G.R. No.

188056 January 8, 2013

SPOUSES AUGUSTO G. DACUDAO AND OFELIA R. DACUDAO, Petitioners,

vs.
SECRETARY OF JUSTICE RAUL M. GONZALES OF THE DEPARTMENT OF JUSTICE, Respondent.

DECISION

BERSAMIN, J.:

Petitioners - residents of Bacaca Road, Davao City - were among the investors whom Celso G. Delos
Angeles, Jr. and his associates in the Legacy Group of Companies (Legacy Group) allegedly defrauded
through the Legacy Group's "buy back agreement" that earned them check payments that were
dishonored. After their written demands for the return of their investments went unheeded, they initiated
a number of charges for syndicated estafa against Delos Angeles, Jr., et al. in the Office of the City
Prosecutor of Davao City on February 6, 2009. Three of the cases were docketed as NPS Docket No. XI-02-
INV.-09-A-00356, Docket No. XI-02-INV.-09-C-00752, and Docket No. XI-02-INV.-09-C-00753.1

On March 18, 2009, the Secretary of Justice issued Department of Justice (DOJ) Order No. 182 (DO No.
182), directing all Regional State Prosecutors, Provincial Prosecutors, and City Prosecutors to forward all
cases already filed against Delos Angeles, Jr., et al. to the Secretariat of the DOJ Special Panel in Manila
for appropriate action.

DO No. 182 reads:2

All cases against Celso G. delos Angeles, Jr., et al. under Legacy Group of Companies, may be filed with the
docket section of the National Prosecution Service, Department of Justice, Padre Faura, Manila and shall
be forwarded to the Secretariat of the Special Panel for assignment and distribution to panel members,
per Department Order No. 84 dated February 13, 2009.

However, cases already filed against Celso G. delos Angeles, Jr. et al. of Legacy group of Companies in your
respective offices with the exemption of the cases filed in Cagayan de Oro City which is covered by
Memorandum dated March 2, 2009, should be forwarded to the Secretariat of the Special Panel at Room
149, Department of Justice, Padre Faura, Manila, for proper disposition.

For information and guidance.

Pursuant to DO No. 182, the complaints of petitioners were forwarded by the Office of the City Prosecutor
of Davao City to the Secretariat of the Special Panel of the DOJ. 3

Aggrieved by such turn of events, petitioners have directly come to the Court via petition for certiorari,
prohibition and mandamus, ascribing to respondent Secretary of Justice grave abuse of discretion in
issuing DO No. 182. They claim that DO No. 182 violated their right to due process, their right to the equal
protection of the laws, and their right to the speedy disposition of cases. They insist that DO No. 182 was
an obstruction of justice and a violation of the rule against enactment of laws with retroactive effect.

Petitioners also challenge as unconstitutional the issuance of DOJ Memorandum dated March 2, 2009
exempting from the coverage of DO No. No. 182 all the cases for syndicated estafa already filed and
pending in the Office of the City Prosecutor of Cagayan de Oro City. They aver that DOJ Memorandum
dated March 2, 2009 violated their right to equal protection under the Constitution.
The Office of the Solicitor General (OSG), representing respondent Secretary of Justice, maintains the
validity of DO No. 182 and DOJ Memorandum dated March 2, 2009, and prays that the petition be
dismissed for its utter lack of merit.

Issues

The following issues are now to be resolved, to wit:

1. Did petitioners properly bring their petition for certiorari, prohibition and mandamus directly to the
Court?

2. Did respondent Secretary of Justice commit grave abuse of discretion in issuing DO No. 182?

3. Did DO No. 182 and DOJ Memorandum dated March 2, 2009 violate petitioners’ constitutionally
guaranteed rights?

Ruling

The petition for certiorari, prohibition and mandamus, being bereft of substance and merit, is dismissed.

Firstly, petitioners have unduly disregarded the hierarchy of courts by coming directly to the Court with
their petition for certiorari, prohibition and mandamus without tendering therein any special, important
or compelling reason to justify the direct filing of the petition.

We emphasize that the concurrence of jurisdiction among the Supreme Court, Court of Appeals and the
Regional Trial Courts to issue the writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus
and injunction did not give petitioners the unrestricted freedom of choice of court forum. 4 An undue
disregard of this policy against direct resort to the Court will cause the dismissal of the recourse. In Bañez,
Jr. v. Concepcion,5 we explained why, to wit:

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the
policy is not to be ignored without serious consequences. The strictness of the policy is designed to shield
the Court from having to deal with causes that are also well within the competence of the lower courts,
and thus leave time to the Court to deal with the more fundamental and more essential tasks that the
Constitution has assigned to it. The Court may act on petitions for the extraordinary writs of certiorari,
prohibition and mandamus only when absolutely necessary or when serious and important reasons exist
to justify an exception to the policy. This was why the Court stressed in Vergara, Sr. v. Suelto:

x x x. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the
functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not
be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the
so-called extraordinary writs should be exercised only where absolutely necessary or where serious and
important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions
or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies
whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance
of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it
is in either of these courts that the specific action for the writ’s procurement must be presented. This is
and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe.
(Emphasis supplied)
In People v. Cuaresma, the Court has also amplified the need for strict adherence to the policy of hierarchy
of courts. There, noting "a growing tendency on the part of litigants and lawyers to have their applications
for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated
directly and immediately by the highest tribunal of the land," the Court has cautioned lawyers and litigants
against taking a direct resort to the highest tribunal, viz:

x x x. This Court’s original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo
warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial
Courts x x x, which may issue the writ, enforceable in any part of their respective regions. It is also shared
by this Court, and by the Regional Trial Court, with the Court of Appeals x x x, although prior to the
effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the
extraordinary writs was restricted to those "in aid of its appellate jurisdiction." This concurrence of
jurisdiction is 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 application therefor will be directed. There is after
all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as
a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary
writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against
the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to
issue these writs should be allowed only when there are special and important reasons therefor, clearly
and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent
inordinate demands upon the Court’s time and attention which are better devoted to those matters
within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the
removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra— resulting from
the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended
precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary
writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had to
be filed with it.1âwphi1

xxxx

The Court therefore closes this decision with the declaration for the information and evidence of all
concerned, that it will not only continue to enforce the policy, but will require a more strict observance
thereof. (Emphasis supplied)

Accordingly, every litigant must remember that the Court is not the only judicial forum from which to seek
and obtain effective redress of their grievances. As a rule, the Court is a court of last resort, not a court of
the first instance. Hence, every litigant who brings the petitions for the extraordinary writs of certiorari,
prohibition and mandamus should ever be mindful of the policy on the hierarchy of courts, the observance
of which is explicitly defined and enjoined in Section 4 of Rule 65, Rules of Court, viz:

Section 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the
denial of the said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or
of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or
not the same is in the aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law
or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.

In election cases involving an act or an omission of a municipal or a regional trial court, the petition shall
be filed exclusively with the Commission on Elections, in aid of its appellate jurisdiction. 6

Secondly, even assuming arguendo that petitioners’ direct resort to the Court was permissible, the
petition must still be dismissed.

The writ of certiorari is available only when any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law.7 "The sole office of the writ of certiorari," according to Delos Santos
v. Metropolitan Bank and Trust Company:8

x x x is the correction of errors of jurisdiction, which includes the commission of grave abuse of discretion
amounting to lack of jurisdiction. In this regard, mere abuse of discretion is not enough to warrant the
issuance of the writ. The abuse of discretion must be grave, which means either that the judicial or quasi-
judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility,
or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the
duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising
judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction.

For a special civil action for certiorari to prosper, therefore, the following requisites must concur, namely:
(a) it must be directed against a tribunal, board or officer exercising judicial or quasi-judicial functions; (b)
the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction; and (c) there is no appeal nor any plain, speedy, and
adequate remedy in the ordinary course of law. 9 The burden of proof lies on petitioners to demonstrate
that the assailed order was issued without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction.

Yet, petitioners have not shown a compliance with the requisites. To start with, they merely alleged that
the Secretary of Justice had acted without or in excess of his jurisdiction. Also, the petition did not show
that the Secretary of Justice was an officer exercising judicial or quasi-judicial functions. Instead, the
Secretary of Justice would appear to be not exercising any judicial or quasi-judicial functions because his
questioned issuances were ostensibly intended to ensure his subordinates’ efficiency and economy in the
conduct of the preliminary investigation of all the cases involving the Legacy Group. The function involved
was purely executive or administrative.

The fact that the DOJ is the primary prosecution arm of the Government does not make it a quasi-judicial
office or agency. Its preliminary investigation of cases is not a quasi-judicial proceeding. Nor does the DOJ
exercise a quasi-judicial function when it reviews the findings of a public prosecutor on the finding of
probable cause in any case. Indeed, in Bautista v. Court of Appeals, 10 the Supreme Court has held that a
preliminary investigation is not a quasi-judicial proceeding, stating:

x x x the prosecutor in a preliminary investigation does not determine the guilt or innocence of the
accused. He does not exercise adjudication nor rule-making functions. Preliminary investigation is merely
inquisitorial, and is often the only means of discovering the persons who may be reasonably charged with
a crime and to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the
merits and has no purpose except that of determining whether a crime has been committed and whether
there is probable cause to believe that the accused is guilty thereof. While the fiscal makes that
determination, he cannot be said to be acting as a quasi-court, for it is the courts, ultimately, that pass
judgment on the accused, not the fiscal.11

There may be some decisions of the Court that have characterized the public prosecutor’s power to
conduct a preliminary investigation as quasi-judicial in nature. Still, this characterization is true only to the
extent that the public prosecutor, like a quasi-judicial body, is an officer of the executive department
exercising powers akin to those of a court of law.

But the limited similarity between the public prosecutor and a quasi-judicial body quickly endsthere. For
sure, a quasi-judicial body is an organ of government other than a court of law or a legislative office that
affects the rights of private parties through either adjudication or rule-making; it performs adjudicatory
functions, and its awards and adjudications determine the rights of the parties coming before it; its
decisions have the same effect as the judgments of a court of law. In contrast, that is not the effect
whenever a public prosecutor conducts a preliminary investigation to determine probable cause in order
to file a criminal information against a person properly charged with the offense, or whenever the
Secretary of Justice reviews the public prosecutor’s orders or resolutions.

Petitioners have self-styled their petition to be also for prohibition. However, we do not see how that can
be. They have not shown in their petition in what manner and at what point the Secretary of Justice, in
handing out the assailed issuances, acted without or in excess of his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction. On the other hand, we already indicated why the
issuances were not infirmed by any defect of jurisdiction. Hence, the blatant omissions of the petition
transgressed Section 2, Rule 65 of the Rules of Court, to wit:

Section 2. Petition for prohibition. — When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its
or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there
is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent to desist from further proceedings in
the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may
require.

The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (2a) Similarly,
the petition could not be one for mandamus, which is a remedy available only when "any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from
the use and enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court."12 The main objective of mandamus is to compel the performance of
a ministerial duty on the part of the respondent. Plainly enough, the writ of mandamus does not issue to
control or review the exercise of discretion or to compel a course of conduct, 13 which, it quickly seems to
us, was what petitioners would have the Secretary of Justice do in their favor. Consequently, their petition
has not indicated how and where the Secretary of Justice’s assailed issuances excluded them from the use
and enjoyment of a right or office to which they were unquestionably entitled.

Thirdly, there is no question that DO No. 182 enjoyed a strong presumption of its validity. In ABAKADA
Guro Party List v. Purisima,14 the Court has extended the presumption of validity to legislative issuances
as well as to rules and regulations issued by administrative agencies, saying:

Administrative regulations enacted by administrative agencies to implement and interpret the law which
they are entrusted to enforce have the force of law and are entitled to respect. Such rules and regulations
partake of the nature of a statute and are just as binding as if they have been written in the statute itself.
As such, they have the force and effect of law and enjoy the presumption of constitutionality and legality
until they are set aside with finality in an appropriate case by a competent court. 15

DO No. 182 was issued pursuant to Department Order No. 84 that the Secretary of Justice had
promulgated to govern the performance of the mandate of the DOJ to "administer the criminal justice
system in accordance with the accepted processes thereof"16 as expressed in Republic Act No. 10071
(Prosecution Service Act of 2010) and Section 3, Chapter I, Title III and Section 1, Chapter I, Title III of Book
IV of Executive Order 292 (Administrative Code of 1987).

To overcome this strong presumption of validity of the questioned issuances, it became incumbent upon
petitioners to prove their unconstitutionality and invalidity, either by showing that the Administrative
Code of 1987 did not authorize the Secretary of Justice to issue DO No. 182, or by demonstrating that DO
No. 182 exceeded the bounds of the Administrative Code of 1987 and other pertinent laws. They did not
do so. They must further show that the performance of the DOJ’s functions under the Administrative Code
of 1987 and other pertinent laws did not call for the impositions laid down by the assailed issuances. That
was not true here, for DO No 182 did not deprive petitioners in any degree of their right to seek redress
for the alleged wrong done against them by the Legacy Group. Instead, the issuances were designed to
assist petitioners and others like them expedite the prosecution, if warranted under the law, of all those
responsible for the wrong through the creation of the special panel of state prosecutors and prosecution
attorneys in order to conduct a nationwide and comprehensive preliminary investigation and prosecution
of the cases. Thereby, the Secretary of Justice did not act arbitrarily or oppressively against petitioners.

Fourthly, petitioners attack the exemption from the consolidation decreed in DO No. 182 of the cases filed
or pending in the Office of the City Prosecutor of Cagayan de Oro City, claiming that the exemption
traversed the constitutional guaranty in their favor of the equal protection of law. 17

The exemption is covered by the assailed DOJ Memorandum dated March 2, 2009, to wit:

It has come to the attention of the undersigned that cases for syndicated estafa were filed with your office
against officers of the Legacy Group of Companies. Considering the distance of the place of complainants
therein to Manila, your Office is hereby exempted from the directive previously issued by the undersigned
requiring prosecution offices to forward the records of all cases involving Legacy Group of Companies to
the Task Force.

Anent the foregoing, you are hereby directed to conduct preliminary investigation of all cases involving
the Legacy Group of Companies filed in your office with dispatch and to file the corresponding
informations if evidence warrants and to prosecute the same in court.

Petitioners’ attack deserves no consideration. The equal protection clause of the Constitution does not
require the universal application of the laws to all persons or things without distinction; what it requires
is simply equality among equals as determined according to a valid classification.18 Hence, the Court has
affirmed that if a law neither burdens a fundamental right nor targets a suspect class, the classification
stands as long as it bears a rational relationship to some legitimate government end. 19

That is the situation here. In issuing the assailed DOJ Memorandum dated March 2, 2009, the Secretary
of Justice took into account the relative distance between Cagayan de Oro, where many complainants
against the Legacy Group resided, and Manila, where the preliminary investigations would be conducted
by the special panel. He also took into account that the cases had already been filed in the City
Prosecutor’s Office of Cagayan de Oro at the time he issued DO No. 182. Given the considerable number
of complainants residing in Cagayan de Oro City, the Secretary of Justice was fully justified in excluding
the cases commenced in Cagayan de Oro from the ambit of DO No. 182. The classification taken into
consideration by the Secretary of Justice was really valid. Resultantly, petitioners could not inquire into
the wisdom behind the exemption upon the ground that the non-application of the exemption to them
would cause them some inconvenience.

Fifthly, petitioners contend that DO No. 182 violated their right to the speedy disposition of cases
guaranteed by the Constitution. They posit that there would be considerable delay in the resolution of
their cases that would definitely be "a flagrant transgression of petitioners’ constitutional rights to speedy
disposition of their cases."20

We cannot favor their contention.

In The Ombudsman v. Jurado,21 the Court has clarified that although the Constitution guarantees the right
to the speedy disposition of cases, such speedy disposition is a flexible concept. To properly define that
concept, the facts and circumstances surrounding each case must be evaluated and taken into account.
There occurs a violation of the right to a speedy disposition of a case only when the proceedings are
attended by vexatious, capricious, and oppressive delays, or when unjustified postponements of the trial
are sought and secured, or when, without cause or justifiable motive, a long period of time is allowed to
elapse without the party having his case tried. 22 It is cogent to mention that a mere mathematical
reckoning of the time involved is not determinant of the concept. 23

The consolidation of the cases against Delos Angeles, Jr., et al. was ordered obviously to obtain
expeditious justice for the parties with the least cost and vexation to them. Inasmuch as the cases filed
involved similar or related questions to be dealt with during the preliminary investigation, the Secretary
of Justice rightly found the consolidation of the cases to be the most feasible means of promoting the
efficient use of public resources and of having a comprehensive investigation of the cases.
On the other hand, we do not ignore the possibility that there would be more cases reaching the DOJ in
addition to those already brought by petitioners and other parties. Yet, any delays in petitioners’ cases
occasioned by such other and subsequent cases should not warrant the invalidation of DO No. 182. The
Constitution prohibits only the delays that are unreasonable, arbitrary and oppressive, and tend to render
rights nugatory.24 In fine, we see neither undue delays, nor any violation of the right of petitioners to the
speedy disposition of their cases.

Sixthly, petitioners assert that the assailed issuances should cover only future cases against Delos Angeles,
Jr., et al., not those already being investigated. They maintain that DO No. 182 was issued in violation of
the prohibition against passing laws with retroactive effect.

Petitioners’ assertion is baseless.

As a general rule, laws shall have no retroactive effect. However, exceptions exist, and one such exception
concerns a law that is procedural in nature. The reason is that a remedial statute or a statute relating to
remedies or modes of procedure does not create new rights or take away vested rights but only operates
in furtherance of the remedy or the confirmation of already existing rights. 25 A statute or rule regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of its passage. All procedural laws are retroactive in that sense and to that extent. The retroactive
application is not violative of any right of a person who may feel adversely affected, for, verily, no vested
right generally attaches to or arises from procedural laws.

Finally, petitioners have averred but failed to establish that DO No. 182 constituted obstruction of justice.
This ground of the petition, being unsubstantiated, was unfounded.

Nonetheless, it is not amiss to reiterate that the authority of the Secretary of Justice to assume jurisdiction
over matters involving the investigation of crimes and the prosecution of offenders is fully sanctioned by
law. Towards that end, the Secretary of Justice exercises control and supervision over all the regional,
provincial, and city prosecutors of the country; has broad discretion in the discharge of the DOJ’s
functions; and administers the DOJ and its adjunct offices and agencies by promulgating rules and
regulations to carry out their objectives, policies and functions.

Consequently, unless and until the Secretary of Justice acts beyond the bounds of his authority, or
arbitrarily, or whimsically, or oppressively, any person or entity who may feel to be thereby aggrieved or
adversely affected should have no right to call for the invalidation or nullification of the rules and
regulations issued by, as well as other actions taken by the Secretary of Justice.

WHEREFORE, the Court DISMISSES the omnibus petition for certiorari, prohibition, and mandamus for lack
of merit.

Petitioners shall pay the costs of suit.

SO ORDERED.
G.R. No. 81385 February 21, 1989

EDUARDO B. OLAGUER AND CONRADO S. REYES in their official capacity as FISCAL AGENTS OF THE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioners,
vs.
THE REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 48, MANILA, PRESIDED BY
THE HONORABLE JUDGE DEMETRIO M. BATARIO, JR., M.B. OLIVARES, AUGUSTO VILLANUEVA,
ARACELLI LINSANGAN, LUISA LINSANGAN, ALEJANDRO MARAMAG, MANUEL SALAK, TURNITA
SORIANO, LINO SISON DOMINGO FLORES, MILAGROS HIZON and CARIDAD ORPIADA, respondents.

The Solicitor General for petitioners.

Delia L. Hermoso for private respondents.

GANCAYCO, J.:

The parameters of the jurisdiction of the ordinary courts in relation to the Securities and Exchange
Commission (SEC) and the Sandiganbayan are put into issue in this petition.

On December 17, 1987, private respondents filed a complaint for injunction and damages, with a prayer
for the issuance of a writ of preliminary injunction and/or temporary restraining order, in the Regional
Trial Court (RTC) of Manila against petitioners and Winston Marbella, Gaston Ortigas, Robeto Federis,
Manuel C. Villa-Real, Emanuel Soriano, Jack Arroyo and Benjamin Tulio.

The complaint alleges, among others, that private respondents are the only stockholders with the right to
vote of the Philippine Journalists, Inc. (PJI) Publisher of several daily periodicals such as Manila Journal,
People's Journal, etc. Sometime in 1977, PJI obtained from the Development Bank of the Philippines (DBP)
certain financing accommodations and as security thereof executed a first mortgage in favor of DBP on its
acts enumerated in a list attached to the mortgage. The PJI stockholders assigned to DBP the voting rights
over 67% of the total subscribed and outstanding voting shares of stock of the company held by them.
The DBP appointed said PJI stockholders as proxies to exercise its right to vote. Due to some financial
difficulty on its part, PJI requested for a restructuring of its loan obligation with certain conditions. The
request was granted by the DBP in a letter dated August 4, 1986. Due to the default on the part of the PJI
the DBP cancelled the proxies in favor of the assigning stockholders on September 30, 1986 and
designated as its proxies petitioner Eduardo Olaguer, Jose Mari Velez and Manuel de Leon. DBP scheduled
a special stockholders meeting for the purpose of electing a new set of directors.

It is also alleged in the complaint that before the special meeting, petitioner Olaguer asked private
respondent Rosario M. Barreto Olivares to assign qualifying shares not only to the three proxies of DBP
but also to two others to be chosen by him so as to enable the five of them to sit in the PJI board of
directors, and that, accordingly, they may be able to coordinate more effectively with DBP as regards the
early evaluation and approval of the request for another restructuring of the PJI loan. Thus respondent
Olivares assigned her shareholdings covered by Stock Certificate. No. 34 (which were at that time assigned
to DBP) to petitioner Olaguer, Marbella, Ortigas, Mari Velez and De Leon, at one share each. The deeds of
assignment provided that the said assignment are valid only as long as the nominee is the person
designated by the DBP as its representative to sit in the board of directors.
The complaint also alleges that although Olaguer was elected chairman of the board and chief executive
officer of PJI he failed to comply with his commitment and that this gave private respondents a reason to
cancel the assignment. Olaguer also committed certain illegal acts which gave rise to the filing of several
complaints against him. However, before these cases could be resolved, Olaguer's appointment as
member of the board of directors of DBP was terminated by President Corazon C. Aquino effective
September 9, 1987. He was informed about his termination through two letters dated August 27 and
October 12, 1987.

It is likewise alleged that, the termination notwithstanding, Olaguer continued to exercise and retain full
management and control of PJI The DBP chief legal counsel wrote to petitioner Reyes informing him of
Olaguer's removal from office and enjoining him from implementing or complying with any instructions
from Olaguer and from disposing of the properties of PJI and disbursing any funds without prior approval
of the board of directors of PJI which will soon be elected, except such amounts needed in the ordinary
course of business. Accordingly, the DBP, acting through its Chairman, Jesus Estanislao and its Director-
in-Charge, Jose Mari Velez, entered into an Interim Agreement with private respondents. The said
agreement called for a special stockholders meeting for the purpose of electing a new board of directors
which shall hold office until the next regular stockholders meeting to be held on February 2, 1988.

The complaint further alleges that in a letter dated December 14, 1987, the DBP chief legal counsel
informed the private respondents that the said Interim Agreement cannot be implemented because
Olaguer claims that he has just been designated the fiscal and team leader of the Presidential Commission
on Good Government (PCGG) assigned to the PJI and that all his actions are sanctioned and reported to
PCGG Chairman Ramon A. Diaz, and that it is the PCGG which exercises the voting rights of all PJI common
stocks sequestered since 1986, including those assigned to DBP and that the PJI qualifying share now held
by PJI Directors came from shares sequestered by the PCGG. These observations are contained in a letter
dated October 31, 1987 written by petitioner Reyes in his capacity as chief legal counsel and corporate
secretary of PJI It is stated therein that Olaguer, together with Marbella, Ortigas, Soriano, Federis, Arroyo
and Villa-Real have been acting as corporate officers and/or members of the board without their having
been elected by the majority vote of stockholders and without their owning in their own right even a
single qualifying share.

In addition, it is alleged that petitioner Reyes had been sending out notices to private respondents about
an alleged stockholders meeting to be held on December 21, 1987 at the PJI building, and that in the letter
written by the DBP chief legal counsel, 1 it is stated that petitioner Olaguer and his associates who claim
to be members of the board and corporate officers of PJI do not represent DBP and that they are not
authorized to act in its behalf.

The complaint emphasizes that the claim of petitioner Reyes that Olaguer can sit as chairman of the board
of directos of PJI even if he is no longer a director of DBP but as long as he is the fiscal agent and team
leader of the PCGG assigned is baseless because: (a) the writs of sequestration on the shares of
respondents Hizon, Orpiada, Maramag, Flores and Sison, served on them on or about February 19, 1987,
and on respondents Linsangan, Salak, Soriano and Villanueva, served on them on or about April 28, 1987,
bad been automatically lifted last August 19, 1987 and October 28, 1987, respectively, pursuant to Section
26, Article XVIII of the 1987 Constitution; and only the sequestration on the shares of respondent Olivares
has not been lifted since a complaint was filed against her before the expiration of the constitutional
deadline for filing cases; (b) the sequestered shares of respondent Olivares could not be voted upon by
petitioners herein and their companions under their claim of being PCGG fiscal agents under the recent
pronouncement of the Supreme Court in several cases clearly stating that sequestration does not involve
the right of ownership; (c) no other meeting has been validly called for the election of a new set of
directors after the members of the board elected last October 2, 1986 had ceased to be such directors,
either by virtue of the cancellation of their qualifying shares or their resignation; (d) with the filing of Civil
Case No. 35 before the Sandiganbayan where the PJI was listed as one of the involved corporations, all
actions affecting said corporation, including those which will affect rights of ownership and disposition of
assets, must have the prior approval of the Sandiganbayan which excercises jurisdiction over these
corporations as one of the properties in litigation; and (e) by order of President Aquino, petitioner
Olaguer's separation from the PJI was called for; that the acts of all the petitioners and their companions
of either continuing to sit in the board of directors of PJI and/or representing and acting as its corporate
officers are illegal and are the acts of usurpers and intruders violative of the rights of private respondents
as stockholders and are causing great damage and prejudice to them as well as to the rights of the DBP
under the Deed of Assignment, and that such acts of usurpation should be enjoined by the trial court.

Under the second cause of action for damages, it is alleged that Olaguer acted illegally and outside the
authority granted him as nominee of DBP and, accordingly, Olivares cancelled the Deed of Assignment of
one qualifying share to him as well as the Deed of Assignment in favor of Marbella and Ortigas. The notice
of cancellation was served upon them on December 5, 1986. As a consequence of such cancellation, the
three failed to qualify to sit as members of the board of PJI.

Private respondents also alleged that despite such notice, petitioner and his associates continued to sit in
the board and that Olaguer took over the complete management of the corporation and even caused the
appointment of other members of the board and/or corporate officers even if such appointees do not
own PJI shares of stock in their own right. It is likewise alleged that the petitioner and his associates should
be enjoined from committing further acts of usurpation and that they should be held liable for all unlawful
disbursements they have made. It is further alleged that some of the private respondents had been
unlawfully dismissed and/or retired one after another thereby depriving them of all benefits they are
entitled to and subjecting them to great mental anguish, sleepless nights, deep humiliation and great
anxiety for which they must be paid damages in an amount left to the sound discretion of the court.
Private respondents also asked for exemplary damages as well as the sum of P200,000.00 for attorney's
fees and expenses of litigation.

Private respondents prayed that pending a hearing on the merits of the case, a writ of preliminary
injunction or a temporary restraining order be issued against petitioner Reyes enjoining him from holding
the special stockholders meeting scheduled at 8:00 A.M. on December 21, 1987, and enjoining Olaguer
and his associates from sitting and acting as members of the board of directors of PJI or as corporate
officers. Private respondents also prayed that such temporary restraining order and/or writ of preliminary
injunction be made permanent after due hearing and that Petitioner Olaguer and his associates be made
to pay, jointly and severally, actual damages as may be proved after audit, including moral and exemplary
damages, attorney's fees and litigation expenses in the amount of P200,000.00, and the costs of the suit. 2

On December 18, 1987, an order was issued by the trial court setting the petition for the issuance of a
writ of preliminary injunction for bearing on January 4, 1988 at 1:30 in the afternoon. A temporary
restraining order was issued enjoining petitioner Reyes from holding the special stockholders meeting
scheduled for December 21, 1987 and enjoining all the other petitioners including Olaguer from sitting
and acting as members of the board and/or corporate officers of PJI until further orders of the court.

