Admin Super Lastcases

lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-32166 October 18, 1977

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs.HON. MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO DEL ROSARIO, accused-appellees.

Office of the Solicitor General for appellant.

Rustics F. de los Reyes, Jr. for appellees.

AQUINO, J.:têñ.£îhqwâ£

This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water fisheries, promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission.

On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. Cruz, Laguna

with having violated Fisheries Administrative Order No. 84-1.

It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by "using their own motor banca, equipped with motor; with a generator colored green with attached dynamo colored gray or somewhat white; and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current, which destroy any aquatic animals within its cuffed reach, to the detriment and prejudice of the populace" (Criminal Case No. 5429).

Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. SC-36). The case is now before this Court on appeal by the prosecution under Republic Act No. 5440.

The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy conducted or transmitted by substances. The lower court further held that, since the law does not clearly prohibit electro fishing, the executive and judicial departments cannot consider it unlawful.

As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing.

Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not more than five hundred pesos nor more than five thousand, and by imprisonment for not less than six months nor more than five years.

It is noteworthy that the Fisheries Law does not expressly punish .electro fishing." Notwithstanding the silence of the law, the Secretary of Agriculture and Natural Resources, upon the recommendation of the Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters. The order is quoted below: ñé+.£ªwph!1

SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS ñé+.£ªwph!1

OF THE PHILIPPINES.

Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the following rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance of all concerned. ñé+.£ªwph!1

SECTION 1. — Definition. — Words and terms used in this Order 11 construed as follows:

(a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago, as defined in the t between the United States and Spain, dated respectively the tenth of December, eighteen hundred ninety eight and the seventh of November, nineteen hundred. For the purpose of this order, rivers, lakes and other bodies of fresh waters are included.

(b) Electro Fishing. — Electro fishing is the catching of fish with the use of electric current. The equipment used are of many electrical devices which may be battery or generator-operated and from and available source of electric current.

(c) 'Persons' includes firm, corporation, association, agent or employee.

(d) 'Fish' includes other aquatic products.

SEC. 2. — Prohibition. — It shall be unlawful for any person to engage in electro fishing or to catch fish by the use of electric current in any portion of the Philippine waters except for research, educational and scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural Resources which shall be carried at all times.

SEC. 3. — Penalty. — Any violation of the provisions of this Administrative Order shall subject the offender to a fine of not exceeding five hundred pesos (P500.00) or imprisonment of not extending six (6) months or both at the discretion of the Court.

SEC. 4. — Repealing Provisions. — All administrative orders or parts thereof inconsistent with the provisions of this Administrative Order are hereby revoked.

SEC. 5. — Effectivity. — This Administrative Order shall take effect six (60) days after its publication in the Office Gazette.

On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of the Fisheries Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of Administrative Order No. 84, by restricting the ban against electro fishing to fresh water fisheries (63 O.G. 9963).

Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other bodies of fresh water."

The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is punishable under section 83 of the Fisheries Law (not under section 76 thereof), which provides that any other violation of that law "or of any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200), or in t for not more than six months, or both, in the discretion of the court."

That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84 imposes a fm of not exceeding P500 on a person engaged in electro fishing, which amount the 83. It seems that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed in section 83.

Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 44 [f],

Judiciary Law; People vs. Ragasi, L-28663, September 22,

We have discussed this pre point, not raised in the briefs, because it is obvious that the crime of electro fishing which is punishable with a sum up to P500, falls within the concurrent original jurisdiction of the inferior courts and the Court of First instance (People vs. Nazareno, L-40037, April 30, 1976, 70 SCRA 531 and the cases cited therein).

And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial capital, the order of d rendered by that municipal court was directly appealable to the Court, not to the Court of First Instance of Laguna (Sec. 45 and last par. of section 87 of the Judiciary Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA 596).

It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. Its order affirming the municipal court's order of dismissal is void for lack of motion. This appeal shall be treated as a direct appeal from the municipal court to this Court. (See People vs. Del Rosario, 97 Phil. 67).

In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not issued under section 11 of the Fisheries Law which, as indicated above, punishes fishing by means of an obnoxious or poisonous substance. This contention is not well-taken because, as already stated, the Penal provision of Administrative Order No. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11.

The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries Law; (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the declared national policy to encourage, Promote and conserve our fishing resources (Sec. 1, Republic Act No. 3512), and (4) section 83 of the Fisheries Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court."

As already pointed out above, the prosecution's reference to section 83 is out of place because the penalty for electro fishing under Administrative order No. 84 is not the same as the penalty fixed in section 83.

We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission, Republic Act No. 3512.

The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.

Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in the old Fisheries Law.

That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2)

unlawful fishing in deepsea fisheries; (3) unlawful taking of marine molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report the kind and quantity of fish caught, and (6) other violations.

Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in punishing electro fishing, does not contemplate that such an offense fails within the category of "other violations" because, as already shown, the penalty for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances, fixed in section 76, and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the Fisheries Law.

The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. (People vs. Exconde 101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11 32).

Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban against electro fishing was confined to fresh water fisheries. The amendment created the impression that electro fishing is not condemnable per se. It could be tolerated in marine waters. That circumstances strengthens the view that the old law does not eschew all forms of electro fishing.

However, at present, there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. 704, which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and which was promulgated on May 16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh water and salt water areas.

That decree provides: ñé+.£ªwph!1

SEC. 33. — Illegal fishing, dealing in illegally caught fish or fishery/aquatic products. — It shall he unlawful for any person to catch, take or gather or cause to be caught, taken or gathered fish or fishery/aquatic products in Philippine waters with the use of explosives, obnoxious or poisonous substance, or by the use of electricity as defined in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: ...

The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586, Presidential Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders, rules and regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704).

The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing.

Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries Administrative Order No. 84 and which is not provided for the old Fisheries Law, is now found in section 3(d) of the decree. Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4) years", a punishment which is more severe than the penalty of a time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order No. 84.

An examination of the rule-making power of executive officials and administrative agencies and, in

particular, of the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order.

Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Muñ;oz, L-24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706, 712).

The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506; Interprovincial Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6).

The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the nondeleption of legislative, powers. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the law" Calalang vs. Williams, 70 Phil. 726; People vs. Rosenthal and Osmeñ;a, 68 Phil. 328).

Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350).

The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans Administrative, L-27299, June 27, 1973, 51 SCRA 340, 349).

There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue instructions, orders, and regulations consistent" with that law, "as may be and proper to carry into effect the provisions thereof." That power is now vested in the Secretary of Natural Resources by on 7 of the Revised Fisheries law, Presidential December No. 704.

Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources, forms instructions, rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries."

Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate, whenever he may see fit do so, all rules, regulates, orders, memorandums, and other instructions, not contrary to law, to regulate the proper working and harmonious and efficient

administration of each and all of the offices and dependencies of his Department, and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said Department; but none of said rules or orders shall prescribe penalties for the violation thereof, except as expressly authorized by law."

Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. Secretary of culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that he should not transcend the bound demarcated by the statute for the exercise of that power; otherwise, he would be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body.

Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution."

As noted by Justice Fernando, "except for constitutional officials who can trace their competence to act to the fundamental law itself, a public office must be in the statute relied upon a grant of power before he can exercise it." "department zeal may not be permitted to outrun the authority conferred by statute." (Radio Communications of the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974, 58 SCRA 493, 496-8).

"Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided in the law. This is so because statutes are usually couched in general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the law are oftentimes left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law." 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 Victories Milling Co., Inc. vs. 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 vs. Lim, 108 Phil. 1091).

This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the attention of technical men in the executive departments, who draft rules and regulations, to the importance and necessity of closely following the legal provisions which they intend to implement so as to avoid any possible misunderstanding or confusion.

The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in accordance with the provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, 124).

In other words, a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided in the authorizing statute and by virtue of the latter (People vs. Exconde 101 Phil. 1125, 1132).

It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in the legislature, and it may not be delegated to any other body or agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F. Supp. 527).

In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law, under which the regulation was issued, because the law itself does not expressly punish electro fishing.

The instant case is similar to People vs. Santos, 63 Phil. 300. The Santos case involves section 28 of Fish and Game Administrative Order No. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law.

Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military reservations authorities of the United States only upon receiving written permission therefor, which permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. A violation of the proviso may be proceeded against under section 45 of the Federal Penal Code.

Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two fishing boats to fish, loiter and anchor without permission from the Secretary within three kilometers from the shoreline of Corrigidor Island.

This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military and naval authorities concerned.

As the said law does not penalize the act mentioned in section 28 of the administrative order, the promulgation of that provision by the Secretary "is equivalent to legislating on the matter, a power which has not been and cannot be delegated to him, it being expressly reserved" to the lawmaking body. "Such an act constitutes not only an excess of the regulatory power conferred upon the Secretary but also an exercise of a legislative power which he does not have, and therefore" the said provision "is null and void and without effect". Hence, the charge against Santos was dismiss.

A penal statute is strictly construed. While an administrative agency has the right to make ranks and regulations to carry into effect a law already enacted, that power should not be confused with the power to enact a criminal statute. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130).

Where the legislature has delegated to executive or administrative officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority granting statute, do not represent a valid precise of the rule-making power but constitute an attempt by an administrative body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51).

In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body, and the order will

be scrutinized with special care. (State vs. Miles supra).

The Miles case involved a statute which authorized the State Game Commission "to adopt, promulgate, amend and/or repeal, and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game.

Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer, pay or receive any reward, prize or compensation for the hunting, pursuing, taking, killing or displaying of any game animal, game bird or game fish or any part thereof."

Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to the person displaying the largest deer in his store during the open for hunting such game animals. For that act, he was charged with a violation of the rule Promulgated by the State Game Commission.

It was held that there was no statute penalizing the display of game. What the statute penalized was the taking of game. If the lawmaking body desired to prohibit the display of game, it could have readily said so. It was not lawful for the administrative board to extend or modify the statute. Hence, the indictment against Miles was quashed. The Miles case is similar to this case.

WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate jurisdiction and the order of dismissal rendered by the municipal court of Sta. Cruz, Laguna in Criminal Case No. 5429 is affirmed. Costs de oficio.

SO ORDERED.

Barredo, Concepcion, Jr., Santos and Guerrero, JJ., concur. 1äwphï1.ñët

Fernando and Antonio, JJ., took no part.

Guerrero, J., was designated to sit in the Second Division.

The Lawphil Project - Arellano Law Foundation

lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-9876 December 8, 1914

THE UNITED STATES, plaintiff-appellee, vs.ADRIANO PANLILIO, defendant-appellant.

Pedro Abad Santos for appellant.Office of the Solicitor General Corpus for appellee.

MORELAND, J.:

This is an appeal from a judgment of the Court of First Instance of the Province of Pampanga convicting the accused of a violation of the law relating to the quarantining of animals suffering from dangerous communicable or contagious diseases and sentencing him to pay a fine of P40, with subsidiary imprisonment in case of insolvency, and to pay the costs of the trial.

The information charges: "That on or about the 22nd day of February, 1913, all of the carabaos belonging to the above-named accused having been exposed to the dangerous and contagious disease known as rinderpest, were, in accordance with an order of duly-authorized agent of the Director of Agriculture, duly quarantined in a corral in the barrio of Masamat, municipality of Mexico, Province of Pampanga, P. I.; that, on said place, the said accused, Adriano Panlilio, illegally and voluntarily and without being authorized so to do, and while the quarantine against said carabaos was still in force, permitted and ordered said carabaos to be taken from the corral in which they were then quarantined and conducted from one place to another; that by virtue of said orders of the accused, his servants and agents took the said carabaos from the said corral and drove them from one place to another for the purpose of working them."

The defendant demurred to this information on the ground that the acts complained of did not constitute a crime. The demurrer was overruled and the defendant duly excepted and pleaded not guilty.

From the evidence introduced by the prosecution on the trial of the cause it appears that the defendant was notified in writing on February 22, 1913, by a duly authorized agent of the Director of agriculture, that all of his carabaos in the barrio of Masamat, municipality of Mexico, Pampanga Province, had been exposed to the disease commonly known as rinderpest, and that said carabaos were accordingly declared under quarantine, and were ordered kept in a corral designated by an agent of the Bureau of Agriculture and were to remain there until released by further order of the Director of Agriculture.

It further appears from the testimony of the witnesses for the prosecution that the defendant fully understood that, according to the orders of the Bureau of Agriculture, he was not to remove the animals, or to permit anyone else to remove them, from the quarantine in which they had been placed. In spite, however, of all this, the carabaos were taken from the corral by the commands of the accused and driven from place to place on his hacienda, and were used as work animals thereon in the same manner as if they had not been quarantined.

The contention of the accused is that the facts alleged in the information and proved on the trial do not constitute a violation of Act No. 1760 or any portion thereof.

We are forced to agree with this contention. 1awphil.net

The original information against the accused charged a violation of section 6 of Act No. 1760 committed by the accused in that he ordered and permitted his carabaos, which, at the time, were in quarantine, to be taken from quarantine and moved from one place to another on his hacienda. An amended information was filed. It failed, however, to specify that section of Act No. 1760 alleged to have been violated, evidently leaving that to be ascertained by the court on the trial.

The only sections of Act No. 1760, which prohibit acts and pronounce them unlawful are 3, 4 and 5. This case does not fall within any of them. Section 3 provides, in effect, that it shall be unlawful for any person, firm, or corporation knowingly to ship or otherwise bring into the Philippine Islands any animal suffering from, infected with, or dead of any dangerous communicable disease, or any of the effects pertaining to such animal which are liable to introduce such disease into the Philippine Islands. Section 4 declares, substantially, that it shall be unlawful for any reason, firm, or corporation knowingly to ship, drive or otherwise take or transport from one island, province, municipality, township, or settlement to another any domestic animal suffering from any dangerous communicable diseased or to expose such animal either alive or dead on any public road or highway where it may come in contact with other domestic animals. Section 5 provides that whenever the Secretary of the Interior shall declare that a dangerous communicable animal disease prevails in any island, province, municipality, township, or settlement and that there is danger of spreading such disease by shipping, driving or otherwise transporting or taking out of such island, province, municipality, township, or settlement any class of domestic animal, it shall be unlawful for any person, firm or corporation to ship, drive or otherwise remove the kind of animals so specified from such locality except when accompanied by a certificate issued by authority of the Director of Agriculture stating the number and the kind of animals to be shipped, driven, taken or transported, their destination, manner in which they are authorized to be shipped, driven, taken, or transported, and their brands and distinguishing marks.

A simple reading of these sections demonstrates clearly that the case at bar does not fall within any of them. There is no question here of importation and there is no charge or proof that the animals in question were suffering from a dangerous communicable disease or that the Secretary of the Interior had made the declaration provided for in section 5 or that the accused had driven or taken said animals from one island, province, municipality, township or settlement to another. It was alleged had been exposed to a dangerous communicable disease and that they had been placed in a corral in quarantine on the premises of the accused and that he, in violation of the quarantine, had taken them from the corral and worked them upon the lands adjoining. They had not been in highway nor moved from one municipality or settlement to another. They were left upon defendant's hacienda, where they were quarantined, and there worked by the servants of the accused.

The Solicitor-General in his brief in this court admits that the sections referred to are not applicable to the case at bar and also admits that section 7 of said Act is not applicable. This section provides: "Whenever the Director of Agriculture shall order any animal placed in quarantine in accordance with the provisions of this Act, the owner of such animal, or his agent, shall deliver it at the place designated for the quarantine and shall provide it with proper food, water, and attendance. Should the owner or his agent fail to comply with this requirement the Director of Agriculture may furnish supplies and attendance needed, and the reasonable cost of such supplies and attendance shall be collectible from the owner or his agent."

We are in accord with the opinion expressed by the Solicitor-General with respect to this section, as we are with his opinion as to sections 3, 4, and 5. the law nowhere makes it a penal offense to refuse to comply with the provisions of section 7, nor is the section itself so phrased as to warrant the conclusion that it was intended to be a penal section. The section provides the means by which the refusal of the owner to comply therewith shall be overcome and the punishment, if we may call it punishment, which he shall receive by reason of that refusal. It has none of the aspects of a penal provision or the form or substance of such provision. It does not prohibit any act. It does not compel an act nor does it really punish or impose a criminal penalty. The other sections of the law under which punishments may be inflicted are so phrased as to make the prohibited act unlawful, and section 8 provides the punishment for any act declared unlawful by the law.

The Solicitor-General suggests, but does not argue, that section 6 is applicable to the case at bar. Section 6 simply authorizes the Director of Agriculture to do certain things, among them, paragraph (c) "to require that animals which are suffering from dangerous communicable diseases or have been exposed thereto be placed in quarantine at such place and for such time as may be deemed by him necessary to prevent the spread of the disease." Nowhere in the law, however, is the violation of the orders of the Bureau of Agriculture prohibited or made unlawful, nor is there provided any punishment for a violation of such orders. Section 8 provides that "any person violating any of the provisions of this Act shall, upon conviction, be punished by a fine of not more than one thousand pesos, or by imprisonment for not more than six months, or by both such fine and imprisonment, in the discretion of the court, for each offense." A violation of the orders of the Bureau of Agriculture, as authorized by paragraph (c), is not a violation of the provision of the Act. The orders of the Bureau of Agriculture, while they may possibly be said to have the force of law, are statutes and particularly not penal statutes, and a violation of such orders is

not a penal offense unless the statute itself somewhere makes a violation thereof unlawful and penalizes it. Nowhere in Act No. 1760 is a violation of the orders of the Bureau of Agriculture made a penal offense, nor is such violation punished in any way therein.

Finally, it is contended by the Government that if the offense stated in the information and proved upon the trial does not constitute a violation of any of the provisions of Act No. 1760, it does constitute a violation of article 581, paragraph 2, of the Penal Code. It provides:

A fine of not less than fifteen and not more than seventy pesetas and censure shall be imposed upon: . . .

2. Any person who shall violate the regulations, ordinances, or proclamations issued with reference to any epedemic disease among animals, the extermination of locusts, or any other similar plague. 1awphil.net

It alleged in the information and was proved on the trial that the Bureau of agriculture had ordered a quarantine of the carabaos at the time and place mentioned; that the quarantine had been executed and completed and the animals actually segregated and confined; that the accused, in violation of such quarantine and of the orders of the Bureau of Agriculture, duly promulgated, broke the quarantine, removed the animals and used them in the ordinary work of his plantation. We consider these acts a plain violation of the article of the Penal Code as above quoted. The fact that the information in its preamble charged a violation of act No. 1760 does not prevent us from finding the accused guilty of a violation of an article of the Penal Code. The complaint opens as follows: "The undersigned accuses Adriano Panlilio of a violation of Act No. 1760, committed as follows:" Then follows the body of the information already quoted in this opinion. We would not permit an accused to be convicted under one Act when he is charged with the violation of another, if the change from one statute to another involved a change of the theory of the trial or required of the defendant a different defense or surprised him in any other way. The allegations required under Act No. 1760 include those required under article 581. The accused could have defended himself in no different manner if he had been expressly charged with a violation of article 581.

In the case of United States vs. Paua (6 Phil. Rep., 740), the information stating the facts upon which the charge was founded terminated with his expression: "In violation of section 315 of Act No. 355 of the Philippine Commission, in effect on the 6th of February, 1902."

In the resolution of this case the Supreme Court found that the facts set forth in the information and proved on the trial did not constitute a violation of section 315 of Act No. 355 as alleged in the information, but did constitute a violation of article 387 in connection with article 383 of the Penal Code, and accordingly convicted the accused under those articles and sentenced him to the corresponding penalty.

In that case the court said: "The foregoing facts, duly established as they were by the testimony of credible witnesses who heard and saw everything that occurred, show beyond peradventure of doubt that the crime of attempted bribery, as defined in article 387, in connection with article 383 of the Penal Code, has been committed, it being immaterial whether it is alleged in the complaint that section 315 of Act No. 355 of the Philippine Commission was violated by the defendant, as the same recites facts and circumstances sufficient to constitute the crime of bribery as defined and punished in the aforesaid articles of the Penal Code." (U. S. vs. Lim San, 17 Phil. Rep., 273; U.S. vs. Jeffrey, 15 Phil. Rep., 391; U. S. vs. Guzman, 25 Phil. Rep., 22.)

The accused is accordingly convicted of a violation of article 581, paragraph 2, of the Penal Code, and is sentenced to pay a fine of seventy pesetas (P14) and censure, with subsidiary imprisonment in case of insolvency, and the costs of this appeal. So ordered.

Arellano, C.J., Torres, Carson and Araullo, JJ., concur.Johnson, J., dissents.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila 

 THIRD DIVISION

 G.R. No. 159149

 June 26, 2006

  The HONORABLE SECRETARY VINCENT S. PEREZ, in his capacity as the Secretary of the Department of Energy, petitioner, vs. LPG REFILLERS ASSOCIATION OF THE PHILIPPINES, INC., respondent  QUISUMBING, J.: Before us is a petition for review on certiorari under Rule 45, assailing the Decision1 and Order2 of the Regional Trial Court of Pasig City, Branch 161, in SCA Case No. 2318, which nullified Circular No. 2000-06-010 of the Department of Energy (DOE). The facts are undisputed. Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing, adulteration, underdelivery, and underfilling of petroleum products, as well as possession for trade of adulterated petroleum products and of underfilled liquefied petroleum gas (LPG) cylinders.3  The said law sets the monetary penalty for violators to a minimum of P20,000 and a maximum of P50,000.4

 On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33, thus:

 SECTION 4. NO PRICE DISPLAY BOARD –  

            LPG Marketer/LPG Dealer/LPG Retail Outlet             1st Offense                 –          Reprimand/warning letter

   2nd Offense                –            Recommend suspension of business operation to the proper local government unit 

            3rd Offense                 –          Recommend business closure to the proper local government unit and initiate criminal proceedings SECTION 5. NO WEIGHING SCALE –             A.  LPG Refiller/Marketer                   1st Offense                       –          Fine of P5,000                   2nd Offense                      –          Fine of P10,000

         3rd Offense                       –          Recommend business closure to the proper local government unit 

            B.  Dealer                   1st Offense                       –          Fine of P3,000                   2nd Offense                      –          Fine of P7,000                                 

         3rd Offense                       –          Recommend business closure to the proper local government unit 

            C.  LPG Retail Outlet 

                              1st Offense                       –          Reprimand 

                   2nd Offense                      –          Fine of P500.00

                    3rd Offense                       –          Fine of P1,000.00 SECTION 6.  NO TARE WEIGHT OR INCORRECT TARE WEIGHT MARKINGS.  (REQUIREMENT ON ENGRAVED TARE WEIGHT SHALL TAKE EFFECT TWO (2) YEARS AFTER EFFECTIVITY OF THIS CIRCULAR) 

A.  LPG Refiller/Marketer       1st Offense                       –          Fine of P3,000 for each cylinder       2nd Offense                      –          Fine of P5,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            B.  Dealer       1st Offense                       –          Fine of P2,000 for each cylinder       2nd Offense                      –          Fine of P4,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            C. LPG Retail Outlet                                           1st Offense                       –          Fine of P1,000 for each cylinder 

     2nd Offense                      –          Fine of P2,000 for each cylinder      3rd Offense                       –          Recommend business closure to the proper local government unit

 SECTION 7.  NO APPROPRIATE OR AUTHORIZED LPG SEAL 

A.  LPG Refiller/Marketer       1st Offense                       –          Fine of P3,000 for each cylinder       2nd Offense                      –          Fine of P5,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            B.  Dealer       1st Offense                       –          Fine of P2,000 for each cylinder       2nd Offense                      –          Fine of P4,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            C. LPG Retail Outlet 

                         1st Offense                       –          Fine of P1,000 for each cylinder 

      2nd Offense                      –          Fine of P2,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

SECTION 8.  NO TRADE NAME, UNBRANDED LPG CYLINDERS, NO SERIAL NUMBER, NO DISTINGUISHING COLOR, NO EMBOSSED IDENTIFYING MARKINGS ON CYLINDER OR

DISTINCTIVE COLLAR OR DESIGN (REQUIREMENT ON SERIAL NUMBER AND DISTINCTIVE COLLAR OR DESIGN SHALL TAKE EFFECT TWO (2) YEARS AFTER EFFECTIVITY OF THIS CIRCULAR) 

A.  LPG Refiller/Marketer       1st Offense                       –          Fine of P4,000 for each cylinder       2nd Offense                      –          Fine of P5,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            B.  Dealer 

      1st Offense                       –          Fine of P3,000 for each cylinder       2nd Offense                      –          Fine of P4,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            C.  LPG Retail Outlet                                            1st Offense                       –          Fine of P1,000 for each cylinder 

      2nd Offense                      –          Fine of P2,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

SECTION 9. UNDERFILLED LPG CYLINDERS A.  LPG REFILLER/MARKETER

       1st Offense                       –          Fine of P4,000 for each cylinder       2nd Offense                      –          Fine of P6,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

            B.  DEALER 

      1st Offense                       –          Fine of P3,000 for each cylinder       2nd Offense                      –          Fine of P4,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit C.  LPG RETAIL OUTLET

                                            1st Offense                       –          Fine of P1,000 for each cylinder 

      2nd Offense                      –          Fine of P2,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

SECTION 10.  TAMPERING, ALTERING, OR MODIFYING OF LPG CYLINDER THRU ANY MEANS SUCH AS BUT NOT LIMITED TO CHANGING THE VALVE, REPAINTING, AND RELABELLING BY ANY PERSON OR ENTITY OTHER THAN THE LEGITIMATE AND REGISTERED OWNER OF THE SAME.  FOR THIS PURPOSE, LPG REFILLER, MARKETER, DEALER, OR RETAIL OUTLET, AS THE CASE MAY BE, WHO HAS POSSESSION OF SUCH ILLEGALLY TAMPERED,

ALTERED, OR OTHERWISE MODIFIED LPG CYLINDER SHALL BE HELD LIABLE FOR THIS OFFENSE 

A.  LPG Refiller/Marketer 

                              1st Offense                       –          Fine of P5,000 for each cylinder                               2nd Offense                      –          Fine of P10,000 for each cylinder                               3rd Offense                       –          Recommend business closure to the proper local government unit 

B.  Dealer                             1st Offense                       –          Fine of P3,000 for each cylinder 

         2nd Offense                      –          Fine of P5,000 for each cylinder          3rd Offense                       –          Recommend business closure to the proper local government unit C. LPG Retail Outlet

                                            1st Offense                       –          Fine of P1,500 for each cylinder 

      2nd Offense                      –          Fine of P3,000 for each cylinder       3rd Offense                       –          Recommend business closure to the proper local government unit 

SECTION 11.  UNAUTHORIZED DECANTING OR REFILLING OF LPG CYLINDERS

 1st Offense                 –          Fine of P5,000 for each cylinder

 2nd Offense                –          Fine of P10,000 for each cylinder 3rd Offense                 –          Recommend business closure to the proper local government unit 

SECTION 12.  HOARDING OF PETROLEUM PRODUCTS INCLUDING LIQUEFIED PETROLEUM GAS

 1st Offense                 –          Fine of P10,000 per cylinder 2nd Offense                –          Recommend business closure to the proper local government unit plus the filing of appropriate criminal                                                      action 

SECTION 13.  REFUSAL TO ALLOW OR COOPERATE WITH DULY AUTHORIZED INSPECTORS OF THE ENERGY INDUSTRY ADMINISTRATION BUREAU (EIAB) OF THE DEPARTMENT OF ENERGY IN THE CONDUCT OF THEIR INSPECTION/INVESTIGATION, WHETHER REGULAR AND ROUTINARY OR COMPLAINT-INITIATED 

1st Offense                 –          Fine of P10,000 2nd Offense                –          Recommend business

closure to the proper local government unit 

SECTION 14.  REFUSAL OR FAILURE TO PAY FINE – The Department of Energy shall recommend to the proper local government unit the closure of business of a respondent who refuses or fails to pay any administrative fine without prejudice to the filing of an appropriate criminal action if warranted.5

Respondent LPG Refillers Association of the Philippines, Inc. asked the DOE to set aside the Circular for being contrary to law.  The DOE, however, denied the request for lack of merit. Respondent then filed a petition for prohibition and annulment with prayer for temporary restraining order and/or writ of preliminary injunction before the trial court.           After trial on the merits, the trial court nullified the Circular on the ground that it introduced new offenses not included in the law.6  The court intimated that the Circular, in providing penalties on a per cylinder basis for each violation, might exceed the maximum penalty under the law.  The decretal part of its Decision reads: 

IN VIEW OF THE FOREGOING, this Court renders judgment declaring DOE Circular No. 2000-06-010 null and void and prohibits the respondent from implementing the same. SO ORDERED.7

           The trial court denied for lack of merit petitioner’s motion for reconsideration.  Hence this petition, raising the following issues: 

I WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT “A CLOSE SCRUTINY OF BP 33, PD 1865 AND R.A. NO. 8479   SHOWS THAT OFFENSES LIKE NO PRICE DISPLAY [BOARD], NO WEIGHING SCALE, ETC. SET FORTH IN THE CIRCULAR ARE NOT PROVIDED FOR IN ANY OF THE THREE (3) LAWS”.  

