ferdinand Marcos. Acting on petitioner's now under TLA No. 356, would constitute an
letter, the MNR through then Minister Ernesto Maceda issued an order unnecessary or superfluous act on the part of the
dated July 22, 1986 denying petitioner's request. The Ministry ruled Ministry.
that a timber license was not a contract within the due process clause of
the Constitution, but only a privilege which could be withdrawn xxx xxx xxx
whenever public interest or welfare so demands, and that petitioner
was not discriminated against in view of the fact that it was among ten
concessionaires whose licenses were revoked in 1983. Moreover, [Annex "11" of the Petition, pp. 3-4; Rollo, pp.
emphasis was made of the total ban of logging operations in the 77-78.]
provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao imposed
on April 2, 1986, thus: On November 26, 1986, petitioner's supplemental motion for
reconsideration was likewise denied. Meanwhile, per MNR
xxx xxx xxx Administrative Order No. 54, series of 1986, issued on November 26,
1986, the logging ban in the province of Quirino was lifted.
It should be recalled that [petitioner's] earlier
request for reinstatement has been denied in view Petitioner subsequently appealed from the orders of the MNR to the
of the total ban of all logging operations in the Office of the President. In a resolution dated July 6, 1987, the Office of
provinces of Nueva Ecija, Nueva Vizcaya, the President, acting through then Deputy Executive Secretary Catalino
Quirino and Ifugao which was imposed for Macaraig, denied petitioner's appeal for lack of merit. The Office of the
reasons of conservation and national security. President ruled that the appeal of petitioner was prematurely filed, the
matter not having been terminated in the MNR. Petitioner's motion for
reconsideration was denied on August 14, 1987.
The Ministry imposed the ban because it realizes
the great responsibility it bear [sic] in respect to
forest t considers itself the trustee thereof. This Hence, petitioner filed directly with this Court a petition for certiorari,
being the case, it has to ensure the availability of with prayer for the issuance of a restraining order or writ of
forest resources not only for the present, but also preliminary injunction, on August 27, 1987. On October 13, 1987, it
for the future generations of Filipinos. filed a supplement to its petition for certiorari. Thereafter, public and
private respondents submitted their respective comments, and
petitioner filed its consolidated reply thereto. In a resolution dated May
On the other hand, the activities of the insurgents 22, 1989, the Court resolved to give due course to the petition.
in these parts of the country are well documented.
Their financial demands on logging
concessionaires are well known. The government, After a careful study of the circumstances in the case at bar, the Court
therefore, is well within its right to deprive its finds several factors which militate against the issuance of a writ of
enemy of sources of funds in order to preserve certiorari in favor of petitioner.

83 ADMIN LAW CASES 0901

1. Firstly, the refusal of public respondents herein to reverse final and [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No. L-
executory administrative orders does not constitute grave abuse of 31628, December 27, 1982, 119 SCRA 392).
discretion amounting to lack or excess of jurisdiction.
Laches is defined as the failure or neglect for an unreasonable and
It is an established doctrine in this jurisdiction that the decisions and unexplained length of time to do that which by exercising due
orders of administrative agencies have upon their finality, the force and diligence, could or should have been done earlier, or to assert a right
binding effect of a final judgment within the purview of the doctrine within a reasonable time, warranting a presumption that the party
of res judicata. These decisions and orders are as conclusive upon the entitled thereto has either abandoned it or declined to assert it [Tijam v.
rights of the affected parties as though the same had been rendered by a Sibonghanoy, G.R. No. L-21450, April 15, 1968, 23 SCRA 29; Seno v.
court of general jurisdiction. The rule of res judicata thus forbids the Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113].
reopening of a matter once determined by competent authority acting The rule is that unreasonable delay on the part of a plaintiff in seeking
within their exclusive jurisdiction [See Brillantes v. Castro, 99 Phil. to enforce an alleged right may, depending upon the circumstances, be
497 (1956); Ipekdjian Merchandising Co., Inc. v. Court of Tax destructive of the right itself. Verily, the laws aid those who are
Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72; San vigilant, not those who sleep upon their rights (Vigilantibus et non
Luis v. Court of Appeals, G.R. No. 80160, June 26, 1989]. dormientibus jura subveniunt) [See Buenaventura v. David, 37 Phil.
435 (1918)].
In the case at bar, petitioner's letters to the Office of the President and
the MNR [now the Department of Environment and Natural Resources In the case at bar, petitioner waited for at least three years before it
(DENR) dated March 17, 1986 and April 2, 1986, respectively, sought finally filed a petition for certiorari with the Court attacking the
the reconsideration of a memorandum order issued by the Bureau of validity of the assailed Bureau actions in 1983 and 1984. Considering
Forest Development which cancelled its timber license agreement in that petitioner, throughout the period of its inaction, was not deprived
1983, as well as the revocation of TLA No. 356 subsequently issued by of the opportunity to seek relief from the courts which were normally
the Bureau to private respondents in 1984. operating at the time, its delay constitutes unreasonable and
inexcusable neglect, tantamount to laches. Accordingly, the writ of
But as gleaned from the record, petitioner did not avail of its remedies certiorari requiring the reversal of these orders will not lie.
under the law, i.e. Section 8 of Pres. Dec. No. 705 as amended, for
attacking the validity of these administrative actions until after 1986. 3. Finally, there is a more significant factor which bars the issuance of
By the time petitioner sent its letter dated April 2, 1986 to the newly a writ of certiorari in favor of petitioner and against public respondents
appointed Minister of the MNR requesting reconsideration of the herein. It is precisely this for which prevents the Court from departing
above Bureau actions, these were already settled matters as far as from the general application of the rules enunciated above.
petitioner was concerned [See Rueda v. Court of Agrarian Relations,
106 Phil. 300 (1959); Danan v. Aspillera G.R. No. L-17305, November A cursory reading of the assailed orders issued by public respondent
28, 1962, 6 SCRA 609; Ocampo v. Arboleda G.R. No. L-48190, Minister Maceda of the MNR which were ed by the Office of the
August 31, 1987, 153 SCRA 374]. President, will disclose public policy consideration which effectively
forestall judicial interference in the case at bar,
No particular significance can be attached to petitioner's letter dated
September 19, 1983 which petitioner claimed to have sent to then Public respondents herein, upon whose shoulders rests the task of
President Marcos [Annex "6" of Petition, Rollo, pp. 50-53], seeking the implementing the policy to develop and conserve the country's natural
reconsideration of the 1983 order issued by Director Cortes of the resources, have indicated an ongoing department evaluation of all
Bureau. It must be pointed out that the averments in this letter are timber license agreements entered into, and permits or licenses issued,
entirely different from the charges of fraud against officials under the
under the previous dispensation. In fact, both the executive and
previous regime made by petitioner in its letters to public respondents legislative departments of the incumbent administration are presently
herein. In the letter to then President Marcos, petitioner simply
taking stock of its environmental policies with regard to the utilization
contested its inclusion in the list of concessionaires, whose licenses of timber lands and developing an agenda for future programs for their
were cancelled, by defending its record of selective logging and conservation and rehabilitation.
reforestation practices in the subject concession area. Yet, no other
administrative steps appear to have been taken by petitioner until 1986,
despite the fact that the alleged fraudulent scheme became apparent in The ongoing administrative reassessment is apparently in response to
1984 as evidenced by the awarding of the subject timber concession the renewed and growing global concern over the despoliation of forest
area to other entities in that year. lands and the utter disregard of their crucial role in sustaining a
balanced ecological system. The legitimacy of such concern can hardly
be disputed, most especially in this country. The Court takes judicial
2. Moreover, petitioner is precluded from availing of the benefits of a notice of the profligate waste of the country's forest resources which
writ of certiorari in the present case because he failed to file his has not only resulted in the irreversible loss of flora and fauna peculiar
petition within a reasonable period. to the region, but has produced even more disastrous and lasting
economic and social effects. The delicate balance of nature having
The principal issue ostensibly presented for resolution in the instant been upset, a vicious cycle of floods and droughts has been triggered
petition is whether or not public respondents herein acted with grave and the supply of food and energy resources required by the people
abuse of discretion amounting to lack or excess of jurisdiction in seriously depleted.
refusing to overturn administrative orders issued by their predecessors
in the past regime. Yet, what the petition ultimately seeks is the
While there is a desire to harness natural resources to amass profit and
nullification of the Bureau orders cancelling TLA No. 87 and granting to meet the country's immediate financial requirements, the more
TLA No. 356 to private respondent, which were issued way back in
essential need to ensure future generations of Filipinos of their survival
1983 and 1984, respectively. in a viable environment demands effective and circumspect action
from the government to check further denudation of whatever remains
Once again, the fact that petitioner failed to seasonably take judicial of the forest lands. Nothing less is expected of the government, in view
recourse to have the earlier administrative actions reviewed by the of the clear constitutional command to maintain a balanced and
courts through a petition for certiorari is prejudicial to its cause. For healthful ecology. Section 16 of Article II of the 1987 Constitution
although no specific time frame is fixed for the institution of a special provides:
civil action for certiorari under Rule 65 of the Revised Rules of Court,
the same must nevertheless be done within a "reasonable time". The SEC. 16. The State shall protect and promote the
yardstick to measure the timeliness of a petition for certiorari is the right of the people to a balanced and healthful
"reasonableness of the length of time that had expired from the ecology in accord with the rhythm and harmony
commission of the acts complained of up to the institution of the of nature.
proceeding to annul the same" [Toledo v. Pardo, G.R. No. 56761,
November 19, 1982, 118 SCRA 566, 571]. And failure to file the
petition for certiorari within a reasonable period of time renders the Thus, while the administration grapples with the complex and
petitioner susceptible to the adverse legal consequences of laches multifarious problems caused by unbridled exploitation of these
resources, the judiciary will stand clear. A long line of cases establish
84 ADMIN LAW CASES 0901
the basic rule that the courts will not interfere in matters which are
addressed to the sound discretion of government agencies entrusted
with the regulation of activities coming under the special technical
knowledge and training of such agencies [See Espinosa v. Makalintal,
79 Phil. 134 (1947); Coloso v. Board of Accountancy, 92 Phil. 938
(1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R. No.
L-19828, February 28, 1963, 7 SCRA 461; Ganitano v. Secretary of
Agriculture and Natural Resources, G. R. No. L-21167, March 31,
1966, 16 SCRA 543; Villegas v. Auditor General, G.R. No. L-21352,
November 29, 1966, 18 SCRA 877; Manuel v. Villena, G.R. No. L-
28218, February 27, 1971, 37 SCRA 745; Lacuesta v. Herrera, G.R.
No. L-33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging
Co., Inc. v. Enage, G.R. No. L-30637, July 16, 1987, 152 SCRA 80].
More so where, as in the present case, the interests of a private logging
company are pitted against that of the public at large on the pressing
public policy issue of forest conservation. For this Court recognizes the
wide latitude of discretion possessed by the government in determining
the appropriate actions to be taken to preserve and manage natural
resources, and the proper parties who should enjoy the privilege of
utilizing these resources [Director of Forestry v. Munoz, G.R. No. L-
24796, June 28, 1968, 23 SCRA 1183; Lim, Sr. v. The Secretary of
Agriculture and Natural Resources, G.R. No. L-26990, August 31,
1970, 34 SCRA 751]. Timber licenses, permits and license agreements
are the principal instruments by which the State regulates the
utilization and disposition of forest resources to the end that public
welfare is promoted. And it can hardly be gainsaid that they merely
evidence a privilege granted by the State to qualified entities, and do
not vest in the latter a permanent or irrevocable right to the particular
concession area and the forest products therein. They may be validly
amended, modified, replaced or rescinded by the Chief Executive when
national interests so require. Thus, they are not deemed contracts
within the purview of the due process of law clause [See Sections 3
(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director
of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].

In fine, the legal precepts highlighted in the foregoing discussion more

than suffice to justify the Court's refusal to interfere in the DENR
evaluation of timber licenses and permits issued under the previous
regime, or to pre-empt the adoption of appropriate corrective measures
by the department.

Nevertheless, the Court cannot help but express its concern regarding
alleged irregularities in the issuance of timber license agreements to a
number of logging concessionaires.

The grant of licenses or permits to exploit the country's timber

resources, if done in contravention of the procedure outlined in the law,
or as a result of fraud and undue influence exerted on department
officials, is indicative of an arbitrary and whimsical exercise of the
State's power to regulate the use and exploitation of forest resources.
The alleged practice of bestowing "special favors" to preferred
individuals, regardless of merit, would be an abuse of this power. And
this Court will not be a party to a flagrant mockery of the avowed
public policy of conservation enshrined in the 1987 Constitution.
Therefore, should the appropriate case be brought showing a clear
grave abuse of discretion on the part of officials in the DENR and
related bureaus with respect to the implementation of this public
policy, the Court win not hesitate to step in and wield its authority,
when invoked, in the exercise of judicial powers under the Constitution
[Section 1, Article VIII].

However, petitioner having failed to make out a case showing grave

abuse of discretion on the part of public respondents herein, the Court
finds no basis to issue a writ of certiorari and to grant any of the
affirmative reliefs sought.

WHEREFORE, the present petition is DISMISSED.

SO ORDERED.

85 ADMIN LAW CASES 0901

R_e_p_u_b_l_i_c_ _v_ _D_r_u_g_m_a_k_e_r_’s_ DECISION
_L_a_b_o_r_a_t_o_r_i_e_s_._ _I_n_c_ _G_R_ _N_o_._
_1_9_0_8_3_7_ _M_a_r_c_h_ _5_,_ _2_0_1_4_ _
PERLAS-BERNABE, J.:
Doctrine: Administrative agencies may exercise quasi-legislative or
rule-making powers only if there exists a law which delegates these
powers to them. Accordingly, the rules so promulgated must be within This is a direct recourse to the Court from the Regional Trial Court of
the confines of the granting statute and must involve no discretion as to Muntinlupa City, Branch 256 (RTC), through a petition for review on
what the law shall be, but merely the authority to fix the details in the certiorari,1 raising a pure question of law. In particular, petitioner
execution or enforcement of the policy set out in the law itself, so as to Republic of the Philippines, represented by the [Link] Food and
conform with the doctrine of separation of powers and, as an adjunct, Drugs (BFAD), now Food and Drug Administration (FDA), assails the
the doctrine of non-delegability of legislative power. Order2dated December 18, 2009 of the RTC in Civil Case No. 08-124
Kinds of Administrative Rules or Regulations: which: (a) declared BF AD Circular Nos. 1 and 8, series of 1997
1. Legislative Rule - in the nature of subordinate legislation and (Circular Nos. 1 and 8, s. 1997) null and void; (b) ordered the issuance
designed to implement a primary legislation by providing the details of writs of permanent injunction and prohibition against the FDA in
thereof. They usually implement existing law, imposing general, extra- implementing the aforesaid circulars; and ( c) directed the FDA to
statutory obligations pursuant to authority properly delegated by issue Certificates of Product Registration (CPR) in favor of
Congress and effect a change in existing law or policy which affects respondents Drugmaker's Laboratories, Inc. and Terrarriedic, Inc.
individual rights and obligations. (respondents).
2. Interpretative Rule - try to say what the statute means and refer to no
single person or party in particular but concern all those belonging to The Facts
the same class which may be covered by the said rules.
3. Contingent Rule - those issued by an administrative authority based
on the existence of certain facts or things upon which the enforcement The FDA3 was created pursuant to Republic Act No. (RA)
of the law depends. 3720,4 otherwise known as the "Food, Drug, and Cosmetic Act,"
Facts: primarily in order "to establish safety or efficacy standards and quality
The Food and Drug Administration was created pursuant to RA3720 to measures for foods, drugs and devices, and cosmetic product[s]." 5 On
establish safety standards and quality measures for foods, drugs, March 15, 1989, the Department of Health (DOH), thru then-Secretary
devices, and cosmetic products . In 1989, the DOH issued Alfredo R.A. Bengzon, issued Administrative Order No. (AO) 67, s.
Administrative Order 67 s. 1989 which required drug manufacturers to 1989, entitled "Revised Rules and Regulations on Registration of
register certain drug and medicine products with FDA before release to Pharmaceutical Products." Among others, it required drug
the market. In this relation, a satisfactory manufacturers to register certain drug and medicine products with the
bioavailability/bioequivalence test is needed for a manufacturer to FDA before they may release the same to the market for sale. In this
secure a Certificate of Product Registration. The BA/BE testing relation, a satisfactory bioavailability6/bioequivalence7 (BA/BE) test is
requirement was implemented through Circular no. 1 s. 1991 and needed for a manufacturer to secure a CPR for these products.
Circular no. 8 s. 1997 issued by the FDA. However, the implementation of the BA/BE testing requirement was
Respondents Drugmakers Laboratories Inc and Terramedic Inc are put on hold because there was no local facility capable of conducting
manufacturers of rifampticin/Refam which were issued CPRs until the same. The issuance of Circular No. 1, s. 1997 8 resumed the FDA’s
2008 despite lack of BA/BE test results. The results turned out that implementation of the BA/BE testing requirement with the
Refam is not bioequivalent with reference drug. Instead of submitting establishment of BA/BE testing facilities in the country. Thereafter, the
satisfactory BA/BE test results, respondents filed a petition for FDA issued Circular No. 8, s. 19979 which provided additional
prohibition and annulment of Circular nos. 1 and 8 alleging that it is implementation details concerning the BA/BE testing requirement on
the DOH which was granted authority to issue and implement rules drug products.10
concerning RA3720. The RTC ruled for respondents.
Issues: Respondents manufacture and trade a "multisource pharmaceutical
1. Whether or not Circular nos. 1 and 8 partake the nature of product"11 with the generic name of rifampicin12– branded as "Refam
administrative rules and regulations 200mg/5mL Suspension" (Refam) – for the treatment of adults and
2. Whether or not the FDA may validly issue the assailed Circulars children suffering from pulmonary and extra-pulmonary
Ruling: tuberculosis.13 On November 15, 1996, respondents applied for and
1. No, Circular Nos. 1 and 8, s. 1997 cannot be considered as were issued a CPR for such drug, valid for five (5) years, or until
administrative regulations because they do not: (a) implement a November 15, 2001.14 At the time of the CPR’s issuance, Refam did
primary legislation by providing the details thereof; (b) interpret, not undergo BA/BE testing since there was still no facility capable of
clarify, or explain existing statutory regulations under which the FDA conducting BA/BE testing. Sometime in 2001, respondents applied for
operates; and/or (c) ascertain the existence of certain facts or things and were granted numerous yearly renewals of their CPR for Refam,
upon which the enforcement of RA 3720 depends. In fact, the only which lasted until November 15, 2006, albeit with the condition that
purpose of these circulars is for the FDA to administer and supervise they submit satisfactory BA/BE test results for said drug. 15
the implementation of the provisions of AO 67, s. 1989, including
those covering the BA/BE testing requirement, consistent with and
pursuant to RA 3720. Accordingly, respondents engaged the services of the University of the
Philippines’ (Manila) Department of Pharmacology and Toxicology,
College of Medicine to conduct BA/BE testing on Refam, the results of
2. Yes. As they are not administrative regulations, the FDA has which were submitted to the FDA.16 In turn, the FDA sent a letter dated
sufficient authority to issue the said circulars and since they would not July 31, 2006 to respondents, stating that Refam is "not bioequivalent
affect the substantive rights of the parties that they seek to govern – as with the reference drug."17 This notwithstanding, the FDA still
they are not, strictly speaking, administrative regulations in the first revalidated respondents’ CPR for Refam two (2) more times, effective
place – no prior hearing, consultation, and publication are needed for until November 15, 2008, the second of which came with a warning
their validity. In sum, the Court holds that Circular Nos. 1 and 8, s. that no more further revalidations shall be granted until respondents
1997 are valid issuances and binding to all concerned parties, including submit satisfactory BA/BE test results for Refam.18
the respondents in this case.
Instead of submitting satisfactory BA/BE test results for Refam,
respondents filed a petition for prohibition and annulment of Circular
Nos. 1 and 8, s. 1997 before the RTC, alleging that it is the DOH, and
G.R. No. 190837 March 5, 2014 not the FDA, which was granted the authority to issue and implement
rules concerning RA 3720. As such, the issuance of the aforesaid
circulars and the manner of their promulgation contravened the law and
REPUBLIC OF THE PHILIPPINES, represented by the the Constitution.19 They further averred that that the non-renewal of the
BUREAU OF FOOD AND DRUGS (now FOOD AND DRUG CPR due to failure to submit satisfactory BA/BE test results would not
ADMINISTRATION), Petitioner, only affect Refam, but their other products as well.20
vs.
DRUGMAKER'S LABORATORIES, INC. and TERRAMEDIC,
INC., Respondents. During the pendency of the case, RA 9711,21 otherwise known as the
"Food and Drug Administration [FDA] Act of 2009," was enacted into
law.
86 ADMIN LAW CASES 0901
The RTC Ruling refer to no single person or party in particular but concern all those
belonging to the same class which may be covered by the said
rules.34 Finally, contingent rules are those issued by an administrative
In an Order22 dated December 18, 2009, the RTC ruled in favor of
respondents, and thereby declared Circular Nos. 1 and 8, s. 1997 null authority based on the existence of certain facts or things upon which
the enforcement of the law depends.35
and void, ordered the issuance of writs of permanent injunction and
prohibition against the FDA in implementing the aforesaid circulars,
and directed the FDA to issue CPRs in favor of respondents’ products. In general, an administrative regulation needs to comply with the
requirements laid down by Executive Order No. 292, s. 1987,
otherwise known as the "Administrative Code of 1987," on prior
The RTC held that there is nothing in RA 3720 which granted either
the FDA the authority to issue and implement the subject circulars, or notice, hearing, and publication in order to be valid and binding, except
the Secretary of Health the authority to delegate his powers to the when the same is merely an interpretative rule. This is because "[w]hen
FDA. For these reasons, it concluded that the issuance of Circular Nos. an administrative rule is merely interpretative in nature, its
1 and 8, s. applicability needs nothing further than its bare issuance, for it gives no
real consequence more than what the law itself has already prescribed.
When, on the other hand, the administrative rule goes beyond merely
1997 constituted an illegal exercise of legislative and administrative providing for the means that can facilitate or render least cumbersome
powers and, hence, must be struck down.23 the implementation of the law but substantially increases the burden of
those governed, it behooves the agency to accord at least to those
Accordingly, the RTC issued a Writ of Permanent Injunction24 dated directly affected a chance to be heard, and thereafter to be duly
January 19, 2010, enjoining the FDA and all persons acting for and informed, before that new issuance is given the force and effect of
under it from enforcing Circular Nos. 1 and 8, s. 1997 and directing law."36
them to approve the renewal and revalidation of respondents’ products
without submitting satisfactory BA/BE test results. In the case at bar, it is undisputed that RA 3720, as amended by
Executive Order No. 175, s. 198737 prohibits, inter alia, the
Aggrieved, the FDA sought direct recourse to the Court through the manufacture and sale of pharmaceutical products without obtaining the
instant petition with an urgent prayer for the immediate issuance of a proper CPR from the FDA.38 In this regard, the FDA has been
temporary restraining order and/or a writ of preliminary injunction deputized by the same law to accept applications for registration of
against the implementation of the RTC’s Order dated December 18, pharmaceuticals and, after due course, grant or reject such
2009 and Writ of Permanent Injunction dated January 19, 2010. 25 The applications.39 To this end, the said law expressly authorized the
Court granted FDA’s application and issued a Temporary Restraining Secretary of Health, upon the recommendation of the FDA Director, to
Order26 dated February 24, 2010, effective immediately and continuing issue rules and regulations that pertain to the registration of
until further orders. pharmaceutical products.40

The Issue Before the Court In accordance with his rule-making power under RA 3720, the
Secretary of Health issued AO 67, s. 1989 in order to provide a
comprehensive set of guidelines covering the registration of
The primordial issue in this case is whether or not the FDA may pharmaceutical products. AO 67, s. 1989, required, among others, that
validly issue and implement Circular Nos. 1 and 8, s. 1997. In certain pharmaceutical products undergo BA/BE testing prior to the
resolving this issue, there is a need to determine whether or not the issuance of CPR, contrary to respondents’ assertion that it was Circular
aforesaid circulars partake of administrative rules and regulations and, Nos. 1 and 8, s. 1997 that required such tests. 41
as such, must comply with the requirements of the law for its issuance.
Despite the fact that the BA/BE testing requirement was already in
The FDA contends that it has the authority to issue Circular Nos. 1 and place as early as the date of effectivity of AO 67, s. 1989, its
8, s. 1997 as it is the agency mandated by law to administer and implementation was indefinitely shelved due to lack of facilities
enforce laws, including rules and regulations issued by the DOH, that capable of conducting the same. It was only sometime in 1997 when
pertain to the registration of pharmaceutical products. 27 technological advances in the country paved the way for the
establishment of BA/BE testing facilities, thus allowing the rule’s
For their part, respondents maintain that under RA 3720, the power to enforcement. Owing to these developments, the FDA (then, the BFAD)
make rules to implement the law is lodged with the Secretary of issued Circular No. 1, s. 1997, the full text of which reads:
Health, not with the FDA.28 They also argue that the assailed circulars
are void for lack of prior hearing, consultation, and publication.29 In Annex 1 of A.O. 67 s. 1989 which is entitled Requirement for
Registration provides that "Bioavailability/Bioequivalence study for
The Court’s Ruling certain drugs as determined by BFAD" is required for [(i)] Tried and
Tested Drug, (ii) Established Drug, and (iii) Pharmaceutical Innovation
of Tried and Tested or Established Drug.
The petition is meritorious.

Drugs requiring strict precaution in prescribing and dispensing

Administrative agencies may exercise quasi-legislative or rule-making contained in the List-B (Prime) were the drugs identified by BFAD in
powers only if there exists a law which delegates these powers to them. the process of registration that will be required
Accordingly, the rules so promulgated must be within the confines of "Bioavailability/Bioequivalence" studies. However, due to the
the granting statute and must involve no discretion as to what the law supervening factor that there had yet been no bioavailability testing
shall be, but merely the authority to fix the details in the execution or unit in the country when the A.O. 67 s. 1989 became effective, the
enforcement of the policy set out in the law itself, so as to conform Bureau did not strictly enforce the said requirement.
with the doctrine of separation of powers and, as an adjunct, the
doctrine of non-delegability of legislative power.30
The supervening factor no longer exist [sic] as of date. As a matter of
fact, one of the registered products tested by the Bioavailability Testing
An administrative regulation may be classified as a legislative rule, an Unit at the University of Sto. Tomas under the NDP Cooperation
interpretative rule, or a contingent rule. Legislative rules are in the Project of the Philippines and Australia failed to meet the standard of
nature of subordinate legislation and designed to implement a primary bioavailability. This finding brings forth the fact that there may be
legislation by providing the details thereof.31 They usually implement registered products which do not or may no longer meet bioavailability
existing law, imposing general, extra-statutory obligations pursuant to standard.
authority properly delegated by Congress32 and effect a change in
existing law or policy which affects individual rights and
obligations.33 Meanwhile, interpretative rules are intended to interpret, Wherefore, all drugs manufacturers, traders, distributor-importers of
clarify or explain existing statutory regulations under which the products contained or identified in the list b’ (prime) provided for by
administrative body operates. Their purpose or objective is merely to BFAD, a copy of which is made part of this circular, are advised that
construe the statute being administered and purport to do no more than all pending initial and renewal registration of the products
interpret the statute. Simply, they try to say what the statute means and aforementioned, as well as all applications for initial and renewal
registration of the same, shall henceforth be required to submit
87 ADMIN LAW CASES 0901
bioavailability test with satisfactory results on the products sought to
be registered or renewed conducted by any bioavailability testing units
here or abroad, duly recognized by the BFAD under the Dept. of
Health.1âwphi1 (Emphases and underscoring supplied)

The FDA then issued Circular No. 8, s. 1997 to supplement Circular

No. 1, s. 1997 in that it reiterates the importance of the BA/BE testing
requirement originally provided for by AO 67, s. 1989.1âwphi1

A careful scrutiny of the foregoing issuances would reveal that AO 67,

s. 1989 is actually the rule that originally introduced the BA/BE testing
requirement as a component of applications for the issuance of CPRs
covering certain pharmaceutical products. As such, it is considered an
administrative regulation – a legislative rule to be exact – issued by the
Secretary of Health in consonance with the express authority granted to
him by RA 3720 to implement the statutory mandate that all drugs and
devices should first be registered with the FDA prior to their
manufacture and sale. Considering that neither party contested the
validity of its issuance, the Court deems that AO 67, s. 1989 complied
with the requirements of prior hearing, notice, and publication pursuant
to the presumption of regularity accorded to the government in the
exercise of its official duties.42

On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered

as administrative regulations because they do not: (a) implement a
primary legislation by providing the details thereof; (b) interpret,
clarify, or explain existing statutory regulations under which the FDA
operates; and/or (c) ascertain the existence of certain facts or things
upon which the enforcement of RA 3720 depends. In fact, the only
purpose of these circulars is for the FDA to administer and supervise
the implementation of the provisions of AO 67, s. 1989, including
those covering the BA/BE testing requirement, consistent with and
pursuant to RA 3720.43 Therefore, the FDA has sufficient authority to
issue the said circulars and since they would not affect the substantive
rights of the parties that they seek to govern – as they are not, strictly
speaking, administrative regulations in the first place – no prior
hearing, consultation, and publication are needed for their validity.

