admin law batch 3 cases

8/13/2019 Admin Law Batch 3 Cases

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 84818 December 18, 1989

PHILIPPINE COMMUNICATIONS SATELLITECORPORATION, petitioner,vs.JOSE LUIS A. ALCUAZ, as NTC Commissioner, and NATIONALTELECOMMUNICATIONS COMMISSION,respondents.

Rilloraza, Africa, De Ocampo & Africa for petitioner.

Victor de la Serna for respondent Alcuaz.

REGALADO, J .:

This case is posed as one of first impression in the sense that it involves

the public utility services of the petitioner Philippine Communications

SatelliteCorporation (PHILCOMSAT, for short) which is the only one

rendering such services in the Philippines.

The petition before us seeks to annul and set aside an Order 1issued by

respondent Commissioner Jose LuisAlcuaz of the National

Telecommunications Commission (hereafter, NTC), dated September 2, 1988,which directs the provisional reduction of the rates which may be charged bypetitioner for certain specified lines of its services by fifteen percent (15%) withthe reservation to make further reductions later, for being violative of theconstitutional prohibition against undue delegation of legislative power and adenial of procedural, as well as substantive, due process of law.

The antecedental facts as summarized by petitioner 2are not in dispute. Byvirtue of Republic Act No. 5514, PHILCOMSAT was granted "a franchise toestablish, construct, maintain and operate in the Philippines, at such places asthe grantee may select, station or stations and associated equipment and

facilities for international satellitecommunications." Under this franchise, it was

likewise granted the authority to "construct and operate such ground facilities

as needed to deliver telecommunications services from the communicationssatellite system and ground terminal or terminals."

Pursuant to said franchise, petitioner puts on record that it undertook thefollowing activities and established the following installations:

1. In 1967, PHILCOMSAT established its provisional earthstation in Pinugay, Rizal.

2. In 1968, earth station standard "A" antenna (Pinugay I)

was established. Pinugay I provided direct

satellitecommunication links with the Pacific Ocean Region

(the United States, Australia, Canada, Hawaii, Guam,Korea, Thailand, China [PROC], New Zealand and Brunei)thru the Pacific Ocean INTELSAT satellite.

3. In 1971, a second earth station standard "A"antenna(Pinugay III) was established. Pinugay II provided

links with the Indian Ocean Region (major cities in Europe,

Middle East, Africa, and other Asia Pacific countriesoperating within the region) thru the Indian OceanINTELSAT satellite.

4. In 1983, a third earth station standard "B" antenna(Pinugay III) was established to temporarily assume thefunctions of Pinugay I and then Pinugay II while they werebeing refurbished. Pinugay III now serves as spare orreserved antenna for possible contingencies.

5. In 1983, PHILCOMSAT constructed and installed a

standard "B" antenna at Clark Air Field, Pampanga as atelevision receive-only earth station which provides the U.S.Military bases with a 24-hour television service.

6. In 1989, petitioner completed the installation of a thirdstandard "A" earth station (Pinugay IV) to take over the linksin Pinugay I due to obsolescence. 3

By designation of the Republic of the Philippines, the petitioner is also thesole signatory for the Philippines in the Agreement and the Operating

Agreement relating to the International Telecommunications Satellite

Organization (INTELSAT) of 115 member nations, as well as in theConvention and the Operating Agreement of the International Maritime


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Satellite Organization (INMARSAT) of 53 member nations, which twoglobal commercial telecommunications satellite corporations werecollectively established by various states in line with the principles set forthin Resolution 1721 (XVI) of the General Assembly of the United Nations.

Since 1968, the petitioner has been leasing its satellite circuits to:

1. Philippine Long Distance Telephone Company;

2. Philippine Global Communications, Inc.;

3. Eastern Telecommunications Phils., Inc.;

4. Globe Mackay Cable and Radio Corp. ITT; and

5. Capitol Wireless, Inc.

or their predecessors-in-interest. The satellite services thus provided by

petitioner enable said international carriers to serve the public withindispensable communication services, such as overseas telephone, telex,facsimile, telegrams, high speed data, live television in full color, andtelevision standard conversion from European to American or vice versa.

Under Section 5 of Republic Act No. 5514, petitioner was exempt from thejurisdiction of the then Public Service Commission, now respondent NTC.However, pursuant to Executive Order No. 196 issued on June 17, 1987,petitioner was placed under the jurisdiction, control and regulation ofrespondent NTC, including all its facilities and services and the fixing ofrates. Implementing said Executive Order No. 196, respondents requiredpetitioner to apply for the requisite certificate of public convenience and

necessity covering its facilities and the services it renders, as well as thecorresponding authority to charge rates therefor.

Consequently, under date of September 9, 1987, petitioner filed withrespondent NTC an application 4for authority to continue operating andmaintaining the same facilities it has been continuously operating and

maintaining since 1967, to continue providing the international satellite

communicationsservices it has likewise been providing since 1967, and to

charge the current rates applied for in rendering such services. Pendinghearing, it also applied for a provisional authority so that it can continue tooperate and maintain the above mentioned facilities, provide the services and

charge therefor the aforesaid rates therein applied for.

On September 16, 1987, petitioner was granted a provisional authority tocontinue operating its existing facilities, to render the services it was thenoffering, and to charge the rates it was then charging. This authority wasvalid for six (6) months from the date of said order. 5When said provisionalauthority expired on March 17, 1988, it was extended for another six (6)months, or up to September 16, 1988.

The NTC order now in controversy had further extended the provisional

authority of the petitioner for another six (6) months, counted fromSeptember 16, 1988, but it directed the petitioner to charge modifiedreduced rates through a reduction of fifteen percent (15%) on the presentauthorized rates. Respondent Commissioner ordered said reduction on thefollowing ground:

The Commission in its on-going review of present servicerates takes note that after an initial evaluation by the RatesRegulation Division of the Common Carriers AuthorizationDepartment of the financial statements of applicant, there ismerit in a REDUCTION in some of applicant's rates, subject

to further reductions, should the Commission finds (sic) inits further evaluation that more reduction should be effectedeither on the basis of a provisional authorization or in thefinal consideration of the case. 6

PHILCOMSAT assails the above-quoted order for the following reasons:

1. The enabling act (Executive Order No. 546) of respondent NTCempowering it to fix rates for public service communications does notprovide the necessary standards constitutionally required, hence there isan undue delegation of legislative power, particularly the adjudicatorypowers of NTC;

2. Assuming arguendo that the rate-fixing power was properly andconstitutionally conferred, the same was exercised in an unconstitutionalmanner, hence it is ultra vires, in that (a) the questioned order violatesprocedural due process for having been issued without prior notice andhearing; and (b) the rate reduction it imposes is unjust, unreasonable andconfiscatory, thus constitutive of a violation of substantive due process.

I. Petitioner asseverates that nowhere in the provisions of Executive OrderNo. 546, providing for the creation of respondent NTC and granting its rate-fixing powers, nor of Executive Order No. 196, placing petitioner under the

jurisdiction of respondent NTC, can it be inferred that respondent NTC is


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guided by any standard in the exercise of its rate-fixing and adjudicatorypowers. While petitioner in its petition-in-chief raised the issue of unduedelegation of legislative power, it subsequently clarified i ts said submissionto mean that the order mandating a reduction of certain rates is unduedelegation not of legislative but of quasi-judicial power to respondent NTC,the exercise of which allegedly requires an express conferment by thelegislative body.