II 

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT “A SCRUTINY OF THE NEW SET OF PENALTIES PROVIDED BY THE CIRCULAR SHOWS THAT THE PENALTIES THIS TIME ARE BASED ON PER CYLINDER BASIS”; THAT “BEING SUCH, NO CEILING WAS PROVIDED FOR AS TO THE ADMINISTRATIVE FINES”; THAT “AS

ILLUSTRATED BY THE PETITIONER, FOR JUST ONE LPG CYLINDER FOUND VIOLATING AT LEAST SEC[TIONS] 6, 7, 8, 9, 10 AND 11 OF THE [CIRCULAR], A FINE OF P24,000.00 IS IMPOSED;” AND THAT “THIS WILL CLEARLY BE BEYOND THE P10,000.00 PROVIDED BY THE LAWS.”  

III 

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SECTION 16 OF PETITIONER’S CIRCULAR WHICH AUTHORIZES THE IMPOSITION OF PECUNIARY PENALTIES WITH THE TOTAL FINE NOT EXCEEDING P20,000.00 FOR RETAIL OUTLETS VIOLATES THE PENALTY CEILING OF P10,000.00 SET UNDER BP BLG. 33, AS AMENDED.  

IV 

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT SINCE SECTION 5 (g) OF R.A. 7638 FINDS NO REFERENCE IN DOE CIRCULAR NO. 2000-06-010, THE SAME SHOULD BE DISREGARDED.  

V 

WHETHER OR NOT THE COURT A QUO GRAVELY ERRED IN HOLDING THAT “ON THE NEW OFFENSES INTRODUCED IN THE CIRCULAR SUCH AS SECTIONS 4, 5, 10, 13 AND 14 AND THE IMPOSITION OF THE GRADUATED PENALTIES ON ‘A PER CYLINDER BASIS’, THIS COURT FINDS [NO] REASON TO DISTURB ITS FINDINGS THAT RESPONDENT-MOVANT EXCEEDED ITS AUTHORITY. X X X IT SHOULD BE REMEMBERED THAT BP BLG. 33 AS AMENDED AND P.D. 1865 ARE CRIMINAL STATUTES AND MUST BE CONSTRUED WITH SUCH STRICTNESS AS TO CAREFULLY SAFEGUARD THE RIGHTS OF THE DEFENDANT.” 

VI 

WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING THAT “THE ASSAILED CIRCULAR SETS NO MAXIMUM LIMIT AS TO THE FINE THAT MAY BE IMPOSED ON AN ERRING PERSON OR ENTITY TO WHICH FACT MOVANT CONCEDES.  FOR ONE (1) CYLINDER ALONE, NOT ONLY DOES THECIRCULAR MAKE THE FINE EXCESSIVE TO THE EXTENT OF BEING CONFISCATORY, BUT IT EVEN IMPOSES A PENALTY WHICH MAY EVEN GO BEYOND THAT MAXIMUM IMPOSABLE FINE OF P50,000.00 SET BY P.D. 1865 IN ITS SEC. 4 AFTER A CRIMINAL PROCEEDING.”8

 To our mind, the issue raised by petitioner may be reduced to the sole issue of whether the Regional Trial Court of Pasig erred in declaring the provisions of the Circular null and void, and prohibiting the Circular’s implementation.

 Petitioner argues that the penalties for the acts and omissions enumerated in the Circular are sanctioned by Sections 19 and 3-A10 of B.P. Blg. 33 and Section 2311 of Republic Act No. 8479.12  Petitioner adds that Sections 5(g)13 and 2114 of Republic Act No. 7638   15 also authorize the DOE to impose the penalties provided in the Circular.           Respondent counters that the enabling laws, B.P. Blg. 33 and R.A. No. 8479, do not expressly penalize the acts and omissions enumerated in the Circular.  Neither is the Circularsupported by R.A. No. 7638, respondent claims, since the said law does not pertain to LPG traders.  Respondent maintains that the Circular is not in conformity with the law it seeks to implement. We resolve to grant the petition. For an administrative regulation, such as the Circular in this case, to have the force of penal law, (1) the violation of the administrative regulation must be made a crime by the delegating statute itself; and (2) the penalty for such violation must be provided by the statute itself.16

The Circular satisfies the first requirement.  B.P. Blg. 33, as amended, criminalizes illegal trading, adulteration, underfilling, hoarding, and overpricing of petroleum products. Under this general description of what constitutes criminal acts involving petroleum products, the Circular merely lists the various modes by which the said criminal acts may be perpetrated, namely:  no price display board, no weighing scale, no tare weight or incorrect tare weight markings, no authorized LPG seal, no trade name, unbranded LPG cylinders, no serial number, no distinguishing color, no embossed identifying markings on cylinder, underfilling LPG cylinders, tampering LPG cylinders, and unauthorized decanting of LPG cylinders.  These specific acts and omissions are obviously within the contemplation of the law, which seeks to curb the pernicious practices of some petroleum merchants. As for the second requirement, we find that the Circular is in accord with the law.  Under B.P. Blg. 33, as amended, the monetary penalty for any person who commits any of the acts aforestated is limited to a minimum of P20,000 and a maximum of P50,000.  Under the Circular, the maximum pecuniary penalty for retail outlets is P20,000,17 an amount within the range allowed by law.  However, for the refillers, marketers, and dealers, the Circular is silent as to any maximum moneetary penalty.  This mere silence, nonetheless, does not amount to violation of the aforesaid statutory maximum limit.  Further, the mere fact that the Circular provides penalties on a per cylinder basis does not in itself run counter to the law since all that B.P. Blg. 33 prescribes are the minimum and the maximum limits of penalties. Clearly, it is B.P. Blg. 33, as amended, which defines what constitute punishable acts involving petroleum products and which set the minimum and maximum limits for the corresponding penalties.  The Circular merely implements the said law, albeit it is silent on the maximum pecuniary penalty for refillers, marketers, and dealers.  Nothing in theCircular contravenes the law. Noteworthy, the enabling laws on which the Circular is based were specifically intended to provide the DOE with increased administrative and penal measures with which to effectively curtail rampant adulteration and shortselling, as well as other acts involving petroleum products, which are inimical to public

interest.  To nullify the Circular in this case would be to render inutile government efforts to protect the general consuming public against the nefarious practices of some unscrupulous LPG traders. WHEREFORE, the petition is GRANTED.  The assailed Circular No. 2000-06-010 of DOE is declared valid.  The Decision and Order of the Regional Trial Court of Pasig City, Branch 161, in SCA Case No. 2318, nullifying said Circular  and prohibiting its implementation are hereby REVERSED and SET ASIDE. No pronouncement as to costs. SO ORDERED.    

  LEONARDO A. QUISUMBINGAssociate Justice

 WE CONCUR:    

ANTONIO T. CARPIOAssociate Justice

CONCHITA CARPIO MORALES

Associate Justice   

DANTE O. TIÑGAAssociate Justice

PRESBITERO J. VELASCO, JR.Associate Justice

A T T E S T A T I O N 

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

  LEONARDO A. QUISUMBINGAssociate Justice

Chairperson   

C E R T I F I C A T I O N 

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

  ARTEMIO V. PANGANIBANChief Justice

  1Rollo, pp. 64-72.  Penned by Judge Alicia P. Mariño-Co.2Id. at 73-77.3SEC.  2.  Prohibited Acts. – The following acts are prohibited and

penalized:           (a) Illegal trading in petroleum and/or petroleum products;           (b) Adulteration of finished petroleum products, or possession of

adulterated finished petroleum products for the purpose of sale, distribution, transportation, exchange or barter;

          (c) Underdelivery or underfilling beyond authorized limits in the sale of petroleum products or possession of underfilled liquefied petroleum gas cylinder for the purpose of sale, distribution, transportation, exchange or barter;

            x x x x            [(b)] (D) Hoarding of petroleum and/or petroleum products;            [(c)] (E) Overpricing in the sale of petroleum products;            [(d)] (F) Misuse of petroleum allocations;            [(e)] (G) Speed contests and rallies involving mainly the use of motor

vehicles, motor-driven watercraft or aircraft utilizing petroleum-derived fuels, including car and motorcycle rallies and drag racing, without the permit from the Bureau of Energy Utilization; and

            [(f)] (H) Sky-diving, and water-skiing except when methanol is used for the power-boat operation.

 4SEC. 4.  Penalties.  – Any person who commits any act herein prohibited

shall, upon conviction, be punished with a   fine of not less than [two] TWENTY thousand pesos [(P 2,000)] (P 20,000) but not more than [Ten] FIFTY  thousand pesos [(P 10,000)] (P 50,000)….

5Rollo, pp. 274-280.6Batas Pambansa Blg .   33 (1979) , Presidential Decree No. 1865 (1983),

or Republic Act No. 8479 (1998).7Rollo, p. 72.8Id. at 500-502.9SECTION 1.  Declaration of Policy.  – It is the declared policy of the State to

institutionalize as a national way of life energy conservation geared towards the judicious and efficient use of energy in order to enhance availability of energy supplies required to support economic, social and developmental goals.  In view of the continuing uncertainty of the international oil supply, it is imperative that measures to conserve energy be strengthened and that acts and activities involving petroleum and/or petroleum products contrary to the intent and spirit of judicious usage and conservation of energy, which are inimical to the public interest and national security, be prohibited and appropriate sanction therefor be imposed.

10Section 3-A (inserted by Section 3 of PD No. 1865) reads:            “SEC. 3-A. Rules and Regulations; Administrative sanctions for

violation thereof.  – The Bureau of Energy Utilization shall issue such rules and regulations as are necessary to carry into effect the provisions of this Act, subject to the approval of the Minister of Energy, after consultation with the affected industry sectors.  Said rules and regulations shall take effect fifteen (15) days from the date of its publication in two (2) newspapers of general circulation.

      “The Bureau of Energy Utilization is empowered to impose in an administrative proceeding, after due notice and hearing, upon any person who violates any provision of such rules and regulations, a fine of not more than ten thousand pesos (P10,000.00) or to suspend or remove the license or permit of a hauler, marketer, refiller, dealer, sub-dealer or retail outlet: Provided, That hearing in any administrative proceedings may be waived by respondent.  Provided, Further, That during the pendency of such administrative proceeding, the Bureau may suspend the business operations of such hauler, marketer, refiller, dealer, sub-dealer or retailer or retail outlet operator when the suspension is consistent with public interest.…

            x x x x      “The administrative sanction that may be imposed shall be without prejudice to the filing of a criminal action as the case may warrant.”

11SEC. 23.  Implementing Rules and Regulations.  – The DOE, in coordination with the Board, the DENR, DFA, Department of Labor and Employment (DOLE), Department of Health (DOH), DOF, DTI, National Economic and Development Authority (NEDA) and TLRC, shall formulate and issue the necessary implementing rules and regulations within sixty (60) days after the effectivity of this Act.

12AN ACT DEREGULATING THE DOWNSTREAM OIL INDUSTRY, AND FOR OTHER PURPOSES.13SEC. 5.  Powers and Functions.  – The Department shall have the following powers and functions:            x x x x            (g) Formulate and implement programs, including a system of

providing incentives and penalties, for the judicious and efficient use of energy in all energy-consuming sectors of the economy;

14SEC.  21.   Appropriations.  – x x x            Subject to existing rules and regulations, the funds and monies

collected or which otherwise come into the possession of the Department and its bureaus from fees, surcharges, fines and penalties which the Department and its bureaus may impose and collect under this Act, x x x shall be disbursed for expenses necessary for the effective discharge of the powers and functions of the Department under this Act.

15A N ACT CREATING THE DEPARTMENT OF ENERGY, RATIONALIZING THE ORGANIZATION AND FUNCTIONS OF GOVERNMENT AGENCIES RELATED TO ENERGY, AND FOR OTHER PURPOSES.

16See United States vs. Panlilio, 28 Phil. 608, 613-614 (1914).17DOE Circular No. 2000-06-010.

SEC. 16.  Maximum Total Penalty.  In the imposition of pecuniary penalties the total fine shall not exceed Twenty Thousand Pesos (P 20,000.00) for retail outlets.

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lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 88709 February 11, 1992

NICOS INDUSTRIAL CORPORATION, JUAN COQUINCO and CARLOS COQUINCO, petitioners, vs.THE COURT OF APPEALS, VICTORINO P. EVANGELISTA, in his capacity as Ex-Officio Sheriff of Bulacan, UNITED COCONUT PLANTERS BANK, MANUEL L. CO, GOLDEN STAR INDUSTRIAL CORPORATION and THE REGISTER OF DEEDS FOR THE PROVINCE OF BULACAN, respondents.

Manuel T. Ubarra for petitioners.

Encanto, Mabugat & Associates for UCPB.

Mangalindan and Bermas Law Offices for private respondent.

Federico Reyes for Manuel L. Co.

CRUZ, J.:

We are asked once again to interpret the constitutional provision that no decision shall be rendered by any court without stating therein clearly and distinctly the facts and the law on which it is based, 1 this time in connection with an order of the trial court sustaining demurrer to the evidence. 2 The order has been affirmed by the respondent Court of Appeals, 3 and the appellant has come to this Court in this petition for review on certiorari, invoking the said provision and alleging several reversible errors.

In the complaint filed by the petitioners before the Regional Trial Court of Bulacan, it was alleged that on January 24, 1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from private respondent United Coconut Planters Bank and to secure payment thereof executed a real estate mortgage on two parcels of land located at Marilao, Bulacan. The mortgage was foreclosed for the supposed non-payment of the loan, and the sheriff's sale was held on July 11, 1983, without re-publication of the required notices after the original date for the auction was changed without the knowledge or consent of the mortgagor. UCPB was the highest and lone bidder and the mortgaged lands were sold to it for P3,558,547.64. On August 29, 1983, UCPB sold all its rights to the properties to private respondent Manuel Co, who on the same day transferred them to Golden Star Industrial Corporation, another private respondent, upon whose petition a writ of possession was issued to it on November 4, 1983. On September 6, 1984, NICOS and the other petitioners, as chairman of its board of directors and its executive vice-president, respectively, filed their action for "annulment of sheriff's sale, recovery of possession, and damages, with prayer for the issuance of a preliminary prohibitory and mandatory injunction."

Golden Star and Victorino P. Evangelista, as ex officio sheriff of Bulacan, moved to dismiss the complaint on the grounds of lack of jurisdiction, prescription, estoppel, and regularity of the sheriff's sale. Co denied the allegations of the plaintiffs and, like the other defendants, counterclaimed for damages. In its answer with counterclaim, UCPB defended the foreclosure of the mortgage for failure of NICOS to pay the loan in accordance with its promissory note and insisted that the sheriff's sale had been conducted in accordance with the statutory requirements.

The plaintiffs presented two witnesses, including petitioner Carlos Coquinco, who testified at three separate hearings. They also submitted 21 exhibits. On April 30, 1986, Golden Star and Evangelista filed a 7-page demurrer to the evidence where they argued that the action was a derivative suit that came under the jurisdiction of the Securities and Exchange Commission; that the mortgage had been validly foreclosed; that the sheriff's sale had been held in accordance with Act 3135; that the notices had been duly published in a newspaper of general circulation; and that the opposition to the writ of possession had not been filed on time. No opposition to the demurrer having been submitted despite notice thereof to the parties, Judge Nestor F. Dantes considered it submitted for resolution and on June 6, 1986, issued thefollowing —

O R D E R

Acting on the "Demurrer to Evidence" dated April 30, 1986 filed by defendants Victorino P. Evangelista and Golden Star Industrial Corporation to which plaintiff and other defendants did not

file their comment/opposition and it appearing from the very evidence adduced by the plaintiff that the Sheriff's Auction Sale conducted on July 11, 1983 was in complete accord with the requirements of Section 3, Act 3135 under which the auction sale was appropriately held and conducted and it appearing from the allegations in paragraph 13 of the plaintiff's pleading and likewise from plaintiff Carlos Coquinco's own testimony that his cause is actually-against the other officers and stockholders of the plaintiff Nicos Industrial Corporation ". . . for the purpose of protecting the corporation and its stockholders, as well as their own rights and interests in the corporation, and the corporate assets, against the fraudulent ants and devices of the responsible officials of the corporation, in breach of the trust reposed upon them by the stockholders . . ." a subject matter not within the competent jurisdiction of the Court, the court finds the same to be impressed with merit.

WHEREFORE, plaintiff's complaint is hereby dismissed. The Defendants' respective counterclaims are likewise dismissed.

The Writ of Preliminary Injunction heretofore issued is dissolved and set aside.

It is this order that is now assailed by the petitioners on the principal ground that it violates the aforementioned constitutional requirement. The petitioners claim that it is not a reasoned decision and does not clearly and distinctly explain how it was reached by the trial court. They also stress that the sheriff's sale was irregular because the notices thereof were published in a newspaper that did not have general circulation and that the original date of the sheriff's sale had been changed without its consent, the same having been allegedly given by a person not authorized to represent NICOS. It is also contended that the original P2 million loan had already been paid and that if there was indeed a second P2 million loan also secured by the real estate mortgage, it was for UCPB to prove this, as well as its allegation that NICOS had defaulted in the payment of the first quarterly installment on the first loan.

The petitioners complain that there was no analysis of their testimonial evidence or of their 21 exhibits, the trial court merely confining itself to the pronouncement that the sheriff's sale was valid and that it had no jurisdiction over the derivative suit. There was therefore no adequate factual or legal basis for the decision that could justify its review and affirmance by the Court of Appeals.

Rejecting this contention, the respondent court held:

In their first assignment of error, appellants faults the court for its failure to state clearly and distinctly the facts and the law on which the order of dismissal is based, as required by Section 1, Rule 36, of the Rules of Court and the Constitution.

An order granting a demurrer to the evidence is in fact an adjudication on the merits and consequently the requirements of Section 1, Rule 36, is applicable. We are not however prepared to hold that there is a reversible omission of the requirements of the rule in the Order appealed from, it appearing from a reading thereof that there is substantial reference to the facts and the law on which it is based.

The Order which adverts to the Demurrer to the Evidence expressly referred to the evidence adduced by the plaintiff as showing that the Sheriff's auction sale conducted on July 11, 1983, was in complete accord with the requisites of Section 3, Act 3135 under which the auction sale was apparently held and conducted. It likewise makes reference to the allegations in paragraph 13 of plaintiff's pleadings and plaintiff Carlos Coquinco's own testimony that the case is actually against the other officers and stockholders of plaintiff NICOS Industrial Corporation and concludes, rightly or wrongly, that the subject matter thereof is not within the competent jurisdiction of the Court.

We hold that the order appealed from as framed by the court a quo while leaving much to be desired, substantially complies with the rules.

This Court does not agree. The questioned order is an over-simplification of the issues, and violates both the letter and spirit of Article VIII, Section 14, of the Constitution.

It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor

of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.

It is important to observe at this point that the constitutional provision does not apply to interlocutory orders, such as one granting a motion for postponement or quashing a subpoena, because it "refers only to decisions on the merits and not to orders of the trial court resolving incidental matters." 4 As for the minute resolutions of this Court, we have already observed in Borromeo v. Court of Appeals 5 that —

The Supreme Court disposes of the bulk of its cases by minute resolutions and decrees them as final and executory, as where a case is patently without merit, where the issues raised are factual in nature, where the decision appealed from is supported by substantial evidence and is in accord with the facts of the case and the applicable laws, where it is clear from the records that the petitions were filed merely to forestall the early execution of judgment and for non-compliance with the rules. The resolution denying due course or dismissing a petition always gives the legal basis.

xxx xxx xxx

The Court is not duty bound to render signed decisions all the time. It has ample discretion to formulate decisions and/or minute resolutions, provided a legal basis is given, depending on its evaluation of a case.

The order in the case at bar does not come under either of the above exceptions. As it is settled that an order dismissing a case for insufficient evidence is a judgment on the merits, 6 it is imperative that it be a reasoned decision clearly and distinctly stating therein the facts and the law on which it is based.

It may be argued that a dismissal based on lack of jurisdiction is not considered a judgment on the merits and so is not covered by the aforecited provision. There is no quarrel with this established principle. However, the rule would be applicable only if the case is dismissed on the sole ground of lack of jurisdiction and not when some other additional ground is invoked.

A careful perusal of the challenged order will show that the complaint was dismissed not only for lack of jurisdiction but also because of the insufficiency of the evidence to prove the invalidity of the sheriff's sale. Regarding this second ground, all the trial court did was summarily conclude "from the very evidence adduced by the plaintiff" that the sheriff's sale "was in complete accord with the requirements of Section 3, Act 3135." It did not bother to discuss what that evidence was or to explain why it believed that the legal requirements had been observed. Its conclusion was remarkably threadbare. Brevity is doubtless an admirable trait, but it should not and cannot be substituted for substance. As the ruling on this second ground was unquestionably a judgment on the merits, the failure to state the factual and legal basis thereof was fatal to the order.

Significantly, the respondent court found that the trial court did have jurisdiction over the case after all. This made even more necessary the factual and legal explanation for the dismissal of the complaint on the ground that the plaintiff's evidence was insufficient.

In People v. Escober, 7 the trial court in a decision that covered only one and a half pages, single spaced found the defendant guilty of murder and sentenced him to death. Holding that the decision violated the constitutional requirement, the Court observed through then Associate Justice Marcelo B. Fernan:

The above-quoted decision falls short of this standard. The inadequacy stems primarily from the respondent judge's tendency to generalize and to form conclusions without detailing the facts from which such conclusions are deduced. Thus, he concluded that the material allegations of the Amended Information were the facts without specifying which of the testimonies or the exhibits supported this conclusion. He rejected the testimony of accused-appellant Escober because it was allegedly replete with contradictions without pointing out what these contradictions consist of or what "vital details" Escober could have recalled as a credible witness. He also found the crime to be attended by the aggravating circumstances of cruelty, nighttime, superior strength, treachery, in band, "among others" but did not particularly state the factual basis for such findings.

While it is true that the case before us does not involve the life or liberty of the defendant, as in Escober, there is still no reason

for the constitutional short-cut taken by the trial judge. The properties being litigated are not of inconsequential value; they were sold for three and a half million pesos in 1983 and doubtless have considerably appreciated since then, after more than eight years. These facts alone justified a more careful and thorough drafting of the order, to fully inform the parties and the courts that might later be called upon to review it of the reasons why the demurrer to the evidence was sustained and the complaint dismissed.

In Romero v. Court of Appeals, 8 the Court, somewhat reluctantly, approved a memorandum decision of the Court of Appeals consisting of 4 pages, single-spaced, which adopted by reference the findings of fact and conclusions of law of the Court of Agrarian Relations. While holding that the decision could be considered substantial compliance with PD 946, Section 18, 9 and BP 129, Section 40, 10 Justice Jose Y. Feria nevertheless expressed the misgiving that "the tendency would be to follow the line of least resistance by just adopting the findings and conclusions of the lower court without thoroughly studying the appealed case."

Obviously, the order now being challenged cannot qualify as a memorandum decision because it was not issued by an appellate court reviewing the findings and conclusions of a lower court. We note that, contrary to the impression of the respondent court, there is not even an incorporation by reference of the evidence and arguments of the parties, assuming this is permitted. No less importantly, again assuming arguendo that such reference is allowed and has been made, there is no immediate accessibility to the incorporated matters so as to insure their convenient examination by the reviewing court. In Francisco v. Permskul, 11 which is the latest decision of the Court on the issue now before us, we categorically required:

. . . Although only incorporated by reference in the memorandum decision of the regional trial court, Judge Balita's decision was nevertheless available to the Court of Appeals. It is this circumstance, or even happenstance, if you will, that has validated the memorandum decision challenged in this case and spared it from constitutional infirmity.

That same circumstance is what will move us now to lay down the following requirement, as a condition for the proper application of Section 40 of BP Blg. 129. The memorandum decision, to be valid, cannot incorporate the findings of fact and the conclusions of law of the lower court only byremote reference, which is to say that the challenged decision is not easily and immediately available to the person reading the memorandum decision. For the incorporation by reference to be allowed, it must provide for direct access to the facts and the law being adopted, which must be contained in a statement attached to the said decision. In other words, the memorandum decision authorized under Section 40 of BP Blg. 129 should actually embody the findings of fact and conclusions of law of the lower court in an annex attached to and made an indispensable part of the decision.

It is expected that this requirement will allay the suspicion that no study was made of the decision of the lower court and that its decision was merely affirmed without a proper examination of the facts and the law on which it was based. The proximity at least of the annexed statement should suggest that such an examination has been undertaken. It is, of course, also understood that the decision being adopted should, to begin with, comply with Article VIII, Section 14 as no amount of incorporation or adoption will rectify its violation.

In Escober, the Court observed that the flawed decision "should have been remanded to the court a quo for the rendition of a new judgment" but decided nevertheless to decide the case directly, the records being already before it and in deference to the right of the accused to a speedy trial as guaranteed by the Bill of Rights. However, we are not so disposed in the case now before us.

It is not the normal function of this Court to rule on a demurrer to the evidence in the first instance; our task comes later, to review the ruling of the trial court after it is examined by the Court of Appeals and, when proper, its decision is elevated to us. In the present case, we find that the respondent court did not have an adequate basis for such examination because of the insufficiency of the challenged order. It must also be noted that we deal here only with property rights and, although we do not mean to minimize them, they do not require the same urgent action we took in Escober, which involved the very life of the accused. All things considered, we feel that the proper step is to remand this case to the court a quo for a revision of the challenged order in accordance with the requirements of the Constitution.

Review by the Court of the other issues raised, most of which are factual, e.g., the allegation of default in the payment of the loan, the existence of a second loan, the nature of the newspapers where the notices of the sale were published, the authority of the person consenting to the postponement of the sale, etc., is impractical and unnecessary at this time. These matters should be discussed in detail in the revised order to be made by the trial court so that the higher courts will know what they are reviewing when the case is appealed.

In one case, 12 this Court, exasperated over the inordinate length of a decision rife with irrelevant details, castigated the trial judge for his "extraordinary verbiage." Kilometric decisions without much substance must be avoided, to be sure, but the other extreme, where substance is also lost in the wish to be brief, is no less unacceptable either. The ideal decision is that which, with welcome economy of words, arrives at the factual findings, reaches the legal conclusions, renders its ruling and, having done so, ends.

WHEREFORE, the challenged decision of the Court of Appeals is SET ASIDE for lack of basis. This case is REMANDED to the Regional Trial Court of Bulacan, Branch 10, for revision, within 30 days from notice, of the Order of June 6, 1986, conformably to the requirements of Article VIII, Section 14, of the Constitution, subject to the appeal thereof, if desired, in accordance with law. It is so ordered.

Narvasa, C.J., Griño-Aquino and Medialdea, JJ., concur.

Footnotes

1 1987 Constitution, Article VIII, Section 14.

2 Rollo, p. 9.

3 Ibid., p. 43.

4 Mendoza v. Court of First Instance of Quezon, 51 SCRA 369 at 375.

5 186 SCRA 1 at 5.

6 Nepomuceno v. Commission on Elections, 126 SCRA 472 at 478.

7 157 SCRA 541 at 555.

8 147 SCRA 183 at 194.

9 Sec. 18. Appeals. — . . .

All cases of the Court of Agrarian Relations now pending before the Court of Appeals shall remain in the Divisions to which they have been assigned, and shall be with sixty (60) days from the effectivity of this Decree. Provided, however, That if the decision or order be an affirmance in toto of the dispositive conclusion of the judgment appealed from, then the Court of Appeals may, instead of rendering an extended opinion, indicate clearly the trial court's findings of fact and pronouncements of law which have been adopted as basis for theaffirmance. . . .

10 Sec. 40. Form of decision in appealed cases. — Every decision or final resolution of a court in appealed cases shall clearly and distinctly state the findings of fact and the conclusions of law on which it is based which may be contained in the decision or final resolution itself, or adopted by reference from those set forth in the decision, order or resolution appealed therefrom.

11 173 SCRA 335.

12 People v. Molina, 184 SCRA 597.

The Lawphil Project - Arellano Law Foundation

THIRD DIVISION

[G.R. No. 95694.  October 9, 1997]

VICENTE VILLLAFLOR, substituted by his heirs, petitioner, vs. COURT OF APPEALS and NASIPIT LUMBER CO., INC., respondents.

D E C I S I O NPANGANIBAN ,J.:

In this rather factually complicated case, the Court reiterates the binding force and effect of findings of specialized administrative agencies as well as those of trial courts when affirmed by the Court of Appeals; rejects petitioner’s theory of simulation of contracts; and passes upon the qualifications of private respondent corporation to acquire disposable public agricultural lands prior to the effectivity of the 1973 Constitution.

The Case

Before us is a petition for review on certiorari seeking the reversal of the Decision[1] of the Court of Appeals, dated September 27, 1990, in C.A. G.R. CV No. 09062, affirming the dismissal by the trial court of Petitioner Vicente Villaflor’s complaint against Private Respondent Nasipit Lumber Co., Inc.  The disposition of both the trial and the appellate courts are quoted in the statement of facts below.