In sum, the Court holds that Circular Nos. 1 and 8, s. 1997 are valid
issuances and binding to all concerned parties, including the
respondents in this case.

As a final note, while the proliferation of generic drugs and medicines

is indeed a welcome development as it effectively ensures access to
affordable quality drugs and medicines for all through their lower
prices, the State, through the FDA, which is the government
instrumentality tasked on this matter, must nevertheless be vigilant in
ensuring that the generic drugs and medicines released to the market
are safe and effective for use.

WHEREFORE, the petition is GRANTED. The Order dated December

18, 2009 and the Writ of Permanent Injunction dated January 19, 2010
of the Regional Trial Court of Muntinlupa City, Branch 256 in Civil
Case No. 08-124 are hereby SET ASIDE. BFAD Circular Nos. 1 and 8,
series of 1997 are declared VALID. Accordingly, the Court's
Temporary Restraining Order dated February 24, 2010 is hereby made
PERMANENT.

SO ORDERED.

88 ADMIN LAW CASES 0901

G.R. No. 164171 February 20, 2006  Regarding the fourth requisite, the Court finds that the
HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE issuance of EO is unreasonable. Since the nature of EO 156
DEPARTMENT OF TRANSPORTATION AND is to protect the domestic industry from the deterioration of
COMMUNICATIONS (DOTC), COMMISSIONER OF CUSTOMS, the local motor manufacturing firms, the Court however,
ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE finds no logic in all the encompassing application of the
(LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT assailed provision to the Freeport Zone which is outside the
ZONE, AND CHIEF OF LTO, SUBIC BAY FREE PORT customs territory of the Philippines. As long as the used
ZONE, Petitioners, motor vehicles do not enter the customs territory, the injury
vs. or harm sought to be prevented or remedied will not arise.
SOUTHWING HEAVY INDUSTRIES, INC., represented by its
President JOSE T. DIZON, UNITED AUCTIONEERS, INC.,  The Court finds that Article 2, Section 3.1 of EO 156 is
represented by its President DOMINIC SYTIN, and MICROVAN, VOID insofar as it is made applicable within the secured
INC., represented by its President MARIANO C. fenced-in former Subic Naval Base area but is declared
SONON, Respondents. VALID insofar as it applies to the customs territory or
the Philippine territory outside the presently secured
FACTS fenced-in former Subic Naval Base area as stated in
 On December 12, 2002, President Gloria Macapagal Arroyo Section 1.1 of EO 97-A (an EO executed by Pres. Fidel V.
issued Executive Order 156 entitled "Providing for a Ramos in 1993 providing the Tax and Duty Free Privilege
comprehensive industrial policy and directions for the motor within the Subic Freeport Zone). Hence, used motor vehicles
vehicle development program and its implementing that come into the Philippine territory via the secured
guidelines." The said provision prohibits the importation of fenced-in former Subic Naval Base area may be stored, used
all types of used motor vehicles in the country including the or traded therein, or exported out of the Philippine territory,
Subic Bay Freeport, or the Freeport Zone, subject to a few but they cannot be imported into the Philippine territory
exceptions. outside of the secured fenced-in former Subic Naval Base
area.
 Consequently, three separate actions for declaratory relief
were filed by Southwing Heavy Industries Inc, Subic Petitions are PARTIALLY GRANTED provided that
Integrated Macro Ventures Corp, and Motor Vehicle said provision is declared VALID insofar as it applies to
Importers Association of Subic Bay Freeport Inc. praying the Philippine territory outside the presently fenced-in
that judgment be rendered declaring Article 2, Section3.1 of former Subic Naval Base area and VOID with respect to
the EO 156 unconstitutional and illegal. its application to the secured fenced-in former Subic
Naval Base area.
 The RTC rendered a summary judgment declaring that  municipal levels, including the barangay. Such delegation
Article 2, Section 3.1 of EO 156 constitutes an unlawful confers upon the President quasi-legislative power which
usurpation of legislative power vested by the may be defined as the authority delegated by the law-making
Constitution with Congress and that the proviso is body to the administrative body to adopt rules and
contrary to the mandate of Republic Act 7227(RA 7227) regulations intended to carry out the provisions of the law
or the Bases Conversion and Development Act of 1992 and implement legislative policy provided that it must
which allows the free flow of goods and capital within the comply with the following requisites:
Freeport. (1) Its promulgation must be
authorized by the legislature;
 The petitioner appealed in the CA but was denied on the (2) It must be promulgated in
ground of lack of any statutory basis for the President to accordance with the prescribed procedure;
issue the same. It held that the prohibition on the (3) It must be within the scope
importation of use motor vehicles is an exercise of police of the authority given by the legislature; and
power vested on the legislature and absent any enabling (4) It must be reasonable.
law, the exercise thereof by the President through an  The first requisite was actually satisfied since EO 156 has
executive issuance is void. both constitutional and statutory bases.
ISSUE:  Anent the second requisite, that the order must be issued or
 Whether or not Article2, Section 3.1 of EO 156 is a valid promulgated in accordance with the prescribed procedure,
exercise of the President’s quasi-legislative power. YES. the presumption is that the said executive issuance duly
complied with the procedures and limitations imposed by
SC RULING law since the respondents never questioned the procedure
 Police power is inherent in a government to enact laws, that paved way for the issuance of EO 156 but instead, what
within constitutional limits, to promote the order, safety, they challenged was the absence of substantive due process
health, morals, and general welfare of society. It is lodged in the issuance of the EO.
primarily with the legislature. By virtue of a valid delegation
of legislative power, it may also be exercised by the  In the third requisite, the Court held that the importation ban
President and administrative boards, as well as the runs afoul with the third requisite as administrative issuances
lawmaking bodies on all respondents never questioned the must not be ultra vires or beyond the limits of the authority
procedure that paved way for the issuance of EO 156 but conferred. In the instant case, the subject matter of the laws
instead, what they challenged was the absence of substantive authorizing the President to regulate or forbid importation of
due process in the issuance of the EO. used motor vehicles, is the domestic industry. EO 156,
however, exceeded the scope of its application by extending
 In the third requisite, the Court held that the importation ban the prohibition on the importation of used cars to the
runs afoul with the third requisite as administrative issuances Freeport, which RA 7227, considers to some extent, a
must not be ultra vires or beyond the limits of the authority foreign territory. The domestic industry which the EO
conferred. In the instant case, the subject matter of the laws seeks to protect is actually the "customs territory" which is
authorizing the President to regulate or forbid importation of defined under the Rules and Regulations Implementing RA
used motor vehicles, is the domestic industry. EO 156, 7227 which states: "the portion of the Philippines outside the
however, exceeded the scope of its application by extending Subic Bay Freeport where the Tariff and Customs Code of
the prohibition on the importation of used cars to the the Philippines and other national tariff and customs laws
Freeport, which RA 7227, considers to some extent, a are in force and effect."
foreign territory. The domestic industry which the EO
seeks to protect is actually the "customs territory" which is  Regarding the fourth requisite, the Court finds that the
defined under the Rules and Regulations Implementing RA issuance of EO is unreasonable. Since the nature of EO 156
7227 which states: "the portion of the Philippines outside the is to protect the domestic industry from the deterioration of
Subic Bay Freeport where the Tariff and Customs Code of the local motor manufacturing firms, the Court however,
the Philippines and other national tariff and customs laws finds no logic in all the encompassing application of the
are in force and effect." assailed provision to the Freeport Zone which is outside the
customs territory of the Philippines. As long as the used
89 ADMIN LAW CASES 0901
 motor vehicles do not enter the customs territory, the injury The instant consolidated petitions seek to annul and set aside the
or harm sought to be prevented or remedied will not arise. Decisions of the Regional Trial Court of Olongapo City, Branch 72, in
Civil Case No. 20-0-04 and Civil Case No. 22-0-04, both dated May
 The Court finds that Article 2, Section 3.1 of EO 156 is 24, 2004; and the February 14, 2005 Decision of the Court of Appeals
VOID insofar as it is made applicable within the secured in CA-G.R. SP. No. 83284, which declared Article 2, Section 3.1 of
fenced-in former Subic Naval Base area but is declared Executive Order No. 156 (EO 156) unconstitutional. Said executive
VALID insofar as it applies to the customs territory or issuance prohibits the importation into the country, inclusive of the
the Philippine territory outside the presently secured Special Economic and Freeport Zone or the Subic Bay Freeport (SBF
fenced-in former Subic Naval Base area as stated in or Freeport), of used motor vehicles, subject to a few exceptions.
Section 1.1 of EO 97-A (an EO executed by Pres. Fidel V.
Ramos in 1993 providing the Tax and Duty Free Privilege The undisputed facts show that on December 12, 2002, President
within the Subic Freeport Zone). Hence, used motor vehicles Gloria Macapagal-Arroyo, through Executive Secretary Alberto G.
that come into the Philippine territory via the secured Romulo, issued EO 156, entitled "Providing for a comprehensive
fenced-in former Subic Naval Base area may be stored, used industrial policy and directions for the motor vehicle development
or traded therein, or exported out of the Philippine territory, program and its implementing guidelines." The challenged provision
but they cannot be imported into the Philippine territory states:
outside of the secured fenced-in former Subic Naval Base
area.
3.1 The importation into the country, inclusive of the
Petitions are PARTIALLY GRANTED provided that Freeport, of all types of used motor vehicles is
said provision is declared VALID insofar as it applies to prohibited, except for the following:
the Philippine territory outside the presently fenced-in
former Subic Naval Base area and VOID with respect to 3.1.1 A vehicle that is owned and for the personal
its application to the secured fenced-in former Subic use of a returning resident or immigrant and
Naval Base area. covered by an authority to import issued under the
No-dollar Importation Program. Such vehicles
cannot be resold for at least three (3) years;
G.R. No. 164171 February 20, 2006
3.1.2 A vehicle for the use of an official of the
HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE Diplomatic Corps and authorized to be imported
DEPARTMENT OF TRANSPORTATION AND by the Department of Foreign Affairs;
COMMUNICATIONS (DOTC), COMMISSIONER OF
CUSTOMS, ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO), COLLECTOR OF 3.1.3 Trucks excluding pickup trucks;
CUSTOMS, SUBIC BAY FREE PORT ZONE, AND CHIEF OF
LTO, SUBIC BAY FREE PORT ZONE, Petitioners, 1. with GVW of 2.5-6.0 tons covered
vs. by an authority to import issued by the
SOUTHWING HEAVY INDUSTRIES, INC., represented by its DTI.
President JOSE T. DIZON, UNITED AUCTIONEERS, INC.,
represented by its President DOMINIC SYTIN, and MICROVAN,
2. With GVW above 6.0 tons.
INC., represented by its President MARIANO C.
SONON, Respondents.
3.1.4 Buses:
x---------------x
1. with GVW of 6-12 tons covered by
an authority to import issued by DTI;
G.R. No. 164172 February 20, 2006

2. with GVW above 12 tons.

HON. EXECUTIVE SECRETARY, SECRETARY OF THE
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATION (DOTC), COMMISSIONER OF 3.1.5 Special purpose vehicles:
CUSTOMS, ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO), COLLECTOR OF 1. fire trucks
CUSTOMS, SUBIC BAY FREE PORT ZONE AND CHIEF OF
LTO, SUBIC BAY FREE PORT ZONE, Petitioners,
vs. 2. ambulances
SUBIC INTEGRATED MACRO VENTURES CORP.,
represented by its President YOLANDA AMBAR,Respondent. 3. funeral hearse/coaches

x---------------x 4. crane lorries

G.R. No. 168741 February 20, 2006 5. tractor heads and truck tractors

HON. EXECUTIVE SECRETARY, HON. SECRETARY OF 6. boom trucks

FINANCE, THE CHIEF OF THE LAND TRANSPORTATION
OFFICE, THE COMMISSIONER OF CUSTOMS, and THE
COLLECTOR OF CUSTOMS, SUBIC SPECIAL ECONOMIC 7. tanker trucks
ZONE, Petitioners,
vs. 8. tank lorries with high pressure spray
MOTOR VEHICLE IMPORTERS ASSOCIATION OF SUBIC gun
BAY FREEPORT, INC., represented by its President ALFREDO
S. GALANG, Respondent.
9. reefers or refrigerated trucks

DECISION
10. mobile drilling derricks

YNARES-SANTIAGO, J.:
11. transit/concrete mixers

90 ADMIN LAW CASES 0901

 12. mobile radiological units subordinates inside the Subic Special Economic Zone or SBMA to
process the registration of imported used motor vehicle; and in general,
to allow unimpeded entry and importation of used motor vehicles to
13. wreckers or tow trucks
the Philippines subject only to the payment of the required customs
duties.
14. concrete pump trucks
SO ORDERED.2
15. aerial/bucket flat-form trucks
From the foregoing decision, petitioners sought relief before this
16. street sweepers Court via a petition for review on certiorari, docketed as G.R. No.
164171.
17. vacuum trucks
G.R. No. 164172:
18. garbage compactors
On January 20, 2004, respondent Subic Integrated Macro Ventures
19. self loader trucks Corporation (Macro Ventures) filed with the same trial court, a similar
action for declaratory relief docketed as Civil Case No. 22-0-04,3 with
the same prayer and against the same parties4 as those in Civil Case
20. man lift trucks No. 20-0-04.

21. lighting trucks In this case, the trial court likewise rendered a summary judgment on
May 24, 2004, holding that Article 2, Section 3.1 of EO 156, is
22. trucks mounted with special repugnant to the constitution.5 Elevated to this Court via a petition for
purpose equipment review on certiorari, Civil Case No. 22-0-04 was docketed as G.R. No.
164172.
23. all other types of vehicle designed
for a specific use. G.R. No. 168741

The issuance of EO 156 spawned three separate actions for declaratory On January 22, 2003, respondent Motor Vehicle Importers Association
relief before Branch 72 of the Regional Trial Court of Olongapo City, of Subic Bay Freeport, Inc. (Association), filed another action for
all seeking the declaration of the unconstitutionality of Article 2, declaratory relief with essentially the same prayer as those in Civil
Section 3.1 of said executive order. The cases were filed by herein Case No. 22-0-04 and Civil Case No. 20-0-04, against the Executive
respondent entities, who or whose members, are classified as Subic Secretary, Secretary of Finance, Chief of the Land Transportation
Bay Freeport Enterprises and engaged in the business of, among others, Office, Commissioner of Customs, Collector of Customs at SBMA and
importing and/or trading used motor vehicles. the Chairman of SBMA. This was docketed as Civil Case No. 30-0-
2003,6 before the same trial court.
G.R. No. 164171:
In a decision dated March 10, 2004, the court a quo granted the
Association’s prayer and declared the assailed proviso as contrary to
On January 16, 2004, respondents Southwing Heavy Industries, Inc., the Constitution, to wit:
(Southwing) United Auctioneers, Inc. (United Auctioneers), and
Microvan, Inc. (Microvan), instituted a declaratory relief case docketed
as Civil Case No. 20-0-04,1 against the Executive Secretary, Secretary WHEREFORE, judgment is hereby rendered in favor of petitioner
of Transportation and Communication, Commissioner of Customs, declaring Executive Order 156 [Article 2, Section] 3.1 for being
Assistant Secretary and Head of the Land Transportation Office, Subic unconstitutional and illegal; directing respondents Collector of
Bay Metropolitan Authority (SBMA), Collector of Customs for the Customs based at SBMA to allow the importation and entry of used
Port at Subic Bay Freeport Zone, and the Chief of the Land motor vehicles pursuant to the mandate of RA 7227; directing
Transportation Office at Subic Bay Freeport Zone. respondent Chief of the Land Transportation Office and its
subordinates inside the Subic Special Economic Zone or SBMA to
process the registration of imported used motor vehicles; directing the
Southwing, United Auctioneers and Microvan prayed that judgment be respondent Chairman of the SBMA to allow the entry into the Subic
rendered (1) declaring Article 2, Section 3.1 of EO 156 Special Economic Zone or SBMA imported used motor vehicle; and in
unconstitutional and illegal; (2) directing the Secretary of Finance, general, to allow unimpeded entry and importation of used motor
Commissioner of Customs, Collector of Customs and the Chairman of vehicles to the Philippines subject only to the payment of the required
the SBMA to allow the importation of used motor vehicles; (2) customs duties.
ordering the Land Transportation Office and its subordinates inside the
Subic Special Economic Zone to process the registration of the
imported used motor vehicles; and (3) in general, to allow the SO ORDERED.7
unimpeded entry and importation of used motor vehicles subject only
to the payment of the required customs duties. Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition
for certiorari8 with the Court of Appeals (CA-G.R. SP. No. 83284)
Upon filing of petitioners’ answer/comment, respondents Southwing which denied the petition on February 14, 2005 and sustained the
and Microvan filed a motion for summary judgment which was granted finding of the trial court that Article 2, Section 3.1 of EO 156, is void
by the trial court. On May 24, 2004, a summary judgment was for being repugnant to the constitution. The dispositive portion thereof,
rendered declaring that Article 2, Section 3.1 of EO 156 constitutes an reads:
unlawful usurpation of legislative power vested by the Constitution
with Congress. The trial court further held that the proviso is contrary WHEREFORE, the instant petition for certiorari is hereby DENIED.
to the mandate of Republic Act No. 7227 (RA 7227) or the Bases The assailed decision of the Regional Trial Court, Third Judicial
Conversion and Development Act of 1992 which allows the free flow Region, Branch 72, Olongapo City, in Civil Case No. 30-0-2003,
of goods and capital within the Freeport. The dispositive portion of the accordingly, STANDS.
said decision reads:
SO ORDERED.9
WHEREFORE, judgment is hereby rendered in favor of petitioner
declaring Executive Order 156 [Article 2, Section] 3.1 for being
unconstitutional and illegal; directing respondents Collector of The aforequoted decision of the Court of Appeals was elevated to this
Customs based at SBMA to allow the importation and entry of used Court and docketed as G.R. No. 168741. In a Resolution dated October
motor vehicles pursuant to the mandate of RA 7227; directing 4, 2005,10 said case was consolidated with G.R. No. 164171 and G.R.
respondent Chief of the Land Transportation Office and its No. 164172.
91 ADMIN LAW CASES 0901
Petitioners are now before this Court contending that Article 2, Section In G.R. No. 168741, the Court of Appeals invalidated Article 2,
3.1 of EO 156 is valid and applicable to the entire country, including Section 3.1 of EO 156, on the ground of lack of any statutory basis for
the Freeeport. In support of their arguments, they raise procedural and the President to issue the same. It held that the prohibition on the
substantive issues bearing on the constitutionality of the assailed importation of used motor vehicles is an exercise of police power
proviso. The procedural issues are: the lack of respondents’ locus vested on the legislature and absent any enabling law, the exercise
standi to question the validity of EO 156, the propriety of challenging thereof by the President through an executive issuance, is void.
EO 156 in a declaratory relief proceeding and the applicability of a
judgment on the pleadings in this case. Police power is inherent in a government to enact laws, within
constitutional limits, to promote the order, safety, health, morals, and
Petitioners argue that respondents will not be affected by the general welfare of society. It is lodged primarily with the legislature.
importation ban considering that their certificate of registration and tax By virtue of a valid delegation of legislative power, it may also be
exemption do not authorize them to engage in the importation and/or exercised by the President and administrative boards, as well as the
trading of used cars. They also aver that the actions filed by lawmaking bodies on all municipal levels, including the
respondents do not qualify as declaratory relief cases. Section 1, Rule barangay.16 Such delegation confers upon the President quasi-
63 of the Rules of Court provides that a petition for declaratory relief legislative power which may be defined as the authority delegated by
may be filed before there is a breach or violation of rights. Petitioners the law-making body to the administrative body to adopt rules and
claim that there was already a breach of respondents’ supposed right regulations intended to carry out the provisions of the law and
because the cases were filed more than a year after the issuance of EO implement legislative policy.17 To be valid, an administrative issuance,
156. In fact, in Civil Case No. 30-0-2003, numerous warrants of such as an executive order, must comply with the following requisites:
seizure and detention were issued against imported used motor vehicles
belonging to respondent Association’s members. (1) Its promulgation must be authorized by the legislature;

Petitioners’ arguments lack merit. (2) It must be promulgated in accordance with the prescribed
procedure;
The established rule that the constitutionality of a law or administrative
issuance can be challenged by one who will sustain a direct injury as a
(3) It must be within the scope of the authority given by the
result of its enforcement11 has been satisfied in the instant case. The legislature; and
broad subject of the prohibited importation is "all types of used motor
vehicles." Respondents would definitely suffer a direct injury from the
implementation of EO 156 because their certificate of registration and (4) It must be reasonable.18
tax exemption authorize them to trade and/or import new and
used motor vehicles and spare parts, except "used cars."12 Other Contrary to the conclusion of the Court of Appeals, EO 156 actually
types of motor vehicles imported and/or traded by respondents and not satisfied the first requisite of a valid administrative order. It has both
falling within the category of used cars would thus be subjected to the constitutional and statutory bases.
ban to the prejudice of their business. Undoubtedly, respondents have
the legal standing to assail the validity of EO 156.
Delegation of legislative powers to the President is permitted in
Section 28(2) of Article VI of the Constitution. It provides:
As to the propriety of declaratory relief as a vehicle for assailing the
executive issuance, suffice it to state that any breach of the rights of
respondents will not affect the case. In Commission on Audit of the (2) The Congress may, by law, authorize the President to fix within
Province of Cebu v. Province of Cebu,13 the Court entertained a suit for specified limits, and subject to such limitations and restrictions as it
declaratory relief to finally settle the doubt as to the proper may impose, tariff rates, import and export quotas, tonnage and
interpretation of the conflicting laws involved, notwithstanding a wharfage dues, and other duties or imposts within the framework of the
violation of the right of the party affected. We find no reason to deviate national development program of the Government.19 (Emphasis
from said ruling mindful of the significance of the present case to the supplied)
national economy.
The relevant statutes to execute this provision are:
So also, summary judgments were properly rendered by the trial court
because the issues involved in the instant case were pure questions of 1) The Tariff and Customs Code which authorizes the President, in
law. A motion for summary judgment is premised on the assumption the interest of national economy, general welfare and/or national
that the issues presented need not be tried either because these are security, to, inter alia, prohibit the importation of any commodity.
patently devoid of substance or that there is no genuine issue as to any Section 401 thereof, reads:
pertinent fact. It is a method sanctioned by the Rules of Court for the
prompt disposition of a civil action in which the pleadings raise only a
legal issue, not a genuine issue as to any material fact.14 Sec. 401. Flexible Clause. —

At any rate, even assuming the procedural flaws raised by petitioners a. In the interest of national economy, general welfare and/or
truly exist, the Court is not precluded from brushing aside these national security, and subject to the limitations herein prescribed,
technicalities and taking cognizance of the action filed by respondents the President, upon recommendation of the National Economic
considering its importance to the public and in keeping with the duty to and Development Authority (hereinafter referred to as NEDA), is
determine whether the other branches of the government have kept hereby empowered: x x x (2) to establish import quota or to ban
themselves within the limits of the Constitution.15 imports of any commodity, as may be necessary; x x x Provided,
That upon periodic investigations by the Tariff Commission and
recommendation of the NEDA, the President may cause a gradual
We now come to the substantive issues, which are: (1) whether there is reduction of protection levels granted in Section One hundred and four
statutory basis for the issuance of EO 156; and (2) if the answer is in of this Code, including those subsequently granted pursuant to this
the affirmative, whether the application of Article 2, Section 3.1 of EO section. (Emphasis supplied)
156, reasonable and within the scope provided by law.
2) Executive Order No. 226, the Omnibus Investment Code of the
The main thrust of the petition is that EO 156 is constitutional because Philippines which was issued on July 16, 1987, by then President
it was issued pursuant to EO 226, the Omnibus Investment Code of the Corazon C. Aquino, in the exercise of legislative power under the
Philippines and that its application should be extended to the Freeport Provisional Freedom Constitution,20 empowers the President to
because the guarantee of RA 7227 on the free flow of goods into the approve or reject the prohibition on the importation of any equipment
said zone is merely an exemption from customs duties and taxes on or raw materials or finished products. Pertinent provisions thereof,
items brought into the Freeport and not an open floodgate for all kinds read:
of goods and materials without restriction.
ART. 4. Composition of the board. The Board of Investments shall be
composed of seven (7) governors: The Secretary of Trade and Industry,
92 ADMIN LAW CASES 0901
three (3) Undersecretaries of Trade and Industry to be chosen by the public hearings before the regulatory measure or importation ban may
President; and three (3) representatives from the government agencies be issued.
and the private sector x x x.
In the present case, respondents neither questioned before this Court
ART. 7. Powers and duties of the Board. nor with the courts below the procedure that paved the way for the
issuance of EO 156. What they challenged in their petitions before the
trial court was the absence of "substantive due process" in the issuance
xxxx
of the EO.30 Their main contention before the court a quo is that the
importation ban is illogical and unfair because it unreasonably drives
(12) Formulate and implement rationalization programs for certain them out of business to the prejudice of the national economy.
industries whose operation may result in dislocation, overcrowding or
inefficient use of resources, thus impeding economic growth. For this
purpose, the Board may formulate guidelines for progressive Considering the settled principle that in the absence of strong evidence
to the contrary, acts of the other branches of the government are
manufacturing programs, local content programs, mandatory sourcing
requirements and dispersal of industries. In appropriate cases and presumed to be valid,31 and there being no objection from the
respondents as to the procedure in the promulgation of EO 156, the
upon approval of the President, the Board may restrict, either
presumption is that said executive issuance duly complied with the
totally or partially, the importation of any equipment or raw
procedures and limitations imposed by law.
materials or finished products involved in the rationalization
program; (Emphasis supplied)
To determine whether EO 156 has complied with the third and fourth
3) Republic Act No. 8800, otherwise known as the "Safeguard requisites of a valid administrative issuance, to wit, that it was issued
Measures Act" (SMA), and entitled "An Act Protecting Local within the scope of authority given by the legislature and that it is
Industries By Providing Safeguard Measures To Be Undertaken In reasonable, an examination of the nature of a Freeport under RA 7227
Response To Increased Imports And Providing Penalties For Violation and the primordial purpose of the importation ban under the questioned
Thereof,"21 designated the Secretaries22 of the Department of Trade and EO is necessary.
Industry (DTI) and the Department of Agriculture, in their capacity
as alter egos of the President, as the implementing authorities of the RA 7227 was enacted providing for, among other things, the sound and
safeguard measures, which include, inter alia, modification or balanced conversion of the Clark and Subic military reservations and
imposition of any quantitative restriction on the importation of a their extensions into alternative productive uses in the form of Special
product into the Philippines. The purpose of the SMA is stated in the Economic and Freeport Zone, or the Subic Bay Freeport, in order to
declaration of policy, thus: promote the economic and social development of Central Luzon in
particular and the country in general.
SEC. 2. Declaration of Policy. – The State shall promote
competitiveness of domestic industries and producers based on sound The Rules and Regulations Implementing RA 7227 specifically defines
industrial and agricultural development policies, and efficient use of the territory comprising the Subic Bay Freeport, referred to as the
human, natural and technical resources. In pursuit of this goal and in Special Economic and Freeport Zone in Section 12 of RA 7227 as "a
the public interest, the State shall provide safeguard measures to separate customs territory consisting of the City of Olongapo and the
protect domestic industries and producers from increased imports Municipality of Subic, Province of Zambales, the lands occupied by
which cause or threaten to cause serious injury to those domestic the Subic Naval Base and its contiguous extensions as embraced,
industries and producers. covered and defined by the 1947 Philippine-U.S. Military Base
Agreement as amended and within the territorial jurisdiction of
There are thus explicit constitutional and statutory permission Morong and Hermosa, Province of Bataan, the metes and bounds of
authorizing the President to ban or regulate importation of articles and which shall be delineated by the President of the Philippines; provided
commodities into the country. further that pending establishment of secure perimeters around the
entire SBF, the SBF shall refer to the area demarcated by the SBMA
pursuant to Section 1332 hereof."
Anent the second requisite, that is, that the order must be issued or
promulgated in accordance with the prescribed procedure, it is
necessary that the nature of the administrative issuance is properly Among the salient provisions of RA 7227 are as follows:
determined. As in the enactment of laws, the general rule is that, the
promulgation of administrative issuances requires previous notice and SECTION 12. Subic Special Economic Zone. —
hearing, the only exception being where the legislature itself requires it
and mandates that the regulation shall be based on certain facts as xxxx
determined at an appropriate investigation.23 This exception pertains to
the issuance of legislative rules as distinguished from interpretative
rules which give no real consequence more than what the law itself has The abovementioned zone shall be subject to the following policies:
already prescribed;24 and are designed merely to provide guidelines to
the law which the administrative agency is in charge of xxxx
enforcing.25 A legislative rule, on the other hand, is in the nature of
subordinate legislation, crafted to implement a primary legislation.
(a) Within the framework and subject to the mandate and
limitations of the Constitution and the pertinent provisions
In Commissioner of Internal Revenue v. Court of of the Local Government Code, the Subic Special Economic
Appeals,26 and Commissioner of Internal Revenue v. Michel J. Lhuillier Zone shall be developed into a self-sustaining, industrial,
Pawnshop, Inc.,27 the Court enunciated the doctrine that when an commercial, financial and investment center to generate
administrative rule goes beyond merely providing for the means that employment opportunities in and around the zone and to
can facilitate or render less cumbersome the implementation of the law attract and promote productive foreign investments;
and substantially increases the burden of those governed, it behooves
the agency to accord at least to those directly affected a chance to be
heard and, thereafter, to be duly informed, before the issuance is given (b) The Subic Special Economic Zone shall be operated and
the force and effect of law. managed as a separate customs territory ensuring free flow
or movement of goods and capital within, into and exported
out of the Subic Special Economic Zone, as well as provide
In the instant case, EO 156 is obviously a legislative rule as it seeks to incentives such as tax and duty-free importations of raw
implement or execute primary legislative enactments intended to materials, capital and equipment. However, exportation or
protect the domestic industry by imposing a ban on the importation of a removal of goods from the territory of the Subic Special
specified product not previously subject to such prohibition. The due Economic Zone to the other parts of the Philippine territory
process requirements in the issuance thereof are embodied in Section shall be subject to customs duties and taxes under the
40128 of the Tariff and Customs Code and Sections 5 and 9 of the Customs and Tariff Code and other relevant tax laws of the
SMA29 which essentially mandate the conduct of investigation and Philippines;