On January 4, 1988, a motion to dismiss was filed by the petitioners on the ground that the court has no
jurisdiction over the persons of petitioners; that they were not served summons and that the subject
matter of the action involves controversies arising out of intra-corporate relations between and among
stockholders which are covered by the provisions of Section 5 of Presidential Decree No. 902-A so that
the matter is within the original and exclusive jurisdiction of the Securities and Exchange Commission
(SEC); that the venue for a petition seeking injunctive relief should be the Sandiganbayan where aforesaid
PCGG Case No. 0035 against Benjamin Romualdez, Rosario Olivares, et al. is pending, pursuant to
Executive Order No. 14 defining the jurisdiction over cases involving the alleged ill-gotten wealth of
Former President Marcos, et al.; that it is the SEC which should exercise jurisdiction over the case pursuant
to Section 6 of Presidential Decree No. 902-A; and that the complaint states no cause of action inasmuch
as the petitioners and the other defendants hold shares emanating from the PCGG, and not from the DBP;
that the shares issued to DBP for Olivares, et al. on the basis of an erroneous DBP legal opinion have been
declared void ab initio and cancelled by the PCGG on November 4, 1987 so that the DBP is not a
stockholder of record; that the call for the stockholders meeting by petitioner Reyes was with the approval
of the PCGG Chairman; that PJI is a sequestered corporation listed as item No. 49 under "Shares of Stock"
in "Assets and Other Property of Benjamin Romualdez" marked Annex "A", in Case No. 0035 for
"Reconveyance, Reversion, Accounting, Restitution and Damages," entitled "Republic of the Philippines,
plaintiff versus Benjamin (Kokoy) Romualdez, et al.,"; that the PJI pursuant to its Board Resolution No. 43,
dated November 14, 1987, has authorized the filing of criminal complaints against Benjamin (Kokoy)
Romualdez, Rosario Olivares, Tuynita Soriano, Jose T. Abundo, Evelyn Nicasio, Alejandro Maramag,
Caridad Orpiada and other former and present PJI officers and employees who defrauded the company
by conspiring in and/or authorizing the illegal disbursements of PJI funds amounting to P 10.6 million, all
for the account and upon instructions of said Romualdez who was neither an officer, director, stockholder
of record of PJI nor a creditor or supplier thereof; that regarding the sequestration of PJI pursuant to
orders of the PCGG dated April 22, 1986 and February 19, 1987, the actual sequestration proceedings
have not been terminated upon the filing of PCGG Case No. 0035 before the Sandiganbayan on July 31,
1987.

Petitioners maintain that under the pertinent provisions of the 1987 Constitution, the commencement of
a judicial action does not ipso facto lift the sequestration order. It is the non-filing of a judicial action
within six months from the ratification of the 1987 Constitution if the sequestration order is issued before
the ratification, or within six months from the time sequestration order was issued if the same was issued
after such ratification, which will automatically lift the sequestration order. Petitioners also stated that
while the PJI suffered huge loses under the administration of private respondents, the corporation
realized profits under the management of petitioner Olaguer. All the common and preferred stocks of
private respondents have been sequestered pursuant to the orders of the PCGG dated April 22, 1986 and
February 19, 1987 and it is the PCGG which exercises the voting rights pertaining to said sequestered
shares pursuant to the Memorandum of President Aquino to the PCGG dated June 26, 1986.

A Memorandum in support of the prayer for the issuance of a writ of preliminary injunction and opposition
to the motion to dismiss was filed by counsel for private respondents.
On January 14, 1988, an order was issued by the trial court denying the motion to dismiss and issuing a
writ of preliminary injunction as prayed for upon a bond in the amount of P50,000.00 to be filed by private
respondents.

Hence, the herein petition for certiorari and prohibition with a prayer for the issuance of a temporary
restraining order and/ or a writ of preliminary injunction wherein the main issue is whether or not the
trial court has jurisdiction over the subject matter of the action.

On January 26, 1988, a resolution was issued by this Court requiring the respondents to comment therein
within ten (10) days from notice. A temporary restraining order was issued enjoining the respondent judge
to cease and desist from enforcing the order of the trial court dated January 14, 1988 in Civil Case No. 87-
43156 as well as the writ of preliminary injunction issued against petitioners.

Acting on the manifestation and motion filed by counsel for private respondents on February 4, 1988, this
Court issued a resolution enjoining petitioner Reyes and/or the corporate officers of PJI from holding
another special stockholders meeting on February 5, 1988 or at any date thereafter pending resolution of
this case, and directing the parties to maintain the status quo until further orders from the Court.

The private respondents filed their comment on the petition. Thereafter, the petitioners filed their reply.
On April 5, 1988, the court resolved to give due course to the petition and considered the case submitted
for decision. Nevertheless, the private respondents filed a rejoinder.

The petition is impressed with merit. There is no dispute that the PJI is now under sequestration by the
PCGG and that Civil Case No. 0035 was filed in the Sandiganbayan wherein the PJI is listed as among the
corporations involved in the unexplained wealth case against former President Marcos, Romualdez and
many others. The records likewise show that petitioner Olaguer, among others, is a fiscal agent of the
PCGG and that as Chairman of the Board of Directors of the PJI he was acting for and in behalf of the
PCGG. Under Section 2 of Executive Order No. 14, the Sandiganbayan has exclusive and original
jurisdiction over all cases regarding "the funds, moneys, assets and properties illegally acquired by Former
President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates,
business associates, dummies, agents, or nominees," 3 civil or criminal, including incidents arising from
such cases. The Decision of the Sandiganbayan is subject to review on certiorari exclusively by the
Supreme Court. 4

In the exercise of its functions, the PCGG is a co-equal body with the regional trial courts and co-equal
bodies have no power to control the other. 5 The regional trial courts and the Court of Appeals have no
jurisdiction over the PCGG in the exercise of its powers under the applicable Executive Orders and Section
26, Article XVIII of the 1987 Constitution and, therefore, may not interfere with and restrain or set aside
the orders and actions of the PCGG. 6 By the same token, the regional trial courts have no jurisdiction over
the acts of fiscal agents of the PCGG acting for and in behalf of said commission.

The Commission should not be embroiled in and swamped by legal suits before inferior courts all over the
land. Otherwise, the Commission will be forced to spend valuable time defending all its actuations in such
courts. This will defeat the very purpose behind the creation of the Commission. Accordingly, Section 4(a)
of Executive Order No. 1 expressly accorded the Commission and its members immunity from suit for
damages in that: "No civil action shall lie against the Commission or any member thereof for anything
done or omitted in the discharge of the task contemplated by this order."
Civil Case No. 87-43156 pending before the respondent judge is denominated as one for "injunction with
prayer for writ of preliminary injunction and/or temporary restraining order and damages." Particularly,
under paragraph 17(d) of the complaint, private respondents admitted that the PJI is listed as one of the
involved corporations in Civil Case No. 0035 pending before the Sandiganbayan which now exercises
jurisdiction over the said corporation. Petitioners Olaguer and Reyes appear to be fiscal agents of the
PCGG. There can be no doubt, therefore, that the subject matter of the action (the PJI its properties and
assets) falls within the exclusive jurisdiction of the Sandiganbayan.

Petitioners, as fiscal agents of the PCGG, cannot be sued in such capacity before the ordinary courts. The
tribunal for such purpose is the Sandiganbayan.

It necessarily follows that the issues raised by the private respondents before the respondent judge to the
effect that petitioners are usurpers and have no right to sit in the board of directors or act as corporate
officers of the PJI are issues which should be addressed to the Sandiganbayan.

WHEREFORE, the petition is GRANTED. The respondent judge is permanently enjoined from enforcing the
order of the trial court dated January 14, 1988. The restraining order issued by this Court dated February
4, 1988 enjoining petitioner Reyes and/or the corporate officers of the PJI from holding the special
stockholders meeting on February 5, 1988 or at any date thereafter, and to preserve and maintain
the status quo, is hereby lifted. The order of the trial court dated January 14, 1988 is hereby SET ASIDE
and another order is hereby issued dismissing the complaint, without pronouncement as to costs. This
Decision is immediately executory.

SO ORDERED.

[G.R. No. 141949. October 14, 2002.]

CEFERINO PADUA, Petitioner, v. HON. SANTIAGO RANADA, PRESIDING JUDGE OF MAKATI, RTC,
BRANCH 137, PHILIPPINE NATIONAL CONSTRUCTION CORP., TOLL REGULATORY BOARD,
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, and REPUBLIC OF THE PHILIPPINES, Respondents.

[G.R. No. 151108. October 14, 2002.]

EDUARDO C. ZIALCITA, Petitioner, v. TOLL REGULATORY BOARD AND CITRA METRO MANILA
TOLLWAYS CORPORATION, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

The focal point upon which these two consolidated cases converge is whether Resolution No. 2001-89
issued by the Toll Regulatory Board (TRB) is valid.
A brief narration of the factual backdrop is imperative, thus:
On November 9, 2001, the TRB issued Resolution No. 2001-89 authorizing provisional toll rate
adjustments at the Metro Manila Skyway, effective January 1, 2002, 1 thus:

"NOW THEREFORE, it is RESOLVED, as it is hereby RESOLVED:

1. That in view of urgent public interest, the Board hereby GRANTS to the Metro Manila Skyway Project,
Provisional Relief in accordance with Rule 10, Section 3 of the Rules of Practice and Procedure Governing
Hearing before the Toll Regulatory Board which states, among others "that the Board may grant
(provisional relief) . . . in its own initiative . . . without prejudice to the final decision after completion of
the hearing.
2. That the Provisional Relief shall be in form of an interim toll rate adjustment in accordance with Section
7.04(3) of the Supplemental Toll Operation Agreement, dated November 27, 1995, referring to Interim
Adjustments in Toll Rates upon the occurrence of a significant currency devaluation:

"Be APPROVED, as it is hereby APPROVED.

"RESOLVED FURTHER, as it is hereby RESOLVED:

"That the Provisional Toll Rates, which are not to exceed the following:

Section Unrounded Toll Rates for Implementation

Toll Rates CLASS 1 CLASS 2 CLASS 3

Elevated Portion 75.00 75.00 150.00 225.00

At-GradePortion

Magallanes to 19.35 19.50 38.50 58.00

Bicutan

Bicutan to Sucat 11.21 11.00 22.50 34.00

Sucat to Alabang 10.99 11.00 21.00 32.50

* includes C5 entry/exit and Merville exit.

"For implementation starting January 1, 2002 after its publication once a week for three (3) consecutive
weeks in a newspaper of general circulation and that said Provisional Toll Rate Increase shall remain in
effect until such time that the TRB Board has determined otherwise:

"Be APPROVED as it is hereby APPROVED.

"RESOLVED FURTHERMORE, as it is hereby RESOLVED that the Provisional Toll Rates be implemented in
two (2) stages in accordance with the following schedule:

Section Unrounded Toll Toll Rates for Implementation

Rates as For Class 1 as Reference

Maximum for JANUARY 1, JULY 1, 2002,

One (1) Year 2002 to to DECEMBER

JUNE 30, 2002 31 2002

Elevated Portion 75.00 65.00 75.00

At-Grade Portion

Magallanes to 19.35 15.00 20.00

Bicutan

Bicutan to Sucat 11.21 9.00 11.00

Sucat to Alabang 10.99 9.00 11.00

"PROVIDED that the recovery of the sum from the interim rate adjustment shall be applied starting the
year 2003.

"APPROVED as it is hereby APPROVED."

On December 17, 24 and 31, 2001, the above Resolution approving provisional toll rate adjustments was
published in the newspapers of general circulation. 2

Tracing back the events that led to the issuance of the said Resolution, it appears that on February 27,
2001 the Citra Metro Manila Tollways Corporation (CITRA) filed with the TRB an application for an interim
adjustment of the toll rates at the Metro Manila Skyway Project — Stage 1. 3 CITRA moored its petition
on the provisions of the "Supplemental Toll Operation Agreement" (STOA), 4 authorizing it, as the
investor, to apply for and if warranted, to be granted an interim adjustment of toll rates in the event of a
"significant currency devaluation." The relevant portions of the STOA read:

a. The Investor and/or the Operator shall be entitled to apply for and if warranted, to be granted an
interim adjustment of Toll Rates upon the occurrence of any of the following events:
x x x

(ii) a significant currency devaluation

x x x

(i) A currency devaluation shall be deemed "significant" if it results in a depreciation of the value of the
Philippine peso relative to the US dollar by at least 10%. For purposes hereof the exchange rate between
the Philippine peso and the US dollar which shall be applicable shall be the exchange rate between the
above mentioned currencies in effect as of the date of approval of the prevailing preceding Toll Rate.

(ii) The Investor’s right to apply for an interim Toll Rate adjustment under section 7.04 (3) (a) (ii) shall be
effective only while any Financing is outstanding and have not yet been paid in full.

x x x

(iv) An interim adjustment in Toll Rate shall be considered such amount as may be required to provide
interim relief to the Investor from a substantial increase in debt-service burden resulting from the
devaluation."

Claiming that the peso exchange rate to a U.S. dollar had devaluated from P26.1671 in 1995 to P48.00 in
2000, CITRA alleged that there was a compelling need for the increase of the toll rates to meet the loan
obligations of the Project and the substantial increase in debt-service burden.

Due to heavy opposition, CITRA’s petition remained unresolved. This prompted CITRA to file on October
9, 2001 an "Urgent Motion for Provisional Approval," 6 this time, invoking Section 3, Rule 10 of the "Rules
of Practice and Procedure Governing Hearing Before the Toll Regulatory Board" (TRB Rules of Procedure)
which provides:

"SECTION 3. Provisional Relief. — Upon the filing of an application or petition for the approval of the initial
toll rate or toll rate adjustment, or at any stage, thereafter, the Board may grant on motion of the pleader
or in its own initiative, the relief prayed for without prejudice to a final decision after completion of the
hearing should the Board find that the pleading, together with the affidavits and supporting documents
attached thereto and such additional evidence as may have been requested and presented, substantially
support the provisional order; Provided: That the Board may, motu proprio, continue to issue orders or
grant relief in the exercise of its powers of general supervision under existing laws. Provided: Finally, that
pending finality of the decision, the Board may require the Petitioner to deposit in whole or in part in
escrow the provisionally approved adjustment or initial toll rates." (Emphasis supplied)

On October 30, 2001, CITRA moved to withdraw 7 its "Urgent Motion for Provisional Approval" without
prejudice to its right to seek or be granted provisional relief under the above-quoted provisions of the TRB
Rules of Procedure, obviously, referring to the power of the Board to act on its own initiative.

On November 7, 2001, CITRA wrote a letter 8 to TRB expressing its concern over the undue delay in the
proceeding, stressing that any further setback would bring the Project’s financial condition, as well as the
Philippine banking system, to a total collapse. CITRA recounted that out of the US$354 million funding
from creditors, two-thirds (2/3) thereof came from the Philippine banks and financial institutions, such as
the Landbank of the Philippines and the Government Service Insurance Services. Thus, CITRA requested
TRB to find a timely solution to its predicament.

On November 9, 2001, TRB granted CITRA’s motion to withdraw 9 the Urgent Motion for Provisional
Approval and, at the same time, issued Resolution No. 2001-89, 10 earlier quoted.

Hence, petitioners Ceferino Padua and Eduardo Zialcita assail before this Court the validity and legality of
TRB Resolution No. 2001-89.

Petitioner Ceferino Padua, as a toll payer, filed an "Urgent Motion for a Temporary Restraining Order to
Stop Arbitrary Toll Fee Increases" 11 in G.R. No. 141949, 12 a petition for mandamus earlier filed by him.
In that petition, Padua seeks to compel respondent Judge Santiago Ranada of the Regional Trial Court,
Branch 137, Makati City, to issue a writ of execution for the enforcement of the Court of Appeals’ Decision
dated August 4, 1989 in CA-G.R. SP No. 13235. In its Decision, the Court of Appeals ordered the exclusion
of certain portions of the expressways (from Villamor Air Base to Alabang in the South, and from
Balintawak to Tabang in the North) from the franchise of the PNCC.

In his urgent motion, petitioner Padua claims that: (1) Resolution No. 2001-89 was issued without the
required publication and in violation of due process; (2) alone, TRB Executive Director Jaime S. Dumlao,
Jr., could not authorize the provisional toll rate adjustments because the TRB is a collegial body; and (3)
CITRA has no standing to apply for a toll fee increase since it is an "investor" and not a "franchisee-
operator.

On January 4, 2002, petitioner Padua filed a "Supplemental Urgent Motion for a TRO against Toll Fee
Increases," 13 arguing further that: (1) Resolution 2001-89 refers exclusively to the Metro Manila Skyway
Project, hence, there is no legal basis for the imposition of the increased rate at the at-grade portions; (2)
Resolution No. 2001-89 was issued without basis considering that while it was signed by three (3) of the
five members of the TRB, none of them actually attended the hearing; and 3) the computation of the rate
adjustment under the STOA is inconsistent with the rate adjustment formula under Presidential Decree
No. 1894.

On January 10, 2002, the Office of the Solicitor General (OSG) filed, in behalf of public respondent TRB,
Philippine National Construction Corporation (PNCC), Department of Public Works and Highways (DPWH)
and Judge Ranada, a "Consolidated Comment" 15 contending that: (1) the TRB has the exclusive
jurisdiction over all matters relating to toll rates; (2) Resolution No. 2001-89 covers both the Skyway and
the at-grade level of the South Luzon Expressway as provided under the STOA; (3) that while Resolution
No. 2001-89 does not mention any factual basis to justify its issuance, however, it does not mean that
TRB’s finding of facts is not supported by evidence; and (4) petitioner Padua cannot assail the validity of
the STOA because he is not a party thereto.
Upon the other hand, on January 9, 2002, petitioner Eduardo Zialcita, as a taxpayer and as Congressman
of Parañaque City, filed the present petition for prohibition 16 with prayer for a temporary restraining
order and/or writ of preliminary injunction against TRB and CITRA, docketed as G.R. No. 151108,
impugning the same Resolution No. 2001-89.
Petitioner Zialcita asserts that the provisional toll rate adjustments are exorbitant and that the TRB
violated its own Charter, Presidential Decree No. 1112, 17 when it promulgated Resolution No. 2001-89
without the benefit of any public hearing. He also maintains that the TRB violated the Constitution when
it did not express clearly and distinctly the facts and the law on which Resolution No. 2001-89 was based.
And lastly, he claims that Section 3, Rule 10 of the TRB Rules of Procedure is not sanctioned by P.D. No.
1112.

Private respondent CITRA, in its comment 18 on Congressman Zialcita’s petition, counters that: (1) the
TRB has primary administrative jurisdiction over all matters relating to toll rates; (2) prohibition is an
inappropriate remedy because its function is to restrain acts about to be done and not acts already
accomplished; (3) Resolution No. 2001-89 was issued in accordance with law; (4) Section 3, Rule 10 of the
TRB Rules is constitutional; and (5) private respondent and the Republic of the Philippines would suffer
more irreparable damages than petitioner.

The TRB, through the OSG, filed a separate comment 19 reiterating the same arguments raised by private
respondent CITRA.

On January 11, 2002, this Court resolved to consolidate the instant petitions, G.R. No. 141949 and G.R.
No. 151108. 20

We rule for the respondents.

In assailing Resolution No. 2001-89, petitioners came to us via two unconventional remedies — one is an
urgent motion for a TRO to stop arbitrary toll fee increases; and the other is a petition for prohibition.
Unfortunately, both are procedurally impermissible.

I
Petitioner Padua’s motion is a leap to a legal contest of different dimension. As previously stated, G.R. No.
141949 is a petition for mandamus seeking to compel respondent Judge Ranada to issue a writ of
execution for the enforcement of the Court of Appeal’s Decision dated August 4, 1989 in CA-G.R. SP No.
13235. The issue therein is whether the application for a writ of execution should be by a mere motion or
by an action for revival of judgment. Thus, for petitioner Padua to suddenly interject in the same petition
the issue of whether Resolution No. 2001-89 is valid is to drag this Court to his web of legal convolution.
Courts cannot, as a case progresses, resolve the intrinsic merit of every issue that comes along its way,
particularly those which bear no relevance to the resolution of the case.

Certainly, petitioner Padua’s recourse in challenging the validity of TRB Resolution No. 2001-89 should
have been to institute an action, separate and independent from G.R. No. 141949.

II
The remedy of prohibition initiated by petitioner Zialcita in G.R. No. 151108 also suffers several infirmities.
Initially, it violates the twin doctrine of primary administrative jurisdiction and non-exhaustion of
administrative remedies.

P.D. No. 1112 explicitly provides that "the decisions of the TRB on petitions for the increase of toll rate
shall be appealable to the Office of the President within ten (10) days from the promulgation thereof." 21
P.D. No. 1894 reiterates this instruction and further provides:
"SECTION 9. The GRANTEE shall have the right and authority to adjust any existing toll being charged the
users of the Expressways under the following guidelines:chanrob1es virtual 1aw library

x x x

c) Any interested Expressways user shall have the right to file, within a period of ninety (90) days after the
date of publication of the adjusted toll rate(s), a petition with the Toll Regulatory Board for a review of
the adjusted toll rate(s); provided, however, that notwithstanding the filing of such petition and the
pendency of the resolution thereof, the adjusted toll shall be enforceable and collectible by the GRANTEE
effective on the first day of January in accordance with the immediately preceding paragraph.

x x x

e) Decisions of the Toll Regulatory Board on petitions for review of adjusted toll shall be appealable to the
Office of the President within ten (10) days from the promulgation thereof.
These same provisions are incorporated in the TRB Rules of Procedure, particularly in Section 6, Rule 5
and Section 1, Rule 12 thereof.

Obviously, the laws and the TRB Rules of Procedure have provided the remedies of an interested
Expressways user. 23 The initial proper recourse is to file a petition for review of the adjusted toll rates
with the TRB. The need for a prior resort to this body is with reason. The TRB, as the agency assigned to
supervise the collection of toll fees and the operation of toll facilities, has the necessary expertise, training
and skills to judiciously decide matters of this kind. As may be gleaned from the petition, the main thrust
of petitioner Zialcita’s argument is that the provisional toll rate adjustments are exorbitant, oppressive,
onerous and unconscionable. This is obviously a question of fact requiring knowledge of the formula used
and the factors considered in determining the assailed rates. Definitely, this task is within the province of
the TRB.

We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative jurisdiction
and exhaustion of administrative remedies. In this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge, experience and capability to hear and
determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review
in case of grave abuse of discretion, is indispensable. Between the power lodged in an administrative body
and a court, the unmistakable trend is to refer it to the former." 24 In Industrial Enterprises, Inc. v. Court
of Appeals, 25 we ruled:

". . ., if the case is such that its determination requires the expertise, specialized skills and knowledge of
the proper administrative bodies because technical matters or intricate questions of facts are involved,
then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the
courts even though the matter is within the proper jurisdiction of a court.
Moreover, petitioner Zialcita’s resort to prohibition is intrinsically inappropriate. It bears stressing that
the office of this remedy is not to correct errors of judgment but to prevent or restrain usurpation of
jurisdiction or authority by inferior tribunals and to compel them to observe the limitation of their
jurisdictions. G.R. No. 151108, while designated as a petition for prohibition, has for its object the setting
aside of Resolution No. 2001-89 on the ground that it was issued without prior notice, hearing and
publication and that the provisional toll rate adjustments are exorbitant. This is not the proper subject of
prohibition because as long as the inferior court, tribunal or board has jurisdiction over the person and
subject matter of the controversy, the writ will not lie to correct errors and irregularities in procedure, or
to prevent an erroneous decision or an enforcement of an erroneous judgment. And even in cases of
encroachment, usurpation, and improper assumption of jurisdiction, the writ will not issue where an
adequate and applicable remedy by appeal, writ or error, certiorari, or other prescribed methods of
review are available. 26 In this case, petitioner Zialcita should have sought a review of the assailed
Resolution before the TRB.

III
Even granting that petitioners’ recourse to the instant remedies is in order, still, we cannot rule in their
favor.
For one, it is not true that the provisional toll rate adjustments were not published prior to its
implementation on January 1, 2002. Records show that they were published on December 17, 24 and 31,
2001 27 in three newspapers of general circulation, particularly the Philippine Star, Philippine Daily
Inquirer and The Manila Bulletin. Surely, such publications sufficiently complied with Section 5 of P.D. No.
1112 which mandates that "no new rates shall be collected unless published in a newspaper of general
publication at least once a week for three consecutive weeks." At any rate, it must be pointed out that
under Letter of Instruction No. 1334-A, 28 the TRB may grant and issue ex parte to any petitioner, without
need of notice, publication or hearing, provisional authority to collect, pending hearing and decision on
the merits of the petition, the increase in rates prayed for or such lesser amount as the TRB may in its
discretion provisionally grant. That LOI No. 1334-A has the force and effect of law finds support in a catena
of cases decreeing that "all proclamations, orders, decrees, instructions, and acts promulgated, issued, or
done by the former President (Ferdinand E. Marcos) are part of the law of the land, and shall remain valid,
legal, binding, and effective, unless modified, revoked or superseded by subsequent proclamations,
orders, decrees, instructions, or other acts of the President." 29 In Association of Small Landowners in the
Philippines, Inc. v. Secretary of Agrarian Reform, 30 this Court held:

"The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could
not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is
that it was issued by President Marcos, whose word was law during that time." (Emphasis supplied)

For another, it is not true that it was TRB Executive Director Dumlao, Jr. alone who issued Resolution No.
2001-89. The Resolution itself contains the signature of the four TRB Directors, namely, Simeon A.
Datumanong, Emmanuel P. Bonoan, Ruben S. Reinoso, Jr. and Mario K. Espinosa. 31 Petitioner Padua
would argue that while these Directors signed the Resolution, none of them personally attended the
hearing. This argument is misplaced. Under our jurisprudence, an administrative agency may employ
other persons, such as a hearing officer, examiner or investigator, to receive evidence, conduct hearing
and make reports, on the basis of which the agency shall render its decision. Such a procedure is practical
necessity." 32 Thus, in Mollaneda v. Umacob, 33 we ruled:

". . . At any rate, it cannot be gainsaid that the term "administrative body or agency" Includes the
subordinate officials upon whose hand the body or agency delegates a portion of its authority. Included
therein are the hearing officers through whose eyes and ears the administrative body or agency observes
the demeanor, conduct and attitude of the witnesses and listens to their testimonies.

"It must be emphasized that the appointment of competent officers to hear and receive evidence is
commonly resorted to by administrative bodies or agencies in the interest of an orderly and efficient
disposition of administrative cases. . .

". . . Corollarily, in a catena of cases, this Court laid down the cardinal requirements of due process in
administrative proceedings, one of which is that "the tribunal or body or any of its judges must act on its
or his own independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate." Thus, it is logical to say that this mandate was rendered precisely to ensure that
in cases where the hearing or reception of evidence is assigned to a subordinate, the body or agency shall
not merely rely on his recommendation but instead shall personally weigh and assess the evidence which
the said subordinate has gathered.

Be that as it may, we must stress that the TRB’s authority to grant provisional toll rate adjustments does
not require the conduct of a hearing. Pertinent laws and jurisprudence support this conclusion.

It may be recalled that Former President Ferdinand E. Marcos promulgated P.D. No. 1112 creating the
TRB on March 31, 1977. The end in view was to authorize the collection of toll fees for the use of certain
public improvements in order to attract private sector investment in the government infrastructure
projects. The TRB was tasked to supervise the collection of toll fees and the operation of toll facilities. One
of its powers is to "issue, modify and promulgate from time to time the rates of toll that will be charged
the direct users of toll facilities and upon notice and hearing, to approve or disapprove petitions for the
increase thereof."

To clarify the intent of P.D. No. 1112 as to the extent of the TRB’s power, 35 Former President Marcos
further issued LOI No. 1334-A expressly allowing the TRB to grant ex parte provisional or temporary
increase in toll rates, thus:
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of
the powers vested in me by the Constitution, do hereby direct, order and instruct the Toll Regulatory
Board to grant and issue ex-parte to any petitioner, without need of notice, publication or hearing,
provisional authority to collect, pending hearing of and decision on the merits of such petition, the
increase in rates prayed for or such lesser amount as the Board may in its discretion provisionally grant,
upon (a) a finding that the said petition is sufficient in form and substance, (b) the submission of an
affidavit by the petitioner showing that the increase in rates substantially conforms to the formula, if any
stipulated in the franchise or toll operation agreement/certificate of the petitioner and that failure to
immediately impose and collect the increase in rates would result in outright delay or stoppage of urgently
needed improvements, expansion or repairs of toll facilities and/or in great irreparable injury to the
petitioner, and (c) the submission by the petitioner to the Board of a bond, in such amount and from such
surety or sureties and under such terms and conditions as the Board shall fix, to guarantee the refund of
the increase in rates to the affected toll payers in case it is finally determined, after notice and hearing,
that the petitioner is not entitled, in whole or in part, to the same. Any provisional toll rate increases shall
be effective immediately upon approval without need of publication.

Thereafter, the TRB promulgated as part of its Rules of Procedure, the following provision:

"RULE 5

PROCEDURE FOR APPROVAL OF TOLL RATE

"Section 2. Provisional Relief — Upon initial findings of the Board that the Petition for the approval of
initial toll rate or the petition for toll rate adjustment is in accordance with Sections 1 and 2 of Rule 2,
Section 2 of Rule 3 and Section 1 of Rule 4 hereof, the Board within a reasonable time after the filing of
the Petition, may in an en banc decision provisionally approve the initial toll rate or toll rate adjustment,
without the necessity of any notice and hearing.