The Facts

The facts of this case, as narrated in detail by Respondent Court of Appeals, are as follows:[2]

“The evidence, testimonial and documentary, presented during the trial show that on January 16, 1940, Cirilo Piencenaves, in a Deed of Absolute Sale (exh. A), sold to [petitioner], a parcel of agricultural land containing an area of 50 hectares,[3] more or less, and particularly described and bounded as follows:

‘A certain parcel of agricultural land planted to abaca with visible concrete monuments marking the boundaries and bounded on the NORTH by Public Land now Private Deeds on the East by Serafin Villaflor, on the SOUTH by Public Land; and on the West by land claimed by H. Patete, containing an area of 60 hectares more or less, now under Tax Dec. 29451 in the (sic) of said Vicente Villaflor, the whole parcel of which this particular parcel is only a part, is assessed at P22,550.00 under the above said Tax Dec. Number.’

This deed states:

‘That the above described land was sold to the said VICENTE VILLAFLOR, xxx on June 22, 1937, but no formal document was then executed, and since then until the present time, the said Vicente Villaflor has been in possession and occupation of (the same); (and)

That the above described property was before the sale, of my exclusive property having inherited from my long dead parents and my ownership to it and that of my [sic] lasted for more than fifty (50) years, possessing and occupying same peacefully, publicly and continuously without interruption for that length of time.’

Also on January 16, 1940, Claudio Otero, in a Deed of Absolute Sale (exh. C) sold to Villaflor a parcel of agricultural land, containing an area of 24 hectares, more or less, and particularly described and bounded as follows:

‘A certain land planted to corn with visible concrete measurements marking the boundaries and bounded on the North by Public Land and Tungao Creek; on the East by Agusan River; on the South by Serafin Villaflor and Cirilo Piencenaves; and on the West by land of Fermin Bacobo containing an area of 24 hectares more or less, under Tax Declaration No. 29451 in the name already of Vicente Villaflor, the whole parcel of which this particular land is only a part, is assessed at P22,550.00 under the above said Tax Declaration No. 29451.’

This deed states:

‘That the above described land was sold to the said VICENTE VILLAFLOR, xxx on June 22, 1937, but no sound document was then executed, however since then and until the present time, the said Vicente Villaflor has been in open and continuous possession and occupation of said land; (and)

That the above described land was before the sale, my own exclusive property, being inherited from my deceased parents, and my ownership to it and that of my

predecessors lasted more than fifty (50) years, possessing and occupying the same, peacefully, openly and continuously without interruption for that length of time.’

Likewise on January 16, 1940, Hermogenes Patete, in a Deed of Absolute Sale (exh. D), sold to Villaflor, a parcel of agricultural land, containing an area of 20 hectares, more or less, and particularly described and bounded as follows:

‘A certain parcel of agricultural land planted to abaca and corn with visible concrete monuments marking the boundaries and bounded on the North by Public Land area-private Road; on the East by land claimed by Cirilo Piencenaves; on the South by Public Land containing an area of 20 hectares more or less, now under Tax Declaration No. 29451 in the name of Vicente Villaflor the whole parcel of which this particular parcel, is assessed at P22,550.00 for purposes of taxation under the above said Tax Declaration No. 29451.’

This deed states:

‘xxx (O)n June 22, 1937 but the formal document was then executed, and since then until the present time, the said VICENTE VILLAFLOR has been in continuous and open possession and occupation of the same; (and)

That  the above described property was before the sale, my own and exclusive property, being inherited from my deceased parents and my ownership to it and that of my predecessors lasted more than fifty (50) years, possessing  and occupying same, peacefully, openly and continuously without interruption for that length of time.’

On February 15, 1940, Fermin Bocobo, in a Deed of Absolute Sale (exh. B), sold to Villaflor, a parcel of agricultural land, containing an area of 18 hectares, more or less, and particularly described and bounded as follows:

‘A certain parcel of agricultural land planted with abaca with visible part marking the corners and bounded on the North by the corners and bounded on the North by Public Land; on the East by Cirilo Piencenaves; on the South by Hermogenes Patete and West by Public Land,  containing an area of 18 hectares more or less now under Tax Declaration No. 29451 in the name of Vicente Villaflor.  The whole parcel of which this particular parcel is only a part is assessed as P22,550.00 for purposes of taxation under the above said Tax Declaration Number (Deed of Absolute Sale executed by Fermin Bocobo date Feb. 15, 1940).  This document was annotated in Registry of Deeds on February 16, 1940).’

This deed states:

‘That the above described property was before the sale of my own exclusive property, being inherited from my deceased parents, and my ownership to it and that of my predecessors lasted more than fifty (50) years, possessing and occupying the same peacefully, openly and continuously without interruption for that length of time.’

On November 8, 1946, Villaflor, in a Lease Agreement (exh. Q), [4] leased to Nasipit Lumber Co., Inc. a parcel of land, containing an area of two (2) hectares, together with all the improvements existing thereon, for a period of five (5) years from June 1, 1946 at a rental of P200.00 per annum ‘to cover the annual rental of house and building sites for thirty three (33) houses or buildings.’  This agreement also provides:[5]

‘3.           During the term of this lease, the Lessee is authorized and empowered to build and construct additional houses in addition to the 33 houses or buildings mentioned in the next preceding paragraph, provided however, that for every additional house or building constructed the Lessee shall pay unto the Lessor an amount of fifty centavos (¢50) per month for every house or building.  The Lessee is empowered and authorized by the Lessor to sublot (sic) the premises hereby leased or assign the same or any portion of the land hereby  leased to any person, firm and corporation; (and)

4.            The Lessee is hereby authorized to make any construction and/or improvement on the premises hereby leased as he may deem necessary and proper thereon, provided however, that any and all such improvements shall become the property of the Lessor upon the termination of this lease without obligation on the part of the latter to reimburse the Lessee for expenses incurred in the construction of the same.’

Villaflor claimed having discovered that after the execution of the lease agreement, that Nasipit Lumber ‘in bad faith x x x surreptitiously grabbed and occupied a big portion of plaintiff’s property x x x’;  that after a confrontation with the corporate’s (sic) field manager, the latter, in a letter dated December 3, 1973 (exh. R), [6] stated recalling having ‘made some sort of agreement for the occupancy (of the property at Acacia, San Mateo), but I no longer recall the details and I had forgotten whether or not we did occupy your land.  But if, as you say, we did occupy it, then (he is ) sure that the company is obligated to pay the rental.’

On July 7, 1948, in an ‘Agreement to Sell’ (exh. 2), Villaflor conveyed to Nasipit Lumber, two (2) parcels of land xxx described as follows: [7]

‘PARCEL ONE

Bounded on the North by Public Land and Tungao Creek; on the East by Agusan River and Serafin Villaflor; on the South by Public Land, on the West by Public Land.  Improvements thereon consist of abaca, fruit trees, coconuts and thirty houses of mixed materials belonging to the Nasipit Lumber Company.  Divided into Lot Nos. 5412, 5413, 5488, 5490, 5491, 5492, 5850, 5849, 5860, 5855, 5851, 5854, 5855, 5859, 5858, 5857, 5853, and 5852.  Boundaries of this parcel of land are marked by concrete monuments of the Bureau of Lands.  Containing an area of 112,000 hectares.  Assessed at P17,160.00 according to Tax Declaration No. V-315 dated April 14, 1946.

PARCEL TWO

Bounded on the North by Pagudasan Creek; on the East by Agusan River; on the South by Tungao Creek; on the West by Public Land.  Containing an area of 48,000 hectares more or less.  Divided into Lot Nos. 5411, 5410, 5409, and 5399.  Improvements 100 coconut trees, productive, and 300 cacao trees.  Boundaries of said land are marked by concrete monuments of the Bureau pf (sic) Lands.  Assessed value  -- P6,290.00 according to Tax No. 317, April 14, 1946.’

This Agreement to Sell provides:

‘3.           That beginning today, the Party of the Second Part shall continue to occupy the property not anymore in concept of lessee but as prospective owners, it being the sense of the parties hereto that the Party of the Second Part shall not in any manner be under any obligation to make any compensation to the Party of the First Part, for the use, and occupation of the property herein before described in such concept of prospective owner, and it likewise being the sense of the parties hereto to terminate as they do hereby terminate, effective on the date of this present instrument, the Contract of Lease, otherwise known as Doc. No. 420, Page No. 36, Book No. II, Series of 1946 of Notary Public Gabriel R. Banaag, of the Province of Agusan.

4.            That the Party of the Second Part has bound as it does hereby bind itself, its executors and administrators, to pay unto the party of the First Part the sum of Five Thousand Pesos (P5,000.00), Philippine Currency, upon presentation by the latter to the former of satisfactory evidence that:

(a)   The Bureau of Lands will not have any objection to the obtainment by the Party of the First Part of a Certificate of Torrens Title in his favor, either thru ordinary land registration proceedings or thru administrative means procedure.

(b)   That there is no other private claimant to the properties hereinbefore described.

5.            That the Party of the First Part has bound as he does hereby bind to undertake immediately after the execution of these presents to secure and obtain, or cause to be secured and obtained, a Certificate of Torrens Title in his favor over the properties described on Page (One) hereof, and after obtainment of such Certificate of Torrens Title, the said Party of the First Part shall execute a (D)eed of Absolute Sale unto and in favor of the Party of the Second Part, its executors, administrators and assigns, it being the sense of the parties that the Party of the Second Part upon delivery to it of such deed of absolute sale, shall pay unto the Party of the First Part in cash, the sum of Twelve Thousand (P12,000.00) Pesos in Philippine Currency, provided, however, that the Party of the First Part, shall be reimbursed by the Party of the Second Part with one half of the expenses incurred by the Party of the First Part for survey and attorney’s fees; and other incidental expenses not exceeding P300.00.’

On December 2, 1948, Villaflor filed Sales Application No. V-807 [8] (exh. 1) with the Bureau of Lands, Manila, ‘to purchase under the provisions of Chapter V, XI or IX of Commonwealth Act. No. 141 (The Public Lands Act), as amended, the tract of public lands x x x and described as follows:  ‘North by Public Land; East by Agusan River and Serafin Villaflor; South by Public Land and West by public land (Lot Nos. 5379, 5489, 5412, 5490, 5491, 5492, 5849, 5850, 5851, 5413, 5488, 5489, 5852, 5853, 5854, 5855, 5856, 5857, 5858, 5859 and 5860 x x x  containing an area of 140 hectares xxx.’  Paragraph 6 of the Application, states: ‘I understand that this application conveys no right to occupy the land prior to its approval, and I recognized (sic) that the land covered by the same is of public domain and any and all rights I may have with respect thereto by virtue of continuous occupation and cultivation are hereby relinquished to the Government.’[9] (exh. 1-D)

On December 7, 1948, Villaflor and Nasipit Lumber executed an ‘Agreement’ (exh 3).[10] This contract provides:

‘1.           That the First Party is the possessor since 1930 of two (2) parcels of land situated in sitio Tungao, Barrio of San Mateo, Municipality of Butuan, Province of Agusan;

2.            That the first parcel of land abovementioned and described in Plan PLS-97 filed in the office of the Bureau of Lands is made up of Lots Nos. 5412, 5413, 5488, 5490, 5491, 5492, 5849, 5850, 5851, 5852, 5853, 5854, 5855, 5856, 5857, 5858, 5859 and 5860 and the second parcel of land is made of Lots Nos. 5399, 5409, 5410 and 5411;

3.            That on July 7, 1948, a contract of Agreement to Sell was executed between the contracting parties herein, covering the said two parcels of land, copy of said Agreement to Sell is hereto attached marked as Annex “A” and made an integral part

of this document.  The parties hereto agree that the said Agreement to Sell be maintained in full force and effect with all its terms and conditions of this present agreement and in no way be considered as modified.

4.            That paragraph 4 of the Contract of Agreement to Sell, marked as annex, “A” stipulates as follows:

‘Par. 4.        That the Party of the Second Part has bound as it does hereby bind itself, its executors and administrators, to pay unto the Party of the First Part of the sum of FIVE THOUSAND PESOS (P5,000.00) Philippine Currency, upon presentation by the latter to the former of satisfactory evidence that:

a)    The Bureau of Lands will have any objection to the obtainment by Party of the First Part of a favor, either thru ordinary land registration proceedings or thru administrative means and procedure.

b)    That there is no other private claimant to the properties hereinabove described.’

That the First Party has on December 2, 1948, submitted to the Bureau of Lands, a Sales Application for the twenty-two (22) lots comprising the two abovementioned parcels of land, the said Sales Application was registered in the said Bureau under No. V-807;

6.            That in reply to the request made by the First Party to the Bureau of Lands, in connection with the Sales Application No. V-807, the latter informed the former that action on his request will be expedited, as per letter of the Chief, Public Land Division, dated December 2, 1948, copy of which is hereto attached marked as annex ‘B’ and made an integral part of this agreement:

7.            That for and in consideration of the premises above stated and the amount of TWENTY FOUR THOUSAND (P24,000.00) PESOS  that the Second Party shall pay to the First Party, by these presents, the First Party hereby sells, transfers and conveys unto the Second Party, its successors and assigns, his right, interest and participation under an(d) by virtue of the Sales Application No. V-807, which he has or may have in the lots mentioned in said Sales Application No. V-807;

8.            That the amount of TWENTY FOUR THOUSAND (P24,000.00) PESOS, shall be paid by the Second Party to the First Party, as follows:

a)    The amount of SEVEN THOUSAND (P7,000.00) PESOS, has already been paid by the Second Party to the First Party upon the execution of the Agreement to Sell, on July 7, 1948;

b)    The amount of FIVE THOUSAND (P5,000.00) PESOS shall be paid upon the signing of this present agreement; and

c)    The balance of TWELVE THOUSAND (P12,000.00) PESOS, shall be paid upon the execution by the First Party of the Absolute Deed of Sale of the two parcels of land in question in favor of the Second Party, and upon delivery to the Second Party of the Certificate of Ownership of the said two parcels of land.

9.            It is specially understood that the mortgage constituted by the First Party in favor of the Second Party, as stated in the said contract of Agreement to Sell dated July 7, 1948, shall cover not only the amount of SEVEN THOUSAND (P7,000.00) PESOS as specified in said document, but shall also cover the amount of FIVE THOUSAND (P5,000.00) PESOS to be paid as stipulated in paragraph 8, sub-paragraph (b) of this present agreement, if the First Party should fail to comply with the obligations as provided for in paragraphs 2, 4, and 5 of the Agreement to Sell;

10.          It is further agreed that the First Party obligates himself to sign, execute and deliver to and in favor of the Second Party, its successors and assigns, at anytime upon demand by the Second Party such other instruments as may be necessary in order to give full effect to this present agreement;’

In the Report dated December 31, 1949 by the public land inspector, District Land Office, Bureau of Lands, in Butuan, the report contains an Indorsement of the aforesaid District Land Officer recommending rejection of the Sales Application of Villaflor for having leased the property to another even before he had acquired transmissible rights thereto.

In a letter of Villaflor dated January 23, 1950, addressed to the Bureau of Lands, he informed the Bureau Director that he was already occupying the property when the Bureau’s Agusan River Valley Subdivision Project was inaugurated, that the property was formerly claimed as private properties (sic), and that therefore, the property was segregated or excluded from disposition because of the claim of private ownership.  In a letter of Nasipit Lumber dated February 22, 1950 (exh. X) [11] addressed to the Director of Lands, the corporation informed the Bureau that it recognized Villaflor as the real owner, claimant and occupant of the land; that since June 1946, Villaflor leased two (2) hectares inside the land to the company; that it has no other interest on the land; and that the Sales Application of Villaflor should be given favorable consideration.

xxx                                                                        xxx                                                                                    xxx

On July 24, 1950, the scheduled date of auction of the property covered by the Sales Application, Nasipit Lumber offered the highest bid of P41.00 per hectare, but since an applicant under CA 141, is allowed to equal the bid of the highest bidder, Villaflor tendered an equal bid, deposited the equivalent of 10% of the bid price and then paid the assessment in full.

xxx                                                                        xxx                                                                                    xxx

On August 16, 1950, Villaflor executed a document, denominated as a ‘Deed of Relinquishment of Rights’ (exh. N),[12] pertinent portion of which reads:

‘5. That in view of my present business in Manila, and my change in residence from Butuan, Agusan to the City of Manila, I cannot, therefore, develope (sic) or cultivate the land applied for as projected before;

6. That the Nasipit Lumber Company, Inc., a corporation duly organized xxx is very much interested in acquiring the land covered by the aforecited application xxx;

7. That I believe the said company is qualified to acquire public land, and has the means to develop (sic) the above-mentioned land;

xxx                                                                        xxx                                                                                    xxx

WHEREFORE, and in consideration of the amount of FIVE THOUSAND PESOS (P5,000.00) to be reimbursed to me by the aforementioned Nasipit Lumber Company, Inc., after its receipt of the order of award, the said amount representing part of the purchase price of the land aforesaid, the value of the improvements I introduced thereon, and the expenses incurred in the publication of the Notice of Sale, I, the applicant, Vicente J. Villaflor, hereby voluntarily renounce and relinquish whatever rights to, and interests I have in the land covered by my above-mentioned application in favor of the Nasipit Lumber Company, Inc.’

Also on August 16, 1950, Nasipit Lumber filed a Sales Application over the two (2) parcels of land, covering an area of 140 hectares, more or less.  This application was also numbered V-807 (exh. Y).

On August 17, 1950 the Director of Lands issued an ‘Order of Award’ [13] in favor of Nasipit Lumber Company, Inc., pertinent portion of  which reads:

‘4. That at the auction sale of the land held on July 24, 1950 the highest bid received was that of Nasipit Lumber Company, Inc. which offered P41.00 per hectare

or P5,740.00 for the whole tract, which bid was equaled by applicant Vicente J. Villaflor, who deposited the amount of P574.00 under Official Receipt No. B-1373826 dated July 24, 1950 which is equivalent to 10% of the bid.  Subsequently, the said xxx Villaflor paid the amount of P5,160.00 in full payment of the purchase price of the above-mentioned land and for some reasons stated in an instrument of relinquishment dated August 16, 1950, he (Vicente J. Villaflor) relinquished his rights to and interest in the said land in favor of the Nasipit Lumber Company, Inc. who filed the corresponding application therefore.

In view of the foregoing, and it appearing that the proceedings had xxx were in accordance with law and in [sic] existing regulations, the land covered thereby is hereby awarded to Nasipit Lumber Company, Inc. at P41.00 per hectare or P5,740.00 for the whole tract.

This application should be entered in the record of this Office as Sales Entry No. V-407.’

It is Villaflor’s claim that he only learned of the Order of Award on January 16, 1974, or after his arrival to the Philippines, coming from Indonesia, where he stayed for more than ten (10) years; that he went to Butuan City in the latter part of 1973 upon the call of his brother Serafin Villaflor, who was then sick and learned that Nasipit Lumber (had) failed and refused to pay the agreed rentals, although his brother was able to collect during the early years; and that Serafin died three days after his (Vicente’s) arrival, and so no accounting of the rentals could be made; that on November 27, 1973, Villaflor wrote a letter to Mr. G.E.C. Mears of Nasipit Lumber, reminding him of their verbal agreement in 1955 xxx that Mr. Mears in a Reply dated December 3, 1973, appears to have referred the matter to Mr. Noriega, the corporate general manager, but the new set of corporate officers refused to recognize (Villaflor’s) claim, for Mr. Florencio Tamesis, the general manager of Nasipit Lumber, in a letter dated February 19, 1974, denied Villaflor’s itemized claim dated January 5, 1974 (exh. V) to be without valid and legal basis.  In that 5th  January, 1974 letter, Villaflor claimed the total amount of P427,000.00 x x x.

In a formal protest dated January 31, 1974[14] which Villaflor filed with the Bureau of Lands, he protested the Sales Application of Nasipit Lumber, claiming that the company has not paid him P5,000.00 as provided in the Deed of Relinquishment of Rights dated August 16, 1950.

xxx                                                                        xxx                                                                                    xxx

x x x (T)hat in a Decision dated August 8, 1977 (exh. 8), the Director of Lands found that the payment of the amount of P5,000.00 in the Deed xxx and the consideration in the Agreement to Sell were duly proven, and ordered the dismissal of Villaflor’s protest and gave due course to the Sales Application of Nasipit Lumber.  Pertinent portion of the Decision penned by Director of Lands, Ramon Casanova, in the Matter of SP No. V-807 (C-V-407) xxx reads:

‘xxx                                                                       xxx                                                                                    xxx

During the proceedings, Villaflor presented another claim entirely different from his previous claim -- this time, for recovery of rentals in arrears arising from a supposed contract of lease by Villaflor as lessor in favor of Nasipit as lessee, and indemnity for damages supposedly caused improvements on his other property xxx in the staggering amount of Seventeen Million (P17,000,000.00) Pesos.  Earlier, he had also demanded from NASIPIT xxx (P427,000.00) xxx also as indemnity for damages to improvements supposedly caused by NASIPIT on his other real property as well as for reimbursement of realty taxes allegedly paid by him thereon.

xxx                                                                        xxx                                                                                    xxx

It would seem that xxx Villaflor has sought to inject so many collaterals, if not extraneous claims, into this case.  It is the considered opinion of this Office that any claim not within the sphere or scope of its adjudicatory authority as an administrative as well as quasi-judicial body or any issue which seeks to delve into the merits of incidents clearly outside of the administrative competence of this Office to decide may not be entertained.

There is no merit in the contention of Villaflor that owing to Nasipit’s failure to pay the amount of xxx (P5,000.00) xxx (assuming that Nasipit had failed) the deed of relinquishment became null and void for lack of consideration. xxxx.

xxx                                                                        xxx                                                                                    xxx

x x x The records clearly show, however, that since the execution of the deed of relinquishment xxx Villaflor has always considered and recognized NASIPIT as having the juridical personality to acquire public lands for agricultural purposes.  xxxx.

xxx                                                                        xxx                                                                                    xxx

Even this Office had not failed to recognize the juridical personality of NASIPIT to apply for the purchase of public lands xxx when it awarded to it the land so relinquished by Villaflor (Order of Award dated August 17, 1950) and accepted its application therefor.  At any rate, the question whether an applicant is qualified to apply for the acquisition of public lands is a matter between the applicant and this Office to decide and which a third party like Villaflor has no personality to question beyond merely calling the attention of this Office thereto.

xxx                                                                        xxx                                                                                    xxx

Villaflor offered no evidence to support his claim of non-payment beyond his own self-serving assertions and expressions that he had not been paid said amount.  As protestant in this case, he has the affirmative of the issue.  He is obliged to prove his allegations, otherwise his action will fail.  For, it is a well settled principle (‘) that if plaintiff upon whom rests the burden of proving his cause of action fails to show in a satisfactory manner the facts upon which he bases his claim, the defendant is under no obligation to prove his exceptions or special defenses (Belen vs. Belen, 13 Phil. 202; Mendoza vs. Fulgencio, 8 Phil. 243).

xxx                                                                        xxx                                                                                    xxx

Consequently, Villaflor’s claim that he had not been paid must perforce fail.

On the other hand, there are strong and compelling reasons to presume that Villaflor had already been paid the amount of Five Thousand (P5,000.00) Pesos.

First, xxx What is surprising, however, is not so much his claims consisting of gigantic amounts as his having forgotten to adduce evidence to prove his claim of non-payment of the Five Thousand (P5,000.00) Pesos  during the investigation proceedings when he had all the time and opportunity to do so.  xxx The fact that he did not adduce or even attempt to adduce evidence in support thereof shows either that he had no evidence to offer xxx that NASIPIT had already paid him in fact.  What is worse is that Villaflor did not even bother to command payment, orally or in writing, of the Five Thousand (P5,000.00) Pesos which was supposed to be due him since August 17, 1950, the date when the order of award was issued to Nasipit, and when his cause of action to recover payment had accrued.  The fact that he only made a command (sic) for payment on January 31, 1974, when he filed his protest or twenty-four (24) years later is immediately nugatory of his claim for non-payment.

But Villaflor maintains that he had no knowledge or notice that the order of award had already been issued to NASIPIT as he had gone to Indonesia and he had been absent from the Philippines during all those twenty-four (24) years.  This of course taxes credulity. xxx.

Second, it should be understood that the condition that NASIPIT should reimburse Villaflor the amount of Five Thousand (P5,000.00) Pesos upon its receipt of the order of award was fulfilled as said award was issued to NASIPIT on August 17, 1950.  The said deed of relinquishment was prepared and notarized in Manila with Villaflor and NASIPIT signing the instrument also in Manila on August 16, 1950 (p.77, (sic)).  The following day or barely a day after that, or on August 17, 1950, the order of award was issued by this Office to NASIPIT also in Manila.  Now, considering that Villaflor is presumed to be more assiduous in following up with the Bureau of Lands the expeditious issuance of the order of award as the payment of the Five Thousand (P5,000.00) Pesos (consideration) would depend on the issuance of said order to award NASIPIT, would it not be reasonable to believe that Villaflor was at hand when the award was issued to NASIPIT on August 17, 1950, or barely a day which (sic) he executed the deed of relinquishment on August 16, 1950, in Manila?  xxx.

Third, on the other hand, NASIPIT has in his possession a sort of “order” upon itself -- (the deed of relinquishment wherein he (sic) obligated itself to reimburse or pay Villaflor the xxx consideration of the relinquishment upon its receipt of the order of award) for the payment of the aforesaid amount the moment the order of award is issued to it.  It is reasonable to presume that NASIPIT has paid the Five Thousand (P5,000.00) Pesos to Villaflor.

‘A person in possession of an order on himself for the payment of money, or the delivery of anything, has paid the money or delivered the thing accordingly.  (Section 5(k) B-131-Revised Rules of Court.’

It should be noted that NASIPIT did not produce direct evidence as proof of its payment of the Five Thousand (P5,000.00) Pesos to Villaflor.  Nasipit’s explanation on this point is found satisfactory.

‘x x x (I)t was virtually impossible for NASIPIT, after the lapse of the intervening 24 years, to be able to cope up with all the records necessary to show that the consideration for the deed of relinquishment had been fully paid.  To expect NASIPIT to keep intact all records pertinent to the transaction for the whole quarter of a century would be to require what even the law does not.  Indeed, even the applicable law itself (Sec. 337, National Internal Revenue Code) requires that all records of corporations be preserved for only a maximum of five years.

NASIPIT may well have added that at any rate while ‘there are transactions where the proper evidence is impossible or extremely difficult to produce after the lapse of time xxx the law creates presumptions of regularity in favor of such transactions (20 Am. Jur. 232) so that when the basic fact is established in an action the existence of the presumed fact must be assumed by force of law. (Rule 13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).

Anent Villaflor’s claim that the 140-hectare land relinquished and awarded to NASIPIT is his private property, little (need) be said.  xxxx The tracks of land referred to therein are not identical to the lands awarded to NASIPIT.  Even in the assumption that the lands mentioned in the deeds of transfer are the same as the 140-hectare area awarded to NASIPIT, their purchase by Villaflor (or) the latter’s occupation of the same did not change the character of the land from that of public land to a private property.  The provision of the law is specific that public lands can only be acquired in the manner provided for therein and not otherwise (Sec. 11, C.A. No. 141, as amended).  The records show that Villaflor had applied for the purchase of the lands in question with this Office (Sales Application No. V-807) on December 2, 1948. xxxx There is a condition in the sales application signed by Villaflor to the effect that he recognizes that the land covered by the same is of public domain and any and all rights he may have with respect thereto by virtue of continuous occupation and cultivation are relinquished to the Government (paragraph 6, Sales Application No. V-807 xxx) of which Villaflor is very much aware.  It also appears that Villaflor had paid for the publication fees appurtenant to the sale of the land. He participated in the public auction where he was declared the successful bidder.  He had fully paid the purchase prive (sic) thereof (sic).   It would be a (sic) height of absurdity for Villaflor to be buying that which is owned by him if his claim of private ownership thereof is to be believed.  The most that can be said is that his possession was merely that of a sales applicant to when it had not been awarded because he relinquished his interest therein in favor of NASIPIT who (sic) filed a sales application therefor.

xxx                                                                        xxx                                                                                    xxx

x x x During the investigation proceedings, Villaflor presented as his Exhibit ‘(sic)’ (which NASIPIT adopted as its own exhibit and had it marked in evidence as Exhibit ‘1’) a duly notarized ‘agreement to Sell’ dated July 7, 1948, by virtue of which Villaflor undertook to sell to Nasipit the tracts of land mentioned therein, for a consideration of Twenty-Four Thousand (P24,000.00) Pesos.  Said tracts of land have been verified to be identical to the parcels of land formerly applied for by Villaflor and which the latter had relinquished in favor of NASIPIT under a deed of relinquishment executed by him on August 16, 1950.  In another document executed on December 7, 1948 xxx Villaflor as ‘FIRST PARTY’ and NASIPIT as ‘SECOND

PARTY’ confirmed the ‘Agreement to Sell’ of July 7, 1948, which was maintained ‘in full force and effect with all its terms and conditions x x x’ (Exh. ‘38-A’); and that ‘for and in consideration of xxx TWENTY FOUR THOUSAND (P24,000.00) PESOS that the Second Party shall pay to the First Party xxx the First Party hereby sells, transfers and conveys unto the Second Party xxx his right interest and participation under and by virtue of the Sales Application No. V-807’ and, in its paragraph 8, it made stipulations as to when part of the said consideration xxx was paid and when the balance was to be paid, to wit:

‘a) the amount of SEVEN THOUSAND xxx PESOS has already been     paid by the Second Party to the First Party upon the execution of the Agreement to Sell, on July 17, 1948;

b) the amount of FIVE THOUSAND xxx PESOS shall be paid upon the signing of this present agreement; and

c) the amount of TWELVE THOUSAND xxx PESOS, shall be paid upon the execution by the First Party of the Absolute Sale of the Two parcels of land in question in favor of the Second Party of the Certificate of Ownership of the said two parcels of land.’ (Exh. 38-B). (Emphasis ours)

It is thus clear from this subsequent document marked Exhibit ’38 ANALCO’ that of the consideration of the ‘Agreement to Sell’ dated July7, 1948, involving the 140-hectare area relinquished by Villaflor in favor of NASIPIT, in the amount of Twenty-Four Thousand (P24,000.00) Pesos:

(1)          the amount of Seven Thousand (P7,000.00) Pesos was already paid upon the execution of the ‘Agreement to Sell’ on July 7, 1948, receipt of which incidentally was admitted by Villaflor in the document of December 7, 1948;

(2)          the amount of Five Thousand (P5,000.00) Pesos was paid when said document was signed by Vicente J. Villaflor as the First Party and Nasipit thru its President, as the Second Party, on December 7, 1948; and

(3)          the balance of Twelve Thousand (P12,000.00) Pesos to be paid upon the execution by the First Party of the Absolute Deed of Sale of the two parcels of land in favor of the Second Party, and upon delivery to the Second Party of the Certificate of Ownership of the said two parcels of land.