Whichever way it is presented, petitioner is in effect questioning theconstitutionality of Executive Orders Nos. 546 and 196 on the ground thatthe same do not fix a standard for the exercise of the power thereinconferred.

We hold otherwise.

Fundamental is the rule that delegation of legislative power may besustained only upon the ground that some standard for its exercise isprovided and that the legislature in making the delegation has prescribedthe manner of the exercise of the delegated power. Therefore, when the

administrative agency concerned, respondent NTC in this case, establishesa rate, its act must both be non- confiscatory and must have beenestablished in the manner prescribed by the legislature; otherwise, in theabsence of a fixed standard, the delegation of power becomesunconstitutional. In case of a delegation of rate-fixing power, the onlystandard which the legislature is required to prescribe for the guidance ofthe administrative authority is that the rate be reasonable and just.However, it has been held that even in the absence of an expressrequirement as to reasonableness, this standard may be implied. 7

It becomes important then to ascertain the nature of the power delegated to

respondent NTC and the manner required by the statute for the lawfulexercise thereof.

Pursuant to Executive Orders Nos. 546 and 196, respondent NTC isempowered, among others, to determine and prescribe rates pertinent tothe operation of public service communications which necessarily includethe power to promulgate rules and regulations in connection therewith.

And, under Section 15(g) of Executive Order No. 546, respondent NTCshould be guided by the requirements of public safety, public interest andreasonable feasibility of maintaining effective competition of private entitiesin communications and broadcasting facilities. Likewise, in Section 6(d)thereof, which provides for the creation of the Ministry of Transportation

and Communications with control and supervision over respondent NTC, it

is specifically provided that the national economic viability of the entirenetwork or components of the communications systems contemplatedtherein should be maintained at reasonable rates. We need not go into anin-depth analysis of the pertinent provisions of the law in order to concludethat respondent NTC, in the exercise of its rate-fixing power, is limited bythe requirements of public safety, public interest, reasonable feasibility andreasonable rates, which conjointly more than satisfy the requirements of avalid delegation of legislative power.

II. On another tack, petitioner submits that the questioned order violatesprocedural due process because it was issued motu proprio, without noticeto petitioner and without the benefit of a hearing. Petitioner laments thatsaid order was based merely on an "initial evaluation," which is a unilateralevaluation, but had petitioner been given an opportunity to present its sidebefore the order in question was issued, the confiscatory nature of the ratereduction and the consequent deterioration of the public service could havebeen shown and demonstrated to respondents. Petitioner argues that thefunction involved in the rate fixing-power of NTC is adjudicatory and hencequasi-judicial, not quasi- legislative; thus, notice and hearing are necessary

and the absence thereof results in a violation of due process.

Respondents admit that the application of a policy like the fixing of rates asexercised by administrative bodies is quasi-judicial rather than quasi-legislative: that where the function of the administrative agency islegislative, notice and hearing are not required, but where an order appliesto a named person, as in the instant case, the function involved isadjudicatory. 8Nonetheless, they insist that under the facts obtaining the orderin question need not be preceded by a hearing, not because it was issuedpursuant to respondent NTC's legislative function but because the assailedorder is merely interlocutory, it being an incident in the ongoing proceedings onpetitioner's application for a certificate of public convenience; and that

petitioner is not the only primary source of data or information since respondentis currently engaged in a continuing review of the rates charged.

We find merit in petitioner's contention.

In Vigan Electric Light Co., Inc. vs. Public Service Commission,9we made acategorical classification as to when the rate-filing power of administrativebodies is quasi-judicial and when it is legislative, thus:

Moreover, although the rule-making power and even thepower to fix rates- when such rules and/or rates are meant

to apply to all enterprises of a given kind throughout thePhilippines-may partake of a legislative character, such is


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not the nature of the order complained of. Indeed, the sameapplies exclusively to petitioner herein. What is more, it ispredicated upon the finding of fact-based upon a reportsubmitted by the General Auditing Office-that petitioner ismaking a profit of more than 12% of its invested capital,which is denied by petitioner. Obviously, the latter is entitledto cross-examine the maker of said report, and to introduceevidence to disprove the contents thereof and/or explain or

complement the same, as well as to refute the conclusiondrawn therefrom by the respondent. In other words, inmaking said finding of fact, respondent performed a functionpartaking of a quasi-judicial character, the valid exercise ofwhich demands previous notice and hearing.

This rule was further explained in the subsequent case of The Central Bankof the Philippines vs. Cloribel, et al. 10to wit:

It is also clear from the authorities that where the function ofthe administrative body is legislative, notice of hearing is not

required by due process of law (See Oppenheimer,Administrative Law, 2 Md. L.R. 185, 204, supra, where it issaid: 'If the nature of the administrative agency isessentially legislative, the requirements of notice andhearing are not necessary. The validity of a rule of futureaction which affects a group, if vested rights of l iberty orproperty are not involved, is not determined according tothe same rules which apply in the case of the directapplication of a policy to a specific individual) ... It is said in73 C.J.S. Public Administrative Bodies and Procedure, sec.130, pages 452 and 453: 'Aside from statute, the necessityof notice and hearing in an administrative proceeding

depends on the character of the proceeding and thecircumstances involved. In so far as generalization ispossible in view of the great variety of administrativeproceedings, it may be stated as a general rule that noticeand hearing are not essential to the validity of administrativeaction where the administrative body acts in the exercise ofexecutive, administrative, or legislative functions; but wherea public administrative body acts in a judicial or quasi-

judicial matter, and its acts are particular and immediaterather than general and prospective, the person whoserights or property may be affected by the action is entitled to

notice and hearing.11

The order in question which was issued by respondent Alcuaz no doubtcontains all the attributes of a quasi-judicial adjudication. Foremost is thefact that said order pertains exclusively to petitioner and to no other.Further, it is premised on a finding of fact, although patently superficial, thatthere is merit in a reduction of some of the rates charged- based on aninitial evaluation of petitioner's financial statements-without affordingpetitioner the benefit of an explanation as to what particular aspect oraspects of the financial statements warranted a corresponding rate

reduction. No rationalization was offered nor were the attendingcontingencies, if any, discussed, which prompted respondents to impose asmuch as a fifteen percent (15%) rate reduction. It is not far-fetched toassume that petitioner could be in a better position to rationalize its ratesvis-a-vis the viability of its business requirements. The rates it chargesresult from an exhaustive and detailed study it conducts of the multi-facetedintricacies attendant to a public service undertaking of such nature andmagnitude. We are, therefore, inclined to lend greater credence topetitioner's ratiocination that an immediate reduction in its rates wouldadversely affect its operations and the quality of its service to the publicconsidering the maintenance requirements, the projects it still has toundertake and the financial outlay involved. Notably, petitioner was noteven afforded the opportunity to cross-examine the inspector who issuedthe report on which respondent NTC based its questioned order.

At any rate, there remains the categorical admission made by respondentNTC that the questioned order was issued pursuant to its quasi-judicialfunctions. It, however, insists that notice and hearing are not necessarysince the assailed order is merely incidental to the entire proceedings and,therefore, temporary in nature. This postulate is bereft of merit.