From the foregoing, it is clear that a hearing is not necessary for the grant of provisional toll rate
adjustment. The language of LOI No. 1334-A is not susceptible of equivocation. It "directs, orders and
instructs" the TRB to issue provisional toll rates adjustment ex parte without the need of notice, hearing
and publication. All that is necessary is that it be issued upon (1) a finding that the main petition is
sufficient in form and substance; (2) the submission of an affidavit showing that the increase in rates
substantially conforms to the formula, if any is stipulated in the franchise or toll operation agreement,
and that failure to immediately impose and collect the increase in rates would result in great irreparable
injury to the petitioner; and (3) the submission of a bond. Again, whether or not CITRA complied with
these requirements is an issue that must be addressed to the TRB.

The practice is not something peculiar. We have ruled in a number of cases that an administrative agency
may be empowered to approve provisionally, when demanded by urgent public need, rates of public
utilities without a hearing. The reason is easily discerned from the fact that provisional rates are by their
nature temporary and subject to adjustment in conformity with the definitive rates approved after final
hearing. 36 In Maceda v. Energy Regulatory Board, 37 we ruled that while the ERB is not precluded from
conducting a hearing on the grant of provisional authority — which is of course, the better procedure —
however, it can not be stigmatized if it failed to conduct one. Citing Citizens’ Alliance for Consumer
Protection v. Energy Regulatory Board, 38 this Court held:

In the light of Section 8 quoted above, public respondent Board need not even have conducted formal
hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of
prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by
private respondents, could have issued an order granting provisional relief immediately upon filing by
private respondents of their respective applications. In this respect, the Court considers the evidence
presented by private respondents in support of their applications — i.e., evidence showing that
importation costs of petroleum products had gone up; that the peso had depreciated in value; and that
the Oil Price Stabilization Fund (OPSF) had been depleted — as substantial and hence constitutive of at
least prima facie basis for issuance by the Board of a provisional relief order granting an increase in the
prices of petroleum products.

Anent petitioner Padua’s contention that CITRA has no standing to apply for a toll fee increase, suffice it
to say that CITRA’s right stems from the STOA which was entered into by no less than the Republic of the
Philippines and by the PNCC. Section 7.04 of the STOA provides that the Investor, CITRA, and/or the
Operator, PNCC, shall be entitled to apply for and if warranted, to be granted an interim adjustment of
toll rates in case of force majeure and a significant currency valuation. 39 Now, unless set aside through
proper action, the STOA has the force and effect of law between the contracting parties, and is entitled
to recognition by this Court. 40 On the same breath, we cannot sustain Padua’s contention that the term
"Metro Manila Skyway" Project excludes the at-grade portions of the South Luzon Expressway considering
that under the same STOA the "Metro Manila Skyway" includes:" (a) the South Metro Manila Skyway,
coupled with the rehabilitated at grade portion of the South Luzon Expressway, from Alabang to Quirino
Avenue; (b) the Central Metro Manila Skyway, from Quirino Avenue to A. Bonifacio Avenue; . . . ." 41

Petitioner Zialcita faults the TRB for not stating the facts and the law on which Resolution No. 2001-89 is
based. Petitioner is wrong. Suffice it to state that while Section 14, Article VIII of the 1987 Constitution
provides that "no decision shall be rendered by any court without expressing therein clearly and distinctly
the facts and the law on which it is based," this rule applies only to a decision of a court of justice, not
TRB.
At this point, let it be stressed that we are not passing upon the reasonableness of the provisional toll rate
adjustments. As we have earlier mentioned, this matter is best addressed to the TRB.

IV
In fine, as what we intimated in Philippine National Construction Corp. v. Court of Appeals, 43 we
commend petitioners for devoting their time and effort on a matter so imbued with public interest as in
this case. But we can do no better than to brush aside their chief objections to the provisional toll rate
adjustments, for a different approach would lead this Court astray into the field of factual conflict where
its pronouncements would not rest on solid grounds. Time and again, we have impressed that this Court
is not a trier of facts, more so, in the consideration of an extraordinary remedy of prohibition where only
questions of lack or excess of jurisdiction or grave abuse of discretion is to be entertained.
And to accord the main petition for mandamus in G.R. No. 141949 the full deliberation it deserves, we
deem it appropriate to discuss its merit on another occasion. Anyway, G.R. No. 141949 was consolidated
with G.R. No. 151108 only by reason of petitioner Padua’s deviant motion assailing Resolution 2001-89.
As we have previously said, the main petition in G.R. No. 141949 presents an entirely different issue and
is set on a different factual landscape.

WHEREFORE, petitioner Padua’s "Urgent Motion for Temporary Restraining Order to Stop Arbitrary Toll
Fee Increases" is DENIED and petitioner Zialcita’s "Petition for Prohibition" is DISMISSED.

SO ORDERED.
G.R. No. 164785 April 29, 2009

ELISEO F. SORIANO, Petitioner,

vs.
MA. CONSOLIZA P. LAGUARDIA, in her capacity as Chairperson of the Movie and Television Review and
Classification Board, MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, JESSIE L. GALAPON,
ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO, BERNABE S.
YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A. GAVINO, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 165636 April 29, 2009

ELISEO F. SORIANO Petitioner,

vs.
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, ZOSIMO G. ALEGRE, JACKIE AQUINO-
GAVINO, NOEL R. DEL PRADO, EMMANUEL BORLAZA, JOSE E. ROMERO IV, and FLORIMONDO C. ROUS,
in their capacity as members of the Hearing and Adjudication Committee of the MTRCB, JESSIE L.
GALAPON, ANABEL M. DELA CRUZ, MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO,
BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A. GAVINO, in their capacity as
complainants before the MTRCB Respondents.

DECISION

VELASCO, JR., J.:

In these two petitions for certiorari and prohibition under Rule 65, petitioner Eliseo F. Soriano seeks to
nullify and set aside an order and a decision of the Movie and Television Review and Classification Board
(MTRCB) in connection with certain utterances he made in his television show, Ang Dating Daan.

Facts of the Case

On August 10, 2004, at around 10:00 p.m., petitioner, as host of the program Ang Dating Daan, aired on
UNTV 37, made the following remarks:

Lehitimong anak ng demonyo; sinungaling;

Gago ka talaga Michael, masahol ka pa sa putang babae o di ba. Yung putang babae ang gumagana lang
doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba! O, masahol pa sa putang babae
yan. Sabi ng lola ko masahol pa sa putang babae yan. Sobra ang kasinungalingan ng mga demonyong
ito.1 x x x

Two days after, before the MTRCB, separate but almost identical affidavit-complaints were lodged by
Jessie L. Galapon and seven other private respondents, all members of the Iglesia ni Cristo (INC), 2 against
petitioner in connection with the above broadcast. Respondent Michael M. Sandoval, who felt directly
alluded to in petitioner’s remark, was then a minister of INC and a regular host of the TV program Ang
Tamang Daan.3 Forthwith, the MTRCB sent petitioner a notice of the hearing on August 16, 2004 in
relation to the alleged use of some cuss words in the August 10, 2004 episode of Ang Dating Daan. 4
After a preliminary conference in which petitioner appeared, the MTRCB, by Order of August 16, 2004,
preventively suspended the showing of Ang Dating Daan program for 20 days, in accordance with Section
3(d) of Presidential Decree No. (PD) 1986, creating the MTRCB, in relation to Sec. 3, Chapter XIII of the
2004 Implementing Rules and Regulations (IRR) of PD 1986 and Sec. 7, Rule VII of the MTRCB Rules of
Procedure.5 The same order also set the case for preliminary investigation.

The following day, petitioner sought reconsideration of the preventive suspension order, praying that
Chairperson Consoliza P. Laguardia and two other members of the adjudication board recuse themselves
from hearing the case.6 Two days after, however, petitioner sought to withdraw7 his motion for
reconsideration, followed by the filing with this Court of a petition for certiorari and
prohibition,8 docketed as G.R. No. 164785, to nullify the preventive suspension order thus issued.

On September 27, 2004, in Adm. Case No. 01-04, the MTRCB issued a decision, disposing as follows:

WHEREFORE, in view of all the foregoing, a Decision is hereby rendered, finding respondent Soriano liable
for his utterances and thereby imposing on him a penalty of three (3) months suspension from his
program, "Ang Dating Daan".

Co-respondents Joselito Mallari, Luzviminda Cruz and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.

SO ORDERED.9

Petitioner then filed this petition for certiorari and prohibition with prayer for injunctive relief, docketed
as G.R. No. 165636.

In a Resolution dated April 4, 2005, the Court consolidated G.R. No. 164785 with G.R. No. 165636.

In G.R. No. 164785, petitioner raises the following issues:

THE ORDER OF PREVENTIVE SUSPENSION PROMULGATED BY RESPONDENT [MTRCB] DATED 16 AUGUST

2004 AGAINST THE TELEVISION PROGRAM ANG DATING DAAN x x x IS NULL AND VOID FOR BEING ISSUED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION

(A) BY REASON THAT THE [IRR] IS INVALID INSOFAR AS IT PROVIDES FOR THE ISSUANCE OF PREVENTIVE
SUSPENSION ORDERS;

(B) BY REASON OF LACK OF DUE HEARING IN THE CASE AT BENCH;

(C) FOR BEING VIOLATIVE OF EQUAL PROTECTION UNDER THE LAW;

(D) FOR BEING VIOLATIVE OF FREEDOM OF RELIGION; AND

(E) FOR BEING VIOLATIVE OF FREEDOM OF SPEECH AND EXPRESSION.10

In G.R. No. 165636, petitioner relies on the following grounds:

SECTION 3(C) OF [PD] 1986, IS PATENTLY UNCONSTITUTIONAL AND ENACTED WITHOUT OR IN EXCESS OF
JURISDICTION x x x CONSIDERING THAT:

I
SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER, UNDULY INFRINGES ON THE CONSTITUTIONAL
GUARANTEE OF FREEDOM OF RELIGION, SPEECH, AND EXPRESSION AS IT PARTAKES OF THE NATURE OF
A SUBSEQUENT PUNISHMENT CURTAILING THE SAME; CONSEQUENTLY, THE IMPLEMENTING RULES AND
REGULATIONS, RULES OF PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB PURSUANT THERETO, I.E.
DECISION DATED 27 SEPTEMBER 2004 AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE
CONSTITUTIONALLY INFIRM AS APPLIED IN THE CASE AT BENCH;

II

SECTION 3(C) OF [PD] 1986, AS APPLIED TO PETITIONER, UNDULY INFRINGES ON THE CONSTITUTIONAL
GUARANTEE OF DUE PROCESS OF LAW AND EQUAL PROTECTION UNDER THE LAW; CONSEQUENTLY, THE
[IRR], RULES OF PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB PURSUANT THERETO, I.E., DECISION
DATED 27 SEPTEMBER 2004 AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE CONSTITUTIONALLY
INFIRM AS APPLIED IN THE CASE AT BENCH; AND

III

[PD] 1986 IS NOT COMPLETE IN ITSELF AND DOES NOT PROVIDE FOR A SUFFICIENT STANDARD FOR ITS
IMPLEMENTATION THEREBY RESULTING IN AN UNDUE DELEGATION OF LEGISLATIVE POWER BY REASON
THAT IT DOES NOT PROVIDE FOR THE PENALTIES FOR VIOLATIONS OF ITS PROVISIONS. CONSEQUENTLY,
THE [IRR], RULES OF PROCEDURE, AND OFFICIAL ACTS OF THE MTRCB PURSUANT THERETO, I.E. DECISION
DATED 27 SEPTEMBER 2004 AND ORDER DATED 19 OCTOBER 2004, ARE LIKEWISE CONSTITUTIONALLY
INFIRM AS APPLIED IN THE CASE AT BENCH11

G.R. No. 164785

We shall first dispose of the issues in G.R. No. 164785, regarding the assailed order of preventive
suspension, although its implementability had already been overtaken and veritably been rendered moot
by the equally assailed September 27, 2004 decision.

It is petitioner’s threshold posture that the preventive suspension imposed against him and the relevant
IRR provision authorizing it are invalid inasmuch as PD 1986 does not expressly authorize the MTRCB to
issue preventive suspension.

Petitioner’s contention is untenable.

Administrative agencies have powers and functions which may be administrative, investigatory,
regulatory, quasi-legislative, or quasi-judicial, or a mix of the five, as may be conferred by the Constitution
or by statute.12 They have in fine only such powers or authority as are granted or delegated, expressly or
impliedly, by law.13 And in determining whether an agency has certain powers, the inquiry should be from
the law itself. But once ascertained as existing, the authority given should be liberally construed.14

A perusal of the MTRCB’s basic mandate under PD 1986 reveals the possession by the agency of the
authority, albeit impliedly, to issue the challenged order of preventive suspension. And this authority
stems naturally from, and is necessary for the exercise of, its power of regulation and supervision.

Sec. 3 of PD 1986 pertinently provides the following:

Section 3. Powers and Functions.—The BOARD shall have the following functions, powers and duties:
xxxx

c) To approve or disapprove, delete objectionable portions from and/or prohibit the x x x production, x x
x exhibition and/or television broadcast of the motion pictures, television programs and publicity
materials subject of the preceding paragraph, which, in the judgment of the board applying contemporary
Filipino cultural values as standard, are objectionable for being immoral, indecent, contrary to law and/or
good customs, injurious to the prestige of the Republic of the Philippines or its people, or with a dangerous
tendency to encourage the commission of violence or of wrong or crime such as but not limited to:

xxxx

vi) Those which are libelous or defamatory to the good name and reputation of any person, whether living
or dead;

xxxx

(d) To supervise, regulate, and grant, deny or cancel, permits for the x x x production, copying, distribution,
sale, lease, exhibition, and/or television broadcast of all motion pictures, television programs and publicity
materials, to the end that no such pictures, programs and materials as are determined by the BOARD to
be objectionable in accordance with paragraph (c) hereof shall be x x x produced, copied, reproduced,
distributed, sold, leased, exhibited and/or broadcast by television;

xxxx

k) To exercise such powers and functions as may be necessary or incidental to the attainment of the
purposes and objectives of this Act x x x. (Emphasis added.)

The issuance of a preventive suspension comes well within the scope of the MTRCB’s authority and
functions expressly set forth in PD 1986, more particularly under its Sec. 3(d), as quoted above, which
empowers the MTRCB to "supervise, regulate, and grant, deny or cancel, permits for the x x x exhibition,
and/or television broadcast of all motion pictures, television programs and publicity materials, to the end
that no such pictures, programs and materials as are determined by the BOARD to be objectionable in
accordance with paragraph (c) hereof shall be x x x exhibited and/or broadcast by television."

Surely, the power to issue preventive suspension forms part of the MTRCB’s express regulatory and
supervisory statutory mandate and its investigatory and disciplinary authority subsumed in or implied
from such mandate. Any other construal would render its power to regulate, supervise, or discipline
illusory.

Preventive suspension, it ought to be noted, is not a penalty by itself, being merely a preliminary step in
an administrative investigation.15 And the power to discipline and impose penalties, if granted, carries
with it the power to investigate administrative complaints and, during such investigation, to preventively
suspend the person subject of the complaint. 16

To reiterate, preventive suspension authority of the MTRCB springs from its powers conferred under PD
1986. The MTRCB did not, as petitioner insinuates, empower itself to impose preventive suspension
through the medium of the IRR of PD 1986. It is true that the matter of imposing preventive suspension
is embodied only in the IRR of PD 1986. Sec. 3, Chapter XIII of the IRR provides:
Sec. 3. PREVENTION SUSPENSION ORDER.––Any time during the pendency of the case, and in order to
prevent or stop further violations or for the interest and welfare of the public, the Chairman of the Board
may issue a Preventive Suspension Order mandating the preventive x x x suspension of the permit/permits
involved, and/or closure of the x x x television network, cable TV station x x x provided that the
temporary/preventive order thus issued shall have a life of not more than twenty (20) days from the date
of issuance.

But the mere absence of a provision on preventive suspension in PD 1986, without more, would not work
to deprive the MTRCB a basic disciplinary tool, such as preventive suspension. Recall that the MTRCB is
expressly empowered by statute to regulate and supervise television programs to obviate the exhibition
or broadcast of, among others, indecent or immoral materials and to impose sanctions for violations and,
corollarily, to prevent further violations as it investigates. Contrary to petitioner’s assertion, the
aforequoted Sec. 3 of the IRR neither amended PD 1986 nor extended the effect of the law. Neither did
the MTRCB, by imposing the assailed preventive suspension, outrun its authority under the law. Far from
it. The preventive suspension was actually done in furtherance of the law, imposed pursuant, to repeat,
to the MTRCB’s duty of regulating or supervising television programs, pending a determination of whether
or not there has actually been a violation. In the final analysis, Sec. 3, Chapter XIII of the 2004 IRR merely
formalized a power which PD 1986 bestowed, albeit impliedly, on MTRCB.

Sec. 3(c) and (d) of PD 1986 finds application to the present case, sufficient to authorize the MTRCB’s
assailed action. Petitioner’s restrictive reading of PD 1986, limiting the MTRCB to functions within the
literal confines of the law, would give the agency little leeway to operate, stifling and rendering it inutile,
when Sec. 3(k) of PD 1986 clearly intends to grant the MTRCB a wide room for flexibility in its operation.
Sec. 3(k), we reiterate, provides, "To exercise such powers and functions as may be necessary or incidental
to the attainment of the purposes and objectives of this Act x x x." Indeed, the power to impose preventive
suspension is one of the implied powers of MTRCB. As distinguished from express powers, implied powers
are those that can be inferred or are implicit in the wordings or conferred by necessary or fair implication
of the enabling act.17 As we held in Angara v. Electoral Commission, when a general grant of power is
conferred or a duty enjoined, every particular power necessary for the exercise of one or the performance
of the other is also conferred by necessary implication. 18 Clearly, the power to impose preventive
suspension pending investigation is one of the implied or inherent powers of MTRCB.

We cannot agree with petitioner’s assertion that the aforequoted IRR provision on preventive suspension
is applicable only to motion pictures and publicity materials. The scope of the MTRCB’s authority extends
beyond motion pictures. What the acronym MTRCB stands for would suggest as much. And while the law
makes specific reference to the closure of a television network, the suspension of a television program is
a far less punitive measure that can be undertaken, with the purpose of stopping further violations of PD
1986. Again, the MTRCB would regretfully be rendered ineffective should it be subject to the restrictions
petitioner envisages.

Just as untenable is petitioner’s argument on the nullity of the preventive suspension order on the ground
of lack of hearing. As it were, the MTRCB handed out the assailed order after petitioner, in response to a
written notice, appeared before that Board for a hearing on private respondents’ complaint. No less than
petitioner admitted that the order was issued after the adjournment of the hearing,19 proving that he had
already appeared before the MTRCB. Under Sec. 3, Chapter XIII of the IRR of PD 1986, preventive
suspension shall issue "[a]ny time during the pendency of the case." In this particular case, it was done
after MTRCB duly apprised petitioner of his having possibly violated PD 1986 20 and of administrative
complaints that had been filed against him for such violation. 21

At any event, that preventive suspension can validly be meted out even without a hearing.22

Petitioner next faults the MTRCB for denying him his right to the equal protection of the law, arguing that,
owing to the preventive suspension order, he was unable to answer the criticisms coming from the INC
ministers.

Petitioner’s position does not persuade. The equal protection clause demands that "all persons subject to
legislation should be treated alike, under like circumstances and conditions both in the privileges
conferred and liabilities imposed."23 It guards against undue favor and individual privilege as well as
hostile discrimination.24 Surely, petitioner cannot, under the premises, place himself in the same shoes as
the INC ministers, who, for one, are not facing administrative complaints before the MTRCB. For another,
he offers no proof that the said ministers, in their TV programs, use language similar to that which he used
in his own, necessitating the MTRCB’s disciplinary action. If the immediate result of the preventive
suspension order is that petitioner remains temporarily gagged and is unable to answer his critics, this
does not become a deprivation of the equal protection guarantee. The Court need not belabor the fact
that the circumstances of petitioner, as host of Ang Dating Daan, on one hand, and the INC ministers, as
hosts of Ang Tamang Daan, on the other, are, within the purview of this case, simply too different to even
consider whether or not there is a prima facie indication of oppressive inequality.

Petitioner next injects the notion of religious freedom, submitting that what he uttered was religious
speech, adding that words like "putang babae" were said in exercise of his religious freedom.

The argument has no merit.

The Court is at a loss to understand how petitioner’s utterances in question can come within the pale of
Sec. 5, Article III of the 1987 Constitution on religious freedom. The section reads as follows:

No law shall be made respecting the establishment of a religion, or prohibiting the free exercise thereof.
The free exercise and enjoyment of religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be required for the exercise of civil or political
rights.

There is nothing in petitioner’s statements subject of the complaints expressing any particular religious
belief, nothing furthering his avowed evangelical mission. The fact that he came out with his statements
in a televised bible exposition program does not automatically accord them the character of a religious
discourse. Plain and simple insults directed at another person cannot be elevated to the status of religious
speech. Even petitioner’s attempts to place his words in context show that he was moved by anger and
the need to seek retribution, not by any religious conviction. His claim, assuming its veracity, that some
INC ministers distorted his statements respecting amounts Ang Dating Daan owed to a TV station does
not convert the foul language used in retaliation as religious speech. We cannot accept that petitioner
made his statements in defense of his reputation and religion, as they constitute no intelligible defense
or refutation of the alleged lies being spread by a rival religious group. They simply illustrate that
petitioner had descended to the level of name-calling and foul-language discourse. Petitioner could have
chosen to contradict and disprove his detractors, but opted for the low road.
Petitioner, as a final point in G.R. No. 164785, would have the Court nullify the 20-day preventive
suspension order, being, as insisted, an unconstitutional abridgement of the freedom of speech and
expression and an impermissible prior restraint. The main issue tendered respecting the adverted
violation and the arguments holding such issue dovetails with those challenging the three-month
suspension imposed under the assailed September 27, 2004 MTRCB decision subject of review under G.R.
No. 165636. Both overlapping issues and arguments shall be jointly addressed.

G.R. No. 165636

Petitioner urges the striking down of the decision suspending him from hosting Ang Dating Daan for three
months on the main ground that the decision violates, apart from his religious freedom, his freedom of
speech and expression guaranteed under Sec. 4, Art. III of the Constitution, which reads:

No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government for redress of grievance.

He would also have the Court declare PD 1986, its Sec. 3(c) in particular, unconstitutional for reasons
articulated in this petition.

We are not persuaded as shall be explained shortly. But first, we restate certain general concepts and
principles underlying the freedom of speech and expression.

It is settled that expressions by means of newspapers, radio, television, and motion pictures come within
the broad protection of the free speech and expression clause. 25 Each method though, because of its
dissimilar presence in the lives of people and accessibility to children, tends to present its own problems
in the area of free speech protection, with broadcast media, of all forms of communication, enjoying a
lesser degree of protection.26 Just as settled is the rule that restrictions, be it in the form of prior restraint,
e.g., judicial injunction against publication or threat of cancellation of license/franchise, or subsequent
liability, whether in libel and damage suits, prosecution for sedition, or contempt proceedings, are
anathema to the freedom of expression. Prior restraint means official government restrictions on the
press or other forms of expression in advance of actual publication or dissemination. 27 The freedom of
expression, as with the other freedoms encased in the Bill of Rights, is, however, not absolute. It may be
regulated to some extent to serve important public interests, some forms of speech not being protected.
As has been held, the limits of the freedom of expression are reached when the expression touches upon
matters of essentially private concern.28 In the oft-quoted expression of Justice Holmes, the constitutional
guarantee "obviously was not intended to give immunity for every possible use of language."29 From Lucas
v. Royo comes this line: "[T]he freedom to express one’s sentiments and belief does not grant one the
license to vilify in public the honor and integrity of another. Any sentiments must be expressed within the
proper forum and with proper regard for the rights of others." 30

Indeed, as noted in Chaplinsky v. State of New Hampshire,31 "there are certain well-defined and narrowly
limited classes of speech that are harmful, the prevention and punishment of which has never been
thought to raise any Constitutional problems." In net effect, some forms of speech are not protected by
the Constitution, meaning that restrictions on unprotected speech may be decreed without running afoul
of the freedom of speech clause.32 A speech would fall under the unprotected type if the utterances
involved are "no essential part of any exposition of ideas, and are of such slight social value as a step of
truth that any benefit that may be derived from them is clearly outweighed by the social interest in order
and morality."33 Being of little or no value, there is, in dealing with or regulating them, no imperative call
for the application of the clear and present danger rule or the balancing-of-interest test, they being
essentially modes of weighing competing values, 34 or, with like effect, determining which of the clashing
interests should be advanced.

Petitioner asserts that his utterance in question is a protected form of speech.

The Court rules otherwise. It has been established in this jurisdiction that unprotected speech or low-
value expression refers to libelous statements, obscenity or pornography, false or misleading
advertisement, insulting or "fighting words", i.e., those which by their very utterance inflict injury or tend
to incite an immediate breach of peace and expression endangering national security.

The Court finds that petitioner’s statement can be treated as obscene, at least with respect to the average
child. Hence, it is, in that context, unprotected speech. In Fernando v. Court of Appeals, the Court
expressed difficulty in formulating a definition of obscenity that would apply to all cases, but nonetheless
stated the ensuing observations on the matter:

There is no perfect definition of "obscenity" but the latest word is that of Miller v. California which
established basic guidelines, to wit: (a) whether to the average person, applying contemporary standards
would find the work, taken as a whole, appeals to the prurient interest; (b) whether the work depicts or
describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and
(c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value. But, it
would be a serious misreading of Miller to conclude that the trier of facts has the unbridled discretion in
determining what is "patently offensive." x x x What remains clear is that obscenity is an issue proper for
judicial determination and should be treated on a case to case basis and on the judge’s sound discretion. 35

Following the contextual lessons of the cited case of Miller v. California, 36 a patently offensive utterance
would come within the pale of the term obscenity should it appeal to the prurient interest of an average
listener applying contemporary standards.

A cursory examination of the utterances complained of and the circumstances of the case reveal that to
an average adult, the utterances "Gago ka talaga x x x, masahol ka pa sa putang babae x x x. Yung putang
babae ang gumagana lang doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba!" may
not constitute obscene but merely indecent utterances. They can be viewed as figures of speech or merely
a play on words. In the context they were used, they may not appeal to the prurient interests of an adult.
The problem with the challenged statements is that they were uttered in a TV program that is rated "G"
or for general viewership, and in a time slot that would likely reach even the eyes and ears of children.

While adults may have understood that the terms thus used were not to be taken literally, children could
hardly be expected to have the same discernment. Without parental guidance, the unbridled use of such
language as that of petitioner in a television broadcast could corrupt impressionable young minds. The
term "putang babae" means "a female prostitute," a term wholly inappropriate for children, who could
look it up in a dictionary and just get the literal meaning, missing the context within which it was used.
Petitioner further used the terms, "ang gumagana lang doon yung ibaba," making reference to the female
sexual organ and how a female prostitute uses it in her trade, then stating that Sandoval was worse than
that by using his mouth in a similar manner. Children could be motivated by curiosity and ask the meaning
of what petitioner said, also without placing the phrase in context. They may be inquisitive as to why
Sandoval is different from a female prostitute and the reasons for the dissimilarity. And upon learning the
meanings of the words used, young minds, without the guidance of an adult, may, from their end, view
this kind of indecent speech as obscene, if they take these words literally and use them in their own speech
or form their own ideas on the matter. In this particular case, where children had the opportunity to hear
petitioner’s words, when speaking of the average person in the test for obscenity, we are speaking of the
average child, not the average adult. The average child may not have the adult’s grasp of figures of speech,
and may lack the understanding that language may be colorful, and words may convey more than the
literal meaning. Undeniably the subject speech is very suggestive of a female sexual organ and its function
as such. In this sense, we find petitioner’s utterances obscene and not entitled to protection under the
umbrella of freedom of speech.

Even if we concede that petitioner’s remarks are not obscene but merely indecent speech, still the Court
rules that petitioner cannot avail himself of the constitutional protection of free speech. Said statements
were made in a medium easily accessible to children. With respect to the young minds, said utterances
are to be treated as unprotected speech.

No doubt what petitioner said constitutes indecent or offensive utterances. But while a jurisprudential
pattern involving certain offensive utterances conveyed in different mediums has emerged, this case is
veritably one of first impression, it being the first time that indecent speech communicated via television
and the applicable norm for its regulation are, in this jurisdiction, made the focal point. Federal
Communications Commission (FCC) v. Pacifica Foundation,37 a 1978 American landmark case cited
in Eastern Broadcasting Corporation v. Dans, Jr. 38 and Chavez v. Gonzales,39 is a rich source of persuasive
lessons. Foremost of these relates to indecent speech without prurient appeal component coming under
the category of protected speech depending on the context within which it was made, irresistibly
suggesting that, within a particular context, such indecent speech may validly be categorized as
unprotected, ergo, susceptible to restriction.

In FCC, seven of what were considered "filthy" words 40 earlier recorded in a monologue by a satiric
humorist later aired in the afternoon over a radio station owned by Pacifica Foundation. Upon the
complaint of a man who heard the pre-recorded monologue while driving with his son, FCC declared the
language used as "patently offensive" and "indecent" under a prohibiting law, though not necessarily
obscene. FCC added, however, that its declaratory order was issued in a "special factual context,"
referring, in gist, to an afternoon radio broadcast when children were undoubtedly in the audience. Acting
on the question of whether the FCC could regulate the subject utterance, the US Supreme Court ruled in
the affirmative, owing to two special features of the broadcast medium, to wit: (1) radio is a pervasive
medium and (2) broadcasting is uniquely accessible to children. The US Court, however, hastened to add
that the monologue would be protected speech in other contexts, albeit it did not expound and identify
a compelling state interest in putting FCC’s content-based regulatory action under scrutiny.