Villaflor contends that NASIPIT could not have paid Villaflor the balance of Twelve Thousand (P12,000.00) Pesos x x x consideration in the Agreement to Sell will only be paid to applicant-assignor (referring to Villaflor) upon obtaining a Torrens Title in

his favor over the 140-hectare of land applied for and upon execution by him of a Deed of Absolute Sale in favor of Nasipit Lumber Company, Inc. x x x.  Inasmuch as applicant-assignor was not able to obtain a Torrens Title over the land in question he could not execute an absolute Deed of (sic) Nasipit Lumber Co., Inc.  Hence, the Agreement to Sell was not carried out and no Twelve Thousand (P12,000.00) Pesos was overpaid either to the applicant-assignor, much less to Howard J. Nell Company.  (See MEMORANDUM FOR THE APPLICANT-ASSIGNOR, dated January 5, 1977).  xxx.

xxx Villaflor did not adduce evidence in support of his claim that he had not been paid the xxx (P12,000.00) xxx consideration of the Agreement to Sell dated July 7, 1948 (Exh. ‘38 NALCO’) beyond his mere uncorroborated assertions.  On the other hand, there is strong evidence to show that said Twelve Thousand (P12,000.00) Pesos had been paid by (private respondent) to Edward J. Nell Company by virtue of the Deed of Assignment of Credit executed by Villaflor (Exh. ‘41 NALCO’) for the credit of the latter.

Atty. Gabriel Banaag, resident counsel of NASIPIT who is in a position to know the facts, testified for NASIPIT.  He described that it was he who notarized the ‘Agreement to Sell‘ (Exh. ‘F’); that he knew about the execution of the document of December 7, 1948 (Exh. ‘38’) confirming the said ‘Agreement to Sell’ having been previously consulted thereon by Jose Fernandez, who signed said document on behalf of NASIPIT xxx that subsequently, in January 1949, Villaflor executed a Deed of Assignment of credit in favor of Edward J. Nell Company (Exh. ‘41 NALCO’) whereby Villaflor ceded to the latter his receivable for NASIPIT corresponding to the remaining balance in the amount of Twelve Thousand xxx Pesos  of the total consideration xxx stipulated in both the ‘Agreement to Sell’ (Exh. ‘F’) and the document dated December 7, 1948 (Exh. ‘39’); xxx.  He further testified that the said assignment of credit was communicated to (private respondent) under cover letter dated January 24, 1949 (Exh. ‘41-A’) and not long thereafter, by virtue of the said assignment of credit, (private respondent) paid the balance of Twelve Thousand xxx due to Villaflor to Edward J. Nell Company xxx. Atty. Banaag’s aforesaid testimony stand unrebutted; hence, must be given full weight and credit. xxx Villaflor and his counsel were present when Atty. Banaag’s foregoing testimony was given.  Yet, Villaflor did not demur, nor did he rebut the same, despite having been accorded full opportunity to do so.

xxx                                                                        xxx                                                                                    xxx

Having found that both the Five Thousand  xxx consideration of the deed of Relinquishment xxx and that the remaining balance of xxx (P12,000.00) to complete

the Twenty-Four Thousand (P24,000.00) Pesos consideration of both the Agreement to Sell dated July 7, 1948, and the document, dated December 7, 1948, executed by the former in favor of the latter, have been paid Villaflor the issue on prescription and laches becomes academic and needs no further discussion.

But more than all the questions thus far raised and resolved is the question whether a sales patent can be issued to NASIPIT for the 140-hectare area awarded to it in the light of Section 11, Article XIV of the new Constitution which provides in its pertinent portion to wit:

‘x x x No private corporation or association may hold alienable land of the public domain except by lease not to exceed one thousand hectares in area xxx.’

The Secretary of Justice had previous occasion to rule on this point in his opinion No. 140, s. 1974.  Said the Honorable Justice Secretary:

‘On the second question, (referring to the questions when may a public land be considered to have been acquired by purchase before the effectivity of the new Constitution posed by the Director of Lands in his query on the effect on pending applications for the issuance of sales patent in the light of Section 11, Art. XIV of the New Constitution aforecited), you refer to this Office’s Opinion No. 64 series of 1973 in which I stated:

On the other hand, with respect to sales applications ready for issuance of sales patent, it is my opinion that where the applicant had, before the Constitution took effect, fully complied with all this obligations under the Public Land Act in order to entitle him to a Sales patent, there would be no legal or equitable justification for refusing to issue or release the sales patent.’

With respect to the point as to when the Sales applicant has complied with all the terms and conditions which would entitle him to a sales patent, the herein above Secretary of Justice went on:

‘That as to when the applicant has complied with all the terms and conditions which would  entitle him to a patent is a questioned (sic) fact which your office would be in the best position to determine.  However, relating this to the procedure for the processing of applications mentioned above, I think that as the  applicant has fulfilled the construction/cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land and (sic) the area (sic) in the provision in question of the new constitution would not apply.’

From the decision of the Director of Lands, Villaflor filed a Motion for Reconsideration which was considered as an Appeal M.N.R. Case 4341, to the Ministry of Natural Resources.

On June 6, 1979, the Minister of Natural Resources rendered a Decision (exh. 9),[15] dismissing the appeal and affirming the decision of the Director of Lands, pertinent portions of which reads:

‘After a careful study of the records and the arguments of the parties, we believe that the appeal is not well taken.

Firstly, the area in dispute is not the private property of appellant.

The evidence adduced by appellant to establish his claim of ownership over the subject area consists of deeds of absolute sale executed in his favor on January 16, and February 15, 1940, by four (4) different persons, namely, Cirilo Piencenaves, Fermin Balobo, Claudio Otero and Hermogenes Patete.

However, an examination of the technical descriptions of the tracts of land subject of the deeds of sale will disclose that said parcels are not identical to, and do not tally with, the area in controversy.

‘It is a basic assumption of our policy that lands of whatever classification belong to the state.  Unless alienated in accordance with law, it retains its rights over the same as dominus, (Santiago vs. de los Santos, L-20241, November 22, 1974, 61 SCRA 152).

For, it is well-settled that no public land can be acquired by private persons without any grant, express or implied from the government.  It is indispensable then that there be showing of title from the state or any other mode of acquisition recognized by law.’  (Lee Hong Hok, et al. vs. David, et al., L-30389, December 27, 1972, 48 SCRA 379.)

It is well-settled that all lands remain part of the public domain unless severed therefrom by state grant or unless alienated in accordance with law.

We, therefore, believe that the aforesaid deeds of sale do not constitute clear and convincing evidence to establish that the contested area is of private ownership.  Hence, the property must be held to be public domain.

‘There being no evidence whatever that the property in question was ever acquired by the applicants or their ancestors either by composition title from the Spanish

Government or by possessory information title or by any other means for the acquisition of public lands, the property must be held to be public domain.’  (Lee  Hong Hok, et al., vs. David , et al., L-30389 December 27, 1972, 48 SCRA 378-379 citing Heirs of Datu Pendatun vs. Director of Lands; see also Director of Lands vs. Reyes, L-27594, November 28, 1975, 68 SCRA 177).

Be that as it may, appellant, by filing a sales application over the controverted land, acknowledged unequivocably [sic] that the same is not his private property.

‘As such sales applicant, appellant manifestly acknowledged that he does not own the land and that the same is a public land under the administration of the Bureau of Lands, to which the application was submitted, xxx All of its acts prior thereof, including its real estate tax declarations, characterized its possessions of the land as that of a ‘sales applicant’ and consequently, as one who expects to buy it, but has not as yet done so, and is not, therefore, its owner.’ (Palawan Agricultural and Industrial Co., Inc. vs. Director of Lands, L-25914, March 21, 1972, 44 SCRA 20, 21).

Secondly, appellant’s alleged failure to pay the consideration stipulated in the deed of relinquishment neither converts said deed into one without a cause or consideration nor ipso facto rescinds the same.  Appellant, though, has the right to demand payment with legal interest for the delay or to demand rescission.

xxx                                                                        xxx                                                                                    xxx

However, appellant’s cause of action, either for specific performance or rescission of contract, with damages, lies within the jurisdiction of civil courts, not with administrative bodies.

xxx                                                                        xxx                                                                                    xxx

Lastly, appellee has acquired a vested right to the subject area and, therefore, is deemed not affected by the new constitutional provision that no private corporation may hold alienable land of the public domain except by lease.

xxx                                                                        xxx                                                                                    xxx

Implementing the aforesaid Opinion No. 64 of the Secretary of Justice, the then Secretary of Agriculture and Natural Resources issued a memorandum, dated February 18, 1974, which pertinently reads as follows:

‘In the implementation of the foregoing opinion, sales application of private individuals covering areas in excess of 24 hectares and those of corporations, associations, or partnership which fall under any of the following categories shall be given due course and issued patents, to wit:

1.    Sales application for fishponds and for agricultural purposes (SFA, SA and IGPSA) wherein prior to January 17, 1973;

a.    the land covered thereby was awarded;

b.    cultivation requirements of law were complied with as shown by investigation reports submitted prior to January 17, 1973;

c.    land was surveyed and survey returns already submitted to the Director of Lands for verification and approval; and

d.    purchase price was fully paid.’

From the records, it is evident that the aforestated requisites have been complied with by appellee long before January 17, 1973, the effectivity of the New Constitution.  To restate, the disputed area was awarded to appellee on August 17, 1950, the purchase price was fully paid on July 26, 1951, the cultivation requirements were complied with as per investigation report dated December 31, 1949, and the land was surveyed under Pls-97.’”

On July 6, 1978, petitioner filed a complaint [16] in the trial court  for “Declaration of Nullity of Contract (Deed of Relinquishment of Rights), Recovery of Possession (of two parcels of land subject of the contract), and Damages” at about the same time that he appealed the decision of the Minister of Natural Resources to the Office of the President.

On January 28, 1983, petitioner died.  The trial court ordered his widow, Lourdes D. Villaflor, to be substituted as petitioner.  After trial in due course, the then Court of First Instance of Agusan del Norte and Butuan City, Branch III, [17] dismissed the complaint on the grounds that: (1) petitioner admitted the due execution and genuineness of the contract and was estopped from proving its nullity, (2) the verbal lease agreements were unenforceable under Article 1403 (2)(e) of the Civil Code, and (3) his causes of action were barred by extinctive prescription and/or laches.  It ruled that there was prescription and/or laches because the alleged verbal lease ended in 1966, but the action was filed only on January 6, 1978.  The six-year period within which to file an action on an oral contract per Article 1145 (1) of the Civil Code expired in 1972.  The decretal portion[18] of the trial court’s decision reads:

“WHEREFORE, the foregoing premises duly considered, judgment is hereby rendered in favor of the defendant and against the plaintiff.  Consequently, this case is hereby ordered DISMISSED. The defendant is hereby declared the lawful actual physical possessor-occupant and having a better right of possession over the two (2) parcels of land in litigation described in par. 1.2 of the complaint as Parcel I and Parcel II, containing a total area of One Hundred Sixty (160) hectares, and was then the subject of the Sales Application No. V-807 of the plaintiff (Exhibits 1, 1-A, 1-B, pp. 421 to 421-A, Record), and now of the Sales Application No. 807, Entry No. V-407 of the defendant Nasipit Lumber Company (Exhibit Y, pp. 357-358, Record).  The Agreements to Sell Real Rights, Exhibits 2 to 2-C, 3 to 3-B, and the Deed of Relinquishment of Rights, Exhibits N to N-1, over the two parcels of land in litigation are hereby declared binding between the plaintiff and the defendant, their successors and assigns.

Double the costs against the plaintiff.”

The heirs of petitioner appealed to Respondent Court of Appeals [19] which, however, rendered judgment against petitioner via the assailed Decision dated September 27, 1990 finding petitioner’s prayers -- (1) for the declaration of nullity of the deed of relinquishment, (2) for the eviction of private respondent from the property and (3) for the declaration of  petitioner’s heirs as owners – to be without basis.  The decretal portion[20] of the assailed 49-page, single-spaced Decision curtly reads:

“WHEREFORE, the Decision appealed from, is hereby AFFIRMED, with costs against plaintiff-appellants.”

Not satisfied, petitioner’s heirs filed the instant 57-page petition for review dated December 7, 1990.  In a Resolution dated June 23, 1991, the Court denied this petition “for being late.”  On reconsideration -- upon plea of counsel that petitioners were “poor” and that a full decision on the merits should be rendered -- the Court reinstated the petition and required comment from private respondent.  Eventually, the petition was granted due course and the parties thus filed their respective memoranda.

The Issues

Petitioner, through his heirs, attributes the following errors to the Court of Appeals:

“I.  Are the findings of the Court of Appeals conclusive and binding upon the Supreme Court?

II.  Are the findings of the Court of Appeals fortified by the similar findings made by the Director of Lands and the Minister of Natural Resources (as well as by the Office of the President)?

III.  Was there ‘forum shopping?’

IV.  Are the findings of facts of the Court of Appeals and the trial court supported by the evidence and the law?

V.  Are the findings of the Court of Appeals supported by the very terms of the contracts which were under consideration by the said court?

VI.  Did the Court of Appeals, in construing the subject contracts, consider the contemporaneous and subsequent act of the parties pursuant to article 1371 of the Civil Code?

VII.  Did the Court of Appeals consider the fact and the unrefuted claim of Villaflor that he never knew of the award in favor of Nasipit?

VIII.  Did the Court of Appeals correctly apply the rules on evidence in its findings that Villaflor was paid the P5,000.00 consideration because Villaflor did not adduce any proof that he was not paid?

IX.  Is the Court of Appeals‘ conclusion that the contract is not simulated or fictitious simply because it is genuine and duly executed by the parties, supported by logic or the law?

X.  May the prestations in a contract agreeing to transfer certain rights constitute estoppel when this very contract is the subject of an action for annulment on the ground that it is fictitious?

XI.  Is the Court of Appeals‘ conclusion that the lease agreement between Villaflor is verbal and therefore, unenforceable supported by the evidence and the law?”

After a review of the various submissions of the parties, particularly those of petitioner, this Court believes and holds that the issues can be condensed into three as follows:

(1)     Did the Court of Appeals err in adopting or relying on the factual findings of the Bureau of Lands, especially those affirmed by the Minister (now Secretary) of Natural Resources and the trial court?

(2)     Did the Court of Appeals err in upholding the validity of the contracts to sell and the deed of relinquishment?  Otherwise stated, did the Court of Appeals err in finding the deed of relinquishment of rights and the contracts to sell valid, and not simulated or fictitious?

(3)     Is the private respondent qualified to acquire title over the disputed property?

The Court’s Ruling

The petition is bereft of merit.  It basically questions the sufficiency of the evidence relied upon by the Court of Appeals, alleging that public respondent’s factual findings were based on speculations, surmises and conjectures.  Petitioner insists that a review of those findings is in order because they were allegedly (1) rooted, not on specific evidence, but on conclusions and inferences of the Director of Lands which were, in turn, based on misapprehension of the applicable law on simulated contracts; (2) arrived at whimsically -- totally ignoring the substantial and admitted fact that petitioner was not notified of the award in favor of private respondent; and (3) grounded on errors and misapprehensions, particularly those relating to the identity of the disputed area.

First Issue:  Primary Jurisdiction of the Director of Lands and Finality of Factual Findings of the Court of Appeals

Underlying the rulings of the trial and appellate courts is the doctrine of primary jurisdiction; i.e., courts cannot and will not resolve a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.[21]

In recent years, it has been the jurisprudential trend to apply this doctrine to cases involving matters that demand the special competence of administrative agencies even if the question involved is also judicial in character.  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.”[22]

In cases where the doctrine of primary jurisdiction is clearly applicable, the court cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence. [23] In Machete vs. Court of Appeals, the Court upheld the primary jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB) in an agrarian dispute over the payment

of back rentals under a leasehold contract. [24] In Concerned Officials of the Metropolitan Waterworks and Sewerage System vs. Vasquez,[25]the Court recognized that the MWSS was in the best position to evaluate and to decide which bid for a waterworks project was compatible with its development plan.

The rationale underlying the doctrine of primary jurisdiction finds application in this case, since the questions on the identity of the land in dispute and the factual qualification of private respondent as an awardee of a sales application require a technical determination by the Bureau of Lands as the administrative agency with the expertise to determine such matters.  Because these issues preclude  prior judicial determination, it behooves the courts to stand aside even when they apparently have statutory power to proceed, in recognition of the primary jurisdiction of the administrative agency.[26]

“One thrust of the multiplication of administrative agencies is that the interpretation of contracts and the determination of private rights thereunder is no longer a uniquely judicial function, exercisable only by our regular courts” [27]

Petitioner initiated his action with a protest before the Bureau of Lands and followed it through in the Ministry of Natural Resources and thereafter in the Office of the President.  Consistent with the doctrine of primary jurisdiction, the trial and the appellate courts had reason to rely on the findings of these specialized administrative bodies.

The primary jurisdiction of the director of lands and the minister of natural resources over the issues regarding the identity of the disputed land and the qualification of an awardee of a sales patent is established by Sections 3 and 4 of Commonwealth Act No. 141, also known as the Public Land Act:

“Section 3. The Secretary of Agriculture and Commerce (now Secretary of Natural Resources) shall be the executive officer charged with carrying out the provisions of this Act through the Director of Lands, who shall act under his immediate control.”

“Section 4. Subject to said control, the Director of Lands shall have direct executive control of the survey, classification, lease, sale or any other form of concession or disposition and management of the lands of the public domain, and his decision as to questions of fact shall be conclusive when approved by the Secretary of Agriculture and Commerce.”

Thus, the Director of Lands, in his decision, said: [28]

“x x x It is merely whether or not Villaflor has been paid the Five Thousand (P5,000.00) Pesos stipulated consideration of the deed of relinquishment made by him without touching on the nature of the deed of relinquishment.  The administration and disposition of public lands is primarily vested in the Director of Lands and ultimately

with the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources), and to this end--

‘Our Supreme Court has recognized that the Director of Lands is a quasi-judicial officer who passes on issues of mixed facts and law (Ortua vs. Bingson Encarnacion, 59 Phil 440).  Sections 3 and 4 of the Public Land Law thus mean that the Secretary of Agriculture and Natural Resources shall be the final arbiter on questions of fact in public land conflicts (Heirs of Varela vs. Aquino, 71 Phil 69; Julian vs. Apostol, 52 Phil 442).‘

The ruling of this Office in its order dated September 10, 1975, is worth reiterating, thus:

‘x x x it is our opinion that in the exercise of his power of executive control, administrative disposition and allegation of public land, the Director of Lands should entertain the protest of Villaflor and conduct formal investigation xxx to determine the following points: (a) whether or not the Nasipit Lumber Company, Inc. paid or reimbursed to Villaflor the consideration of the rights in the amount of P5,000.00 and what evidence the company has to prove payment, the relinquishment of rights being part of the administrative process in the disposition of the land in question xxx.

xxxx Besides, the authority of the Director of Lands to pass upon and determine questions considered inherent in or essential to the efficient exercise of his powers like the incident at issue, i.e. , whether Villaflor had been paid or not, is conceded by law.‘”

Reliance by the trial and the appellate courts on the factual findings of the Director of Lands and the Minister of Natural Resources is not misplaced.  By reason of the special knowledge and expertise of said administrative agencies over matters falling under their jurisdiction, they are in a better position to pass judgment thereon; thus, their findings of fact in that regard are generally accorded great respect, if not finality, [29] by the courts.[30] The findings of fact of an administrative agency must be respected as long as they are supported by substantial evidence, even if such evidence might not be overwhelming or even preponderant.  It is not the task of an appellate court to weigh once more the evidence submitted before the administrative body and to substitute its own judgment for that of the administrative agency in respect of sufficiency of evidence.[31]

However, the rule that factual findings of an administrative agency are accorded respect and even finality by courts admits of exceptions.  This is true also in assessing factual findings of lower courts. [32] It is incumbent on the petitioner to show that the resolution of the factual issues by the administrative agency and/or by the trial court falls under any of the exceptions.  Otherwise, this Court will not disturb such findings. [33]

We mention and quote extensively from the rulings of the Bureau of Lands and the Minister of Natural Resources because the points, questions and issues raised by petitioner before the trial court, the appellate court and now before this Court are basically the same as those brought up before the aforesaid specialized administrative agencies.  As held by the Court of Appeals:[34]

“We find that the contentious points raised by appellant in this action, are substantially the same matters he raised in BL Claim No. 873 (N).  In both actions, he claimed private ownership over the land in question, assailed the validity and effectiveness of the Deed of Relinquishment of Rights he executed in August 16, 1950, that he had not been paid the P5,000.00 consideration, the value of the improvements he introduced on the land and other expenses incurred by him.”

In this instance, both the principle of primary jurisdiction of administrative agencies and the doctrine of finality of factual findings of the trial courts, particularly when affirmed by the Court of Appeals as in this case, militate against petitioner’s cause.  Indeed, petitioner has not given us sufficient reason to deviate from them.

Land in Dispute Is Public Land

Petitioner argues that even if the technical description in the deeds of sale and those in the sales application were not identical, the area in dispute remains his private property.  He alleges that the deeds did not contain any technical description, as they were executed prior to the survey conducted by the Bureau of Lands; thus, the properties sold were merely described by reference to natural boundaries.  His private ownership thereof was also allegedly attested to by private respondent’s former field manager in the latter’s February 22, 1950 letter, which contained an admission that the land leased by private respondent was covered by the sales application.

This contention is specious.  The lack of technical description did not prove that the finding of the Director of Lands lacked substantial evidence.  Here, the issue is not so much whether the subject land is identical with the property purchased by petitioner.  The issue, rather, is whether the land covered by the sales application is private or public land.  In his sales application, petitioner expressly admitted that said property was public land.   This  is formidable  evidence as it amounts  to an admission against interest.

In the exercise of his primary jurisdiction over the issue, Director of Lands Casanova ruled that the land was public: [35]

“x x x Even (o)n the assumption that the lands mentioned in the deeds of transfer are the same as the 140-hectare area awarded to Nasipit, their purchase by Villaflor (or) the latter’s occupation of the same did not change the character of the land from that of public land to a private property.  The provision of the law is specific that public

lands can only be acquired in the manner provided for therein and not otherwise (Sec. 11, C.A. No. 141, as amended).  The records show that Villaflor had applied for the purchase of lands in question with this Office (Sales Application No. V-807) on December 2, 1948.  xxx There is a condition in the sales application xxx to the effect that he recognizes that the land covered by the same is of public domain and any and all rights he may have with respect thereto by virtue of continuous occupation and cultivation are relinquished to the Government (paragraph 6, Sales Application No. V-807 of Vicente J. Villaflor, p. 21, carpeta) of which Villaflor is very much aware.  It also appears that Villaflor had paid for the publication fees appurtenant to the sale of the land.  He participated in the public auction where he was declared the successful bidder.  He had fully paid the purchase prive (sic) thereor (sic).  It would be a (sic) height of absurdity for Villaflor to be buying that which is owned by him if his claim of private ownership thereof is to be believed. xxx.”

This finding was affirmed by the Minister of Natural Resources: [36]

“Firstly, the area in dispute is not the private property of appellant (herein petitioner).

The evidence adduced by (petitioner) to establish his claim of ownership over the subject area consists of deeds of absolute sale executed in his favor xxx.

However, an examination of the technical descriptions of the tracts of land subject of the deeds of sale will disclose that said parcels are not identical to, and do not tally with, the area in controversy.

‘It is a basic assumption of our policy that lands of whatever classification belong to the state.  Unless alienated in accordance with law, it retains its rights over the same as dominus. (Santiago vs. de los Santos, L-20241, November 22, 1974, 61 SCRA 152).

For it is well-settled that no public land can be acquired by private persons without any grant, express or implied from the government.  It is indispensable then that there be showing of title from the state or any other mode of acquisition recognized by law. (Lee Hong Hok, et al. vs. David, et al., L-30389, December 27, 1972, 48 SCRA 379).’

xxx                                                                        xxx                                                                                    xxx                                                                                    xxx

We, therefore, believe that the aforesaid deeds of sale do not constitute clear and convincing evidence to establish that the contested area is of private ownership.  Hence, the property must be held to be public domain.

‘There being no evidence whatever that the property in question was ever acquired by the applicants or their ancestors either by composition title from the Spanish Government or by possessory information title or by any other means for the acquisition of public lands, the property must be held to be public domain.’

Be that as it may, [petitioner], by filing a sales application over the controverted land, acknowledged unequivocably [sic] that the same is not his private property.

‘As such sales applicant manifestly acknowledged that he does not own the land and that the same is a public land under the administration of the Bureau of Lands, to which the application was submitted, xxx All of its acts prior thereof, including its real estate tax declarations, characterized its possessions of the land as that of a ‘sales applicant’.  And consequently, as one who expects to buy it, but has not as yet done so, and is not, therefore, its owner.’(Palawan Agricultural and Industrial Co., Inc. vs. Director of Lands, L-25914, March 21, 1972, 44 SCRA 15).”

Clearly, this issue falls under the primary jurisdiction of the Director of Lands because its resolution requires “survey, classification, xxx disposition and management of the lands of the public domain.”  It follows that his rulings deserve great respect.  As petitioner failed to show that this factual finding of the Director of Lands was unsupported by substantial evidence, it assumes finality.  Thus, both the trial and the appellate courts correctly relied on such finding.[37] We can do no less.

Second Issue:  No Simulation of Contracts Proven

Petitioner insists that contrary to Article 1371 [38] of the Civil Code, Respondent Court erroneously ignored the contemporaneous and subsequent acts of the parties; hence, it failed to ascertain their true intentions.  However, the rule on the interpretation of contracts that was alluded to by petitioner is used in affirming, not negating, their validity. Thus, Article 1373,[39] which is a conjunct of Article 1371, provides that, if the instrument is susceptible of two or more interpretations, the interpretation which will make it valid and effectual should be adopted.  In this light, it is not difficult to understand that the legal basis urged by petitioner does not support his allegation that the contracts to sell and the deed of relinquishment are simulated and fictitious.  Properly understood, such rules on interpretation even negate petitioner’s thesis.

But let us indulge the petitioner awhile and determine whether the cited contemporaneous  and  subsequent  acts of  the  parties support his allegation of simulation.  Petitioner asserts that the relinquishment of rights and the agreements to sell were simulated because, first, the language and terms of said contracts negated private respondent’s  acquisition of ownership of the land in issue; and second, contemporaneous and subsequent communications between him and private respondent allegedly showed that the latter admitted that petitioner owned and occupied

the two parcels; i.e., that private respondent was not applying for said parcels but was interested only in the two hectares it had leased, and that private respondent supported petitioner’s application for a patent.

Petitioner explains that the Agreement to Sell dated December 7, 1948 did not and could not transfer ownership because paragraph 8 (c) thereof stipulates that the “balance of twelve thousand pesos (P12,000.00) shall be paid upon the execution by the First Party [petitioner] of the Absolute Deed of Sale of the two parcels of land in question in favor of the Second Party, and upon delivery to the Second Party [private respondent] of the Certificate of Ownership of the said two parcels of land.”   The mortgage provisions in paragraphs 6 and 7 of the agreement state that the P7,000.00 and P5,000.00 were “earnest money or a loan with antichresis by the free occupancy and use given to Nasipit of the 140 hectares of land not anymore as a lessee.”   If the agreement to sell transferred ownership to Nasipit, then why was it necessary to require petitioner, in a second agreement, to mortgage his property in the event of nonfulfillment of the prestations in the first agreement?