93 ADMIN LAW CASES 0901

The Freeport was designed to ensure free flow or movement of goods purposes of our customs laws, and that people can come, bring
and capital within a portion of the Philippine territory in order to attract their goods, store them there and bring them out again, as long as
investors to invest their capital in a business climate with the least they do not come into the domestic commerce of the Republic.
governmental intervention. The concept of this zone was explained by
Senator Guingona in this wise:
We do not really care whether these goods are stored here. The only
thing that we care is for our people to have an employment because of
Senator Guingona. Mr. President, the special economic zone is the entry of these goods that are being discharged, warehoused and
successful in many places, particularly Hong Kong, which is a free reloaded into the ships so that they can be exported. That will generate
port. The difference between a special economic zone and an industrial employment for us. For as long as that is done, we are saying, in effect,
estate is simply expansive in the sense that the commercial activities, that we have the least contact with our tariff and customs laws and our
including the establishment of banks, services, financial institutions, tax laws. Therefore, we consider these goods as outside of the customs
agro-industrial activities, maybe agriculture to a certain extent. jurisdiction of the Republic of the Philippines as yet, until we draw
them from this territory and bring them inside our domestic commerce.
In which case, they have to pass through our customs gate. I thought
This delineates the activities that would have the least of
we are carving out this entire area and convert it into this kind of
government intervention, and the running of the affairs of the
concept.34
special economic zone would be run principally by the investors
themselves, similar to a housing subdivision, where the subdivision
owners elect their representatives to run the affairs of the However, contrary to the claim of petitioners, there is nothing in the
subdivision, to set the policies, to set the guidelines. foregoing excerpts which absolutely limits the incentive to Freeport
investors only to exemption from customs duties and taxes. Mindful of
the legislative intent to attract investors, enhance investment and boost
We would like to see Subic area converted into a little Hong Kong,
the economy, the legislature could not have limited the enticement only
Mr. President, where there is a hub of free port and free entry, free
to exemption from taxes. The minimum interference policy of the
duties and activities to a maximum spur generation of investment
government on the Freeport extends to the kind of business that
and jobs.
investors may embark on and the articles which they may import or
export into and out of the zone. A contrary interpretation would defeat
While the investor is reluctant to come in the Philippines, as a rule, the very purpose of the Freeport and drive away investors.
because of red tape and perceived delays, we envision this special
economic zone to be an area where there will be minimum government
interference. It does not mean, however, that the right of Freeport enterprises to
import all types of goods and article is absolute. Such right is of course
subject to the limitation that articles absolutely prohibited by law
The initial outlay may not only come from the Government or the cannot be imported into the Freeport.35 Nevertheless, in determining
Authority as envisioned here, but from them themselves, because they whether the prohibition would apply to the Freeport, resort to the
would be encouraged to invest not only for the land but also for the purpose of the prohibition is necessary.
buildings and factories. As long as they are convinced that in such an
area they can do business and reap reasonable profits, then many from
other parts, both local and foreign, would invest, Mr. In issuing EO 156, particularly the prohibition on importation under
President.33 (Emphasis, added) Article 2, Section 3.1, the President envisioned to rationalize the
importation of used motor vehicles and to enhance the capabilities of
the Philippine motor manufacturing firms to be globally competitive
With minimum interference from the government, investors can, in producers of completely build-up units and their parts and components
general, engage in any kind of business as well as import and export for the local and export markets.36 In justifying the issuance of EO 156,
any article into and out of the Freeport. These are among the rights petitioners alleged that there has been a decline in the sales of new
accorded to Subic Bay Freeport Enterprises under Section 39 of the vehicles and a remarkable growth of the sales of imported used motor
Rules and Regulations Implementing RA 7227, thus – vehicles. To address the same, the President issued the questioned EO
to prevent further erosion of the already depressed market base of the
SEC. 39. Rights and Obligations.- SBF Enterprises shall have the local motor vehicle industry and to curtail the harmful effects of the
following rights and obligations: increase in the importation of used motor vehicles.37

a. To freely engage in any business, trade, manufacturing, financial or Taking our bearings from the foregoing discussions, we hold that the
service activity, and to import and export freely all types of goods into importation ban runs afoul the third requisitefor a valid administrative
and out of the SBF, subject to the provisions of the Act, these Rules order. To be valid, an administrative issuance must not be ultra vires or
and other regulations that may be promulgated by the SBMA; beyond the limits of the authority conferred. It must not supplant or
modify the Constitution, its enabling statute and other existing laws,
for such is the sole function of the legislature which the other branches
Citing, inter alia, the interpellations of Senator Enrile, petitioners claim of the government cannot usurp. As held in United BF Homeowner’s
that the "free flow or movement of goods and capital" only means that Association v. BF Homes, Inc.:38
goods and material brought within the Freeport shall not be subject to
customs duties and other taxes and should not be construed as an open
floodgate for entry of all kinds of goods. They thus surmise that the The rule-making power of a public administrative body is a delegated
importation ban on motor vehicles is applicable within the Freeport. legislative power, which it may not use either to abridge the authority
Pertinent interpellations of Senator Enrile on the concept of Freeport is given it by Congress or the Constitution or to enlarge its power beyond
as follows: the scope intended. Constitutional and statutory provisions control
what rules and regulations may be promulgated by such a body, as well
as with respect to what fields are subject to regulation by it. It may not
Senator Enrile: Mr. President, I think we are talking here of sovereign make rules and regulations which are inconsistent with the provisions
concepts, not territorial concepts. The concept that we are supposed to of the Constitution or a statute, particularly the statute it is
craft here is to carve out a portion of our terrestrial domain as well as administering or which created it, or which are in derogation of, or
our adjacent waters and say to the world: "Well, you can set up your defeat, the purpose of a statute.
factories in this area that we are circumscribing, and bringing your
equipment and bringing your goods, you are not subject to any taxes
and duties because you are not within the customs jurisdiction of the In the instant case, the subject matter of the laws authorizing the
Republic of the Philippines, whether you store the goods or only for President to regulate or forbid importation of used motor vehicles, is
purposes of transshipment or whether you make them into finished the domestic industry. EO 156, however, exceeded the scope of its
products again to be reexported to other lands." application by extending the prohibition on the importation of used
cars to the Freeport, which RA 7227, considers to some extent, a
foreign territory. The domestic industry which the EO seeks to protect
xxxx is actually the "customs territory" which is defined under the Rules
and Regulations Implementing RA 7227, as follows:
My understanding of a "free port" is, we are in effect carving out a
part of our territory and make it as if it were foreign territory for
94 ADMIN LAW CASES 0901
"the portion of the Philippines outside the Subic Bay Freeport in accountancy. Besides being unreasonable on its face and violative of
where the Tariff and Customs Code of the Philippines and other academic freedom, the measure was found to be more sweeping than
national tariff and customs laws are in force and effect."39 what was necessary, viz:

The proscription in the importation of used motor vehicles should be Needless to say, the enforcement of Resolution No. 105 is not a
operative only outside the Freeport and the inclusion of said zone guarantee that the alleged leakages in the licensure examinations will
within the ambit of the prohibition is an invalid modification of RA be eradicated or at least minimized. Making the examinees suffer by
7227. Indeed, when the application of an administrative issuance depriving them of legitimate means of review or preparation on those
modifies existing laws or exceeds the intended scope, as in the instant last three precious days — when they should be refreshing themselves
case, the issuance becomes void, not only for being ultra vires, but also with all that they have learned in the review classes and preparing their
for being unreasonable. mental and psychological make-up for the examination day itself —
would be like uprooting the tree to get rid of a rotten branch. What is
This brings us to the fourth requisite. It is an axiom in administrative needed to be done by the respondent is to find out the source of such
law that administrative authorities should not act arbitrarily and leakages and stop it right there. If corrupt officials or personnel should
capriciously in the issuance of rules and regulations. To be valid, such be terminated from their loss, then so be it. Fixers or swindlers should
be flushed out. Strict guidelines to be observed by examiners should be
rules and regulations must be reasonable and fairly adapted to secure
the end in view. If shown to bear no reasonable relation to the purposes set up and if violations are committed, then licenses should be
suspended or revoked. x x x
for which they were authorized to be issued, then they must be held to
be invalid.40
In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,45 the Court
There is no doubt that the issuance of the ban to protect the domestic likewise struck down as unreasonable and overbreadth a city ordinance
granting an exclusive franchise for 25 years, renewable for another 25
industry is a reasonable exercise of police power. The deterioration of
the local motor manufacturing firms due to the influx of imported used years, to one entity for the construction and operation of one common
bus and jeepney terminal facility in Lucena City. While professedly
motor vehicles is an urgent national concern that needs to be swiftly
addressed by the President. In the exercise of delegated police power, aimed towards alleviating the traffic congestion alleged to have been
the executive can therefore validly proscribe the importation of these caused by the existence of various bus and jeepney terminals within the
vehicles. Thus, in Taxicab Operators of Metro Manila, Inc. v. Board of city, the ordinance was held to be beyond what is reasonably necessary
Transportation,41 the Court held that a regulation phasing out taxi cabs to solve the traffic problem in the city.
more than six years old is a valid exercise of police power. The
regulation was sustained as reasonable holding that the purpose thereof By parity of reasoning, the importation ban in this case should also be
was to promote the convenience and comfort and protect the safety of declared void for its too sweeping and unnecessary application to the
the passengers. Freeport which has no bearing on the objective of the prohibition. If
the aim of the EO is to prevent the entry of used motor vehicles from
The problem, however, lies with respect to the application of the the Freeport to the customs territory, the solution is not to forbid entry
of these vehicles into the Freeport, but to intensify governmental
importation ban to the Freeport. The Court finds no logic in the all
encompassing application of the assailed provision to the Freeport campaign and measures to thwart illegal ingress of used motor vehicles
into the customs territory.
which is outside the customs territory. As long as the used motor
vehicles do not enter the customs territory, the injury or harm sought to
be prevented or remedied will not arise. The application of the law At this juncture, it must be mentioned that on June 19, 1993, President
should be consistent with the purpose of and reason for the Fidel V. Ramos issued Executive Order No. 97-A, "Further Clarifying
law. Ratione cessat lex, et cessat lex. When the reason for the law The Tax And Duty-Free Privilege Within The Subic Special Economic
ceases, the law ceases. It is not the letter alone but the spirit of the law And Free Port Zone," Section 1 of which provides:
also that gives it life.42 To apply the proscription to the Freeport would
not serve the purpose of the EO. Instead of improving the general SECTION 1. The following guidelines shall govern the tax and duty-
economy of the country, the application of the importation ban in the free privilege within the Secured Area of the Subic Special Economic
Freeport would subvert the avowed purpose of RA 7227 which is to and Free Port Zone:
create a market that would draw investors and ultimately boost the
national economy.
1.1. The Secured Area consisting of the presently fenced-in former
Subic Naval Base shall be the only completely tax and duty-free area in
In similar cases, we also declared void the administrative issuance or the SSEFPZ. Business enterprises and individuals (Filipinos and
ordinances concerned for being unreasonable. To illustrate, in De la foreigners) residing within the Secured Area are free to import raw
Cruz v. Paras,43 the Court held as unreasonable and unconstitutional an materials, capital goods, equipment, and consumer items tax and dutry-
ordinance characterized by overbreadth. In that case, the Municipality free. Consumption items, however, must be consumed within the
of Bocaue, Bulacan, prohibited the operation of all night clubs, Secured Area. Removal of raw materials, capital goods, equipment and
cabarets and dance halls within its jurisdiction for the protection of consumer items out of the Secured Area for sale to non-SSEFPZ
public morals. As explained by the Court:
registered enterprises shall be subject to the usual taxes and duties,
except as may be provided herein.
x x x It cannot be said that such a sweeping exercise of a lawmaking
power by Bocaue could qualify under the term reasonable. The In Tiu v. Court of Appeals46 as reiterated in Coconut Oil Refiners
objective of fostering public morals, a worthy and desirable end can be
Association, Inc. v. Torres,47 this provision limiting the special
attained by a measure that does not encompass too wide a field. privileges on tax and duty-free importation in the presently fenced-in
Certainly the ordinance on its face is characterized by overbreadth. The
former Subic Naval Base has been declared valid and constitutional
purpose sought to be achieved could have been attained by reasonable and in accordance with RA 7227. Consistent with these rulings and for
restrictions rather than by an absolute prohibition. The admonition in easier management and monitoring of activities and to prevent
Salaveria should be heeded: "The Judiciary should not lightly set aside fraudulent importation of merchandise and smuggling, the free flow
legislative action when there is not a clear invasion of personal or and importation of used motor vehicles shall be operative only within
property rights under the guise of police regulation." It is clear that in the "secured area."
the guise of a police regulation, there was in this instance a clear
invasion of personal or property rights, personal in the case of those
individuals desirous of patronizing those night clubs and property in In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void
terms of the investments made and salaries to be earned by those insofar as it is made applicable to the presently secured fenced-in
therein employed. former Subic Naval Base area as stated in Section 1.1 of EO 97-A.
Pursuant to the separability clause48 of EO 156, Section 3.1 is declared
valid insofar as it applies to the customs territory or the Philippine
Lupangco v. Court of Appeals,44 is a case involving a resolution issued territory outside the presently secured fenced-in former Subic Naval
by the Professional Regulation Commission which prohibited
Base area as stated in Section 1.1 of EO 97-A. Hence, used motor
examinees from attending review classes and receiving handout vehicles that come into the Philippine territory via the secured fenced-
materials, tips, and the like three days before the date of examination in
in former Subic Naval Base area may be stored, used or traded therein,
order to preserve the integrity and purity of the licensure examinations or exported out of the Philippine territory, but they cannot be imported
95 ADMIN LAW CASES 0901
into the Philippine territory outside of the secured fenced-in former
Subic Naval Base area.

WHEREFORE, the petitions are PARTIALLY GRANTED and the

May 24, 2004 Decisions of Branch 72, Regional Trial Court of
Olongapo City, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04;
and the February 14, 2005 Decision of the Court of Appeals in CA-
G.R. SP No. 63284, are MODIFIED insofar as they declared Article 2,
Section 3.1 of Executive Order No. 156, void in its entirety.

Said provision is declared VALID insofar as it applies to the Philippine

territory outside the presently fenced-in former Subic Naval Base area
and VOID with respect to its application to the secured fenced-in
former Subic Naval Base area.

SO ORDERED.

96 ADMIN LAW CASES 0901

  respondents never questioned the procedure that paved way The principal question posed in these consolidated special civil actions
for the issuance of EO 156 but instead, what they challenged for certiorari and mandamus is whether the Commission on Elections
was the absence of substantive due process in the issuance of (COMELEC) can issue implementing rules and regulations (IRRs) that
the EO. provide a ground for the substitution of a party-list nominee not written
in Republic Act (R.A.) No. 7941,1 otherwise known as the Party-List
 In the third requisite, the Court held that the importation ban System Act, the law that the COMELEC thereby implements.
runs afoul with the third requisite as administrative issuances
must not be ultra vires or beyond the limits of the authority Common Antecedents
conferred. In the instant case, the subject matter of the laws
authorizing the President to regulate or forbid importation of
used motor vehicles, is the domestic industry. EO 156, The Citizens’ Battle Against Corruption (CIBAC) was one of the
however, exceeded the scope of its application by extending organized groups duly registered under the party-list system of
the prohibition on the importation of used cars to the representation that manifested their intent to participate in the May 14,
Freeport, which RA 7227, considers to some extent, a 2007 synchronized national and local elections. Together with its
foreign territory. The domestic industry which the EO manifestation of intent to participate,2 CIBAC, through its president,
seeks to protect is actually the "customs territory" which is Emmanuel Joel J. Villanueva, submitted a list of five nominees from
defined under the Rules and Regulations Implementing RA which its representatives would be chosen should CIBAC obtain the
7227 which states: "the portion of the Philippines outside the required number of qualifying votes. The nominees, in the order that
Subic Bay Freeport where the Tariff and Customs Code of their names appeared in the certificate of nomination dated March 29,
the Philippines and other national tariff and customs laws 2007,3 were: (1) Emmanuel Joel J. Villanueva; (2) herein petitioner
are in force and effect." Luis K. Lokin, Jr.; (3) Cinchona C. Cruz-Gonzales; (4) Sherwin Tugna;
and (5) Emil L. Galang. The nominees’ certificates of acceptance were
 Regarding the fourth requisite, the Court finds that the attached to the certificate of nomination filed by CIBAC. The list of
issuance of EO is unreasonable. Since the nature of EO 156 nominees was later published in two newspapers of general circulation,
is to protect the domestic industry from the deterioration of The Philippine Star News4 (sic) and The Philippine Daily Inquirer.5
the local motor manufacturing firms, the Court however,
finds no logic in all the encompassing application of the Prior to the elections, however, CIBAC, still through Villanueva, filed
assailed provision to the Freeport Zone which is outside the a certificate of nomination, substitution and amendment of the list of
customs territory of the Philippines. As long as the used nominees dated May 7, 2007,6 whereby it withdrew the nominations of
motor vehicles do not enter the customs territory, the injury Lokin, Tugna and Galang and substituted Armi Jane R. Borje as one of
or harm sought to be prevented or remedied will not arise. the nominees. The amended list of nominees of CIBAC thus included:
(1) Villanueva, (2) Cruz-Gonzales, and (3) Borje.
 The Court finds that Article 2, Section 3.1 of EO 156 is
VOID insofar as it is made applicable within the secured
Following the close of the polls, or on June 20, 2007, Villanueva sent a
fenced-in former Subic Naval Base area but is declared
letter to COMELEC Chairperson Benjamin Abalos,7 transmitting
VALID insofar as it applies to the customs territory or
therewith the signed petitions of more than 81% of the CIBAC
the Philippine territory outside the presently secured
members, in order to confirm the withdrawal of the nomination of
fenced-in former Subic Naval Base area as stated in
Lokin, Tugna and Galang and the substitution of Borje. In their
Section 1.1 of EO 97-A (an EO executed by Pres. Fidel V.
petitions, the members of CIBAC averred that Lokin and Tugna were
Ramos in 1993 providing the Tax and Duty Free Privilege
not among the nominees presented and proclaimed by CIBAC in its
within the Subic Freeport Zone). Hence, used motor vehicles
proclamation rally held in May 2007; and that Galang had signified his
that come into the Philippine territory via the secured
desire to focus on his family life.
fenced-in former Subic Naval Base area may be stored, used
or traded therein, or exported out of the Philippine territory,
but they cannot be imported into the Philippine territory On June 26, 2007, CIBAC, supposedly through its counsel, filed with
outside of the secured fenced-in former Subic Naval Base the COMELEC en banc sitting as the National Board of Canvassers a
area. motion seeking the proclamation of Lokin as its second nominee.8 The
right of CIBAC to a second seat as well as the right of Lokin to be thus
Petitions are PARTIALLY GRANTED provided that proclaimed were purportedly based on Party-List Canvass Report No.
said provision is declared VALID insofar as it applies to 26, which showed CIBAC to have garnered a grand total of 744,674
the Philippine territory outside the presently fenced-in votes. Using all relevant formulas, the motion asserted that CIBAC was
former Subic Naval Base area and VOID with respect to clearly entitled to a second seat and Lokin to a proclamation.
its application to the secured fenced-in former Subic
Naval Base area. The motion was opposed by Villanueva and Cruz-Gonzales.

G.R. Nos. 179431-32 June 22, 2010 Notwithstanding Villanueva’s filing of the certificate of nomination,
substitution and amendment of the list of nominees and the petitions of
LUIS K. LOKIN, JR., as the second nominee of CITIZENS more than 81% of CIBAC members, the COMELEC failed to act on
BATTLE AGAINST CORRUPTION (CIBAC),Petitioner, the matter, prompting Villanueva to file a petition to confirm the
vs. certificate of nomination, substitution and amendment of the list of
COMMISSION ON ELECTIONS and the HOUSE OF nominees of CIBAC on June 28, 2007.9
REPRESENTATIVES, Respondents.
On July 6, 2007, the COMELEC issued Resolution No.
x - - - - - - - - - - - - - - - - - - - - - - -x 8219,10 whereby it resolved to set the matter pertaining to the validity
of the withdrawal of the nominations of Lokin, Tugna and Galang and
the substitution of Borje for proper disposition and hearing. The case
G.R. No. 180443
was docketed as E.M. No. 07-054.

LUIS K. LOKIN, JR., Petitioner,

In the meantime, the COMELEC en banc, sitting as the National Board
vs.
of Canvassers, issued National Board of Canvassers (NBC) Resolution
COMMISSION ON ELECTIONS (COMELEC), EMMANUEL
No. 07-60 dated July 9, 200711 to partially proclaim the following
JOEL J. VILLANUEVA, CINCHONA C. GONZALES and ARMI
parties, organizations and coalitions participating under the Party-List
JANE R. BORJE, Respondents.
System as having won in the May 14, 2007 elections, namely: Buhay
Hayaan Yumabong, Bayan Muna, CIBAC, Gabriela Women's Party,
DECISION Association of Philippine Electric Cooperatives, Advocacy for Teacher
Empowerment Through Action, Cooperation and Harmony Towards
BERSAMIN, J.: Educational Reforms, Inc., Akbayan! Citizen's Action Party, Alagad,
Luzon Farmers Party, Cooperative-Natco Network Party, Anak Pawis,
Alliance of Rural Concerns and Abono; and to defer the proclamation
97 ADMIN LAW CASES 0901
of the nominees of the parties, organizations and coalitions with No. 7804).17 He alleges that Section 13 of Resolution No. 7804
pending disputes until final resolution of their respective cases. expanded Section 8 of R.A. No. 7941.18the law that the COMELEC
seeks to thereby implement.
The COMELEC en banc issued another resolution, NBC Resolution
No. 07-72 dated July 18, 2007,12 proclaiming Buhay Hayaan In its comment, the COMELEC asserts that a petition for certiorari is
Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC, an inappropriate recourse in law due to the proclamation of Cruz-
Gabriela Women's Party, and Association of Philippine Electric Gonzales as Representative and her assumption of that office; that
Cooperatives to an additional seat each; and holding in abeyance the Lokin’s proper recourse was an electoral protest filed in the House of
proclamation of the nominees of said parties, organizations and Representatives Electoral Tribunal (HRET); and that, therefore, the
coalitions with pending disputes until the final resolution of their Court has no jurisdiction over the matter being raised by Lokin.
respective cases.
For its part, CIBAC posits that Lokin is guilty of forum shopping for
With the formal declaration that CIBAC was entitled to an additional filing a petition for mandamus and a petition for certiorari, considering
seat, Ricardo de los Santos, purportedly as secretary general of that both petitions ultimately seek to have him proclaimed as the
CIBAC, informed Roberto P. Nazareno, Secretary General of the second nominee of CIBAC.
House of Representatives, of the promulgation of NBC Resolution No.
07-72 and requested that Lokin be formally sworn in by Speaker Jose
Issues
de Venecia, Jr. to enable him to assume office. Nazareno replied,
however, that the request of Delos Santos could not be granted because
COMELEC Law Director Alioden D. Dalaig had notified him of the The issues are the following:
pendency of E.M. 07-054.
(a) Whether or not the Court has jurisdiction over the
On September 14, 2007, the COMELEC en banc resolved E.M. No. controversy;
07-05413 thuswise:
(b) Whether or not Lokin is guilty of forum shopping;
WHEREFORE, considering the above discussion, the Commission
hereby approves the withdrawal of the nomination of Atty. Luis K. (c) Whether or not Section 13 of Resolution No. 7804 is
Lokin, Sherwin N. Tugna and Emil Galang as second, third and fourth unconstitutional and violates the Party-List System Act; and
nominees respectively and the substitution thereby with Atty. Cinchona
C. Cruz-Gonzales as second nominee and Atty. Armi Jane R. Borje as
third nominee for the party list CIBAC. The new order of CIBAC's (d) Whether or not the COMELEC committed grave abuse
nominees therefore shall be: of discretion amounting to lack or excess of jurisdiction in
approving the withdrawal of the nominees of CIBAC and
allowing the amendment of the list of nominees of CIBAC
1. Emmanuel Joel J. Villanueva without any basis in fact or law and after the close of the
polls, and in ruling on matters that were intra-corporate in
2. Cinchona C. Cruz-Gonzales nature.

3. Armi Jane R. Borje Ruling

SO ORDERED. The petitions are granted.

The COMELEC en banc explained that the actions of Villanueva in his A

capacity as the president of CIBAC were presumed to be within the The Court has jurisdiction over the case
scope of his authority as such; that the president was charged by
Section 1 of Article IV of the CIBAC By-Laws to oversee and direct The COMELEC posits that once the proclamation of the winning
the corporate activities, which included the act of submitting the party's party-list organization has been done and its nominee has assumed
manifestation of intent to participate in the May 14, 2007 elections as office, any question relating to the election, returns and qualifications
well as its certificate of nominees; that from all indications, Villanueva of the candidates to the House of Representatives falls under the
as the president of CIBAC had always been provided the leeway to act jurisdiction of the HRET pursuant to Section 17, Article VI of the 1987
as the party's representative and that his actions had always been Constitution. Thus, Lokin should raise the question he poses herein
considered as valid; that the act of withdrawal, although done without either in an election protest or in a special civil action for quo
any written Board approval, was accomplished with the Board’s warranto in the HRET, not in a special civil action for certiorari in this
acquiescence or at least understanding; and that the intent of the party Court.
should be given paramount consideration in the selection of the
nominees.
We do not agree.
As a result, the COMELEC en banc proclaimed Cruz-Gonzales as the
official second nominee of CIBAC.14 Cruz-Gonzales took her oath of An election protest proposes to oust the winning candidate from office.
office It is strictly a contest between the defeated and the winning candidates,
based on the grounds of electoral frauds and irregularities, to determine
who between them has actually obtained the majority of the legal votes
as a Party-List Representative of CIBAC on September 17, 2007.15 cast and is entitled to hold the office. It can only be filed by a candidate
who has duly filed a certificate of candidacy and has been voted for in
Precís of the Consolidated Cases the preceding elections.