The Court in Chavez41 elucidated on the distinction between regulation or restriction of protected speech
that is content-based and that which is content-neutral. A content-based restraint is aimed at the contents
or idea of the expression, whereas a content-neutral restraint intends to regulate the time, place, and
manner of the expression under well-defined standards tailored to serve a compelling state interest,
without restraint on the message of the expression. Courts subject content-based restraint to strict
scrutiny.
With the view we take of the case, the suspension MTRCB imposed under the premises was, in one
perspective, permissible restriction. We make this disposition against the backdrop of the following
interplaying factors: First, the indecent speech was made via television, a pervasive medium that, to
borrow from Gonzales v. Kalaw Katigbak,42 easily "reaches every home where there is a set [and where]
[c]hildren will likely be among the avid viewers of the programs therein shown"; second, the broadcast
was aired at the time of the day when there was a reasonable risk that children might be in the audience;
and third, petitioner uttered his speech on a "G" or "for general patronage" rated program. Under Sec.
2(A) of Chapter IV of the IRR of the MTRCB, a show for general patronage is "[s]uitable for all ages,"
meaning that the "material for television x x x in the judgment of the BOARD, does not contain anything
unsuitable for children and minors, and may be viewed without adult guidance or supervision." The words
petitioner used were, by any civilized norm, clearly not suitable for children. Where a language is
categorized as indecent, as in petitioner’s utterances on a general-patronage rated TV program, it may be
readily proscribed as unprotected speech.

A view has been advanced that unprotected speech refers only to pornography, 43 false or misleading
advertisement,44 advocacy of imminent lawless action, and expression endangering national security. But
this list is not, as some members of the Court would submit, exclusive or carved in stone. Without going
into specifics, it may be stated without fear of contradiction that US decisional law goes beyond the
aforesaid general exceptions. As the Court has been impelled to recognize exceptions to the rule against
censorship in the past, this particular case constitutes yet another exception, another instance of
unprotected speech, created by the necessity of protecting the welfare of our children. As unprotected
speech, petitioner’s utterances can be subjected to restraint or regulation.

Despite the settled ruling in FCC which has remained undisturbed since 1978, petitioner asserts that his
utterances must present a clear and present danger of bringing about a substantive evil the State has a
right and duty to prevent and such danger must be grave and imminent. 45

Petitioner’s invocation of the clear and present danger doctrine, arguably the most permissive of speech
tests, would not avail him any relief, for the application of said test is uncalled for under the premises.
The doctrine, first formulated by Justice Holmes, accords protection for utterances so that the printed or
spoken words may not be subject to prior restraint or subsequent punishment unless its expression
creates a clear and present danger of bringing about a substantial evil which the government has the
power to prohibit.46 Under the doctrine, freedom of speech and of press is susceptible of restriction when
and only when necessary to prevent grave and immediate danger to interests which the government may
lawfully protect. As it were, said doctrine evolved in the context of prosecutions for rebellion and other
crimes involving the overthrow of government.47 It was originally designed to determine the latitude
which should be given to speech that espouses anti-government action, or to have serious and substantial
deleterious consequences on the security and public order of the community. 48 The clear and present
danger rule has been applied to this jurisdiction.49 As a standard of limitation on free speech and press,
however, the clear and present danger test is not a magic incantation that wipes out all problems and
does away with analysis and judgment in the testing of the legitimacy of claims to free speech and which
compels a court to release a defendant from liability the moment the doctrine is invoked, absent proof of
imminent catastrophic disaster.50 As we observed in Eastern Broadcasting Corporation, the clear and
present danger test "does not lend itself to a simplistic and all embracing interpretation applicable to all
utterances in all forums."51
To be sure, the clear and present danger doctrine is not the only test which has been applied by the courts.
Generally, said doctrine is applied to cases involving the overthrow of the government and even other
evils which do not clearly undermine national security. Since not all evils can be measured in terms of
"proximity and degree" the Court, however, in several cases—Ayer Productions v. Capulong52 and
Gonzales v. COMELEC,53 applied the balancing of interests test. Former Chief Justice Fred Ruiz Castro, in
Gonzales v. COMELEC, elucidated in his Separate Opinion that "where the legislation under constitutional
attack interferes with the freedom of speech and assembly in a more generalized way and where the
effect of the speech and assembly in terms of the probability of realization of a specific danger is not
susceptible even of impressionistic calculation,"54 then the "balancing of interests" test can be applied.

The Court explained also in Gonzales v. COMELEC the "balancing of interests" test:

When particular conduct is regulated in the interest of public order, and the regulation results in an
indirect, conditional, partial abridgment of speech, the duty of the courts is to determine which of the
two conflicting interests demands the greater protection under the particular circumstances presented. x
x x We must, therefore, undertake the "delicate and difficult task x x x to weigh the circumstances and to
appraise the substantiality of the reasons advanced in support of the regulation of the free enjoyment of
rights x x x.

In enunciating standard premised on a judicial balancing of the conflicting social values and individual
interests competing for ascendancy in legislation which restricts expression, the court in Douds laid the
basis for what has been called the "balancing-of-interests" test which has found application in more recent
decisions of the U.S. Supreme Court. Briefly stated, the "balancing" test requires a court to take conscious
and detailed consideration of the interplay of interests observable in a given situation or type of situation.

xxxx

Although the urgency of the public interest sought to be secured by Congressional power restricting the
individual’s freedom, and the social importance and value of the freedom so restricted, "are to be judged
in the concrete, not on the basis of abstractions," a wide range of factors are necessarily relevant in
ascertaining the point or line of equilibrium. Among these are (a) the social value and importance of the
specific aspect of the particular freedom restricted by the legislation; (b) the specific thrust of the
restriction, i.e., whether the restriction is direct or indirect, whether or not the persons affected are few;
(c) the value and importance of the public interest sought to be secured by the legislation––the reference
here is to the nature and gravity of the evil which Congress seeks to prevent; (d) whether the specific
restriction decreed by Congress is reasonably appropriate and necessary for the protection of such public
interest; and (e) whether the necessary safeguarding of the public interest involved may be achieved by
some other measure less restrictive of the protected freedom. 55

This balancing of interest test, to borrow from Professor Kauper, 56 rests on the theory that it is the court’s
function in a case before it when it finds public interests served by legislation, on the one hand, and the
free expression clause affected by it, on the other, to balance one against the other and arrive at a
judgment where the greater weight shall be placed. If, on balance, it appears that the public interest
served by restrictive legislation is of such nature that it outweighs the abridgment of freedom, then the
court will find the legislation valid. In short, the balance-of-interests theory rests on the basis that
constitutional freedoms are not absolute, not even those stated in the free speech and expression clause,
and that they may be abridged to some extent to serve appropriate and important interests. 57 To the mind
of the Court, the balancing of interest doctrine is the more appropriate test to follow.

In the case at bar, petitioner used indecent and obscene language and a three (3)-month suspension was
slapped on him for breach of MTRCB rules. In this setting, the assertion by petitioner of his enjoyment of
his freedom of speech is ranged against the duty of the government to protect and promote the
development and welfare of the youth.

After a careful examination of the factual milieu and the arguments raised by petitioner in support of his
claim to free speech, the Court rules that the government’s interest to protect and promote the interests
and welfare of the children adequately buttresses the reasonable curtailment and valid restraint on
petitioner’s prayer to continue as program host of Ang Dating Daan during the suspension period.

No doubt, one of the fundamental and most vital rights granted to citizens of a State is the freedom of
speech or expression, for without the enjoyment of such right, a free, stable, effective, and progressive
democratic state would be difficult to attain. Arrayed against the freedom of speech is the right of the
youth to their moral, spiritual, intellectual, and social being which the State is constitutionally tasked to
promote and protect. Moreover, the State is also mandated to recognize and support the vital role of the
youth in nation building as laid down in Sec. 13, Art. II of the 1987 Constitution.

The Constitution has, therefore, imposed the sacred obligation and responsibility on the State to provide
protection to the youth against illegal or improper activities which may prejudice their general well-being.
The Article on youth, approved on second reading by the Constitutional Commission, explained that the
State shall "extend social protection to minors against all forms of neglect, cruelty, exploitation,
immorality, and practices which may foster racial, religious or other forms of discrimination." 58

Indisputably, the State has a compelling interest in extending social protection to minors against all forms
of neglect, exploitation, and immorality which may pollute innocent minds. It has a compelling interest in
helping parents, through regulatory mechanisms, protect their children’s minds from exposure to
undesirable materials and corrupting experiences. The Constitution, no less, in fact enjoins the State, as
earlier indicated, to promote and protect the physical, moral, spiritual, intellectual, and social well-being
of the youth to better prepare them fulfill their role in the field of nation-building.59 In the same way, the
State is mandated to support parents in the rearing of the youth for civic efficiency and the development
of moral character.60

Petitioner’s offensive and obscene language uttered in a television broadcast, without doubt, was easily
accessible to the children. His statements could have exposed children to a language that is unacceptable
in everyday use. As such, the welfare of children and the State’s mandate to protect and care for them,
as parens patriae,61 constitute a substantial and compelling government interest in regulating petitioner’s
utterances in TV broadcast as provided in PD 1986.

FCC explains the duty of the government to act as parens patriae to protect the children who, because of
age or interest capacity, are susceptible of being corrupted or prejudiced by offensive language, thus:

[B]roadcasting is uniquely accessible to children, even those too young to read. Although Cohen’s written
message, ["Fuck the Draft"], might have been incomprehensible to a first grader, Pacifica’s broadcast
could have enlarged a child’s vocabulary in an instant. Other forms of offensive expression may be
withheld from the young without restricting the expression at its source. Bookstores and motion picture
theaters, for example, may be prohibited from making indecent material available to children. We held in
Ginsberg v. New York that the 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 children may obtain access to broadcast material, coupled with the
concerns recognized in Ginsberg, amply justify special treatment of indecent broadcasting.

Moreover, Gonzales v. Kalaw Katigbak likewise stressed the duty of the State to attend to the welfare of
the young:

x x x It is the consensus of this Court that where television is concerned, a less liberal approach calls for
observance. This is so because unlike motion pictures where the patrons have to pay their way, television
reaches every home where there is a set. Children then will likely will be among the avid viewers of the
programs therein shown. As was observed by Circuit Court of Appeals Judge Jerome Frank, it is hardly the
concern of the law to deal with the sexual fantasies of the adult population. It cannot be denied though
that the State as parens patriae is called upon to manifest an attitude of caring for the welfare of the
young.62

The compelling need to protect the young impels us to sustain the regulatory action MTRCB took in the
narrow confines of the case. To reiterate, FCC justified the restraint on the TV broadcast grounded on the
following considerations: (1) the use of television with its unique accessibility to children, as a medium of
broadcast of a patently offensive speech; (2) the time of broadcast; and (3) the "G" rating of the Ang
Dating Daan program. And in agreeing with MTRCB, the court takes stock of and cites with approval the
following excerpts from FCC:

It is appropriate, in conclusion, to emphasize the narrowness of our holding. This case does not involve a
two-way radio conversation between a cab driver and a dispatcher, or a telecast of an Elizabethan
comedy. We have not decided that an occasional expletive in either setting would justify any sanction. x
x x The [FFC’s] decision rested entirely on a nuisance rationale under which context is all important. The
concept requires consideration of a host of variables. The time of day was emphasized by the [FFC]. The
content of the program in which the language is used will affect the composition of the audience x x x. As
Mr. Justice Sutherland wrote a ‘nuisance may be merely a right thing in the wrong place, like a pig in the
parlor instead of the barnyard.’ We simply hold that when the [FCC] finds that a pig has entered the parlor,
the exercise of its regulatory power does not depend on proof that the pig is obscene. (Citation omitted.)

There can be no quibbling that the remarks in question petitioner uttered on prime-time television are
blatantly indecent if not outright obscene. It is the kind of speech that PD 1986 proscribes necessitating
the exercise by MTRCB of statutory disciplinary powers. It is the kind of speech that the State has the
inherent prerogative, nay duty, to regulate and prevent should such action served and further compelling
state interests. One who utters indecent, insulting, or offensive words on television when unsuspecting
children are in the audience is, in the graphic language of FCC, a "pig in the parlor." Public interest would
be served if the "pig" is reasonably restrained or even removed from the "parlor."

Ergo, petitioner’s offensive and indecent language can be subjected to prior restraint.

Petitioner theorizes that the three (3)-month suspension is either prior restraint or subsequent
punishment that, however, includes prior restraint, albeit indirectly.
After a review of the facts, the Court finds that what MTRCB imposed on petitioner is an administrative
sanction or subsequent punishment for his offensive and obscene language in Ang Dating Daan.

To clarify, statutes imposing prior restraints on speech are generally illegal and presumed unconstitutional
breaches of the freedom of speech. The exceptions to prior restraint are movies, television, and radio
broadcast censorship in view of its access to numerous people, including the young who must be insulated
from the prejudicial effects of unprotected speech. PD 1986 was passed creating the Board of Review for
Motion Pictures and Television (now MTRCB) and which requires prior permit or license before showing
a motion picture or broadcasting a TV program. The Board can classify movies and television programs
and can cancel permits for exhibition of films or television [Link]

The power of MTRCB to regulate and even impose some prior restraint on radio and television shows,
even religious programs, was upheld in Iglesia Ni Cristo v. Court of Appeals. Speaking through Chief Justice
Reynato S. Puno, the Court wrote:

We thus reject petitioner’s postulate that its religious program is per se beyond review by the respondent
Board. Its public broadcast on TV of its religious program brings it out of the bosom of internal belief.
Television is a medium that reaches even the eyes and ears of children. The Court iterates the rule that
the exercise of religious freedom can be regulated by the State when it will bring about the clear and
present danger of some substantive evil which the State is duty bound to prevent, i.e., serious detriment
to the more overriding interest of public health, public morals, or public welfare. x x x

xxxx

While the thesis has a lot to commend itself, we are not ready to hold that [PD 1986] is unconstitutional
for Congress to grant an administrative body quasi-judicial power to preview and classify TV programs and
enforce its decision subject to review by our courts. As far back as 1921, we upheld this setup in Sotto vs.
Ruiz, viz:

"The use of the mails by private persons is in the nature of a privilege which can be regulated in order to
avoid its abuse. Persons possess no absolute right to put into the mail anything they please, regardless of
its character."63

Bernas adds:

Under the decree a movie classification board is made the arbiter of what movies and television programs
or parts of either are fit for public consumption. It decides what movies are "immoral, indecent, contrary
to law and/or good customs, injurious to the prestige of the Republic of the Philippines or its people," and
what "tend to incite subversion, insurrection, rebellion or sedition," or "tend to undermine the faith and
confidence of the people in their government and/or duly constituted authorities," etc. Moreover, its
decisions are executory unless stopped by a court.64

Moreover, in MTRCB v. ABS-CBN Broadcasting Corporation,65 it was held that the power of review and
prior approval of MTRCB extends to all television programs and is valid despite the freedom of speech
guaranteed by the Constitution. Thus, all broadcast networks are regulated by the MTRCB since they are
required to get a permit before they air their television programs. Consequently, their right to enjoy their
freedom of speech is subject to that requirement. As lucidly explained by Justice Dante O. Tinga,
government regulations through the MTRCB became "a necessary evil" with the government taking the
role of assigning bandwidth to individual broadcasters. The stations explicitly agreed to this regulatory
scheme; otherwise, chaos would result in the television broadcast industry as competing broadcasters
will interfere or co-opt each other’s signals. In this scheme, station owners and broadcasters in effect
waived their right to the full enjoyment of their right to freedom of speech in radio and television
programs and impliedly agreed that said right may be subject to prior restraint—denial of permit or
subsequent punishment, like suspension or cancellation of permit, among others.

The three (3) months suspension in this case is not a prior restraint on the right of petitioner to continue
with the broadcast of Ang Dating Daan as a permit was already issued to him by MTRCB for such broadcast.
Rather, the suspension is in the form of permissible administrative sanction or subsequent punishment
for the offensive and obscene remarks he uttered on the evening of August 10, 2004 in his television
program, Ang Dating Daan. It is a sanction that the MTRCB may validly impose under its charter without
running afoul of the free speech clause. And the imposition is separate and distinct from the criminal
action the Board may take pursuant to Sec. 3(i) of PD 1986 and the remedies that may be availed of by
the aggrieved private party under the provisions on libel or tort, if applicable. As FCC teaches, the
imposition of sanctions on broadcasters who indulge in profane or indecent broadcasting does not
constitute forbidden censorship. Lest it be overlooked, the sanction imposed is not per se for petitioner’s
exercise of his freedom of speech via television, but for the indecent contents of his utterances in a "G"
rated TV program.

More importantly, petitioner is deemed to have yielded his right to his full enjoyment of his freedom of
speech to regulation under PD 1986 and its IRR as television station owners, program producers, and hosts
have impliedly accepted the power of MTRCB to regulate the broadcast industry.

Neither can petitioner’s virtual inability to speak in his program during the period of suspension be
plausibly treated as prior restraint on future speech. For viewed in its proper perspective, the suspension
is in the nature of an intermediate penalty for uttering an unprotected form of speech. It is definitely a
lesser punishment than the permissible cancellation of exhibition or broadcast permit or license. In fine,
the suspension meted was simply part of the duties of the MTRCB in the enforcement and administration
of the law which it is tasked to implement. Viewed in its proper context, the suspension sought to penalize
past speech made on prime-time "G" rated TV program; it does not bar future speech of petitioner in
other television programs; it is a permissible subsequent administrative sanction; it should not be
confused with a prior restraint on speech. While not on all fours, the Court, in MTRCB, 66 sustained the
power of the MTRCB to penalize a broadcast company for exhibiting/airing a pre-taped TV episode
without Board authorization in violation of Sec. 7 of PD 1986.

Any simplistic suggestion, however, that the MTRCB would be crossing the limits of its authority were it
to regulate and even restrain the prime-time television broadcast of indecent or obscene speech in a "G"
rated program is not acceptable. As made clear in Eastern Broadcasting Corporation, "the freedom of
television and radio broadcasting is somewhat lesser in scope than the freedom accorded to newspaper
and print media." The MTRCB, as a regulatory agency, must have the wherewithal to enforce its mandate,
which would not be effective if its punitive actions would be limited to mere fines. Television broadcasts
should be subject to some form of regulation, considering the ease with which they can be accessed, and
violations of the regulations must be met with appropriate and proportional disciplinary action. The
suspension of a violating television program would be a sufficient punishment and serve as a deterrent
for those responsible. The prevention of the broadcast of petitioner’s television program is justified, and
does not constitute prohibited prior restraint. It behooves the Court to respond to the needs of the
changing times, and craft jurisprudence to reflect these times.

Petitioner, in questioning the three-month suspension, also tags as unconstitutional the very law creating
the MTRCB, arguing that PD 1986, as applied to him, infringes also upon his freedom of religion. The Court
has earlier adequately explained why petitioner’s undue reliance on the religious freedom cannot lend
justification, let alone an exempting dimension to his licentious utterances in his program. The Court sees
no need to address anew the repetitive arguments on religious freedom. As earlier discussed in the
disposition of the petition in G.R. No. 164785, what was uttered was in no way a religious speech.
Parenthetically, petitioner’s attempt to characterize his speech as a legitimate defense of his religion fails
miserably. He tries to place his words in perspective, arguing evidently as an afterthought that this was
his method of refuting the alleged distortion of his statements by the INC hosts of Ang Tamang Daan. But
on the night he uttered them in his television program, the word simply came out as profane language,
without any warning or guidance for undiscerning ears.

As to petitioner’s other argument about having been denied due process and equal protection of the law,
suffice it to state that we have at length debunked similar arguments in G.R. No. 164785. There is no need
to further delve into the fact that petitioner was afforded due process when he attended the hearing of
the MTRCB, and that he was unable to demonstrate that he was unjustly discriminated against in the
MTRCB proceedings.

Finally, petitioner argues that there has been undue delegation of legislative power, as PD 1986 does not
provide for the range of imposable penalties that may be applied with respect to violations of the
provisions of the law.

The argument is without merit.

In Edu v. Ericta, the Court discussed the matter of undue delegation of legislative power in the following
wise:

It is a fundamental principle flowing from the doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of the government, subject to the exception that
local governments may over local affairs participate in its exercise. What cannot be delegated is the
authority under the Constitution to make laws and to alter and repeal them; the test is the completeness
of the statute in all its term and provisions when it leaves the hands of the legislature. To determine
whether or not there is an undue delegation of legislative power, the inquiry must be directed to the
scope and definiteness of the measure enacted. The legislature does not abdicate its functions when it
describes what job must be done, who is to do it, and what is the scope of his authority. For a complex
economy, that may indeed be the only way in which the legislative process can go forward. A distinction
has rightfully been made between delegation of power to make laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or
discretion as to its execution to be exercised under and in pursuance of the law, to which no valid
objection can be made. The Constitution is thus not to be regarded as denying the legislature the
necessary resources of flexibility and practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that
the legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the
charge of complete abdication may be hard to repel. A standard thus defines legislative policy, marks its
limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances
under which the legislative command is to be effected. It is the criterion by which legislative purpose may
be carried out. Thereafter, the executive or administrative office designated may in pursuance of the
above guidelines promulgate supplemental rules and regulations. 67

Based on the foregoing pronouncements and analyzing the law in question, petitioner’s protestation
about undue delegation of legislative power for the sole reason that PD 1986 does not provide for a range
of penalties for violation of the law is untenable. His thesis is that MTRCB, in promulgating the IRR of PD
1986, prescribing a schedule of penalties for violation of the provisions of the decree, went beyond the
terms of the law.

Petitioner’s posture is flawed by the erroneous assumptions holding it together, the first assumption
being that PD 1986 does not prescribe the imposition of, or authorize the MTRCB to impose, penalties for
violators of PD 1986. As earlier indicated, however, the MTRCB, by express and direct conferment of
power and functions, is charged with supervising and regulating, granting, denying, or canceling permits
for the exhibition and/or television broadcast of all motion pictures, television programs, and publicity
materials to the end that no such objectionable pictures, programs, and materials shall be exhibited
and/or broadcast by television. Complementing this provision is Sec. 3(k) of the decree authorizing the
MTRCB "to exercise such powers and functions as may be necessary or incidental to the attainment of the
purpose and objectives of [the law]." As earlier explained, the investiture of supervisory, regulatory, and
disciplinary power would surely be a meaningless grant if it did not carry with it the power to penalize the
supervised or the regulated as may be proportionate to the offense committed, charged, and proved. As
the Court said in Chavez v. National Housing Authority:

x x x [W]hen a general grant of power is conferred or duty enjoined, every particular power necessary for
the exercise of the one or the performance of the other is also conferred. x x x [W]hen the statute does
not specify the particular method to be followed or used by a government agency in the exercise of the
power vested in it by law, said agency has the authority to adopt any reasonable method to carry out its
function.68

Given the foregoing perspective, it stands to reason that the power of the MTRCB to regulate and
supervise the exhibition of TV programs carries with it or necessarily implies the authority to take effective
punitive action for violation of the law sought to be enforced. And would it not be logical too to say that
the power to deny or cancel a permit for the exhibition of a TV program or broadcast necessarily includes
the lesser power to suspend?

The MTRCB promulgated the IRR of PD 1986 in accordance with Sec. 3(a) which, for reference, provides
that agency with the power "[to] promulgate such rules and regulations as are necessary or proper for the
implementation of this Act, and the accomplishment of its purposes and objectives x x x." And Chapter
XIII, Sec. 1 of the IRR providing:

Section 1. VIOLATIONS AND ADMINISTRATIVE SANCTIONS.––Without prejudice to the immediate filing of

the appropriate criminal action and the immediate seizure of the pertinent articles pursuant to Section
13, any violation of PD 1986 and its Implementing Rules and Regulations governing motion pictures,
television programs, and related promotional materials shall be penalized with suspension or cancellation
of permits and/or licenses issued by the Board and/or with the imposition of fines and other
administrative penalty/penalties. The Board recognizes the existing Table of Administrative Penalties
attached without prejudice to the power of the Board to amend it when the need arises. In the meantime
the existing revised Table of Administrative Penalties shall be enforced. (Emphasis added.)

This is, in the final analysis, no more than a measure to specifically implement the aforequoted provisions
of Sec. 3(d) and (k). Contrary to what petitioner implies, the IRR does not expand the mandate of the
MTRCB under the law or partake of the nature of an unauthorized administrative legislation. The MTRCB
cannot shirk its responsibility to regulate the public airwaves and employ such means as it can as a
guardian of the public.

In Sec. 3(c), one can already find the permissible actions of the MTRCB, along with the standards to be
applied to determine whether there have been statutory breaches. The MTRCB may evaluate motion
pictures, television programs, and publicity materials "applying contemporary Filipino cultural values as
standard," and, from there, determine whether these audio and video materials "are objectionable for
being immoral, indecent, contrary to law and/or good customs, [etc.] x x x" and apply the sanctions it
deems proper. The lawmaking body cannot possibly provide for all the details in the enforcement of a
particular statute.69 The grant of the rule-making power to administrative agencies is a relaxation of the
principle of separation of powers and is an exception to the non-delegation of legislative
powers.70 Administrative regulations or "subordinate legislation" calculated to promote the public
interest are necessary because of "the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the law." 71 Allowing
the MTRCB some reasonable elbow-room in its operations and, in the exercise of its statutory disciplinary
functions, according it ample latitude in fixing, by way of an appropriate issuance, administrative penalties
with due regard for the severity of the offense and attending mitigating or aggravating circumstances, as
the case may be, would be consistent with its mandate to effectively and efficiently regulate the movie
and television industry.

But even as we uphold the power of the MTRCB to review and impose sanctions for violations of PD 1986,
its decision to suspend petitioner must be modified, for nowhere in that issuance, particularly the power-
defining Sec. 3 nor in the MTRCB Schedule of Administrative Penalties effective January 1, 1999 is the
Board empowered to suspend the program host or even to prevent certain people from appearing in
television programs. The MTRCB, to be sure, may prohibit the broadcast of such television programs or
cancel permits for exhibition, but it may not suspend television personalities, for such would be beyond
its jurisdiction. The MTRCB cannot extend its exercise of regulation beyond what the law provides. Only
persons, offenses, and penalties clearly falling clearly within the letter and spirit of PD 1986 will be
considered to be within the decree’s penal or disciplinary operation. And when it exists, the reasonable
doubt must be resolved in favor of the person charged with violating the statute and for whom the penalty
is sought. Thus, the MTRCB’s decision in Administrative Case No. 01-04 dated September 27, 2004 and
the subsequent order issued pursuant to said decision must be modified. The suspension should cover
only the television program on which petitioner appeared and uttered the offensive and obscene
language, which sanction is what the law and the facts obtaining call for.

In ending, what petitioner obviously advocates is an unrestricted speech paradigm in which absolute
permissiveness is the norm. Petitioner’s flawed belief that he may simply utter gutter profanity on
television without adverse consequences, under the guise of free speech, does not lend itself to
acceptance in this jurisdiction. We repeat: freedoms of speech and expression are not absolute freedoms.
To say "any act that restrains speech should be greeted with furrowed brows" is not to say that any act
that restrains or regulates speech or expression is per se invalid. This only recognizes the importance of
freedoms of speech and expression, and indicates the necessity to carefully scrutinize acts that may
restrain or regulate speech.

WHEREFORE, the decision of the MTRCB in Adm. Case No. 01-04 dated September 27, 2004 is hereby
AFFIRMED with the MODIFICATION of limiting the suspension to the program Ang Dating Daan. As thus
modified, the fallo of the MTRCB shall read as follows:

WHEREFORE, in view of all the foregoing, a Decision is hereby rendered, imposing a penalty of THREE (3)
MONTHS SUSPENSION on the television program, Ang Dating Daan, subject of the instant petition.

Co-respondents Joselito Mallari, Luzviminda Cruz, and UNTV Channel 37 and its owner, PBC, are hereby
exonerated for lack of evidence.

Costs against petitioner.

SO ORDERED.

G.R. No. 93237 November 6, 1992

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,

vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) and JUAN A. ALEGRE, respondents.

PADILLA, J.:

Private respondent Juan A. Alegre's wife, Dr. Jimena Alegre, sent two (2) RUSH telegrams through
petitioner RCPI's facilities in Taft Ave., Manila at 9:00 in the morning of 17 March 1989 to his sister and
brother-in-law in Valencia, Bohol and another sister-in-law in Espiritu, Ilocos Norte, with the following
identical texts:

MANONG POLING DIED INTERMENT TUESDAY 1

Both telegrams did not reach their destinations on the expected dates. Private respondent filed a letter-
complaint against the RCPI with the National Telecommunications Commission (NTC) for poor service,
with a request for the imposition of the appropriate punitive sanction against the company.