True, the agreement to sell did not absolutely transfer ownership of the land to private respondent.  This fact, however, does not show that the agreement was simulated.  Petitioner’s delivery of the Certificate of Ownership and execution of the deed of absolute sale were suspensive conditions, which gave rise to a corresponding obligation on the part of the private respondent, i.e.,the payment of the last installment of the consideration mentioned in the December 7, 1948 Agreement.  Such conditions did not affect the perfection of the contract or prove simulation.  Neither did the mortgage.

Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical act which does not exist or is different from that which was really executed. [40] Such an intention is not apparent in the agreements.  The intent to sell, on the other hand, is as clear as daylight.

Petitioner alleges further that the deed of relinquishment of right did not give full effect to the two agreements to sell, because the preliminary clauses of the deed allegedly served only to give private respondent an interest in the property as a future owner thereof and to enable respondent to follow up petitioner’s sales application.

We disagree.  Such an intention is not indicated in the deed.  On the contrary, a real and factual sale is evident in paragraph 6 thereof, which states: “That the Nasipit Lumber Co., Inc., xxx is very much interested in acquiring the land covered by the aforecited application to be used for purposes of mechanized farming” and the penultimate paragraph stating: “xxx VICENTE J. VILLAFLOR, hereby voluntarily renounce and relinquish whatever rights to, and interests I have in the land covered by my above-mentioned application in favor of the Nasipit Lumber Co., Inc.”

We also hold that no simulation is shown either in the letter, dated December 3, 1973, of the former field manager of private respondent, George Mear.   A pertinent portion of the letter reads:

“(a)s regards your property at Acacia, San Mateo, I recall that we made some sort of agreement for the occupancy, but I no longer recall the details and I had forgotten whether or not we actually did occupy your land. But if, as you say, we did occupy it, then I am sure that the Company is obligated to pay a rental.”

The letter did not contain any express admission that private respondent was still leasing the land from petitioner as of that date.  According to Mear, he could no longer recall the details of his agreement with petitioner.  This cannot be read as evidence of the simulation of either the deed of relinquishment or the agreements to sell.  It is evidence merely of an honest lack of recollection.

Petitioner also alleges that he  continued to pay realty taxes on the land even after the execution of said contracts.  This is immaterial because payment of realty taxes does not necessarily prove ownership, much less simulation of said contracts. [41]

Nonpayment of the ConsiderationDid Not Prove Simulation

Petitioner insists that nonpayment of the consideration in the contracts proves their simulation.  We disagree.  Nonpayment, at most, gives him only the right to sue for collection.  Generally, in a contract of sale, payment of the price is a resolutory condition and the remedy of the seller is to exact fulfillment or, in case of a substantial breach, to rescind the contract under Article 1191 of the Civil Code. [42] However, failure to pay is not even a breach, but merely an event which prevents the vendor’s obligation to convey title from acquiring binding force.[43]

Petitioner also argues that Respondent Court violated evidentiary rules in upholding the ruling of the Director of Lands that petitioner did not present evidence to show private respondent’s failure to pay him.  We disagree.  Prior to the amendment of the rules on evidence on March 14, 1989, Section 1, Rule 131, states that each party must prove his or her own affirmative allegations. [44] Thus, the burden of proof in any cause rested upon the party who, as determined by the pleadings or the nature of the case, asserts the affirmative of an issue and remains there until the termination of the action.[45] Although nonpayment is a negative fact which need not be proved, the party seeking payment is still required to prove the existence of the debt and the fact that it is already due.[46]

Petitioner showed the existence of the obligation with the presentation of the contracts, but did not present any evidence that he demanded payment from private respondent.  The demand letters dated January 2 and 5, 1974 (Exhs. “J” and “U”), adduced in evidence by petitioner, were for the payment of back rentals, damages to improvements and reimbursement of acquisition costs and realty taxes, not payment arising from the contract to sell.

Thus, we cannot fault Respondent Court for adopting the finding of the Director of Lands that petitioner “offered no evidence to support his claim of nonpayment beyond

his own self-serving assertions,” as he did not even demand “payment, orally or in writing, of the five thousand (P5,000.00) pesos which was supposed to be due him since August 17, 1950, the date when the order of award was issued to Nasipit, and when his cause of action to recover payment had accrued.”  Nonpayment of the consideration in the contracts to sell or the deed of relinquishment was raised for the first time in the protest filed with the Bureau of Lands on January 31, 1974.  But this protest letter was not the demand letter required by law.

Petitioner alleges that the assignment of credit and the letter of the former field manager of private respondent are contemporaneous and subsequent acts revealing the nonpayment of the consideration.  He maintains that the P12,000.00 credit assigned pertains to the P5,000.00 and P7,000.00 initial payments in the December 7, 1948 Agreement, because the balance ofP12,000.00 was not yet “due and accruing.”  This is consistent, he argues, with the representation that private respondent was not interested in filing a sales application over the land in issue and that  Nasipit was instead supporting petitioner’s application thereto in  Mear’s letter to the Director of Lands dated February 22, 1950 (Exh. “X”). [47]

This argument is too strained to be acceptable.  The assignment of credit did not establish the nondelivery of these initial payments of the total consideration.  First, the assignment of credit happened on January 19, 1949, or a month after the signing of the December 7, 1948 Agreement and almost six months after the July 7, 1948 Agreement to Sell.  Second, it does not overcome the recitation in the Agreement of December 7, 1948:  “xxx a) The amount of SEVEN THOUSAND (P7,000.00) PESOS has already been paid by the Second Party to the First Party upon the execution of the Agreement to Sell, on July 7, 1948; b) The amount of FIVE THOUSAND (P5,000.00) PESOS shall be paid upon the signing of this present agreement; xxx.”

Aside from these facts, the Director of Lands found evidence of greater weight showing that payment was actually made:[48]

“x x x (T)here is strong evidence to show that said xxx (P12,000.00) had been paid by NASIPIT to Edward J. Nell Company by virtue of the Deed of Assignment of Credit executed by Villaflor (Exh. “41 NALCO”) for the credit of the latter.

Atty. Gabriel Banaag, resident counsel of NASIPIT xxx declared that it was he who notarized the ‘Agreement to Sell’ (Exh. “F”); xxxx that subsequently, in January 1949, Villaflor executed a Deed of Assignment of credit in favor of Edward J. Nell Company (Exh. “41 NALCO”) whereby Villaflor ceded to the latter his receivable for NASIPIT corresponding to the remaining balance in the amount of xxx (P12,000.00) xxx of the total consideration xxxx; He further testified that the said assignment xxx was communicated to NASIPIT under cover letter dated January 24, 1949 (Exh. “41-A”) and not long thereafter, by virtue of the said assignment of credit, NASIPIT paid the balance xxx to Edward J. Nell Company (p. 58, bid).  Atty. Banaag’s aforesaid testimony stand unrebutted; hence, must be given full weight and credit.

xxx                                                                        xxx                                                                                    xxx.”

The Director of Lands also found that there had been payment of the consideration in the relinquishment of rights:[49]

“On the other hand, there are strong and compelling reasons to presume that Villaflor had already been paid the amount of Five Thousand (P5,000.00) Pesos.

First, x x x What is surprising, however, is not so much his claims consisting of gigantic amounts as his having forgotten to adduce evidence to prove his claim of non-payment of the Five Thousand (P5,000.00) Pesos during the investigation proceedings when he had all the time and opportunity to do so.  xxxx The fact that he did not adduce or even attempt to adduce evidence in support thereof shows either that he had no evidence to offer of that NASIPIT had already paid him in fact.  What is worse is that Villaflor did not even bother to command payment, orally or in writing, of the Five Thousand (P5,000.00) Pesos which was supposed to be due him since August 17, 1950, the date when the order of award was issued to Nasipit, and when his cause of action to recover payment had accrued.  The fact that he only made a command for payment on January 31, 1974, when he filed his protest or twenty-four (24) years later is immediately nugatory of his claim for non-payment.

But Villaflor maintains that he had no knowledge or notice that the order of award had already been issued to NASIPIT as he had gone to Indonesia and he had been absent from the Philippines during all those twenty-four (24) years.  This of course taxes credulity.xxxx

‘ x x x It is more in keeping with the ordinary course of things that he should have acquired information as to what was transpiring in his affairs in Manila x x x.‘

Second, it should be understood that the condition that NASIPIT should reimburse Villaflor the amount of Five Thousand (P5,000.00) Pesos upon its receipt of the order of award was fulfilled as said award was issued to NASIPIT on August 17, 1950.  The said deed of relinquishment was prepared and notarized in Manila with Villaflor and NASIPIT signing the instrument also in Manila.  Now, considering that Villaflor is presumed to be more assiduous in following up with the Bureau of Lands the expeditious issuance of the order of award as the (consideration) would depend on the issuance of said order to award NASIPIT, would it not be reasonable to believe that Villaflor was at hand when the award was issued to NASIPIT on August 17, 1950, or barely a day which he executed the deed of relinquishment on August 16, 1950, in Manila?  xxxx.

Third, on the other hand, NASIPIT has in his possession a sort of “order” upon itself -- (the deed of relinquishment wherein he(sic) obligated itself to reimburse or pay Villaflor the xxx consideration of the relinquishment upon its receipt of the order of award) for the payment of the aforesaid amount the moment the order of award is issued to it.  It is reasonable to presume that NASIPIT has paid the (consideration) to Villaflor.

xxx                                                                        xxx                                                                                    xxx

x x x (I)t was virtually impossible for NASIPIT, after the lapse of the intervening 24 years, to be able to cope up with all the records necessary to show that the consideration for the deed of relinquishment had been fully paid.  To expect NASIPIT to keep intact all records pertinent to the transaction for the whole quarter of a century would be to require what even the law does not.  Indeed, even the applicable law itself (Sec. 337, National Internal Revenue Code) requires that all records of corporations be preserved for only a maximum of five years.

NASIPIT may well have added that at any rate while there are transactions where the proper evidence is impossible or extremely difficult to produce after the lapse of time xxx the law creates presumptions of regularity in favor of such transactions (20 Am. Jur. 232) so that when the basic fact is established in an action the existence of the presumed fact must be assumed by force of law. (Rule 13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).”

The Court also notes that Mear’s letter of February 22, 1950 was sent six months prior to the execution of the deed of relinquishment of right.  At the time of its writing, private respondent had not perfected its ownership of the land to be able to qualify as a sales applicant.  Besides, although he was a party to the July 7, 1948 Agreement to Sell, Mear was not a signatory to the Deed of Relinquishment or to the December 7, 1948 Agreement to Sell.  Thus, he cannot be expected to know the existence of and the amendments to the later contracts.  These circumstances explain the mistaken representations, not misrepresentations, in said letter.

Lack of Notice of the Award

Petitioner insists that private respondent suppressed evidence, pointing to his not having been notified of the Order of Award dated August 17, 1950. [50] At the bottom of page 2 of the order, petitioner was not listed as one of the parties who were to be furnished a copy by Director of Lands Jose P. Dans.  Petitioner also posits that Public Land Inspector Sulpicio A. Taeza irregularly received the copies for both private respondent and the city treasurer of Butuan City.  The lack of notice for petitioner can

be easily explained.  Plainly,  petitioner was not entitled to said notice of award from the Director of Lands, because by then, he had already relinquished his rights to the disputed land in favor of private respondent.  In the heading of the order, he was referred to as sales applicant-assignor.  In paragraph number 4, the order stated that, on August 16, 1950, he relinquished his rights to the land subject of the award to private respondent.  From such date, the sales application was considered to be a matter between the Bureau of Lands and private respondent only.  Considering these facts, the failure to give petitioner a copy of the notice of the award cannot be considered as suppression of evidence.[51] Furthermore, this order was in fact available to petitioner and had been referred to by him since January 31, 1974 when he filed his protest with the Bureau of Lands.[52]

Third Issue:  Private Respondent Qualified for an   Award of Public Land

Petitioner asserts that private respondent was legally disqualified from acquiring the parcels of land in question because it was not authorized by its charter to acquire disposable public agricultural lands under Sections 121, 122 and 123 of the Public Land Act, prior to its amendment by P.D. No. 763.  We disagree.  The requirements for a sales application under the Public Land Act are: (1) the possession of the qualifications required by said Act (under Section 29) and (2) the lack of the disqualifications mentioned therein (under Sections 121, 122, and 123).  However, the transfer of ownership via the two agreements dated July 7 and December 7, 1948 and the relinquishment of rights, being private contracts, were binding only between petitioner and private respondent.  The Public Land Act finds no relevance because the disputed land was covered by said Act only after the issuance of the order of award in favor of private respondent.  Thus, the possession of any disqualification by private respondent under said Act is immaterial to the private contracts between the parties thereto.  (We are not, however, suggesting a departure from the rule that laws are deemed written in contracts.)  Consideration of said provisions of the Act will further show their inapplicability to these contracts.  Section 121 of the Act pertains to acquisitions of public land by a corporation from a grantee, but petitioner never became a grantee of the disputed land.  On the other hand, private respondent itself was the direct grantee.  Sections 122 and 123 disqualify corporations, which are not authorized by their charter, from acquiring public land;  the records do not show that private respondent was not so authorized under its charter.

Also,  the determination by the Director of Lands and the Minister of Natural Resources of the qualification of private respondent to become an awardee or grantee under the Act is persuasive on Respondent Court.  In Espinosa vs. Makalintal,[53] the Court ruled that, by law, the powers of the Secretary of Agriculture and Natural Resources regarding the disposition of public lands -- including the approval, rejection, and reinstatement of applications – are of executive and administrative nature.  (Such powers, however, do not include the judicial power to decide controversies arising from disagreements in civil or contractual relations between the litigants.)  Consequently, the

determination of whether private respondent is qualified to become an awardee of public land under C.A. 141 by sales application is included therein.

All told, the only disqualification that can be imputed to private respondent is the prohibition in the 1973 Constitution against the holding of alienable lands of the public domain by corporations.[54] However, this Court earlier settled the matter, ruling that said constitutional prohibition had no retroactive effect and could not prevail over a vested right to the land.  In Ayog vs. Cusi, Jr.,[55] this Court declared:

“We hold that the said constitutional prohibition has no retroactive application to the sales application of Biñan Development Co., Inc. because it had already acquired a vested right to the land applied for at the time the 1973 Constitution took effect.

That vested right has to be respected.  It could not be abrogated by the new Constitution.  Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares.  Petitioner’s prohibition action is barred by the doctrine of vested rights in constitutional law.

‘A right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest.’ (16 C.J.S. 1173).  It is ‘the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by existing law’ (12 C.J. 955, Note 46, No. 6) or ‘some right or interest in property which has become fixed and established and is no longer open to doubt or controversy’ (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).

The due process clause prohibits the annihilation of vested rights.  ‘A state may not impair vested rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the police power’ (16 C.J.S. 1177-78).

It has been observed that, generally, the term ‘vested right’ expresses the concept of present fixed interest, which in right reason and natural justice should be protected against arbitrary State action, or an innately just an imperative right which an enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd587).

Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the Constitution took effect, had fully complied with all his obligations under the Public Land Act in order to entitle him to a sales patent, there would seem to be no

legal or equitable justification for refusing to issue or release the sales patent (p. 254, Rollo).

In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land and to him the area limitation in the new Constitution would not apply.

In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements were fulfilled before the new Constitution took effect but the full payment of the price was completed after January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p. 256, Rollo).

Such a contemporaneous construction of the constitutional prohibition by a high executive official carries great weight and should be accorded much respect.  It is a correct interpretation of section 11 of Article XIV.

In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land in question had become fixed and established and was no longer open to doubt or controversy.

Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the said land from the public domain.  The corporation’s right to obtain a patent for that land is protected by law.  It cannot be deprived of that right without due process (Director of Lands vs. CA, 123 Phil. 919).”

The Minister of Natural Resources ruled, and we agree, that private respondent was similarly qualified to become an awardee of the disputed land because its rights to it vested prior to the effectivity of the 1973 Constitution: [56]

“Lastly, appellee has acquired a vested right to the subject area and, therefore, is deemed not affected by the new constitutional provision that no private corporation may hold alienable land of the public domain except by lease.

It may be recalled that the Secretary of Justice in his Opinion No. 64, series of 1973, had declared, to wit:

‘On the other hand, with respect to sales application ready for issuance of sales patent, it is my opinion that where the applicant had, before, the constitution took effect, fully complied with all his obligations under the Public Land act in order to entitle him to sales patent, there would seem to be not legal or equitable justification for refusing to issue or release the sales patent.’

Implementing the aforesaid Opinion No. 64 xxx, the then Secretary of Agriculture and Natural Resources issued a memorandum, dated February 18, 1974, which pertinently reads as follows:

‘In the implementation of the foregoing opinion, sales application of private individuals covering areas in excess of 24 hectares and those of corporations, associations, or partnership which fall under any of the following categories shall be given due course and issued patents, to wit:

Sales application for fishponds and for agricultural purposes (SFA, SA and IGPSA) wherein prior to January 17, 1973,

a.    the land covered thereby was awarded;

b.    cultivation requirements of law were complied with as shown by investigation reports submitted prior to January 17, 1973;

c.    land was surveyed and survey returns already submitted to the Director of Lands for verification and approval; and

d.    purchase price was fully paid.‘

From the records, it is evident that the aforestated requisites have been complied with by appellee long before January 17, 1973, the effectivity of the New Constitution.  To restate, the disputed area was awarded to appellee on August 17, 1950, the purchase price was fully paid on July 26, 1951, the cultivation requirements were complied with as per investigation report dated December 31, 1949, and the land was surveyed under Pls-97.”

The same finding was earlier made by the Director of  Lands:[57]

“It is further contended by Villaflor that Nasipit has no juridical personality to apply for the purchase of public lands for agricultural purposes.  The records clearly show, however, that since the execution of the deed of relinquishment of August 16, 1950, in favor of Nasipit, Villaflor has always considered and recognized Nasipit as having the juridical personality to acquire public lands for agricultural purposes.  In the deed of relinquishment xxx, it is stated:

‘6. That the Nasipit Lumber Co., Inc., a corporation duly organized in accordance with the laws of the Philippines, x x x.’

Even this Office had not failed to recognize the juridical personality of Nasipit to apply for the purchase of public lands xxx when it awarded to it the land so relinquished by Villaflor (Order of Award dated August 17, 1950) and accepted its application therefor.  At any rate, the question whether an applicant is qualified to apply for the acquisition of public lands is a matter between the applicant and this Office to decide and which a third party like Villaflor has no personality to question beyond merely calling the attention of this Office thereto.”

Needless to say, we also agree that the November 8, 1946 Lease Agreement between petitioner and private respondent had been terminated by the agreements to sell and the relinquishment of rights.  By the time the verbal leases were allegedly made in 1951 and 1955,[58] the disputed land had already been acquired and awarded to private respondent.  In any event, petitioner’s cause of action on these alleged lease agreements prescribed long before he filed Civil Case No. 2072-III, as correctly found by the trial and appellate courts. [59] Thus, it is no longer important, in this case, to pass upon the issue of whether or not amendments to a lease contract can be proven by parol evidence.  The same holds true as regards the issue of forum-shopping.

All in all, petitioner has not provided us sufficient reason to disturb the cogent findings of the Director of Lands, the Minister of Natural Resources, the trial court and the Court of Appeals.

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

Narvasa, C.J., (Chairman), Romero, and Francisco, JJ., concur.Melo, J., no part.

[1] Rollo, pp. 69-117.[2] Rollo, pp. 71-74.[3] This should be 60 hectares, as stated in the deed of sale.[4] Folder of Exhibits, pp. 28 -30.[5] Lease Agreement, Folder of Exhibits, pp. 29-30.[6] Folder of Exhibits, p. 32.[7] Ibid., p. 45.[8] Folder of Exhibits, p. 44.[9] Ibid.[10] Id., pp. 49-51.[11] Id., p. 38.[12] Id., pp. 25-26.

[13] Rollo, pp. 184-185.[14] Id., pp. 111-112.[15] RTC Folder of Exhibits, pp. 77-87.[16] Docketed as Civil Case No. 2072-III.[17] Presided by Judge Miguel S. Rallos.

[18] RTC rollo, p. 732.

[19]  The Twelfth Division composed of JJ. Artemon D. Luna, ponente; Reynato S. Puno (now a member of this Court) and Jorge S. Imperial.

[20] Rollo, p. 117.[21] Brett vs. Intermediate Appellate Court, 191 SCRA 687, 698, November 27, 1990, per Regalado, J.[22] Industrial Enterprises, Inc. vs. Court of Appeals, 184 SCRA 426, 431-432, April 18, 1990, per Melencio-

Herrera, J.[23] Machete vs. Court of Appeals, 250 SCRA 176, 182, November 20, 1995.[24] Ibid., p. 182.[25] 240 SCRA 502, 528-529, January 25, 1995.[26] Ibid., p. 532.[27] Id.[28] Folder of Exhibits, pp. 68-69.[29] Factual findings should be distinguished from contemporaneous construction and interpretation of a law

by the implementing administrative agency which is accorded great respect by courts.  Bagatsing vs. Committee on Privatization, 246 SCRA 334, 354, July 14, 1995.

[30] Philippine Merchant Marine School, Inc. vs. Court of Appeals, 244 SCRA 770, 785, June 2, 1995; Casa Filipina Realty Corporation vs. Office of the President, 241 SCRA 165, 174, February 7, 1995; and COCOFED vs. Trajano,241 SCRA 363, 368, February 15, 1995.

[31] Rubenecia vs. Civil Service Commission, 244 SCRA 640, 652, May 31, 1995.

[32] Proceeding by analogy, the exceptions to the rule on conclusiveness of factual findings of the Court of Appeals, enumerated in Fuentes vs. Court of Appeals, can also be applied to those of quasi-judicial bodies, to wit:

1. When the conclusion is a finding grounded entirely on speculation, surmise or conjecture;

2. When the inference made is manifestly absurd, mistaken or impossible;

3. When there is grave abuse of discretion in the appreciation of facts;

4. When the judgment is premised on a misapprehension of facts;

5. When the findings of fact are conflicting;

6. When the Court of Appeals in making its findings went beyond the issues of the case and the same is contrary to the admissions of both appellants and appellees;

7. When the findings of fact of the Court of Appeals are at variance with those of the trial court;

8. When the findings of fact are conclusions without citation of specific evidence on which they are based;

9. When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondents;

10.When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and are contradicted by the evidence on record; and

11.When certain material facts and circumstances had been overlooked by the trial court which, if taken into account, would alter the result of the case. (Fuentes vs. Court of Appeals, G.R. No. 109849, February 26, 1997, pp. 6-8)

[33] Lanzona vs. Intermediate Appellate Court, 187 SCRA 33, 38, July 2, 1990; Medina vs. Asistio, Jr., 191 SCRA 218, 223, November 8, 1990; De los Santos vs. Reyes, 205 SCRA 437, 445, January 27, 1992; Universal Motors vs. Court of Appeals, 205 SCRA 448, 455, January 27, 1992; FNCB Finance vs. Estavillo, 192 SCRA 514, 517, December 20, 1990.

[34] Rollo, p. 111.[35] Folder of Exhibits, pp. 71-72.[36] Exhibit 9, ibid., pp. 82-84.

[37] We should add that, at present, under Supreme Court Revised Circular 1-95, recourse from rulings of administrative agencies including those of executive departments is to the Court of Appeals directly and not to trial courts. Pertinent provisions of this circular are:

1. Scope.—These rules shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.  Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunication Commission, Department of Agrarian Reform under Republic Act 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, and Construction Industry Arbitration Commission.

2. Cases not covered.—These rules shall not apply to judments or final orders issued under the Labor Code of the Philippines.

3. Where to appeal.—An appeal under these rules may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, or law, or mixed questions of fact and law.

xxx       xxx       xxx”[38] “ART. 1371.  In order to judge the intention of the contracting parties, their contemporaneous and

subsequent acts shall be principally considered.”[39] “ART. 1373.  If some stipulation of any contract should admit of several meanings, it shall be

understood as bearing that import which is most adequate to render it effectual.”[40] Tongoy vs. Court of Appeals, 123 SCRA 99, 118, June 28, 1983, per Makasiar, J.[41] Rivera vs. Court of Appeals, 244 SCRA 218, 222, May 22, 1995.[42] Jacinto vs. Kaparaz, 209 SCRA 246, 255, May 22, 1992, per Davide, J.

[43] Ibid., p. 254.[44] “SECTION 1.  Burden of proof in civil cases.-- Each party must prove his own affirmative

allegations.  Evidence need not be given in support of a negative allegation except when such negative allegation is an essential part of the statement of the right or title on which the cause of action or defense is founded, nor even in such case when the allegation is a denial of the existence of a document the custody of which belongs to the opposite party.  The burden of proof lies in the party who would be defeated if no evidence were given on either side.”

[45] 31 C.J.S., 709; Geraldez vs Court of Appeals,  230 SCRA 320, 330, February 23, 1994.[46] Francisco, The Revised Rules of Court in the Philippines: Evidence, Vol. VII, Part II, 1973 ed., p. 12.[47] Folder of Exhibits, p. 38.[48] Id., pp. 73-74.[49] Id., pp. 69-71.[50] CA rollo, pp. 41LLL-MMM.[51] Manila Bay Club Corporation vs. Court of Appeals, 249 SCRA 303, 305-307, October 13, 1995.[52] People vs. Barlis, 231 SCRA 426, 439-440, March 24, 1994.[53] 79 Phil 134, 137, August 29, 1947.

[54] Section 11, Article XIV of the 1973 Constitution provides:

“Section 11.  The National Assembly, taking into account conservation, ecological, and developmental requirements of the natural resources shall determine by law the size of lands of the public domain which may be developed, held or acquired by, or leased to, any qualified individual, corporation, or association, and the conditions therefor.  No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area; xxx.”

[55] 118 SCRA 492, 498-500, November 19, 1982, per Aquino, J.[56] Folder of Exhibits, pp. 86-87.[57] Ibid., pp. 68-69.[58] Complaint, records, p. 4.

[59] ART. 1145.  The following actions must be commenced within six years from the time the right of action accrues:

(1) Upon an oral contract;

xxxx.”

lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 139492             November 19, 2002

LAGUNA CATV NETWORK, INC., petitioner, vs.HON. ALEX E. MARAAN, Regional Director, Region IV, Dept. of Labor and Employment (DOLE), ENRICO SAGMIT, Acting Deputy Sheriff, DOLE Region IV, PEDRO IGNACIO, DIOMEDES CASTRO, FE ESPERANZA CANDILLA, RUBEN LAMINA, JR., JOEL PERSIUNCULA, ALVINO PRUDENTE, JOEL RAYMUNDO, REGIE ROCERO, LINDA RODRIGUEZ, JOHN SELUDO, ALBERTO REYES, and ANACLETA VALOIS, respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

On March 3, 1998, private respondents Pedro Ignacio, Diomedes Castro, Fe Esperanza Candilla, Ruben Lamina, Jr., Joel Persiuncula, Alvino Prudente, Joel Raymundo, Regie Rocero, Linda Rodriguez, John Seludo, Alberto Reyes and Anacleta Valois filed with the Department of Labor and Employment, Regional Office No. IV (DOLE Region IV), separate complaints for underpayment of wages and non-payment of other employee benefits.1Impleaded as respondent was their employer, Laguna CATV Network, Inc. (Laguna CATV).

Private respondents filed their separate complaints pursuant to Article 128 of the Labor Code, as amended by Republic Act No. 7730,2 which provides:

"Article 128. Visitorial and enforcement powers. - (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have access to employer’s records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.

"(b) x x x

"An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (emphasis added)

"x x x."

On April 1, 1998, DOLE Region IV conducted an inspection within the premises of Laguna CATV and found that the latter violated the laws on payment of wages and other benefits. Thereupon, DOLE Region IV requested Laguna CATV to correct its violations but the latter refused, prompting Regional Director Alex E. Maraan to set the case for summary investigation.3 Thereafter, he issued an Order dated August 19, 19984 directing Laguna CATV to pay the concerned employees the sum of Two Hundred Sixty-One Thousand, Nine and 19/100 (P261,009.19) Pesos representing their unpaid claims, within 10 days from notice, and to submit proof of payment within the same period. Forthwith, Laguna CATV filed a motion for reconsideration.5

In view of Laguna CATV’s failure to comply with the Order directing it to pay the unpaid claims of its employees, DOLE Regional Director Maraan issued a writ of execution on January 29, 19996 ordering Sheriff Enrico Sagmit to collect in cash from Laguna CATV the amount specified in the writ or, in lieu thereof, to attach its goods and chattels or those of its owner, Dr. Bernardino Bailon. Sheriff Sagmit subsequently levied on Dr. Bailon’s L300 van and garnished his bank deposits.