In G.R. No. 179431 and G.R. No. 179432, Lokin seeks through A special civil action for quo warranto refers to questions of disloyalty
mandamus to compel respondent COMELEC to proclaim him as the to the State, or of ineligibility of the winning candidate. The objective
official second nominee of CIBAC. of the action is to unseat the ineligible person from the office, but not
to install the petitioner in his place. Any voter may initiate the action,
which is, strictly speaking, not a contest where the parties strive for
In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 supremacy because the petitioner will not be seated even if the
promulgated on January 12, 2007;16 and the resolution dated respondent may be unseated.
September 14, 2007 issued in E.M. No. 07-054 (approving CIBAC’s
withdrawal of the nominations of Lokin, Tugna and Galang as
CIBAC’s second, third and fourth nominees, respectively, and the The controversy involving Lokin is neither an election protest nor an
substitution by Cruz-Gonzales and Borje in their stead, based on the action for quo warranto, for it concerns a very peculiar situation in
right of CIBAC to change its nominees under Section 13 of Resolution which Lokin is seeking to be seated as the second nominee of CIBAC.
98 ADMIN LAW CASES 0901
Although an election protest may properly be available to one party-list On the other hand, Lokin has resorted to the petition for certiorari to
organization seeking to unseat another party-list organization to assail the September 14, 2007 resolution of the COMELEC (approving
determine which between the defeated and the winning party-list the withdrawal of the nomination of Lokin, Tugna and Galang and the
organizations actually obtained the majority of the legal votes, Lokin’s substitution by Cruz-Gonzales as the second nominee and Borje as the
case is not one in which a nominee of a particular party-list third nominee); and to challenge the validity of Section 13 of
organization thereby wants to unseat another nominee of the same Resolution No. 7804, the COMELEC’s basis for allowing CIBAC’s
party-list organization. Neither does an action for quo warranto lie, withdrawal of Lokin’s nomination.
considering that the case does not involve the ineligibility and
disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some Applying the test for forum shopping, the consecutive filing of the
other cause of disqualification for her. action for certiorari and the action for mandamus did not violate the
rule against forum shopping even if the actions involved the same
Lokin has correctly brought this special civil action for certiorari parties, because they were based on different causes of action and the
against the COMELEC to seek the review of the September 14, 2007 reliefs they sought were different.
resolution of the COMELEC in accordance with Section 7 of Article
IX-A of the 1987 Constitution, notwithstanding the oath and
C
assumption of office by Cruz-Gonzales. The constitutional mandate is
Invalidity of Section 13 of Resolution No. 7804
now implemented by Rule 64 of the 1997 Rules of Civil Procedure,
which provides for the review of the judgments, final orders or
resolutions of the COMELEC and the Commission on Audit. As Rule The legislative power of the Government is vested exclusively in the
64 states, the mode of review is by a petition for certiorari in Legislature in accordance with the doctrine of separation of powers. As
accordance with Rule 65 to be filed in the Supreme Court within a a general rule, the Legislature cannot surrender or abdicate its
limited period of 30 days. Undoubtedly, the Court has original and legislative power, for doing so will be unconstitutional. Although the
exclusive jurisdiction over Lokin’s petitions for certiorari and for power to make laws cannot be delegated by the Legislature to any
mandamus against the COMELEC. other authority, a power that is not legislative in character may be
delegated.25
B
Petitioner is not guilty of forum shopping Under certain circumstances, the Legislature can delegate to executive
officers and administrative boards the authority to adopt and
promulgate IRRs. To render such delegation lawful, the Legislature
Forum shopping consists of the filing of multiple suits involving the must declare the policy of the law and fix the legal principles that are
same parties for the same cause of action, either simultaneously or to control in given cases. The Legislature should set a definite or
successively, for the purpose of obtaining a favorable judgment. Thus, primary standard to guide those empowered to execute the law. For as
forum shopping may arise: (a) whenever as a result of an adverse long as the policy is laid down and a proper standard is established by
decision in one forum, a party seeks a favorable decision (other than by statute, there can be no unconstitutional delegation of legislative power
appeal or certiorari) in another; or (b) if, after having filed a petition in when the Legislature leaves to selected instrumentalities the duty of
the Supreme Court, a party files another petition in the Court of
making subordinate rules within the prescribed limits, although there is
Appeals, because he thereby deliberately splits appeals "in the hope conferred upon the executive officer or administrative board a large
that even as one case in which a particular remedy is sought is
measure of discretion. There is a distinction between the delegation of
dismissed, another case (offering a similar remedy) would still be power to make a law and the conferment of an authority or a discretion
open"; or (c) where a party attempts to obtain a writ of preliminary
to be exercised under and in pursuance of the law, for the power to
injunction from a court after failing to obtain the writ from another make laws necessarily involves a discretion as to what it shall be. 26
court.19

The authority to make IRRs in order to carry out an express legislative

What is truly important to consider in determining whether forum
purpose, or to effect the operation and enforcement of a law is not a
shopping exists or not is the vexation caused to the courts and the power exclusively legislative in character, but is rather administrative
litigants by a party who accesses different courts and administrative in nature. The rules and regulations adopted and promulgated must not,
agencies to rule on the same or related causes or to grant the same or however, subvert or be contrary to existing statutes. The function of
substantially the same reliefs, in the process creating the possibility of promulgating IRRs may be legitimately exercised only for the purpose
conflicting decisions being rendered by the different fora upon the of carrying out the provisions of a law. The power of administrative
same issue.20 agencies is confined to implementing the law or putting it into effect.
Corollary to this is that administrative regulation cannot extend the law
The filing of identical petitions in different courts is prohibited, and amend a legislative enactment. It is axiomatic that the clear letter
because such act constitutes forum shopping, a malpractice that is of the law is controlling and cannot be amended by a mere
proscribed and condemned as trifling with the courts and as abusing administrative rule issued for its implementation. Indeed,
their processes. Forum shopping is an improper conduct that degrades administrative or executive acts shall be valid only when they are not
the administration of justice.21 contrary to the laws or the Constitution.27

Nonetheless, the mere filing of several cases based on the same To be valid, therefore, the administrative IRRs must comply with the
incident does not necessarily constitute forum shopping. The test is following requisites to be valid:28
whether the several actions filed involve the same transactions and the
same essential facts and circumstances.22 The actions must also raise
1. Its promulgation must be authorized by the Legislature;
identical causes of action, subject matter, and issues. 23 Elsewise stated,
forum shopping exists where the elements of litis pendentia are
present, or where a final judgment in one case will amount to res 2. It must be within the scope of the authority given by the
judicata in the other.24 Legislature;

Lokin has filed the petition for mandamus to compel the COMELEC to 3. It must be promulgated in accordance with the prescribed
proclaim him as the second nominee of CIBAC upon the issuance of procedure; and
NBC Resolution No. 07-72 (announcing CIBAC’s entitlement to an
additional seat in the House of Representatives), and to strike down the 4. It must be reasonable.
provision in NBC Resolution No. 07-60 and NBC Resolution No. 07-
72 holding in abeyance "all proclamation of the nominees of concerned
parties, organizations and coalitions with pending disputes shall The COMELEC is constitutionally mandated to enforce and administer
likewise be held in abeyance until final resolution of their respective all laws and regulations relative to the conduct of an election, a
cases." He has insisted that the COMELEC had the ministerial duty to plebiscite, an initiative, a referendum, and a recall.29 In addition to the
proclaim him due to his being CIBAC’s second nominee; and that the powers and functions conferred upon it by the Constitution, the
COMELEC had no authority to exercise discretion and to suspend or COMELEC is also charged to promulgate IRRs implementing the
defer the proclamation of winning party-list organizations with pending provisions of the Omnibus Election Code or other laws that the
disputes. COMELEC enforces and administers.30
99 ADMIN LAW CASES 0901
The COMELEC issued Resolution No. 7804 pursuant to its powers MR. LAGMAN: In other words, what I would like to see is that after
under the Constitution, Batas Pambansa Blg. 881, and the Party-List the list is submitted to the COMELEC officially, no more changes
System Act.31 Hence, the COMELEC met the first requisite. should be made in the names or in the order of listing.

The COMELEC also met the third requisite. There is no question that MR. ABUEG: Mr. Speaker, there may be a situation wherein the name
Resolution No. 7804 underwent the procedural necessities of of a particular nominee has been submitted to the Commission on
publication and dissemination in accordance with the procedure Elections but before election day the nominee changed his political
prescribed in the resolution itself. party affiliation. The nominee is therefore no longer qualified to be
included in the party list and the political party has a perfect right to
Whether Section 13 of Resolution No. 7804 was valid or not is thus to change the name of that nominee who changed his political party
be tested on the basis of whether the second and fourth requisites were affiliation.
met. It is in this respect that the challenge of Lokin against Section 13
succeeds. MR. LAGMAN: Yes of course. In that particular case, the change can
be effected but will be the exception rather than the rule. Another
As earlier said, the delegated authority must be properly exercised. exception most probably is the nominee dies, then there has to be a
This simply means that the resulting IRRs must not be ultra vires as to change but any change for that matter should always be at the last part
be issued beyond the limits of the authority conferred. It is basic that an of the list so that the prioritization made by the party will not be
administrative agency cannot amend an act of Congress,32 for adversely affected.37
administrative IRRs are solely intended to carry out, not to supplant or
to modify, the law. The administrative agency issuing the IRRs may The usage of "No" in Section 8 – "No change of names or alteration of
not enlarge, alter, or restrict the provisions of the law it administers and the order of nominees shall be allowed after the same shall have been
enforces, and cannot engraft additional non-contradictory requirements submitted to the COMELEC except in cases where the nominee dies,
not contemplated by the Legislature.33 or withdraws in writing his nomination, or becomes incapacitated, in
which case the name of the substitute nominee shall be placed last in
Section 8 of R.A. No. 7941 reads: the list" – renders Section 8 a negative law, and is indicative of the
legislative intent to make the statute mandatory. Prohibitive or negative
words can rarely, if ever, be directory, for there is but one way to obey
Section 8. Nomination of Party-List Representatives.-Each registered the command "thou shall not," and that is to completely refrain from
party, organization or coalition shall submit to the COMELEC not later doing the forbidden act,38 subject to certain exceptions stated in the law
that forty-five (45) days before the election a list of names, not less itself, like in this case.
than five (5), from which party-list representatives shall be chosen in
case it obtains the required number of votes.
Section 8 does not unduly deprive the party-list organization of its right
to choose its nominees, but merely divests it of the right to change its
A person may be nominated in one (1) list only. Only persons who nominees or to alter the order in the list of its nominees’ names after
have given their consent in writing may be named in the list. The list submission of the list to the COMELEC.
shall not include any candidate of any elective office or a person who
has lost his bid for an elective office in the immediately preceding
election. No change of names or alteration of the order of nominees The prohibition is not arbitrary or capricious; neither is it without
shall be allowed after the same shall have been submitted to the reason on the part of lawmakers. The COMELEC can rightly presume
COMELEC except in cases where the nominee dies, or withdraws in from the submission of the list that the list reflects the true will of the
writing his nomination, becomes incapacitated in which case the name party-list organization. The COMELEC will not concern itself with
of the substitute nominee shall be placed last in the list. Incumbent whether or not the list contains the real intended nominees of the party-
sectoral representatives in the House of Representatives who are list organization, but will only determine whether the nominees pass all
nominated in the party-list system shall not be considered resigned. the requirements prescribed by the law and whether or not the
nominees possess all the qualifications and none of the
disqualifications. Thereafter, the names of the nominees will be
The provision is daylight clear. The Legislature thereby deprived the published in newspapers of general circulation. Although the people
party-list organization of the right to change its nominees or to alter the vote for the party-list organization itself in a party-list system of
order of nominees once the list is submitted to the COMELEC, except election, not for the individual nominees, they still have the right to
when: (a) the nominee dies; (b) the nominee withdraws in writing his know who the nominees of any particular party-list organization are.
nomination; or (c) the nominee becomes incapacitated. The provision The publication of the list of the party-list nominees in newspapers of
must be read literally because its language is plain and free from general circulation serves that right of the people, enabling the voters
ambiguity, and expresses a single, definite, and sensible meaning. Such to make intelligent and informed choices. In contrast, allowing the
meaning is conclusively presumed to be the meaning that the party-list organization to change its nominees through withdrawal of
Legislature has intended to convey. Even where the courts should be their nominations, or to alter the order of the nominations after the
convinced that the Legislature really intended some other meaning, and submission of the list of nominees circumvents the voters’ demand for
even where the literal interpretation should defeat the very purposes of transparency. The lawmakers’ exclusion of such arbitrary withdrawal
the enactment, the explicit declaration of the Legislature is still the law, has eliminated the possibility of such circumvention.
from which the courts must not depart.34 When the law speaks in clear
and categorical language, there is no reason for interpretation or
construction, but only for application.35Accordingly, an administrative D
agency tasked to implement a statute may not construe it by expanding Exceptions in Section 8 of R.A. 7941 are exclusive
its meaning where its provisions are clear and unambiguous. 36
Section 8 of R.A. No. 7941 enumerates only three instances in which
The legislative intent to deprive the party-list organization of the right the party-list organization can substitute another person in place of the
nominee whose name has been submitted to the COMELEC, namely:
to change the nominees or to alter the order of the nominees was also
expressed during the deliberations of the Congress, viz: (a) when the nominee dies; (b) when the nominee withdraws in writing
his nomination; and (c) when the nominee becomes incapacitated.

MR. LAGMAN: And again on Section 5, on the nomination of party

The enumeration is exclusive, for, necessarily, the general rule applies
list representatives, I do not see any provision here which prohibits or
for that matter allows the nominating party to change the nominees or to all cases not falling under any of the three exceptions.
to alter the order of prioritization of names of nominees. Is the
implication correct that at any time after submission the names could When the statute itself enumerates the exceptions to the application of
still be changed or the listing altered? the general rule, the exceptions are strictly but reasonably construed.
The exceptions extend only as far as their language fairly warrants, and
all doubts should be resolved in favor of the general provision rather
MR. ABUEG: Mr. Speaker, that is a good issue brought out by the
distinguished Gentleman from Albay and perhaps a perfecting than the exceptions. Where the general rule is established by a statute
with exceptions, none but the enacting authority can curtail the former.
amendment may be introduced therein. The sponsoring committee will
gladly consider the same. Not even the courts may add to the latter by implication, and it is a rule
100 ADMIN LAW CASES 0901
that an express exception excludes all others, although it is always the deliberations of the House of Representatives has indicated). The
proper in determining the applicability of the rule to inquire whether, in grant thus conflicted with the statutory intent to save the nominee from
a particular case, it accords with reason and justice.391avvphi1 falling under the whim of the party-list organization once his name has
been submitted to the COMELEC, and to spare the electorate from the
capriciousness of the party-list organizations.
The appropriate and natural office of the exception is to exempt
something from the scope of the general words of a statute, which is
otherwise within the scope and meaning of such general words. We further note that the new ground would not secure the object of
Consequently, the existence of an exception in a statute clarifies the R.A. No. 7941 of developing and guaranteeing a full, free and open
intent that the statute shall apply to all cases not excepted. Exceptions party-list electoral system. The success of the system could only be
are subject to the rule of strict construction; hence, any doubt will be ensured by avoiding any arbitrariness on the part of the party-list
resolved in favor of the general provision and against the exception. organizations, by seeing to the transparency of the system, and by
Indeed, the liberal construction of a statute will seem to require in guaranteeing that the electorate would be afforded the chance of
many circumstances that the exception, by which the operation of the making intelligent and informed choices of their party-list
statute is limited or abridged, should receive a restricted construction. representatives.

E The insertion of the new ground was invalid. An axiom in

Section 13 of Resolution No. 7804 expanded administrative law postulates that administrative authorities should not
the exceptions under Section 8 of R.A. No. 7941 act arbitrarily and capriciously in the issuance of their IRRs, but must
ensure that their IRRs are reasonable and fairly adapted to secure the
Section 13 of Resolution No. 7804 states: end in view. If the IRRs are shown to bear no reasonable relation to the
purposes for which they were authorized to be issued, they must be
held to be invalid and should be struck down.45
Section 13. Substitution of nominees. – A party-list nominee may be
substituted only when he dies, or his nomination is withdrawn by
the party, or he becomes incapacitated to continue as such, or he F
withdraws his acceptance to a nomination. In any of these cases, the Effect of partial nullity of Section 13 of Resolution No. 7804
name of the substitute nominee shall be placed last in the list of
nominees. An IRR adopted pursuant to the law is itself law. 46 In case of conflict
between the law and the IRR, the law prevails. There can be no
No substitution shall be allowed by reason of withdrawal after the question that an IRR or any of its parts not adopted pursuant to the law
is no law at all and has neither the force nor the effect of law. 47 The
polls.
invalid rule, regulation, or part thereof cannot be a valid source of any
right, obligation, or power.
Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides
four instances, the fourth being when the "nomination is withdrawn by
Considering that Section 13 of Resolution No. 7804 – to the extent that
the party."
it allows the party-list organization to withdraw its nomination already
submitted to the COMELEC – was invalid, CIBAC’s withdrawal of its
Lokin insists that the COMELEC gravely abused its discretion in nomination of Lokin and the others and its substitution of them with
expanding to four the three statutory grounds for substituting a new nominees were also invalid and ineffectual. It is clear enough that
nominee. any substitution of Lokin and the others could only be for any of the
grounds expressly stated in Section 8 of R.A. No. 7941. Resultantly,
We agree with Lokin. the COMELEC’s approval of CIBAC’s petition of withdrawal of the
nominations and its recognition of CIBAC’s substitution, both through
its assailed September 14, 2007 resolution, should be struck down for
The COMELEC, despite its role as the implementing arm of the lack of legal basis. Thereby, the COMELEC acted without jurisdiction,
Government in the enforcement and administration of all laws and having relied on the invalidly issued Section 13 of Resolution No. 7804
regulations relative to the conduct of an election, 40 has neither the to support its action.
authority nor the license to expand, extend, or add anything to the law
it seeks to implement thereby. The IRRs the COMELEC issues for that
purpose should always accord with the law to be implemented, and WHEREFORE, we grant the petitions for certiorari and mandamus.
should not override, supplant, or modify the law. It is basic that the
IRRs should remain consistent with the law they intend to carry out.41 We declare Section 13 of Resolution No. 7804 invalid and of no effect
to the extent that it authorizes a party-list organization to withdraw its
Indeed, administrative IRRs adopted by a particular department of the nomination of a nominee once it has submitted the nomination to the
Government under legislative authority must be in harmony with the Commission on Elections.
provisions of the law, and should be for the sole purpose of carrying
the law’s general provisions into effect. The law itself cannot be Accordingly, we annul and set aside:
expanded by such IRRs, because an administrative agency cannot
amend an act of Congress.42
(a) The resolution dated September 14, 2007 issued in E. M.
No. 07-054 approving Citizens’ Battle Against Corruption’s
The COMELEC explains that Section 13 of Resolution No. 7804 has withdrawal of the nominations of Luis K. Lokin, Jr.,
added nothing to Section 8 of R.A. No. 7941, 43because it has merely Sherwin N. Tugna, and Emil Galang as its second, third, and
reworded and rephrased the statutory provision’s phraseology. fourth nominees, respectively, and ordering their substitution
by Cinchona C. Cruz-Gonzales as second nominee and Armi
The explanation does not persuade. Jane R. Borje as third nominee; and

To reword means to alter the wording of or to restate in other words; (b) The proclamation by the Commission on Elections of
to rephrase is to phrase anew or in a new form.44 Both terms signify Cinchona C. Cruz-Gonzales as a Party-List Representative
that the meaning of the original word or phrase is not altered. representing Citizens’ Battle Against Corruption in the
House of Representatives.
However, the COMELEC did not merely reword or rephrase the text of
Section 8 of R.A. No. 7941, because it established an entirely new We order the Commission on Elections to forthwith proclaim petitioner
ground not found in the text of the provision. The new ground granted Luis K. Lokin, Jr. as a Party-List Representative representing Citizens’
to the party-list organization the unilateral right to withdraw its Battle Against Corruption in the House of Representatives.
nomination already submitted to the COMELEC, which Section 8 of
R.A. No. 7941 did not allow to be done. Neither was the grant of the We make no pronouncements on costs of suit. SO ORDERED
unilateral right contemplated by the drafters of the law, who precisely
denied the right to withdraw the nomination (as the quoted record of
101 ADMIN LAW CASES 0901
 G.R. NO. 152574, NOVEMBER 17, 2004 questioned. Corollary to this point, he should be granted the
FRANCISCO ABELLA JR., PETITIONER, VS. CIVIL SERVICE opportunity to prove his eligibility. He had a personal stake in the
COMMISSION, RESPONDENT. outcome of the case, which justifies his challenge to the CSC act that
[PANGANIBAN.] denied his permanent appointment.

A real party in interest is one who would be benefited or injured

Facts: by the judgment, or one entitled to the avails of the suit. “Interest”
Petitioner Francisco A. Abella, Jr., a lawyer, retired from the within the meaning of the rule means material interest or an interest in
Export Processing Zone Authority (EPZA), now the Philippine issue and to be affected by the decree, as distinguished from mere
Economic Zone Authority (PEZA), on July 1, 1996 as Department interest in the question involved or a mere incidental interest.
Manager of the Legal Services Department. He held a civil service Otherwise stated, the rule refers to a real or present substantial interest
eligibility for the position of Department Manager, having completed as distinguished from a mere expectancy; or from a future, contingent,
the training program for Executive Leadership and Management in subordinate, or consequential interest. As a general rule, one who has
1982 under the Civil Service Academy, pursuant to CSC Resolution no right or interest to protect cannot invoke the jurisdiction of the court
No. 850 dated April 16, 1979, which was then the required eligibility as a party-plaintiff in an action.
for said position.
Although the earlier discussion demonstrates that the appointing
On May 31, 1994, the Civil Service Commission issued authority is adversely affected by the CSC’s Order and is a real party in
Memorandum Circular No. 21, series of 1994 with Section 4 interest, the appointee is rightly a real party in interest too. He is also
enumerating the positions covered by the Career Executive Service injured by the CSC disapproval, because he is prevented from
(CES). These positions require Career Service Executive Eligibility assuming the office in a permanent capacity. Moreover, he would
(CSEE) as a requirement for permanent appointment. But, this necessarily benefit if a favorable judgment is obtained, as an approved
provides that incumbents to CES shall retain their permanent appointment would confer on him all the rights and privileges of a
appointment but upon promotion or transfer to other CES positions, permanent appointee.
they shall be under temporary status until they qualify.
B. Due Process
Two years after his retirement, petitioner was hired by the Civil Service laws have expressly empowered the CSC to issue
Subic Bay Metropolitan Authority (SBMA) on a contractual basis. On and enforce rules and regulations to carry out its mandate. In the
January 1, 1999, petitioner was issued by SBMA a permanent exercise of its authority, the CSC deemed it appropriate to clearly
employment as Department Manager III, Labor define and identify positions covered by the Career Executive Service.
and Employment Center. However, when said appointment was Logically, the CSC had to issue guidelines to meet this objective,
submitted to respondent Civil Service Commission Regional Office specifically through the issuance of the challenged Circular.
No. III, it was disapproved on the ground that petitioner’s eligibility
was not appropriate. Petitioner was advised by SBMA of the The challenged Circular did not revoke petitioner’s ELM
disapproval of his appointment. In view thereof, petitioner was issued a eligibility. He was appointed to a CES position; however, his eligibility
temporary appointment as Department Manager III, Labor and was inadequate. Eligibility must necessarily conform to the
Employment Center, SBMA on July 9, 1999. Petitioner appealed the requirements of the position, which in petitioner’s case was a Career
disapproval of his permanent appointment by respondent to the Civil Service Executive Eligibility (CSEE). The challenged Circular protects
Service Commission, which issued Resolution No. 000059, dated the rights of incumbents as long as they remain in the positions to
January 10, 2000, affirming the action taken by respondent. which they were previously appointed. They are allowed to retain their
Petitioner’s motion for reconsideration thereof was denied by the CSC positions in a permanent capacity, notwithstanding the lack of CSEE.
in Resolution No. 001143 dated May 11, 2000. Clearly, the Circular recognizes the rule of prospectivity of regulations;
hence, it is not an post facto law or a bill of attainder.
Petitioner appealed to the Court of Appeals but it ruled that
he did not have legal standing to question the disapproval and was not In the present case, the government service of petitioner ended
the real party in interest. when he retired in 1996; thus, his right to remain in a CES position,
notwithstanding his lack of eligibility, also ceased. Upon his
Issue/s: reemployment years later as department manager III at SBMA in 2001,
A. Whether the petitioner has the personality and the it was necessary for him to comply with the eligibility prescribed at the
real party in interest to question the disapproval of his time for that position.
appointment.
B. Whether the issuance of Section 4 of CSC On petitioner’s averment that he was not afforded due process for
Memorandum Circular No. 21, s. 1994, which deprived CSC’s alleged failure to notify him of a hearing relating to the issuance
petitioner his property right without due process of law, is of the challenged Circular, is not convincing. The issuance of the
constitutional. circular was an exercise of a quasi-legislative function as such, prior
C. Whether the CSC correctly denied his notice to and hearing of every affected party, as elements of due
appointment. process, are not required since there is no determination of past events
or facts that have to be established or ascertained. As a general rule,
Ruling: prior notice and hearing are not essential to the validity of rules or
A. Personality and real party in interest. regulations promulgated to govern future conduct.
The CSC’s disapproval of an appointment is a challenge to the
exercise of the appointing authority’s discretion. The appointing C. Whether CSC correctly denied his appointment
authority must have the right to contest the disapproval. While there is Since petitioner had no CES eligibility, the CSC correctly denied
justification to allow the appointing authority to challenge the CSC his permanent appointment. The appointee need not have been
disapproval, there is none to preclude the appointee from taking the previously heard, because the nature of the action did not involve the
same course of action. Aggrieved parties, including the CSC, should be imposition of an administrative disciplinary measure. The CSC, in
given the right to file motions for reconsideration or to appeal. On this approving or disapproving an appointment, merely examines the
point, the concepts of “legal standing” and “real party in interest” conformity of the appointment with the law and the appointee’s
become relevant. possession of all the minimum qualifications and none of the
disqualification. In sum, while petitioner was able to demonstrate his
The question in legal standing is whether such parties have standing to appeal the CSC Resolutions to the courts, he failed to prove
‘alleged such a personal stake in the outcome of the controversy to his eligibility to the position he was appointed to.
assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends for illumination of The Petition was GRANTED insofar as it seeks legal standing for
difficult constitutional questions.’ If legal standing is granted to petitioner, but DENIED insofar as it prays for the reversal of the CSC
challenge the constitutionality or validity of a law or governmental act Resolutions disapproving his appointment as department manager III
despite the lack of personal injury on the challenger’s part, then more of the Labor and Employment Center, Subic Bay Metropolitan
so should petitioner be allowed to contest the CSC Order disapproving Authority.
his appointment. Clearly, the petitioner was prejudiced by the
disapproval, since he could not continue his office. Although petitioner
had no vested right to the position, it was his eligibility that was being
102 ADMIN LAW CASES 0901
G.R. No. 152574 November 17, 2004 '2. the position is above division chief level

FRANCISCO ABELLA JR., petitioner, '3. the duties and responsibilities of the position
vs. require the performance of executive or
CIVIL SERVICE COMMISSION, respondent. managerial functions.

'4. Status of Appointment of Incumbents of

Positions Included Under the Coverage of the
CES. Incumbents of positions which are declared
DECISION to be Career Executive Service positions for the
first time pursuant to this Resolution who hold
permanent appointments thereto shall remain
under permanent status in their respective
positions. However, upon promotion or transfer to
other Career Executive Service (CES) positions,
PANGANIBAN, J.: these incumbents shall be under temporary status
in said other CES positions until they qualify.'
Both the appointing authority and the appointee are the real parties in
interest, and both have legal standing, in a suit assailing a Civil Service "Two years after his retirement, petitioner was hired by the
Commission (CSC) order disapproving an appointment. Despite having Subic Bay Metropolitan Authority (SBMA) on a contractual
legal interest and standing, herein petitioner unsuccessfully challenges basis. On January 1, 1999, petitioner was issued by SBMA a
the constitutionality of the CSC circular that classifies certain positions permanent employment as Department Manager III, Labor
in the career service of the government. In sum, petitioner was and Employment Center. However, when said appointment
appointed to a Career Executive Service (CES) position, but did not was submitted to respondent Civil Service Commission
have the corresponding eligibility for it; hence, the CSC correctly Regional Office No. III, it was disapproved on the ground
disapproved his appointment. that petitioner's eligibility was not appropriate. Petitioner
was advised by SBMA of the disapproval of his
appointment. In view thereof, petitioner was issued a
The Case temporary appointment as Department Manager III, Labor
and Employment Center, SBMA on July 9, 1999.
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
challenging the November 16, 2001 Decision2 and the March 8, 2002 "Petitioner appealed the disapproval of his permanent
Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 58987. appointment by respondent to the Civil Service Commission,
The Assailed Decision disposed as follows: which issued Resolution No. 000059, dated January 10,
2000, affirming the action taken by respondent. Petitioner's
"WHEREFORE, the petition for review is DENIED for lack motion for reconsideration thereof was denied by the CSC in
of merit."4 Resolution No. 001143 dated May 11, 2000."

The challenged Resolution denied petitioner's Motion for "x x x xxx xxx
Reconsideration.
"Undaunted, petitioner filed with [the CA] a petition for
The Facts review seeking the reversal of the CSC Resolutions dated
January 10, 2000 and May 11, 2000 on the ground that CSC
Memorandum Circular No. 21, s. 1994 is unconstitutional as
The CA narrates the factual antecedents in this wise: it rendered his earned civil service eligibility ineffective or
inappropriate for the position of Department Manager [III]"5
"Petitioner Francisco A. Abella, Jr., a lawyer, retired from
the Export Processing Zone Authority (EPZA), now the Ruling of the Court of Appeals
Philippine Economic Zone Authority (PEZA), on July 1,
1996 as Department Manager of the Legal Services
Department. He held a civil service eligibility for the The CA shunned the issue of constitutionality, arguing that a
position of Department Manager, having completed the constitutional question should not be passed upon if there are other
training program for Executive Leadership and Management grounds upon which the case may be decided.6 Citing CSC
in 1982 under the Civil Service Academy, pursuant to CSC Memorandum Circular 40, s. 1998 and Mathay v. Civil Service
Resolution No. 850 dated April 16, 1979, which was then Commission,7 the appellate court ruled that only the appointing officer
the required eligibility for said position. may request reconsideration of the action taken by the CSC on
appointments. Thus, it held that petitioner did not have legal standing
to question the disapproval of his appointment.8
"It appears, however, that on May 31, 1994, the Civil
Service Commission issued Memorandum Circular No. 21,
series of 1994, the pertinent provisions of which read: On reconsideration, the CA added that petitioner was not the real party
in interest, as his appointment was dependent on the CSC's approval.
Accordingly, he had no vested right in the office, since his appointment
'1. Positions Covered by the Career Executive was disapproved.9
Service

Unsatisfied, petitioner brought this recourse to this Court. 10

xxx xxx xxx

The Issues
(b) In addition to the above identified positions and other
positions of the same category which had been previously
classified and included in the CES, all other third level Petitioner raises the following issues for our consideration:
positions of equivalent category in all branches and
instrumentalities of the national government, including "A. Whether or not Respondent Court committed grave
government owned and controlled corporations with original abuse of discretion amounting to lack of jurisdiction in
charters are embraced within the Career Executive Service ruling that petitioner lacks the personality to question the
provided that they meet the following criteria: disapproval by respondent office of petitioner's appointment
as Department Manager III, Labor and Employment Center,
'1. the position is a career position; SBMA.

