G

Nature of Quasi-Legislative PowerEASTERN SHIPPING LINES, INC., petitioner, vs. COURT OF APPEALS and DAVAO PILOTS ASSOCIATION, respondents. G.R. No. 116356 June 29, 1998

Facts:On September 25, 1989, private respondent elevated a complaint against petitioner for sum of money and attorney's fees alleging that private respondent had rendered pilotage services to petitioner between with total unpaid fees of P703,290.18. Despite repeated demands, petitioner failed to pay and prays that the latter be directed to pay P703,290.18 with legal rate of interest from the filing of the complaint.

On November 18, 1989 petitioner disputed the claims of private respondent assailing the constitutionality of EO 1088 upon which it bases its claims; that the subject of the complaint falls within the scope and authority of the Philippine Ports Authority by virtue of PD No. 857 ; that Executive Order No. 1088 is an unwarranted repeal or modification of the Philippine Ports Authority Charter, among others.

Petitioner argues that EO 1088 is not constitutional, because its interpretation and application are left to private respondent, a private person, and it constitutes an undue delegation of power. Petitioner insists that it should pay pilotage fees in accordance with and on the basis of the memorandum circulars issued by the PPA, the administrative body vested under PD 857 with the power to regulate and prescribe pilotage fees. It on paying pilotage fees prescribed under PPA circulars because EO 1088 sets a higher rate.

Issues:Whether Executive Order 1088 is unconstitutional.

Whether there is undue delegation of legislative power on private respondent.

Held:Petition DENIED.

Reiterating the pronouncement of the Court in Philippine Interisland Shipping Association of the Philippines vs. Court of Appeals, the Court held that EO 1088 is valid. E.O. NO. 1088 provides for adjusted pilotage service rates without withdrawing the power of the PPA to impose, prescribe, increase or decrease rates, charges or fees. The reason is because E.O. No. 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the "rationalization of pilotage service charges, through the imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports.

Petitioner cannot insist on paying pilotage fees based on the PPA circulars because the PPA circulars are inconsistent with EO 1088, they are void and ineffective. "Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution." As stated by the Court in Land Bank of the Philippines vs. Court of Appeals, "the conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction, or grave abuse of discretion clearly conflicting with either the letter or spirit of the law." It is axiomatic that an administrative agency, like the PPA, has no discretion whether to implement the law or not. Its duty is to enforce it. Therefore, if there is any conflict between the PPA circular and a law, such as EO 1088, the latter prevails.

In conclusion, the Court made it clear that E.O. No. 1088 is a valid statute and that the PPA is duty bound to comply with its provisions. The PPA may increase the rates but it may not decrease them below those mandated by E.O. No. 1088.Res Judicata

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU) vs. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES, INC. G.R. No. 122226 March 25, 1998Facts:United Pepsi-Cola Supervisory Union, UPSU, is a union consisting of supervisory employees. On March 20, 1995, UPSU filed a petition for certification election on behalf of the route managers at Pepsi-Cola Products Philippines, Inc. Said petition was however denied by the med-arbiter and on appeal to the Secretary of Labor. The ground was that the route managers were managerial employees and therefore not eligible for union membership under Art. 245 of the Labor Code.

Petitioner challenged the questioned orders but was dismissed by the Third Division of the Court for lack of showing that respondent committed grave abuse of discretion. Petitioner filed a motion for reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of the Labor Code, so far as it declares managerial employees to be ineligible to form, assist or join unions, contravenes Art. III, 8 of the Constitution which provides: The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

For this reason, the petition was referred to the Court en banc.

It appears, however, that the subject of the case at bar was the same subject of two previous determinations by the Secretary of Labor and Employment. The first was in Worker's Alliance Trade Union (WATU) v. Pepsi-Cola Products Philippines, Inc., where the Secretary of Labor found that only those employees occupying the position of route manager and accounting manager are managerial employees. The findings were reiterated in In Re: Petition for Direct Certification and/or Certification Election-Route Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc.Issue:Whether or not previous administrative determinations on the question whether route managers are managerial employees constitute res judicata over the case at bar.Held:Petition is DISMISSED.

Petitioner relies in the Courts ruling in Nasipit Lumber Co. v. National Labor Relations Commission in submitting its argument that these previous administrative determinations do not have the effect of res judicata in this case, because "labor relations proceedings" are "non-litigious and summary in nature without regard to legal technicalities."

The said case involved a clearance to dismiss an employee issued by the Department of Labor. The requirement of a clearance to terminate employment was a creation of the Department of labor to carry out the Labor Code provisions on security of tenure and termination of employment.

The question in that case was whether in a subsequent proceeding for illegal dismissal, the clearance was res judicata. In holding it was not, the Court made it clear that it was referring to labor relations proceedings of a non-adversary character. The Court clarified at the end of its opinion that "the doctrine of res judicata applies . . . to judicial or quasi judicial proceedings and not to the exercise of administrative powers."QUASI-JUDICIAL POWER: Notice & Hearing

BAUTISTA vs. BOE & MERALCO. G.R. No. 75016 January 13, 1989Facts:On May 30, 1986, MERALCO filed with the BOE a verified application for an upward revision of its rates alleging that the company has suffered net losses in 1984 and 1985, a drop in kilowatt sales and the deterioration of system loss, among others. The proposed rate increase is 9.5 centavos per kilowatt hour. However, consumptions up to 130 kilowatt hours per month of residential customers, and up to 70 kilowatt hours of small commercial customers, and consumptions of government-owned hospitals and public street lighting services are not affected by the increase.

On June 9, 1986, the petitioners filed for an opposition and prayed that no provisional approval should be granted by the BOE. They alleged that they, together with others similarly situated, are adversely affected by the increase in rates of MERALCO and that the increase in rates is exorbitant and unreasonable as the prices of petroleum products had already gone down.

On June 11, 1986, the BOE provisionally approved MERALCO's revised rate schedules without hearing. Alleging that they were not afforded the opportunity to be heard, the petitioners moved for a reconsideration of the BOEs order. The motion was denied by the Board without setting it for hearing, contending that it has the power to grant provisional relief on motion of a party in a case or even on its own initiative under Section 12 of Republic Act No. 6173, as amended by Presidential Decree No. 1128, in relation to Section 9(e) of Presidential Decree No. 1206 .

Petitioners argue that the authority of the BOE to grant provisional approval without hearing is not absolute, but is subject to the due process clause of the constitution and that their opposition to the grant of provisional approval should have been set for hearing for MERALCO to present a prima facie case on the issue of urgent public need.

Hence, the instant petition.

Issue: Whether or not the Board of Energy acted with grave abuse of discretion amounting to lack of jurisdiction when it provisionally approved the application for increase in rates of MERALCO without hearing.

Held:Petition DISMISSED.

The records show that the issue has become moot and academic as MERALCO decreased its rate by 12.6 centavos per kilowatt hour in its electric, bills for August 1986, apart from a 4.2 centavo cut per kilowatt-hour for September 1986. Where during the pendency of the case, certain events or circumstances have taken place which would render the case moot and academic, the petition for certiorari will be dismissed. Hence, the Court will neither determine an abstract proposition nor express an opinion in a case in which no practical relief may be granted in view of supervening events.

Assuming that the case has not yet become moot, it is beyond dispute that when BOE provisionally authorized private respondent's application without hearing, it merely exercised a prerogative granted to it by law.