Taking cognizance of the complaint, NTC directed RCPI to answer the complaint and set the initial hearing
of the case to 2 May 1989. After two (2) resettings, RCPI moved to dismiss the case on the following
grounds:

1. Juan Alegre is not the real party in interest;

2. NTC has no jurisdiction over the case;

3. the continued hearing of the case violates its constitutional right to due process of law. 2

RCPI likewise moved for deferment of scheduled hearings until final determination of its motion to
dismiss.

On 15 June 1989, NTC proceeded with the hearing and received evidence for private respondent Juan
Alegre. On 3 October 1989, RCPI's motion to dismiss was denied, thus:

The herein complainant is the husband of the sender of the "rush" telegram that respondent allegedly
failed to deliver in a manner respondent bound itself to undertake, so his legal interest in this
administrative case cannot be seriously called in question. As regards the issue of jurisdiction, the
authority of the Commission to hear and decide this case stems from its power of control and supervision
over the operation of public communication utilities as conferred upon it by law.

Besides, the filing of a motion to dismiss is not allowed by the rules (Section 1, Rule 12, Rules of Practice
and Procedures). Following, however, the liberal construction of the rules, respondent (sic) motion shall
be treated as its answer or be passed upon after the conclusion of the hearing on the merits. . . . 3

Hearings resumed in the absence of petitioner RCPI which was, however, duly notified thereof. On 27
November 1989, NTC disposed of the controversy in the following manner:

WHEREFORE, in view of all the foregoing, the Commission finds respondent administratively liable for
deficient and inadequate service defined under Section 19(a) of C.A. 146 and hereby imposes the penalty
of FINE payable within thirty (30) days from receipt hereof in the aggregate amount of ONE THOUSAND
PESOS (P1,000.00) for:

1. Rush Telegram sent to Valencia, Bohol on March 17, 1989 and received on March 21, 1989

3 days x P200.00 per day = P600.00

2. Rush Telegram sent to Espiritu, Ilocos Norte on March 17, 1989 and received on March 20, 1989

2 days x P200.00 per day = P400.00

Total = P1,000.00

ENTERED. November 27, 1989. 4

A motion for reconsideration by RCPI reiterating averments in its earlier motion to dismiss was denied for
lack of merit; 5 hence, this petition for review invoking C.A. 146 Sec. 19(a) which limits the jurisdiction of
the Public Service Commission (precursor of the NTC) to the fixing of rates. RCPI submits that its position
finds support in two (2) decided cases 6 identical with the present one. Then Justice (later Chief Justice)
Fernando writing for the Court stated:

. . . There can be no justification then for the Public Service Commission imposing the fines for these two
petitions. The law cannot be any clearer. The only power it possessed over radio companies, as noted was
the (sic ) fix rates. It could not take to task a radio company for negligence or misfeasance. It was bereft
of such competence. It was not vested within such authority. . . .
The Public Service Commission having been abolished by virtue of a Presidential Decree, as set forth at
the outset, and a new Board of Communications having been created to take its place, nothing said in its
decision has reference to whatever powers are now lodged in the latter body. . . . . . . (Footnotes omitted)

Two (2) later cases, 7 adhering to the above tenet ruled:

Even assuming that the respondent Board of Communications has the power of jurisdiction over
petitioner in the exercise of its supervision to insure adequate public service, petitioner cannot be
subjected to payment of fine under sec. 21 of the Public Service Act, because this provision of the law
subjects to a fine every public service that violates or falls (sic) to comply with the terms and conditions
of any certificate or any orders, decisions and regulations of the Commission. . . . .

The Office of the Solicitor General now claims that the cited cases are no longer applicable, that the power
and authority of the NTC to impose fines is incidental to its power to regulate public service utilities and
to supervise telecommunications facilities, which are now clearly defined in Section 15, Executive Order
No. 546 dated 23 July 1979: thus:

Functions of the Commission. The Commission shall exercise the following functions:

xxx xxx xxx

b. Establish, prescribe and regulate the areas of operation of particular operators of the public service
communications;

xxx xxx xxx

h. Supervise and inspect the operation of radio stations and telecommunications facilities.

Regulatory administrative agencies necessarily impose sanctions, adds the Office of the Solicitor General.
RCPI was fined based on the finding of the NTC that it failed to undertake adequate service in delivering
two (2) rush telegrams. NTC takes the view that its power of supervision was broadened by E. O. No. 546,
and that this development superseded the ruling in RCPI vs. Francisco Santiago and companion cases.

The issues of due process and real parties in interest do not have to be discussed in this case. This decision
will dwell on the primary question of jurisdiction of the NTC to administratively impose fines on a
telegraph company which fails to render adequate service to a consumer.

E. O. 546, it will be observed, is couched in general terms. The NTC stepped "into the shoes" of the Board
of Communications which exercised powers pursuant to the Public Service Act. The power to impose fines
should therefore be read in the light of the Francisco Santiago case because subsequent legislation did
not grant additional powers to the Board of Communications. The Board in other words, did not possess
the power to impose administrative fines on public services rendering deficient service to
customers, ergo its successor cannot arrogate unto itself such power, in the absence of legislation. It is
true that the decision in RCPI vs. Board of Communications seems to have modified the Santiago ruling in
that the later case held that the Board of Communications can impose fines if the public service entity
violates or fails to comply with the terms and conditions of any certificate or any order, decision or
regulation of the Commission. But can private respondent's complaint be similarly treated when the
complaint seeks redress of a grievance against the company? 8 NTC has no jurisdiction to impose a
fine. Globe Wireless Ltd. vs. Public Service Commission (G. R. No. L-27250, 21 January 1987, 147 SCRA 269)
says so categorically.

Verily, Section 13 of Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act,
vested in the Public Service Commission jurisdiction, supervision and control over all public services and
their franchises, equipment and other properties.

xxx xxx xxx

The act complained of consisted in petitioner having allegedly failed to deliver the telegraphic message of
private respondent to the addressee in Madrid, Spain. Obviously, such imputed negligence has nothing
whatsoever to do with the subject matter of the very limited jurisdiction of the Commission over
petitioner.

Moreover, under Section 21 of C. A. 146, as amended, the Commission was empowered to impose an
administrative fine in cases of violation of or failure by a public service to comply with the terms and
conditions of any certificate or any orders, decisions or regulations of the Commission. Petitioner
operated under a legislative franchise, so there were no terms nor conditions of any certificate issued by
the Commission to violate. Neither was there any order, decision or regulation from the Commission
applicable to petitioner that the latter had allegedly violated, disobeyed, defied or disregarded.

No substantial change has been brought about by Executive Order No. 546 invoked by the Solicitor
General's Office to bolster NTC's jurisdiction. The Executive Order is not an explicit grant of power to
impose administrative fines on public service utilities, including telegraphic agencies, which have failed to
render adequate service to consumers. Neither has it expanded the coverage of the supervisory and
regulatory power of the agency. There appears to be no alternative but to reiterate the settled doctrine
in administrative law that:

Too basic in administrative law to need citation of jurisprudence is the rule that jurisdiction and powers
of administrative agencies, like respondent Commission, are limited to those expressly granted or
necessarily implied from those granted in the legislation creating such body; and any order without or
beyond such jurisdiction is void and ineffective . . . (Globe Wireless case, supra).

WHEREFORE, the decision appealed from is REVERSED and SET ASIDE for lack of jurisdiction of the NTC to
render it. The temporary restraining order issued on 18 June 1990 is made PERMANENT without prejudice,
however, to the filing by the party aggrieved by the conduct of RCPI, of the proper action in the proper
forum. No costs.

SO ORDERED.
G.R. No. 110120 March 16, 1994

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC, Branch 127, Caloocan City, HON.
MACARIO A. ASISTIO, JR., City Mayor of Caloocan and/or THE CITY GOVERNMENT OF
CALOOCAN, respondents.

Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner.

The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr. and the City Government
of Caloocan.

ROMERO, J.:

The clash between the responsibility of the City Government of Caloocan to dispose off the 350 tons of
garbage it collects daily and the growing concern and sensitivity to a pollution-free environment of the
residents of Barangay Camarin, Tala Estate, Caloocan City where these tons of garbage are dumped
everyday is the hub of this controversy elevated by the protagonists to the Laguna Lake Development
Authority (LLDA) for adjudication.

The instant case stemmed from an earlier petition filed with this Court by Laguna Lake Development
Authority (LLDA for short) docketed as G.R.
No. 107542 against the City Government of Caloocan, et al. In the Resolution of November 10, 1992, this
Court referred G.R. No. 107542 to the Court of Appeals for appropriate disposition. Docketed therein as
CA-G.R. SP
No. 29449, the Court of Appeals, in a decision1 promulgated on January 29, 1993 ruled that the LLDA has
no power and authority to issue a cease and desist order enjoining the dumping of garbage in Barangay
Camarin, Tala Estate, Caloocan City. The LLDA now seeks, in this petition, a review of the decision of the
Court of Appeals.

The facts, as disclosed in the records, are undisputed.

On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin,
Caloocan City, filed a letter-complaint2 with the Laguna Lake Development Authority seeking to stop the
operation of the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan City due
to its harmful effects on the health of the residents and the possibility of pollution of the water content
of the surrounding area.

On November 15, 1991, the LLDA conducted an on-site investigation, monitoring and test sampling of the
leachate3 that seeps from said dumpsite to the nearby creek which is a tributary of the Marilao River. The
LLDA Legal and Technical personnel found that the City Government of Caloocan was maintaining an open
dumpsite at the Camarin area without first securing an Environmental Compliance Certificate (ECC) from
the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources,
as required under Presidential Decree No. 1586, 4 and clearance from LLDA as required under Republic Act
No. 4850,5 as amended by Presidential Decree No. 813 and Executive Order No. 927, series of 1983. 6
After a public hearing conducted on December 4, 1991, the LLDA, acting on the complaint of Task Force
Camarin Dumpsite, found that the water collected from the leachate and the receiving streams could
considerably affect the quality, in turn, of the receiving waters since it indicates the presence of bacteria,
other than coliform, which may have contaminated the sample during collection or handling. 7 On
December 5, 1991, the LLDA issued a Cease and Desist Order8 ordering the City Government of Caloocan,
Metropolitan Manila Authority, their contractors, and other entities, to completely halt, stop and desist
from dumping any form or kind of garbage and other waste matter at the Camarin dumpsite.

The dumping operation was forthwith stopped by the City Government of Caloocan. However, sometime
in August 1992 the dumping operation was resumed after a meeting held in July 1992 among the City
Government of Caloocan, the representatives of Task Force Camarin Dumpsite and LLDA at the Office of
Environmental Management Bureau Director Rodrigo U. Fuentes failed to settle the problem.

After an investigation by its team of legal and technical personnel on August 14, 1992, the LLDA issued
another order reiterating the December 5, 1991, order and issued an Alias Cease and Desist Order
enjoining the City Government of Caloocan from continuing its dumping operations at the Camarin area.

On September 25, 1992, the LLDA, with the assistance of the Philippine National Police, enforced its Alias
Cease and Desist Order by prohibiting the entry of all garbage dump trucks into the Tala Estate, Camarin
area being utilized as a dumpsite.

Pending resolution of its motion for reconsideration earlier filed on September 17, 1992 with the LLDA,
the City Government of Caloocan filed with the Regional Trial Court of Caloocan City an action for the
declaration of nullity of the cease and desist order with prayer for the issuance of writ of injunction,
docketed as Civil Case No. C-15598. In its complaint, the City Government of Caloocan sought to be
declared as the sole authority empowered to promote the health and safety and enhance the right of the
people in Caloocan City to a balanced ecology within its territorial jurisdiction. 9

On September 25, 1992, the Executive Judge of the Regional Trial Court of Caloocan City issued a
temporary restraining order enjoining the LLDA from enforcing its cease and desist order. Subsequently,
the case was raffled to the Regional Trial Court, Branch 126 of Caloocan which, at the time, was presided
over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127, the pairing judge of the recently-
retired presiding judge.

The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the ground, among others, that
under Republic Act No. 3931, as amended by Presidential Decree No. 984, otherwise known as the
Pollution Control Law, the cease and desist order issued by it which is the subject matter of the complaint
is reviewable both upon the law and the facts of the case by the Court of Appeals and not by the Regional
Trial Court. 10

On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating Civil Case No. C-15598 with
Civil Case No. C-15580, an earlier case filed by the Task Force Camarin Dumpsite entitled "Fr. John Moran,
et al. vs. Hon. Macario Asistio." The LLDA, however, maintained during the trial that the foregoing cases,
being independent of each other, should have been treated separately.

On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to dismiss, issued in the
consolidated cases an order11 denying LLDA's motion to dismiss and granting the issuance of a writ of
preliminary injunction enjoining the LLDA, its agent and all persons acting for and on its behalf, from
enforcing or implementing its cease and desist order which prevents plaintiff City of Caloocan from
dumping garbage at the Camarin dumpsite during the pendency of this case and/or until further orders
of the court.

On November 5, 1992, the LLDA filed a petition for certiorari, prohibition and injunction with prayer for
restraining order with the Supreme Court, docketed as G.R. No. 107542, seeking to nullify the aforesaid
order dated October 16, 1992 issued by the Regional Trial Court, Branch 127 of Caloocan City denying its
motion to dismiss.

The Court, acting on the petition, issued a Resolution 12 on November 10, 1992 referring the case to the
Court of Appeals for proper disposition and at the same time, without giving due course to the petition,
required the respondents to comment on the petition and file the same with the Court of Appeals within
ten (10) days from notice. In the meantime, the Court issued a temporary restraining order, effective
immediately and continuing until further orders from it, ordering the respondents: (1) Judge Manuel Jn.
Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to cease and desist from
exercising jurisdiction over the case for declaration of nullity of the cease and desist order issued by the
Laguna Lake Development Authority (LLDA); and (2) City Mayor of Caloocan and/or the City Government
of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan
City.

Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr. filed on November 12, 1992
a motion for reconsideration and/or to quash/recall the temporary restraining order and an urgent
motion for reconsideration alleging that ". . . in view of the calamitous situation that would arise if the
respondent city government fails to collect 350 tons of garbage daily for lack of dumpsite (i)t is therefore,
imperative that the issue be resolved with dispatch or with sufficient leeway to allow the respondents to
find alternative solutions to this garbage problem."

On November 17, 1992, the Court issued a Resolution13 directing the Court of Appeals to immediately set
the case for hearing for the purpose of determining whether or not the temporary restraining order issued
by the Court should be lifted and what conditions, if any, may be required if it is to be so lifted or whether
the restraining order should be maintained or converted into a preliminary injunction.

The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in the morning at the
Hearing Room, 3rd Floor, New Building, Court of Appeals.14 After the oral argument, a conference was set
on December 8, 1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the General
Manager of LLDA, the Secretary of DENR or his duly authorized representative and the Secretary of DILG
or his duly authorized representative were required to appear.

It was agreed at the conference that the LLDA had until December 15, 1992 to finish its study and review
of respondent's technical plan with respect to the dumping of its garbage and in the event of a rejection
of respondent's technical plan or a failure of settlement, the parties will submit within 10 days from notice
their respective memoranda on the merits of the case, after which the petition shall be deemed submitted
for resolution.15 Notwithstanding such efforts, the parties failed to settle the dispute.

On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1) the Regional Trial Court
has no jurisdiction on appeal to try, hear and decide the action for annulment of LLDA's cease and desist
order, including the issuance of a temporary restraining order and preliminary injunction in relation
thereto, since appeal therefrom is within the exclusive and appellate jurisdiction of the Court of Appeals
under Section 9, par. (3), of Batas Pambansa Blg. 129; and (2) the Laguna Lake Development Authority has
no power and authority to issue a cease and desist order under its enabling law, Republic Act No. 4850,
as amended by P.D. No. 813 and Executive Order
No. 927, series of 1983.

The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary injunction issued in the said
case was set aside; the cease and desist order of LLDA was likewise set aside and the temporary restraining
order enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist
from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City was lifted, subject,
however, to the condition that any future dumping of garbage in said area, shall be in conformity with the
procedure and protective works contained in the proposal attached to the records of this case and found
on pages 152-160 of the Rollo, which was thereby adopted by reference and made an integral part of the
decision, until the corresponding restraining and/or injunctive relief is granted by the proper Court upon
LLDA's institution of the necessary legal proceedings.

Hence, the Laguna Lake Development Authority filed the instant petition for review on certiorari, now
docketed as G.R. No. 110120, with prayer that the temporary restraining order lifted by the Court of
Appeals be re-issued until after final determination by this Court of the issue on the proper interpretation
of the powers and authority of the LLDA under its enabling law.

On July, 19, 1993, the Court issued a temporary restraining order 16 enjoining the City Mayor of Caloocan
and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate,
Barangay Camarin, Caloocan City, effective as of this date and containing until otherwise ordered by the
Court.

It is significant to note that while both parties in this case agree on the need to protect the environment
and to maintain the ecological balance of the surrounding areas of the Camarin open dumpsite, the
question as to which agency can lawfully exercise jurisdiction over the matter remains highly open to
question.

The City Government of Caloocan claims that it is within its power, as a local government unit, pursuant
to the general welfare provision of the Local Government Code, 17 to determine the effects of the
operation of the dumpsite on the ecological balance and to see that such balance is maintained. On the
basis of said contention, it questioned, from the inception of the dispute before the Regional Trial Court
of Caloocan City, the power and authority of the LLDA to issue a cease and desist order enjoining the
dumping of garbage in the Barangay Camarin over which the City Government of Caloocan has territorial
jurisdiction.

The Court of Appeals sustained the position of the City of Caloocan on the theory that Section 7 of
Presidential Decree No. 984, otherwise known as the Pollution Control law, authorizing the defunct
National Pollution Control Commission to issue an ex-parte cease and desist order was not incorporated
in Presidential Decree No. 813 nor in Executive Order No. 927, series of
1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act No. 4850, as amended, the
LLDA is instead required "to institute the necessary legal proceeding against any person who shall
commence to implement or continue implementation of any project, plan or program within the Laguna
de Bay region without previous clearance from the Authority."
The LLDA now assails, in this partition for review, the abovementioned ruling of the Court of Appeals,
contending that, as an administrative agency which was granted regulatory and adjudicatory powers and
functions by Republic Act No. 4850 and its amendatory laws, Presidential Decree No. 813 and Executive
Order No. 927, series of 1983, it is invested with the power and authority to issue a cease and desist order
pursuant to Section 4 par. (c), (d), (e), (f) and (g) of Executive Order No. 927 series of 1983 which provides,
thus:

Sec. 4. Additional Powers and Functions. The authority shall have the following powers and functions:

xxx xxx xxx

(c) Issue orders or decisions to compel compliance with the provisions of this Executive Order and its
implementing rules and regulations only after proper notice and hearing.

(d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and
the time within which such discontinuance must be accomplished.

(e) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the
prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for the
installation or operation of sewage works and industrial disposal system or parts thereof.

(f) After due notice and hearing, the Authority may also revoke, suspend or modify any permit issued
under this Order whenever the same is necessary to prevent or abate pollution.

(g) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for
the purpose of enforcing this Executive Order and its implementing rules and regulations and the orders
and decisions of the Authority.

The LLDA claims that the appellate court deliberately suppressed and totally disregarded the above
provisions of Executive Order No. 927, series of 1983, which granted administrative quasi-judicial
functions to LLDA on pollution abatement cases.

In light of the relevant environmental protection laws cited which are applicable in this case, and the
corresponding overlapping jurisdiction of government agencies implementing these laws, the resolution
of the issue of whether or not the LLDA has the authority and power to issue an order which, in its nature
and effect was injunctive, necessarily requires a determination of the threshold question: Does the Laguna
Lake Development Authority, under its Charter and its amendatory laws, have the authority to entertain
the complaint against the dumping of garbage in the open dumpsite in Barangay Camarin authorized by
the City Government of Caloocan which is allegedly endangering the health, safety, and welfare of the
residents therein and the sanitation and quality of the water in the area brought about by exposure to
pollution caused by such open garbage dumpsite?

The matter of determining whether there is such pollution of the environment that requires control, if not
prohibition, of the operation of a business establishment is essentially addressed to the Environmental
Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive Order No. 192, series
of 1987,18 has assumed the powers and functions of the defunct National Pollution Control Commission
created under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication Board (PAB)
under the Office of the DENR Secretary now assumes the powers and functions of the National Pollution
Control Commission with respect to adjudication of pollution cases. 19
As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board
(PAB), except in cases where the special law provides for another forum. It must be recognized in this
regard that the LLDA, as a specialized administrative agency, is specifically mandated under Republic Act
No. 4850 and its amendatory laws to carry out and make effective the declared national policy 20 of
promoting and accelerating the development and balanced growth of the Laguna Lake area and the
surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and
Caloocan21 with due regard and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution. Under such a broad grant and power and authority, the LLDA,
by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the discharge of wastes from the
surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated, among
others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local
government offices/agencies within the region, public corporations, and private persons or enterprises
where such plans, programs and/or projects are related to those of the LLDA for the development of the
region. 22

In the instant case, when the complainant Task Force Camarin Dumpsite of Our Lady of Lourdes Parish,
Barangay Camarin, Caloocan City, filed its letter-complaint before the LLDA, the latter's jurisdiction under
its charter was validly invoked by complainant on the basis of its allegation that the open dumpsite project
of the City Government of Caloocan in Barangay Camarin was undertaken without a clearance from the
LLDA, as required under Section 4, par. (d), of Republic Act. No. 4850, as amended by P.D. No. 813 and
Executive Order No. 927. While there is also an allegation that the said project was without an
Environmental Compliance Certificate from the Environmental Management Bureau (EMB) of the DENR,
the primary jurisdiction of the LLDA over this case was recognized by the Environmental Management
Bureau of the DENR when the latter acted as intermediary at the meeting among the representatives of
the City Government of Caloocan, Task Force Camarin Dumpsite and LLDA sometime in July 1992 to
discuss the possibility of
re-opening the open dumpsite.

Having thus resolved the threshold question, the inquiry then narrows down to the following issue: Does
the LLDA have the power and authority to issue a "cease and desist" order under Republic Act No. 4850
and its amendatory laws, on the basis of the facts presented in this case, enjoining the dumping of garbage
in Tala Estate, Barangay Camarin, Caloocan City.

The irresistible answer is in the affirmative.

The cease and desist order issued by the LLDA requiring the City Government of Caloocan to stop dumping
its garbage in the Camarin open dumpsite found by the LLDA to have been done in violation of Republic
Act No. 4850, as amended, and other relevant environment laws,23 cannot be stamped as an unauthorized
exercise by the LLDA of injunctive powers. By its express terms, Republic Act No. 4850, as amended by
P.D. No. 813 and Executive Order No. 927, series of 1983, authorizes the LLDA to "make, alter or modify
order requiring the discontinuance or pollution."24 (Emphasis supplied) Section 4, par. (d) explicitly
authorizes the LLDA to make whatever order may be necessary in the exercise of its jurisdiction.

To be sure, the LLDA was not expressly conferred the power "to issue and ex-parte cease and desist order"
in a language, as suggested by the City Government of Caloocan, similar to the express grant to the defunct
National Pollution Control Commission under Section 7 of P.D. No. 984 which, admittedly was not
reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it would be a mistake to draw
therefrom the conclusion that there is a denial of the power to issue the order in question when the power
"to make, alter or modify orders requiring the discontinuance of pollution" is expressly and clearly
bestowed upon the LLDA by Executive Order No. 927, series of 1983.

Assuming arguendo that the authority to issue a "cease and desist order" were not expressly conferred
by law, there is jurisprudence enough to the effect that the rule granting such authority need not
necessarily be express.25 While it is a fundamental rule that an administrative agency has only such powers
as are expressly granted to it by law, it is likewise a settled rule that an administrative agency has also
such powers as are necessarily implied in the exercise of its express powers. 26 In the exercise, therefore,
of its express powers under its charter as a regulatory and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce,
implied. Otherwise, it may well be reduced to a "toothless" paper agency.

In this connection, it must be noted that in Pollution Adjudication Board v. Court of Appeals, et al.,27 the
Court ruled that the Pollution Adjudication Board (PAB) has the power to issue an ex-parte cease and
desist order when there is prima facie evidence of an establishment exceeding the allowable standards
set by the anti-pollution laws of the country. The ponente, Associate Justice Florentino P. Feliciano,
declared:

Ex parte cease and desist orders are permitted by law and regulations in situations like that here
presented precisely because stopping the continuous discharge of pollutive and untreated effluents into
the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation
over the ultimate correctness or propriety of such orders has run its full course, including multiple and
sequential appeals such as those which Solar has taken, which of course may take several years. The
relevant pollution control statute and implementing regulations were enacted and promulgated in the
exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort
of the public, as well as the protection of plant and animal life, commonly designated as the police power.
It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the
necessities of protecting vital public interests like those here involved, through the exercise of police
power. . . .

The immediate response to the demands of "the necessities of protecting vital public interests" gives
vitality to the statement on ecology embodied in the Declaration of Principles and State Policies or the
1987 Constitution. Article II, Section 16 which provides:

The State shall protect and advance the right of the people to a balanced and healthful ecology in accord
with the rhythm and harmony of nature.

As a constitutionally guaranteed right of every person, it carries the correlative duty of non-impairment.
This is but in consonance with the declared policy of the state "to protect and promote the right to health
of the people and instill health consciousness among them."28 It is to be borne in mind that the Philippines
is party to the Universal Declaration of Human Rights and the Alma Conference Declaration of 1978 which
recognize health as a fundamental human right. 29
The issuance, therefore, of the cease and desist order by the LLDA, as a practical matter of procedure
under the circumstances of the case, is a proper exercise of its power and authority under its charter and
its amendatory laws. Had the cease and desist order issued by the LLDA been complied with by the City
Government of Caloocan as it did in the first instance, no further legal steps would have been necessary.

The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring upon the LLDA the means
of directly enforcing such orders, has provided under its Section 4 (d) the power to institute "necessary
legal proceeding against any person who shall commence to implement or continue implementation of
any project, plan or program within the Laguna de Bay region without previous clearance from the LLDA."

Clearly, said provision was designed to invest the LLDA with sufficiently broad powers in the regulation of
all projects initiated in the Laguna Lake region, whether by the government or the private sector, insofar
as the implementation of these projects is concerned. It was meant to deal with cases which might
possibly arise where decisions or orders issued pursuant to the exercise of such broad powers may not be
obeyed, resulting in the thwarting of its laudabe objective. To meet such contingencies, then the writs
of mandamus and injunction which are beyond the power of the LLDA to issue, may be sought from the
proper courts.

Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake region and its
surrounding provinces, cities and towns are concerned, the Court will not dwell further on the related
issues raised which are more appropriately addressed to an administrative agency with the special
knowledge and expertise of the LLDA.

WHEREFORE, the petition is GRANTED. The temporary restraining order issued by the Court on July 19,
1993 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan from dumping their
garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby made permanent.

SO ORDERED.
G.R. No. 110265 July 7, 1994

FREEMAN, INC., FREEMAN MANAGEMENT & DEVELOPMENT CORP., CHIAO LIAN, LECHU S. LIM, PERLITA
S. DYOGI, OLIVIA S. SANTOS, CARMEN S. SAW and RUBEN CHUA, petitioners,
vs.
THE SECURITIES AND EXCHANGE COMMISSION, SAW MUI, RUBEN SAW, DIONISIO SAW, LINA S. CHUA,
LUCILA S. RUSTE and EVELYN SAW, respondents.

Abelardo G. Luzano for petitioner.

Benito O. Ching, Jr. for private respondents.

BELLOSILLO, J.:

This petition for certiorari filed under Rule 65 of the Rules of Court seeks to annul and set aside the order
of respondent Securities and Exchange Commission dated 7 January 1993 in SEC-EB No. 308 denying the
action of petitioners to nullify the 7 January 1992 order of the Securities and Exchange Commission in SEC
Case No. 3577.

Sometime in 1986 and 1987, Freeman, Inc. (FREEMAN), was granted a loan by Equitable Banking
Corporation (EQUITABLE) as evidenced by two (2) promissory notes, P.N. No. 125957 dated 8 December
1986 for P1,700,000.00 payable 8 December 1987, and P.N. No. TL-369 dated 24 April 1987 for
P6,000,000.00 payable 24 April 1988. Saw Chiao Lian, President of Freeman, Inc., signed as co-maker in
both promissory notes.

When FREEMAN failed to pay its obligations, EQUITABLE instituted collection suit against FREEMAN and
Saw Chiao Lian.1 EQUITABLE also prayed for preliminary attachment.

On 27 May 1988, private respondents Saw Mui, Ruben Saw, Dionisio Saw, Lina S. Chua, Lucila S. Ruste and
Evelyn Saw filed an answer in intervention claiming that they owned the minority interest in FREEMAN.

On 12 October 1988, the trial court denied the intervention of private respondents. The denial was
affirmed by the Court of Appeals and thereafter by this Court.2

The collection case was terminated when the parties entered into a compromise agreement duly
approved by the court and a decision rendered thereon on 5 December 1988. However, Freeman, Inc.
(FREEMAN) and Saw Chiao Lian, defendants in the trial court, failed to comply with the judgment.

On 30 January 1989, a writ of execution was issued. Two (2) parcels of land belonging to FREEMAN covered
by TCT Nos. 34219 and 34220 were levied upon and sold at public auction on 31 March 1989. The highest
bidder was one of the petitioners, Freeman Management and Development Corporation (FREEMAN
MANAGEMENT), which thereafter registered its certificate of sale with the Register of Deeds.