103 ADMIN LAW CASES 0901

 "B. Whether or not Respondent Court committed grave the appointing authority within thirty days from issuance,
abuse of discretion amounting to lack of jurisdiction in otherwise, the appointment becomes ineffective thirty days
ruling that petitioner is not the real party in interest to thereafter."18
question the disapproval by respondent office of petitioner's
appointment as Department Manager III, Labor and
The appointing officer and the CSC acting together, though not
Employment Center, SBMA. concurrently but consecutively, make an appointment complete. 19 In
acting on the appointment, the CSC determines whether the appointee
"C. Whether or not Respondent Court committed grave possesses the appropriate civil service eligibility or the required
abuse of discretion amounting to lack of jurisdiction, in qualifications. If the appointee does, the appointment must be
dismissing petitioner's appeal on a mere technicality approved; if not, it should be disapproved.20 According to the appellate
considering that petitioner is questioning the court, only the appointing authority had the right to challenge the
constitutionality of respondent office' issuance of Section 4 CSC's disapproval. It relied on Section 2 of Rule VI of CSC
of CSC Memorandum Circular No. 21, s. 1994, which Memorandum Circular 40, s. 1998 (Omnibus Rules on Appointment
deprived petitioner his property right without due process of and Other Personal Actions), which provides:
law."11
"Section 2. Request for Reconsideration of, or appeal from,
The Court's Ruling the disapproval of an appointment may be made by the
appointing authority and submitted to the Commission
The Petition is partly meritorious. within fifteen (15) calendar days from receipt of the
disapproved appointment."

First Issue:
Appointing Authority's Right to
Challenge CSC Disapproval
Who May File Reconsideration or Appeal
While petitioner does not challenge the legality of this provision, he
Preliminary Observation now claims that it is merely a technicality, which does not prevent him
from requesting reconsideration.
Petitioner imputes to the CA "grave abuse of discretion amounting to
lack of jurisdiction" for ruling that he had no legal standing to contest We clarify. The power of appointment necessarily entails the exercise
the disapproval of his appointment.12 Grave abuse of discretion is a of judgment and discretion.21 Luego v. Civil Service
ground for a petition for certiorari under Rule 65 of the Rules of Court. 22
Commission declared:
Nevertheless, this Court resolved to grant due course to the Petition
and to treat it appropriately as a petition for review on certiorari under
Rule 45 of the Rules of Court. The grounds shall be deemed "reversible "Appointment is an essentially discretionary power and must
errors," not "grave abuse of discretion." be performed by the officer in which it is vested according
to his best lights, the only condition being that the appointee
should possess the qualifications required by law. If he does,
Approval Required for then the appointment cannot be faulted on the ground that
Permanent Appointment there are others better qualified who should have been
preferred. This is a political question involving
A permanent appointment in the career service is issued to a person considerations of wisdom which only the appointing
who has met the requirements of the position to which the appointment authority can decide."23
is made in accordance with the provisions of law, the rules and the
standards promulgated pursuant thereto.13 It implies the civil service Significantly, "the selection of the appointee -- taking into account the
eligibility of the appointee.14 Thus, while the appointing authority has totality of his qualifications, including those abstract qualities that
the discretion to choose whom to appoint, the choice is subject to the define his personality -- is the prerogative of the appointing
caveat that the appointee possesses the required qualifications.15 authority."24 No tribunal, not even this Court,25 may compel the
exercise of an appointment for a favored person.26
To make it fully effective, an appointment to a civil service position
must comply with all legal requirements.16 Thus, the law requires the The CSC's disapproval of an appointment is a challenge to the exercise
appointment to be submitted to the CSC which will ascertain, in the of the appointing authority's discretion. The appointing authority must
main, whether the proposed appointee is qualified to hold the position have the right to contest the disapproval. Thus, Section 2 of Rule VI of
and whether the rules pertinent to the process of appointment were CSC Memorandum Circular 40, s. 1998 is justified insofar as it allows
observed.17 The applicable provision of the Civil Service Law reads: the appointing authority to request reconsideration or appeal.

"SECTION 9. Powers and Functions of the Commission. — In Central Bank v. Civil Service Commission,27 this Court has affirmed
The Commission shall administer the Civil Service and shall that the appointing authority stands to be adversely affected when the
have the following powers and functions: CSC disapproves an appointment. Thus, the said authority can "defend
its appointment since it knows the reasons for the same."28 It is also the
"x x x xxx xxx act of the appointing authority that is being questioned when an
appointment is disapproved.29
"(h) Approve all appointments, whether original or
promotional, to positions in the civil service, except those of Appointee's Legal Standing to
presidential appointees, members of the Armed Forces of the Challenge the CSC Disapproval
Philippines, police forces, firemen, and jailguards, and
disapprove those where the appointees do not possess the While there is justification to allow the appointing authority to
appropriate eligibility or required qualifications. An challenge the CSC disapproval, there is none to preclude the appointee
appointment shall take effect immediately upon issue by the from taking the same course of action. Aggrieved parties, including the
appointing authority if the appointee assumes his duties Civil Service Commission, should be given the right to file motions for
immediately and shall remain effective until it is reconsideration or to appeal.30 On this point, the concepts of "legal
disapproved by the Commission, if this should take place, standing" and "real party in interest" become relevant.
without prejudice to the liability of the appointing authority
for appointments issued in violation of existing laws or
rules: Provided, finally, That the Commission shall keep a Although commonly directed towards ensuring that only certain parties
record of appointments of all officers and employees in the can maintain an action, "legal standing" and "real party in interest" are
civil service. All appointments requiring the approval of the different concepts. Kilosbayan v. Morato31 explained:
Commission as herein provided, shall be submitted to it by

104 ADMIN LAW CASES 0901

 "The difference between the rule on standing and real party- appeals from, unfavorable decisions involving appointments. Indeed,
in-interest has been noted by authorities thus: 'It is important there is no legislative intent to bar appointees from challenging the
to note . . . that standing because of its constitutional and CSC's disapproval.
public policy underpinnings, is very different from questions
relating to whether a particular plaintiff is the real party-in-
The view that only the appointing authority may request
interest or has capacity to sue. Although all three reconsideration or appeal is too narrow. The appointee should have the
requirements are directed towards ensuring that only certain same right. Parenthetically, CSC Resolution 99-193638 recognizes the
parties can maintain an action, standing restrictions require a right of the adversely affected party to appeal to the CSC Regional
partial consideration of the merits, as well as broader policy Offices prior to elevating a matter to the CSC Central Office. 39 The
concerns relating to the proper role of the judiciary in certain adversely affected party necessarily includes the appointee.
areas. (FRIEDENTHAL, KANE AND MILLER, CIVIL
PROCEDURE 328 [1985])
This judicial pronouncement does not override Mathay v. Civil Service
Commission,40 which the CA relied on. The Court merely noted in
"Standing is a special concern in constitutional law because passing -- by way of obiter -- that based on a similar provision,41 only
in some cases suits are brought not by parties who have been the appointing officer could request reconsideration of actions taken by
personally injured by the operation of a law or by official
the CSC on appointments.
action taken, but by concerned citizens, taxpayers or voters
who actually sue in the public interest. Hence the question in
standing is whether such parties have 'alleged such a In that case, Quezon City Mayor Ismael A. Mathay Jr. sought the
personal stake in the outcome of the controversy to assure nullification of CSC Resolutions that recalled his appointment of a city
that concrete adverseness which sharpens the presentation of government officer. He filed a Petition assailing the CA Decision,
issues upon which the court so largely depends for which had previously denied his Petition for Certiorari for being the
illumination of difficult constitutional questions.' (Baker v. wrong remedy and for being filed out of time. We observed then that
Carr, 369 U.S. 186, 7 L. Ed. 2d 633 (1962)) the CSC Resolutions were already final and could no longer be
elevated to the CA.42 Furthermore, Mathay's Petition for Certiorari filed
with the CA was improper, because there was an available remedy of
"x x x xxx xxx appeal. And the CSC could not have acted without jurisdiction,
considering that it was empowered to recall an appointment initially
"On the other hand, the question as to 'real party-in-interest' approved.43
is whether he is 'the party who would be [benefited] or
injured by the judgment, or the 'party entitled to the avails of The right of the appointee to seek reconsideration or appeal was not the
the suit.' (Salonga v. Warner Barnes & Co., Ltd., 88 Phil. main issue in Mathay. At any rate, the present case is being decided en
125, 131 [1951])"32 banc, and the ruling may reverse previous doctrines laid down by this
Court.44
If legal standing is granted to challenge the constitutionality or validity
of a law or governmental act despite the lack of personal injury on the
Second Issue:
challenger's part, then more so should petitioner be allowed to contest
the CSC Order disapproving his appointment. Clearly, he was
prejudiced by the disapproval, since he could not continue his office. Constitutionality of Section 4, CSC Memorandum Circular 21,
Series of 1994
Although petitioner had no vested right to the position, 33 it was his
eligibility that was being questioned. Corollary to this point, he should Alleging that his civil service eligibility was rendered ineffective and
be granted the opportunity to prove his eligibility. He had a personal that he was consequently deprived of a property right without due
stake in the outcome of the case, which justifies his challenge to the process,45 petitioner challenges the constitutionality of CSC
CSC act that denied his permanent appointment. Memorandum Circular 21, s. 1994.46 The pertinent part of this Circular
reads:
The Appointee a Real
Party in Interest "1. Positions Covered by the Career Executive Service.

A real party in interest is one who would be benefited or injured by the "(a) The Career Executive Service includes the
judgment, or one entitled to the avails of the suit.34 "Interest" within the positions of Undersecretary, Assistant Secretary,
meaning of the rule means material interest or an interest in issue and Bureau Director, Assistant Bureau Director,
to be affected by the decree, as distinguished from mere interest in the Regional Director (department-wide and bureau-
question involved or a mere incidental interest.35 Otherwise stated, the wide), Assistant Regional Director (department-
rule refers to a real or present substantial interest as distinguished from wide and bureau-wide) and Chief of Department
a mere expectancy; or from a future, contingent, subordinate, or Service[.]
consequential interest.36 As a general rule, one who has no right or
interest to protect cannot invoke the jurisdiction of the court as a party- "(b) In addition to the above identified positions
plaintiff in an action.37 and other positions of the same category which
had been previously classified and included in the
Although the earlier discussion demonstrates that the appointing CES, all other third level positions in all branches
authority is adversely affected by the CSC's Order and is a real party in and instrumentalities of the national government,
interest, the appointee is rightly a real party in interest too. He is also including government-owned or controlled
injured by the CSC disapproval, because he is prevented from corporations with original charters are embraced
assuming the office in a permanent capacity. Moreover, he would within the Career Executive Service provided that
necessarily benefit if a favorable judgment is obtained, as an approved they meet the following criteria:
appointment would confer on him all the rights and privileges of a
permanent appointee. "1. the position is a career position;

Appointee Allowed "2. the position is above division chief

Procedural Relief level;

Section 2 of Rule VI of CSC Memorandum Circular 40, s. 1998 should "3. the duties and responsibilities of the
not be interpreted to restrict solely to the appointing authority the right position require the performance of
to move for a reconsideration of, or to appeal, the disapproval of an executive or managerial functions."
appointment. PD 807 and EO 292, from which the CSC derives the
authority to promulgate its rules and regulations, are silent on whether
appointees have a similar right to file motions for reconsideration of, or xxx xxx xxx
105 ADMIN LAW CASES 0901
 "4. Status of Appointment of Incumbents of Positions Under which have settled meanings in criminal jurisprudence, are clearly
the Coverage of the CES. Incumbents of positions which are inapplicable here.
declared to be Career Executive Service positions for the
first time pursuant to this Resolution who hold permanent The government service of petitioner ended when he retired in 1996;
appointments thereto shall remain under permanent status in
thus, his right to remain in a CES position, notwithstanding his lack of
their respective positions. However, upon promotion or eligibility, also ceased. Upon his reemployment56 years later as
transfer to other Career Executive Service (CES) positions, department manager III at SBMA in 2001, it was necessary for him to
these incumbents shall be under temporary status in said comply with the eligibility prescribed at the time for that position.
other CES positions until they qualify."

Security of Tenure
Petitioner argues that his eligibility, through the Executive Leadership Not Impaired
and Management (ELM) training program, could no longer be affected
by a new eligibility requirement. He claims that he was eligible for his
previous position as department manager of the Legal Services The argument of petitioner that his security of tenure is impaired is
Department, PEZA; hence, he should retain his eligibility for the unconvincing. First, security of tenure in the Career Executive Service
position of department manager III, Labor and Employment Center, -- except in the case of first and second level employees in the civil
SBMA, notwithstanding the classification of the latter as a CES service -- pertains only to rank, not to the position to which the
position. employee may be appointed.57 Second, petitioner had neither rank nor
position prior to his reemployment. One cannot claim security of
tenure if one held no tenure prior to appointment.
CSC Authorized to Issue
Rules and Regulations
Due Process
Not Violated
The Constitution mandates that, as "the central personnel agency of the
government,"47 the CSC should "establish a career service and adopt
measures to promote the morale, efficiency, integrity, responsiveness, Petitioner contends that his due process rights, as enunciated in Ang
progressiveness, and courtesy in the Civil Service."48 It further requires Tibay v. Court of Appeals,58 were violated.59 We are not convinced. He
that appointments in the civil service be made only through merit and points in particular to the CSC's alleged failure to notify him of a
fitness to be determined by competitive examination.49 Civil Service hearing relating to the issuance of the challenged Circular.
laws have expressly empowered the CSC to issue and enforce rules and
regulations to carry out its mandate. The classification of positions in career service was a quasi-legislative,
not a quasi-judicial, issuance. This distinction determines whether prior
In the exercise of its authority, the CSC deemed it appropriate to notice and hearing are necessary.
clearly define and identify positions covered by the Career Executive
Service.50 Logically, the CSC had to issue guidelines to meet this In exercising its quasi-judicial function, an administrative body
objective, specifically through the issuance of the challenged Circular. adjudicates the rights of persons before it, in accordance with the
standards laid down by the law.60 The determination of facts and the
Career Service applicable law, as basis for official action and the exercise of judicial
Classified by Levels discretion, are essential for the performance of this function. 61 On these
considerations, it is elementary that due process requirements, as
enumerated in Ang Tibay, must be observed. These requirements
Positions in the career service, for which appointments require
include prior notice and hearing.62
examinations, are grouped into three major levels:

On the other hand, quasi-legislative power is exercised by

"(a) The first level shall include clerical, trades, crafts, and administrative agencies through the promulgation of rules and
custodial service positions which involve non-professional
regulations within the confines of the granting statute and the doctrine
or sub[-]professional work in a non-supervisory or of non-delegation of certain powers flowing from the separation of the
supervisory capacity requiring less than four years of
great branches of the government.63 Prior notice to and hearing of every
collegiate studies; affected party, as elements of due process, are not required since there
is no determination of past events or facts that have to be established or
"(b) The second level shall include professional, technical, ascertained. As a general rule, prior notice and hearing are not essential
and scientific positions which involve professional, to the validity of rules or regulations promulgated to govern future
technical, or scientific work in a non-supervisory or conduct.64
supervisory capacity requiring at least four years of college
work up to Division Chief level; and Significantly, the challenged Circular was an internal matter addressed
to heads of departments, bureaus and agencies. It needed no prior
"(c) The third level shall cover positions in the Career publication, since it had been issued as an incident of the
Executive Service."51 administrative body's power to issue guidelines for government
officials to follow in performing their duties.65
Entrance to the different levels requires the corresponding civil service
eligibility. Those in the third level (CES positions) require Career Final Issue:
Service Executive Eligibility (CSEE) as a requirement for permanent
appointment.52
Disapproval of Appointment

The challenged Circular did not revoke petitioner's ELM eligibility. He Since petitioner had no CES eligibility, the CSC correctly denied his
was appointed to a CES position; however, his eligibility was
permanent appointment. The appointee need not have been previously
inadequate. Eligibility must necessarily conform to the requirements of heard, because the nature of the action did not involve the imposition
the position, which in petitioner's case was a CSEE. of an administrative disciplinary measure.66 The CSC, in approving or
disapproving an appointment, merely examines the conformity of the
Rights Protected appointment with the law and the appointee's possession of all the
minimum qualifications and none of the disqualification.67
The challenged Circular protects the rights of incumbents as long as
they remain in the positions to which they were previously appointed. In sum, while petitioner was able to demonstrate his standing to appeal
They are allowed to retain their positions in a permanent capacity, the CSC Resolutions to the courts, he failed to prove his eligibility to
notwithstanding the lack of CSEE. Clearly, the Circular recognizes the the position he was appointed to.
rule of prospectivity of regulations;53 hence, there is no basis to argue
that it is an ex post facto law54 or a bill of attainder.55 These terms,

106 ADMIN LAW CASES 0901

WHEREFORE, the Petition is GRANTED insofar as it seeks legal
standing for petitioner, but DENIED insofar as it prays for the reversal
of the CSC Resolutions disapproving his appointment as department
manager III of the Labor and Employment Center, Subic Bay
Metropolitan Authority. Costs against petitioner.

SO ORDERED.

107 ADMIN LAW CASES 0901

SMART COMMUNICATIONS, INC. ET AL. V. NATIONAL regulations on the billing of telecommunications services. Among its
TELECOMMUNICATIONS COMMISSION (NTC) pertinent provisions are the following:
G.R. 151908, August 12, 2003
(1) The billing statements shall be received by the subscriber
Facts: The NTC issued Billing Circular 13-6-2000 which promulgated
of the telephone service not later than 30 days from the end
rules and regulations on the billing of telecommunications services. of each billing cycle. In case the statement is received
Petitioners filed with the RTC a petition to declare the circular as beyond this period, the subscriber shall have a specified
unconstitutional. A motion to dismiss was filed by the NTC on the grace period within which to pay the bill and the public
ground of petitioner’s to exhaust administrative remedies. The RTC telecommunications entity (PTEs) shall not be allowed to
denied the motion to dismiss but on certiorari, the CA reversed RTC. disconnect the service within the grace period.
Held: 1. Administrative bodies had (a) quasi-legislative or rule-making
powers and (b) quasi-judicial or administrative adjudicatory powers. (2) There shall be no charge for calls that are diverted to a
Quasi-legislative or rule-making power is the power to make rules and voice mailbox, voice prompt, recorded message or similar
regulations which results in delegated legislation that is within the facility excluding the customer's own equipment.
confines of the granting statute and the doctrine of non-delegability and
separability of powers. To be valid, such rules and regulations must (3) PTEs shall verify the identification and address of each
conform to, and be consistent with, the provisions of enabling statute. purchaser of prepaid SIM cards. Prepaid call cards and SIM
Quasi-judicial or administrative adjudicatory power is the power to cards shall be valid for at least 2 years from the date of first
hear and determine questions of fact to which the legislative policy is use. Holders of prepaid SIM cards shall be given 45 days
to apply and to decide in accordance with the standards laid down by from the date the prepaid SIM card is fully consumed but
law itself in enforcing and administering the same law. In carrying out not beyond 2 years and 45 days from date of first use to
their quasi-judicial functions, the administrative officers or bodies are replenish the SIM card, otherwise the SIM card shall be
required to investigate facts or ascertain the existence of facts, hold rendered invalid. The validity of an invalid SIM card,
hearings, weigh evidence, and draw conclusions from them for their however, shall be installed upon request of the customer at
official action and exercise of discretion in a judicial. no additional charge except the presentation of a valid
2. The determination of whether a specific rule or set of rules issued by prepaid call card.
an administrative body contravenes the law or the constitution is within
the judicial power as defined by the Constitution which is “ the duty of
the Courts of justice to settle actual controversies involving rights (4) Subscribers shall be updated of the remaining value of
which are legally demandable and enforceable, and to determine their cards before the start of every call using the cards.
whether or not there haw been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or (5) The unit of billing for the cellular mobile telephone
instrumentality of the Government.” The NTC circular was issued service whether postpaid or prepaid shall be reduced from 1
pursuant to its quasi-legislative or rule-making power. Hence, the minute per pulse to 6 seconds per pulse. The authorized rates
action must be filed directly with the regular courts without requiring per minute shall thus be divided by 10.1
exhaustion of administrative remedies.
3. Where the act of administrative agency was performed pursuant to
its quasi-judicial function, exhaustion of administrative remedy is The Memorandum Circular provided that it shall take effect 15 days
required, before going to court. after its publication in a newspaper of general circulation and three
4. The doctrine of primary jurisdiction applies only where the certified true copies thereof furnished the UP Law Center. It was
administrative agency exercises its quasi-judicial or adjudicatory published in the newspaper, The Philippine Star, on June 22,
function. Thus, in cases involving specialized disputes, the same must 2000.2 Meanwhile, the provisions of the Memorandum Circular
be referred to an administrative agency of special competence pursuant pertaining to the sale and use of prepaid cards and the unit of billing for
to the doctrine of primary jurisdiction. This doctrine of primary cellular mobile telephone service took effect 90 days from the
jurisdiction applies where the claim requires the resolution of issues effectivity of the Memorandum Circular.
which, under a regulatory scheme, has been placed within the special
competence of an administrative body. In such case, the judicial On August 30, 2000, the NTC issued a Memorandum to all cellular
process is suspended pending referral of such issues to the mobile telephone service (CMTS) operators which contained measures
administrative body for its view. to minimize if not totally eliminate the incidence of stealing of cellular
phone units. The Memorandum directed CMTS operators to:

a. strictly comply with Section B(1) of MC 13-6-2000

G.R. No. 151908 August 12, 2003 requiring the presentation and verification of the identity and
addresses of prepaid SIM card customers;

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO

TELEPHONE CORPORATION (PILTEL), petitioners, b. require all your respective prepaid SIM cards dealers to
vs. comply with Section B(1) of MC 13-6-2000;
NATIONAL TELECOMMUNICATIONS COMMISSION
(NTC), respondent. c. deny acceptance to your respective networks prepaid
and/or postpaid customers using stolen cellphone units or
x---------------------------------------------------------x cellphone units registered to somebody other than the
applicant when properly informed of all information relative
to the stolen cellphone units;
G.R. No. 152063 August 12, 2003
d. share all necessary information of stolen cellphone units
GLOBE TELECOM, INC. (GLOBE) and ISLA to all other CMTS operators in order to prevent the use of
COMMUNICATIONS CO., INC. (ISLACOM), petitioners, stolen cellphone units; and
vs.
COURT OF APPEALS (The Former 6th Division) and the
NATIONAL TELECOMMUNICATIONS e. require all your existing prepaid SIM card customers to
COMMISSION, respondents. register and present valid identification cards.3

YNARES-SANTIAGO, J.: This was followed by another Memorandum dated October 6, 2000
addressed to all public telecommunications entities, which reads:

Pursuant to its rule-making and regulatory powers, the National

Telecommunications Commission (NTC) issued on June 16, 2000 This is to remind you that the validity of all prepaid cards
Memorandum Circular No. 13-6-2000, promulgating rules and sold on 07 October 2000 and beyond shall be valid for at

108 ADMIN LAW CASES 0901

 least two (2) years from date of first use pursuant to MC 13- WHEREFORE, premises considered, the instant petition for
6-2000. certiorari and prohibition is GRANTED, in that, the order of
the court a quo denying the petitioner's motion to dismiss as
In addition, all CMTS operators are reminded that all SIM well as the order of the court a quo granting the private
respondents' prayer for a writ of preliminary injunction, and
packs used by subscribers of prepaid cards sold on 07
October 2000 and beyond shall be valid for at least two (2) the writ of preliminary injunction issued thereby, are hereby
years from date of first use. Also, the billing unit shall be on ANNULLED and SET ASIDE. The private respondents'
a six (6) seconds pulse effective 07 October 2000. complaint and complaint-in-intervention below are hereby
DISMISSED, without prejudice to the referral of the private
respondents' grievances and disputes on the assailed
For strict compliance.4 issuances of the NTC with the said agency.

On October 20, 2000, petitioners Isla Communications Co., Inc. and SO ORDERED.10
Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A. Santiago,
Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Petitioners' motions for reconsideration were denied in a Resolution
Nestor C. Dacanay, an action for declaration of nullity of NTC dated January 10, 2002 for lack of merit.11
Memorandum Circular No. 13-6-2000 (the Billing Circular) and the
NTC Memorandum dated October 6, 2000, with prayer for the issuance Hence, the instant petition for review filed by Smart and Piltel, which
of a writ of preliminary injunction and temporary restraining order. was docketed as G.R. No. 151908, anchored on the following grounds:
The complaint was docketed as Civil Case No. Q-00-42221 at the
Regional Trial Court of Quezon City, Branch 77.5 A.

Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no
THE HONORABLE COURT OF APPEALS GRAVELY
jurisdiction to regulate the sale of consumer goods such as the prepaid ERRED IN HOLDING THAT THE NATIONAL
call cards since such jurisdiction belongs to the Department of Trade TELECOMMUNICATIONS COMMISSION (NTC) AND
and Industry under the Consumer Act of the Philippines; that the NOT THE REGULAR COURTS HAS JURISDICTION
Billing Circular is oppressive, confiscatory and violative of the OVER THE CASE.
constitutional prohibition against deprivation of property without due
process of law; that the Circular will result in the impairment of the
viability of the prepaid cellular service by unduly prolonging the B.
validity and expiration of the prepaid SIM and call cards; and that the
requirements of identification of prepaid card buyers and call balance THE HONORABLE COURT OF APPEALS ALSO
announcement are unreasonable. Hence, they prayed that the Billing GRAVELY ERRED IN HOLDING THAT THE PRIVATE
Circular be declared null and void ab initio. RESPONDENTS FAILED TO EXHAUST AN
AVAILABLE ADMINISTRATIVE REMEDY.
Soon thereafter, petitioners Globe Telecom, Inc and Smart
Communications, Inc. filed a joint Motion for Leave to Intervene and C.
to Admit Complaint-in-Intervention.6 This was granted by the trial
court.
THE HONORABLE COURT OF APPEALS ERRED IN
NOT HOLDING THAT THE BILLING CIRCULAR
On October 27, 2000, the trial court issued a temporary restraining ISSUED BY THE RESPONDENT NTC IS
order enjoining the NTC from implementing Memorandum Circular UNCONSTITUTIONAL AND CONTRARY TO LAW
No. 13-6-2000 and the Memorandum dated October 6, 2000.7 AND PUBLIC POLICY.

In the meantime, respondent NTC and its co-defendants filed a motion D.

to dismiss the case on the ground of petitioners' failure to exhaust
administrative remedies.
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT THE PRIVATE RESPONDENTS
Subsequently, after hearing petitioners' application for preliminary FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT
injunction as well as respondent's motion to dismiss, the trial court TO WARRANT THE ISSUANCE OF A WRIT OF
issued on November 20, 2000 an Order, the dispositive portion of PRELIMINARY INJUNCTION.12
which reads:
Likewise, Globe and Islacom filed a petition for review, docketed as
WHEREFORE, premises considered, the defendants' motion G.R. No. 152063, assigning the following errors:
to dismiss is hereby denied for lack of merit. The plaintiffs'
application for the issuance of a writ of preliminary
injunction is hereby granted. Accordingly, the defendants 1. THE HONORABLE COURT OF APPEALS SO
are hereby enjoined from implementing NTC Memorandum GRAVELY ERRED BECAUSE THE DOCTRINES OF
Circular 13-6-2000 and the NTC Memorandum, dated PRIMARY JURISDICTION AND EXHAUSTION OF
October 6, 2000, pending the issuance and finality of the ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE
decision in this case. The plaintiffs and intervenors are, THE INSTANT CASE IS FOR LEGAL NULLIFICATION
however, required to file a bond in the sum of FIVE (BECAUSE OF LEGAL INFIRMITIES AND
HUNDRED THOUSAND PESOS (P500,000.00), VIOLATIONS OF LAW) OF A PURELY
Philippine currency. ADMINISTRATIVE REGULATION PROMULGATED
BY AN AGENCY IN THE EXERCISE OF ITS RULE
MAKING POWERS AND INVOLVES ONLY
SO ORDERED.8 QUESTIONS OF LAW.