On March 2, 1999, Laguna CATV and Dr. Bailon, in his personal capacity, filed a motion to quash the writ of execution, notice of levy and sale on execution and garnishment of bank deposits,7 alleging that the writ was premature because Laguna CATV’s motion for reconsideration of the Order dated August 19, 1998 has not yet been resolved by Regional Director Maraan. On April 21, 1999, he issued an Order8 denying the motion to quash the writ of execution, stating inter alia, that Laguna CATV failed to perfect its appeal of the August 19, 1998 Order because it did not comply with the mandatory requirement of posting a bond equivalent to the monetary award ofP261,009.19; and that the writ of execution dated January 29, 1999 should be considered as an "overt denial" of Laguna CATV’s motion for reconsideration.9

Instead of appealing to the Secretary of Labor, Laguna CATV filed with the Court of Appeals a motion for extension of time to file a petition for review.10 Laguna CATV was of the view that an appeal to the Secretary of Labor "would be an exercise in futility considering that the said appeal will be filed with the Regional Office and it will surely be disapproved."11

On May 13, 1999, the Court of Appeals issued a Resolution12 denying Laguna CATV’s motion for extension and dismissing the case. The Appellate Court found, among others, that it failed to exhaust administrative remedies.

Laguna CATV filed a motion for reconsideration but was denied by the Court of Appeals in its Resolution dated July 22, 1999.13 Hence, it filed the instant petition for review on certiorari.14

Specifically, petitioner contends that the Court of Appeals erred in denying its motion for extension and in dismissing the case.

Private respondents, in their comment on the petition, claim that the assailed Orders of DOLE Region IV have become final and executory for petitioner’s failure to appeal to the Secretary of Labor.

The petition lacks merit. The Court of Appeals was correct in holding that petitioner failed to exhaust all administrative remedies.

As provided under Article 128 of the Labor Code, as amended, earlier quoted, an order issued by the duly authorized representative of the Secretary of Labor may be appealed to the latter. Thus, petitioner should have first appealed to the Secretary of Labor instead of filing with the Court of Appeals a motion for extension of time to file a petition for review.

Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum.15 Observance of this doctrine is a sound practice and policy. As succinctly explained by this Court in Carale vs. Abarintos:16

"It (the doctrine of exhaustion of administrative remedies) ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency, avoidance of interference with functions of the administrative agency by withholding judicial action until the administrative process had run its course, and prevention of attempts to swamp the courts by a resort to them in the first instance."17

This Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the court’s judicial power can be sought.18 The party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but also pursue it to its

appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court.19 The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter will decide the same correctly.20Therefore, petitioner should have completed the administrative process by appealing the questioned Orders to the Secretary of Labor.

Although this Court has allowed certain exceptions to the doctrine of exhaustion of administrative remedies, such as:

1) when there is a violation of due process;

2) when the issue involved is a purely legal question;

3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction;

4) when there is estoppel on the part of the administrative agency concerned;

5) when there is irreparable injury;

6) when the respondent is a Department Secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter;

7) when to require exhaustion of administrative remedies would be unreasonable;

8) when it would amount to a nullification of a claim;

9) when the subject matter is a private land in land case proceedings;

10) when the rule does not provide a plain, speedy, adequate remedy;

11) when there are circumstances indicating the urgency of judicial intervention;

12) when no administrative review is provided by law;

13) where the rule of qualified political agency applies; and

14) when the issue of non-exhaustion of administrative remedies has been rendered moot,21

petitioner fails to show that the instant case falls under any of the exceptions. Its contention that an appeal to the Secretary of Labor would be futile as "it will surely be disapproved," is purely conjectural and definitely misplaced.

In the recent case of Republic of the Philippines vs. Express Telecommunication Co.,22 this Court held that "the premature invocation of the court’s intervention is fatal to one’s cause of action." Accordingly, absent any finding of waiver, estoppel, or any of the exceptions to the doctrine of exhaustion of administrative remedies, the case is susceptible of dismissal for lack of cause of action.23

WHEREFORE, the instant petition for review is DENIED.

SO ORDERED.

Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur.Corona, J., on official leave.

Footnotes

1 Annexes "C" to "C-8" of Petition, Rollo, at 26-34.

2 Dated June 2, 1994.

3 Annex "E," supra, at 38.

4 Id., at 38-40.

5 Filed on September 14, 1998.

6 Annex "G," supra, at 41.

7 Annex "H," supra, at 43-45.

8 Annex "I," supra, at 46, 48.

9 Supra, at 47.

10 Annex "J," supra, at 49-50.

11 Id., at 49.

12 Annex "A," supra, at 22-23.

13 Annex "B," id., at 24-25.

14 Pursuant to Rule 45 of the 1997 Rules of Civil Procedure, as amended.

15 Factoran, Jr. vs. Court of Appeals, 320 SCRA 530, 539 (1999), citing University of the Philippines vs. Catungal, Jr., 272 SCRA 221, 240 (1997); Carale vs. Abarintos, 269 SCRA 132, 141 (1997).

16 Supra.

17 Id., at 141, citing Antonio vs. Tanco, Jr., 65 SCRA 448, 454 (1975); Abe-Abe vs. Manta, 90 SCRA 524, 532 (1979).

18 Province of Zamboanga del Norte vs. Court of Appeals, 342 SCRA 549, 557 (2000); Zabat vs. Court of Appeals, 338 SCRA 551, 560 (2000); Diamonon vs. Department of Labor and Employment, 327 SCRA 283, 291 (2000); Social Security System Employees Association vs. Bathan-Velasco, 313 SCRA 250, 252 (1999); Paat vs. Court of Appeals, 266 SCRA 167, 175 (1997).

19 Carale vs. Abarintos, supra, at 142.

20 Id., at 141.

21 Province of Zamboanga del Norte vs. Court of Appeals, supra, at 558-559; Paat vs. Court of Appeals, supra, at 176-177.

22 G.R. Nos. 147096 & 147210, January 15, 2002.

23 Province of Zamboanga del Norte vs. Court of Appeals, supra, at 557; Paat vs. Court of Appeals, supra, at 175.

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-23721             March 31, 1965

R. MARINO CORPUS, petitioner-appellant, vs.MIGUEL CUADERNO, SR., ET AL., respondents-appellants.

Juan T. David and Rosauro Alvarez for petitioner-appellant.Nat. M. Balboa, G. B. Guevarra, F. E. Evangelista and C. B. Angeles for respondents-appellants.

REYES, J.B.L., J.:

Not satisfied with the decision of the Court of First Instance of Manila, in its Civil Case No. 41226, both the above-named petitioner and respondents interposed their respective appeals to the Court of Appeals. The Court of Appeals, however, certified the said appeals to this Court to avoid splitting them, it appearing that, while the Court of Appeals has jurisdiction over the respondents' appeal, the amount in controversy in the petitioner's appeal (P574,000.00) in damages and attorneys' fees, is beyond the jurisdiction of the said appellate court.

The essential facts are as follows: On 7 March 1958, the petitioner-appellant, R. Marino Corpus, then holding the position of "Special Assistant to the Governor, In Charge of the Export Department" of the Central Bank, a position declared by the President of the Philippines on 24 January 1957 as highly technical in nature, and admitted as such by both the present litigants, was administratively charged by several employees in the export department with dishonesty, incompetence, neglect of duty, and/or abuse of authority, oppression, conduct unbecoming of a public official, and of violation of the internal regulations of the Central Bank.

On 18 March 1958, the Monetary Board suspended the petitioner from office effective on said date and created a three-man investigating committee composed of Atty. Guillermo de Jesus, chairman; and Atty. Apolinar Tolentino, Assistant Fiscal of the City of Manila, and Professor Gerardo Florendo, senior attorney of the Central Bank, members. In its final report dated 5 May 1959, the investigating committee, "after most extensive hearings in which both complainants and respondent were afforded all the opportunity to submit their evidence, and after a most exhaustive and conscientious study of the records and evidence submitted in the case," made the following conclusion and recommendation:

(1) In view of the foregoing, the Committee finds that there is no basis upon which to recommend disciplinary action against respondent, and, therefore, respectfully recommends that he be immediately reinstated.

Nevertheless, on 20 July 1959, the Monetary Board approved the following resolution:

After an exhaustive and mature deliberation on the report of the aforesaid fact-finding committee in conjunction with the entire records of the case and representations of both complainants and respondent, through their respective counsel; and, further, after a thorough review of the service record of the respondent, particularly the various cases presented against him, object of Monetary Board Res. No. 1527 dated August 30, 1955, which all involves fitness, discipline, etc. of respondent; and moreover, upon formal statement of the Governor that he has lost confidence in the respondent as Special Assistant to the Governor and In-Charge of the Export Department (such position being primarily confidential and highly technical in nature), the Monetary Board finds that the continuance of the respondent in the service of the Central Bank would be prejudicial to the best interests of the Central Bank and, therefore, in accordance with the provisions of Section 14 of the Bank Charter, considers the respondent R. Marino Corpus, resigned as of the date of his suspension.

Corpus moved for the reconsideration of the above resolution, but the Board denied it, after which he filed an action for certiorari, mandamus, quo warranto, and damages, with preliminary injunction, with the Court of First Instance of Manila. The said court, after trial, rendered judgment declaring the Board resolution null and void, and ordering, among others, the reinstatement of the herein petitioner and awarding him P5,000.00 as attorney's fees. As aforesaid, both the petitioner and the respondents appealed the judgment.

Per its resolution, the premises of the board in dismissing the petitioner are: (1) its deliberation of the report of the committee, the records of the case and the representations of the parties; (2) the service record of the petitioner, particularly the various cases against him in 1955; and (3) loss of confidence by the Governor, with the implied concurrence of the Monetary Board. No specific findings were made; it is, therefore, evident that the petitioner was removed on the third ground, since he was neither removed for guilt of the charges against him in the administrative complaint nor on account of his previous cases in 1955 because he had suffered the corresponding penalty imposed upon him on the counts for which he was then found guilty, and because he was thereafterpromoted in salary and to the position in question by the Monetary Board on recommendation of the Governor.1äwphï1.ñët

The appeal of the Central Bank and its Monetary Board is planted on the proposition that officers holding highly technical positions may be removed at any time for lack of confidence by the appointing power, and that such power of removal is implicit in section 1, Art. XII, of the Constitution:

Section 1. A Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as to those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination.

It is argued that for the three classes of position referred to in the constitutional disposition (policy-determining, primarily confidential and highly technical), lack of confidence of the one making the appointment constitutes sufficient and legitimate cause of removal.

We find the appeal of the Central Bank authorities to be clearly untenable.

In the first place, the loss of confidence ground, on which the dismissal is sought to be predicated, is a clear and evident afterthought resorted to when the charges, subject matter of the investigation, were not proved or substantiated. The Monetary Board nowhere stated anything in the record which the committee failed to consider in recommending exoneration from the charges; it nowhere pointed to any substantiation of the charges; it, therefore, relied only on the statement of the loss of confidence made by Governor Cuaderno. We find in the particular set of facts herein that the alleged loss of confidence is clearly a pretext to cure the inability of substantiating the charges upon which the investigation had proceeded.

The court, therefore, cannot rely on the so-called "loss of confidence" as a reason for dismissal. And inasmuch as the charges against petitioner were unsubstantiated, that leaves no other alternative but to follow the mandate that —

No public officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law (Sec. 4, Art. XII, Constitution of the Phil.)

Since in the interest of the service reasonable protection should be afforded civil servants in positions that are by their nature important, such as those that are "highly technical," the Constitutional safeguard requiring removal or suspension to be "for cause as provided by law" at least demands that their dismissal for alleged "loss of confidence" if at all allowed, be attended with prudence and deliberation adequate to show that said ground exists.

In the second place, the argument for the Monetary Board ignores the self-evident fact that the constitutional provisions merely constitute the policy-determining, primarily confidential, and highly technical positions asexceptions to the rule requiring appointments in the Civil Service to be made on the basis of merit and fitness as determined from competitive examinations (sec. 1, supra) (Jover vs. Borra, 49 O.G. [No. 7] 2755), but that the Constitution does not exempt such positions from the operation of the principle emphatically and categorically enunciated in section 4 of Article XII, that —

No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law.

and which recognizes no exception. The absolute rule thus propounded is repeated almost verbatim in Sec. 132 of the Central Bank Charter (Rep. Act 265) that provides in equally absolute terms that —

No officer or employee of the Central Bank subject to the Civil Service Law or regulations shall be removed or suspended except for cause as provided by law.

It is well to recall here that the Civil Service Law in force (Rep. Act No. 2260) divides positions into three categories: competitive or classified; non-competitive or unclassified service; and exempt service, the last being expressly excluded from the scope of the Civil Service Act (sec. 3, R.A. 2260). In view of sections 3 and 5 of the same law, providing that —

SEC 3. Positions embraced in the Civil Service.—The Philippine Civil Service shall embrace all branches, subdivisions and instrumentalities of the Government, including government-owned or controlled corporations, ...

SEC. 5. The non-competitive service.—The non-competitive or unclassified service shall be composed of positions expressly declared by law to be in the non-competitive or unclassified service or those which are policy-determining, primarily confidential or highly technical in nature. (R.A. 2260)

it is indisputable that the plaintiff Corpus is protected by the Civil Service law and regulations as a member of the non-competitive or unclassified service, and that his removal or suspension must be for cause recognized by law (Unabia vs. Mayor, 53 Off. Gaz. 132; Arcel vs. Osmeña, L-14956, Feb. 27, 1961; Garcia vs. Executive Secretary, L-19748, September 13, 1962).

The tenure of officials holding primarily confidential positions (such as private secretaries of public functionaries) ends upon loss of confidence, because their term of office lasts only as long as confidence in them endures; and thus their cessation involves no removal. But the situation is different for those holding highly technical posts, requiring special skills and qualifications. The Constitution clearly distinguished the primarily confidential from the highly technical, and to apply the loss of confidence rule to the latter incumbents is to ignore and erase the differentiation expressly made by our fundamental charter. Moreover, it is illogical that while an ordinary technician, say a clerk, stenographer, mechanic, or engineer, enjoys security of tenure and may not be removed at pleasure, a highly technical officer, such as an economist or a scientist of avowed attainments and reputation, should be denied security and be removable at any time, without right to a hearing or chance to defend himself. No

technical men worthy of the name would be willing to accept work under such conditions. Ultimately, the rule advocated by the Bank would demand that highly technical positions be filled by persons who must labor always with an eye cocked at the humor to their superiors. It would signify that the so-called highly technical positions will have to be filled by incompetents and yes-men, who must rely not on their own qualifications and skill but on their ability to curry favor with the powerful. The entire objective of the Constitution in establishing and dignifying the Civil Service on the basis of merit would be thus negated.

Of course, a position may be declared both highly technical and confidential, as the supreme interests of the state may require. But the position of plaintiff-appellant Corpus is not of this category.

The decision in De los Santos vs. Mallare, 87 Phil. 289, relied upon by the appellant Bank, is not applicable since said case involved the office of city engineer that the court expressly found to be "neither primarily confidential, policy-determining nor highly technical" (at p. 297, in fine).

Turning now to the appeal of plaintiff R. Marino Corpus. The latter complains first against the allowance of only P5,000.00 attorney's fees by the court below stressing that the stipulation of facts between the parties clearly recites that Corpus had agreed to pay his attorney P20,000.00 as fees. It is to be noted, however, that the agreement between client and lawyer cannot bind the other party who was a stranger to the fee contract. While the Civil Code allows a party to recover reasonable counsel fees by way of damages, such fees must lie primarily in the discretion of the trial court, and no abuse of that discretion is here shown. The same thing can be said as to plaintiff's recovery of moral damages; the trial court was evidently not satisfied that such damages were adequately proved and on the record, we do not believe we would be warranted in interfering with its judgment.

The claim for exemplary damages must presuppose the existence of the circumstances enumerated in Articles 2231 and 2232 of the Civil Code. That is essentially a question of fact that lies within the province of the court a quo, and we do not believe that in opining that the position of Corpus was one dependent on confidence, the defendant Monetary Board necessarily acted with vindictiveness or wantonness, and not in the exercise of honest judgment.

WHEREFORE, the decision appealed from is hereby affirmed without special pronouncement as to costs.

Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.Bengzon, C.J., and Bautista Angelo, J., took no part.

Separate Opinions

BENGZON, J.P., J., concurring:

I agree with the decision because, as stated therein, in this particular case the so-called "loss of confidence" is a clear afterthought resorted to only when the charges subject-matter of the investigation could not be substantiated. The resolution of the Monetary Board considering the petitioner resigned, stated that his position was "highly technical," as declared by the President, thereby noticeably seeking to put it within a category where "loss of confidence" operates to terminate the employment. Furthermore, a reference to former charges against petitioner which had already been disposed of prior to his promotion, obviously provides no apparent basis for the stand therein taken. As a result, the alleged "loss of confidence" cannot be relied upon as a reason for petitioner's dismissal. This point , I believe, suffices to affirm the decision of the court a quo with respect to respondents' appeal.

A ruling on the far-reaching question of whether or not "loss of confidence" is a lawful ground for dismissal from a highly technical position in the Civil Service should, to my mind, await the instance when it is absolutely required in deciding a case. A further discussion could then be pursued on: (1) a highly technical position that involves utmost confidence, e. g., that of a scientist in an Atomic Energy Research Office dealing with secrets that affect the security of the State; (2) the rule as to policy-determining positions; and (3) whether Section 1, Article XII of the Constitution speaks of "policy-determining, primarily confidential or highly technical in nature" disjunctively or together.

Consequently, I reserve my view as to whether incumbents of highly technical positions in the Civil Service may or may not be removed for "loss of confidence" in a proper case, and I concur with the decision in all other respects.

Zaldivar, J., concurs.

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-12944             March 30, 1959

MARIA NATIVIDAD VDA. DE TAN, petitioner-appellee, vs.VETERANS BACKPAY COMMISSION, respondent-appellant.

Atilano R. Cinco and Aguilan and Rosero Law Offices for appellee.Acting Solicitor General Guillermo E. Torres and Solicitor Camilo D. Quiason for appellant.

REYES, J.B.L., J.:

On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the Court of First Instance of Manila a verified petition for mandamus seeking an order to compel the respondent-appellant Veterans Back Pay Commission: (1) to declare deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national, entitled to backpay rights, privileges, and prerogatives under Republic Act No. 304, as amended by Republic Act No. 897; and (2) to give due course to the claim of petitioner, as the widow of the said veterans, by issuing to her the corresponding backpay certificate of indebtedness.

Respondent Commission filed its answer in due time asserting certain special and affirmative defenses, on the basis of which,

the Commission unsuccessfully moved to dismiss the petition.

The parties then submitted a stipulation of facts hereinbelow reproduced:

Come now the petitioner and respondent in the above-entitled case through their respective counsel, and to this Honorable Court respectfully agree and stipulate that the following facts are true:

1. That the petitioner is of legal age, widow, and a resident of 400 Lallana, Tondo, Manila; that the respondent is a government instrumentality or agency, with offices in the City of Manila, Philippines, duly vested with authority to implement the provisions of the Backpay Law, otherwise known as Republic Act No. 879, further amending Republic Act No. 304;

2. That the petitioner is the widow of the late Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national, and a bona fide member of the 1st Regiment, United States-Chinese Volunteers in the Philippines;

3. That the United States-Chinese Volunteers in the Philippines is a guerrilla organization duly recognized by the Army of the United States and forming part and parcel of the Philippine Army;

4. That Tan Chiat Bee alias Tan Lian Lay died in the service on April 4, 1945 in the battle at Ipo Dam, Rizal Province, Philippines; he was duly recognized as a guerrilla veteran and certified to by the Armed Forces of the Philippines as having rendered meritorious military services during the Japanese occupation;

5. That petitioner as the widow of the said recognized deceased veteran, filed an application for back pay under the provisions of Republic Act No. 897, the resolution of the Veterans Back Pay Commissions dated November 19, 1953 and the letter of the Veterans Back Pay Commission dated December 9, 1953;

6. That on June 18, 1955, the Secretary and the Chief of Office Staff of Veterans Back Pay Commission sent a letter to General Vicente Lopez of the United States-Chinese Volunteers in the Philippines apprising the latter that the Commission has reaffirmed its resolution granting the back pay to alien members;

7. That the Adjutant, Armed Forces of the Philippines, has verified and certified that deceased veteran has rendered service as a recognized guerrilla for the period indicated in his (Adjutant's) indorsement to the Chief, Finance Service Armed Forces of the Philippines;

8. That, likewise, the Chief of Finance Service, Camp Murphy, has computed the backpay due the petitioner and the same was passed in audit by representatives of the Auditor General;

9. That after due liberation respondent revoked its previous stands and ruled that aliens are not entitled to back pay;

10. That on February 13, 1957, the respondent Veterans Back Pay Commission, through its Secretary & Chief of Office Staff, made a formal reply to the aforesaid claim of the herein petitioner denying her request on the ground that aliens are not entitled to back pay;

11. That upon refusal of the Veterans Back Pay Commission the petitioner brought the case direct to this Honorable Court by way of mandamus;

12. That petitioner and respondent admit the existence and authenticity of the following documents;

Annex A—Resolution of the Veterans Back Pay dated November 19, 1953.

Annex B—Letter dated December 9, 1953.

Annex C—Letter dated June 18, 1955.

Annex D—Executive Order No. 21 dated October 28, 1944.

Annex E—Executive Order No. 68 dated September 26, 1945.

Annex F—Minutes of the Resolution of the Back Pay Commission regarding the opinion of the Secretary of Justice dated February 8, 1956.

Annex G—Letter of Back Pay Commission dated February 26, 1954 to Secretary of Justice.

Annex H—Opinion No. 213 series of 1956 of the Secretary of Justice.

Annex I—Reply of Veterans Backpay Commission.

Annex J—Explanatory Note to House Bill No. 1953.

Annex K—Explanatory note to Senate Bill No. 10.

Annex L—Explanatory note to House Bill No. 1228, now Republic Act No. 897.

Annex M—Joint Resolution No. 5 of the First Congress of the Philippines.

13. That the parties waive the presentation of further evidence;

14. That the respondents will file its memorandum within ten (10) days from August 1, 1957 and the petitioner may file her memorandum within ten (10) days from receipt of respondent's memorandum, after which the case is deemed submitted for decision.

Manila, July 31, 1957.

Based on the foregoing, the lower court rendered judgment the dispositive portion of which, reads:

Wherefore, the petition is granted, ordering respondent Commission to give due course to the claim of herein petitioner to the backpay to which her deceased husband was entitled as member of a duly recognized guerrilla organization.

Against the decision, the respondent instituted this appeal averring once more, in its assignment of errors, the special and affirmative defenses that the petitioner failed to exhaust available administrative remedies; that the suit is, in effect, an action to enforce a money claim against the government without its consent; that mandamus will not lie to compel the exercise of a discretionary function; and that the Republic Act Nos. 304 and 897 already referred to were never intended to benefit aliens.

We find no merit in the appeal. As to the claim that mandamus is not the proper remedy to correct the exercise of discretion of the Commission, it may well be remembered that its discretion is limited to the facts of the case, i.e., in merely evaluating the evidence whether or not the claimant is a member of a guerrilla force duly recognized by the United States Army. Nowhere in the law is the respondent Commission given the power to adjudicate or determine rights after such facts are established. Having been satisfied that deceased Tan Chiat Bee was an officer of a duly recognized guerrilla outfit, certified to by the Armed Forces of the Philippines, having served under the United States-Chinese Volunteers in the Philippines, a guerrilla unit recognized by the United States army and forming part of the Philippine Army, it becomes the ministerial duty of the respondent to give due course to his widow's application. (See sections 1 and 6, Republic Act 897). Note that the Chief of the Finance Service, Camp Murphy, has accepted the backpay due the petitioner's husband and the same was passed in audit by the representatives of the Auditor General.

It is insisted by the respondent Commission that aliens are not included within the purview of the law. We disagree. The law is contained in Republic Act Nos. 304 and 897 is explicit enough, and it extends its benefits to members of "guerrilla forces duly recognized by the Army of the United States." From the plain and clear language thereof, we fail to see any indication that its operation should be limited to citizens of the Philippines only, for all that is required is that the guerrilla unit be duly recognized by the Army of the United States. We are in full accord with Opinion No. 213, series of 1956, of the Secretary of Justice, which

reads:

Section 1 of the cited Act (Republic act No. 304, as amended by Republic Act No. 897), otherwise known as the Back Pay Law, recognizes the rights to the backpay of members of "guerrilla forces duly recognized by the Army of the United States, among others. A perusal of its provisions reveals nothing which may be construed to mean that only Filipino citizens are entitled to back pay thereunder. On the contrary, the statute expressly includes within its coverage "persons under contract with the Government of the Commonwealth", which clause was construed by this office to refer to service" by the government (Opinion No. 137, s. 1953), a majority of whom were non-citizens. Thus, the Opinion No. 30, s. 1949, this office ruled that a civil service employee of the U.S. Coast and Geodetic Survey rendering the service to the Philippine Government when war broke out on December 8, 1941, was entitled to back pay.

As regards guerrillas, it seems clear that all the law requires is that they be "duly recognized by the Army of the United States." Section 1 of the Back Pay Law, it is also noted, enumerates those who are not entitled to its benefits; recognized guerrillas who were not Filipino citizens are not among those expressly mentioned. The maxim expressio unius est exclusio alterius, I think, finds application here.

Moreover, Executive Order No. 21, dated October 28, 1944, expressly declared that, Sections 22 (a) and 27 of Commonwealth Act No. 1 to the contrary notwithstanding, "all persons of any nationality or citizenship, who are actively serving in recognized military forces in the Philippines, are thereby considered to be on active service in the Philippine Army."

It is the respondent's main argument that it could not have been the intention of Congress to extend its benefit to aliens, as the purpose of the law was "precisely to help rehabilitate members of the Armed Forces of the Philippines and recognized guerrillas by giving them the right to acquire public lands and public property by using the back pay certificate", and "it is fundamental under the Constitution that aliens except American citizens cannot acquire public lands or exploit our natural resources". Respondent Commission fails to realize that this is just one of the various uses of the certificate; and that it may also be utilized for the payment of obligations to the Government or to any of its branches or instrumentalities, i.e., taxes, government hospital bills, etc. (See Sec. 2, Rep. act No. 897).

As further observed by the lower court:

It is one thing to be entitled to backpay and to receive acknowledgment therefor, and another thing to receive backpay certificates in accordance with the resolutions of the Commission and to make use of the same.

It was, therefore, unreasonable if not arbitrary on the part of respondent Commission to deny petitioner's claim on the basis.

It is further contended by the Commission that the petitioner should have first exhausted her administrative remedies by appealing to the President of the Philippines, and that her failure to do so is a bar to her action in court (Montes vs. The Civil Service Board of Appeals, 101 Phil., 490; 54 Off. Gaz. [7] 2174. The respondent Commission is in estoppel to invoke this rule, considering that in its resolution (Annex F of the Stipulation of Facts) reiterating its obstinate refusal to abide by the opinion of the Secretary of Justice, who is the legal adviser of the Executive Department, the Commission declared that —

The opinions promulgated by the Secretary of Justice are advisory in nature, which may either be accepted or ignored by the office seeking the opinion, and any aggrieved party has the court for recourse, (Annex F)

thereby leading the petitioner to conclude that only a final judicial ruling in her favor would be accepted by the Commission.

Neither is there substance in the contention that the petition is, in effect, a suit against the government without its consent. the relief prayed for is simply "the recognition of the petitioner-appellee" under the provisions of sections 1 and 2 of Republic Act No. 897, and consists in "directing an agency of the government to perform an act . . . it is bound to perform." Republic Act Nos. 304 and 897 necessarily embody state consent to an action against the officers entrusted with the implementation of said Acts in case of unjustified refusal to recognize the rights of proper applicants.

The decision appealed from should be, and hereby is, affirmed. No costs. So ordered.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A. Bautista Angelo, Labrador, Concepcion and Endencia, JJ.,concur.

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 91551 August 16, 1991

U.P. BOARD OF REGENTS, DR. JOSE V. ABUEVA, in his capacity as U.P. President, DR. ERNESTO O. DOMINGO, in his capacity as Chancellor of U.P. Manila, and the Nomination Committee for the Director of the U.P.-P.G.H. Medical Center, petitioners, vs.HON. JAINAL D. RASUL, in his capacity as Presiding Judge, Branch 69 of the Regional Trial Court, Pasig, Metro Manila, and DR. FELIPE A. ESTRELLA, JR., respondents.

Ledesma, Saludo & Associates for private respondent.

GANCAYCO, J.:p

The principal issue in this case is whether or not respondent Dr. Felipe A. Estrella who holds the position of Director of the Philippine General Hospital (PGH) can invoke security of tenure during his term of office notwithstanding the abolition of the said position by the University of the Philippines Board of Regents.

Petitioners seek to annul and set aside the decision dated August 28, 1989 and the order dated October 23, 1989 issued and rendered by respondent Judge, Honorable Jainal D. Rasul of the Regional Trial Court, Branch 69, Pasig, Metro Manila. The dispositive portion of the decision in question reads as follows:

WHEREFORE, in view of the foregoing and by virtue of preponderance of evidence, this Court hereby renders judgment in favor of the plaintiff and against the defendants.