On 23 May 1989, before FREEMAN MANAGEMENT could consolidate its title over the properties
purchased at the auction sale, private respondents, representing the minority shareholdings of FREEMAN,
filed a petition with the Securities and Exchange Commission (SEC) seeking the dissolution of FREEMAN,
accounting and reconveyance of the properties covered by TCT Nos. 34219 and 34220. 3
On 5 April 1990, private respondent filed a similar complaint against petitioners with the Regional Trial
Court of Kalookan City.4 The complaint sought to annul the compromise agreement between EQUITABLE
on one hand and defendants FREEMAN and Saw Chiao Lian on the other, as well as the promissory notes
executed by Saw Chiao Lian, the auction sale, and the sheriff's certificate of sale of the lots covered by
TCT Nos. 34219 and 34220.

Petitioners moved for the dismissal of the complaint on the ground that the same was a duplication of
the case pending in the SEC. But the motion was denied. Petitioners went up on certiorari to the Court of
Appeals which reversed the trial court and directed the dismissal of the complaint by reason of the
pendency of the case.5

On 7 January 1992, on motion on private respondents in SEC Case

No. 3577, and despite the opposition thereto by petitioners, SEC Hearing Officer Juanito B. Almosa, Jr.,
issued a writ of preliminary injunction to prevent the consolidation of ownership of petitioner FREEMAN
MANAGEMENT over the properties it acquired in the auction sale of 31 March 1989, the redemption
period having expired on 7 April 1990.6

Petitioners assailed the order of the SEC Hearing Officer by filing a petition for certiorari with the SEC en
banc which on 7 January 1993 however denied the petition. 7 On 15 March 1993, petitioners' motion for
reconsideration was likewise denied.8

On 22 April 1993, petitioners filed with this Court a petition for certiorari questioning the 15 March 1993
order of the SEC.9 In a Resolution dated 10 May 1993, this Court dismissed the petition for its failure to
state the date when the questioned SEC Order was received as well as the date when the order denying
the Motion for Reconsideration was received.10

On 4 June 1993, petitioners filed the present petition containing the matters omitted in the petition earlier
dismissed. Petitioners allege that the SEC committed grave abuse of discretion and acted in excess of
jurisdiction in sustaining the order of its Hearing Officer granting the writ of injunction enjoining
consolidation of ownership in FREEMAN MANAGEMENT and that the SEC miscontrued the decisions of
the Court of Appeals in Equitable Banking Corp. v. Hon. Mangay11 and of this Court in Saw v. Court
of Appeals, 12 which in effect ruled the SEC has jurisdiction to take cognizance of and determine the rights
of petitioners and private respondents as against each other. Petitioners also argue that the assailed order
of the SEC violated the basic principle that the SEC, being a coordinate body with the Regional Trial Court,
could not interfere in the proceedings held therein, and neither could it review the issues passed upon by
the said court. They likewise maintain that although SEC Case No. 3577 could still proceed as to the
dissolution of FREEMAN, the two (2) properties of the latter which were levied upon and sold to FREEMAN
MANAGEMENT are already excluded from the corporate assets of FREEMAN; and, that these properties
could no longer be the subject of the action for reconveyance in the SEC because they had been the
subject of execution to enforce the decision of the trial court in Civil Case No. 88-44404 which had already
attained finality.

In their comment, private respondents contend that the present petition was filed beyond the
reglementary period of thirty (30) days within which to appeal to this Court, citing Sec. 1, Rule 17, of the
New Rules of Procedure of the SEC. Private respondents also allege that the jurisdiction of the SEC has
been resolved by this Court in Saw v. Court of Appeals 13 when it held that "even with the denial of
petitioners' motion to intervene, nothing is really lost to them. The denial did not necessarily prejudice
them as their rights are being litigated in the case (SEC Case No. 3577) now before the Securities and
Exchange Commission and may be fully asserted and protected in that separate proceeding."

In its comment, the Office of the Solicitor General expresses conformity with the allegations in the petition
and prays that the petition be given due course. It also avers that since the present petition, which is one
under Rule 65 of the Rules of Court, was filed thirty-five (35) days after receipt of the assailed resolution
of the SEC, the instant petition was filed within a reasonable time. The Solicitor General also agrees with
petitioners' contention that the SEC, as a co-equal body with the Regional Trial Court, cannot modify,
reverse or pass upon the decision of said court. Moreover, private respondents had the opportunity to
submit a bid for the foreclosed properties during the public auction and their failure to exercise their right
should not prejudice petitioners.

We sustain petitioners. The present petition seeks to annul and set aside the order of the SEC for want of
jurisdiction to issue the writ of injunction, a provisional remedy to the principal action pending in the SEC
for the dissolution of petitioner FREEMAN. Hence, the petition is not an appeal from a final order of the
SEC but a special civil action questioning the legal competence of the latter to issue such interlocutory
order. It is covered by Sec. 1, Rule 65, of the Rules of Court which allow a person aggrieved to file a verified
petition in the proper court praying that judgment be rendered annulling or modifying the proceedings,
as the law requires, of the tribunal, board or officer when the latter, exercising judicial functions, has acted
without or in excess of its or his jurisdiction or with grave abuse of discretion and there is no appeal, nor
any plain, speedy and adequate remedy in the ordinary course of law.

We have consistently ruled that petitions for certiorari must be filed within a reasonable time. In the
instant case, the records show that the petition at bench was filed on 4 June 1993, or two (2) months and
nineteen (19) days from 17 March 1993, which was the date when petitioners received copy of the order
of the SEC denying their motion for reconsideration. There is no doubt that this petition was seasonably
filed.

SEC Case No. 3577 arose from the action filed by private respondents as minority shareholders of
petitioner FREEMAN for the dissolution of the corporation and reconveyance of the properties conveyed
to another petitioner FREEMAN MANAGEMENT in a public auction. The SEC maintained that it had
jurisdiction to issue the writ of injunction preventing the consolidation of ownership in FREEMAN
MANAGEMENT on the basis of our ruling in Saw v. Court of Appeals. We denied the intervention of private
respondents in the trial court in Civil Case No. 88-44404 which had already been terminated. As we stated
therein, even with the denial of herein private respondents' motion to intervene nothing could really be
lost to them as their rights were being litigated before the SEC and would be fully asserted and protected
in that separate proceeding.

Our ruling in Saw v. Court of Appeals should be understood in the light of two(2) basic legal principles.
First, that administrative agencies like the SEC are tribunals of limited jurisdiction and as such can exercise
only those powers which are specifically granted to them by their enabling statutes. 14 Section 5 of P.D.
No. 902-A, as amended, provides the cases over which the SEC has original and exclusive jurisdiction to
hear and decide. These include controversies arising out of intra-corporate or partnership relations
between and among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or associates,
respectively; and, between such corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity. Section 6 of the same decree empowers
the SEC to issue preliminary or permanent injunction, whether prohibitory or mandatory, in all cases in
which it has jurisdiction.

The action for dissolution of FREEMAN filed by its minority stockholders is well within the jurisdiction of
the SEC to resolve in accordance with P.D. No. 902-A. However, the inclusion in the SEC case of FREEMAN
MANAGEMENT of which private respondents are not stockholders for the purpose of compelling it to
reconvey to FREEMAN the properties originally owned by the latter but were levied upon and sold to
FREEMAN MANAGEMENT in a public auction is a matter outside of the limited jurisdiction of the SEC. The
petition for reconveyance of properties against FREEMAN MANAGEMENT is not an intra-corporate
controversy since private respondents have no shares or interests whatsoever in FREEMAN
MANAGEMENT, a corporation separate and distinct from FREEMAN, which is undergoing dissolution
proceedings in the SEC.

The second basic principle is the doctrine of non-interference which should be regarded as highly
important in judicial stability and in the administration of justice whereby the judgment of a court of
competent jurisdiction may not be opened, modified or vacated by any court or tribunal of concurrent
jurisdiction.15 The SEC is at the very least co-equal with the Regional Trial Court. As such, one would have
no power to control the other.16 Moreover, in the instant case, judgment was rendered by the trial court
in Civil Case No. 88-44404 approving the compromise agreement between EQUITABLE on one hand, and
FREEMAN and Saw Chiao Lian on the other. A writ of execution was issued against the defendants to
enforce the judgment and two (2) properties of FREEMAN were levied upon and sold to FREEMAN
MANAGEMENT as highest bidder in the public auction.

Finally, the judgment was fully satisfied and a certificate of sale was issued to FREEMAN MANAGEMENT.
It is axiomatic that after a judgment has been fully satisfied, the case is deemed terminated once and for
all.17 It cannot be modified or altered. Hence, the properties sold to FREEMAN MANAGEMENT are now
considered excluded from the corporate assets of FREEMAN and can no longer be the subject of the
proceedings in the SEC for the dissolution of the latter. Therefore SEC exceeded its jurisdiction when it
issued a writ of injunction enjoining FREEMAN MANAGEMENT from consolidating its ownership over the
two (2) parcels of land it acquired as highest bidder in the execution sale.

WHEREFORE, the petition is GRANTED and the assailed orders of the Securities and Exchange Commission
dated 7 January 1993 and 15 March 1993 are REVERSED and SET ASIDE.

SO ORDERED.
G.R. No. L-45839 June 1, 1988

RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO FRANCO, AND LA SUERTE TRANSPORTATION

CORPORATION, petitioners,
vs.
HON. LEOPOLDO M. ABELLERA, ACTING CHAIRMAN OF THE BOARD OF TRANSPORTATION, HON.
GODOFREDO Q. ASUNCION, MEMBER OF THE BOARD OF TRANSPORTATION, ARTURO DELA CRUZ, MS
TRANSPORTATION CO., INC., NEW FAMILIA TRANSPORTATION CO., ROBERTO MOJARES, ET
AL., respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari and prohibition, with application for preliminary injunction, seeking the
annulment and inhibition of the grant or award of provisional permits or special authority by the
respondent Board of Transportation (BOT) to respondent taxicab operators, for the operation and
legalization of "excess taxicab units" under certain provisions of Presidential Decree No. 101 "despite the
lapse of the power to do so thereunder," and "in violation of other provisions of the Decree, Letter of
Instructions No. 379 and other relevant rules of the BOT."

The petitioners and private respondents are all authorized taxicab operators in Metro Manila. The
respondents, however, admittedly operate "colorum" or "kabit" taxicab units. On or about the second
week of February, 1977, private respondents filed their petitions with the respondent Board for the
legalization of their unauthorized "excess" taxicab units citing Presidential Decree No. 101, promulgated
on January 17, 1973, "to eradicate the harmful and unlawful trade of clandestine operators, by replacing
or allowing them to become legitimate and responsible operators." Within a matter of days, the
respondent Board promulgated its orders setting the applications for hearing and granting applicants
provisional authority to operate their "excess taxicab units" for which legalization was sought. Thus, the
present petition.

Opposing the applications and seeking to restrain the grant of provisional permits or authority, as well as
the annulment of permits already granted under PD 101, the petitioners allege that the BOT acted without
jurisdiction in taking cognizance of the petitions for legalization and awarding special permits to the
private respondents.

Presidential Decree No. 101 vested in the Board of Transportation the power, among others "To grant
special permits of limited term for the operation of public utility motor vehicles as may, in the judgment
of the Board, be necessary to replace or convert clandestine operators into legitimate and responsible
operators." (Section 1, PD 101)

Citing, however, Section 4 of the Decree which provides:

SEC. 4. Transitory Provision. — Six months after the promulgation of this Decree, the Board of
Transportation, the Bureau of Transportation, The Philippine Constabulary, the city and municipal forces,
and the provincial and city fiscals shall wage a concerted and relentless drive towards the total elimination
and punishment of all clandestine and unlawful operators of public utility motor vehicles."
the petitioners argue that neither the Board of Transportation chairman nor any member thereof had the
power, at the time the petitions were filed (i.e. in 1977), to legitimize clandestine operations under PD
101 as such power had been limited to a period of six (6) months from and after the promulgation of the
Decree on January 17, 1973. They state that, thereafter, the power lapses and becomes functus officio.

To reinforce their stand, the petitioners refer to certain provisions of the Rules and Regulations
implementing PD 101 issued by respondent Board, Letter of Instructions No. 379, and BOT Memorandum
Circular No. 76-25 (a). In summary, these rules provide inter alia that (1) only applications for special
permits for "colorum" or "kabit" operators filed before July 17, 1973 shall be accepted and processed
(Secs. 3 and 16 (c), BOT-LTC-HPG Joint Regulations Implementing PD 101, pp. 33 and 47, Rollo); (2) Every
provisional authority given to any taxi operator shall be cancelled immediately and no provisional
authority shall thereafter be issued (par. 6, Letter of Instructions No. 379, issued March 10, 1976, p. 58,
Rollo); (3) Effective immediately, no provisional authorities on applications for certificates of public
convenience shall be granted or existing provisional authorities on new applications extended to, among
others, taxi denominations in Metro Manila (BOT Memorandum Circular No. 75-25 (a), August 30, 1976,
p. 64, Rollo); (4) All taxis authorized to operate within Metro Manila shall obtain new special permits from
the BOT, which permits shall be the only ones recognized within the area (par. 8, LOI No. 379, supra); and
(5) No bonafide applicant may apply for special permit to operate, among others, new taxicab services,
and, no application for such new service shall be accepted for filing or processed by any LTC agency or
granted under these regulations by any LTC Regional Office until after it shall have announced its program
of development for these types of public motor vehicles (Sec. 16d, BOT-LTC-HPG Joint Regulations, p. 47,
Rollo).

The petitioners raise the following issues:

I. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO GRANT PROVISIONAL
PERMITS TO OPERATE DESPITE THE BAN THEREON UNDER LETTER OF INSTRUCTIONS NO. 379;

II. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE POWER TO LEGALIZE, AT THIS TIME,
CLANDESTINE AND UNLAWFUL TAXICAB OPERATIONS UNDER SECTION 1, P.D. 101; AND

III. WHETHER OR NOT THE PROCEDURE BEING FOLLOWED BY THE BOARD IN THE CASES IN QUESTION
SATISFIES THE PROCEDURAL DUE PROCESS REQUIREMENTS. (p. 119, Rollo)

We need not pass upon the first issue raised anent the grant of provisional authority to respondents.
Considering that the effectivity of the provisional permits issued to the respondents was expressly limited
to June 30, 1977, as evidenced by the BOT orders granting the same (Annexes G, H, I and J among others)
and Memorandum Circular No. 77-4 dated January 20, 1977 (p. 151, Rollo), implementing paragraph 6 of
LOI 379 (ordering immediate cancellation of all provisional authorities issued to taxicab operators, supra),
which provides:

5. After June 30, 1977, all provisional authorities are deemed cancelled, even if hearings on the main
application have not been terminated.

the issue is MOOT and ACADEMIC. Only the issue on legalization remains under consideration.

Justifying its action on private respondent's applications, the respondent Board emphasizes public need
as the overriding concern. It is argued that under PD 101, it is the fixed policy of the State "to eradicate
the harmful and unlawful trade of clandestine operators by replacing or allowing them to become
legitimate and responsible ones" (Whereas clause, PD 101). In view thereof, it is maintained that
respondent Board may continue to grant to "colorum" operators the benefits of legalization under PD
101, despite the lapse of its power, after six (6) months, to do so, without taking punitive measures against
the said operators.

Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to issue
provisional permits as a step towards the legalization of colorum taxicab operations without the alleged
time limitation. There is nothing in Section 4, cited by the petitioners, to suggest the expiration of such
powers six (6) months after promulgation of the Decree. Rather, it merely provides for the withdrawal of
the State's waiver of its right to punish said colorum operators for their illegal acts. In other words, the
cited section declares when the period of moratorium suspending the relentless drive to eliminate illegal
operators shall end. Clearly, there is no impediment to the Board's exercise of jurisdiction under its broad
powers under the Public Service Act to issue certificates of public convenience to achieve the avowed
purpose of PD 101 (Sec. 16a, Public Service Act, Nov. 7, 1936).

It is a settled principle of law that in determining whether a board or commission has a certain power, the
authority given should be liberally construed in the light of the purposes for which it was created, and that
which is incidentally necessary to a full implementation of the legislative intent should be upheld as being
germane to the law. Necessarily, too, where the end is required, the appropriate means are deemed given
(Martin, Administrative Law, 1979, p. 46). Thus, as averred by the respondents:

... [A]ll things considered, the question is what is the best for the interest of the public. Whether PD 101
has lost its effectiveness or not, will in no way prevent this Board from resolving the question in the same
candor and spirit that P.D. 101 and LOI 379 were issued to cope with the multifarious ills that plague our
transport system. ... (Emphasis supplied) (pp. 91-92, Rollo)

This, the private respondents appreciate, as they make reference to PD 101, merely to cite the compassion
with which colorum operators were dealt with under the law. They state that it is "in the same vein and
spirit that this Honorable Board has extended the Decree of legalization to the operatives of the various
PUJ and PUB services along legislative methods," that respondents pray for authorization of their colorum
units in actual operation in Metro Manila (Petitions for Legalization, Annexes E & F, par. 7, pp. 65-79,
Rollo).

Anent the petitioners' reliance on the BOT Rules and Regulations Implementing PD 101 as well as its
Memorandum Circular No. 76-25(a), the BOT itself has declared:

In line with its duty to rationalize the transport industry, the Board shall. from time to time, re- study the
public need for public utilities in any area in the Philippines for the purpose of re- evaluating the policies.
(p. 64, Rollo)

Thus, the respondents correctly argue that "as the need of the public changes and oscillates with the
trends of modern life, so must the Memo Orders issued by respondent jibe with the dynamic and flexible
standards of public needs. ... Respondent Board is not supposed to 'tie its hands' on its issued Memo
Orders should public interest demand otherwise" (Answer of private respondents, p. 121, Rollo).

The fate of the private respondent's petitions is initially for the Board to determine. From the records of
the case, acceptance of the respondent's applications appears to be a question correctly within the
discretion of the respondent Board to decide. As a rule, where the jurisdiction of the BOT to take
cognizance of an application for legalization is settled, the Court enjoins the exercise thereof only when
there is fraud, abuse of discretion or error of law. Furthermore, the court does not interfere, as a rule,
with administrative action prior to its completion or finality . It is only after judicial review is no longer
premature that we ascertain in proper cases whether the administrative findings are not in violation of
law, whether they are free from fraud or imposition and whether they find substantial support from the
evidence.

Finally, with respect to the last issue raised by the petitioners alleging the denial of due process by
respondent Board in granting the provisional permits to the private respondents and in taking cognizance
of their applications for legalization without notice and hearing, suffice it to say that PD 101 does not
require such notice or hearing for the grant of temporary authority . The provisional nature of the
authority and the fact that the primary application shall be given a full hearing are the safeguards against
its abuse. As to the applications for legalization themselves, the Public Service Act does enjoin the Board
to give notice and hearing before exercising any of its powers under Sec. 16 thereof. However, the
allegations that due process has been denied are negated by the hearings set by the Board on the
applications as expressed in its orders resolving the petitions for special permits (Annexes G, H, I, pp. 80-
102, Rollo).

The Board stated:

The grounds involved in the petition are of first impression. It cannot resolve the issue ex-parte. It needs
to hear the views of other parties who may have an interest, or whose interest may be affected by any
decision that this Board may take.

The Board therefore, decides to set the petition for hearing.

xxx xxx xxx

As to the required notice, it is impossible for the respondent Board to give personal notice to all parties
who may be interested in the matter, which parties are unknown to it. Its aforementioned order
substantially complies with the requirement. The petitioners having been able to timely oppose the
petitions in question, any lack of notice is deemed cured.

WHEREFORE. the petition is hereby DISMISSED for lack of merit. The questioned orders of the then Board
of Transportation are AFFIRMED.

SO ORDERED.
G.R. No. 108310 September 1, 1994

RUFINO O. ESLAO, in his capacity as President of Pangasinan State University, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

Mehol K. Sadain for petitioner.

FELICIANO, J.:

In this Petition for Certiorari, Rufino O. Eslao in his capacity as President of the Pangasinan State
University ("PSU") asks us to set aside Commission on Audit ("COA") Decisions Nos. 1547 (1990)
and 2571 (1992) which denied honoraria and per diems claimed under National Compensation
Circular No. 53 by certain PSU personnel including petitioner.

On 9 December 1988, PSU entered into a Memorandum of Agreement ("MOA") 1 with the Department
of Environment and Natural Resources ("DENR") for the evaluation of eleven (11) government
reforestation operations in Pangasinan. 2 The evaluation project was part of the commitment of the
Asian Development Bank ("ADB") under the ADB/OECF Forestry Sector Program Loan to the
Republic of the Philippines and was one among identical project agreements entered into by the DENR
with sixteen (16) other state universities.

On 9 December 1988, a notice to proceed 3 with the review and evaluation of the eleven (11)
reforestation operations was issued by the DENR to PSU. The latter complied with this notice and did
proceed.

On 16 January 1989, per advice of the PSU Auditor-in-Charge with respect to the payment
of honoraria and per diems of PSU personnel engaged in the review and evaluation project, PSU Vice
President for Research and Extension and Assistant Project Director Victorino P. Espero requested
the Office of the President, PSU, to have the University's Board of Regents ("BOR") confirm the
appointments or designations of involved PSU personnel including the rates of honoraria and per
diems corresponding to their specific roles and functions. 4

The BOR approved the MOA on 30 January 1989 5 and on 1 February 1989, PSU issued Voucher No.
8902007 6 representing the amount of P70,375.00 for payment of honoraria to PSU personnel
engaged in the project. Later, however, the approved honoraria rates were found to be somewhat
higher than the rates provided for in the guidelines of National Compensation Circular ("NCC") No. 53.
Accordingly, the amounts were adjusted downwards to conform to NCC No. 53. Adjustments were
made by deducting amounts from subsequent disbursements of honoraria. By June 1989, NCC No.
53 was being complied with. 7

On 6 July 1989, Bonifacio Icu, COA resident auditor at PSU, alleging that there were excess payments
of honoraria, issued a "Notice of Disallowance" 8 disallowing P64,925.00 from the amount of
P70,375.00 stated in Voucher No. 8902007, mentioned earlier. The resident auditor based his action
on the premise that Compensation Policy Guidelines ("CPG") No. 80-4, dated 7 August 1980, issued
by the Department of Budget and Management which provided for lower rates than NCC No. 53 dated
21 June 1988, also issued by the Department of Budget and Management, was the schedule
for honoraria and per diems applicable to work done under the MOA of 9 December 1988 between
the PSU and the DENR.
On 18 October 1989, a letter 9 was sent by PSU Vice President and Assistant Project Director Espero
to the Chairman of the COA requesting reconsideration of the action of its resident auditor. In the
meantime, the Department of Budget and Management ("DBM"), upon request by PSU, issued a
letter 10 clarifying that the basis for the project's honoraria should not be CPG No. 80-4 which pertains
to locally funded projects but rather NCC No. 53 which pertains to foreign-assisted projects. A copy of
this clarification was sent to the COA upon request by PSU.

On 18 September 1990, COA Decision No. 1547 11 was issued denying reconsideration of the decision
of its resident auditor. The COA ruled that CPG. No. 80-4 is the applicable guideline in respect of
the honoraria as CPG No. 80-4 does not distinguish between projects locally funded and projects
funded or assisted with monies of foreign-origin.

PSU President Eslao sent a letter 12 dated 20 March 1991 requesting reconsideration of COA Decision
No. 1547 (1990) alleging that (a) COA had erred in applying CPG No. 80-4 and not NCC No. 53 as
the project was foreign-assisted and (b) the decision was discriminatory — honoraria based on NCC
No. 53 having been approved and granted by COA resident auditors in two (2) other state universities
engaged in the same reforestation project. PSU then submitted to the COA (a) a certification 13 from
the DENR to the effect that the DENR evaluation project was foreign- assisted and (b) the letter of the
DBM quoted in the margin supra.

On 16 November 1992, COA Decision No. 2571 (1992) 14 was issued denying reconsideration.

In the meantime, in December 1990, the DENR informed petitioner of its acceptance of the PSU final
reports on the review and evaluation of the government reforestation
projects. 15 Subsequently, honoraria for the period from January 1989 to January 1990 were disbursed
in accordance with NCC No. 53. A Certificate of Settlement and Balances (CSB No. 92-0005-184
[DENR]) 16 was then issued by the COA resident auditor of PSU showing disallowance of alleged
excess payment of honoraria which petitioner was being required to return.

The instant Petition prays that (a) COA Decision Nos. 1547 (1990) and 2571 (1992) be set aside; (b)
the COA be ordered to pass in audit the grant of honoraria for the entire duration of the project based
on the provisions and rates contained in NCC No. 53; and (c) the COA be held liable for actual
damages as well as petitioner's legal expenses and attorney's fees.

The resolution of the dispute lies in the determination of the circular or set of provisions applicable in
respect of the honoraria to be paid to PSU personnel who took part in the evaluation project, i.e., NCC
No. 53 or CPG No. 80-4.

In asserting that NCC No. 53 supplies the applicable guideline and that the COA erred in applying
CPG No. 80-4 as the pertinent standard, petitioner contends that:

(a) CPG No. 80-4 applies to "special projects" the definition and scope of which do not embrace
the evaluation project undertaken by petitioner for the DENR;

(b) NCC No. 53 applies to foreign-assisted projects ("FAPs") while CPG No. 80-4 applies to
locally-funded projects as no reference to any foreign component characterizing the projects
under its coverage is made;

(c) the DENR evaluation project is a foreign-assisted project per certification and clarification
of the DENR and DBM respectively as well as the implied admission of the COA in its
Comment; and
 (d) the DBM's position on the matter should be respected since the DBM is vested with
authority to (i) classify positions and determine appropriate salaries for specific position
classes, (ii) review the compensation benefits programs of agencies and (iii) design job
evaluation programs.

The Office of the Solicitor General, in lieu of a Comment on the Petition, filed a Manifestation 17 stating
that (a) since, per certification of the DENR and Letter/Opinion of the DBM that the project undertaken
by PSU is foreign-assisted, NCC No. 53 should apply; and (b) respondent COA's contention that CPG
No. 80-4 does not distinguish between projects which are foreign-funded from locally-funded projects
deserves no merit, since NCC No. 53, a special guideline, must be construed as an exception to CPG
No. 80-4, a general guideline. The Solicitor General, in other words, agreed with the position of
petitioner.

Upon the other hand, respondent COA filed its own comment, asserting that:

(a) while the DBM is vested with the authority to issue rules and regulations pertaining
to compensation, this authority is regulated by Sec. 2 (2) of Art. IX-D of the 1987
Constitution which vests respondent COA with the power to "promulgate accounting
and auditing rules and regulations, including those for the prevention and disallowance
of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or
uses of government funds and properties;

(b) the Organizational Arrangement and Obligations of the Parties sections of the MOA
clearly show that the evaluation project is an "inter-agency activity" between the DENR
and PSU and therefore a "special project";

(c) the issue as to whether the evaluation project is in fact a "special project" has
become moot in view of the DBM's clarification/ruling that the evaluation project is
foreign-assisted and therefore NCC No. 53, not CPG No. 80-4 which applies only to
locally-funded projects, should apply;

(d) the DBM issuance notwithstanding, respondent COA applied CPG No. 80-4 to
effectively rationalize the rates of additional compensation assigned to or detailed in
"special projects" as its application is without distinction as to the source of funding
and any payment therefore in excess of that provided by CPG No. 80-4 is
unnecessary, excessive and disadvantageous to the government;

(e) respondent COA's previous allowance of payment of honoraria based on NCC No.
53 or the fact that a full five years had already elapsed since NCC No. 53's issuance
does not preclude COA from assailing the circular's validity as "it is the responsibility
of any public official to rectify every error he encounters in the performance of his
function" and "he is not duty- bound to pursue the same mistake for the simple reason
that such mistake had been continuously committed in the past";

(f) the DBM ruling classifying the evaluation project as foreign-assisted does not rest
on solid ground since loan proceeds, regardless of source, eventually become public
funds for which the government is accountable, hence, any project under the loan
agreement is to be considered locally-funded;

(g) the DBM ruling constitutes an unreasonable classification, highly discriminatory and
violative of the equal protection clause of the Constitution; and
 (h) granting arguendo NCC No. 53 is the applicable criterion, petitioner
received honoraria in excess of what was provided in the MOA.

We consider the Petition meritorious.

Sec. 2.1 of CPG No. 80-4 defines "special project" as

an inter-agency or inter-committee activity or an undertaking by a composite group of

officials/employees from various agencies which [activity or undertaking] is not
among the regular and primary functions of the agencies involved. (Emphasis and
brackets supplied)

Respondent COA maintains that the sections of the MOA detailing the "Organizational Arrangement
and Obligations of the Parties" clearly show that the evaluation project is an "inter-agency activity."
The pertinent sections of the MOA are as follows:

ORGANIZATIONAL ARRANGEMENTS

A Coordinating Committee shall be created which shall be responsible for the overall
administration and coordination of the evaluation, to be chaired by a senior officer of
the DENR. The Committee shall [be] composed [of] the following:

Chairman : Undersecretary for Planning,

Policy and Project Management
[DENR]

Co-Chairman : Vice-President for Research

and Development [PSU]

Members : Director of FMB

Dean, PSU Infanta Campus
Associate Dean, PSU Infanta
Campus
Chief, Reforestation
Division
Project Director of the ADB
Program Loan for Forestry
Sector

OBLIGATIONS OF THE PARTIES

Obligations of DENR:

The DENR shall have the following obligations:

1. Provide the funds necessary for the review and reevaluation of eleven (11)
reforestation projects.

xxx xxx xxx

 2. Undertake the monitoring of the study to ascertain its progress and the proper
utilization of funds in conformity with the agreed work and financial plan.