This Court has upheld the authority of regulatory boards like the Energy Regulatory Board to grant provisional relief upon the filing of an application, petition or complaint or at any stage thereafter, and without the need of prior hearing, but it shall call a hearing thereon within thirty days thereafter for the determination of its final decision. The order granting such provisional relief, however, must be based upon substantial evidence supporting papers duly verified or authenticated, and is without prejudice to rendition of a final decision after hearing.Fourth requisite: Administrative Regulation must be reasonable

Araneta vs. Gatmaitan, GR Nos. L-8895 and L- 9191, Apr. 30,1957

Facts:An authorization granted by the congress in favor of the Secretary of Agriculture and Natural Resources to promulgate rules and regulations concerning trawl fishing which power was directly exercised by the President Ramon Magsaysay. A group of Otter trawl operators took the matter to the court by filing a complaint for injunction and/or declaratory relief with preliminary injunction with the Court of First Instance of Manila, praying that a writ of preliminary injunction be issued to restrain the Secretary of Agriculture and Natural Resources and the Director of Fisheries from enforcing said executive order; to declare the same null and void, and for such other relief as may be just and equitable in the premises.

Issue:Whether or not the regulation promulgated by the Secretary of Agriculture and Natural Resources is unreasonable?

Held:The court ruled in negative. The promulgation made by the Secretary of Agriculture and Natural Resources satisfies all the requisite of a valid administrative regulation. The primary purpose of the rule was that trawl fishing caused the depletion of the marine resources. Also in the Fisheries Act it provided that the Secretary of Agriculture and Natural Resources has the power to promulgate such regulations as would protect the aquatic resources of the land.

Quasi-Judicial Power: Administrative Appeal and Review

Araneta vs. Gatmaitan, 101 Phil 328

Facts:Then President Magsaysay issued Executive Orders prohibiting trawl fishing in San Miguel Bay, located between the provinces of Camarines Norte and Camarines Sur.

A group of trawl operators took the matter to court by filing a complaint for injunction to restrain the Secretary of Agriculture and the Director of Fisheries from enforcing the said executive order.

The lower court granted injunction an nullified the assailed executive orders saying that the matter of allowing or prohibiting trawl fishing is within the power of the legislature and not with the executive.

Issue:Whether or not the President of the Philippines has the power to issue executive orders banning trawl fishing in San Miguel Bay.

Held:The executive orders restricting and banning trawl fishing from San Miguel Bay are valid and issued by authority of law.

Under the Fisheries law, the restriction and banning of trawl fishing from all Philippine waters come within the powers of the Secretary of Agriculture and Natural Resources. However, since the Secretary of Agriculture exercise its functions subject to the general supervision and control of the President, the President can exercise the same power and authority through executive orders, regulations and decrees upon the recommendation of the Secretary concerned.

Powers of Administrative Agencies: Tests of Delegation

YNOT vs. IAC, G.R. No. 74457, March 20, 1987Facts: The six carabaos transported by petitioner, Restituto Ynot, in a pump boat from Masbate to Iloilo was confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of Executive Order No. 626-A. The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as raise by the petitioner, for lack of authority and also for its presumed validity.

The petitioner appealed the decision to the Intermediate Appellate Court, which upheld the trial court, and he has now come before this Court in this petition for review on certiorari.

The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the penalty is invalid because it is imposed without according the owner a right to be heard before a competent and impartial court as guaranteed by due process. He complains that the measure should not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the legislative power by the former President under Amendment No. 6 of the 1973 Constitution.

Issue:Whether or not Executive Order No. 626-A is unconstitutional due to invalid delegation of legislative powers.

Held:Executive Order No. 626-A is hereby declared unconstitutional.

This Court has declared that while lower courts should observe a becoming modesty in examining constitutional questions, they are nonetheless not prevented from resolving the same whenever warranted, subject only to review by the highest tribunal. We have jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide," final judgments and orders of lower courts in, among others, all cases involving the constitutionality of certain measures.

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as prescribed in the questioned executive order. It is there authorized that the seized property shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and therefore invalid delegation of legislative powers.

There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we hereby declare Executive Order No. 626-A unconstitutional.

The Quasi-Legislative Power: Third Requisite (Publication); Fourth Requisite (Due-Process)

TAADA vs. TUVERA, G.R. No. L-63915, April 24, 1985

Facts: Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV of the 1973 Philippine Constitution, as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners, Lorenzo M. Taada et. al., seek a writ of mandamus to compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of implementation and administrative orders.

The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have no legal personality or standing to bring the instant petition.

Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to compel the performance of a public duty, they need not show any specific interest for their petition to be given due course.

Issue:Whether or not the said presidential issuances are in violation of the due process law for not being published in the official gazette.

Held:The Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect.

The Court hold therefore that all statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution, Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the guidelines to be followed by their subordinates in the performance of their duty.

It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC :

In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official government repository promulgate and publish the texts of all such decrees, orders and instructions so that the people may know where to obtain their official and specific contents.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

GONZALES vs. CA, G.R. No. 106028, May 9, 2001

Facts: Petitioner, Petitioner Lilia Y. Gonzales, received two orders from the Regional Office of the Department of Agrarian Reform (DAR), signed by the respondent DAR Regional Director Antonio S. Maraya, and issued pursuant to the operation land transfer program of the government under Presidential Decree (PD) No. 27 directing her to surrender the titles to her land and to submit the other requirements of the respondent Land Bank of the Philippines, while the said bank was ordered to pay the petitioner an aggregate amount of P55,690.74 as compensation for the two parcels of land.

The petitioner filed a Petition for Certiorari and Prohibition with Temporary Restraining Order with the Court of Appeals to restrain the enforcement and to annul the said two Orders of the DAR Regional Director on the ground of lack or excess of jurisdiction, alleging that the petitioner never filed a land transfer claim and was not notified of nor heard in the execution of the final survey plans and the valuation of her land.

After requiring the respondents to file their Comment, the Court of Appeals rendered a Decision dismissing the petition for failure of the petitioners to exhaust administrative remedies. The Court of Appeals also held that Certiorari cannot be used by the petitioners as a substitute for appeal of the assailed issuances. Hence this petition.

Issue: Whether or not the court of appeals committed a reversible error of law in dismissing the petition for failing to exhaust administrative remedies.

Held: The petition is denied, and the assailed Decision of the Court of Appeals is affirmed.

The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. It is presumed that an administrative agency, if afforded an opportunity to pass upon a matter, will decide the same correctly, or correct any previous error committed in its forum.9 Furthermore, reasons of law, comity and convenience prevent the courts from entertaining cases proper for determination by administrative agencies. Hence, premature resort to the courts necessarily becomes fatal to the cause of action of the petitioner.

After a careful perusal of the records, we find the doctrine of exhaustion of administrative remedies to be applicable in this case.

The petitioner raises the following exceptions to the doctrine of Exhaustion of Administrative Remedies as applicable to the case at bar: (1) where the questioned order is a patent nullity; (2) where there is a deprivation of the petitioner's fundamental right to due process; and (3) where the question involved is a purely legal one. We are not convinced that any of the exceptions obtains here. As above stated, the Orders issued by the Regional Director pursuant to law are not patent nullities, and the alleged denial of the petitioner's right to due process is intertwined with the question of notice upon the petitioner which raises basically a factual matter, i.e., whether three notices were properly served upon petitioner. This issue is not to be resolved by the Court of Appeals in the first instance on certiorari. This Court do not see how the controversy raises a purely legal question.