Defendants filed a motion for reconsideration, which was denied in an 2. THE HONORABLE COURT OF APPEALS SO
Order dated February 1, 2001.9 GRAVELY ERRED BECAUSE THE DOCTRINE ON
EXHAUSTION OF ADMINISTRATIVE REMEDIES
Respondent NTC thus filed a special civil action for certiorari and DOES NOT APPLY WHEN THE QUESTIONS RAISED
prohibition with the Court of Appeals, which was docketed as CA-G.R. ARE PURELY LEGAL QUESTIONS.
SP. No. 64274. On October 9, 2001, a decision was rendered, the
decretal portion of which reads: 3. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED BECAUSE THE DOCTRINE OF
EXHAUSTION OF ADMINISTRATIVE REMEDIES
109 ADMIN LAW CASES 0901
 DOES NOT APPLY WHERE THE ADMINISTRATIVE The resolution in question was issued by the PCA in the exercise of its
ACTION IS COMPLETE AND EFFECTIVE, WHEN rule- making or legislative power. However, only judicial review of
THERE IS NO OTHER REMEDY, AND THE decisions of administrative agencies made in the exercise of their
PETITIONER STANDS TO SUFFER GRAVE AND quasi-judicial function is subject to the exhaustion doctrine.
IRREPARABLE INJURY.
Even assuming arguendo that the principle of exhaustion of
4. THE HONORABLE COURT OF APPEALS SO administrative remedies apply in this case, the records reveal that
GRAVELY ERRED BECAUSE PETITIONERS IN FACT petitioners sufficiently complied with this requirement. Even during
EXHAUSTED ALL ADMINISTRATIVE REMEDIES the drafting and deliberation stages leading to the issuance of
AVAILABLE TO THEM. Memorandum Circular No. 13-6-2000, petitioners were able to register
their protests to the proposed billing guidelines. They submitted their
5. THE HONORABLE COURT OF APPEALS SO respective position papers setting forth their objections and submitting
GRAVELY ERRED IN ISSUING ITS QUESTIONED proposed schemes for the billing circular.21 After the same was issued,
RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA petitioners wrote successive letters dated July 3, 2000 22 and July 5,
HAVE A CLEAR RIGHT TO AN INJUNCTION.13 2000,23 asking for the suspension and reconsideration of the so-called
Billing Circular. These letters were not acted upon until October 6,
2000, when respondent NTC issued the second assailed Memorandum
The two petitions were consolidated in a Resolution dated February 17, implementing certain provisions of the Billing Circular. This was taken
2003.14 by petitioners as a clear denial of the requests contained in their
previous letters, thus prompting them to seek judicial relief.
On March 24, 2003, the petitions were given due course and the parties
were required to submit their respective memoranda.15 In like manner, the doctrine of primary jurisdiction applies only where
the administrative agency exercises its quasi-judicial or adjudicatory
We find merit in the petitions. function. Thus, in cases involving specialized disputes, the practice has
been to refer the same to an administrative agency of special
competence pursuant to the doctrine of primary jurisdiction. The courts
Administrative agencies possess quasi-legislative or rule-making will not determine a controversy involving a question which is within
powers and quasi-judicial or administrative adjudicatory powers. the jurisdiction of the administrative tribunal prior to the resolution of
Quasi-legislative or rule-making power is the power to make rules and that question by the administrative tribunal, where the question
regulations which results in delegated legislation that is within the demands the exercise of sound administrative discretion requiring the
confines of the granting statute and the doctrine of non-delegability and special knowledge, experience and services of the administrative
separability of powers.16 tribunal to determine technical and intricate matters of fact, and a
uniformity of ruling is essential to comply with the premises of the
The rules and regulations that administrative agencies promulgate, regulatory statute administered. The objective of the doctrine of
which are the product of a delegated legislative power to create new primary jurisdiction is to guide a court in determining whether it
and additional legal provisions that have the effect of law, should be should refrain from exercising its jurisdiction until after an
within the scope of the statutory authority granted by the legislature to administrative agency has determined some question or some aspect of
the administrative agency. It is required that the regulation be germane some question arising in the proceeding before the court. It applies
to the objects and purposes of the law, and be not in contradiction to, where the claim is originally cognizable in the courts and comes into
but in conformity with, the standards prescribed by law. 17 They must play whenever enforcement of the claim requires the resolution of
conform to and be consistent with the provisions of the enabling statute issues which, under a regulatory scheme, has been placed within the
in order for such rule or regulation to be valid. Constitutional and special competence of an administrative body; in such case, the judicial
statutory provisions control with respect to what rules and regulations process is suspended pending referral of such issues to the
may be promulgated by an administrative body, as well as with respect administrative body for its view.24
to what fields are subject to regulation by it. It may not make rules and
regulations which are inconsistent with the provisions of the However, where what is assailed is the validity or constitutionality of a
Constitution or a statute, particularly the statute it is administering or rule or regulation issued by the administrative agency in the
which created it, or which are in derogation of, or defeat, the purpose performance of its quasi-legislative function, the regular courts have
of a statute. In case of conflict between a statute and an administrative jurisdiction to pass upon the same. The determination of whether a
order, the former must prevail.18 specific rule or set of rules issued by an administrative agency
contravenes the law or the constitution is within the jurisdiction of the
Not to be confused with the quasi-legislative or rule-making power of regular courts. Indeed, the Constitution vests the power of judicial
an administrative agency is its quasi-judicial or administrative review or the power to declare a law, treaty, international or executive
adjudicatory power. This is the power to hear and determine questions agreement, presidential decree, order, instruction, ordinance, or
of fact to which the legislative policy is to apply and to decide in regulation in the courts, including the regional trial courts. 25 This is
accordance with the standards laid down by the law itself in enforcing within the scope of judicial power, which includes the authority of the
and administering the same law. The administrative body exercises its courts to determine in an appropriate action the validity of the acts of
quasi-judicial power when it performs in a judicial manner an act the political departments.26 Judicial power includes the duty of the
which is essentially of an executive or administrative nature, where the courts of justice to settle actual controversies involving rights which
power to act in such manner is incidental to or reasonably necessary for are legally demandable and enforceable, and to determine whether or
the performance of the executive or administrative duty entrusted to it. not there has been a grave abuse of discretion amounting to lack or
In carrying out their quasi-judicial functions, the administrative excess of jurisdiction on the part of any branch or instrumentality of
officers or bodies are required to investigate facts or ascertain the the Government.27
existence of facts, hold hearings, weigh evidence, and draw
conclusions from them as basis for their official action and exercise of In the case at bar, the issuance by the NTC of Memorandum Circular
discretion in a judicial nature.19 No. 13-6-2000 and its Memorandum dated October 6, 2000 was
pursuant to its quasi-legislative or rule-making power. As such,
In questioning the validity or constitutionality of a rule or regulation petitioners were justified in invoking the judicial power of the Regional
issued by an administrative agency, a party need not exhaust Trial Court to assail the constitutionality and validity of the said
administrative remedies before going to court. This principle applies issuances. In Drilon v. Lim,28 it was held:
only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function, and not when the We stress at the outset that the lower court had jurisdiction
assailed act pertained to its rule-making or quasi-legislative power. to consider the constitutionality of Section 187, this
In Association of Philippine Coconut Dessicators v. Philippine authority being embraced in the general definition of the
Coconut Authority,20 it was held: judicial power to determine what are the valid and binding
laws by the criterion of their conformity to the fundamental
The rule of requiring exhaustion of administrative remedies before a law. Specifically, B.P. 129 vests in the regional trial courts
party may seek judicial review, so strenuously urged by the Solicitor jurisdiction over all civil cases in which the subject of the
General on behalf of respondent, has obviously no application here. litigation is incapable of pecuniary estimation, even as the
110 ADMIN LAW CASES 0901
 accused in a criminal action has the right to question in his
defense the constitutionality of a law he is charged with
violating and of the proceedings taken against him,
particularly as they contravene the Bill of Rights. Moreover,
Article X, Section 5(2), of the Constitution vests in the
Supreme Court appellate jurisdiction over final judgments
and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation,
order, instruction, ordinance, or regulation is in question.29

In their complaint before the Regional Trial Court, petitioners averred

that the Circular contravened Civil Code provisions on sales and
violated the constitutional prohibition against the deprivation of
property without due process of law. These are within the competence
of the trial judge. Contrary to the finding of the Court of Appeals, the
issues raised in the complaint do not entail highly technical matters.
Rather, what is required of the judge who will resolve this issue is a
basic familiarity with the workings of the cellular telephone service,
including prepaid SIM and call cards – and this is judicially known to
be within the knowledge of a good percentage of our population – and
expertise in fundamental principles of civil law and the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide
Civil Case No. Q-00-42221. The Court of Appeals erred in setting
aside the orders of the trial court and in dismissing the case.

WHEREFORE, in view of the foregoing, the consolidated petitions

are GRANTED. The decision of the Court of Appeals in CA-G.R. SP
No. 64274 dated October 9, 2001 and its Resolution dated January 10,
2002 are REVERSED and SET ASIDE. The Order dated November
20, 2000 of the Regional Trial Court of Quezon City, Branch 77, in
Civil Case No. Q-00-42221 is REINSTATED. This case is
REMANDED to the court a quo for continuation of the proceedings.

SO ORDERED.

111 ADMIN LAW CASES 0901

GMA NETWORK vs. COMELEC (GR 205357, September 2, 2014 suddenly inadequate? And, the short answer to that from the
) respondent, in a manner which smacks of overbearing exercise of
DOCTRINE: COMELEC Resolution No. 9615 introduced a radical discretion, is that it is within the discretion of the COMELEC. The
departure from the previous COMELEC resolutions relative to the COMELEC went beyond the authority granted it by the law in
airtime limitations on political advertisements. This essentially consists adopting "aggregate" basis in the determination of allowable airtime.
in computing the airtime on an aggregate basis involving all the media The legislative history of R.A. 9006 clearly shows that Congress
of broadcast communications compared to the past where it was done intended to impose the per candidate or political party aggregate total
on a per station basis. Thus, it becomes immediately obvious that there airtime limits on political advertisements and election propaganda.
was effected a drastic reduction of the allowable minutes within which This is evidenced by the dropping of the "per day per station" language
candidates and political parties would be able to campaign through the embodied in both versions of the House of Representatives and Senate
air. The question is accordingly whether this is within the power of the bills in favour of the "each candidate" and "not more than" limitations
COMELEC to do or not. The Court holds that it is not within the now found in Section 6 of R.A. 9006.
power of the COMELEC to do so. Section 9 (a) of COMELEC Resolution No. 9615 on airtime limits also
goes against the constitutional guaranty of freedom of expression, of
FACTS: The five (5) petitions before the Court put in issue the alleged speech and of the press.
unconstitutionality of Section 9 (a) of COMELEC Resolution No. 9615 The guaranty of freedom to speak is useless without the ability to
(Resolution) limiting the broadcast and radio advertisements of communicate and disseminate what is said. And where there is a need
candidates and political parties for national election positions to an to reach a large audience, the need to access the means and media for
aggregate total of one hundred twenty (120) minutes and one hundred such dissemination becomes critical. This is where the press and
eighty (180) minutes, respectively. They contend that such restrictive broadcast media come along. At the same time, the right to speak and
regulation on allowable broadcast time violates freedom of the press, to reach out would not be meaningful if it is just a token ability to be
impairs the people's right to suffrage as well as their right to heard by a few. It must be coupled with substantially reasonable means
by which the communicator and the audience could effectively interact.
information relative to the exercise of their right to choose who to elect
during the forth coming elections. The heart of the controversy Section 9 (a) of COMELEC Resolution No. 9615, with its adoption of
the "aggregate-based" airtime limits unreasonably restricts the
revolves upon the proper interpretation of the limitation on the number
of minutes that candidates may use for television and radio guaranteed freedom of speech and of the press.
advertisements, as provided in Section 6 of Republic Act No. 9006
otherwise known as the Fair Elections Act. Petitioners ABS-CBN, Section 9 (a) of Resolution 9615 is violative of the people's right to
ABC, GMA, MBC, NBN, and RMN are owners/operators of radio and suffrage fundamental to the idea of a democratic and republican state
television networks in the Philippines, while petitioner Kapisanan ng is the right of the people to determine their own destiny through the
mga Brodkaster ng Pilipinas (KBP) is the national organization of choice of leaders they may have in government. Thus, the primordial
broadcasting companies in the Philippines representing operators of importance of suffrage and the concomitant right of the people to be
radio and television stations and said stations. They sent their adequately informed for the intelligent exercise of such birthright.
respective letters to the COMELEC questioning the provisions of the
aforementioned Resolution, thus, the COMELEC held public hearings.
Thereafter, on February 1, 2013, respondent issued Resolution No.
9631 amending provisions of Resolution No. 9615. Nevertheless,
petitioners still found the provisions objectionable and oppressive, G.R. No. 205357 September 2, 2014
hence, the present petitions. All of the petitioners assail the following
provisions of the Resolution: GMA NETWORK, INC., Petitioner,
vs.
a) Section 7 (d), which provides for a penalty of suspension or COMMISSION ON ELECTIONS, Respondent.
revocation of an offender's franchise or permit, imposes criminal
liability against broadcasting entities and their officers in the event they SENATOR ALAN PETER "COMPAÑERO" S.
sell airtime in excess of the size, duration, or frequency authorized in CAYETANO,Petitioner-Intervenor.
the new rules;
b) Section 9 (a), which provides for an "aggregate total" airtime
instead of the previous "per station" airtime for political campaigns or x-----------------------x
dvertisements, and also required prior COMELEC approval for
candidates' television and radio guestings and appearances; and G.R. No. 205374
c) Section 14, which provides for a candidate's "right to reply."
Respondent maintains that the per candidate rule or total aggregate
airtime limit is in accordance with R.A. No. 9006 as this would truly ABC DEVELOPMENT CORPORATION, Petitioner,
give life to the constitutional objective to equalize access to media vs.
during elections. It sees this as a more effective way of levelling the COMMISSION ON ELECTIONS, Respondent.
playing field between candidates/political parties with enormous
resources and those without much. Moreover, the COMELEC's x-----------------------x
issuance of the assailed Resolution is pursuant to Section 4, Article IX
(C) of the Constitution which vests on the COMELEC the power to
G.R. No. 205592
supervise and regulate, during election periods, transportation and
other public utilities, as well as mass media.
ISSUE: W/N Section 9(a) of COMELEC Resolution No. 9615, as MANILA BROADCASTING COMPANY, INC. and
amended by Resolution No. 9631, constitutional NEWSOUNDS BROADCASTING NETWORK, INC., Petitioner,
HELD: No. There is no question that the COMELEC is the office vs.
constitutionally and statutorily authorized to enforce election laws but COMMISSION ON ELECTIONS, Respondent.
it cannot exercise its powers without limitations - or reasonable basis.
It could not simply adopt measures or regulations just because it feels x-----------------------x
that it is the right thing to do, in so far as it might be concerned. It does
have discretion, but such discretion is something that must be exercised
within the bounds and intent of the law. The COMELEC is not free to G.R. No. 205852
simply change the rules especially if it has consistently interpreted a
legal provision in a particular manner in the past. If ever it has to KAPISANAN NG MGA BRODKASTER NG PILIPINAS (KBP)
change the rules, the same must be properly explained with sufficient and ABS-CBN CORPORATION, Petitioners,
basis. vs.
Based on the transcripts of the hearing conducted by the COMELEC COMMISSION ON ELECTIONS, Respondent.
after it had already promulgated the Resolution, the respondent did not
fully explain or justify the change in computing the airtime allowed
candidates and political parties, except to make reference to the need to x-----------------------x
"level the playing field." If the "per station" basis was deemed enough
to comply with that objective in the past, why should it now be G.R. No. 206360
112 ADMIN LAW CASES 0901
RADIO MINDANAO NETWORK, INC., Petitioner, For this purpose, the COMELEC shall require any broadcast station or
vs. entity to submit to the COMELEC a copy of its broadcast logs and
COMMISSION ON ELECTIONS, Respondent. certificates of performance for the review and verification of the
frequency, date, time and duration of advertisements broadcast for any
candidate or political party.
DECISION

During the previous elections of May 14, 2007 and May 10, 2010,
PERALTA, J.:
COMELEC issued Resolutions implementing and interpreting Section
6 of R.A. No. 9006, regarding airtime limitations, to mean that a
"The clash of rights demands a delicate balancing of interests approach candidate is entitled to the aforestated number of minutes "per
which is a 'fundamental postulate of constitutional law.'"1 station."7 For the May 2013 elections, however, respondent
COMELEC promulgated Resolution No. 9615 dated January 15, 2013,
Once again the Court is asked to draw a carefully drawn balance in the changing the interpretation of said candidates' and political parties'
incessant conflicts between rights and regulations, liberties and airtime limitation for political campaigns or advertisements from a "per
limitations, and competing demands of the different segments of station" basis, to a "total aggregate" basis.
society. Here, we are confronted with the need to strike a workable and
viable equilibrium between a constitutional mandate to maintain free, Petitioners ABS-CBN Corporation (ABS-CBN), ABC Development
orderly, honest, peaceful and credible elections, together with the aim Corporation (ABC), GMA Network, Incorporated ( GMA), Manila
of ensuring equal opportunity, time and space, and the right to reply, Broadcasting Company, Inc. (MBC), Newsounds Broadcasting
including reasonable, equal rates therefor, for public information Network, Inc. (NBN), and Radio Mindanao Network, Inc. (RMN) are
campaigns and forums among candidates,2 on one hand, and the owners/operators of radio and television networks in the Philippines,
imperatives of a republican and democratic state, 3 together with its while petitioner Kapisanan ng mga Brodkaster ng Pilipinas (KBP) is
guaranteed rights of suffrage,4 freedom of speech and of the press,5 and the national organization of broadcasting companies in the Philippines
the people's right to information,6 on the other. representing operators of radio and television stations and said stations
themselves. They sent their respective letters to the COMELEC
In a nutshell, the present petitions may be seen as in search of the questioning the provisions of the aforementioned Resolution, thus, the
answer to the question - how does the Charter of a republican and COMELEC held public hearings. Thereafter, on February 1, 2013,
democratic State achieve a viable and acceptable balance between respondent issued Resolution No. 9631 amending provisions of
liberty, without which, government becomes an unbearable tyrant, and Resolution No. 9615. Nevertheless, petitioners still found the
authority, without which, society becomes an intolerable and provisions objectionable and oppressive, hence, the present petitions.
dangerous arrangement?
All of the petitioners assail the following provisions of the Resolution:
Assailed in these petitions are certain regulations promulgated by the
Commission on Elections (COMELEC) relative to the conduct of the a) Section 7 (d),8 which provides for a penalty of suspension
2013 national and local elections dealing with political advertisements. or revocation of an offender's franchise or permit, imposes
Specifically, the petitions question the constitutionality of the criminal liability against broadcasting entities and their
limitations placed on aggregate airtime allowed to candidates and officers in the event they sell airtime in excess of the size,
political parties, as well as the requirements incident thereto, such as duration, or frequency authorized in the new rules;
the need to report the same, and the sanctions imposed for violations.
b) Section 9 (a),9 which provides for an "aggregate total"
The five (5) petitions before the Court put in issue the alleged airtime instead of the previous "per station" airtime for
unconstitutionality of Section 9 (a) of COMELEC Resolution No. 9615 political campaigns or dvertisements, and also required prior
(Resolution) limiting the broadcast and radio advertisements of COMELEC approval for candidates' television and radio
candidates and political parties for national election positions to an guestings and appearances; and
aggregate total of one hundred twenty (120) minutes and one hundred
eighty (180) minutes, respectively. They contend that such restrictive
regulation on allowable broadcast time violates freedom of the press, c) Section 14,10 which provides for a candidate's "right to
impairs the people's right to suffrage as well as their right to reply."
information relative to the exercise of their right to choose who to elect
during the forth coming elections. In addition, petitioner ABC also questions Section 1 (4) 11 thereof,
which defines the term "political advertisement" or "election
The heart of the controversy revolves upon the proper interpretation of propaganda," while petitioner GMA further assails Section 35, 12 which
the limitation on the number of minutes that candidates may use for states that any violation of said Rules shall constitute an election
offense.
television and radio advertisements, as provided in Section 6 of
Republic Act No. 9006 (R.A. No. 9006), otherwise known as the Fair
Election Act. Pertinent portions of said provision state, thus: On March 15, 2013, Senator Alan Peter S. Cayetano (Petitioner-
Intervenor) filed a Motion for Leave to Intervene and to File and Admit
Sec. 6. Equal Access to Media Time and Space. - All registered parties the Petition-in-Intervention, which was granted by the Court per its
and bona fide candidates shall have equal access to media time and Resolution dated March 19, 2013. Petitioner-Intervenor also assails
Section 9 (a) of the Resolution changing the interpretation of
space. The following guidelines may be amplified on by the
COMELEC: candidates' and political parties' airtime limitation for political
campaigns or advertisements from a "per station" basis, to a "total
aggregate" basis. Petitioners allege that Resolutions No. 9615 and
xxxx 9631, amending the earlier Resolution, are unconstitutional and issued
without jurisdiction or with grave abuse of discretion amounting to
6.2 (a) Each bona fide candidate or registered political party for a lack or excess of jurisdiction, for the reasons set forth hereunder.
nationally elective office shall be entitled to not more than one hundred
twenty (120) minutes of television advertisement and one hundred Petitioners posit that Section 9 (a) of the assailed Resolution provides
eighty (180) minutes of radio advertisement whether by purchase or for a very restrictive aggregate airtime limit and a vague meaning for a
donation. proper computation of "aggregate total" airtime, and violates the equal
protection guarantee, thereby defeating the intent and purpose of R.A.
b. Each bona fide candidate or registered political party for a locally No. 9006.
elective office shall be entitled to not more than sixty ( 60) minutes of
television advertisement and ninety (90) minutes of radio Petitioners contend that Section 9 (a), which imposes a notice
advertisement whether by purchase or donation. requirement, is vague and infringes on the constitutionally protected
freedom of speech, of the press and of expression, and on the right of
people to be informed on matters of public concern

113 ADMIN LAW CASES 0901

Also, Section 9 (a) is a cruel and oppressive regulation as it imposes an frequency authorized by law or these rules." Furthermore, words
unreasonable and almost impossible burden on broadcast mass media should be understood in the sense that they have in common usage, and
of monitoring a candidate's or political party's aggregate airtime, should be given their ordinary meaning. Thus, in the provision for the
otherwise, it may incur administrative and criminal liability. right to reply, "charges" against candidates or parties must be
understood in the ordinary sense, referring to accusations or criticisms.
Further, petitioners claim that Section 7 (d) is null and void for
unlawfully criminalizing acts not prohibited and penalized as criminal Respondent also sees no prior restraint in the provisions requiring
offenses by R.A. No. 9006. notice to the COMELEC for appearances or guestings of candidates in
bona fide news broadcasts. It points out that the fact that notice may be
Section 14 of Resolution No. 9615, providing for a candidate's or given 24 hours after first broadcast only proves that the mechanism is
political party's "right to reply," is likewise assailed to be for monitoring purposes only, not for censorship. Further, respondent
unconstitutional for being an improper exercise of the COMELEC's argues, that for there to be prior restraint, official governmental
regulatory powers; for constituting prior restraint and infringing restrictions on the press or other forms of expression must be done in
petitioners' freedom of expression, speech and the press; and for being advance of actual publication or dissemination. Moreover, petitioners
violative of the equal protection guarantee. In addition to the foregoing, are only required to inform the COMELEC of candidates'/parties'
guestings, but there is no regulation as to the content of the news or the
petitioner GMA further argues that the Resolution was promulgated
without public consultations, in violation of petitioners' right to due expressions in news interviews or news documentaries. Respondent
then emphasized that the Supreme Court has held that freedom of
process. Petitioner ABC also avers that the Resolution's definition of
the terms "political advertisement" and "election propaganda" suffers speech and the press may be limited in light of the duty of the
COMELEC to ensure equal access to opportunities for public service.
from overbreadth, thereby producing a "chilling effect," constituting
prior restraint.
With regard to the right to reply provision, respondent also does not
On the other hand, respondent posits in its Comment and consider it as restrictive of the airing of bona fide news broadcasts.
More importantly, it stressed, the right to reply is enshrined in the
Opposition13 dated March 8, 2013, that the petition should be denied
based on the following reasons: Constitution, and the assailed Resolutions provide that said right can
only be had after going through administrative due process. The
provision was also merely lifted from Section 10 of R.A. No. 9006,
Respondent contends that the remedies of certiorari and prohibition are hence, petitioner ABC is actually attacking the constitutionality of R.A.
not available to petitioners, because the writ of certiorari is only No. 9006, which cannot be done through a collateral attack.
available against the COMELEC's adjudicatory or quasi-judicial
powers, while the writ of prohibition only lies against the exercise of
judicial, quasijudicial or ministerial functions. Said writs do not lie Next, respondent counters that there is no merit to ABC's claim that the
against the COMELEC's administrative or rule-making powers. Resolutions' definition of "political advertisement" or "election
propaganda" suffers from overbreadth, as the extent or scope of what
falls under said terms is clearly stated in Section 1 (4) of Resolution
Respondent likewise alleges that petitioners do not have locus standi, No. 9615.
as the constitutional rights and freedoms they enumerate are not
personal to them, rather, they belong to candidates, political parties and
the Filipino electorate in general, as the limitations are imposed on It is also respondent's view that the nationwide aggregate total airtime
candidates, not on media outlets. It argues that petitioners' alleged risk does not violate the equal protection clause, because it does not make
of exposure to criminal liability is insufficient to give them legal any substantial distinctions between national and regional and/or local
standing as said "fear of injury" is highly speculative and contingent on broadcast stations, and even without the aggregate total airtime rule,
candidates and parties are likely to be more inclined to advertise in
a future act.
national broadcast stations. Respondent likewise sees no merit in
petitioners' claim that the Resolutions amount to taking of private
Respondent then parries petitioners' attack on the alleged infirmities of property without just compensation. Respondent emphasizes that radio
the Resolution's provisions. and television broadcasting companies do not own the airwaves and
frequencies through which they transmit broadcast signals; they are
Respondent maintains that the per candidate rule or total aggregate merely given the temporary privilege to use the same. Since they are
airtime limit is in accordance with R.A. No. 9006 as this would truly merely enjoying a privilege, the same may be reasonably burdened
give life to the constitutional objective to equalize access to media with some form of public service, in this case, to provide candidates
during elections. It sees this as a more effective way of levelling the with the opportunity to reply to charges aired against them.
playing field between candidates/political parties with enormous
resources and those without much. Moreover, the COMELEC's Lastly, respondent contends that the public consultation requirement
issuance of the assailed Resolution is pursuant to Section 4, Article IX does not apply to constitutional commissions such as the COMELEC,
(C) of the Constitution which vests on the COMELEC the power to pursuant to Section 1, Chapter I, Book VII of the Administrative Code
supervise and regulate, during election periods, transportation and of 1987. Indeed, Section 9, Chapter II, Book VII of said Code
other public utilities, as well as mass media, to wit: provides, thus:

Sec. 4. The Commission may, during the election period, supervise or Section 9. Public Participation. - (1) If not otherwise
regulate the enjoyment or utilization of all franchises or permits for the required by law, an agency shall, as far as practicable,
operation of transportation and other public utilities, media of publish or circulate notices of proposed rules and afford
communication or information, all grants, special privileges, or interested parties the opportunity to submit their views prior
concessions granted by the Government or any subdivision, agency, or to the adoption of any rule.
instrumentality thereof, including any government-owned or controlled
corporation or its subsidiary. Such supervision or regulation shall aim
However, Section 1, Chapter 1, Book VII of said Code clearly
to ensure equal opportunity, and equal rates therefor, for public
information campaigns and forums among candidates in connection provides:
with the objective of holding free, orderly, honest, peaceful, and
credible elections. Section 1. Scope. -This Book shall be applicable to all
agencies as defined in the next succeeding section, except
This being the case, then the Resolutions cannot be said to have been the Congress, the Judiciary, the Constitutional Commissions,
military establishments in all matters relating exclusively to
issued with grave abuse of discretion amounting to lack of jurisdiction.
Armed Forces personnel, the Board of Pardons and Parole,
and state universities and colleges.
Next, respondent claims that the provisions are not vague because the
assailed Resolutions have given clear and adequate mechanisms to
Nevertheless, even if public participation is not required, respondent
protect broadcast stations from potential liability arising from a
candidate's or party's violation of airtime limits by putting in the still conducted a meeting with representatives of the KBP and various
media outfits on December 26, 2012, almost a month before the
proviso that the station "may require buyer to warrant under oath that
such purchase [of airtime] is not in excess of size, duration or issuance of Resolution No. 9615.
114 ADMIN LAW CASES 0901
On April 2, 2013, petitioner GMA filed its Reply, 14 where it advanced the provisions thereof. This makes the provisions have the nature of
the following counter-arguments: malum prohibitum.

According to GMA, a petition for certiorari is the proper remedy to Next, GMA also says that the application of the aggregate airtime limit
question the herein assailed Resolutions, which should be considered constitutes prior restraint and is unconstitutional, opining that "[t]he
as a "decision, order or ruling of the Commission" as mentioned in reviewing power of respondent COMELEC and its sole judgment of a
Section 1, Rule 37 of the COMELEC Rules of Procedure which news event as a political advertisement are so pervasive under the
provides: assailed Resolutions, and provoke the distastes or chilling effect of
prior restraint"16 as even a legitimate exercise of a constitutional right
Section 1. Petition for Certiorari,· and Time to File. - Unless otherwise might expose it to legal sanction. Thus, the governmental interest of
provided by law, or by any specific provisions in these Rules, any leveling the playing field between rich and poor candidates cannot
decision, order or ruling of the Commission may be brought to the justify the restriction on the freedoms of expression, speech and of the
Supreme Court on certiorari by the aggrieved party within thirty (30) press.
days from its promulgation.
On the issue of lack of prior public participation, GMA cites Section
GMA further stressed that this case involves national interest, and the 82 of the Omnibus Election Code, pertinent portions of which provide,
urgency of the matter justifies its resort to the remedy of a petition for thus:
certiorari.
Section 82. Lawful election propaganda. - Lawful election propaganda
Therefore, GMA disagrees with the COMELEC's position that the shall include:
proper remedy is a petition for declaratory relief because such action
only asks the court to make a proper interpretation of the rights of xxxx
parties under a statute or regulation. Such a petition does not nullify the
assailed statute or regulation, or grant injunctive relief, which All other forms of election propaganda not prohibited by this Code as
petitioners are praying for in their petition. Thus, GMA maintains that the Commission may authorize after due notice to all interested parties
a petition for certiorari is the proper remedy. and hearing where all the interested parties were given an equal
opportunity to be heard: Provided, That the Commission's
GMA further denies that it is making a collateral attack on the Fair authorization shall be published in two newspapers of general
Election Act, as it is not attacking said law. GMA points out that it has circulation throughout the nation for at least twice within one week
stated in its petition that the law in fact allows the sale or donation of after the authorization has been granted.
airtime for political advertisements and does not impose criminal
liability against radio and television stations. What it is assailing is the There having been no prior public consultation held, GMA contends
COMELEC's erroneous interpretation of the law's provisions by that the COMELEC is guilty of depriving petitioners of its right to due
declaring such sale and/or donation of airtime unlawful, which is
process of law.
contrary to the purpose of the Fair Election Act.