While respondents may fix a temporary rate pending final determination ofthe application of petitioner, such rate-fixing order, temporary though it may

be, is not exempt from the statutory procedural requirements of notice andhearing, as well as the requirement of reasonableness. Assuming that suchpower is vested in NTC, i t may not exercise the same in an arbitrary andconfiscatory manner. Categorizing such an order as temporary in naturedoes not perforce entail the applicability of a different rule of statutoryprocedure than would otherwise be applied to any other order on the samematter unless otherwise provided by the applicable law. In the case at bar,the applicable statutory provision is Section 16(c) of the Public Service Actwhich provides:

Section 16. Proceedings of the Commission, upon notice

and hearing the Commission shall have power, upon propernotice and hearing in accordance with the rules and


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provisions of this Act, subject to the limitations andexceptions mentioned and saving provisions to the contrary:

xxx xxx xxx

(c) To fix and determine individual or joint rates, ... whichshall be imposed, observed and followed thereafter by anypublic service; ...

There is no reason to assume that the aforesaid provision does not apply torespondent NTC, there being no limiting, excepting, or saving provisions tothe contrary in Executive Orders Nos. 546 and 196.

It is thus clear that with regard to rate-fixing, respondent has no authority tomake such order without first giving petitioner a hearing, whether the orderbe temporary or permanent, and it is immaterial whether the same is madeupon a complaint, a summary investigation, or upon the commission's ownmotion as in the present case. That such a hearing is required is evident inrespondents' order of September 16, 1987 in NTC Case No. 87-94 which

granted PHILCOMSAT a provisional authority "to continue operating itsexisting facilities, to render the services it presently offers, and to chargethe rates as reduced by them "under the condition that "(s)ubject to hearingand the final consideration of the merit of this application, the Commissionmay modify, revise or amend the rates ..." 12

While it may be true that for purposes of rate-fixing respondents may haveother sources of information or data, still, since a hearing is essential,respondent NTC should act solely on the basis of the evidence before itand not on knowledge or information otherwise acquired by it but which isnot offered in evidence or, even if so adduced, petitioner was given no

opportunity to controvert.

Again, the order requires the new reduced rates to be made effective on aspecified date. It becomes a final legislative act as to the period duringwhich it has to remain in force pending the final determination of thecase. 13An order of respondent NTC prescribing reduced rates, even for atemporary period, could be unjust, unreasonable or even confiscatory,especially if the rates are unreasonably low, since the utility permanently losesits just revenue during the prescribed period. In fact, such order is in effect finalinsofar as the revenue during the period covered by the order is concerned.Upon a showing, therefore, that the order requiring a reduced rate isconfiscatory, and will unduly deprive petitioner of a reasonable return upon its

property, a declaration of its nullity becomes inductible, which brings us to theissue on substantive due process.

III. Petitioner contends that the rate reduction is confiscatory in that itsimplementation would virtually result in a cessation of its operations andeventual closure of business. On the other hand, respondents assert thatsince petitioner is operating its communications satellite facilities through alegislative franchise, as such grantee it has no vested right therein. What ithas is merely a privilege or license which may be revoked at will by theState at any time without necessarily violating any vested property right ofherein petitioner. While petitioner concedes this thesis of respondent, it

counters that the withdrawal of such privilege should nevertheless beneither whimsical nor arbitrary, but it must be fair and reasonable.

There is no question that petitioner is a mere grantee of a legislativefranchise which is subject to amendment, alteration, or repeal by Congresswhen the common good so requires. 14Apparently, therefore, such grantcannot be unilaterally revoked absent a showing that the termination of theoperation of said utility is required by the common good.

The rule is that the power of the State to regulate the conduct and businessof public utilities is limited by the consideration that it is not the owner of the

property of the utility, or clothed with the general power of managementincident to ownership, since the private right of ownership to such propertyremains and is not to be destroyed by the regulatory power. The power toregulate is not the power to destroy useful and harmless enterprises, but isthe power to protect, foster, promote, preserve, and control with due regardfor the interest, first and foremost, of the public, then of the utility and of itspatrons. Any regulation, therefore, which operates as an effectiveconfiscation of private property or constitutes an arbitrary or unreasonableinfringement of property rights is void, because it is repugnant to theconstitutional guaranties of due process and equal protection of the laws. 15

Hence, the inherent power and authority of the State, or its authorized

agent, to regulate the rates charged by public utilities should be subjectalways to the requirement that the rates so fixed shall be reasonable and

just. A commission has no power to fix rates which are unreasonable or toregulate them arbitrarily. This basic requirement of reasonablenesscomprehends such rates which must not be so low as to be confiscatory, ortoo high as to be oppressive. 16

What is a just and reasonable rate is not a question of formula but of soundbusiness judgment based upon the evidence 17it is a question of fact callingfor the exercise of discretion, good sense, and a fair, enlightened andindependent judgment. 18In determining whether a rate is confiscatory, it is

essential also to consider the given situation, requirements and opportunities ofthe utility. A method often employed in determining reasonableness is the fair


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return upon the value of the property to the public utility. Competition is also avery important factor in determining the reasonableness of rates since a carrieris allowed to make such rates as are necessary to meet competition. 19

A cursory perusal of the assailed order reveals that the rate reduction issolely and primarily based on the initial evaluation made on the financialstatements of petitioner, contrary to respondent NTC's allegation that it hasseveral other sources of information without, however, divulging such

sources. Furthermore, it did not as much as make an attempt to elaborateon how it arrived at the prescribed rates. It just perfunctorily declared thatbased on the financial statements, there is merit for a rate reduction withoutany elucidation on what implications and conclusions were necessarilyinferred by it from said statements. Nor did it deign to explain how the datareflected in the financial statements influenced its decision to impose a ratereduction.

On the other hand, petitioner may likely suffer a severe drawback, with theconsequent detriment to the public service, should the order of respondentNTC turn out to be unreasonable and improvident. The business in which

petitioner is engaged is unique in that its machinery and equipment havealways to be taken in relation to the equipment on the other end of thetransmission arrangement. Any lack, aging, acquisition, rehabilitation, orrefurbishment of machinery and equipment necessarily entails a majoradjustment or innovation on the business of petitioner. As pointed out bypetitioner, any change in the sending end abroad has to be matched withthe corresponding change in the receiving end in the Philippines.Conversely, any in the receiving end abroad has to be matched with thecorresponding change in the sending end in the Philippines. An inability onthe part of petitioner to meet the variegations demanded be technologycould result in a deterioration or total failure of the service of satellitecommunications.

At present, petitioner is engaged in several projects aimed at refurbishing,rehabilitating, and renewing its machinery and equipment in order to keepup with the continuing charges of the times and to maintain its facilities at acompetitive level with the technological advances abroad. There projectedundertakings were formulated on the premise that rates are maintained attheir present or at reasonable levels. Hence, an undue reduction thereofmay practically lead to a cessation of i ts business. While we concede theprimacy of the public interest in an adequate and efficient service, the sameis not necessarily to be equated with reduced rates. Reasonableness in therates assumes that the same is fair to both the public utility and the

consumer.