Completeness Test

Beltran vs. Sec. of Health

Facts:Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law on April 2, 1994. The Act seeks to provide an adequate supply of safe blood by promoting voluntary blood donation and by regulating blood banks in the country. It was approved by then President Fidel V. Ramos on May 15, 1994 and was subsequently published in the Official Gazette on August 18, 1994. The law took effect on August 23, 1994. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and Regulations of said law was promulgated by respondent Secretary of the Department of Health Years prior to the passage of the National Blood Services Act of 1994, petitioners have already been operating commercial blood banks. Petitioners were granted by the Secretary of Health their licenses to open and operate a blood bank only until May 27, 1998. On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed a petition for certiorari with application for the issuance of a writ of preliminary injunction or temporary restraining order under Rule 65 of the Rules of Court assailing the constitutionality and validity of the aforementioned Act and its Implementing Rules and Regulations.

Issue:WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE POWER

Held:In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete in all its terms and provisions when it left the hands of the Legislature so that nothing was left to the judgment of the administrative body or any other appointee or delegate of the Legislature. Except as to matters of detail that may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers and administrative boards, an act of the Legislature, as a general rule, is incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative board may be guided in the exercise of the discretionary powers delegated to it

Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear from the provisions of the Act that the Legislature intended primarily to safeguard the health of the people and has mandated several measures to attain this objective. One of these is the phase out of commercial blood banks in the country. The law has sufficiently provided a definite standard for the guidance of the Secretary of Health in carrying out its provisions, that is, the promotion of public health by providing a safe and adequate supply of blood through voluntary blood donation. By its provisions, it has conferred the power and authority to the Secretary of Health as to its execution, to be exercised under and in pursuance of the law.

Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations to implement a given legislation and effectuate its policies. The Secretary of Health has been given, under Republic Act No. 7719, broad powers to execute the provisions of said Act.

Doctrine of Exhaustion of Administrative Remedies

CRISTOBAL VS COURT OF APPEALS, June 22, 1998 GRN 125339

Facts: When Visayas Avenue became a national road, private respondent Ledesma, owner of the road lot used as a passageway by petitioners, filed for a petition before the RTC of Quezon City for conversion of his road lot into residential lot. The petition was approved and thereafter sold his property to private respondent Pacione. Petitioners opposed because it was inconvenient for them to use the longer route exit to Visayas Avenue. Trial Court dismissed the petition for easement of right of way and on appeal to the CA, petitioners alleged that the conversion of the Road Lot into two (2) residential lots by Cesar Ledesma, Inc., was violative of PD No. 957 and the titles issued as a consequence of the conversion were null and void.

Respondent Court of Appeals affirmed the decision of the Trial Court dismissing petitioners petition for easement of right of way and stated that has no legal leg to stand on since plaintiff-appellants cannot just introduce a new issue to an already settled one, especially for the time on appeal.

Issue:Whether the Court of Appeals properly rejected the contention of petitioners that the conversion of a road lot into a residential lot should be lodged in Administrative bodies and not by the Courts.

Held:The Supreme Court ruled that petitioners contention was properly rejected by the appellate court. Primarily, the issue of legality or illegality of the conversion of the road lot in question has long been laid to rest in LRC Case No. Q-1614 which declared with finality the legality of the segregation subdivision survey plan of the disputed road lot. Consequently, it is now too late for petitioners to question the validity of the conversion of the road lot.

Finally, questions relating to non-compliance with the requisites for conversion of subdivision lots are properly cognizable by the National Housing Authority (NHA), now the Housing and Land Use Regulatory Board (HLURB), pursuant to Sec. 22 of PD 957 and not by the regular court. Under the doctrine of primary administrative jurisdiction, where jurisdiction is vested upon an administrative body, no resort to the courts may be made before such administrative body shall have acted upon the matter.

Quasi-Legislative Function: Fourth Requisite

De Jesus vs. COA

Facts: Petitioners are employees of the Local Water Utilities Administration (LWUA). They were receiving honoraria as designated members of the LWUA Board Secretariat and the President Qualification, Bids and Awards Committee. Meanwhile, RA 6758 took effect and provides for the consolidation of allowances and additional compensation into standardized salary rates. To implement it, DBM issued CCC No. 10 discontinuing without qualification, all allowances and fringe benefits granted on top of basic salary. Aggrieved, petitioners appealed to COA, questioning the validity and enforceability of DBM-CCC No.10 and that it is without force and effect because it was not published in the Official Gazette.

Issue:Whether or not DBM-CCC No. 10 is valid and enforceable.

Held: Petition granted. DBM-CCC No. 10 is invalid.

Rationale: Publication in the Official Gazette or in a newspaper of general circulation in the Philippines is required since DBM-CCC No. 10 is in the nature of an administrative circular. The purpose of which is to enforce or implement an existing law. Stated differently, to be effective and enforceable, DBM-CCC No. 10 must go through the requisite publication in the Official Gazette or in a newspaper of general circulation in the Philippines. It is not merely an interpretative or internal regulation for it tends to deprive government workers of their allowances and additional compensation sorely needed to keep body and soul together. At the very least, before the said circular under attack may be permitted to substantially reduce their income, the government officials and employees concerned should be apprised and alerted by the publication of subject circular in the Official Gazette or in the newspaper of general circulation in the Philippines to the end that they may have, and to ventilate their stance on the matter. This approach is more in keeping with democratic precepts and rudiments of fairness and transparency.

Powers of Administrative Agency: Sufficient Standard Test

BATANGAS CATV, INC vs. COURT OF APPEALS, 439 SCRA 326

Facts: Sangguniang Panlungsod enacted Resolution No. 2107 granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Under it petitioner is authorized to increase the rates of its services to its maximum rate. Subsequently, petitioner increased its subscriber rates from 88pesos to 180pesos. As a result, respondent mayor wrote petitioner threatening to cancel its permit unless it secures the approval of Sangguniang Panlungsod pursuant to Resolution No. 210.

Petitioner then filed a petition for injunction contending that the Sangguniang Panlungsod has no authority to regulate because it is the National telecommunications Commission who has the power to regulate the CATV operation in the Philippines. Petitioner won in the lower court but was reversed by the appellate court on the basis of Batas Pambansa Bilang 337, otherwise known as the Local Government Code of 1983. Section 177 (now Section 457 paragraph 3 (ii) of Republic Act 7160) substantially provides of the powers of the Sanggunian Panlungsod to enact ordinances, Regulate, fix the license fee for, and tax any business or profession being carried on and exercised within the territorial jurisdiction of the city xxx. Under cover of the General Welfare Clause as provided in this section, Local Government Units can perform just about any power that will benefit their constituencies. Thus, local government units can exercise powers that are: (1) expressly granted; (2) necessarily implied from the power that is expressly granted; (3) necessary, appropriate or incidental for its efficient and effective governance; and (4) essential to the promotion of the general welfare of their inhabitants. Hence, this petition.

Issue: Whether or not the Sangguniang Panlungsod is authorized to exercise the regulatory function solely lodged with the NTC E.O. No.205?

Held: Earlier, Pres. Marcos issued Letter of Instruction (LOI) No. 894 vesting upon the Chairman of the Board of Communications direct supervision over CATV operations directing it to issue certificates, establish and prescribe areas of operation xxx. Upon President Corazon C. Aquinos assumption of power, she issued E.O. No. 20522 opening the CATV industry to all citizens of the Philippines. It mandated the NTC to grant Certificates of Authority to CATV operators and to issue the necessary implementing rules and regulations. On September 9, 1997, President Fidel V. Ramos issued E.O. No. 43623 prescribing policy guidelines to govern CATV operation in the Philippines.

But lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their general power to prescribe regulations under the general welfare clause of the Local Government Code. It must be emphasized that when E.O. No. 436 decrees that the "regulatory power" shall be vested "solely" in the NTC, it pertains to the "regulatory power" over those matters which are peculiarly within the NTCs competence, such as, the: (1) determination of rates, (2) issuance of "certificates of authority, (3) establishment of areas of operation, (4) examination and assessment of the legal, technical and financial qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar matters.26 Within these areas, the NTC reigns supreme as it possesses the exclusive power to regulate -- a power comprising varied acts, such as "to fix, establish, or control; to adjust by rule, method or established mode; to direct by rule or restriction; or to subject to governing principles or laws."

The general welfare clause is the delegation in statutory form of the police power of the State to LGUs. Through this, LGUs may prescribe regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. This recourse finds application here. Thus, we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over matters affecting CATV operation, including specifically the fixing of subscriber rates, but nothing herein precludes LGUs from exercising its general power, under R.A. No. 7160, to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of their constituents. In effect, both laws become equally effective and mutually complementary.

WHEREFORE, the petition is GRANTED.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

EDUARDO P. CORSIGA vs. HON. QUIRICO G. DEFENSOR, 391 SCRA 267

Facts: Private respondent Ortizo was the senior engineer of B in the National Irrigation Administration (NIA), Jalaur-Suague River Irrigation System Region VI. He is tasked to assist Irrigation Superintendent in the said station. Sometime in June 1995, petitioner Eduardo P. Corsiga, then regional irrigation manager of the NIA, Region VI, issued Regional Office Memorandum (ROM) No. 52, reassigning private respondent to Aganan-Sta. Barbara River Irrigation System, likewise to assist the Irrigation Superintendent thereat. But private respondent wrote petitioner contending that the policy of rotation only applies to Department Managers, Irrigation Superintendents, Provincial Engineers and Division Manager of Field Offices. Petitioner denied the request and so private respondent filed a petition for injunction.

Petitioner moved to dismiss the petition for lack of jurisdiction and non-exhaustion of administrative remedies, but the motion was denied. Petitioner then elevated it to the Court of Appeals but the same was denied saying that the doctrine of exhaustion of administrative remedies does not apply where the controverted act is patently illegal, arbitrary, and oppressive. Regional Office Memorandum No. 52, according to the court, was illegal since it violated private respondent's constitutional right to security of tenure. Private respondent's original appointment as Senior Engineer B in the NIA Jalaur River Irrigation System, Region VI is a permanent one; thus, it entitled him to a security of tenure. He cannot, therefore, be reassigned to another position that involves a reduction in rank without his consent. Hence, this petition.

Issue: Whether or not respondent has a valid cause of action against petitioner for failure to exhaust administrative remedies?

Held: Being an NIA employee covered by the Civil Service Law, in our view, private respondent should have first complained to the NIA Administrator, and if necessary, then appeal to the Civil Service Commission. As ruled in Abe-Abe vs. Manta, 90 SCRA 524 (1979), if a litigant goes to court without first pursuing his administrative remedies, his action is premature, and he has no cause of action to ventilate in court. Hence, petitioner asserts that private respondent's case is not ripe for judicial determination.

According to private respondent, the circumstances of the case required him to urgently act on his reassignment since he might be administratively charged if he resisted petitioner's order, yet, at the same time he could be in estopped to question the order had he yielded to it without protest. According to private respondent, petitioner was guilty of bad faith; his real objective was to assign someone close to him to replace private respondent. Petitioner's action was capricious, whimsical, arbitrary, and discriminatory, said private respondent since he was the only one, from among the officials or employees of the same rank, who was reassigned.

However, private respondent failed to reckon with the fact that the issue in Civil Case No. 22462 was not purely a question of law. Certain Facts needed to be resolved first. Did private respondent's reassignment involve a reduction in rank? Private respondent claimed his transfer to a new station violated the rule on reassignment for he was allegedly transferred to a lower position. But petitioner had refuted this contention, adding that his order reassigning private respondent was a lawful exercise of management prerogatives. Lastly, private respondent claimed urgency in that he had no other recourse but to go to court, or he would be charged administratively. However, under Omnibus Rules Implementing the Civil Service Law, a recourse is available to him by way of appeal which could be brought to the agency head, with further recourse, if needed, to the Civil Service Commission.

WHEREFORE, the petition is GRANTED.

Quasi-Judicial Power: Notice and Hearing

DELANO T. PADILLA vs. HON. PATRICIA STO. TOMAS, 243 SCRA 155

Facts: A case was filed against petitioner Delano Padilla, former officer-in-charge of the Land Transportation Office (LTO) of Bacolod City. . It was alleged that petitioner succeeded in having caused and approved the registration and/or transfer of ownership of twelve (12) carnapped and stolen vehicles despite prior knowledge that existing laws, rules and regulations were violated in the registration and transfer thereof. As contended by complainant LTO, petitioner failed to require confirmation of the Certificate of Registration and Official Receipts corresponding to the subject vehicles from the LTO district offices which issued the same. Had he done so, no registration and/or transfer of the vehicles would have been possible because all the supporting documents pertinent to them were spurious. Petitioner however contended that the twelve (12) motor vehicles were covered by proper clearances, certificates and similar documents issued by the Constabulary Highway Patrol Group (CHPG). The case was heard before the DOTC but petitioner and his counsel failed to appear. The case was decided against him and ordered him to be dismissed from office. Petitioner moved for reconsideration but the same was denied. Petitioner appealed to the Civil Service Commission but it was also denied. Hence, this petition.

Issue: Whether or not petitioners right of due process was violated?

Held: Petitioner contends that his constitutional right to due process was violated when on April 20, 1989 the scheduled hearing proceeded despite his, and his counsel's absence. He claims that nobody testified during the hearing and that the supporting documents were not presented or marked in evidence.

Petitioner's position cannot be sustained.

The essence of due process is that a party be afforded reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. In administrative proceedings such as the one at bench, due process simply means the opportunity to explain one's side or the opportunity to seek a reconsideration of the action or ruling complained of.

In the instant case, petitioner does not deny the fact that he was furnished a copy of the charges against him wherein he was required to file an answer and to state whether he wanted a formal investigation. Petitioner did file his answer. And petitioner also admitted that he was notified. Thereafter, on account of the liberality of the AAB-DOTC, he was heard and was allowed to present his evidence. He was not denied his right to due process. One may be heard, not only by verbal presentation but also, sometimes more eloquently, through pleadings. "Due process is not semper et ubique judicial process." Hence, a formal or trial-type hearing is not, at all times, necessary. So long as a party is afforded fair and reasonable opportunity to explain his side, the requirement of due process is complied with.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit.

Necessity for Notice of Hearing

MACEDA VS ENERGY REGULATORY BOARD, 192 SCRA 363

Facts:On 10 September 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum Corporation, and Petron Corporation proferred separate applications with the Energy Regulatory Board for permission to increase the wholesale posted prices of petroleum products, and meanwhile, for provisional authority to increase temporarily such wholesale posted prices pending further proceedings. On September 21, 1990, the Energy Regulatory Board, in a joint (on three applications) order granted provisional relief and authorizes said applicants a weighted average provisional increase of ONE PESO AND FORTY-TWO CENTAVOS (P1.42) per liter in the wholesale posted prices of their various petroleum products, refined and/or marketed by them locally. The petitioners, Senator Ernesto Maceda and Atty. Oliver Lozano submits that the same was issued without proper notice and hearing in violation of Section 3, paragraph (e), of Executive Order No. 172, and has been issued with grave abuse of discretion, tantamount to lack of jurisdiction, and correctible by certiorari. Hence, this petition praying for injunctive relief, to stop the Energy Regulatory Board from implementing its order, dated September 21, 1990, mandating a provisional increase in the prices of petroleum and petroleum products.