GMA then concludes that it is also entitled to a temporary restraining

GMA then claims that it has legal standing to bring the present suit order, because the implementation of the Resolutions in question will
because:
cause grave and irreparable damage to it by disrupting and
emasculating its mandate to provide television and radio services to the
x x x First, it has personally suffered a threatened injury in the form of public, and by exposing it to the risk of incurring criminal and
risk of criminal liability because of the alleged unconstitutional and administrative liability by requiring it to perform the impossible task of
unlawful conduct of respondent COMELEC in expanding what was surveillance and monitoring, or the broadcasts of other radio and
provided for in R.A. No. 9006. Second, the injury is traceable to the television stations.
challenged action of respondent COMELEC, that is, the issuance of the
assailed Resolutions. Third, the injury is likely to be redressed by the Thereafter, on April 4, 2013, the COMELEC, through the Office of the
remedy sought in petitioner GMA's Petition, among others, for the
Solicitor General (OSG), filed a Supplemental Comment and
Honorable Court to nullify the challenged pertinent provisions of the Opposition17 where it further expounded on the legislative intent
assailed Resolutions.15 behind the Fair Election Act, also quoting portions of the deliberations
of the Bicameral Conference Committee, allegedly adopting the Senate
On substantive issues, GMA first argues that the questioned Bill version setting the computation of airtime limits on a per
Resolutions are contrary to the objective and purpose of the Fair candidate, not per station, basis. Thus, as enacted into law, the
Election Act. It points out that the Fair Election Act even repealed the wordings of Section 6 of the Fair Election Act shows that the airtime
political ad ban found in the earlier law, R.A. No. 6646. The Fair limit is imposed on a per candidate basis, rather than on a per station
Election Act also speaks of "equal opportunity" and "equal access,'' but basis. Furthermore, the COMELEC states that petitioner intervenor
said law never mentioned equalizing the economic station of the rich Senator Cayetano is wrong in arguing that there should be empirical
and the poor, as a declared policy. Furthermore, in its opinion, the data to support the need to change the computation of airtime limits
supposed correlation between candidates' expenditures for TV ads and from a per station basis to a per candidate basis, because nothing in law
actually winning the elections, is a mere illusion, as there are other obligates the COMELEC to support its Resolutions with empirical
various factors responsible for a candidate's winning the election. data, as said airtime limit was a policy decision dictated by the
GMA then cites portions of the deliberations of the Bicameral legislature itself, which had the necessary empirical and other data
Conference Committee on the bills that led to the enactment of the Fair upon which to base said policy decision.
Election Act, and alleges that this shows the legislative intent that
airtime allocation should be on a "per station" basis. Thus, GMA The COMELEC then points out that Section 2 (7),18 Article IX (C) of
claims it was arbitrary and a grave abuse of discretion for the the Constitution empowers it to recommend to Congress effective
COMELEC to issue the present Resolutions imposing airtime measures to minimize election spending and in furtherance of such
limitations on an "aggregate total" basis. constitutional power, the COMELEC issued the questioned
Resolutions, in faithful implementation of the legislative intent and
It is likewise insisted by GMA that the assailed Resolutions impose an objectives of the Fair Election Act.
unconstitutional burden on them, because their failure to strictly
monitor the duration of total airtime that each candidate has purchased The COMELEC also dismisses Senator Cayetano's fears that
even from other stations would expose their officials to criminal unauthorized or inadvertent inclusion of his name, initial, image,
liability and risk losing the station's good reputation and goodwill, as
brand, logo, insignia and/or symbol in tandem advertisements will be
well as its franchise. It argues that the wordings of the Resolutions charged against his airtime limits by pointing out that what will be
belie the COMELEC's claim that petitioners would only incur liability
counted against a candidate's airtime and expenditures are those
if they "knowingly" sell airtime beyond the limits imposed by the advertisements that have been paid for or donated to them to which the
Resolutions, because the element of knowledge is clearly absent from
candidate has given consent.

115 ADMIN LAW CASES 0901

With regard to the attack that the total aggregate airtime limit Meanwhile, RMN filed its Petition on April 8, 2013. On June 4, 2013,
constitutes prior restraint or undue abridgement of the freedom of the Court issued a Resolution25 consolidating the case with the rest of
speech and expression, the COMELEC counters that "the Resolutions the petitions and requiring respondent to comment thereon.
enjoy constitutional and congressional imprimatur. It is the
Constitution itself that imposes the restriction on the freedoms of
On October 10, 2013, respondent filed its Third Supplemental
speech and expression, during election period, to promote an important Comment and Opposition.26 Therein, respondent stated that the petition
and significant governmental interest, which is to equalize, as far as filed by RMN repeats the issues that were raised in the previous
practicable, the situation of rich and poor candidates by preventing the petitions. Respondent, likewise, reiterated its arguments that certiorari
former from enjoying the undue advantage offered by huge campaign in not the proper remedy to question the assailed resolutions and that
'war chests."'19 RMN has no locus standi to file the present petition. Respondent
maintains that the arguments raised by RMN, like those raised by the
Lastly, the COMELEC also emphasizes that there is no impairment of other petitioners are without merit and that RMN is not entitled to the
the people's right to information on matters of public concern, because injunctive relief sought.
in this case, the COMELEC is not withholding access to any public
record. The petition is partly meritorious.

On April 16, 2013, this Court issued a Temporary Restraining At the outset, although the subject of the present petit10ns are
Order20 (TRO) in view of the urgency involved and to prevent Resolutions promulgated by the COMELEC relative to the conduct of
irreparable injury that may be caused to the petitioners if respondent the 2013 national and local elections, nevertheless the issues raised by
COMELEC is not enjoined from implementing Resolution No. 9615. the petitioners have not been rendered moot and academic by the
conclusion of the 2013 elections. Considering that the matters elevated
On April 19, 2013 respondent filed an Urgent Motion to Lift to the Court for resolution are susceptible to repetition in the conduct
Temporary Restraining Order and Motion for Early Resolution of the of future electoral exercises, these issues will be resolved in the present
Consolidated Petitions.21 action.

On May 8, 2013, petitioners ABS-CBN and the KBP filed its PROCEDURAL ASPECTS
Opposition/Comment22 to the said Motion. Not long after, ABC
followed suit and filed its own Opposition to the Motion23 filed by the Matters of procedure and technicalities normally take a backseat when
respondent. issues of substantial and transcendental importance are presented
before the Court. So the Court does again in this particular case.
In the interim, respondent filed a Second Supplemental Comment and
Opposition24 dated April 8, 2013. Proper Remedy

In the Second Supplemental Comment and Opposition, respondent Respondent claims that certiorari and prohibition are not the proper
delved on points which were not previously discussed in its earlier remedies that petitioners have taken to question the assailed
Comment and Supplemental Comment, particularly those raised in the Resolutions of the COMELEC. Technically, respondent may have a
petition filed by petitioner ABS-CBN and KBP. point. However, considering the very important and pivotal issues
raised, and the limited time, such technicality should not deter the
Respondent maintains that certiorari in not the proper remedy to Court from having to make the final and definitive pronouncement that
question the Constitutionality of the assailed Resolutions and that everyone else depends for enlightenment and guidance. "[T]his Court
petitioners ABS-CBN and KBP have no locus standi to file the present has in the past seen fit to step in and resolve petitions despite their
petition. being the subject of an improper remedy, in view of the public
importance of the tile issues raised therein.27
Respondent posits that contrary to the contention of petitioners, the
legislative history of R.A. No. 9006 conclusively shows that congress It has been in the past, we do so again.
intended the airtime limits to be computed on a "per candidate" and not
on a "per station" basis. In addition, the legal duty of monitoring lies Locus Standi
with the COMELEC. Broadcast stations are merely required to submit
certain documents to aid the COMELEC in ensuring that candidates
are not sold airtime in excess of the allowed limits. Every time a constitutional issue is brought before the Court, the issue
of locus standi is raised to question the personality of the parties
invoking the Court's jurisdiction. The Court has routinely made
Also, as discussed in the earlier Comment, the prior notice requirement
reference to a liberalized stance when it comes to petitions raising
is a mechanism designed to inform the COMELEC of the appearances issues of transcendental importance to the country. Invariably, after
or guesting of candidates in bona fide news broadcasts. It is for
some discussions, the Court would eventually grant standing. 28
monitoring purposes only, not censorship. It does not control the
subject matter of news broadcasts in anyway. Neither does it prevent
media outlets from covering candidates in news interviews, news In this particular case, respondent also questions the standing of the
events, and news documentaries, nor prevent the candidates from petitioners. We rule for the petitioners. For petitioner-intervenor
appearing thereon. Senator Cayetano, he undoubtedly has standing since he is a candidate
whose ability to reach out to the electorate is impacted by the assailed
Resolutions.
As for the right to reply, respondent insists that the right to reply
provision cannot be considered a prior restraint on the freedoms of
expression, speech and the press, as it does not in any way restrict the For the broadcast companies, they similarly have the standing in view
airing of bona fide new broadcasts. Media entities are free to report any of the direct injury they may suffer relative to their ability to carry out
news event, even if it should turn out to be unfavourable to a candidate their tasks of disseminating information because of the burdens
or party. The assailed Resolutions merely give the candidate or party imposed on them. Nevertheless, even in regard to the broadcast
the right to reply to such charges published or aired against them in companies invoking the injury that may be caused to their customers or
news broadcasts. the public - those who buy advertisements and the people who rely on
their broadcasts - what the Court said in White Light Corporation v.
City of Manila29 may dispose of the question. In that case, there was an
Moreover, respondent contends that the imposition of the penalty of issue as to whether owners of establishments offering "wash-up" rates
suspension and revocation of franchise or permit for the sale or
may have the requisite standing on behalf of their patrons' equal
donation of airtime beyond the allowable limits is sanctioned by the protection claims relative to an ordinance of the City of Manila which
Omnibus Election Code.
prohibited "short-time" or "wash-up" accommodation in motels and
similar establishments. The Court essentially condensed the issue in
this manner: "[T]he crux of the matter is whether or not these
establishments have the requisite standing to plead for protection of
116 ADMIN LAW CASES 0901
their patrons' equal protection rights."30 The Court then went on to COMELEC to do or not. The Court holds that it is not within the
hold: power of the COMELEC to do so.

Standing or locus standi is the ability of a party to demonstrate to the a. Past elections and airtime limits
court sufficient connection to and harm from the law or action
challenged to support that party's participation in the case. More The authority of the COMELEC to impose airtime limits directly flows
importantly, the doctrine of standing is built on the principle of
from the Fair Election Act (R.A. No. 9006 [2001])32 - one hundred
separation of powers, sparing as it does unnecessary interference or (120) minutes of television advertisement and one-hundred· eighty
invalidation by the judicial branch of the actions rendered by its co-
(180) minutes for radio advertisement. For the 2004 elections, the
equal branches of government. respondent COMELEC promulgated Resolution No.
652033 implementing the airtime limits by applying said limitation on a
The requirement of standing is a core component of the judicial system per station basis.34 Such manner of determining airtime limits was
derived directly from the Constitution. The constitutional component likewise adopted for the 2007 elections, through Resolution No.
of standing doctrine incorporates concepts which concededly are not 7767.35 In the 2010 elections, under Resolution No. 8758, 36 the same
susceptible of precise definition. In this jurisdiction, the extancy of "a was again adopted. But for the 2013 elections, the COMELEC, through
direct and personal interest" presents the most obvious cause, as well as Resolution No. 9615, as amended by Resolution No. 9631, chose to
the standard test for a petitioner's standing. In a similar vein, the United aggregate the total broadcast time among the different broadcast media,
States Supreme Court reviewed and elaborated on the meaning of the thus: Section 9. Requirements and/or Limitations on the Use of
three constitutional standing requirements of injury, causation, and Election Propaganda through Mass Media. - All parties and bona fide
redressability in Allen v. Wright. candidates shall have equal access to media time and space for their
election propaganda during the campaign period subject to the
following requirements and/or limitations:
Nonetheless, the general rules on standing admit of several exceptions
such as the overbreadth doctrine, taxpayer suits, third party standing
and, especially in the Philippines, the doctrine of transcendental a. Broadcast Election Propaganda
importance.
The duration of an air time that a candidate, or party may use for their
For this particular set of facts, the concept of third party standing as an broadcast advertisements or election propaganda shall be, as follows:
exception and the overbreadth doctrine are appropriate. x x x

xxxx For Not more than an aggregate total of

Candidates/Registered one hundred (120) minutes of
Political parties for a television advertising, whether
American jurisprudence is replete with examples where parties- National Elective appearing on national, regional, or
ininterest were allowed standing to advocate or invoke the fundamental Position local, free or cable television, and
due process or equal protection claims of other persons or classes of one hundred eighty (180) minutes of
persons injured by state action. x x x radio advertising, whether airing on
national, regional, or local radio,
xxxx whether by purchase or donation

For Not more than an aggregate total of

Assuming arguendo that petitioners do not have a relationship with
Candidates/Registered sixty (60) minutes of television
their patrons for the former to assert the rights of the latter, the
Political parties for a advertising, whether appearing on
overbreadth doctrine comes into play. In overbreadth analysis,
Local Elective national, regional, or local, free or
challengers to government action are in effect permitted to raise the
Position cable television, and ninety (90)
rights of third parties. Generally applied to statutes infringing on the
minutes of radio advertising, whether
freedom of speech, the overbreadth doctrine applies when a statute
airing on national, regional, or local
needlessly restrains even constitutionally guaranteed rights. In this
radio, whether by purchase or
case, the petitioners claim that the Ordinance makes a sweeping
donation.
intrusion into the right to liberty of their clients. We can see that based
on the allegations in the petition, the Ordinance suffers from
overbreadth.
In cases where two or more candidates or parties whose names, initials,
images, brands, logos, insignias, color motifs, symbols, or forms of
We thus recognize that the petitioners have a right to assert the graphical representations are displayed, exhibited, used, or mentioned
constitutional rights of their clients to patronize their establishments for together in the broadcast election propaganda or advertisements, the
a "wash-rate" time frame.31 length of time during which they appear or are being mentioned or
promoted will be counted against the airtime limits allotted for the said
If in regard to commercial undertakings, the owners may have the right candidates or parties and the cost of the said advertisement will
to assert a constitutional right of their clients, with more reason should likewise be considered as their expenditures, regardless of whoever
establishments which publish and broadcast have the standing to assert paid for the advertisements or to whom the said advertisements were
the constitutional freedom of speech of candidates and of the right to donated.
information of the public, not to speak of their own freedom of the
press. So, we uphold the standing of petitioners on that basis. x x x x37

SUBSTANTIVE ASPECTS Corollarily, petitioner-intervenor, Senator Cayetano, alleges:

Aggregate Time Limits 6.15. The change in the implementation of Section 6 of R.A. 9006 was
undertaken by respondent Comelec without consultation with the
COMELEC Resolution No. 9615 introduced a radical departure from candidates for the 2013 elections, affected parties such as media
the previous COMELEC resolutions relative to the airtime limitations organizations, as well as the general public. Worse, said change was
on political advertisements. This essentially consists in computing the put into effect without explaining the basis therefor and without
airtime on an aggregate basis involving all the media of broadcast showing any data in support of such change. Respondent Comelec
communications compared to the past where it was done on a per merely maintained that such action "is meant to level the playing field
station basis. Thus, it becomes immediately obvious that there was between the moneyed candidates and those who don i have enough
effected a drastic reduction of the allowable minutes within which resources," without particularizing the empirical data upon which such
candidates and political parties would be able to campaign through the a sweeping statement was based. This was evident in the public hearing
air. The question is accordingly whether this is within the power of the held on 31 January 2013 where petitioner GMA, thru counsel,
explained that no empirical data on he excesses or abuses of broadcast

117 ADMIN LAW CASES 0901

media were brought to the attention of the public by respondent their time and all radio time and TV time then there will be practically
Comelec, or even stated in the Comelec unlimited use of the mass media ....

Resolution No. 9615. Thus – Atty. Lucila

xxxx Was there in 2010 Your Honor, was there any data to support that there
was an unlimited and abuse of a (sic) political ads in the mass media
Chairman Brillantes that became the basis of this change in interpretation Your Honor? We
would like to know about it Your Honor.

So if we can regulate and amplify, we may amplify meaning we can

expand if we want to. But the authority of the Commission is if we do Chairman Brillantes
not want to amplify and we think that the 120 or 180 is okay we cannot
be compelled to amplify. We think that 120 or 180 is okay, is enough. What do you think there was no abuse in 201 O?

Atty. Lucila Atty. Lucila

But with due respect Your Honor, I think the basis of the resolution is As far as the network is concern, there was none Your Honor.
found in the law and the law has been enterpreted (sic) before in 2010
to be 120 per station, so why the change, your Honor? Chairman Brillantes

Chairman Brillantes There was none ..... .

No, the change is not there, the right to amplify is with the Atty. Lucila
Commission on Elections. Nobody can encroach in our right to
amplify. Now, if in 2010 the Commission felt that per station or per
network is the rule then that is the prerogative of the Commission then I'm sorry, Your Honor ...
they could amplify it to expand it. If the current Commission feels that
120 is enough for the particular medium like TV and 180 for radio, that Chairman Brillantes
is our prerogative. How can you encroach and what is unconstitutional
about it?
Yes, there was no abuse, okay, but there was some advantage given to
those who took ... who had the more moneyed candidates took
Atty. Lucila advantage of it.

We are not questioning the authority of the Honorable Commission to Atty. Lucila
regulate Your Honor, we are just raising our concern on the manner of
regulation because as it is right now, there is a changing mode or
sentiments of the Commission and the public has the right to know, But that is the fact in life, Your Honor there are poor candidates, there
was there rampant overspending on political ads in 2010, we were not are rich candidates. No amount of law or regulation can even level the
informed Your Honor. Was there abuse of the media in 2010, we were playing filed (sic) as far as the economic station in life of the
not informed Your Honor. So we would like to know what is the basis candidates are concern (sic) our Honor.38
of the sudden change in this limitation, Your Honor .. And law must
have a consistent interpretation that [is]our position, Your Honor. Given the foregoing observations about what happened during the
hearing, Petitioner-Intervenor went on to allege that:
Chairman Brillantes
6.16. Without any empirical data upon which to base the regulatory
But my initial interpretation, this is personal to this representation measures in Section 9 (a), respondent Comelec arbitrarily changed the
counsel, is that if the Constitution allows us to regulate and then it rule from per station basis to aggregate airtime basis. Indeed, no
gives us the prerogative to amplify then the prerogative to amplify you credence should be given to the cliched explanation of respondent
should leave this to the discretion of the Commission. Which means if Comelec (i.e. leveling the playing field) in its published statements
previous Commissions felt that expanding it should be part of our which in itself is a mere reiteration of the rationale for the enactment of
authority that was a valid exercise if we reduce it to what is provided the political ad ban of Republic Act No. 6646, and which has likewise
for by law which is 120-180 per medium, TV, radio, that is also within been foisted when said political ad ban was lifted by R.A. 9006.39
the law and that is still within our prerogative as provided for by the
Constitution. If you say we have to expose the candidates to the public From the foregoing, it does appear that the COMELEC did not have
then I think the reaction should come, the negative reaction should any other basis for coming up with a new manner of determining
come from the candidates not from the media, unless you have some allowable time limits except its own idea as to what should be the
interest to protect directly. Is there any interest on the part of the media maximum number of minutes based on its exercise of discretion as to
to expand it? how to level the playing field. The same could be encapsulized in the
remark of the COMELEC Chairman that "if the Constitution allows us
Atty. Lucila to regulate and then it gives us the prerogative to amplify then the
prerogative to amplify you should leave this to the discretion of the
Commission."40
Well, our interest Your Honor is to participate in this election Your
Honor and we have been constantly (sic) as the resolution says and
even in the part involved because you will be getting some affirmative The Court could not agree with what appears as a nonchalant exercise
action time coming from the media itself and Comelec time coming of discretion, as expounded anon.
from the media itself. So we could like to be both involved in the
whole process of the exercise of the freedom of suffrage Your Honor. b. COMELEC is duty bound to come up with reasonable basis for
changing the interpretation and implementation of the airtime limits
Chairman Brillantes
There is no question that the COMELEC is the office constitutionally
Yes, but the very essence of the Constitutional provision as well as the and statutorily authorized to enforce election laws but it cannot
provision of 9006 is actually to level the playing field. That should be exercise its powers without limitations - or reasonable basis. It could
the paramount consideration. If we allow everybody to make use of all not simply adopt measures or regulations just because it feels that it is
the right thing to do, in so far as it might be concerned. It does have

118 ADMIN LAW CASES 0901

discretion, but such discretion is something that must be exercised his broadcast or print campaign advertisements, and that he must get it
within the bounds and intent of the law. The COMELEC is not free to through the COMELEC Time or COMELEC Space, R.A. No. 9006
simply change the rules especially if it has consistently interpreted a relieved him or her from that restriction and allowed him or her to
legal provision in a particular manner in the past. If ever it has to broadcast time or print space subject to the limitations set out in the
change the rules, the same must be properly explained with sufficient law. Congress, in enacting R.A. No. 9006, felt that the previous law
basis. was not an effective and efficient way of giving voice to the people.
Noting the debilitating effects of the previous law on the right of
Based on the transcripts of the hearing conducted by the COMELEC suffrage and Philippine democracy, Congress decided to repeal such
after it had already promulgated the Resolution, the respondent did not rule by enacting the Fair Election Act.
fully explain or justify the change in computing the airtime allowed
candidates and political parties, except to make reference to the need to In regard to the enactment of the new law, taken in the context of the
"level the playing field." If the "per station" basis was deemed enough restrictive nature of the previous law, the sponsorship speech of
to comply with that objective in the past, why should it now be Senator Raul Roco is enlightening:
suddenly inadequate? And, the short answer to that from the
respondent, in a manner which smacks of overbearing exercise of The bill seeks to repeal Section 85 of the Omnibus Election Code and
discretion, is that it is within the discretion of the COMELEC. As
Sections 10 and 11 of RA 6646. In view of the importance of their
quoted in the transcript, "the right to amplify is with the COMELEC. appeal in connection with the thrusts of the bill, I hereby quote these
Nobody can encroach in our right to amplify. Now, if in 2010 the
sections in full:
Commission felt that per station or per network is the rule then that is
the prerogative of the Commission then they could amplify it to expand
it. If the current Commission feels that 120 is enough for the particular "SEC. 85. Prohibited forms of election propaganda. - It shall be
medium like TV and 180 for radio, that is our prerogative. How can unlawful:
you encroach and what is unconstitutional about it?"41
"(a) To print, publish, post or distribute any
There is something basically wrong with that manner of explaining poster, pamphlet, circular, handbill, or printed
changes in administrative rules. For one, it does not really provide a matter urging voters to vote for or against any
good basis for change. For another, those affected by such rules must candidate unless they hear the names and
be given a better explanation why the previous rules are no longer good addresses of the printed and payor as required in
enough. As the Court has said in one case: Section 84 hereof;

While stability in the law, particularly in the business field, is "(b) To erect, put up, make use of, attach, float or
desirable, there is no demand that the NTC slavishly follow precedent. display any billboard, tinplate-poster, balloons
However, we think it essential, for the sake of clarity and intellectual and the like, of whatever size, shape, form or
honesty, that if an administrative agency decides inconsistently with kind, advertising for or against any candidate or
previous action, that it explain thoroughly why a different result is political party;
warranted, or ?f need be, why the previous standards should no longer
apply or should be overturned. Such explanation is warranted in order "(c) To purchase, manufacture, request, distribute
to sufficiently establish a decision as having rational basis. Any or accept electoral propaganda gadgets, such as
inconsistent decision lacking thorough, ratiocination in support may be pens, lighters, fans of whatever nature, flashlights,
struck down as being arbitrary. And any decision with absolutely athletic goods or materials, wallets, shirts, hats,
nothing to support it is a nullity.42 bandannas, matches, cigarettes and the like,
except that campaign supporters accompanying a
What the COMELEC came up with does not measure up to that level candidate shall be allowed to wear hats and/or
of requirement and accountability which elevates administrative rules shirts or T-shirts advertising a candidate;
to the level of respectability and acceptability. Those governed by
administrative regulations are entitled to a reasonable and rational basis "(d) To show or display publicly any
for any changes in those rules by which they are supposed to live by, advertisement or propaganda for or against any
especially if there is a radical departure from the previous ones. candidate by means of cinematography, audio-
visual units or other screen projections except
c. The COMELEC went beyond the authority granted it by the law in telecasts which may be allowed as hereinafter
adopting "aggregate" basis in the determination of allowable airtime provided; and

The law, which is the basis of the regulation subject of these petitions, "(e) For any radio broadcasting or television
pertinently provides: station to sell or give free of charge airtime for
campaign and other political purposes except as
authorized in this Code under the rules and
6.2. (a) Each bona fide candidate or registered political party for a regulations promulgated by the Commission
nationally elective office shall be entitled to not more than one hundred
pursuant thereto;
twenty (120) minutes of television advertisement and one hundred
eighty (180) minutes of radio advertisement whether by purchase or
donation. "Any prohibited election propaganda gadget or advertisement shall be
stopped, confiscated or tom down by the representative of the
Commission upon specific authority of the Commission." "SEC. 10.
(b) Each bona fide candidate or registered political party for a locally Common Poster Areas. - The Commission shall designate common
elective office shall be entitled to not more than sixty (60) minutes of poster areas in strategic public places such as markets, barangay
television advertisement and ninety (90) minutes of radio centers and the like wherein candidates can post, display or exhibit
advertisement whether by purchase or donation; x x x election propaganda to announce or further their candidacy.