1. Permanently enjoining the Defendants Dr. Jose V. Abueva, in his capacity as UP President; Dr. Ernesto Domingo, in his capacity as Chancellor of UP-Manila; the Nomination Committee for the Director of the UP-PGH Medical Center and the UP Board of Regents, from proceeding with the nomination of a Medical Director, until the expiration of the term of office of the plaintiff, Dr. Felipe A. Estrella, Jr., in his capacity as Director of the PGH or unless sooner removed, for cause provided by law;

2. Permanently enjoining the UP Board of Regents from implementing the so-called Reorganization Plan of UP-PGH, unless there is a prior legislative enactment of enabling law authorizing it and finally,

3. Ordering the defendants to pay attorney's fees and litigation expenses for P50,000.00 and the costs of this suit.

SO ORDERED. 1

In an order dated October 23, 1989, the respondent Judge denied petitioners' motion for reconsideration of the decision above-mentioned.

Assailing the above-mentioned rulings, petitioners allege as errors the following:

REASONS FOR THE ALLOWANCE OF THE WRIT

I

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT RESPONDENT ESTRELLA IS ENTITLED TO THE PROTECTIVE MANTLE OF THE CONSTITUTIONAL GUARANTEE OF SECURITY OF TENURE

II

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE REORGANIZATION OF U.P. MANILA INCLUDING THE PGH, WAS DONE IN BAD FAITH

III

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT RESPONDENT ESTRELLA NEED NOT EXHAUST ADMINISTRATIVE REMEDIES BEFORE HE CAN BRING SUIT AGAINST THE U.P. BOARD OF REGENTS, ET AL.

IV

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE REORGANIZATION PLAN FOR THE U.P. PGH MEDICAL CENTER CANNOT YET BE IMPLEMENTED

V

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT THE U.P. BOARD OF REGENTS HAS NO AUTHORITY TO REORGANIZE

VI

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT HE CAN SUBSTITUTE HIS OWN JUDGMENT FOR THAT OF THE U.P. BOARD REGENTS.

VII

RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT NON-IMPLEMENTATION OF THE REORGANIZATION PLAN WILL NOT CAUSE CONSIDERABLE DAMAGE TO U.P. IN GENERAL AND TO PGH IN PARTICULAR. 2

The petition is devoid of merit.

The facts and background of the case as narrated by the trial court are as follows—

That on June 26, 1986, plaintiff Dr. Felipe A. Estrella, Jr., was appointed by the defendant Board of Regents BOR as Director of the Philippine General Hospital, to take effect "1 September 1986 until 30 April 1992"(Exh. "A-14");that the defendant U.P. Board of Regents speaking thru its then University Secretary Professor Martin Gregorio intended to have the plaintiff serve his full term, as Director, since any other arrangement would impede the hospital's development, not to mention the continuity of its service operations (Exh. "A"); that the duties and responsibilities, under Chapter 29, of the Revised Administrative Code, as PGH Director, inter alia, to direct and manage various activities within the hospital; formulate and implement regulations; develop institutional plans and policies; approve/recommend budget proposals of the hospital; execute contracts; represent the hospital in proper functions; approve and sign warrants, checks, vouchers and recommend or endorse appointments of personnel to higher authorities (Exh. "M").

On September 16, 1987, barely two (2) weeks after assuming the presidency of the University of the Philippines defendant Jose V. Abueva submitted a memorandum to the Board of Regents to reorganize the U.P. Manila including the Philippine General Hospital with a draft resolution for approval of the Board of Regents, recommending that certain key positions of UP Manila including that of plaintiff be declared vacant (Exhs. "C" to "C-3"): that on March 20, 1988, the defendant Board of Regent upon recommendation of defendants Abueva and Domingo approved the so-called reorganization plan for the Philippine General Hospital.

On April 29, 1988, defendant Dr. Ernesto Domingo acting on instruction of defendant Dr. Jose v. Abueva, U.P. President, issued a memorandum creating the Nomination Committee for the UP-PGH Medical Center Director; that on May 10, 1988, defendant-members of the Nomination Committee thus created, are scheduled to nominate plaintiff s replacement as Director; that consequently on May 2, 1988, plaintiff filed with this Court, his complaint for Injunction with Preliminary Injunction of temporary restraining Order, seeking to enjoin defendants Abueva, Domingo, the Nomination Committee and the ITP Board of Regents from proceeding with the nomination of UP-PGH medical Center Director, in order to forestall the consequent removal/dismissal of the plaintiff Dr. Felipe A. Estrella, Jr., incumbent PGH Director, even before the expiration of his term of office on April 30, 1992 without any cause provided by law.

On May 2, this Court issued the Restraining Order and on May 30, After due hearing this Court, thru its then Presiding Judge Hon. Julio Logarta issued the Writ of Preliminary Injunction, enjoining defendants from implementing the

reorganization plan for the UP-PGH medical Center (Exh. "A" Affidavit of plaintiff Dr. Felipe A. Estrella, Jr.; Exh. "10" Affidavit of defendant Dr. Ernesto O. Domingo; TSN pp. 1-23, June 1, 1989, TSN pp. 1-106, June 1, 1989; TSN pp.1-52, June 1, 1989). 3

Respondent Judge, based on the evidence presented, concluded that the reorganization of PGH was done in bad faith. Accordingly, the lower court ruled that respondent Dr. Estrella cannot be removed from office as a result of such defective abolition of the position to which he was appointed. Significant in this regard is the following pronouncement of the lower court:

Going over the organizational structure of present set-up of the PGH and proposed reorganizational structure, it appears that there are other minor differences aside from changes of designations and enlargement of functions and powers, namely: (1) The positions of Assistant Director for Administration and Assistant Director for Fiscal matters in the present set-up are combined into only one position of Assistant Director for Administrative and Fiscal Matters in the reorganization plan; (2) The position of Assistant Director for Health Operation in the present set-up was changed to position of Director of Health Services, directly under the UP-PGH Medical Center Director with one Assistant Director for Allied Medical Services, under it, in the reorganization plan and (3) The five (5) Departments of Oncology, Out-Patient Department, Emergency Room, Charity Ward and Pay Ward under the present set-up were converted into Institute of Oncology, Out-Patient Hospital, Emergency Hospital, Charity Hospital and Non-Charity Hospital under the reorganization plan.

In other words, these five (5) units were merely enlarged, expanded and called hospitals headed each by a Director. The Director of the PGH under the present set-up became Director of UP-PGH Medical Center. Aside from the three changes above and change of designations and transfers of duties, the structure remains substantially the same. The leadership element which the defendant Abueva wants to impress upon this Court, encourages reorganization and justifies abolition of positions. But the whole reorganization set-up under our law cannot or should not have the effect of abolishing the position of the plaintiff unless legal requirements are complied with.(Brallo vs. Enage, 94 Phil. 732) If the reorganization plan results in abolishing the position of the plaintiff and in putting in his place another one, with substantially the same duties, not to say qualifications, in the name of leadership, it will surely be considered a device to unseat the incumbent and to circumvent the constitutional and statutory prohibition of removal from office of a civil service officer even without cause provided by law. Plaintiffs position should not therefore be deemed abolished by mere implication. (Cuneta vs. CA, 1 SCRA 663, 111 Phil. 249) If the abolition of office is made to circumvent the constitutional security of tenure of civil service employees, our Supreme Court, has ruled that such abolition is null and void. (Gutierrez vs. CA, 1-25972, 2 /26 / 68, 26 SCRA 32) 4

Respondent Dr. Estrella was appointed Director of PGH on June 26, 1986 by the LTP Board of Regents. His appointment was to be effective September 1, 1986 until April 30, 1992 or unless sooner terminated. Appointees of the LTP Board of Regents enjoy security of tenure during their term of office. In Tapales v. President of the University of the Philippines, 5 We held that Director Tapales who was appointed by the UP Board of Regents as Director of the Conservatory of Music for a term of five (5) years is entitled to security of tenure during his term of office. Likewise, in Sta. Maria v. President Salvador P. Lopez, et. al., 6 We rejected the removal of Professor Sta. Maria as dean of the College of Education. In that case, Professor Sta. Maria was appointed by the UP Board of Regents as dean of the College of Education effective May 16,1967 until May 17,1972 or unless sooner terminated. Before the expiration of his term of office, President Salvador P. Lopez removed him as dean of the College of Education and tranferred him to the office of the UP President. Upholding the right of Professor Sta. Maria to security of tenure, We explained out that "... a college dean holding an appointment with a fixed term ... cannot, without his consent, be terminated before the end of his term. He cannot be asked to give up his post. Nor may he be appointed as dean of another college. Much less can he be transferred to another position even if it be dignified with a dean's rank."

Petitioners argue, however, that the abolition of the position of respondent Dr. Estrella Jr. negates his claim to security of tenure. The argument is devoid of merit.

It is clear from the record that the PGH itself was not abolished in the reorganization plan approved by the UP Board of Regents. The PGH was merely renamed "UP-PGH Medical Center" and some of it functions and objectives were expanded or

consolidated. There is no substantial distinction, in terms of functions, between PGH and the proposed UP-PGH Medical Center.

While PGH itself was not abolished, the position of PGH Director was abolished and in its place, the position of UP-PGH Medical Center Director was created. After abolishing said position, it was proposed to be reclassified as Director, Charity hospital, one of the five (5) hospital director positions proposed to be created in the reorganized PGH.

The UP Board of Regents acted within the scope and limitations of its charter, Act No. 1870, as amended when it approved the reorganization plan renaming the PGH and expanding and consolidating some of its functions and objectives. The UP Board of Regents did not and could not have abolished PGH. And rightly so. The PGH and one of its component units, the Cancer Institute, are creations of special laws, the old Administrative, Code (Chapter 29, Secs. 706-707) and Commonwealth Act No. 398, respectively. The authority of the UP under Act No. 1870 as amended, to combine two or more colleges in the interest of economy and efficiency does not empower UP to abolish offices created by special laws. Section 6(b) of Act No. 1870, al amended, reads as follows:

(b) To provide for the establishment of one or more Colleges of Liberal Arts; a College of Law; a College of Social and Political Science; a College of Medicine and Surgery; a College of Pharmacy; a College of Dentistry; a College of Veterinary Science; a College of Engineering; a College of Mines; a College of Agriculture; a College of Education; a School of Fine Arts; a School of Forestry; a Conservatory of Music, and such other colleges and schools as the Board of Regents may deem necessary: Provided, That the Board of Regents may establish these colleges, or any of them, in Manila or in any other place in the Archipelago, as soon as in its judgment conditions shall favor their opening and finds shall be available for their maintenance: And provided further, That the Board of Regents shall have the power to combine two or more of the colleges authorized by this Act, in the interests of economy and efficiency And provided finally, That the Philippine Medical School as established by Act Numbered Fourteen Hundred and Fifteen as amended, shall become the College of Medicine and Surgery of the Philippine University as soon as two or more colleges of the University of the Philippines shall have been established and in actual operation.

It is therefore clear that the authority of the UP is limited to what is expressly provided in Act No. 1870 as amended, that is, to combine or merge colleges. that is all the law speaks of in such instance.

On the other hand, the power to create and abolish offices carries with it the power to fix the number of positions, salaries, emoluments, and to provide funds for the operation of the office created. 7 This power is inherently legislative in character. The UP Board of Regents does not have such power. Hence, the abolition of the position of respondent Dr. Estrella is not valid.

It is true that a valid and bona fide abolition of an office denies to the incumbent the right to security of tenure. 8However, in this case, the renaming and restructuring of the PGH and its component units cannot give rise to a valid and bona fide abolition of the position of PGH Director. This is because where the abolished office and the offices created in its place have similar functions, the abolition lacks good faith. 9 We hereby apply the principle enunciated in Cesar Z. Dalio vs. Hon. Salvador M. Mison 10 that abolition which merely changes the nomenclature of positions is invalid and does not result in the removal of the incumbent.

The above notwithstanding, and assuming that the abolition of the position of the PGH Director and the creation of a UP-PGH Medical Center Director are valid the removal of the incumbent is still not justified for the reason that the duties and functions of the two positions are basically the same. The UP-PGH Medical Center is essentially the same PGH hence, the Medical Center Director will be performing duties very similar to the present PGH Director. It cannot be invoked to sustain the argument that respondent is not entitled to security of tenure. In Palma-Fernandez v. de la Paz, 11 the abolition of the position of "Chief of Clinic" and the creation of the position of "Assistant Director, Professional Services" were set aside for the reason that the two positions are basically one and the same except for the change of nomenclature.

The proposal to establish five hospitals within the UP-PGH Medical Center, and with it, the proposal to create five hospital director positions militate against the propriety of giving due course to this petition. As presently organized, there is only one hospital director position in the plantilla of positions of the PGH, the PGH Director. In the proposed reorganization, such number will be increased to six, one UP-PGH Medical Center Director and five directors for each of the five hospitals proposed to be established namely, the Out-Patient Hospital, Emergency Hospital, Charity Hospital, Non-Charity Hospital and Institute of Oncology. In Guerrero vs. Arizabal, 12 We held that the creation of additional management positions in a proposed reorganization is evidence of bad faith and is in violation of Republic Act No. 6656. We hold that the same applies to the PGH

reorganization.

Finally, the admission by petitioner Dr. Jose V. Abueva that the staffing pattern for the reorganized PGH has not been prepared is fatal to petitioners' cause. In Dario v. Mison, 13 We made the observation that no reorganization of the Bureau of Customs actually took place since a staffing pattern which could have been the basis for hiring and g was lacking. In this case, petitioners were poised to nominate and appoint a UP-PGH Medical Center Director inspite of the absence of a staffing pattern. The absence of such an important element in the reorganization plan contradicts the petitioners' claim of good faith and only proves that petitioners were unreasonably in a hurry to remove respondent Estrella from his office.

Anent the issue regarding respondent Estrella's failure to exhaust all administrative remedies, We hold that this case has special circumstances that made it fall under the jurisprudentially accepted exceptions to the rule. As the facts show, respondent Dr. Estrella was about to be replaced by the Nomination Committee. He must have believed that airing his protest with the Board of Regents would only be fruitless and that unless he goes to the courts, irreparable damage or injury on his part will be caused by the implementation of the proposed reorganization.

Respondent Judge did not commit any reversible error much less grave abuse of discretion. The facts as supported by evidence established may no longer be disturbed.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 28, 1989 and Order dated October 23, 1989 of the respondent Judge are hereby AFFIRMED in toto. No costs.

SO ORDERED.

Narvasa, Gutierrez, Jr., Cruz, Paras, Padilla, Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Sarmiento, J., is on leave.

Davide, Jr., J., concur in the result.

Separate Opinions

MELENCIO-HERRERA, J., concurring and dissenting:

I concur in so far as the security of tenure issue is concerned. However, in line with my dissent in Dario v. Mison(176 SCRA 84), I disagree with the sweeping conclusion that the reorganization of U.P. Manila, including the PGH, was done in bad faith.

There was a genuine reorganization involved with the end in view of improving and streamlining the U.P.-PGH system and to bring about a medical center worthy of the name. A novel organizational set-up was contemplated.

It is just unfortunate that the declaration of vacancy of the position of the PGH Director, and the call for the nomination of a new Medical Center Director to replace the incumbent Director, clashed with the security of Tenure enjoyed by the latter.

Fernan, C.J., concurs.

FELICIANO, J., dissenting:

I dissent on the grounds set out in Mme. Justice Herrera's dissenting opinion in Dario v. Mison, 176 SCRA 84.

Separate Opinions

MELENCIO-HERRERA, J., concurring and dissenting:

I concur in so far as the security of tenure issue is concerned. However, in line with my dissent in Dario v. Mison(176 SCRA 84), I disagree with the sweeping conclusion that the reorganization of U.P. Manila, including the PGH, was done in bad faith.

There was a genuine reorganization involved with the end in view of improving and streamlining the U.P.-PGH system and to bring about a medical center worthy of the name. A novel organizational set-up was contemplated.

It is just unfortunate that the declaration of vacancy of the position of the PGH Director, and the call for the nomination of a new Medical Center Director to replace the incumbent Director, clashed with the security of Tenure enjoyed by the latter.

Fernan, C.J., concurs.

FELICIANO, J., dissenting:

I dissent on the grounds set out in Mme. Justice Herrera's dissenting opinion in Dario v. Mison, 176 SCRA 84.

Footnotes

1 p. 320, Rollo.

2 pp. 16-17. Rollo.

3 pp. 310-311, Rollo.

4 p. 318, Rollo.

5 7 SCRA 553 (1963).

6 31 SCRA 637 (1970).

7 Castillo v. Pajo 103 Phil. 515 (1958); Llanto v. Dimaporo et. al., 16 SCRA 599 (1966 ).

8 De la Llana N Alba, 112 SCRA 294 (1982).

9 Jose L. Guerrero v. Hon. Antonio V. Arizabal G.R. No. 81928. June 4, 1990.186 SCRA 108 (1990).

10 176 SCRA 84 (1989).

11 160 SCRA 751 (1988).

12 Supra, note 9.

13 Supra, note 10.

The Lawphil Project - Arellano Law Foundation

lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. Nos. 115121-25             February 9, 1996

NATIONAL FOOD AUTHORITY and ROMEO G. DAVID, petitioners, vs.THE HON. COURT OF APPEALS, HON. BERNARDO P. ABESAMIS, Presiding Judge, Regional Trial Court, Branch 85, Quezon City, HON. RODOLFO ORTIZ, Presiding Judge, Regional trial Court, Branch 89, Quezon City, HON. TIRSO D. C. VELASCO, Presiding Judge, Regional Trial Court, Branch 88, Quezon City, HON. BENEDICTO B. ULEP, Presiding Judge, Branch 105, Quezon City, HON. JUSTO M. SULTAN, Presiding Judge, Branch 98, Quezon City, COL. FELIX M. MANUBAY, MASADA SECURITY AGENCY, CONTINENTAL WATCHMAN AND SECURITY AGENCY, ALBERTO T. LASALA, and NORMAN D. MAPAGAY,respondents.

D E C I S I O N

PUNO, J.:

The case at bar involves the legality of negotiated security contracts awarded by the National Food Authority (NFA), a government-owned and controlled corporation and its Administrator, Romeo G. David, to several private security agencies, in default of a public bidding. Petitioners NFA and David seek a modification of the decision of the Court of Appeals insofar as it nullifies and enjoins the implementation of the said negotiated security contracts.

The facts are not disputed.

In 1990, the NFA, through then Administrator Pelayo J. Gabaldon, conducted a public bidding to award security contracts for

the protection of its properties and facilities all over the country . Twelve security agencies were awarded one-year contracts, among whom were private respondents Col. Felix M. Manubay (doing business under the name Greenview Investigation and Security Agency), Continental Watchman and Security Agency, Alberto T. Lasala (doing business under the name PSF Watchman and Investigation Agency) and Norman D. Mapagay (doing business under the name People's Protective and Security Agency).

In August 1992, petitioner Romeo G. David became NFA Administrator. He caused a review of all security service contracts, procedures on the accreditation of private security agencies and the bidding for security services. Pending this review, Administrator David extended the services of private respondents and the other incumbent security agencies on a periodic basis.

The review was completed in March 1993 and new terms for accreditation, bidding and hiring of security agencies were made. The bidding areas were also reclassified and reduced from fourteen NFA regions to only five NFA areas nationwide. A special order was thereafter issued for the implementation of the new rules and procedure.

On April 6, 1993, Special Order No. 04-07 was issued under which Administrator David created a Prequalification, Bids and Awards Committee (PBAC) to undertake the prequalification of prospective bidders, conduct the bidding, evaluate the bids tendered and recommend to the Administrator the bids accepted. Notices for prequalification and bidding for security services were published in a newspaper of national circulation. All incumbent security contractors were required to prequalify and only those prequalified were to be allowed to participate in the prebidding and bidding scheduled on June 4 and 18, 1993, respectively.

The prebidding and bidding dates were later reset to June 18 and 30, 1993 to give more time for the participants to comply with documentary requirements. Forty-one security agencies, composed of the incumbents and new applicants, including private respondent Masada Security Agency, submitted the necessary documents for prequalification.

Upon a review of the documents submitted, the PBAC disqualified respondent Mapagay for failure to submit proof of his financial capability to support his bid. It also disqualified respondent Lasala for alleged failure to meet the five-year service requirement. Only respondents Manubay, Continental and Masada participated in the prebidding and were declared on June 17, 1993 prequalified to bid.

Meanwhile, however, two of the applicants who failed to prequalify, namely Lanting Security and Watchman Agency and respondent Lasala, filed separate complaints with the Regional Trial Court, Quezon City to restrain Administrator David and the PBAC from proceeding with the public bidding. As prayed for, restraining orders were issued by the two courts on June 29, 1993 which the NFA received on June 30, 1993, the day of the scheduled bidding. No bidding thus took place on said date.

On respondent Lasala's application, the Regional Trial Court, Branch 93, Quezon City issued on July 20, 1993 a preliminary injunction ordering the PBAC to refrain from proceeding with the bidding until the merits of the case shall have been heard and resolved.

During the effectivity of the writ of preliminary injunction, Administrator David sent to all incumbent security agencies, including four of herein private respondents, notices of termination dated July 30, 1993. Private respondents .were informed that their services were to end on August 16, 1993 inasmuch as their respective contracts had expired and they no longer enjoyed the trust and confidence of the NFA. They were thus instructed to withdraw their security guards from all NFA installations.

On August 4, 1993, Administrator David contracted the services of seven new security agencies starting August 16, 1993 on a month-to-month basis pending resolution of the injunction against the bidding. Private respondents forthwith filed separate complaints with the Regional Trial Court, Branches 85, 89, 88, 105 and 98, Quezon City for prohibition, mandamus and damages with a prayer for the issuance of a preliminary injunction and restraining order.1

The trial courts issued five separate restraining orders and injunctions ordering the NFA to desist from terminating the services of respondents, and from awarding and installing the new security agencies replacing them.

These orders were challenged by NFA and David in separate petitions before the Court of Appeals alleging grave abuse of discretion by respondent judges. The Court of Appeals consolidated the petitions and on March 11, 1994 rendered a decision partially granting the same by annulling that part of the orders restraining NFA from terminating the contracts with the incumbent security agencies but affirming the orders insofar as they enjoined NFA from awarding the contracts to the seven new security agencies. The Court of Appeals ordered:

WHEREFORE, premises considered, the petition is found meritorious in part and partially given DUE COURSE . The assailed orders and writs of preliminary injunction are ANNULLED and SET ASIDE insofar as they order petitioners to cease and desist from terminating or implementing the termination of private respondents' expired security contracts with NFA. The said assailed orders and writs of preliminary injunction issued are, however, declared LEGAL, VALID and NOT issued in excess of jurisdiction or with grave abuse of discretion insofar as they enjoin petitioners from awarding the security service contracts to the seven (7) security agencies named by petitioners and/or implementing said awards. To this extent the petitions are DISMISSED for lack of merit.2

Reconsideration was denied on April 15, 1994.

Petitioners now assail that part of the decision of the Court of Appeals nullifying and enjoining the implementation of the contracts with the new security agencies. They plead that we restrain the lower courts from enforcing the injunction as against the new security agencies. They argue that the new security agencies were hired as an "emergency measure" after the contracts with the incumbent security agencies expired. They claim that without the new security agencies, the properties of the NFA worth billions of pesos would be exposed to danger of loss and dissipation.3

On May 18, 1994, we issued a temporary restraining order enjoining respondents from enforcing the decision of the Court of Appeals and the writs of preliminary injunction issued by the trial courts "insofar as the same nullify or otherwise stop the implementation of the subject interim negotiated NFA security contracts." We however ordered petitioners to "proceed with the public bidding of the security contracts without delay and submit to us a report on the result of such bidding within 30 days from the holding thereof.4

On July 21, 1994, petitioners submitted a report dated July 19, 1994 informing the Court that a public bidding was held on June 21, 1994 but no contract had been awarded because the PBAC had to study and evaluate each and every bid proposal.5

A second report dated March 3, 1995 was filed by petitioners informing us that deliberation on the bids was prolonged by the necessity of passing upon the technical merits of each bid and by the discovery of collusion between two bidders "which spawned threats against the life of the members of the PBAC." The PBAC decided to conduct a rebidding in Areas 1, 2 and 3 and apprise the court of the results thereof.6

A third report dated July 13, 1995 was submitted where petitioners manifested that still no contract had been awarded because the minimum number of bidders per area was not met. Two bidders7 for Areas 3, 4 and 5 submitted identical bids which were held collusive by the PBAC per advice of the Office of the Government Corporate Counsel. The rejection of the two agencies reduced the number of bidders in each area below the required minimum compelling the PBAC to recommend a failure of bidding in all five NFA areas. Petitioners, however, could not act on the PBAC's recommendation because a temporary restraining order was issued on April 10, 1995 by the Regional Trial Court, Branch 17, Davao. One of the bidders found in collusion8 filed a complaint with the said Regional Trial Court questioning the legality of the PBAC's rejection of its bids and enjoining NFA and the PBAC from awarding security contracts to any lowest or next lowest qualified bidder.9

We shall now resolve the contentions of petitioners that the Court of Appeals gravely erred:

I

IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS HAVE NO RIGHT AND CAUSE OF ACTION AGAINST PETITIONERS, AND THEREFORE, ARE NOT ENTITLED TO THE QUESTIONED RELIEF GRANTED THEM BY RESPONDENTS RTC JUDGES AND COURT OF APPEALS;

II

IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS DID NOT AVAIL OF, MUCH LESS EXHAUST, AVAILABLE ADMINISTRATIVE REMEDIES, THEREBY RENDERING THEIR COMPLAINT PREMATURE AND LEGALLY DEFICIENT TO MERIT THE GRANT OF JUDICIAL RELIEF;

III

IN ITS FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE NEW INTERIM MONTHLY NEGOTIATED SECURITY CONTRACTS OF NFA, INTENDED TO PROVIDE NFA WITH AMPLE SECURITY DURING THE TEMPORARY EMERGENCY PERIOD THAT A PUBLIC BIDDING CANNOT BE

CONDUCTED BY REASON OF THE INJUNCTIVE ORDERS OF THE COURTS A QUO, ARE SANCTIONED BY LAW, BEING LEGITIMATE EXCEPTION TO THE GENERAL REQUIREMENT OF A PUBLIC BIDDING;

IV

IN ITS GENERAL FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE INTERIM MONTHLY NEGOTIATED NFA SECURITY CONTRACTS ARE A VALID EXERCISE OF BUSINESS JUDGMENT WITHIN THE PERIMETERS OF NFA MANAGEMENT'S AREA OF COMPETENCE. THE CA, MOREOVER, SERIOUSLY ERRED WHEN IT FAILED TO CONSIDER THAT THE LAW AND THE SITUATIONAL FACTS OF THE CASE SANCTION AND EVEN CALL FOR THE IMMEDIATE IMPLEMENTATION OF SAID INTERIM CONTRACTS.10

We reject these contentions.

The principle of exhaustion of administrative remedies is not a hard and fast rule. It is subject to some limitations and exceptions. In this case, private respondents' contracts were terminated in the midst of bidding preparations and their replacements hired barely five days after their termination. In fact, respondent Masada, a prequalified bidder, submitted all requirements and was preparing for the public bidding only to find out that contracts had already been awarded by negotiation. Indeed, an appeal to the NFA Board or Council of Trustees and the Secretary of Agriculture pursuant to the provisions of the Administrative Code of 1987 11 was not a plain, speedy and adequate remedy in the ordinary course of the law. 12 The urgency of the situation compelled private respondents to go to court to stop the implementation of these negotiated security contracts.

We are neither impressed by petitioners' claim that the subject contracts were negotiated as a necessity to stave off a crisis that gripped the NFA, i.e., the loss, destruction and dissipation of their properties, warehouses, rice and corn stocks and facilities with an estimated value of P19 billion. Petitioners allege they were merely exercising their sound business judgment in an emergency situation brought about by respondent security agencies themselves who, in the first place, obtained the injunctions from the Quezon City trial courts.

First of all, the restraining orders and writ of preliminary injunction issued by the two Quezon City trial courts on complaint by Lanting and respondent Lasala suspending the public bidding scheduled on June 30, 1993 did not result in the emergency situation petitioners alleged. The security vacuum was created when petitioners terminated the services of the incumbent security agencies after the issuance of the said orders and before the injunctions issued by respondent trial courts on application by private respondents.

When the bidding did not take place on June 30, 1993, the incumbent security agencies continued rendering services to petitioners, albeit on a temporary and provisional basis. However, one month later, they were all terminated on grounds of expiration of contract and loss of trust and confidence.

We agree with the Court of Appeals that it was well within the power of petitioners to discontinue the services of the incumbent security agencies. Their contracts with the NFA expired in 1992, hence, their services were deemed terminated on said date. 13 The fact that these agencies continued rendering services to NFA did not amount to an implied. renewal of their respective contracts. Respondents do not have any vested right to continue their contracts with NFA. They remained and continued performing their tasks at the tolerance of NFA who, by sending the notices of termination, simply reminded them of the expiration of their contracts. 14 These contracts can be renewed, revived or extended only by mutual consent of the parties. No court can compel a party to agree to a contract thru the instrumentality of a writ of preliminary injunction.