Issue:Whether or not the Order of the Energy Regulatory Board mandating a provisional increase on petroleum products was issued in violation of the Constitutional right to notice and hearing?

Held:The Court ruled in the negative. Senator Maceda and Atty. Lozano, in questioning the lack of notice and hearing, have overlooked the provisions of Section 8 of Executive Order No. 172. As the Order itself indicated, the authority for provisional increase falls within this provision. There is no merit in the Senators contention that the applicable provision is Section 3, paragraph (e) of said Executive Order. What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex parte, a provisional increase, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 3 paragraph (e) is akin to a temporary restraining order or a writ or preliminary attachment issued by the courts, which are given ex parte, and which are subject to the resolution of the main case.

Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority which is of course, the better procedure however, it cannot be stigmatized later if it failed to conduct one.

Quasi-Judicial Power: Notice and Hearing

Montemayor vs. CA

Facts:Petitioner EDILLO C. MONTEMAYOR assails the Decision of the Court of Appeals, dated April 18, 2001, affirming the decision of the Office of the President in Administrative Order No. 12 ordering petitioners dismissal as Regional Director of the Department of Public Works and Highways (DPWH) for unexplained wealth.

Petitioners dismissal originated from an unverified letter-complaint, Private respondent accused petitioner, then OIC-Regional Director, Region III, of the DPWH, of accumulating unexplained wealth, in violation of Section 8 of Republic Act No. 3019. Private respondent charged that in 1993, petitioner and his wife purchased a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California, making a down payment of US$100,000.00. He further alleged that petitioners in-laws who were living in California had a poor credit standing due to a number of debts and they could not have purchased such an expensive property for petitioner and his wife. Private respondent accused petitioner of amassing wealth from lahar funds and other public works projects.

From May 29, 1996 until March 13, 1997, the PCAGC conducted its own investigation of the complaint. While petitioner participated in the proceedings and submitted various pleadings and documents through his counsel, private respondent-complainant could not be located as his Philippine address could not be ascertained. In the course of the investigation, the PCAGC repeatedly required petitioner to submit his Statement of Assets, Liabilities and Net Worth (SALN), Income Tax Returns (ITRs) and Personal Data Sheet. Petitioner ignored these directives and submitted only his Service Record. He likewise adduced in evidence the checks allegedly issued by his sister-in-law to pay for the house and lot in Burbank, California. When the PCAGC requested the Deputy Ombudsman for Luzon to furnish it with copies of petitioners SALN from 1992-1994, it was informed that petitioner failed to file his SALN for those years.

After the investigation, the PCAGC, in its Report to the Office of the President, made the following findings: The PCAGC concluded that the petitioner could not have been able to afford to buy the property on his annual income of P168,648.00 in 1993 as appearing on his Service Record. It likewise found petitioners explanation as unusual, largely unsubstantiated, unbelievable and self-serving. The PCAGC noted that instead of adducing evidence, petitioners counsel exerted more effort in filing pleadings and motion to dismiss on the ground of forum shopping. It also took against petitioner his refusal to submit his SALN and ITR despite the undertaking made by his counsel which raised the presumption that evidence willfully suppressed would be adverse if produced. The PCAGC concluded that as petitioners acquisition of the subject property was manifestly out of proportion to his salary, it has been unlawfully acquired. Thus, it recommended petitioners dismissal from service pursuant to Section 8 of R.A. No. 3019.

Petitioners Motion for Reconsideration was denied. His appeal to the Court of Appeals was likewise dismissed.

Issue:whether he was denied due process in the investigation before the PCAGC

Held:On the issue of due process, petitioner submits that the PCAGC committed infractions of the cardinal rules of administrative due process when it relied on Bundalians unverified letter-complaint. He gripes that his counter-affidavit should have been given more weight as the unverified complaint constitutes hearsay evidence. Moreover, petitioner insists that in ruling against him, the PCAGC failed to respect his right to confront and cross-examine the complainant as the latter never appeared in any of the hearings before the PCAGC nor did he send a representative therein.

We find no merit in his contentions. The essence of due process in administrative proceedings is the opportunity to explain ones side or seek a reconsideration of the action or ruling complained of. As long as the parties are given the opportunity to be heard before judgment is rendered, the demands of due process are sufficiently met. In the case at bar, the PCAGC exerted efforts to notify the complainant of the proceedings but his Philippine residence could not be located. Be that as it may, petitioner cannot argue that he was deprived of due process because he failed to confront and cross-examine the complainant. Petitioner voluntarily submitted to the jurisdiction of the PCAGC by participating in the proceedings before it. He was duly represented by counsel. He filed his counter-affidavit, submitted documentary evidence, attended the hearings, moved for a reconsideration of Administrative Order No. 12 issued by the President and eventually filed his appeal before the Court of Appeals. His active participation in every step of the investigation effectively removed any badge of procedural deficiency, if there was any, and satisfied the due process requirement. He cannot now be allowed to challenge the procedure adopted by the PCAGC in the investigation.

Neither can we sustain petitioners contention that the charge against him was unsupported by substantial evidence as it was contained in an unverified complaint. The lack of verification of the administrative complaint and the non-appearance of the complainant at the investigation did not divest the PCAGC of its authority to investigate the charge of unexplained wealth. Under Section 3 of Executive Order No. 151 creating the PCAGC, complaints involving graft and corruption may be filed before it in any form or manner against presidential appointees in the executive department. Indeed, it is not totally uncommon that a government agency is given a wide latitude in the scope and exercise of its investigative powers. The Ombudsman, under the Constitution, is directed to act on any complaint likewise filed in any form and manner concerning official acts or omissions. The Court Administrator of this Court investigates and takes cognizance of, not only unverified, but even anonymous complaints filed against court employees or officials for violation of the Code of Ethical Conduct. This policy has been adopted in line with the serious effort of the government to minimize, if not eradicate, graft and corruption in the service.

It is well to remember that in administrative proceedings, technical rules of procedure and evidence are not strictly applied. Administrative due process cannot be fully equated with due process in its strict judicial sense for it is enough that the party is given the chance to be heard before the case against him is decided.

Quasi-Judicial Power: Doctrine of Res Judicata

Montemayor vs. CA

Facts:Petitioner EDILLO C. MONTEMAYOR assails the Decision of the Court of Appeals, dated April 18, 2001, affirming the decision of the Office of the President in Administrative Order No. 12 ordering petitioners dismissal as Regional Director of the Department of Public Works and Highways (DPWH) for unexplained wealth.

Petitioners dismissal originated from an unverified letter-complaint, Private respondent accused petitioner, then OIC-Regional Director, Region III, of the DPWH, of accumulating unexplained wealth, in violation of Section 8 of Republic Act No. 3019. Private respondent charged that in 1993, petitioner and his wife purchased a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California, making a down payment of US$100,000.00. He further alleged that petitioners in-laws who were living in California had a poor credit standing due to a number of debts and they could not have purchased such an expensive property for petitioner and his wife. Private respondent accused petitioner of amassing wealth from lahar funds and other public works projects.

Petitioner likewise pointed out that the charge against him was the subject of similar cases filed before the Ombudsman. He attached to his counter-affidavit the Consolidated Investigation Report of the Ombudsman dismissing similar charges for insufficiency of evidence.