The law, on its face, does not justify a conclusion that the maximum "Whenever feasible, common billboards may be installed by the
allowable airtime should be based on the totality of possible broadcast Commission and/or non-partisan private or civic organizations which
in all television or radio stations. Senator Cayetano has called our the Commission may authorize whenever available, after due notice
attention to the legislative intent relative to the airtime allowed - that it and hearing, in strategic areas where it may readily be seen or read,
should be on a "per station" basis.43 with the heaviest pedestrian and/or vehicular traffic in the city or
municipality.
This is further buttressed by the fact that the Fair Election Act (R.A.
No. 9006) actually repealed the previous provision, Section ll(b) of The space in such common poster areas or billboards shall be allocated
Republic Act No. 6646,44 which prohibited direct political free of charge, if feasible, equitably and impartially among the
advertisements -the so-called "political ad ban." If under the previous candidates in the province, city or municipality. "SEC. 11. Prohibite,d
law, no candidate was allowed to directly buy or procure on his own
119 ADMIN LAW CASES 0901
Forms of Election Propaganda. - In addition to the forms of election minutes per day in each television, cable television and radio stations
propaganda prohibited under Section 85 of Batas Pambansa Blg. 881, it during the applicable campaign period.
shall be unlawful: (a) to draw, paint, inscribe, write, post, display or
puolicly exhibit any election propaganda in any place, whether private Senate Bill No. 1742:
or public, except in common poster areas and/or billboards provided in
the immediately preceding section, at the candidate's own residence, or
at the campaign headquarters of the candidate or political party: SEC. 5. Equal Access to Media Space and Time. -All registered parties
Provided, That such posters or election propaganda shall in no case and bona fide candidates shall have equal access to media space and
exceed two (2) feet by three (3) feet in area; Provided, further, That at time. The following guidelines may be amplified by the COMELEC.
the site of and on the occasion of a public meeting or rally, streamers,
not more than two (2) feet and not exceeding three (3) feet by eight (8) xxx xxx xxx
each may be displayed five (5) days before the date of the meeting or
rally, and shall be removed within twenty-four (24) hours after said
meeting or rally; and 2. The total airtime available for each registered party and bona fide
candidate whether by purchase or donation shall not exceed a total of
one (1) minute per day per television or radio station. (Emphasis
"(b) For any newspapers, radio broadcasting or television station, or supplied.)
other mass media, or any person making use of the mass media to sell
or give for free of charge print space or air time for campaign or other
political purposes except to the Commission as provided under Section As Section 6 of R.A. 9006 is presently worded, it can be clearly seen
90 and 92 of Batas Pambansa Big. 881. Any mass media columnist, that the legislature intended the aggregate airtime limits to be
commentator, announcer or personality who is a candidate for any computed on per candidate or party basis. Otherwise, if the legislature
elective public office shall take a leave of absence from his work as intended the computation to be on per station basis, it could have left
such during the campaign." the original "per day per station" formulation.46

The repeal of the provision on the Common Poster Area implements The Court does not agree. It cannot bring itself to read the changes in
the strong recommendations of the Commission on Elections during the bill as disclosing an intent that the COMELEC wants this Court to
the hearings. It also seeks to apply the doctrine enunciated by the put on the final language of the law. If anything, the change in
Supreme Court in the case of Blo Umpar Adiong vs. Commission on language meant that the computation must not be based on a "per day"
Elections, 207 SCRA 712, 31 March 1992. Here a unanimous Supreme basis for each television or radio station. The same could not therefore
Court ruled: The COMELEC's prohibition on the posting of decals and lend itself to an understanding that the total allowable time is to be
stickers on "mobile" places whether public or private except [in] done on an aggregate basis for all television or radio stations. Clearly,
designated areas provided for by the COMELEC itself is null and void the respondent in this instance went beyond its legal mandate when it
on constitutional grounds. provided for rules beyond what was contemplated by the law it is
supposed to implement. As we held in Lakin, Jr. v. Commission on
Elections:47
For the foregoing reasons, we commend to our colleagues the early
passage of Senate Bill No. 1742. In so doing, we move one step
towards further ensuring "free, orderly, honest, peaceful and credible The COMELEC, despite its role as the implementing arm of the
elections" as mandated by the Constitution.45 Government in the enforcement and administration of all laws and
regulations relative to the conduct of an election, has neither the
authority nor the license to expand, extend, or add anything to the law
Given the foregoing background, it is therefore ineluctable to conclude it seeks to implement thereby. The IRRs the COMELEC issued for that
that Congress intended to provide a more expansive and liberal means purpose should always be in accord with the law to be implemented,
by which the candidates, political parties, citizens and other stake and should not override, supplant, or modify the law. It is basic that the
holders in the periodic electoral exercise may be given a chance to IRRs should remain consistent with the law they intend to carry out.
fully explain and expound on their candidacies and platforms of
governance, and for the electorate to be given a chance to know better
the personalities behind the candidates. In this regard, the media is also Indeed, administrative IRRs adopted by a particular department of the
given a very important part in that undertaking of providing the means Government under legislative authority must be in harmony with the
by which the political exercise becomes an interactive process. All of provisions of the law, and should be for the sole purpose of carrying
these would be undermined and frustrated with the kind of regulation the law's general provisions into effect. The law itself cannot be
that the respondent came up with. expanded by such IRRs, because an administrative agency cannot
amend an act of Congress.48
The respondent gave its own understanding of the import of the
legislative deliberations on the adoption of R.A. No. 9006 as follows: In the case of Lakin, Jr., the COMELEC's explanation that the
Resolution then in question did not add anything but merely reworded
and rephrased the statutory provision did not persuade the Court. With
The legislative history of R.A. 9006 clearly shows that Congress more reason here since the COMELEC not only reworded or rephrased
intended to impose the per candidate or political party aggregate total the statutory provision - it practically replaced it with its own idea of
airtime limits on political advertisements and election propaganda. what the law should be, a matter that certainly is not within its
This is evidenced by the dropping of the "per day per station" language authority. As the Court said in Villegas v. Subido:49
embodied in both versions of the House of Representatives and Senate
bills in favour of the "each candidate" and "not more than" limitations
now found in Section 6 of R.A. 9006. One last word. Nothing is better settled in the law than that a public
official exercises power, not rights. The government itself is merely an
agency through which the will of the state is expressed and enforced.
The pertinent portions of House Bill No. 9000 and Senate Bill No. Its officers therefore are likewise agents entrusted with the
1742 read as follows: responsibility of discharging its functions. As such there is no
presumption that they are empowered to act. There must be a
House Bill No. 9000: delegation of such authority, either express or implied. In the absence
of a valid grant, they are devoid of power. What they do suffers from a
fatal infirmity. That principle cannot be sufficiently stressed. In the
SEC. 4. Section 86 of the same Batas is hereby amended to read as appropriate language of Chief Justice Hughes: "It must be conceded
follows: that departmental zeal may not be permitted to outrun the authority
conferred by statute." Neither the high dignity of the office nor the
Sec. 86. Regulation of Election Propaganda Through Mass Media. righteousness of the motive then is an acceptable substitute. Otherwise
the rule of law becomes a myth. Such an eventuality, we must take all
xxx xxx xxx pains to avoid.50

A) The total airtime available to the candidate and political party, So it was then. So does the rule still remains the same.
whether by purchase or by donation, shall be limited to five (5)
120 ADMIN LAW CASES 0901
d. Section 9 (a) of COMELEC Resolution No. 9615 on airtime limits 5.10 If a candidate loads all of his 81.81 seconds per day in
also goes against the constitutional guaranty of freedom of expression, one network, this will translate to barely three 30-second
of speech and of the press advertising spots in television on a daily basis using the
same assumptions above.
The guaranty of freedom to speak is useless without the ability to
communicate and disseminate what is said. And where there is a need 5.11 Based on the data from the 2012 Nielsen TV audience
to reach a large audience, the need to access the means and media for measurement in Mega Manila, the commercial
such dissemination becomes critical. This is where the press and advertisements in television are viewed by only 39.2% of the
broadcast media come along. At the same time, the right to speak and average total day household audience if such advertisements
to reach out would not be meaningful if it is just a token ability to be are placed with petitioner GMA, the leading television
heard by a few. It must be coupled with substantially reasonable means network nationwide and in Mega Manila. In effect, under the
by which the communicator and the audience could effectively interact. restrictive aggregate airtime limits in the New Rules, the
Section 9 (a) of COMELEC Resolution No. 9615, with its adoption of three 30-second political advertisements of a candidate in
the "aggregate-based" airtime limits unreasonably restricts the petitioner GMA will only be communicated to barely 40%
guaranteed freedom of speech and of the press. of the viewing audience, not even the voting population, but
only in Mega Manila, which is defined by AGB Nielsen
Political speech is one of the most important expressions protected by Philippines to cover Metro Manila and certain urban areas in
the provinces of Bulacan, Cavite, Laguna, Rizal, Batangas
the Fundamental Law. "[F]reedom of speech, of expression, and of the
press are at the core of civil liberties and have to be protected at all and Pampanga. Consequently, given the voting population
distribution and the drastically reduced supply of airtime as
costs for the sake of democracy."51 Accordingly, the same must remain
unfettered unless otherwise justified by a compelling state interest. a result of the New Rules' aggregate airtime limits, a
national candidate will be forced to use all of his airtime for
political advertisements in television only in urban areas
In regard to limitations on political speech relative to other state such as Mega Manila as a political campaign tool to achieve
interests, an American case observed: maximum exposure.

A restriction on the amount of money a person or group can spend on 5.12 To be sure, the people outside of Mega Manila or other
political communication during a campaign necessarily reduces the urban areas deserve to be informed of the candidates in the
quantity of expression by restricting the number of issues discussed, national elections, and the said candidates also enjoy the
the depth of their exploration, and the size of the audience reached. right to be voted upon by these informed populace.53
This is because virtually every means of communicating ideas in
today's mass society requires the expenditure of money. The
distribution of the humblest handbill or leaflet entails printing, paper, The Court agrees. The assailed rule on "aggregate-based" airtime limits
and circulation costs. Speeches and rallies generally necessitate hiring is unreasonable and arbitrary as it unduly restricts and constrains the
a hall and publicizing the event. The electorate's increasing dependence ability of candidates and political parties to reach out and communicate
with the people. Here, the adverted reason for imposing the "aggregate-
on television, radio, and other mass media for news and information
has made these expensive modes of communication indispensable based" airtime limits - leveling the playing field - does not constitute a
compelling state interest which would justify such a substantial
instruments of effective political speech.
restriction on the freedom of candidates and political parties to
communicate their ideas, philosophies, platforms and programs of
The expenditure limitations contained in the Act represent substantial, government. And, this is specially so in the absence of a clear-cut basis
rather than merely theoretical restraints on the quantity and diversity of for the imposition of such a prohibitive measure. In this particular
political speech. The $1,000 ceiling on spending "relative to a clearly instance, what the COMELEC has done is analogous to letting a bird
identified candidate," 18 U.S.C. § 608(e)(l) (1970 ed., Supp. IV), fly after one has clipped its wings.
would appear to exclude all citizens and groups except candidates,
political parties, and the institutional press from any significant use of
the most effective modes of communication. Although the Act's It is also particularly unreasonable and whimsical to adopt the
limitations on expenditures by campaign organizations and political aggregate-based time limits on broadcast time when we consider that
parties provide substantially greater room for discussion and debate, the Philippines is not only composed of so many islands. There are also
they would have required restrictions in the scope of a number of past a lot of languages and dialects spoken among the citizens across the
congressional and Presidential campaigns and would operate to country. Accordingly, for a national candidate to really reach out to as
many of the electorates as possible, then it might also be necessary that
constrain campaigning by candidates who raise sums in excess of the
spending ceiling.52 he conveys his message through his advertisements in languages and
dialects that the people may more readily understand and relate to. To
add all of these airtimes in different dialects would greatly hamper the
Section 9 (a) ofCOMELEC Resolution No. 9615 comes up with what ability of such candidate to express himself - a form of suppression of
is challenged as being an unreasonable basis for determining the his political speech.
allowable air time that candidates and political parties may avail of.
Petitioner GMA came up with its analysis of the practical effects of
such a regulation: Respondent itself states that "[t]elevision is arguably the most
costeffective medium of dissemination. Even a slight increase in
television exposure can significantly boost a candidate's popularity,
5.8. Given the reduction of a candidate's airtime minutes in name recall and electability."54 If that be so, then drastically curtailing
the New Rules, petitioner GMA estimates that a national the ability of a candidate to effectively reach out to the electorate
candidate will only have 120 minutes to utilize for his would unjustifiably curtail his freedom to speak as a means of
political advertisements in television during the whole connecting with the people.
campaign period of 88 days, or will only have 81.81 seconds
per day TV exposure allotment. If he chooses to place his
political advertisements in the 3 major TV networks in equal Finally on this matter, it is pertinent to quote what Justice Black wrote
allocation, he will only have 27.27 seconds of airtime per in his concurring opinion in the landmark Pentagon Papers case: "In
network per day. This barely translates to 1 advertisement the First Amendment, the Founding Fathers gave the free press the
spot on a 30-second spot basis in television. protection it must have to fulfill its essential role in our democracy.
The press was to serve the governed, not the governors. The
Government's power to censor the press was abolished so that the press
5.9. With a 20-hour programming per day and considering would remain forever free to censure the Government. The press was
the limits of a station's coverage, it will be difficult for 1 protected so that it could bare the secrets of government and inform the
advertising spot to make a sensible and feasible people. Only a free and unrestrained press can effectively expose
communication to the public, or in political propaganda, to deception in government."55
"make known [a candidate's] qualifications and stand on
public issues".
In the ultimate analysis, when the press is silenced, or otherwise
muffled in its undertaking of acting as a sounding board, the people
ultimately would be the victims.
121 ADMIN LAW CASES 0901
e. Section 9 (a) of Resolution 9615 is violative of the people's right to amendatory provisions applied to locally manufactured cigarettes
suffrage which at the time of its effectivity were not so classified as bearing
foreign brands. x x x In so doing, the BIR not simply interpreted the
Fundamental to the idea of a democratic and republican state is the law; verily, it legislated under its quasi-legislative authority. The due
observance of the requirements of notice, of hearing, and of publication
right of the people to determine their own destiny through the choice of
leaders they may have in government. Thus, the primordial importance should not have been then ignored.59
of suffrage and the concomitant right of the people to be adequately
informed for the intelligent exercise of such birthright. It was said that: For failing to conduct prior hearing before coming up with Resolution
No. 9615, said Resolution, specifically in regard to the new rule on
x x x As long as popular government is an end to be achieved and aggregate airtime is declared defective and ineffectual.
safeguarded, suffrage, whatever may be the modality and form devised,
must continue to be the means by which the great reservoir of power g. Resolution No. 9615 does not impose an unreasonable burden on the
must be emptied into the receptacular agencies wrought by the people broadcast industry
through their Constitution in the interest of good government and the
common weal. Republicanism, in so far as it implies the adoption of a It is a basic postulate of due process, specifically in relation to its
representative type of government, necessarily points to the substantive component, that any governmental rule or regulation must
enfranchised citizen as a particle of popular sovereignty and as the be reasonable in its operations and its impositions. Any restrictions, as
ultimate source of the established authority. He has a voice in his well as sanctions, must be reasonably related to the purpose or
Government and whenever possible it is the solemn duty of the objective of the government in a manner that would not work
judiciary, when called upon to act in justifiable cases, to give it unnecessary and unjustifiable burdens on the citizenry. Petitioner
efficacy and not to stifle or frustrate it. This, fundamentally, is the GMA assails certain requirements imposed on broadcast stations as
reason for the rule that ballots should be read and appreciated, if not
unreasonable. It explained:
with utmost, with reasonable, liberality. x x x56 It has also been said
that "[ c ]ompetition in ideas and governmental policies is at the core of
our electoral process and of the First Amendment 5.40 Petitioner GMA currently operates and monitors 21 FM
freedoms."57 Candidates and political parties need adequate breathing and AM radio stations nationwide and 8 originating
space - including the means to disseminate their ideas. This could not television stations (including its main transmitter in Quezon
be reasonably addressed by the very restrictive manner by which the City) which are authorized to dechain national programs for
respondent implemented the time limits in regard to political airing and insertion of local content and advertisements.
advertisements in the broadcast media.
5.41 In light of the New Rules wherein a candidate's airtime
f. Resolution No. 9615 needs prior hearing before adoption minutes are applied on an aggregate basis and considering
that said Rules declare it unlawful in Section 7( d) thereof
for a radio, television station or other mass media to sell or
The COMELEC promulgated Resolution No. 9615 on January 15, give for free airtime to a candidate in excess of that allowed
2013 then came up with a public hearing on January 31, 2013 to by law or by said New Rules:
explain what it had done, particularly on the aggregate-based air time
limits. This circumstance also renders the new regulation, particularly
on the adoption of the aggregate-based airtime limit, questionable. It "Section 7. Prohibited Forms of Election Propaganda -
must not be overlooked that the new Resolution introduced a radical During the campaign period, it is unlawful: x x x x x x x x x
change in the manner in which the rules on airtime for political
advertisements are to be reckoned. As such there is a need for adequate (d) for any newspaper or publication, radio, television or
and effective means by which they may be adopted, disseminated and cable television station, or other mass media, or any person
implemented. In this regard, it is not enough that they be published - or making use of the mass media to sell or to give free of
explained - after they have been adopted. charge print space or air time for campaign or election
propaganda purposes to any candidate or party in excess of
While it is true that the COMELEC is an independent office and not a the size, duration or frequency authorized by law or these
mere administrative agency under the Executive Department, rules rules;
which apply to the latter must also be deemed to similarly apply to the
former, not as a matter of administrative convenience but as a dictate xxx xxx xxx
of due process. And this assumes greater significance considering the
important and pivotal role that the COMELEC plays in the life of the
nation. Thus, whatever might have been said in Commissioner of (Emphasis supplied)
Internal Revenue v. Court of Appeals,58 should also apply mutatis
mutandis to the COMELEC when it comes to promulgating rules and petitioner GMA submits that compliance with the New
regulations which adversely affect, or impose a heavy and substantial Rules in order to avoid administrative or criminal liability
burden on, the citizenry in a matter that implicates the very nature of would be unfair, cruel and oppressive.
government we have adopted:
x x x x.
It should be understandable that when an administrative rule is merely
interpretative in nature, its applicability needs nothing further than its
bare issuance for it gives no real consequence more than what the law 5.43 In the present situation wherein airtime minutes shall be
itself has already prescribed. When, upon the other hand, the shared by all television and radio stations, broadcast mass
administrative rule goes beyond merely providing for the means that media organizations would surely encounter insurmountable
can facilitate or render least cumbersome the implementation of the difficulties in monitoring the airtime minutes spent by the
law but substantially adds to or increases the burden of those governed, numerous candidates for various elective positions, in real
it behooves the agency to accord at least to those directly affected a time.
chance to be heard, and thereafter to be duly informed, before that new
issuance is given the force and effect of law. 5.44 An inquiry with the National Telecommunications
Commission (NTC) bears out that there are 372 television
A reading of RMC 37-93, particularly considering the circumstances stations and 398 AM and 800 FM radio stations nationwide
under which it has been issued, convinces us that the circular cannot be as of June 2012. In addition, there are 1, 113 cable TV
viewed simply as a corrective measure (revoking in the process the providers authorized by the NTC to operate within the
previous holdings of past Commissioners) or merely as construing country as of the said date.
Section 142(c)(l) of the NIRC, as amended, but has, in fact and most
importantly, been made in order to place "Hope Luxury," "Premium 5.45 Given such numbers of broadcast entities and the
More" and "Champion" within the classification of locally necessity to monitor political advertisements pursuant to the
manufactured cigarettes bearing foreign brands and to thereby have New Rules, petitioner OMA estimates that monitoring
them covered by RA 7654. Specifically, the new law would have its television broadcasts of all authorized television station
122 ADMIN LAW CASES 0901
 would involve 7,440 manhours per day. To aggravate monitoring by the COMELEC and ensuring that parties and candidates
matters, since a candidate may also spend his/her were afforded equal opportunities to promote their candidacy, the
broadcasting minutes on cable TV, additional 281,040 media entity shall give prior notice to the COMELEC, through the
manhours per day would have to be spent in monitoring the appropriate Regional Election Director (RED), or in the case of the
various channels carried by cable TV throughout the National Capital Region (NCR), the Education and Information
Philippines. As far as radio broadcasts (both AM and FM Department (EID). If such prior notice is not feasible or practicable,
stations) are concerned, around 23,960 manhours per day the notice shall be sent within twenty-four (24) hours from the first
would have to be devoted by petitioner OMA to obtain an broadcast or publication.1awp++i1 Nothing in the foregoing sentence
accurate and timely determination of a political candidate's shall be construed as relieving broadcasters, in connection with the
remaining airtime minutes. During the campaign period, presentation of newscasts, news interviews, news documentaries, and
petitioner OMA would have to spend an estimated on-the-spot coverage of news events, from the obligation imposed
27,494,720 manhours in monitoring the election campaign upon them under Sections 10 and 14 of these Rules."63
commercials of the different candidates in the
country.1âwphi1
Further, the petitioner in G.R. No. 205374 assails the constitutionality
of such monitoring requirement, contending, among others, that it
5.46 In order to carry-out the obligations imposed by the constitutes prior restraint. The Court finds otherwise. Such a
New Rules, petitioner OMA further estimates that it would requirement is a reasonable means adopted by the COMELEC to
need to engage and train 39,055 additional persons on an ensure that parties and candidates are afforded equal opportunities to
eight-hour shift, and assign them all over the country to promote their respective candidacies. Unlike the restrictive aggregate-
perform the required monitoring of radio, television and based airtime limits, the directive to give prior notice is not unduly
cable TV broadcasts. In addition, it would likewise need to burdensome and unreasonable, much less could it be characterized as
allot radio, television, recording equipment and computers, prior restraint since there is no restriction on dissemination of
as well as telecommunications equipment, for this information before broadcast. Additionally, it is relevant to point out
surveillance and monitoring exercise, thus imputing that in the original Resolution No. 9615, the paragraph in issue was
additional costs to the company. Attached herewith are the worded in this wise:
computations explaining how the afore-said figures were
derived and the conservative assumptions made by petitioner
Appearance or guesting by a candidate on any bona fide newscast,
OMA in reaching said figures, as Annex "H". bona fide news interview, bona fide news documentary, if the
appearance of the candidate is incidental to the presentation of the
5.47 Needless to say, such time, manpower requirements, subject or subjects covered by the news documentary, or on-the-spot
expense and effort would have to be replicated by each and coverage of bona fide news events, including but not limited to events
every radio station to ensure that they have properly sanctioned by the Commission on Elections, political conventions, and
monitored around 33 national and more than 40,000 local similar activities, shall not be deemed to be broadcast election
candidates' airtime minutes and thus, prevent any risk of propaganda within the meaning of this provision. To determine
administrative and criminal liability.60 whether the appearance or guesting in a program is bona fide, the
broadcast stations or entities must show that (1) prior approval of the
The Court cannot agree with the contentions of GMA. The Commission was secured; and (2) candidates and parties were afforded
apprehensions of the petitioner appear more to be the result of a equal opportunities to promote their candidacy. Nothing in the
misappreciation of the real import of the regulation rather than a real foregoing sentence shall be construed as relieving broadcasters, in
and present threat to its broadcast activities. The Court is more in connection with the presentation of newscasts, news interviews, news
agreement with the respondent when it explained that: documentaries, and on-the-spot coverage of news events, from the
obligation imposed upon them under Sections 10 and 14 of these
Rules.64
The legal duty of monitoring lies with the Comelec. Broadcast stations
are merely required to submit certain documents to aid the Comelec in
ensuring that candidates are not sold airtime in excess of the allowed Comparing the original with the revised paragraph, one could readily
appreciate what the COMELEC had done - to modify the requirement
limits. These documents include: (1) certified true copies of broadcast
logs, certificates of performance, and certificates of acceptance, or from "prior approval" to "prior notice." While the former may be
suggestive of a censorial tone, thus inviting a charge of prior restraint,
other analogous record on specified dates (Section 9[d][3], Resolution
No. 9615, in relation to Section 6.2, R.A. 9006; and (2) copies of all the latter is more in the nature of a content-neutral regulation designed
contract for advertising, promoting or opposing any political party or to assist the poll body to undertake its job of ensuring fair elections
the candidacy of any person for public office within five (5) days after without having to undertake any chore of approving or disapproving
its signing (Section 6.3, R.A. 9006). certain expressions.

Also, the right to reply provision is reasonable

*****

In the same way that the Court finds the "prior notice" requirement as
[T]here is absolutely no duty on the broadcast stations to do
monitoring, much less monitoring in real time. GMA grossly not constitutionally infirm, it similarly concludes that the "right to
reply" provision is reasonable and consistent with the constitutional
exaggerates when it claims that the non-existent duty would require
them to hire and train an astounding additional 39,055 personnel mandate.
working on eight-hour shifts all over the country.61
Section 14 of Resolution No. 9615, as revised by Resolution No. 9631,
provides:
The Court holds, accordingly, that, contrary to petitioners' contention,
the Reporting Requirement for the COMELEC's monitoring is
reasonable. SECTION 14. Right to Reply. - All registered political parties, party-
list groups or coalitions and bona fide candidates shall have the right to
reply to charges published or aired against them. The reply shall be
Further, it is apropos to note that, pursuant to Resolution No.
9631,62 the respondent revised the third paragraph of Section 9 (a). As given publicity by the newspaper, television, and/or radio station which
revised, the provision now reads: first printed or aired the charges with the same prominence or in the
same page or section or in the same time slot as the first statement.

Appearance or guesting by a candidate on any bona fide newscast,

bona fide news interview, bona fide news documentary, if the Registered political parties, party-list groups or coalitions and bona
appearance of the candidate is incidental to the presentation of the fide candidates may invoke the right to reply by submitting within a
subject or subjects covered by the news documentary, or on-the-spot nonextendible period of forty-eight hours from first broadcast or
coverage of bona fide news events, including but not limited to events publication, a formal verified claim against the media outlet to the
sanctioned by the Commission on Elections, political conventions, and COMELEC, through the appropriate RED. The claim shall include a
similar activities, shall not be deemed to be broadcast election detailed enumeration of the circumstances and occurrences which
propaganda within the meaning of this provision. For purposes of warrant the invocation of the right to reply and must be accompanied
by supporting evidence, such a copy of the publication or recording of
123 ADMIN LAW CASES 0901
the television or radio broadcast, as the case may be. If the supporting First Amendment protection. Thus, although other speakers cannot be
evidence is not yet available due to circumstances beyond the power of licensed except under laws that carefully define and narrow official
the claimant, the latter shall supplement his claim as soon as the discretion, a broadcaster may be deprived of his license and his forum
supporting evidence becomes available, without delay on the part of if the Commission decides that such an action would serve "the public
the claimant. The claimant must likewise furnish a copy of the verified interest, convenience, and necessity." Similarly, although the First
claim and its attachments to the media outlet concerned prior to the Amendment protects newspaper publishers from being required to print
filing of the claim with the COMELEC. the replies of those whom they criticize, Miami Herald Publishing Co.
v. Tornillo, 418 US 241, 41 L Ed 2d 730, 94 S Ct 2831, it affords no
The COMELEC, through the RED, shall view the verified claim within such protection to broadcasters; on the contrary, they must give free
forty-eight ( 48) hours from receipt thereof, including supporting time to the victims of their criticism. Red Lion Broadcasting Co. v.
evidence, and if circumstances warrant, give notice to the media outlet FCC, 395 US. 367, 23 L Ed 2d 371, 89 S Ct 1794.
involved for appropriate action, which shall, within forty-eight ( 48)
hours, submit its comment, answer or response to the RED, explaining The reasons for these distinctions are complex, but two have relevance
the action it has taken to address the claim. The media outlet must to the present case. First, the broadcast media have established a
likewise furnish a copy of the said comment, answer or response to the uniquely pervasive presence in the lives of all Americans. Patently
claimant invoking the right to reply. offensive, indecent material presented over the airwaves confronts the
citizen not only in public, but also in the privacy of the home, where
the individual's right to be left alone plainly outweighs the First
Should the claimant insist that his/her right to reply was not addressed,
he/she may file the appropriate petition and/or complaint before the Amendment rights of an intruder. Rowan v. Post Office Dept., 397 US
728, 25 L Ed 2d 736, 90 S Ct 1484. Because the broadcast audience is
Commission on Elections or its field offices, which shall be endorsed
to the Clerk of Court. constantly tuning in and out, prior warnings cannot completely protect
the listener or viewer from unexpected program content. To say that
one may avoid further offense by turning off the radio when he hears
The attack on the validity of the "right to reply" provision is primarily indecent language is like saying that the remedy for an assault is to run
anchored on the alleged ground of prior restraint, specifically in so far away after the first blow. One may hang up on an indecent phone call,
as such a requirement may have a chilling effect on speech or of the but that option does not give the caller a constitutional immunity or
freedom of the press. avoid a harm that has already taken place.

Petitioner ABC states, inter alia: Second, broadcasting is uniquely accessible to children, even those too
young to read. Although Cohen's written message might have been
5 .14 5. A "conscious and detailed consideration" of the incomprehensible to a first grader, Pacifica's broadcast could have
interplay of the relevant interests - the constitutional enlarged a child's vocabulary in an instant. Other forms of offensive
mandate granting candidates the right to reply and the expression may be withheld from the young without restricting the
inviolability of the constitutional freedom of expression, expression at its source. Bookstores and motion picture theaters, for
speech, and the press - will show that the Right to Reply, as example, may be prohibited from making indecent material available to
provided for in the Assailed Resolution, is an impermissible children. We held in Ginsberg v. New York, 390 US 629, that the
restraint on these fundamental freedoms. government's interest in the "well-being of its youth" and in supporting
"parents' claim to authority in their own household" justified the
regulation of otherwise protected expression. The ease with which
5.146. An evaluation of the factors set forth in Soriano (for children may obtain access to broadcast material, coupled with the
the balancing of interests test) with respect to the present concerns recognized in Ginsberg, amply justify special treatment of
controversy will show that the Constitution does not tilt the indecent broadcasting.69
balance in favor of the Right to Reply provision in the
Assailed Resolution and the supposed governmental interest
it attempts to further.65 Given the foregoing considerations, the traditional notions of
preferring speech and the press over so many other values of society do
not readily lend itself to this particular matter. Instead, additional
The Constitution itself provides as part of the means to ensure free, weight should be accorded on the constitutional directive to afford a
orderly, honest, fair and credible elections, a task addressed to the right to reply. If there was no such mandate, then the submissions of
COMELEC to provide for a right to reply.66 Given that express petitioners may more easily commend themselves for this Court's
constitutional mandate, it could be seen that the Fundamental Law acceptance. But as noted above, this is not the case. Their arguments
itself has weighed in on the balance to be struck between the freedom simplistically provide minimal importance to that constitutional
of the press and the right to reply. Accordingly, one is not merely to command to the point of marginalizing its importance in the equation.
see the equation as purely between the press and the right to reply.
Instead, the constitutionallymandated desiderata of free, orderly,
honest, peaceful, and credible elections would necessarily have to be In fine, when it comes to election and the exercise of freedom of
factored in trying to see where the balance lies between press and the speech, of expression and of the press, the latter must be properly
demands of a right-to-reply. viewed in context as being necessarily made to accommodate the
imperatives of fairness by giving teeth and substance to the right to
reply requirement.
Moreover, as already discussed by the Court in Telecommunications
and Broadcast Attorneys of the Philippines, Inc. v. Commission on
Elections.67 WHEREFORE, premises considered, the petitions are PARTIALLY
GRANTED, Section 9 (a) of Resolution No. 9615, as amended by
Resolution No. 9631, is declared UNCONSTITUTIONAL and,
In truth, radio and television broadcasting companies, which are given therefore, NULL and VOID. The constitutionality of the remaining
franchises, do not own the airwaves and frequencies through which provisions of Resolution No. 9615, as amended by Resolution No.
they transmit broadcast signals and images. They are merely given the 9631, is upheld and remain in full force and effect.
temporary privilege of using them. Since a franchise is a mere
privilege, the exercise of the privilege may reasonably be burdened
with the performance by the grantee of some form of public service. x In view of this Decision, the Temporary Restraining Order issued by
x x68 the Court on April 16, 2013 is hereby made PERMANENT.

Relevant to this aspect are these passages from an American Supreme SO ORDERED.
Court decision with regard to broadcasting, right to reply requirements,
and the limitations on speech:

We have long recognized that each medium of expression presents

special First Amendment problems. Joseph Burstyn, Inc. v. Wilson,
343 US 495, 502-503, 96 L Ed 1098, 72 S Ct 777. And of all forms of
communication, it is broadcasting that has received the most limited
124 ADMIN LAW CASES 0901
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