Consequently, we hold that the challenged order, particularly on the issueof rates provided therein, being violative of the due process clause is voidand should be nullified. Respondents should now proceed, as they shouldheretofore have done, with the hearing and determination of petitioner'spending application for a certificate of public convenience and necessityand in which proceeding the subject of rates involved in the presentcontroversy, as well as other matter involved in said application, be dulyadjudicated with reasonable dispatch and with due observance of our

pronouncements herein.

WHEREFORE, the writ prayed for is GRANTED and the order ofrespondents, dated September 2, 1988, in NTC Case No. 87-94 is herebySET ASIDE. The temporary restraining order issued under our resolution ofSeptember 13, 1988, as specifically directed against the aforesaid order ofrespondents on the matter of existing rates on petitioner's presentauthorized services, is hereby made permanent.

SO ORDERED.

Fernan, (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano,Gancayco, Bidin, Sarmiento, Cortes, Grio-Aquino and Medialdea, JJ.,concur.

Padilla, J., took no part.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the ponencia of Justice Regalado and join him in the erudite andthorough discussion of the respondent's authority. However, I havereservations about our continuing to abide by the dictum that in theexercise of quasi-legislative power, notice and hearing are not required. Ibelieve that this doctrine is ripe for re- examination.


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Senators and Congressmen are directly elected by the people.Administrative officials are not. If the members of an administrative bodyare, as is so often the case, appointed not on the basis of competence andqualifications but out of political or personal considerations, it is not only thesense of personal responsibility to the electorate affected by legislationwhich is missing. The expertise and experience needed for the issuance ofsound rules and regulations would also be sorely lacking.

Congress never passes truly important legislation without holding publichearings. Yet, administrative officials who are not directly attuned to thepublic pulse see no need for hearings. They issue rules and circulars withfar reaching effects on our economy and our nation's future on theassumption that the head of an agency knows best what is good for thepeople. I believe that in the exercise of quasi-legislative powers,administrative agencies, much, much more than Congress, should holdhearings and should be given guidelines as to when notices and hearingsare essential even in quasi-legislation.


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Manila

EN BANC

G.R. No. 133842 January 26, 2000

FEDERICO S. SANDOVAL,petitioner,vs.COMMISSION ON ELECTIONS and CANUTO SENEN A.ORETA,respondents.

PUNO,J.:

The petition at bar assails the order of the Commission

on Elections(COMELEC) en bancdated June 2, 1998 nullifying and

setting aside the proclamation of petitioner Federico S. Sandoval as

congressman-elect for the Malabon-Navotas legislative district.

The facts are as follows:

Petitioner Federico S. Sandoval and private respondent Canuto SenenOreta, together with Pedro Domingo, Mariano Santiago, Symaco Benitoand Warren Serna, vied for the congressional seat for the Malabon-Navotas legistative district during the election held on May 11, 1998.

On election day, after the votes have been cast and counted in the variousprecincts in the two municipalities, their respective board of canvassersconvened to canvass the election returns forwarded by the board ofelection inspectors.

In Malabon, a receptiongroup and several canvassing committees were

formed to expedite the canvass. The reception group received, examined

and recorded the sealed envelopes containing the election returns, as well

as the ballot boxes coming from the precincts. The reception group thendistributed the election returns among the canvassing committees. Thecommittees simultaneously canvassed the election returns assigned to

them in the presence of the lawyersand watchers of the candidates.

On May 16, 1998, counsels for private respondent made a written requestupon Malabon Election Officer Armando Mallorca to furnish them with a

complete list of the statement of votes so that they could verify whether allstatements of votes have been tabulated.1They likewise requested for acomplete list of precincts in the municipality together with the number ofcanvassed votes for petitioner and private respondent as of May 16, 1998.They also sought permission to conduct an audit of the tabulation reportsmade by the municipal board of canvassers.2These requests, however,were denied by the municipal board of canvassers on the followinggrounds: (1) that any counsel for a candidate has neither personality nor

right to conduct an audit of the tabulation report as the proceedings of theboard are presumed to be regular, and (2) that the granting of the requestswould delay the proceedings of the board to the prejudice of the will of thepeople of Malabon.3

On May 17, 1998, the Malabon municipal board of canvassers concludedits proceedings. The board issued a certificate of canvass of votes statingthat it canvassed 804 out of 805 precincts in the municipality. Thecertificate of canvass showed that private respondent obtained the highestnumber of votes in Malabon with 57,760 votes, with petitioner coming insecond with 42,892 votes.4

On the same day, after obtaining copies of the statements of votes, Ma.Rosario O. Lapuz, authorized representative of private respondent wrotethen COMELEC Chairman Bernardo Pardo5and informed him that severalelection returns were not included in the canvass conducted by theMalabon municipal board of canvassers. She moved that the certificate ofcanvass issued by said board be declared "not final."6

On May 19, 1998, Ms. Lapuz again wrote Chairman Pardo. The letterreiterated the allegations in her letter dated May 17, 1998 and requestedthat the Malabon municipal board of canvassers be ordered to canvass theelection returns which it allegedly failed to include in its canvass.7

On May 23, 1998, private respondent filed with the COMELEC an UrgentPetition entitled "In re: Petition to Correct Manifest Error in Tabulation ofElection Returns by the Municipal Board of Canvassers of Malabon,NCR. Canuto Tito Oreta vs. Municipal Board of Canvassers of Malabon."The petition was docketed as SPC No. 98-143. It alleged that while thecertificate of canvass showed that 804 election returns were canvassedand tabulated, only 790 election returns were actually canvassed. Privaterespondent contended that there was a manifest error in the non-recordingor copying of the results in 14 election returns from 14 precincts into thestatement of votes. It prayed: (1) that the municipal board of canvassers of

Malabon be reconvened to correct said manifest error by entering theresults of the elections in the 14 election returns into the statement of votes
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and that the certificate of canvass be corrected to reflect the completeresults in 804 precincts; and (2) that the canvass of the results for thecongressional election by the district board of canvassers for Malabon andNavotas be suspended until the alleged manifest error is corrected.8

Meanwhile, the proceedings of the municipal board of canvassers ofNavotas were disrupted by the riotous exchange of accusations by thesupporters of the opposing mayoralty candidates. The COMELEC had to

move the venue to the Philippine International Convention Center in Manilato finish the canvass. On May 27, 1998, Chairman Pardo issued amemorandum to Atty. Ma. Anne V.G. Lacuesta, Chairman, District Board ofCanvassers for Malabon-Navotas, authorizing her to immediatelyreconvene the district board of canvassers, complete the canvassing of themunicipal certificate of canvass and supporting statement of votes permunicipality, and proclaim the winning candidate for the congressional seatof the Malabon-Navotas legislative district.9

On May 28, 1998, private respondent filed with the COMELEC an UrgentManifestation/Motion in connection with SPC No. 98-143. It prayed that the

canvass of the results of the congressional election by the district board ofcanvassers be suspended until the alleged manifest error in SPC No. 98-143 is corrected.10

At 4:15 in the afternoon on May 28, 1998, the district board of canvassersconvened at the Philippine International Convention Center. It took upprivate respondent's petition to correct the manifest error arising from thenon-inclusion of 19 election returns in the canvass. After examining thestatement of votes by precinct and the certificate of canvass signed and

thumbmarked by three watchers from different parties, the district board of

canvassers found that a total of 804 election returns were canvassed bythe Malabon municipal board of canvassers.11