3. Reserve the right to accept or reject the final report and in the latter case, DENR
may request PSU to make some revisions/modifications on the same.

Obligations of the PSU:

The PSU shall have the following obligations:

1. Undertake the review and evaluation of the eleven (11) DENR-funded

reforestation projects in accordance with the attached TOR;

2. Submit regularly to DENR financial status reports apart from the progress report
required to effect the second release of funds;

3. Submit the final report to DENR fifteen (15) days after the completion of the work.
The report should at least contain the information which appears in Annex D;

4. Return to DENR whatever balance is left of the funds after the completion of work.

Simply stated, respondent COA argues that since the Coordinating Committee is composed of
personnel from the DENR and PSU, the evaluation project is an "inter-agency activity" within the
purview of the definition of a "special project".

We are unable to agree with respondent COA.

Examination of the definition in CPG No. 80-4 of a "special project" reveals that definition has two (2)
components: firstly, there should be an inter-agency or inter-committee activity or undertaking by a
group of officials or employees who are drawn from various agencies; and secondly, the activity or
undertaking involved is not part of the "regular or primary" functions of the participating agencies.
Examination of the MOA and its annexes reveals that two (2) groups were actually created. The first
group consisted of the coordinating committee, the membership of which was drawn from officials of
the DENR and of the PSU; and the second, the evaluation project team itself which was, in
contrast, composed exclusively of PSU personnel. 18 We believe that the first component of the CPU
No. 80-4's definition of "special project" is applicable in respect of the group which is charged with the
actual carrying out of the project itself, rather than to the body or group which coordinates the task of
the operating or implementing group. To construe the administrative definition of "special project"
otherwise would create a situation, which we deem to be impractical and possibly even absurd, under
which any undertaking entered into between the senior officials of government agencies would have
to be considered an "inter-agency or inter-committee activity," even though the actual undertaking or
operation would be carried out not by the coordinating body but rather by an separate group which
might not (as in the present case) be drawn from the agencies represented in the coordinating group.
In other words, an "inter-agency or inter-committee activity or . . . undertaking" must be one which is
actually carried out by a composite group of officials and employees from the two (2) or more
participating agencies.

As already noted, in the case at hand, the project team actually tasked with carrying out the evaluation
of the DENR reforestation activity is composed exclusively of personnel from PSU; the project team's
responsibility and undertaking are quite distinct from the responsibilities of the coordinating [DENR
and PSU] committee. Thus, the project team is not a "composite group" as required by the definition
of CPG No. 80-4 of "special projects." It follows that the evaluation projects here involved do not fall
within the ambit of a "special project" as defined and regulated by CPG No. 80-4.

We do not consider it necessary to rule on whether the project at hand involved an undertaking "which
is not among the regular and primary functions of the agencies involved" since the reforestation activity
evaluation group is not, as pointed out above, a "special project" within the meaning of CPG No. 80-
4. In any case, this particular issue was not raised by any of the parties here involved.

It is true, as respondent COA points out, that the provisions of CPG No. 80-4 do not distinguish
between "a special project" which is funded by monies of local or Philippine origin and "a special
project" which is funded or assisted by monies originating from international or foreign agencies. As
earlier noted, CPG No. 80-4 was issued by the Department of Budget and Management back in 7
August 1980. Upon the other hand, NCC No. 53 was issued also by the Department of Budget and
Management more than eight (8) years later, i.e., 9 December 1988. Examination of the provisions of
NCC No. 53 makes it crystal clear that the circular is applicable to foreign-assisted projects only. The
explicit text of NCC No. 53 states that it was issued to

prescribe/authorize the classification and compensation rates of positions in foreign-

assisted projects (FAPs) including honoraria rates for personnel detailed to FAPs and
guidelines in the implementation thereof pursuant to Memorandum No. 173 dated 16
May 1988 19 (Emphasis supplied)

and which apply to all positions in foreign-assisted projects only. Clearly, NCC No. 53 amended the
earlier CPG No. 80-4 by carving out from the subject matter originally covered by CPG No. 80-4 all
"foreign-assisted [special] projects." CPG No. 80-4 was, accordingly, modified so far as "foreign-
assisted [special] projects (FAPs)" are concerned. It is this fact or consequence of NCC No. 53 that
respondent COA apparently failed to grasp. Thus, CPG No. 80-4 does not control, nor even relate to,
the DENR evaluation project for at least two (2) reasons: firstly, the evaluation project was not a
"special project" within the meaning of CPG No. 80-4; secondly, that same evaluation project was a
Foreign-Assisted Project to which NCC No. 53 is specifically applicable.

That the instant evaluation project is a Foreign-Assisted Project is borne out by the records: (a) the
MOA states that the project is "part of the commitment with the Asian Development Bank (ADB) under
the Forestry Sector Program Loan"; (b) the certification issued by the DENR certifies that

. . . the review and evaluation of DENR reforestation projects undertaken by State

Universities and Colleges, one of which is Pangasinan State University, is one of the
components of the ADB/OECF Forestry Sector Program Loan which is funded by the
loan. It is therefore a foreign-assisted project (Underscoring supplied); and

(c) the clarification issued by the DBM stating that

The honoraria rates of the detailed personnel should not be based on Compensation
Policy Guidelines No. 80-4, which pertains to locally funded projects. Since the funding
source for this activity come from loan proceeds, National Compensation Circular No.
53 should apply.

Even in its Comment respondent COA submits that

. . . the issue as to whether or not the project was special already became moot in the
face of the opinion/ruling of the DBM that since it (the project) is "foreign-assisted"
NCC 53 should apply, for CPG No. 80-4 applies only to "locally-funded projects. 20
Under the Administration Code of 1987, the Compensation and Position Classification Bureau of the
DBM "shall classify positions and determine appropriate salaries for specific position classes and
review appropriate salaries for specific position classes and review the compensation benefits
programs of agencies and shall design job evaluation programs." 21 In Warren Manufacturing Workers
Union (WMWU) v. Bureau of Labor Relations, 22 the Court held that "administrative regulations and
policies enacted by administrative bodies to interpret the law have the force of law and are entitled to
great respect." It is difficult for the Court to understand why, despite these certifications, respondent
COA took such a rigid and uncompromising posture that CPG No. 80-4 was the applicable criterion
for honoraria to be given members of the reforestation evaluation project team of the PSU.

Respondent COA's contention that the DBM clarification is unconstitutional as that ruling does not
fulfill the requisites of a valid classification 23 is, in the Court's perception, imaginative but nonetheless
an after-thought and a futile attempt to justify its action. As correctly pointed out by petitioner, the
constitutional arguments raised by respondent COA here were never even mentioned, much less
discussed, in COA Decisions Nos. 1547 (1990) and 2571 (1992) or in any of the proceedings
conducted before it.

Petitioner also argues that the project's duration stipulated in the MOA was implicitly extended by the
parties. The DENR's acceptance, without any comment or objection, of PSU's (a) letter explaining the
delay in its submission of the final project report and (b) the final project report itself brought about,
according to petitioner, an implied agreement between the parties to extend the project duration. It is
also contended that by the very nature of an evaluation project, the project's duration is difficult to fix
and as in the case at bar, the period fixed in the MOA is merely an initial estimate subject to extension.
Lastly, petitioner argues that whether the project was impliedly extended is an inconsequential
consideration; the material consideration being that the project stayed within its budget. The project
having been extended, petitioner concludes that the evaluation team should be paid honoraria from
the time it proceeded with the project and up to the time the DENR accepted its final report.

Mindful of the detailed provisions of the MOA and Project Proposal governing project duration and
project financing as regulated by NCC No. 53, the Court is not persuaded that petitioner can so
casually assume implicit consent on the part of the DENR to an extension of the evaluation project's
duration.

The "Duration of Work" clause of the MOA provides that

PSU shall commence the work 10 days from receipt of the Notice to Proceed and shall
be completed five months thereafter. (Emphasis supplied)

On 9 December 1988, the DENR advised PSU President Rufino Eslao that PSU "may now
proceed with the review and reevaluation as stipulated" in the MOA. The Notice to Proceed
further stated that

Your institution is required to complete the work within five months starting ten (10)
days upon receipt of this notice. (Emphasis supplied)

In respect of the financial aspects of the project, the MOA provides that

The DENR shall have the following obligations:

1. Provide the funds necessary for the review and reevaluation of the eleven (11)
reforestation projects . . . in the amount not more than FIVE HUNDRED SIX
THOUSAND TWO HUNDRED TWENTY FOUR PESOS (P506,224.00) which shall be
 spent in accordance with the work and financial plan which attached as Annex C. Fund
remittances shall be made on a staggered basis with the following schedule:

a. FIRST RELEASE

Twenty percent (20%) of the total cost to be remitted within fifteen (15) working days
upon submission of work plan;

b. SECOND RELEASE

Forty percent of the total cost upon submission of a progress report of the activities
that were so far undertaken;

c. THIRD RELEASE

Thirty percent (30%) of the total amount upon submission of the draft final report;

d. FOURTH RELEASE

Ten percent of the total amount [upon submission] of the final report. (Underscoring
supplied)

Annex "C" referred to in the MOA is the Project Proposal. Per the Proposal's "Budget Estimate,"
P175,000.00 and P92,500.00 were allotted for "Expert Services" and "Support Services" respectively
itemized as follows:

PERSONAL SERVICES
EXPERT SERVICES

Duration

Expert of Service Rate/ Total

(mo.) mo.

1. Ecologist 4 P5,000 P20,000

2. Silviculturist 3 -do- 15,000

3. Forestry Economist 4 -do- 20,000

4. Soils Expert 2 -do- 10,000

5. Social Forestry Expert 4 -do- 20,000

6. Management Expert 2 -do- 10,000

7. Horticulturist 2 -do- 10,000

8. Agricultural Engineer 2 -do- 10,000

 9. Systems Analysts/Programer 2 -do- 10,000

10. Statistician 2 -do- 10,000

11. Shoreline Resources Expert 2 -do- 10,000

12. Animal Science Specialist 2 -do- 10,000

13. Policy/Administrative 4 -do- 20,000

Expert

T O T A L P175,000

Support Services

Research Associates (2) P8,000

Honorarium P1,000/mo. for 4 months
Special Disbursing Officer (1) 4,000
Honorarium P1,000/mo. for 4 months
Enumerators/Data Gatheres 36,000
360 mandays at P100/manday
including COLA
Coders/Encoders 30,000
300 mandays at P100/manday
including COLA
Cartographer/Illustrator 5,000
50 mandays at P100/manday
including COLA
Documentalist 4,500
45 mandays at P100/manday
including COLA
Typist 5,000
50 mandays at P100/manday
including COLA

T O T A L P92,500
————

In addition, the Proposal already provided a list of identified experts:

EXPERTS

1. Dr. Victorino P. Espero Enviromental Science

2. Dean Antonio Q. Repollo Silviculture
3. Prof. Artemio M. Rebugio Forestry Economics
4. Ms. Naomenida Olermo Soils
5. Dr. Elvira R. Castillo Social Forestry
6. Dr. Alfredo F. Aquino Management
7. Dr. Lydio Calonge Horticulture
8. Engr. Manolito Bernabe Engineering
 9. Dr. Elmer C. Vingua Animal Science
10. Prof. Rolando J. Andico Systems Analysts
Programming
11. Dr. Eusebio Miclat, Jr. Statistics/
Instrumentation
12. Dr. Porferio Basilio Shoreline Resources
13. Dr. Rufino O. Eslao Policy Administration

who, together with six (6) staff members namely Henedina M. Tantoco, Alicia Angelo Yolanda
Z. Sotelo, Gregoria Q. Calela, Nora A. Caburnay and Marlene S. Bernebe composed the
evaluation project team. At this point, it should be pointed out that the " Budget Estimate even
provides a duration for the participation of each and every person whether rendering expert or
support services.

On the other hand, NCC No. 53 provides:

3.3.1 The approved 0rganization and staffing shall be valid up to project completion
except for modifications deemed necessary by the Project Manager. The Project
Manager shall be given the flexibility to determine the timing of hiring
personnel provided the approved man-years for a given position for the duration of the
project is not exceeded.

xxx xxx xxx

3.6 A regular employee who may detailed to any FAPs on a part-time basis shall be
entitled to receive honoraria in accordance with the schedule shown in Attachment II
hereof.

xxx xxx xxx

3.7 Payment of honoraria shall be made out of project funds and in no case shall
payment thereof be made out of regular agency fund.

xxx xxx xxx

3.10 The total amount of compensation to be paid shall not exceed the original amount
allocated for personal services of the individual foreign-assisted projects. Any
disbursement in excess of the original amount allotted for personal services of the
individual projects shall be the personal liability and responsibility of the officials and
employees authorizing or making such payment. (Underscoring supplied)

Attachment II of NCC No. 53 prescribes the monthly rates allowed for officials/employees on
assignment to foreign- assisted special projects:

A. Position Level — Project Manager/Project

Director

Responsibility — . . .

Parttime — P2,000.00
 B. Position Level — Assistant Project
Director

Responsibility — . . .

Parttime — P1,500.00

C. Position Level — Project Consultant

Responsibility — . . .

Parttime — P1,000.00

D. Position Level — Supervisor/Senior Staff

Member

Responsibility — . . .

Parttime — P1,000.00

E. Position Level — Staff Member

Responsibility — . . .

Parttime — P700.00

Administrative and Clerical Support

A. Position Level — Administrative Assistant

Responsibility — . . .

Parttime — P500.00

B. Position Level — Administrative Support

Staff

Responsibility — . . .

Parttime — P400.00

From the clear and detailed provisions of the MOA and Project Proposal in relation to NCC No. 53,
consent to any extension of the evaluation project, in this instance, must be more concrete than the
alleged silence or lack of protest on the part of the DENR. Although tacit acceptance is recognized in
our jurisdiction, 24 as a rule, silence is not equivalent to consent since its ambiguity lends itself to error.
And although under the Civil Code there are instances when silence amounts to consent, 25 these
circumstances are wanting in the case at bar. Furthermore, as correctly pointed out by the respondent
COA, the date when the DENR accepted the final project report is by no means conclusive as to the
terminal date of the evaluation project. Examination of the MOA (quoted earlier on pages 19-20)
reveals that the submission of reports merely served to trigger the phased releases of funds. There
being no explicit agreement between PSU and the DENR to extend the duration of the evaluation
project, the MOA's "Budget Estimate" which, among others, provides in detail the duration of service
for each member of the evaluation project as amended by the rates provided by NCC No. 53 must be
the basis of the honoraria due to the evaluation team.

The other arguments of respondent COA appear to us to be insubstantial and as, essentially,
afterthoughts. The COA apparently does not agree with the policy basis of NCC No. 53 in
relation to CPG No. 80-4 since COA argues that loan proceeds regardless of source eventually
become public funds for which the government is accountable. The result would be that any
provisions under any [foreign] loan agreement should be considered locally-funded. We do not
consider that the COA is, under its constitutional mandate, authorized to substitute its own
judgment for any applicable law or administrative regulation with the wisdom or propriety of
which, however, it does not agree, at least not before such law or regulation is set aside by
the authorized agency of government — i.e., the courts — as unconstitutional or illegal and
void. The COA, like all other government agencies, must respect the presumption of legality
and constitutionality to which statutes and administrative regulations are entitled 26 until such
statute or regulation is repealed or amended, or until set aside in an appropriate case by a
competent court (and ultimately this Court).

Finally, we turn to petitioner's claim for moral damages and reimbursement of legal expenses.
We consider that this claim cannot be granted as petitioner has failed to present evidence of
bad faith or tortious intent warranting an award thereof. The presumption of regularity in the
performance of duty must be accorded to respondent COA; its action should be seen as its
effort to exercise (albeit erroneously, in the case at bar) its constitutional power and duty in
respect of uses of government funds and properties.

WHEREFORE, for all the foregoing, the Petition for Certiorari is hereby GRANTED. COA
Decisions Nos. 1547 and 2571, respectively dated 18 September 1990 and 16 November
1992, are hereby SET ASIDE. The instant evaluation project being a Foreign-Assisted Project,
the following PSU personnel involved in the project shall be paid according to the Budget
Estimate schedule of the MOA as aligned with NCC No. 53:

A. A. For Experts

Duration Rate/
Expert of month Total
Service (NCC
(mo.) No. 53)

1. Dr. Rufino O. Eslao Policy/Admi- 4 P2,000 P8,000 nistrative

expert*-
2. Dr. Victorino P. Espero Ecologist** 4 1,500 6,000
3. Dean Antonio Q. Repollo Silvicul- 3 1,000 3,000
turist***
4. Prof. Artemio M. Rebugio Forestry 4 1,000 4,000
Economist
5. Ms. Naomenida Olermo Soils Expert 2 1,000 2,000
6. Dr. Elvira R. Castillo Social 4 1,000 4,000
Forestry
Expert
7. Dr. Alfredo F. Aquino Management 2 1,000 2,000
Expert
 8. Dr. Lydio Calonge Horticul 2 1,000 2,000
turist
9. Engr. Manolito Bernabe Agricultural 2 1,000 2,000
Engineer
10. Prof. Rolando J. Andico Systems 2 1,000 2,000
Analysts/
Programmer
11. Dr. Eusebio Miclat, Jr. Statistician 2 1,000 2,000
12. Dr. Porferio Basilio Shoreline 2 1,000 2,000
Resources
Expert
13. Dr. Elmer C. Vingua Animal 2 1,000 2,000
Science
Specialist

41,000
———

* Project Manager/ Project Director

** Assistant Project Director
*** Project Consultants

B. For Support Staff

Duration Rate/
Expert of month Total
Service (NCC
(mo.) No. 53)

1 Henedina M. Tantoco Research 4 700 2,800

Associate**
2 Alicia Angelo Research 4 700 2,800
3 Yolanda Z. Sotelo Documentalist 2.04 700 1,428
4 Gregoria Q. Calela Special 4 700 2,800
Disbursing
Officer
5 Nora A. Caburnay Typist 2.27 500 1,135
6 Marlene S. Bernebe Cashier 2.27 500 1,135

———
12,098

* Per Attachment to DBM Clarification dated 10

November 1989, Rollo, p. 59.
** Staff Member
*** Administrative Assistants.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 170251 June 1, 2011

CELIA S. VDA. DE HERRERA, Petitioner,

vs.
EMELITA BERNARDO, EVELYN BERNARDO as Guardian of Erlyn, Crislyn and Crisanto
Bernardo,* Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set
aside the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 73674.

The antecedents are as follows:

Respondents heirs of Crisanto S. Bernardo, represented by Emelita Bernardo, filed a complaint before the
Commission on the Settlement of Land Problems (COSLAP) against Alfredo Herrera (Alfredo) for
interference, disturbance, unlawful claim, harassment and trespassing over a portion of a parcel of land
situated at Barangay Dalig, Cardona, Rizal, with an area of 7,993 square meters. The complaint was
docketed as COSLAP Case No. 99-221.

Respondents claimed that said parcel of land was originally owned by their predecessor-in-interest,
Crisanto Bernardo, and was later on acquired by Crisanto S. Bernardo. The parcel of land was later on
covered by Tax Declaration No. CD-006-0828 under the name of the respondents.

Petitioner, on the other hand, alleged that the portion of the subject property consisting of about 700
square meters was bought by Diosdado Herrera, Alfredo's father, from a certain Domingo Villaran. Upon
the death of Diosdado Herrera, Alfredo inherited the 700-square-meter lot.

The COSLAP, in a Resolution3 dated December 6, 1999, ruled that respondents have a rightful claim over
the subject property. Consequently, a motion for reconsideration and/or reopening of the proceedings
was filed by Alfredo. The COSLAP, in an Order4 dated August 21, 2002, denied the motion and reiterated
its Order dated December 6, 1999. Aggrieved, petitioner Celia S. Vda. de Herrera, as the surviving spouse
of Alfredo, filed a petition for certiorari with the CA.5 The CA, Twelfth Division, in its Decision dated April
28, 2005, dismissed the petition and affirmed the resolution of the COSLAP. The CA ruled that the COSLAP
has exclusive jurisdiction over the present case and, even assuming that the COSLAP has no jurisdiction
over the land dispute of the parties herein, petitioner is already estopped from raising the issue of
jurisdiction because Alfredo failed to raise the issue of lack of jurisdiction before the COSLAP and he
actively participated in the proceedings before the said body. Petitioner filed a motion for reconsideration,
which was denied by the CA in a Resolution dated October 17, 2005.

Hence, petitioner elevated the case to this Court via Petition for Review on Certiorari under Rule 45 of the
Rules of Court, with the following issues:

I. WHETHER OR NOT COSLAP HAD JURISDICTION TO DECIDE THE QUESTION OF OWNERSHIP.

II. WHETHER OR NOT THE ISSUANCE OF A TORRENS TITLE IN THE NAME OF THE PETITIONER'S
HUSBAND IN 2002 RENDERED THE INSTANT CONTROVERSY ON THE ISSUE OF OWNERSHIP
OVER THE SUBJECT PROPERTY MOOT AND ACADEMIC.6
Petitioner averred that the COSLAP has no adjudicatory powers to settle and decide the question of
ownership over the subject land. Further, the present case cannot be classified as explosive in nature as
the parties never resorted to violence in resolving the controversy. Petitioner submits that it is the
Regional Trial Court which has jurisdiction over controversies relative to ownership of the subject
property.

Respondents, on the other hand, alleged that the COSLAP has jurisdiction over the present case. Further,
respondents argued that petitioner is estopped from questioning the jurisdiction of the COSLAP by reason
of laches due to Alfredo's active participation in the actual proceedings before the COSLAP. Respondents
said that Alfredo's filing of the Motion for Reconsideration and/or Reopening of the proceedings before
the COSLAP is indicative of his conformity with the questioned resolution of the COSLAP.

The main issue for our resolution is whether the COSLAP has jurisdiction to decide the question of
ownership between the parties.

The petition is meritorious.

The COSLAP was created by virtue of Executive Order (E.O.) No. 561, issued on September 21, 1979 by
then President Ferdinand E. Marcos. It is an administrative body established as a means of providing a
mechanism for the expeditious settlement of land problems among small settlers, landowners and
members of the cultural minorities to avoid social unrest.

Section 3 of E.O. No. 561 specifically enumerates the instances when the COSLAP can exercise its
adjudicatory functions:

Section 3. Powers and Functions. - The Commission shall have the following powers and functions:

xxxx

2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land
problem or dispute referred to the Commission: Provided, That the Commission may, in the following
cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in
nature considering, for instance, the large number of the parties involved, the presence or emergence
of social tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;

(b) Between occupants/squatters and government reservation grantees;

(c) Between occupants/squatters and public land claimants or applicants;

(d) Petitions for classification, release and/or subdivision of lands of the public domain; and

(e) Other similar land problems of grave urgency and magnitude.7

Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction that can only wield powers
which are specifically granted to it by its enabling statute.8 Under Section 3 of E.O. No. 561, the COSLAP
has two options in acting on a land dispute or problem lodged before it, to wit: (a) refer the matter to the
agency having appropriate jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter
is one of those enumerated in paragraph 2 (a) to (e) of the law, if such case is critical and explosive in
nature, taking into account the large number of parties involved, the presence or emergence of social
unrest, or other similar critical situations requiring immediate action. In resolving whether to assume
jurisdiction over a case or to refer the same to the particular agency concerned, the COSLAP has to
consider the nature or classification of the land involved, the parties to the case, the nature of the
questions raised, and the need for immediate and urgent action thereon to prevent injuries to persons
and damage or destruction to property. The law does not vest jurisdiction on the COSLAP over any land
dispute or problem.9

In the instant case, the COSLAP has no jurisdiction over the subject matter of respondents' complaint. The
present case does not fall under any of the cases enumerated under Section 3, paragraph 2 (a) to (e) of
E.O. No. 561. The dispute between the parties is not critical and explosive in nature, nor does it involve a
large number of parties, nor is there a presence or emergence of social tension or unrest. It can also hardly
be characterized as involving a critical situation that requires immediate action.

It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency,
over the nature and subject matter of a petition or complaint is determined by the material allegations
therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant
is entitled to any or all such reliefs.10

Respondents' cause of action before the COSLAP pertains to their claim of ownership over the subject
property, which is an action involving title to or possession of real property, or any interest therein, 11 the
jurisdiction of which is vested with the Regional Trial Courts or the Municipal Trial Courts depending on
the assessed value of the subject property.12

The case of Banaga v. Commission on the Settlement of Land Problems, 13 applied by the CA and invoked
by the respondents, is inapplicable to the present case. Banaga involved parties with conflicting free
patent applications over a parcel of public land and pending with the Bureau of Lands. Because of the
Bureau of Land's inaction within a considerable period of time on the claims and protests of the parties
and to conduct an investigation, the COSLAP assumed jurisdiction and resolved the conflicting claims of
the parties. The Court held that since the dispute involved a parcel of public land on a free patent issue,
the COSLAP had jurisdiction over that case. In the present case, there is no showing that the parties have
conflicting free patent applications over the subject parcel of land that would justify the exercise of the
COSLAP's jurisdiction.

Since the COSLAP has no jurisdiction over the action, all the proceedings therein, including the decision
rendered, are null and void.14 A judgment issued by a quasi-judicial body without jurisdiction is void. It
cannot be the source of any right or create any obligation. 15 All acts performed pursuant to it and all claims
emanating from it have no legal effect.16 Having no legal effect, the situation is the same as it would be as
if there was no judgment at all. It leaves the parties in the position they were before the proceedings. 17

Respondents’ allegation that petitioner is estopped from questioning the jurisdiction of the COSLAP by
reason of laches does not hold water. Petitioner is not estopped from raising the jurisdictional issue,
because it may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel.18 The fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop
him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must arise
by law and not by mere consent of the parties.19
In Regalado v. Go,20 the Court held that laches should be clearly present for the Sibonghanoy 21 doctrine
to apply, thus:

Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier, it is negligence or omission to
assert a right within a reasonable length of time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it."

The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v.
Sibonghanoy on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by
laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches should have been clearly present; that
is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party
entitled to assert it had abandoned or declined to assert it.

In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed
by the Surety almost 15 years after the questioned ruling had been rendered. At several stages of the
proceedings, in the court a quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits. It
was only when the adverse decision was rendered by the Court of Appeals that it finally woke up to raise
the question of jurisdiction.22

The factual settings attendant in Sibonghanoy are not present in the case at bar that would justify the
application of estoppel by laches against the petitioner. Here, petitioner assailed the jurisdiction of the
COSLAP when she appealed the case to the CA and at that time, no considerable period had yet elapsed
for laches to attach. Therefore, petitioner is not estopped from assailing the jurisdiction of the COSLAP.
Additionally, no laches will even attach because the judgment is null and void for want of jurisdiction. 23

Anent the issuance of OCT No. M-10991 in favor of petitioner’s husband Alfredo Herrerra in 2002,
respondents alleged that there was fraud, misrepresentation and bad faith in the issuance thereof. Thus,
respondents are now questioning the legality of OCT No. M-10991, an issue which this Court cannot pass
upon in this present petition. It is a rule that the validity of a Torrens title cannot be assailed
collaterally.24 Section 48 of Presidential Decree No. 1529 provides that:

Certificate not Subject to Collateral Attack. − A certificate of title shall not be subject to collateral attack.
It cannot be altered, modified, or canceled, except in a direct proceeding in accordance with law.

The issue of the validity of the Title was brought only during the proceedings before this Court as said title
was issued in the name of petitioner's husband only during the pendency of the appeal before the CA.
The issue on the validity of title, i.e., whether or not it was fraudulently issued, can only be raised in an
action expressly instituted for that purpose25 and the present appeal before us, is simply not the direct
proceeding contemplated by law.

WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the Court of Appeals, dated
April 28, 2005 and October 17, 2005, respectively, in CA-G.R. SP No. 73674 are REVERSED and SET ASIDE.
The Decision and Order of the Commission on the Settlement of Land Problems, dated December 6, 1999
and August 21, 2002, respectively, in COSLAP Case No. 99-221, are declared NULL and VOID for having
been issued without jurisdiction. SO ORDERED.
G.R. No. 191890 December 04, 2012

EVALYN I. FETALINO and AMADO M. CALDERON, Petitioners,

MANUEL A. BARCELONA, JR., Petitioner-Intervenor,
vs.
COMMISSION ON ELECTIONS, Respondent.