After the investigation, the PCAGC, in its Report to the Office of the President, made the following findings: The PCAGC concluded that the petitioner could not have been able to afford to buy the property on his annual income of P168,648.00 in 1993 as appearing on his Service Record. It likewise found petitioners explanation as unusual, largely unsubstantiated, unbelievable and self-serving. The PCAGC noted that instead of adducing evidence, petitioners counsel exerted more effort in filing pleadings and motion to dismiss on the ground of forum shopping. It also took against petitioner his refusal to submit his SALN and ITR despite the undertaking made by his counsel which raised the presumption that evidence willfully suppressed would be adverse if produced. The PCAGC concluded that as petitioners acquisition of the subject property was manifestly out of proportion to his salary, it has been unlawfully acquired. Thus, it recommended petitioners dismissal from service pursuant to Section 8 of R.A. No. 3019.

Petitioners Motion for Reconsideration was denied. His appeal to the Court of Appeals was likewise dismissed.

Issue:Whether the earlier dismissal of similar cases before the Ombudsman rendered the administrative case before the PCAGC moot and academic.

Held:we cannot sustain petitioners stance that the dismissal of similar charges against him before the Ombudsman rendered the administrative case against him before the PCAGC moot and academic. To be sure, the decision of the Ombudsman does not operate as res judicata in the PCAGC case subject of this review. The doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the exercise of administrative powers. Petitioner was investigated by the Ombudsman for his possible criminal liability for the acquisition of the Burbank property in violation of the Anti-Graft and Corrupt Practices Act and the Revised Penal Code. For the same alleged misconduct, petitioner, as a presidential appointee, was investigated by the PCAGC by virtue of the administrative power and control of the President over him. As the PCAGCs investigation of petitioner was administrative in nature, the doctrine of res judicata finds no application in the case at bar.

Quasi-Legislative Function: Nature

SHELL PHILIPPINES, INC. vs. CENTRAL BANK OF THE PHILIPPINES, G.R. No. L-51353, June 27, 1988

Facts: On May 1, 1970, Congress approved the Act imposing a stabilization tax on consignments abroad (RA 6125).

Ten per centum of the F.O.B. peso proceeds of exports received on or after the date of effectivity of this Act to June thirty, nineteen hundred seventy-one; Eight per centum of the F.O.B. peso proceeds of exports received from July first, nineteen hundred seventy-one to June thirty, nineteen hundred seventy-two.

In August, 1970, the Central Bank, through its Circular No. 309 provided that:

The stabilization tax shall begin to apply on January 1st following the calendar year during which such export products shall have reached the aggregate F.O.B. value of more than US $5 million, and the applicable tax rates shall be the rates prescribed in Schedule (b) of Section 1 of Republic Act No. 6125 for the fiscal year following the reaching of the said aggregate value.

During 1971, appellee Shell, Philippines, Inc. exported seria residues, a by-product of petroleum refining, to an extent reaching $5 million. On January 7, 1972, the Monetary Board issued its Resolution No. 47 "subjecting petroleum pitch and other petroleum residues" to the stabilization tax effective January 1, 1972. Under the Central Bank Circular No. 309, implemented by Resolution No. 47, appellee had to pay the stabilization tax beginning January 1, 1972, which it did under protest.

The appellee filed suit against the Central Bank before the Court of First Instance of Manila, praying that Monetary Board Resolution No. 47 be declared null and void, and that Central Bank be ordered to refund the stabilization tax it paid during the first semester of 1972. Its position was that, pursuant to the provisions of RA 6125, it had to pay the stabilization tax only from July 1, 1972.

The lower court sustained appellee, and it declared Monetary Board Resolution No. 47 as void. The Central Bank appeals.

Issue:Whether or not the Central Bank Circular No. 309, implemented by Resolution No. 47 is null and void being contradictory to R.A. 6125.

Held: The assailed decision is affirmed but modified.

The trial court was correct in declaring that "Monetary Board Resolution No. 47 is void insofar as it imposes the tax mentioned in Republic Act No. 6125 on the export seria residue of (plaintiff) the aggregate annual F.O.B., value of which reached five million United States dollars in 1971 effective on January 1, 1972." The said resolution runs counter to the provisions of R.A. 6125.

The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency. (Davis, Administrative Law, p. 194, 197, cited in Victorias Milling Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).

In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People v. Lim, 108 Phil. 1091).

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

DEPARTMENT OF AGRARIAN REFORM vs. APEX INVESTMENT AND FINANCING CORPORATION (now SM Investment Corporation), G.R. No. 149422, April 10, 2003

Facts:Respondent Apex Investment and Financing Corporation (now SM Investments Corporation), registered under the laws of the Philippines, owns several lots located at Barangay Paliparan, Dasmarias, Cavite. The Municipal Agrarian Reform Office (MARO) of Dasmarias initiated compulsory acquisition proceedings over those lots pursuant to Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988. The MARO issued a Notice of Coverage informing respondent of the compulsory acquisition and inviting it to a meeting set on September 8, 1994; and Notice of Acquisition. Copies of these notices were sent to respondent's office at 627 Echague Street, Manila. However, respondent denied having received the same because it was no longer holding office there.

Respondent learned of the compulsory acquisition proceedings from the December 11, 1997 issue of the Balita stating, that 23,614 square meters of their lot, has been placed under the compulsory acquisition program. Forthwith, petitioner sent respondent a copy of the Notice of Land Valuation and Acquisition, offering to pay compensation. Respondent filed with the PARO a Protest rejecting the offer of compensation and contending that its lands are not covered by R.A. No. 6657 because they were classified as residential.

Respondent received a letter dated May 28, 1999 from petitioner requiring it to submit certified true copies of the TCTs covering its lots and a Certification from the HLURB attesting that they are within the residential zone of Dasmarias based on HLURB Resolution No. R-42-A-3 dated February 11, 1981.

Respondent came to know that TCT No. T-868471 was cancelled and in lieu thereof, TCT No. CLOA-2473 was issued in the name of Angel M. Umali, a farmer-beneficiary allegedly occupying the land. This prompted respondent to file with the Court of Appeals a petition for certiorari and prohibition praying that the compulsory acquisition proceedings over its landholdings be declared void and that TCT No. CLOA-2473 issued to Angel Umali be cancelled.

In its comment, petitioner alleged that respondent failed to exhaust all administrative remedies before filing its petition. Hence, the same should be dismissed. The Court of Appeals granted the petition for certiorari. Petitioner filed a motion for reconsideration but was denied in the Resolution dated August 2, 2001. Hence, the instant petition for review on certiorari.

Issue:Whether or not the respondent corporation violated the doctrine of exhaustion of administrative remedies.

Held:The challenged decision of the Court of Appeals is affirmed with modifications.

The Court has consistently held that the doctrine of exhaustion of administrative remedies is a relative one and is flexible depending on the peculiarity and uniqueness of the factual and circumstantial settings of a case. Among others, it is disregarded where, as in this case, (a) there are circumstances indicating the urgency of judicial intervention; and (b) the administrative action is patently illegal and amounts to lack or excess of jurisdiction.

In Natalia Realty vs. Department of Agrarian Reform, we held that the aggrieved landowners were not supposed to wait until the DAR acted on their letter-protests (after it had sat on them for almost a year) before resorting to judicial process. Given the official indifference which, under the circumstances could have continued forever, the landowners had to act to assert and protect their interests. Thus, their petition for certiorari was allowed even though the DAR had not yet resolved their protests. In the same vein, respondent here could not be expected to wait for petitioner DAR to resolve its protest before seeking judicial intervention. Obviously, petitioner might continue to alienate respondent's lots during the pendency of its protest. Hence, the Court of Appeals did not err in concluding that on the basis of the circumstances of this case, respondent need not exhaust all administrative remedies before filing its petition for certiorari and prohibition.