The district board of canvassers then proceeded to canvass the certificatesof canvass from the two municipalities. Counsel for private respondentrequested that the canvassing be suspended until the Commission hasresolved their petition for correction of manifest error in the certificate ofcanvass of Malabon. The district board of canvasser, however, denied therequest for the following reasons:

1. absence of restraining order from the Commission;

2. order of the Chairman dated May 27, 1998 directing the districtboard to proceed with the canvass and proclamation of winningcandidates for the district of Malabon-Navotas;

3. there is no irregularity in the submitted certificate of canvass fromboth municipalities and there were no objections raised for bothcertificates of canvass of the counsels present;

4. no report coming from the municipal board of canvassers fromMalabon that there were uncanvassed election return except forone;

5. the municipal board of canvassers of Malabon submitted to thedistrict board of canvassers certificate of canvass which indicatedthat the number of canvassed returns for District I is 397 and 407for District II for a total of 804 out of 805 election returns;

6. the board has only the ministerial duty to tally the votes asreflected on the certificate of canvass supplemented by the

statement of votes and has no authority to verify allegations ofirregularities in the preparation thereof; and

7. there is no pre-proclamation contest for the position ofcongressman.12

Private respondent's counsel sought reconsideration of the decision of thedistrict board of canvassers but it was likewise denied by the board.

After canvassing the municipal certificates of canvass, the district board ofcanvassers proclaimed petitioner the duly elected congressman of the

legislative district of Malabon-Navotas. The board declared that petitionerobtained a total vote of 82,339 over private respondent's 80,319votes.13Petitioner took his oath of office on the same day.14

The following day, on May 29, 1998, private respondent filed with theCOMELEC in connection with SPC No. 98-143 an "Urgent Appeal from theDecision of the Legislative District Board of Canvassers for Malabon andNavotas with Prayer for the Nullification of the Proclamation of Federico S.Sandoval as Congressman." It alleged that there was a verbal order fromthe COMELEC Chairman to suspend the canvass and proclamation of thewinning candidate for congressman of the Malabon-Navotas legislative

district; that the district board of canvassers proceeded with the canvassand proclamation despite the verbal order; and that the non-inclusion of the
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19 election returns in the canvass would result in an incomplete canvass ofthe election returns. It prayed that the decision of the district board ofcanvassers be reversed and that the municipal board of canvassers ofMalabon be reconvened to complete its canvass. It also prayed that theproclamation of petitioner as congressman be annulled.15

On May 30, 1998, private respondent filed with the COMELEC an UrgentPetition docketed as SPC No. 98-206. The petition sought the annulment of

petitioner's proclamation as congressman. It alleged that at about 4:00 inthe afternoon on May 28, 1998, the COMELEC Chairman directed thedistrict board of canvassers to suspend the canvass and proclamationpending the resolution of the petition for correction of manifest error in themunicipal certificate of canvass of Malabon; that the district board ofcanvassers still proceeded with the canvass in spite of the order; that theproclamation was made despite the non-inclusion of election returns from19 precincts in Malabon; and that the non-inclusion of these electionreturns will materially affect the result of the election. Private respondentprayed that the proclamation of petitioner as congressman be annulled andthat the municipal board of canvassers of Malabon be ordered toreconvene to include the 19 election returns in the canvass.16

On June 2, 1998, the COMELEC en bancissued an order setting aside theproclamation of petitioner. The COMELEC ruled that the proclamation bythe district board of canvassers was void because: (1) it was made indefiance of the verbal order by the COMELEC Chairman relayed throughExecutive Director Resurrection Z. Borra to suspend the proclamation ofthe winner in the congressional election until the Commission has resolvedprivate respondent's petition for correction of manifest error in thecertificate of canvass; and (2) it was based on an incomplete canvass. Thedispositive portion of the order reads:

WHEREFORE, the proclamation made by the District Board ofCanvassers of Malabon and Navotas for the position ofCongressman being void ab initiois no proclamation at all.Meantime, it is hereby set aside.

Atty. Ma. Anne Lacuesta is hereby relieved as Chairman, DistrictBoard of Canvassers of Malabon-Navotas, and Atty. Consuelo B.Diola is named Chairman of said Board. Atty. Diola is directed tomaintain the status quoprior to the Board's unauthorizedproclamation, until further orders.

Meantime, let these cases be set for hearing en bancon 09 June1998 at 10:00 in the morning.

SO ORDERED.17

On June 8, 1998, petitioner filed this petition for certiorariseeking theannulment and reversal of said order. Petitioner contended:

1. Respondent COMELEC's annulment of petitioner Sandoval'sproclamation as winner in the election for congressman ofMalabon-Navotas, without the benefit of prior hearing, is grosslyindecent and violates his right to due process of law.

2. Respondent COMELEC's action on respondent Oreta's petitionsviolates Republic Act 7166 which bars pre-proclamation cases inthe elections of members of the House of Representative.

3. Respondent Oreta's remedy for seeking correction of allegedmanifest errors in the certificate of canvass for members of

Congress does not lie with respondent COMELEC but, initially withthe municipal board of canvassers.

4. At any rate, respondent Oreta's right to raise questionsconcerning alleged manifest errors in the Malabon certificate ofcanvass is barred by his failure to raise such questions beforepetitioner Sandoval's proclamation.

5. Respondent Oreta's recourse lies with the House ofRepresentatives Electoral Tribunal which is not precluded frompassing upon the allegedly uncanvassed election returns in

Malabon.18

On June 9, 1998, we required the respondents to comment on the petition.We also issued a temporary restraining order mandating the COMELEC tocease and desist from implementing and enforcing the questioned order.19

The COMELEC nonetheless conducted a hearing on June 9, 1998concerning SPC No. 98-143 and SPC No. 98-206.

Private respondent filed his comment20on June 22, 1998. He argued:
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1. Respondent COMELEC committed no jurisdictional error indeclaring void ab initiothe proclamation of petitioner Sandoval asCongressman-elect for the Malabon-Navotas legislative district.

a. The premature and hasty proclamation of respondentSandoval made by the District Board on the basis of anincomplete canvass is illegal, hence, null and void.

b. Respondent COMELEC substantially complied with therequirements of due process in declaring the proclamationof respondent Sandoval an absolute nullity.

2. Respondent COMELEC properly took cognizance of respondentOreta's petition to correct manifest error in the certificate of canvassissued by the Malabon board.

a. While technically a pre-proclamation case, correction ofmanifest errors for purposes of the congressional electionsis within the power and authority of the COMELEC to order,

in the exercise of its appellate and original jurisdiction oversuch subject matter.

b. The failure of the Malabon board to tabulate the results ofseventeen (17) election returns and to record the votessupporting the certificate of canvass resulted in a manifesterror in the certificate of canvass which should besummarily corrected by ordering the Malabon board toreconvene, canvass the 17 election returns, record thevotes in the statement of votes and prepare a newcertificate of canvass.