DECISION

BRION, J.:

Before us is a Petition for Certiorari, Mandamus and Prohibition with Application for Writ of Preliminary
Injunction and/or Temporary Restraining Order, 1 seeking to nullify and enjoin the implementation of
Commission on Elections (Co melee) Resolution No. 8808 issued on March 30, 2010. 2 Republic
Act (R.A.) No. 1568, as amended,3 extends a five-year lump sum gratuity to the chairman or any member
of the Comelec upon retirement, after completion of the term of office; incapacity; death;
and resignation after reaching 60 years of age but before expiration of the term of office. The Comelec en
banc determined that former Comelec Commissioners Evalyn I. Fetalino 4 and Amado M.
Calderon5 (petitioners) - whose ad interim appointments were not acted upon by the Commission on
Appointments (CA) and, who were subsequently, not reappointed — are not entitled to the five-year lump
sum gratuity because they did not complete in full the seven year term of office.

The Antecedent Facts

On February 10, 1998, President Fidel V. Ramos extended an interim appointment to the petitioners as
Comelec Commissioners, each for a term of seven (7) years, pursuant to Section 2, Article IX-D of the 1987
Constitution.6 Eleven days later (or on February 21, 1998), Pres. Ramos renewed the petitioners’ ad
interim appointments for the same position. Congress, however, adjourned in May 1998 before the CA
could act on their appointments. The constitutional ban on presidential appointments later took effect
and the petitioners were no longer re-appointed as Comelec Commissioners.7 Thus, the
petitioners merely served as Comelec Commissioners for more than four months, or from February 16,
1998 to June 30, 1998.8

Subsequently, on March 15, 2005, the petitioners applied for their retirement benefits and monthly
pension with the Comelec, pursuant to R.A. No. 1568. 9 The Comelec initially approved the petitioners’
claims pursuant to its Resolution No. 06-136910 dated December 11, 2006 whose dispositive portion reads:

The Commission RESOLVED, as it hereby RESOLVES, to approve the recommendation of Director Alioden
D. Dalaig, Law Department, to grant the request of former Comelec Commissioners Evalyn Fetalino and
Amado Calderon for the payment of their retirement benefits, subject to release of funds for the purpose
by the Department of Budget and Management.11

On February 6, 2007, the Comelec issued Resolution No. 07-0202 granting the petitioners a pro-rated
gratuity and pension.12 Subsequently, on October 5, 2007, the petitioners asked for a re-computation of
their retirement pay on the principal ground that R.A. No. 1568,13 does not cover a pro-rated computation
of retirement pay. In response, the Comelec issued a resolution referring the matter to its Finance Services
Department for comment and recommendation.14 On July 14, 2009, the Comelec issued another
resolution referring the same matter to its Law Department for study and recommendation. 15
In the presently assailed Resolution No. 880816 dated March 30, 2010, the Comelec, on the basis of the
Law Department’s study, completely disapproved the petitioners’ claim for a lump sum benefit under R.A.
No. 1568. The Comelec reasoned out that:

Of these four (4) modes by which the Chairman or a Commissioner shall be entitled to lump sum benefit,
only the first instance (completion of term) is pertinent to the issue we have formulated above. It is clear
that the non-confirmation and non-renewal of appointment is not a case of resignation or incapacity or
death. The question rather is: Can it be considered as retirement from service for having completed one’s
term of office?

xxxx

The full term of the Chairman and the Commissioners is seven (7) years. When there has been a partial
service, what remains is called the "unexpired term." The partial service is usually called tenure. There is
no doubt in the distinction between a term and tenure. Tenure is necessarily variable while term is always
fixed. When the law, in this case, RA 1568 refers to completion of term of office, it can only mean finishing
up to the end of the seven year term. By completion of term, the law could not have meant partial service
or a variable tenure that does not reach the end. It could not have meant, the "expiration of term" of the
Commissioner whose appointment lapses by reason of non-confirmation of appointment by the
Commission on Appointments and non-renewal thereof by the President. It is rightly called expiration of
term but note: it is not completion of term. RA 1568 requires ‘having completed his term of office’ for the
Commissioner to be entitled to the benefits.

Therefore, one whose ad interim appointment expires cannot be said to have completed his term of office
so as to fall under the provisions of Section 1 of RA 1568 that would entitle him to a lump sum benefit of
five (5) years salary.17 (emphasis, italics and underscores ours)

On this basis, the Comelec ruled on the matter, as follows:

Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to APPROVE and ADOPT
the study of the Law Department on the payment of retirement benefits to members of the Commission.

Consequently, the following former Chairman and Commissioners of this Commission whose
appointments expired by reason of nonapproval by Commission on Appointments and non-renewal by
the President are not entitled to a lump sum benefit under Republic Act 1528 (sic):

Name Position Date of Service

1. Alfredo Benipayo, Jr. Chairman Feb. 16, 2001 to June 5, 2002

2. Evalyn Fetalino Commissioner Feb. 16, 1998 to June 30, 1998

3. Amado Calderon Commissioner Feb. 16, 1998 to June 30, 1998

4. Virgilio Garciliano Commissioner Feb. 12, 2004 to June 10, 2005

 5. Manuel Barcelona, Jr. Commissioner Feb. 12, 2004 to June 10, 2005

6. Moslemen Macarambon Commissioner Nov[.] 05, 2007 to Oct. 10, 2008

7. Leonardo Leonida Commissioner July 03, 2008 to June 26, 2009

This resolution shall also apply to all requests of former COMELEC Chairmen and Commissioners similarly
situated. All previous resolutions which are inconsistent herewith are hereby AMENDED or REVOKED
accordingly.

Let the Finance Services and Personnel Departments implement this resolution.18 (emphasis ours)

The Petitions

The petitioners sought the nullification of Comelec Resolution No. 8808 via a petition for certiorari under
Rule 65 of the Rules of Court. Petitioner intervenor Manuel A. Barcelona, Jr. later joined the petitioners in
questioning the assailed resolution. Like the petitioners, Barcelona did not complete the full seven-year
term as Comelec Commissioner since he served only from February 12, 2004 to July 10, 2005. The
petitioners and Barcelona commonly argue that:

(1) the non-renewal of their ad interim appointments by the CA until Congress already adjourned qualifies
as retirement under the law and entitles them to the full five-year lump sum gratuity;

(2) Resolution No. 06-1369 that initially granted the five-year lump sum gratuity is already final and
executory and cannot be modified by the Comelec; and

(3) they now have a vested right over the full retirement benefits provided by RA No. 1568 in view of the
finality of Resolution No. 06- 1369.19

In the main, both the petitioners and Barcelona pray for a liberal interpretation of Section 1 of R.A. No.
1568. They submit that the involuntary termination of their ad interim appointments as Comelec
Commissioners should be deemed by this Court as a retirement from the service. Barcelona, in support of
his plea for liberal construction, specifically cites the case of Ortiz v. COMELEC.20 The Court ruled in this
cited case that equity and justice demand that the involuntary curtailment of Mario D. Ortiz’s term be
deemed a completion of his term of office so that he should be considered retired from the service.

In addition, the petitioners also bewail the lack of notice and hearing in the issuance of Comelec
Resolution No. 8808. Barcelona also assails the discontinuance of his monthly pension on the basis of the
assailed Comelec issuance.21

The Case for the Respondents

On July 22, 2010, the Comelec filed its Comment22 through the Office of the Solicitor General. The Comelec
prays for the dismissal of the petition on the grounds outlined below:

First, it submits that the petitioners’ reliance on Section 13, Rule 18 of the Comelec Rules of Procedure to
show that Resolution No. 06-1369 has attained finality is misplaced as this resolution is not the final
decision contemplated by the Rules. It also argues that estoppel does not lie against the Comelec since
the erroneous application and enforcement of the law by public officers do not estop the Government
from making a subsequent correction of its errors.23

Second, the Comelec reiterates that the petitioners are not entitled to the lump sum gratuity, considering
that they cannot be considered as officials who retired after completing their term of office. It emphasizes
that R.A. No. 1568 refers to the completion of the term of office, not to partial service or to a variable
tenure that does not reach its end, as in the case of the petitioners. The Comelec also draws the Court’s
attention to the case of Matibag v. Benipayo24 where the Court categorically ruled that an ad
interim appointment that lapsed by inaction of the Commission on Appointments does not constitute a
term of office.25

Third, it argues that the petitioners do not have any vested right on their retirement benefits considering
that the retirements benefits afforded by R.A. No. 1568 are purely gratuitous in nature; they are not
similar to pension plans where employee participation is mandatory so that they acquire vested rights in
the pension as part of their compensation. Without such vested rights, the Comelec concludes that the
petitioners were not deprived of their property without due process of law. 26

The Court’s Ruling

We DISMISS the petition and DENY Barcelona’s petition for intervention.

Preliminary Considerations

R.A. No. 1568 provides two types of retirement benefits for a Comelec Chairperson or Member:
a gratuity or five-year lump sum, and an annuity or a lifetime monthly pension.27 Our review of the
petitions, in particular, Barcelona’s petition for intervention, indicates that he merely questions the
discontinuance of his monthly pension on the basis of Comelec Resolution No. 8808.28 As the assailed
resolution, by its plain terms (cited above), only pertains to the lump sum benefit afforded by R.A. No.
1568, it appears that Barcelona’s petition for intervention is misdirected. We note, too, that Barcelona
has not substantiated his bare claim that the Comelec discontinued the payment of his monthly pension
on the basis of the assailed Resolution.

To put the case in its proper perspective, the task now before us is to determine whether the petitioners
are entitled to the full five-year lump sum gratuity provided for by R.A. No. 1568. We conclude under our
discussion below that they are not so entitled as they did not comply with the conditions required by law.

The petitioners are not entitled to the lump sum gratuity under Section 1 of R.A. No. 1568, as amended

That the petitioners failed to meet conditions of the applicable retirement law — Section 1 of R.A. No.
156829 — is beyond dispute. The law provides:

Sec. 1. When the Auditor General or the Chairman or any Member of the Commission on Elections retires
from the service for having completed his term of office or by reason of his incapacity to discharge the
duties of his office, or dies while in the service, or resigns at any time after reaching the age of sixty years
but before the expiration of his term of office, he or his heirs shall be paid in lump sum his salary for one
year, not exceeding five years, for every year of service based upon the last annual salary that he was
receiving at the time of retirement, incapacity, death or resignation, as the case may be: Provided, That
in case of resignation, he has rendered not less than twenty years of service in the government; And,
provided, further, That he shall receive an annuity payable monthly during the residue of his natural life
equivalent to the amount of monthly salary he was receiving on the date of retirement, incapacity or
resignation. [italics supplied]

To be entitled to the five-year lump sum gratuity under Section 1 of R.A. No. 1568, any of the following
events must transpire:

(1) Retirement from the service for having completed the term of office;

(2) Incapacity to discharge the duties of their office;

(3) Death while in the service; and

(4) Resignation after reaching the age of sixty (60) years but before the expiration of the term of office. In
addition, the officer should have rendered not less than twenty years of service in the government at the
time of retirement.

Death during the service obviously does not need to be considered in the present case, thus
leaving retirement, incapacity and resignation as the event that must transpire in order to be entitled to
the lump sum gratuity.

We note that the termination of the petitioners’ ad interim appointments could hardly be considered as
incapacity since it was not the result of any disability that rendered them incapable of performing the
duties of a Commissioner. Thus, incapacity is likewise effectively removed from active consideration.

"Resignation is defined as the act of giving up or the act of an officer by which he declines his office and
renounces the further right to it. To constitute a complete and operative act of resignation, the officer or
employee must show a clear intention to relinquish or surrender his position accompanied by the act of
relinquishment."30 In this sense, resignation likewise does not appear applicable as a ground because the
petitioners did not voluntarily relinquish their position as Commissioners; their termination was merely a
consequence of the adjournment of Congress without action by the CA on their ad interim appointments.

This eliminative process only leaves the question of whether the termination of the petitioners’ ad
interim appointments amounted to retirement from the service after completion of the term of office.
We emphasize at this point that the right to retirement benefits accrues only when two conditions are
met: first, when the conditions imposed by the applicable law – in this case, R.A. No. 1568 — are fulfilled;
and second, when an actual retirement takes place.31 This Court has repeatedly emphasized that
retirement entails compliance with certain age and service requirements specified by law and
jurisprudence, and takes effect by operation of law.32

Section 1 of R.A. No. 1568 allows the grant of retirement benefits to the Chairman or any Member of the
Comelec who has retired from the service after having completed his term of office. The petitioners
obviously did not retire under R.A. No. 1568, as amended, since they never completed the full seven-year
term of office prescribed by Section 2, Article IX-D of the 1987 Constitution; they served as Comelec
Commissioners for barely four months, i.e., from February 16, 1998 to June 30, 1998. In the recent case
of Re: Application for Retirement of Judge Moslemen T. Macarambon under Republic Act No. 910, as
amended by Republic Act No. 9946,33 where the Court did not allow Judge Macarambon to retire under
R.A. No. 910 because he did not comply with the age and service requirements of the law, the Court
emphasized:
Strict compliance with the age and service requirements under the law is the rule and the grant of
exception remains to be on a case to case basis. We have ruled that the Court allows seeming exceptions
to these fixed rules for certain judges and justices only and whenever there are ample reasons to grant
such exception. (emphasis ours; citations omitted)

More importantly, we agree with the Solicitor General that the petitioners’ service, if any, could only
amount to tenure in office and not to the term of office contemplated by Section 1 of R.A. No.
1568. Tenure and term of office have well-defined meanings in law and jurisprudence. As early as 1946,
the Court, in Topacio Nueno v. Angeles,34 provided clear distinctions between these concepts in this wise:

The term means the time during which the officer may claim to hold the office as of right, and fixes the
interval after which the several incumbents shall succeed one another. The tenure represents the term
during which the incumbent actually holds the office. The term of office is not affected by the hold-over.
The tenure may be shorter than the term for reasons within or beyond the power of the incumbent. There
is no principle, law or doctrine by which the term of an office may be extended by reason of war. [emphasis
ours]

This is the ruling that has been followed since then and is the settled jurisprudence on these concepts. 35

While we characterized an ad interim appointment in Matibag v. Benipayo36 "as a permanent

appointment that takes effect immediately and can no longer be withdrawn by the President once the
appointee has qualified into office," we have also positively ruled in that case that "an ad
interim appointment that has lapsed by inaction of the Commission on Appointments does not constitute
a term of office."37 We consequently ruled:

However, an ad interim appointment that has lapsed by inaction of the Commission on Appointments
does not constitute a term of office. The period from the time the ad interim appointment is made to
the time it lapses is neither a fixed term nor an unexpired term. To hold otherwise would mean that the
President by his unilateral action could start and complete the running of a term of office in the COMELEC
without the consent of the Commission on Appointments. This interpretation renders inutile the
confirming power of the Commission on Appointments.38 (emphasis ours; italics supplied)

Based on these considerations, we conclude that the petitioners can never be considered to have retired
from the service not only because they did not complete the full term, but, more importantly, because
they did not serve a "term of office" as required by Section 1 of R.A. No. 1568, as amended.

Ortiz v. COMELEC cannot be applied to the present case

We are not unmindful of the Court’s ruling in Ortiz v. COMELEC39 which Barcelona cites as basis for his
claim of retirement benefits despite the fact that — like the petitioners — he did not complete the full
term of his office.

In that case, the petitioner was appointed as Comelec Commissioner, for a term expiring on May 17, 1992,
by then President Ferdinand E. Marcos, and took his oath of office on July 30, 1985. When President
Corazon Aquino assumed the Presidency and following the lead of the Justices of the Supreme Court, Ortiz
— together with the other Comelec Commissioners — tendered his courtesy resignation on March 5,
1986. On July 21, 1986, President Aquino accepted their resignations effective immediately. Thereafter,
Ortiz applied for retirement benefits under R.A. No. 1568, which application the Comelec denied. The
Court, however, reversed the Comelec and held that "[t]he curtailment of [Ortiz’s] term not being
attributable to any voluntary act on the part of the petitioner, equity and justice demand that he should
be deemed to have completed his term xxx. [That he] should be placed in the same category as that of an
official holding a primarily confidential position whose tenure ends upon his superior’s loss of confidence
in him." Thus, as "he is deemed to have completed his term of office, [Ortiz] should be considered retired
from the service."40

A close reading of Ortiz reveals that it does not have the same fact situation as the present case and is
thus not decisive of the present controversy. We note that the impact of the principle of stare decisis that
Barcelona cited as basis is limited; specific judicial decisions are binding only on the parties to the case
and on future parties with similar or identical factual situations.41 Significantly, the factual situation
in Ortiz is totally different so that its ruling cannot simply be bodily lifted and applied arbitrarily to the
present case.

First, in Ortiz, Ortiz’s appointment was a regular appointment made by then President Marcos, while the
petitioners were appointed by President Ramos ad interim or during the recess of Congress.

Second, Ortiz’s appointment was made under the 1973 Constitution which did not require the
concurrence of the CA. Notably, the 1973 Constitution abolished the CA and did not provide for an
executive limit on the appointing authority of the President. In the present case, the petitioners’ ad
interim appointment was made under the 1987 Constitution which mandated that an appointment shall
be effective only until disapproval by the CA or until the next adjournment of Congress.

Third, in Ortiz, the Court addressed the issue of whether a constitutional official, whose "courtesy
resignation" had been accepted by the President of the Philippines during the effectivity of the Freedom
Constitution, may be entitled to retirement benefits under R.A. No. 1568. In the present case, the issue is
whether the termination of the petitioners’ ad interim appointments entitles them to the full five-year
lump sum gratuity provided for by R.A. No. 1568.

No occasion for liberal construction since Section 1 of R.A. No. 1568, as amended, is clear and
unambiguous

The petitioners’ appeal to liberal construction of Section 1 of R.A. No. 1568 is misplaced since the law is
clear and unambiguous. We emphasize that the primary modality of addressing the present case is to look
into the provisions of the retirement law itself. Guided by the rules of statutory construction in this
consideration, we find that the language of the retirement law is clear and unequivocal; no room for
construction or interpretation exists, only the application of the letter of the law.

The application of the clear letter of the retirement law in this case is supported by jurisprudence. As early
as 1981, in the case of In Re: Claim of CAR Judge Noel,42 the Court strictly adhered to the provisions of R.A.
No. 910 and did not allow the judge’s claim of monthly pension and annuity under the aforementioned
law, considering that his length of government service fell short of the minimum requirements.

Similarly, in Re: Judge Alex Z. Reyes,43 the Court dismissed CTA Judge Reyes’ invocation of the doctrine of
liberal construction of retirement laws to justify his request that the last step increment of his salary grade
be used in the computation of his retirement pay and terminal leave benefits, and held:
In Borromeo, the court had occasion to say: "It is axiomatic that retirement laws are liberally construed
and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law
should be resolved in favor of the retiree to achieve its humanitarian purposes." Such interpretation in
favor of the retiree is unfortunately not called for nor warranted, where the clear intent of the
applicable law and rules are demonstrably against the petitioner's claim. (Paredes v. City of Manila, G.R.
No. 88879, March 21, 1991). Section 4 is explicit and categorical in its prohibition and, unfortunately for
Judge Reyes, applies squarely to the instant case.44 (emphasis ours; italics supplied)

Finally, in Gov’t Service Insurance System v. Civil Service Commission, 45 the Court was asked to resolve
whether government service rendered on a per diem basis is creditable for computing the length of
service for retirement purposes. In disregarding the petitioners’ plea for liberal construction, the Court
held:

The law is very clear in its intent to exclude per diem in the definition of "compensation." Originally, per
diem was not among those excluded in the definition of compensation (See Section 1(c) of C.A. No. 186),
not until the passage of the amending laws which redefined it to exclude per diem.

The law not only defines the word "compensation," but it also distinguishes it from other forms of
remunerations. Such distinction is significant not only for purposes of computing the contribution of the
employers and employees to the GSIS but also for computing the employees' service record and benefits.

xxxx

Private respondents both claim that retirement laws must be liberally interpreted in favor of the
retirees. However, the doctrine of liberal construction cannot be applied in the instant petitions, where
the law invoked is clear, unequivocal and leaves no room for interpretation or construction. Moreover,
to accommodate private respondents' plea will contravene the purpose for which the law was enacted,
and will defeat the ends which it sought to attain (cf. Re: Judge Alex Z. Reyes, 216 SCRA 720
[1992]).46 [italics supplied; emphasis ours]

No compelling reasons exist to warrant the liberal application of Section 1 of R.A. No. 1568, as amended,
to the present case

We find no compelling legal or factual reasons for the application of the Court’s liberality in the
interpretation of retirement laws to the present case. The discretionary power of the Court to exercise
the liberal application of retirement laws is not limitless; its exercise of liberality is on a case-to-case basis
and only after a consideration of the factual circumstances that justify the grant of an exception. The
recent case of Re: Application for Retirement of Judge Moslemen T. Macarambon under Republic Act No.
910, as amended by Republic Act No. 994647 fully explained how a liberal approach in the application of
retirement laws should be construed, viz:

The rule is that retirement laws are construed liberally in favor of the retiring employee. However, when
in the interest of liberal construction the Court allows seeming exceptions to fixed rules for certain
retired Judges or Justices, there are ample reasons behind each grant of an exception. The crediting of
accumulated leaves to make up for lack of required age or length of service is not done indiscriminately.
It is always on a case to case basis.
In some instances, the lacking element—such as the time to reach an age limit or comply with length of
service is de minimis. It could be that the amount of accumulated leave credits is tremendous in
comparison to the lacking period of time.

More important, there must be present an essential factor before an application under
the Plana or Britanico rulings may be granted. The Court allows a making up or compensating for lack of
required age or service only if satisfied that the career of the retiree was marked by competence, integrity,
and dedication to the public service; it was only a bowing to policy considerations and an acceptance of
the realities of political will which brought him or her to premature retirement. (emphases and italics ours;
citation omitted)

In the present case, as previously mentioned, Ortiz cannot be used as authority to justify a liberal
application of Section 1 of R.A. No. 1568, as amended not only because it is not on all fours with the
present case; more importantly, the Court in Ortiz had ample reasons, based on the unique factual
circumstances of the case, to grant an exception to the service requirements of the law. In Ortiz, the Court
took note of the involuntariness of Ortiz’s "courtesy resignation," as well as the peculiar circumstances
obtaining at that time President Aquino issued Proclamation No. 1 calling for the courtesy resignation of
all appointive officials, viz:

From the foregoing it is evident that petitioner's "resignation" lacks the element of clear intention to
surrender his position. We cannot presume such intention from his statement in his letter of March 5,
1986 that he was placing his position at the disposal of the President. He did not categorically state therein
that he was unconditionally giving up his position. It should be remembered that said letter was actually
a response to Proclamation No. 1 which President Aquino issued on February 25, 1986 when she called
on all appointive public officials to tender their "courtesy resignation" as a "first step to restore confidence
in public administration."48

In stark contrast, no such peculiar circumstances obtain in the present case.

Finally, in the absence of any basis for liberal interpretation, the Court would be engaged in judicial
legislation if we grant the petitioners’ plea. We cannot overemphasize that the policy of liberal
construction cannot and should not be to the point of engaging in judicial legislation — an act that the
Constitution absolutely forbids this Court to do. In the oft-cited case of Tanada v. Yulo,49 Justice George A.
Malcolm cautioned against judicial legislation and warned against liberal construction being used as a
license to legislate and not to simply interpret,50 thus:

Counsel in effect urges us to adopt a liberal construction of the statute. That in this instance, as in the
past, we aim to do. But counsel in his memorandum concedes "that the language of the proviso in
question is somewhat defective and does not clearly convey the legislative intent", and at the hearing in
response to questions was finally forced to admit that what the Government desired was for the court to
insert words and phrases in the law in order to supply an intention for the legislature. That we cannot do.
By liberal construction of statutes, courts from the language used, the subject matter, and the purposes
of those framing them are able to find out their true meaning. There is a sharp distinction, however,
between construction of this nature and the act of a court in engrafting upon a law something that has
been omitted which someone believes ought to have been embraced. The former is liberal construction
and is a legitimate exercise of judicial power. The latter is judicial legislation forbidden by the tripartite
division of powers among the three departments of government, the executive, the legislative, and the
judicial.51

In the present case, Section 1 of R.A. No. 1568, by its plain terms, is clear that retirement entails the
completion of the term of office. To construe the term "retirement" in Section 1 of R.A. No. 1568 to include
termination of an ad interim appointment is to read into the clear words of the law exemptions that its
literal wording does not support; to depart from the meaning expressed by the words of R.A. No. 1568 is
to alter the law and to legislate, and not to interpret. We would thereby violate the timehonored rule on
the constitutional separation of powers. The words of Justice E. Finley Johnson in the early case of Nicolas
v. Alberto52 still ring true today, viz.:

The courts have no legislative powers. In the interpretation and construction of statutes their sole function
is to determine, and, within the constitutional limits of the legislative power, to give effect to the intention
of the legislature. The courts cannot read into a statute something which is not within the manifest
intention of the legislature as gathered from the statute itself. To depart from the meaning expressed by
the words of a statute, is to alter the statute, to legislate and not to interpret. The responsibility for the
justice or wisdom of legislation rests with the legislature, and it is the province of the courts to construe,
not to make the laws.

To reiterate, in light of the express and clear terms of the law, the basic rule of statutory construction
should therefore apply: "legislative intent is to be determined from the language employed, and where
there is no ambiguity in the words, there is no room for construction." 53

The Comelec did not violate the rule on finality of judgments

Petitioners argue that Resolution No. 06-1369, which initially granted them a five-year lump sum gratuity,
attained finality thirty (30) days after its promulgation, pursuant to Section 13, Rule 18 of the Comelec
Rules of Procedure, and, thus, can no longer be modified by the Comelec.

We cannot agree with this position. Section 13, Rule 18 of the Comelec Rules of Procedure reads:

Sec. 13. Finality of Decisions or Resolutions. –

a. In ordinary actions, special proceedings, provisional remedies and special reliefs a decision or
resolution of the Commission en banc shall become final and executory after thirty (30) days from its
promulgation.

A simple reading of this provision shows that it only applies to ordinary actions, special proceedings,
provisional remedies and special reliefs. Under Section 5, Rule 1 of the Comelec Rules of
Procedures, ordinary actions refer to election protests, quo warranto, and appeals from decisions of
courts in election protest cases; special proceedings refer to annulment of permanent list of voters,
registration of political parties and accreditation of citizens’ arms of the Commission; provisional
remedies refer to injunction and/or restraining order; and special reliefs refer to certiorari, prohibition,
mandamus and contempt. Thus, it is clear that the proceedings that precipitated the issuance of
Resolution No. 06-1369 do not fall within the coverage of the actions and proceedings under Section 13,
Rule 18 of the Comelec Rules of Procedure. Thus, the Comelec did not violate its own rule on finality of
judgments.1âwphi1

No denial of due process

We also find no merit in the petitioners’ contention that that they were denied due process of law when
the Comelec issued Resolution No. 8808 without affording them the benefit of a notice and hearing. We
have held in the past that "[t]he essence of due process is simply the opportunity to be heard, or as applied
to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a
reconsideration of the action or ruling complained of. [Thus, a] formal or trial-type hearing is not at all
times and in all instances essential. The requirements are satisfied where the parties are given fair and
reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is absolute
lack of notice and hearing." 54 In Bautista v. Commission on Elections,55 we emphasized:

In Zaldivar vs. Sandiganbayan (166 SCRA 316 [1988]), we held that the right to be heard does not only
refer to the right to present verbal arguments in court. A party may also be heard through his pleadings.
Where opportunity to be heard is accorded either through oral arguments or pleadings, there is no denial
of procedural due process. As reiterated in National Semiconductor (HK) Distribution, Ltd. vs. NLRC (G.R.
No. 123520, June 26, 1998), the essence of due process is simply an opportunity to be heard, or as applied
to administrative proceedings, an opportunity to explain one's side. Hence, in Navarro III vs. Damaso (246
SCRA 260 1995), we held that a formal or trial-type hearing is not at all times and not in all instances
essential.56 (italics supplied)

Thus, "a party cannot successfully invoke deprivation of due process if he was accorded the opportunity
of a hearing, through either oral arguments or pleadings. There is no denial of due process when a party
is given an opportunity through his pleadings."57 In the present case, the petitioners cannot claim
deprivation of due process because they actively participated in the Comelec proceedings that sought for
payment of their retirement benefits under R.A. No. 1568. The records clearly show that the issuance of
the assailed Comelec resolution was precipitated by the petitioners’ application for retirement benefits
with the Comelec. Significantly, the petitioners were given ample opportunity to present and explain their
respective positions when they sought a re-computation of the initial pro-rated retirement benefits that
were granted to them by the Comelec. Under these facts, no violation of the right to due process of law
took place.

No vested rights over retirement benefits

As a last point, we agree with the Solicitor General that the retirement benefits granted to the petitioners
under Section 1 of R.A. No. 1568 are purely gratuitous in nature; thus, they have no vested right over
these benefits. 58 Retirement benefits as provided under R.A. No. 1568 must be distinguished from a
pension which is a form of deferred compensation for services performed; in a pension, employee
participation is mandatory, thus, employees acquire contractual or vested rights over the pension as part
of their compensation. 59 In the absence of any vested right to the R.A. No. 1568 retirement benefits, the
petitioners' due process argument must perforce fail.

WHEREFORE, premises considered, we hereby DISMISS the petition for certiorari filed by petitioners
Evalyn I. Fetalino and Amado M. Calderon for lack of merit. We likewise DENY Manuel A. Barcelona, Jr.'s
petition for intervention for lack of merit. No costs.

SO ORDERED.