Completeness Test

Velarde vs. SJS

Facts: Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the June 12, 2003 Decision and July 29, 2003 Order3 of the Regional Trial Court (RTC) of Manila (Branch 49).The challenged Decision was the offshoot of a Petition for Declaratory Relief filed before the RTC-Manila by herein Respondent Social Justice Society (SJS) against herein Petitioner Mariano "Mike" Z. Velarde, together with His Eminence, Jaime Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie Villanueva and Brother Eliseo F. Soriano as co-respondents. The Petition prayed for the resolution of the question "whether or not the act of a religious leader like any of herein respondents, in endorsing the candidacy of a candidate for elective office or in urging or requiring the members of his flock to vote for a specified candidate, is violative of the letter or spirit of the constitutional provisions.

Issue: Did the RTC Decision conform to the form and substance required by the Constitution, the law and the Rules of Court?

Held: The Constitution commands that "[n]o decision shall be rendered by any court without expressing therein clearly and distinctly the Facts and the law on which it is based. No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the basis therefor."

Consistent with this constitutional mandate, Section 1 of Rule 36 of the Rules on Civil Procedure similarly provides:

"Sec. 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the Facts and the law on which it is based, signed by him and filed with the clerk of court."

In the same vein, Section 2 of Rule 120 of the Rules of Court on Criminal Procedure reads as follows:

"Sec. 2. Form and contents of judgments. -- The judgment must be written in the official language, personally and directly prepared by the judge and signed by him and shall contain clearly and distinctly a statement of the Facts proved or admitted by the accused and the law upon which the judgment is based.

Pursuant to the Constitution, this Court also issued on January 28, 1988, Administrative Circular No. 1, prompting all judges "to make complete findings of Facts in their decisions, and scrutinize closely the legal aspects of the case in the light of the evidence presented. They should avoid the tendency to generalize and form conclusions without detailing the Facts from which such conclusions are deduced."

"Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a paramount component of due process and fair play. It is likewise demanded by the due process clause of the Constitution. The parties to a litigation should be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

Industrial Enterprise Inc. vs. CA (184 SCRA 462)

Facts: Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract for the exploration of three additional coal blocks which, together with the original two blocks, comprised the so-called "Giporlos Area."

IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supply-demand balance, the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the subject of IEI's coal operating contract.

Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with damages against MMIC and the then Minister of Energy before the Regional Trial Court of Makati alleging that MMIC took possession of the subject coal blocks even before the Memorandum of Agreement was finalized and approved by the BED; that MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for the adjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed upon and to assume IEI's loan obligation as provided in the Memorandum of Agreement. IEI also prayed that the Energy Minister be ordered to approve the return of the coal operating contract from MMIC to petitioner, with a written confirmation that said contract is valid and effective, and, in due course, to convert said contract from an exploration agreement to a development/production or exploitation contract in IEI's favor.

Issue: Whether or not the civil court has jurisdiction to hear and decide the suit for rescission of the Memorandum of Agreement?

Held: No.

In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction in many cases involving matters that demand the special competence of administrative agencies. It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body, in such case the judicial process is suspended pending referral of such issues to the administrative body for its view".

Clearly, the doctrine of primary jurisdiction finds application in this case since the question of what coal areas should be exploited and developed and which entity should be granted coal operating contracts over said areas involves a technical determination by the BED as the administrative agency in possession of the specialized expertise to act on the matter. The Trial Court does not have the competence to decide matters concerning activities relative to the exploration, exploitation, development and extraction of mineral resources like coal. These issues preclude an initial judicial determination. It behooves the courts to stand aside even when apparently they have statutory power to proceed in recognition of the primary jurisdiction of an administrative agency.

Powers of Administrative Agency: Sufficient Standard Test

Tatad vs. Secretary of Dept. of Energy (G.R. No. 124360, Nov. 5, 1997)

Facts: In March 1996, Congress enacted R.A. No. 8180, entitled the "Downstream Oil Industry Deregulation Act of 1996," to deregulate the oil industry.

Under the deregulated environment, "any person or entity may import or purchase any quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries and other downstream oil facilities and market such crude oil or use the same for his own requirement," subject only to monitoring by the Department of Energy.

The deregulation process has two phases: the transition phase and the full deregulation phase. The first phase of deregulation commenced on August 12, 1996. On February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry through E.O. No. 372.

The pertinent portion of Sec. 15 of R.A. No. 8180 states:

Sec. 15. Implementation of Full Deregulation Pursuant to section 5(e) of Republic Act No. 7638, the DOE shall, upon approval of the President, implement the full deregulation of the downstream oil industry not later than March 1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable . . .

Petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, Flag Human Rights Foundation, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contend that the words "as far as practicable," "declining" and "stable" should have been defined in R.A. No. 8180 as they do not set determinate or determinable standards for full deregulation.

Issue: Whether or not R.A. No. 8180 contains sufficient standards for implementation?

Held: Yes. It will be noted that Congress expressly provided in R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion to postpone it for any purported reason. Thus, the law is complete on the question of the final date of full deregulation. The discretion given to the President is to advance the date of full deregulation before the end of March 1997. Sec. 15 lays down the standard to guide the judgment of the President he is to time it as far as practicable when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable.

Furthermore, the dictionary meanings of these words ("as far as practicable," "declining" and "stable") are well settled and cannot confuse men of reasonable intelligence. Webster defines "practicable" as meaning possible to practice or perform, "decline" as meaning to take a downward direction, and "stable" as meaning firmly established. The fear of petitioners that these words will result in the exercise of executive discretion that will run riot is thus groundless.

Quasi-Legislative Function: Administrative Rule with Penal Sanctions

Tayug Rural Bank vs. Central Bank of the Phils. (G.R. No. L-46158, Nov. 28, 1986)

Facts: During the period from December 28, 1962 to July 30, 1963, Tayug Rural Bank, Inc. obtained 13 loans from the Central Bank of the Philippines. The loans were all covered by corresponding promissory notes prescribing the terms and conditions of the aforesaid loans. No penal clause was included in the promissory notes.

On December 23, 1964, the Central Bank issued Memorandum Circular No. DLC-8, informing all rural banks that an additional penalty interest rate of ten per cent (10%) per annum would be assessed on all past due loans beginning January 4, 1965. Said Memorandum Circular was actually enforced on all rural banks effective July 4, 1965.

The Central Bank justified the imposition of the penalty by stating that it was legally imposed under the provisions of Section 147 and 148 of the Rules and Regulations Governing Rural Banks promulgated by the Monetary Board on September 5, 1958, under authority of Section 3 of Republic Act No. 720, as amended.

Issue: Whether or not the Central Bank can validly impose the 10% penalty?

Held: No. Sec. 3 of R.A. No. 720 reads:

SEC. 3. In furtherance of this policy, the Monetary Board of the Central Bank of the Philippines shall formulate the necessary rules and regulations governing the establishment and operatives of Rural Banks for the purpose of providing adequate credit facilities to small farmers and merchants, or to cooperatives of such farmers or merchants and to supervise the operation of such banks.