On June 29, 1998, then Solicitor General Silvestre Bello III filed aManifestation and Motion in Lieu of Comment.21He found the assailed orderof the COMELEC null and void for the following reasons:

1. Respondent COMELEC's motu propioand ex parteannulment ofpetitioner's proclamation as winner in the election for congressmanof Malabon-Navotas is tainted with grave abuse of discretionamounting to lack or excess of jurisdiction and violated petitioner'sright to due process; and

2. Respondent COMELEC had no jurisdiction over the petitionsfiled by respondent Oreta, hence its order dated June 2, 1998annulling petitioner's proclamation is null and void.

In view of the Solicitor General's manifestation and motion, we required theCOMELEC to file i ts own comment.

The COMELEC filed its comment on August 11, 1998. It invoked its power

of direct control and supervision over the board of canvassers, allowing it toreview, revise and reverse the board's actions. It said that it rendered thequestioned order upon finding that petitioner's proclamation was illegal andtherefore void ab initio. It cited two reasons to support its findings:first, itwas made in disregard of the Chairman's verbal order to suspend thecanvass and proclamation, and second, it was based on an incompletecanvass.22

On August 27, 1998, the new Solicitor General, Ricardo P. Galvez, filed aManifestation and Motion withdrawing the Manifestation and Motion filed byformer Solicitor General Bello. The Solicitor General, this time, upheld the

validity of the assailed order. In essence, he argued that the Malabonmunicipal board of canvassers failed to include 17 election returns in itscanvass; that such omission constitutes manifest error in the certificate ofcanvass which must be corrected by the district board of canvassers; andthat the proclamation of petitioner was void ab initiobecause it was basedon an incomplete canvass.23

Petitioner and private respondent subsequently filed their respective reply,rejoinder and sur-rejoinder.

Considering the arguments raised by the parties, the issues that need to be

resolved in this case are:

1. whether the COMELEC has the power to take cognizance ofSPC No. 98-143 and SPC No. 98-206, both alleging the existenceof manifest error in the certificate of canvass issued by the Malabonmunicipal board of canvassers and seeking to reconvene saidboard of canvassers to allow it to correct the alleged error; and

2. whether the COMELEC's order to set aside petitioner'sproclamation was valid.

On the first issue, we uphold the jurisdiction of the COMELEC over thepetitions filed by private respondent. As ageneral rule, candidates and
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registered political parties involved in an election are allowed to file pre-proclamation cases before the COMELEC. Pre-proclamation cases refer toany question pertaining to or affecting the proceedings of the board ofcanvassers which may be raised by any candidate or by any registeredpolitical party or coalition of political parties before the board or directly withthe Commission, or any matter raised under Sections 233, 234, 235 and236 in relation to the preparation, transmission, receipt, custody andappreciation of election

returns.24

The COMELEC has exclusive jurisdiction over all pre-proclamation controversies.25As an exception, however, to the generalrule, Section 15 of Republic Act (RA) 716626prohibits candidates in thepresidential, vice-presidential, senatorial and congressional elections fromfiling pre-proclamation cases.27It states:

Sec. 15. Pre-proclamation Cases Not Allowed in Elections forPresident, Vice-President, Senator, and Members of the House ofRepresentatives. For purposes of the elections for President,Vice-President, Senator and Member of the HouseRepresentatives, no pre-proclamation cases shall be allowed onmatters relating to the preparation, transmission, receipt, custodyand appreciation of election returns or the certificates of canvass,as the case may be. However, this does not preclude the authorityof the appropriate canvassing body motu propio or upon writtencomplaint of an interested person to correct manifest errors in thecertificate of canvass or election returns before it.

The prohibition aims to avoid delay in the proclamation of the winner in theelection, which delay might result in a vacuum in these sensitiveposts.28The law, nonetheless, provides an exception to the exception. Thesecond sentence of Section 15 allows the filing of petitions for correctionof manifest errors in the certificate of canvass or election returns even in

elections for president, vice-president and members of the House ofRepresentatives for the simple reason that the correction of manifest errorwill not prolong the process of canvassing nor delay the proclamation of thewinner in the election. This rule is consistent with and complements theauthority of the COMELEC under the Constitution to "enforce andadminister all laws and regulations relative to the conduct of an election,plebiscite, initiative, referendum and recall"29and its power to "decide,except those involving the right to vote, all questions affecting elections."30

Applying the foregoing rule, we hold that the Commission hasjurisdiction over SPC No. 98-143 and SPC No. 98-206, both filed by private

respondent seeking to correct the alleged manifest error in the certificate ofcanvass issued by the Malabon municipal board of canvassers. These

petitions essentially allege that there exists a manifest error in saidcertificate of canvass as the board failed to include several election returnsin the canvassing. Private respondent prays that the board be reconvenedto correct said error. Section 15 of RA 7166 vests the COMELEC with

jurisdiction over cases of this nature.We reiterate the long-standing rulethat jurisdiction is conferred by law and is determined by the allegations inthe petition regardless of whether or not the petitioner is entitled to the reliefsought.31

The authority to rule on petitions for correction of manifest error is vested intheCOMELEC en banc. Section 7 of Rule 27 of the 1993 COMELEC Rulesof Procedure32provides that if the error is discovered before proclamation,the board of canvassers may motu proprio, or upon verified petition by anycandidate, political party, organization or coalition of political parties, afterdue notice and hearing, correct the errors committed. The aggrieved partymay appeal the decision of the board to the Commission and said appealshall be heard and decided by the Commission en banc. Section 5,however, of the same rule states that a petition for correction of manifesterror may be filed directly with the Commission en bancprovided that sucherrors could not have been discovered during the canvassing despite theexercise of due diligence and proclamation of the winning candidate hadalready been made. Thus, we held in Ramirez vs. COMELEC:33

Although in Ong, Jr. v. COMELEC it was said that "By now it issettled that election cases which include pre-proclamationcontroversies must first be heard and decided by a division of theCommission" and a petition for correction of manifest error in theStatement of Votes, like SPC 95-198 is a pre-proclamationcontroversyin none of the cases cited to support this propositionwas the issue the correction of a manifest error in the Statement ofVotes under Sec. 231 of the Omnibus Election Code (B.P. Blg. 881)

or Sec. 15 of R.A. No. 7166. On the other hand, Rule 27, Sec. 5 ofthe 1993 Rules of the COMELEC expressly provides thatproclamation controversies involving, inter alia, manifest errors inthe tabulation or tallying of the results may be filed directly with theCOMELEC en banc. . . .34

Petitioner nonetheless contends that SPC No. 98-143 and SPC No. 98-206must be dismissed because private respondent failed to raise the issue ofmanifest error before the appropriate board of canvassers in accordancewith the second sentence of Section 15 of RA 7166.

We disagree.
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The issue of manifest error in the certificate of canvass for Malabon hasbeen raised before the district board of canvassers before petitioner couldbe proclaimed and said board has in fact ruled on the issue.35We find thisas sufficient compliance with the law. The facts show that it was impossiblefor private respondent to raise the issue before the Malabon municipalboard of canvassers as it still did not have a copy of the statement of votesand the precinct list at the time of the canvassing in the municipal level. Atthat time, private respondent still had no knowledge of the alleged manifest

error. He, however, lost no time in notifying the COMELEC Chairman andthe district board of the alleged error upon discovery thereof. We findpetitioner's argument, therefore, to be devoid of merit.