Nowhere in any of the above-quoted pertinent provisions of R.A. 720 nor in any other provision of R.A. 720 for that matter, is the monetary Board authorized to mete out on rural banks an additional penalty rate on their past due accounts with Central Bank. While the Monetary Board possesses broad supervisory powers, nonetheless, the retroactive imposition of administrative penalties cannot be taken as a measure supervisory in character.

An administrative agency cannot impose a penalty not so provided in the law authorizing the promulgation of the rules and regulations, much less one that is applied retroactively.

POWERS OF ADMINISTRATIVE AGENCY - SUFFICIENT STANDARD TESTEMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, December 24, 1965

Facts:From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive orders to create thirty-three municipalities pursuant to Section 68 of the Revised Administrative Code. Public funds thereby stood to be disbursed in implementation of said executive orders.Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this Court a petition for prohibition with preliminary injunction against the Auditor General. It seeks to restrain the respondent or any person acting in his behalf, from passing in audit any expenditure of public funds in implementation of the executive orders aforementioned.Petitioner contends that the President has no power to create a municipality by executive order. It is argued that Section 68 of the Revised Administrative Code of 1917, so far as it purports to grant any such power, is invalid or, at the least, already repealed, in light of the Philippine Constitution and Republic Act 2370 (The Barrio Charter).Issue:Whether the act of the president constitutes a violation of valid delegation of power?Held:The Supreme Court ruled that the authority to create municipal corporations is essentially legislative in nature and "strictly a legislative function" or "solely and exclusively the exercise of legislative power"; that "municipal corporations are purely the creatures of statutes." That although Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) fix a standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions.2a Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and, without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican system.Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. That the better proof of the fact that the issuance of said executive orders entails the exercise of purely legislative functions can hardly be given. That power of control of the president over the officers of the executive departments, bureaus, or offices of the national government is denied by the constitution to the executive, in so far as the local government is concerned. Likewise the supreme court ruled, that instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments, bureaus or offices.The Executive Orders in question are declared null and void ab initio by the supreme court and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to.QUASI-JUDICIAL POWER - ADMIN. APPEAL AND REVIEW, DOCTRINE OF RES JUDICATA

Fortich vs. Corona (289 SCRA 624)

Facts:The strikers protested the March 29, 1996 Decision of the Office of the President (OP), issued through then Executive Secretary Ruben D. Torres, which approved the conversion of a one hundred forty-four (144)-hectare land from agricultural to agro-industrial/institutional area. This led the Office of the President, through then Deputy Executive Secretary Renato C. Corona, to issue the so-called Win-Win Resolution on November 7, 1997, substantially modifying its earlier Decision after it had already become final and executory. The said Resolution modified the approval of the land conversion to agro-industrial area only to the extent of forty-four (44) hectares, and ordered the remaining one hundred (100) hectares to be distributed to qualified farmer-beneficiaries.

This case involves a 144-hectare land, owned by the Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of the petitioners. In 1984, the land was leased as a pineapple plantation to the Philippine Packing Corporation, now Del Monte Philippines, Inc. (DMPI), a multinational corporation, for a period of ten (10) years under the Crop Producer and Growers Agreement. The lease expired in April, 1994.

In October, 1991, during the existence of the lease, the Department of Agrarian Reform (DAR) placed the entire 144-hectare property under compulsory acquisition. NQSRMDC resisted the DARs action. In February, 1992, it sought and was granted by the DAR Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator, a writ of prohibition with preliminary injunction.

Despite the DARAB order, the DAR Regional Director issued a memorandum, dated directing the Land Bank to open a trust account in the name of NQSRMDC and to conduct summary proceedings to determine the just compensation of the subject property. NQSRMDC objected to these moves and filed on June 9, 1992 an Omnibus Motion to enforce the DARAB order of March 31, 1992 and to nullify the summary proceedings undertaken by the DAR Regional Director and Land Bank on the valuation of the subject property.

The DARAB, acted favorably on the Omnibus Motion by (a) ordering the DAR Regional Director and Land Bank to seriously comply with the terms of the order dated (b) nullifying the DAR Regional Directors memorandum and the summary proceedings conducted pursuant thereto; and (c) directing the Land Bank to return the claim folder of Petitioner NQSRMDCs subject property to the DAR until further orders.

In the meantime, Governor Carlos O. Fortich, passed Resolution No. 6dated, designating certain areas along Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones where the subject property is situated.

On November 14, 1994, the DAR, thru Secretary Garilao, issued an Order denying the instant application for the conversion of the subject land from agricultural to agro-industrial and, instead, placed the same under the compulsory coverage of CARP.

Governor Carlos O. Fortich of Bukidnon appealed the order of denial to the Office of the President and prayed for the conversion/reclassification of the subject land as the same would be more beneficial to the people of Bukidnon.

On June 29, 1995, filed with the Court of Appeals a petition for certiorari, prohibition with preliminary injunction.In resolving the appeal, the Office of the President, through then Executive Secretary Ruben D. Torres, issued a Decision approving the application of the petitioners. Thereafter DAR filed a motion for reconsideration of the OP decision.

NQSRMDC filed a complaint with the Regional Trial Court (RTC) of Malaybalay, Bukidnon for annulment and cancellation of title, damages and injunction against DAR and 141 others. The RTC then issued a Temporary Restraining Order and a Writ of Preliminary Injunction, restraining the DAR and 141 others from entering, occupying and/or wresting from NQSRMDC the possession of the subject land.

On June 23, 1997, an Order was issued by then Executive Secretary Ruben D. Torres denying DARs motion for reconsideration for having been filed beyond the reglementary period of fifteen (15) days. The said order further declared that the March 29, 1996 OP decision had already become final and executory. The DAR filed on July 11, 1997 a second motion for reconsideration of the June 23, 1997 Order of the President.

On August 12, 1997, the said writ of preliminary injunction issued by the RTC was challenged by some alleged farmers before the Court of Appeals through a petition for certiorari and prohibition, praying for the lifting of the injunction and for the issuance of a writ of prohibition from further trying the RTC case. On October 9, 1997, some alleged farmer-beneficiaries began their hunger strike in front of the DAR Compound in Quezon City to protest the OP Decision of March 29, 1996. On November 7, 1997, the Office of the President resolved the strikers protest by issuing the so-called Win/Win Resolution penned by then Deputy Executive Secretary Renato C. Corona.

A copy of the Win-Win Resolution was received by Governor Carlos O. Fortich and NQSRMDC and they filed the present petition for certiorari, prohibition and injunction with urgent prayer for a temporary restraining order and/or writ of preliminary injunction against then Deputy Executive Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao.

A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries, through counsel, claiming that they are real parties in interest.

In seeking the nullification of the Win-Win Resolution, the petitioners claim that the Office of the President come up purely political decision to appease the farmers, by reviving and modifying the Decision of 29 March 1996 which has been declared final and executory in an Order of 23 June 1997. Petitioners further allege, respondent then Deputy Executive Secretary Renato C. Corona committed grave abuse of discretion and acted beyond his jurisdiction when he issued the questioned Resolution of 7 November 1997.

Issues:Whether the recourse of petitioners is proper or not?

Whether the petitioners committed a fatal procedural lapse when they failed to file a motion for reconsideration of the assailed resolution before seeking judicial recourse?

Whether the act petitioners constitute forum shopping?

Whether the intervention filed by the farmer beneficiaries, meritorious?

Whether the final and executory decision dated March 29, 1996 can still be substantially modified by the win win resolution ?

Held:First issue; to resolve the issue the S.C. draw a line between an error of judgment and an error of jurisdiction. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reviewable only by an appeal. On the other hand, an error of jurisdiction is one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or