We now go to the second issue. Although the COMELEC is clothed withjurisdiction over the subject matter and issue of SPC No. 98-143 and SPCNo. 98-206, we find the exercise of its jurisdiction tainted with illegality. Wehold that its order to set aside the proclamation of petitioner is invalid forhaving been rendered without due process of law. Procedural due processdemands prior notice and hearing. Then after the hearing, it is alsonecessary that the tribunal show substantial evidence to support itsruling.36In other words, due process requires that a party be given anopportunity to adduce his evidence to support his side of the case and thatthe evidence should be considered in the adjudication of the case.37Thefacts show that COMELEC set aside the proclamation of petitioner withoutthe benefit of prior notice and hearing and it rendered the questioned orderbased solely on private respondent's allegations. We heldin Bince, Jr. vs. COMELEC:38

Petitioner cannot be deprived of his office without due process oflaw. Although public office is not property under Section 1 of the Billof Rights of the Constitution, and one cannot acquire a vested rightto public office, it is, nevertheless, a protected right. Due process in

proceedings before the COMELEC, exercising its quasi-judicialfunctions, requires due notice and hearing, among others. Thus,although the COMELEC possesses, in appropriate cases, thepower to annul or suspend the proclamation of any candidate, Wehad ruled in Farinas vs. Commission on Elections, Reyesvs. Commission on Electionsand Gallardo vs.Commission onElectionsthat the COMELEC is without power to partially or totallyannul a proclamation or suspend the effects of a proclamationwithout notice and hearing.39

Citing Section 242 of the Omnibus Election Code, private respondent

argues that the COMELEC is authorized to annul an illegal proclamationeven without notice and hearing because the law states that it may motu

proprioorder a partial or total suspension of the proclamation of anycandidate-elect or annul partially or totally any proclamation, if one hasbeen made. We reject the argument. Section 242 of the Omnibus ElectionCode reads as:

Sec. 242. Commission's exclusive jurisdiction of all pre-proclamation controversies. The Commission shall haveexclusive jurisdiction of all pre-proclamation controversies. It

may motu proprioor upon written petition, and after due notice andhearing, order the partial or total suspension of the proclamation ofany candidate-elect or annul partially or totally any proclamation, ifone has been made, as the evidence shall warrant in accordancewith the succeeding sections.

The phrase "motu proprio" does not refer to the annulment of proclamationbut to the manner of initiating the proceedings to annul a proclamationmade by the board of canvassers. The law provides two ways by whichannulment proceedings may be initiated. It may be at the own initiative ofthe COMELEC (motu proprio) or by written petition. In either case; notice

and hearing is required. This is clear from the language of the law.

We likewise reject private respondent's assertion that the hearing held onJune 9, 1998 substantially satisfies the due process requirement. The lawrequires that the hearing be held before the COMELEC rules on thepetition. Here, the public respondent first issued an order annulling theproclamation of petitioner and then set the date of the hearing. Weexplained in Farinas vs.COMELEC40the pernicious effect of suchprocedure:

As aptly pointed out by the Solicitor General, "to sanction theimmediate annulment or even the suspension of the effects of aproclamation before the petition seeking such annulment orsuspension of its effects shall have been heard would open thefloodgates of unsubstantiated petitions after the results are known,considering the propensity of the losing candidates to put up allsorts of obstacles in an open display of unwillingness to acceptdefeat, or would encourage the filing of baseless petitions not onlyto the damage and prejudice of winning candidates but also to thefrustration of the sovereign will of the electorate." (citations omitted)

Public respondent submits that procedural due process need not beobserved in this case because it was merely exercising its administrative

power to review, revise and reverse the actions of the board of canvassers.
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It set aside the proclamation made by the district board of canvassers forthe position of congressman upon finding that it was tainted with illegality.

We cannot accept public respondent's argument.

Taking cognizance of private respondent's petitions for annulment ofpetitioner's proclamation; COMELEC was not merely performing anadministrative function. The administrative powers of the COMELEC

include the power to determine the number and location of polling places,appoint election officials and inspectors, conduct registration of voters,deputize law enforcement agencies and government instrumentalities toensure free, orderly, honest, peaceful and credible elections, registerpolitical parties, organizations or coalitions, accredit citizens' arms of theCommission, prosecute election offenses, and recommend to the Presidentthe removal of or imposition of any other disciplinary action upon any officeror employee it has deputized for violation or disregard of its directive, orderor decision. In addition, the Commission also has direct control andsupervision over all personnel involved in the conduct ofelection. However, the resolution of the adverse claims of private

respondent and petitioner as regards the existence of a manifest error inthe questioned certificate of canvass requires the COMELEC to act as anarbiter. It behooves the Commission to hear both parties to determine theveracity of their allegations and to decide whether the alleged error is amanifest error.Hence, the resolution of this issue calls for the exercise bythe COMELEC of its quasi-judicial power. It has been said that where apower rests in judgment or discretion, so that it is of judicial nature orcharacter, but does not involve the exercise of functions of a judge, or isconferred upon an officer other than a judicial officer, it is deemed quasi-

judicial.41The COMELEC therefore, acting as quasi-judicial tribunal, cannotignore the requirements of procedural due process in resolving the petitionsfiled by private respondent.

IN VIEW WHEREOF, the COMELEC order dated June 2, 1998 in SPC No.98-143 and SPC No. 98-206 is ANNULLED. This case is REMANDED tothe COMELEC and the Commission is hereby ordered to hold a hearing onthe issues presented in SPC No. 98-143 and SPC No. 98-206, andthereafter render a decision based on the evidence adduced and theapplicable laws. The incident of whether or not petitioner may continuedischarging the functions of the office of the congressman pendingresolution of the case on its merit shall be addressed by the COMELEC inthe exercise of i ts reasonable discretion.

SO ORDERED.1wphi1.nt
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Manila

THIRD DIVISION

G.R. NO. 144322 February 6, 2007

METROPOLITAN BANK and TRUST COMPANY, INC., Petitioner,vs.NATIONAL WAGES AND PRODUCTIVITY COMMISSION andREGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD -REGION II,Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the

Revised Rules of Courtseeking the reversal of the Decision1of the Court

of Appeals(CA) dated July 19, 2000 in CA-G.R. SP No. 42240 which

denied the petition for certiorari and prohibition of Metropolitan Bank and

TrustCompany, Inc. (petitioner).

The procedural antecedents and factual background of the case are asfollows:

On October 17, 1995, the Regional Tripartite Wages and ProductivityBoard, Region II, Tuguegarao, Cagayan (RTWPB), by virtue of Republic

Act No. 6727 (R.A. No. 6727), otherwise known as the WageRationalization Act,2issued Wage Order No. R02-03 (Wage Order), asfollows:

Section 1. Upon effectivity of this Wage Order, all employees/workers in theprivate sector throughout Region II, regardless of the status of employmentare granted an across-the-board increase of P15.00 daily.3

The Wage Order was published in a newspaper of general circulation onDecember 2, 19954and took effect on January 1, 1996.5Its ImplementingRules6were approved on February 14, 1996.7Per Section 13 of the WageOrder, any party aggrieved by the Wage Order may file an appeal with the

National Wages and Productivity Commission(NWPC) through the

RTWPB within 10 calendar days from the publication of the Wage Order.

In a letter-inquiry to the NWPC dated May 7, 1996, the Bankers' Council forPersonnel Management (BCPM), on behalf of its member-banks,requested for a ruling on the eligibility of establishments with head officesoutside Region II to seek exemption from the coverage of the Wage Ordersince its member-banks are already paying more than the

prevailing minimum wage ratein the National Capital Region (NCR), whichis their principal place of business.8

In a letter-reply dated July 16, 1996, the NWPC stated that the member-banks of BCPM are covered by the Wage Order and do not fall under theexemptible categories listed under the Wage Order.9

In a letter-inquiry to the NWPC dated July 23, 1996, petitioner sought forinterpretation of the applicability of said Wage Order.10The NWPC referredpetitioner's inquiry to the RTWPB.

In a letter-reply dated August 12, 1996, the RTWPB clarified that the WageOrder covers all private establishments situated in Region II, regardless ofthe voluntary adoption by said establishments of the wage ordersestablished in Metro Manila and irrespective of the amounts already paidby the petitioner.11

On October 15, 1996, the petitioner filed a Petition for CertiorariandProhibition with the CA seeking nullification of the Wage Order on groundsthat the RTWPB acted without authority when it issued the questionedWage Order; that even assuming that the RTWPB was vested with theauthority to prescribe an increase, it exceeded its authority when it did so

without any ceiling or qualification; that the implementation of the WageOrder will cause the petitioner, and other similarly situated employers, toincur huge financial losses and suffer labor unrest.12

On March 24, 1997, the Office of the Solicitor General (OSG) filed aManifestation and Motion in lieu of Comment affirming the petitioner's claimthat the RTWPB acted beyond its authority in issuing the Wage Orderprescribing an across-the-board increase to all workers and employees inRegion II, effectively granting additional or other benefits not contemplatedby R.A. No. 6727.13

In view of the OSG's manifestation, the CA directed respondents NWPCand RTWPB to file their comment.14
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On September 22, 1997, respondents filed their Comment praying that thepetition should be dismissed outright for petitioner's procedural lapses; thatcertiorari and prohibition are unavailing since petitioner failed to avail of theremedy of appeal prescribed by the Wage Order; that the Wage Order haslong been in effect; and that the issuance of the Wage Order wasperformed in the exercise of a purely administrative function.15

On July 19, 2000, the CA rendered its Decision denying the petition. The

appellate court held that a writ of prohibition can no longer be issued sinceimplementation of the Wage Order had long become fait accompli,theWage Order having taken effect on January 1, 1996 and its implementingrules approved on February 14, 1996; that a writ of certiorari is impropersince the Wage Order was issued in the exercise of a purely administrativefunction, not judicial or quasi-judicial; that the letter-query did not present

justiciable controversies ripe for consideration by the respondents in theexercise of their wage-fixing function, since no appeal from the Wage Orderwas filed; that petitioner never brought before the said bodies any formaland definite challenge to the Wage Order and it cannot pass off the letter-queries as actual applications for relief; that even if petitioner's procedurallapse is disregarded, a regional wage order prescribing a wage increaseacross-the-board applies to banks adopting a unified wage system and adisparity in wages between employees holding similar positions in differentregions is not wage distortion.16

Hence, the present petition anchored on the following grounds:

4.1 THE COURT OF APPEALS ERRED IN REFUSING TODECLARE WAGE ORDER NO. R02-03 NULL AND VOID AND OFNO LEGAL EFFECT.

4.1.1 THE BOARD, IN ISSUING WAGE ORDER NO. R02-03, EXCEEDED THE AUTHORITY DELEGATED TO IT BYCONGRESS.

4.1.2 WAGE ORDER NO. R02-03 IS AN UNREASONABLEINTRUSION INTO THE PROPERTY RIGHTS OFPETITIONER.

4.1.3 WAGE ORDER NO. R02-03 UNDERMINES THEVERY ESSENCE OF COLLECTIVE BARGAINING.

4.1.4 WAGE ORDER NO. R02-03 FAILS TO TAKE INTOACCOUNT THE VERY RATIONALE FOR A UNIFIEDWAGE STRUCTURE.

4.2 PETITIONER'S RECOURSE TO A WRIT OF CERTIORARIAND PROHIBITION WAS PROPER.17

Following the submission of the Comment18and Reply19thereto, the Court

gave due course to the petition and required both parties to submit theirrespective memoranda.20In compliance therewith, petitioner andrespondents submitted their respective memoranda.21

Petitioner poses two issues for resolution, to wit: (1) whether Wage OrderNo. R02-03 is void and of no legal effect; and (2) whether petitioner's

recourse to a petition for certiorari and prohibition with the CA was proper.

Anent the first issue, petitioner maintains that the RTWPB, in issuing saidWage Order, exceeded the authority delegated to it under R.A. No. 6727,which is limited to determining and fixing the minimum wage rate within

their respective territorial jurisdiction and with respect only to employeeswho do not earn the prescribed minimum wage rate; that the RTWPB is notauthorized to grant a general across-the-board wage increase for non-minimum wage earners; that Employers Confederation of the Philippines v.National Wages and Productivity Commission22(hereafter referred to as"ECOP") is not authority to rule that respondents have been empowered tofix wages other than the minimum wage since said case dealt with anacross-the-board increase with a salary ceiling, where the wage adjustmentis applied to employees receiving a certain denominated salary ceiling; thatthe Wage Order is an unreasonable intrusion into its property rights; thatthe Wage Order undermines the essence of collective bargaining; that theWage Order fails to take into account the rationale for a unified wagestructure.

As to the second issue, petitioner submits that ultra viresacts ofadministrative agencies are correctible by way of a writ of certiorariandprohibition; that even assuming that it did not observe the proper remedialprocedure in challenging the Wage Order, the remedy of certiorariandprohibition remains available to it by way of an exception, on grounds of

justice and equity; that its failure to observe procedural rules could not havevalidated the manner by which the disputed Wage Order was issued.

Respondents counter that the present petition is fatally defective from

inception since no appeal from the Wage Order was filed by petitioner; that
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the letter-query to the NWPC did not constitute the appeal contemplated bylaw; that the validity of the Wage Order was never raised before therespondents; that the implementation of the Wage Order had long becomefait accompli for prohibition to prosper. Respondents insist that, even ifpetitioner's procedural lapses are disregarded, the Wage Order was issuedpursuant to the mandate of R.A. No. 6727 and in accordance with theCourt's pronouncements in the ECOP case;23that the Wage Order is not anintrusion on property rights since it was issued after the required public

hearings; that the Wage Order does not undermine but in fact recognizesthe right to collective bargaining; that the Wage Order did not result in wagedistortion.

The Court shall first dispose of the procedural matter relating to thepropriety of petitioner's recourse to the CA before proceeding with thesubstantive issue involving the validity of the Wage Order.

Certiorarias a special civil action is available only if the following essentialrequisites concur: (1) it must be directed against a tribunal, board, or officerexercising judicial or quasi-judicial functions; (2) the tribunal, board, or

officer must have acted without or in excess of jurisdiction or with graveabuse of discret

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