Nevertheless, what causes eyebrows to arch is the act of petitioners in discontinuing the incumbents' services. Respondents Manubay and Lasala allege that their agencies had been rendering security services to the NFA since 1985 15 and 1988, 16 respectively. Moreover, Manubay and Continental passed the prequalification stage and were declared by the PBAC eligible to join the public bidding. Scarcely a month later, however, their services were terminated at the same time and for the same reasons as the rest of the incumbent security agencies. It is certainly strange why petitioners chose to do away with the incumbents' services at a time when a "security void" would directly and most necessarily result from their withdrawal. The least petitioners could have done under the circumstances was to maintain the status quo until the writ of preliminary injunction obtained by respondent Lasala shall have been lifted.

Assuming arguendo that an emergency actually existed and the negotiated contracts were justified, petitioners' continued failure to conduct a public bidding and select the bidder within a reasonable time casts doubts on the good faith behind the negotiated contracts. This Court, on May 18, 1994, specifically ordered petitioners to conduct a public bidding and report the results within thirty days from holding thereof. In compliance, a public bidding was conducted on June 21, 1994 but until now no

bidder has been chosen and no contract has been awarded.

Petitioners cited various reasons for the delay. They alleged that the minimum number of bidders in three of the five areas had not been met and that two bidders in the other two areas were in collusion. This suspicion of collusion generated so much controversy that the PBAC could not decide whether to include the bids of the two agencies. Finally, the PBAC excluded them and recommended that the Administrator declare a failure of bidding in all five areas of responsibility.

The Administrator should have immediately acted upon the PBAC's recommendation and accordingly scheduled another public bidding but somehow petitioners chose to abide by a restraining order of the Davao trial court. It must be noted that what the Davao trial court issued was a temporary restraining order enjoining petitioners from awarding the contracts to the lowest or next lowest bidder at the June 21, 1994 public bidding. It was not a writ of preliminary injunction nor was an order restraining the holding of another bidding.

Petitioners and the PBAC are obviously taking their sweet time to select and award security contracts to winning bidders. They took one year evaluating and deliberating on thirteen bid proposals only to declare a failure of bidding in all five areas of responsibility. Then they relied on a restraining order of a trial court after no less that this Highest Court specifically ordered them to conduct and conclude a public bidding.

Litigants should be conscious of the position lower courts occupy in the operation of the integrated judicial system of the nation. 17 There is only one Supreme Court and all courts and litigants should take their bearings from this Court. 18

Petitioners' manifest reluctance to hold a public bidding and award a contract to the winning bidder smacks of favoritism and partiality toward the security agencies to whom it awarded the negotiated contracts and cannot be countenanced. A competitive public bidding aims to protect the public interest by giving the public the best possible advantages thru open competition. It is a mechanism that enables the government agency to avoid or preclude anomalies in the execution of public contracts. 19

The General Appropriations Act (GAA) of 1993 20 cannot be used by petitioners to justify their actuations. An appropriations act is primarily a special type of legislation whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit. 21 Section 31 on the General Provisions of the GAA of 1993 merely authorizes the heads of departments, bureaus, offices or agencies of the national government to hire, through public bidding or negotiated contracts, contractual personnel to perform specific activities or services related or incidental to their functions. This law specifically authorizes expenditures for the hiring of these personnel. 22  It is not the governing law on the award of service contracts by government agencies nor does it do away with the general requirement of public bidding. 23

IN VIEW WHEREOF, the petition is dismissed and the decision dated March 11, 1994 and resolution dated April 15, 1994 of the Court of Appeals in CA-G.R. SP Nos. 32213, 32230 and 32274-76 are affirmed. The temporary restraining order issued by this Court on May 18, 1994 is hereby lifted. Treble costs against petitioners.

SO ORDERED.

Regalado, Romero and Mendoza, JJ., concur.

Footnotes

1 Civil Cases Nos. Q-93-17202, Q-93-17209, Q-93-17139, Q-93-17278, and Q-93-17155.

2 CA Decision, p. 12; Rollo, p. 377.

3 Amended Petition, p. 14; Rollo, p. 321.

4 Rollo, p. 299.

5 Id., p. 694.

6 Id., pp. 970-972.

7 Davao Security and Investigation Agency, Inc. (DASIA) and Metroguard .

8 DASIA.

9 Id., pp. 1038-1043.

10 Amended Petition, pp. 23-24; Rollo, pp. 330-331.

11 E.O. 292, Bk. IV, Title IV Chapter 6 Sec. 47; Bk. VII, Chapter 4, Secs. 1, 19; Chapter 9 Sec. 42.

12 Laganapan v. Asedillo, 154 SCRA 377 [1987]; Sta. Maria v. Lopez, 31 SCRA 637 [1970]; Fernandez v. Cuneta, 108 Phil. 427 [1960].

13 Brent School, Inc. v. Zamora, 181 SCRA 702, 709 [1990].

14 Brent School, Inc. v. Zamora, supra.; Escudero v. Office of the President of the Philippines, 172 SCRA 783 [1989]; Labajo v. Alejandro, 165 SCRA 747 [1988].

15 Comment of Greenview, Annexes "1" and "2," Rollo, pp. 760, 761-767.

16 Memorandum of Lasala, p. 2; Rollo, p. 1136.

17 People v. Vera, 65 Phil. 56, 81-82 [1937].

18 Ang Ping v. RTC of Manila, Branch 40, 154 SCRA 77 [1987]; Albert v. CFI of Manila, 23 SCRA 948 [1968].

19 Danville Maritime, Inc. v. Commission on Audit, 175 SCRA 701 [1989]; Malaga v. Penachos, 213 SCRA 516 [1992].

20 Republic Act No. 7645.

21 Philippine Constitution Association v. Enriquez, 235 SCRA 506, 533 [1994].

22 R.A. No. 7645, p. 1204.

23 Executive Order No. 301, Section 1 provides:

"Sec. 1. Guidelines for Negotiated Contracts. Any provision of law, decree, executive order or other issuances to the contrary notwithstanding, no contract for public services or for furnishing supplies, materials and equipment to the government or any of its branches, agencies or instrumentalities shall be renewed or entered into without public bidding, except under any of the following situations: . . . ".

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-24989             July 21, 1967

PEDRO GRAVADOR, petitioner-appellee, vs.EUTIQUIO MAMIGO, THE DISTRICT SUPERVISOR OF BAYAWAN-STA. CATALINA SCHOOL DISTRICT, THE DIVISION SUPERINTENDENT OF SCHOOLS OF NEGROS ORIENTAL, THE DIRECTOR OF PUBLIC SCHOOLS and THE SECRETARY OF EDUCATION, (all sued in their official and personal capacities),respondents-appellants.

Office of the Solicitor Genero Arturo A. Alafriz, Assistant Solicitor General I. C. Borromeo and Solicitor F. J. Bautista for respondents-appellants.Newton E. Serion for petitioner-appellee.

CASTRO, J.:

The petitioner Pedro Gravador was the principal of the Sta. Catalina Elementary School in Sta. Catalina, Negros Oriental on August 15, 1964 when he was advised by the then, Superintendent of Schools Angel Salazar, Jr., through the respondent Supervisor Teodulfo E. Dayao, of his separation from the service on the ground that he had reached the compulsory retirement age of 65. The advice reads:

According to your pre-war records as a teacher in the public schools, including your Employee's Record Card, which has just been found in connection with the verification of the services of all school officials including elementary school principals in this division, you were born on November 26, 1897. As of this date, therefore, you are now 66 years, 8 months, and 22 days old.

In view of the above, you are hereby advised of your separation from the service effective immediately

unless you can show valid proof in the form of a baptismal or birth certificate that you are below sixty-five years of age today.

A few days later the respondent Eutiquio Mamigo was designated teacher-in-charge of the said elementary school.

On August 31, 1964 the petitioner wrote the Director of Public Schools, protesting his forced retirement on the ground that the date of his birth is not November 26, 1897 but December 11, 1901. Attached to his letter was the affidavit, executed on July 26, 1962, of Lazaro Bandoquillo and Pedro A. Sienes both of Amlan Negros Oriental, in which these two affiants declared that they knew that the petitioner "was born on December 11, 1901, in the Municipality of Amlan formerly known as New Ayuquitan Province of Negros Oriental, Philippines" because, "we were the neighbors of the late spouses, NEPOMUCENO GRAVADOR and AGUEDA REGOROSA [petitioner's parents], and we were present when said PEDRO GRAVADOR was born; furthermore,we were also invited during the baptismal party a few weeks after the birth of said PEDRO GRAVADOR."

On October 19, 1964 the petitioner wrote to the Division Superintendents of Schools, reiterating his claim that he had not reached the age of 65 and enclosing some papers in support thereof.

On April 13, 1965 he filed this suit for quo warranto, mandamus and damages in the Court of First Instance of Negros Oriental. He asked the court to adjudge him entitled to the office of principal of the Sta. Catalina Elementary School and to order payment to him of not only his back salaries but also damages in the total amount of P52,400. Named as respondents were Eutiquio Mamigo, the District Supervisor, the Superintendent of Schools, the Director of Public Schools and the Secretary of Education.

The respondents filed their answer, entered into a stipulation of facts with the petitioner, and thereafter the case was submitted for decision. The trial court concluded that the petitioner was born on December 11, 1901 accordingly granted his petition. Immediate execution was ordered, as a result of which the petitioner was reinstated.

The respondents appealed directly to this Court.

On July 6, 1967 the petitioner asked for the dismissal of the appeal on the ground that the issues posed thereby had become moot with his retirement from the service on December 11, 1966 and the payment to him of the corresponding retirement benefits. We deem it necessary, however, to review the trial court's decision on the merits, considering that the computation of retirement annuities is based among other things, on the number of years of service of a retiree,1 and that payment of benefits already made to the petitioner on the basis of December 11, 1901 as the date of his birth would not exempt him from the obligation to make a refund should this Court ultimately rule that he was actually born November 26, 1897, as the respondents claim.

The controversy on the petitioner's date of birth arose as a result of the conflicting records of the Division of Schools of Negros Oriental. On the one hand the pre-war records show his date of birth to be November 26, 1897. These records consist of two Insular Teachers Cards2 and one Employee's Record Card.3 It is on the basis of these records that the Superintendent of Schools determined the petitioner's age to be 66 years, 8 months and 22 days on August 15, 1964.

On the other hand, the post-war records, consisting of an Elementary Teacher's Report Card,4 an Employee's Record Card,5 and an Employee's Record of Qualifications,6 state that the petitioner was born on Dec. 11, 1901. These are the records on which the petitioner bases his claim.

The problem is aggravated by two uncontroverted facts, namely, that the records of the church where the petitioner was baptized were destroyed by fire, and that the municipal civil register contains no record. of the petitioner's birth.

According to the trial court, the post-war records were intended to replace the pre-war records and therefore the correct date of birth of the petitioner is December 11, 1901. The court also took into account the verified answer in a cadastral proceeding in the Court of First Instance of Negros Oriental, dated March 15, 1924, filed by the petitioner's brother, Romulo Gravador, now deceased. It is therein stated that the petitioner, said to be one of the co-owners of a piece of land, was at the time 23 years old.

The respondents now contend that the trial court erred in placing full reliance on the post-war records to establish the date of birth (December 11, 1901) of the petitioner. They argue that these records were made only because it was thought that the pre-war records had been lost or destroyed, but as some pre-war records had since been located, the date contained in the pre-war records should be regarded as controlling and that the finding of the Superintendent of Schools that the petitioner was born on November 26, 1897 is an administrative finding that should not be disturbed by the court.

That the findings of fact of administrative officials are binding on the courts if supported by substantial evidence, is a settled rule of administrative law, But whether there is substantial evidence supporting the finding of the Superintendent of Schools is precisely the issue in this case. The school official based his determination of the petitioner's age on the pre-war records in the preparation of which the petitioner does not appear to have taken a part.7 On the other hand, the petitioner post-war records which he personally accomplished to prove the date of his birth.8

It is our considered view that the lower court correctly relied upon the post-war records, for three cogent reasons.

In the first place, as Moran states, although a person can have no personal knowledge of the date of his birth, he may testify as to his age as he had learned it from his parents and relatives and his testimony in such case is an assertion of a family tradition.9 Indeed, even in is application for back pay which he filed with the Department of Finance, through the Office of the Superintendent of Schools, on October 7, 1948, the petitioner stated that the date of his birth is December 11, 1901. He repeated the same assertion in 1956 and again in 1960 when he asked the Government Service Insurance System and the Civil Service Commission to correct the date of his birth to December 11, 1901.

In the second place, the import of the declaration of the petitioner's brother, contained in a verified pleading in a cadastral case way back in 1924, to the effect that the petitioner was then 23 years old, can not be ignored. Madeante litem motam by a deceased relative, this statement is at once a declaration regarding pedigree within the intendment and meaning of section 33 of Rule 130 of the Rules of Court.

Thus, December 11, 1901 is established as the date of birth of the petitioner not only by evidence of family tradition but also by the declaration ante litem motam of a deceased relative.1äwphï1.ñët

Finally, the patties are agreed that the petitioner has a brother, Constantino, who was born on June 10, 1898 and who retired on June 10, 1963 with full retirement pay. The petitioner then could not have been born earlier than Constantino, say in 1897 as pre-war records indicate, because Constantino is admittedly older than he.10

Still it is argued that the petitioner's action was prematurely brought because he had not availed of all administrative remedies. This argument is without merit. Suit for quo warranto to recover a public office must be brought within one year.11 Before filing this case the petitioner waited for eight months for the school officials to act on his protest. To require him to tarry a little more would obviously be unfair to him since on April 13, 1965, when this case was filed, he had only four months left within which to bring the case to court. There was neither manner nor form of assurance that the decision of the Director of Public Schools would be forthcoming. The rule on exhaustion of administrative remedies does not apply where insistence on its observance would result in the nullification of the claim being asserted.12

Accordingly, the judgment a quo is affirmed. No pronouncement as to costs.

Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Angeles and Fernando, JJ., concur.Concepcion, C.J. and Dizon, J., took no part.

Footnotes

1See Government Service Insurance Act (Com. Act No. 186), sec. 11 (1936).

The amount of monthly annuity at the age of 57 is P20 plus, for each year of service rendered after June 16, 1951, 1.6% of the average monthly salary received during the last five years, plus for each year of service rendered prior to June 16, 1951, if such service lasted for at least seven years, 1.2% of the average monthly salary. This amount is adjusted actuarially if retirement is at an age other than 57, but the maximum amount of the monthly salary is in no case more than 2/3 of the average monthly salary or P500, whichever is the smaller amount.

The formula is —

R = P20 + [(1.6% x M) + (1.2% x P) [A]

Where —

R = Monthly annuity at 57

A = Average monthly salary for the last 5 years

M = No. of years of service after June 16, 1951

P = No. of years of service before June 16, 1951 if at least 7 years

If retirement is at an age other than 57, the monthly annuity at 57 is first computed after which the amount obtained is multiplied by the actuarial adjustment factor corresponding to the age at retirement in accordance with the following table:

Age Adj. Factor Age Adj. Factor

52 years .87 59 years 1.06

53 years .89 60 years 1.09

54 years .92 61 years 1.12

55 years .94 62 years 1.16

56 years .97 63 years 1.20

57 years 1.00 64 years 1.24

58 years 1.03 65 years 1.24

(GSIS Handbook of Information on Retirement Insurance 14-15 [1965]).

2Stipulation of Facts (hereinafter cited as Stipulation), Annexes G & I.

3Id., Annex I-1.

4Id., Annex I-2.

5Id., Annex I-3.

6Id., Annex J.

7Id., par. 7.

8Id., par. 8.

95 M. Moran, Comments on the Rules of Court 314 (1963).

10Stipulation, Annex P.

11E.g., De la Maza vs. Ochave, G.R. L-22336, May 23, 1967; Unabia vs. City Mayor, 99 Phil. 253 (1956).

12Alzate vs. Aldana, G.R. L-14407, Feb. 29, 1960.

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 80719 September 26, 1989

HILDA RALLA ALMINE, petitioner, vs.HONORABLE COURT OF APPEALS, MINISTRY OF AGRARIAN REFORM (MAR) AND SULPICIO BOMBALESrespondents.

GANCAYCO, J.:

This case involves the issue of the power of review of the Court of Appeals over the administrative decision on the transfer of the land to the tenant-farmer under Presidential Decree No. 27 and the amendatory and related decrees.

The facts are few and simple. On December 25, 1975, petitioner filed a sworn application for retention of her riceland or for exemption thereof from the Operation Land Transfer Program with the then Ministry of Agrarian Reform (MAR), Regional Office in Tabaco, Albay. After due hearing, Atty. Cidarminda Arresgado of the said office filed an investigation report dated June 26, 1980 for the cancellation of the Certificate of Land Transfer (CLT) of private respondent who appears to be petitioner's tenant over her riceland. Upon failure of the Ministry to take the necessary action, petitioner reiterated her application sometime in 1979-1985 alleging that her tenant deliberately failed and refused to deliver her landowner's share from 1975 up to the time of the filing of the said application and that the latter had distributed his landholding to his children. A reinvestigation was conducted this time by Atty. Seth Evasco who on October 31, 1985 filed his report recommending the cancellation of private respondent's CLT Said report was elevated to the MAR. In an endorsement dated November 25, 1985, Regional Director

Salvador Pejo manifested his concurrence with the report of Atty. Evasco holding that the properties of the petitioner consist of 4.3589 hectares as evidenced by Transfer Certificates of Title Nos. 27167, 27168 and 27344 and hence not covered by the Operation Land Transfer Program. Juanito L. Lorena, the Officer-in-Charge of MAR likewise concurred therewith. However, in the order dated February 13, 1986, then Minister Conrado Estrella denied petitioner's application for retention.

On April 17, 1986, petitioner appealed to the then Intermediate Appellate Court (IAC) The case was entitled Hilda Ralla Almine vs. MAR and docketed as AC-G.R. SP No. 08550. Private respondent filed a motion to dismiss the appeal. However, it was denied in an order dated May 28, 1986. A motion for reconsideration thereof was likewise denied. After the parties filed their respective pleadings, the Court of Appeals rendered a decision dated June 29, 1987 1 dismissing the appeal on the ground of lack of jurisdiction holding that questions as to whether a landowner should or should not be allowed to retain his land-holdings, if administratively administratively by the Minister of Agrarian Reform, are appealable and could be reviewed only by the Court of Agrarian Relations and now by the Regional Trial Courts pursuant to Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980. 2 Petitioner filed a motion for reconsideration but the same was denied in a resolution dated October 22, 1987. 3

Hence, the present petition.

Petitioner's posture is that it is an error for the respondent appellate court to dismiss the appeal on the ground of lack of jurisdiction since under Section 9 of Batas Pambansa Blg. 129, said appellate court is vested with the exclusive appellate jurisdiction over all decisions, resolutions, or orders of quasi-judicial agencies except those falling within the appellate jurisdiction of the Supreme Court. Petitioner argues that since the appeal involves both calibration of the evidence and the determination of the laws applicable thereto, then an appeal to the Court of Appeals is the appropriate remedy and hence her appeal should not have been dismissed. Petitioner argues further that on the assumption that the Court of Appeals has no jurisdiction on the matter, still the appeal should not have been dismissed but should have been certified to the proper court citing Section 3 of Rule 50 of the Revised Rules of Court.

The Court of Agrarian Relations has original and exclusive jurisdiction as follows:

Jurisdiction over Subject matter. — The Courts of Agrarian Relations shall have original and exclusive jurisdiction over:

a) Cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission; Provided, That no case involving the determination of rentals over any kind of tenanted agricultural land shall be taken cognizance of by the Courts of Agrarian Relations unless there has been a prior fixing of provisional rental by the Department of Agrarian Reform, except that the tenant-farmer may directly bring the case for immediate determination by the Courts of Agrarian Relations;

b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program; Provided, however, That matters involving the administrative implementation of the transfer of the land to the tenant-farmer under Presidential Decree No. 27 and amendatory and related decrees, orders, instructions, rules and regulations, shall be exclusively cognizable by the Secretary of Agrarian Reform, namely:

(1) classification and identification of landholdings;

(2) identification of tenant-farmers and landowners, and determination of their tenancy relationship;

(3) parcellary mapping;

(4) determination of the total production and value of the land to be transferred to the tenant-farmer;

(5) issuance, recall or cancellation of certificates of land transfer in cases outside the purview of Presidential Decree No. 816;

(6) right of retention of the landowner;

xxx xxx xxx

Provided, further, That the decision of the Secretary of Agrarian Reform may be appealed to the President of the Philippines. 4

A perusal of the provision above cited reveals that questions as to whether a landowner should or should not be allowed to retain his landholdings are exclusively cognizable by the Minister (now Secretary) of Agrarian Reform whose decision may be appealed to the Office of the President and not to the Court of Agrarian Relations. These cases are thus excluded from those cognizable by the then CAR, now the Regional Trial Courts. There is no appeal from a decision of the President. However, the said decision may be reviewed by the courts through a special civil action for certiorari, prohibition or mandamus, as the case may be under Rule 65 of the Rules of Court.

Thus, the respondent appellate court erred in holding that it has no jurisdiction over the petition for review by way of certiorari brought before it of a decision of the Minister of Agrarian Reform allegedly made in grave abuse of his discretion and in holding that this is a matter within the competence of the Court of Agrarian Reform. The Court of Appeals has concurrent jurisdiction with this Court and the Regional Trial Court over petitions seeking the extraordinary remedy of certiorari, prohibition or mandamus. 5

The failure to appeal to the Office of the President from the decision of the Minister of Agrarian Reform in this case is not a violation of the rule on exhaustion of administrative remedies as the latter is the alter ego of the President .6

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated June 29, 1987 and its resolution dated October 22, 1987, in CA-G.R. SP No. 08550 are set aside and the records of the case are remanded to said appellate court for further proceedings. No costs.

SO ORDERED.

Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.

Footnotes

1 Penned by Associate Justice Ricardo Pronove, Jr., and concurred in by Associate Justices Esteban Lising and Bonifacio A. Cacdac, Jr.

2 Pages 14-16, Rollo.

3 Page 17, Rollo.

4 Section 12, P.D. No. 946, (Reorganizing the Courts of Agrarian Relations, Streamlining Their Procedures And For Other Purposes).

5 Sections 9 (1) and 21 (l), B.P. Blg. 129; Section 5 (l); Article VIII, 1987 Constitution.

6 Tulawie vs. Provincial Agriculturist of Sulu, 11 SCRA 611 (1964); Santos vs. Secretary of Public Works and Communications, 19 SCRA 636 (1967); Gonzales vs. Hechanova, 9 SCRA 230 (1963).

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-42380 June 22, 1990

DATILES AND COMPANY, represented by LORETA DATILES and LARRY DATILES, petitioner, vs.Honorable MELQUIADES S. SUCALDITO, Presiding Judge of Branch I, Court of First Instance of Zamboanga del Sur, Honorable MATIAS A. GUIEB, or his Successor-in-Office, Regional Director, Region No. IX, Bureau of Fisheries and Aquatic Resources and JESUS DEYPALUBOS and DANIEL CABELIEZA,respondents.

Larry B. Datiles for petitioners.

Cerilles & Cerilles, Vera Cruz, Largo, Bautista Law Offices for respondent J. Deypalubos.

PADILLA, J.:

The issue before the Court is whether or not an investigation of a formal protest over a lease grant, by a Regional Director of the Bureau of Fisheries and Aquatic Resources may be the subject of a petition for prohibition and/or injunction before the Regional Trial Court, in the light of the following antecedent facts:

Petitioner Datiles and Company has in its favor a fishpond lease agreement 1 whereby the Republic of the Philippines, thru the Secretary of Agriculture and Natural Resources, agreed to lease to the company one hundred seventy five hectares, ninety nine ares and fifty-nine centares (175.9959 has.) of public land located in Batu, Siay, Zamboanga del Sur, for fishpond purposes. Fishpond Lease Agreement (FLA) No. 1902 was executed on 16 June 1971, with an original period of ten (10) years, later extended to twenty five (25) years, or up to year 2002. 2

About the middle of 1973, petitioner-lessee filed a complaint for "Injunction with Writ of Possession with Preliminary and Prohibitory Injunction, with Damages" before the Court of First Instance (now Regional Trial Court) of Zamboanga del Sur, and docketed as Civil Case No. 1389, against herein private respondents Jesus Deypalubos and Daniel Cabdieza. 3 Said court action was alleged to have been resorted to after the vehement refusal of the respondents to obey the orders of the then Philippine Fisheries Commission and Bureau of Fisheries 4 (now Bureau of Fisheries and Aquatic Resources) to vacate that portion of the area covered by FLA No. 1902 which they (private respondents) were occupying without a fishpond permit and the knowledge and consent of petitioner.

To the accusation of their unlawful entry, private respondents set up the defense of good faith at the time of their entry and occupation of the land which they described as forested and uncultivated. They added that prior to the filing of their own respective fishpond lease applications over the disputed area (i.e., Deypalubos on the southern portion of about forty-nine (49) hectares and Cabelieza on the eastern part of about two (2) hectares) on 3 January 1973, they were assured by an officer from the Bureau that the areas were unoccupied and not subject of any pending leasehold agreement or application. 5

Meanwhile, respondent Deypalubos submitted to the Bureau of Fisheries his formal protest against petitioner's existing fishpond permit over the 49 hectares, subject on Civil Case 1389. 6

Later, or on 18 February 1974, the trial court, in Civil Case No. 1389 ordered the issuance of a writ of preliminary mandatory injunction against both respondents 7 resulting in the restoration of possession and occupancy of the disputed areas by the petitioner on 28 May 1974. 8

Thereafter, or on 2 June 1974, the Barrio Council of Batu, Slay, Zamboanga del Sur prepared and submitted to the Bureau of Fisheries a resolution 9 which attests that the 49 hectare controverted fishpond area was never occupied by the Datiles family (herein petitioner company's predecessor) and that it was Mr. Deypalubos (herein private co-respondent) who cleared the same and constructed all the improvements therein. The resolution further requests that the original grant of 175.9959 hectares to Datiles and Company (herein petitioner) be reduced to fifty (50) hectares only in accordance with a certain presidential decree limiting the cultivation of a fishpond to about fifty (50) hectares, with the remaining area to be distributed to poor families.

No investigation of both the above-mentioned barrio council resolution and Deypalubos' formal protest over the forty-nine (49) hectares was held in view of a 29 October 1974 order of the Bureau Director to hold in abeyance any hearing on the matter until such time that Civil Case No. 1389 shall have been finally resolved. 10

On 3 January 1975, another memorandum was issued by the Bureau Director addressed to herein public respondent Regional Director Guieb, directing "an immediate formal investigation of those issues involved in the foregoing resolution and the protest of Mr. Jesus Deypalubos ...and not touched upon in Civil Case No. 1389." 11

Accordingly, public respondent Guieb notified the parties of the scheduled hearing of the said protest and resolution. 12

Praying to restrain the proposed investigation on the fishpond conflict, petitioner filed its 10 February 1975 petition for "Prohibition and/or Injunction with Preliminary Injunction" (Special Civil Case No. 1426) before the CFI of Zamboanga del Sur against public respondent Guieb and impleading pro forma therein respondents Deypalubos and Cabelieza. 13 Following the limitation on the scope of issues to be investigated as directed in the 3 January 1975 Memorandum of the Bureau Director, petitioner alleged that Regional Director Guieb has no longer any authority to conduct the investigation, as the issues proposed to be investigated are the same issues raised in the then pending Civil Case No. 1389.

The presiding judge of the court a quo, Hon. Melquiades S. Sucaldito (now respondent), seeing that a possible irreparable injury could be caused the petitioner if the investigation in question were to proceed, issued the 31 March 1975 restraining order. 14

During the trial of said Sp. Civil Case No. 1426, private respondents moved to dismiss the case and to dissolve the restraining order, 15 anchored on the grounds of (a) lack of the court's jurisdiction to try the case for failure on the part of petitioner to exhaust available administrative remedies, and (b) violation of Section 1 of Pres. Decree No. 605 which provides, in part, as follows:

SECTION 1. No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary mandatory injunction in any case involving or growing out of the issuance, approval or disapproval, revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions, licenses, permits, patents, or public grants of connection with the disposition, exploitation, utilization, exploration and/or development of

the natural resources of the Philippines.

Upholding respondents' contentions, the respondent judge dismissed Sp. Civil Case No. 1426 and lifted the 31 March 1975 restraining order on 4 August 1975. Pertinent portions of his decision read as follows: 16

... the element of said section which read:

or any action whatsoever by the proper administrative officials or body on concessions, licenses, permits, patents or public grants of any kind.

is so embrasive as to include the projected investigation sought to be prohibited. Clearly, therefore, Section 1 of Presidential Decree No. 605, as cited above, is squarely applicable to the restraining order sought to be dissolved. ...

... in that Civil Case No. 1389, in granting the said Writ of Preliminary Mandatory and Prohibitory Injunction, the Court acted solely to eject the respondents Deypalubos and Cabelleza from, and to prevent their return to the premises in question; to prevent them in widening their possession .... This Civil Case No. 1389 has not yet been tried on the merit. On the other hand, the investigation sought to be enjoined, and/or prohibited, involved not only mere possession, but the right of the parties to lease the premises in question, based on law, rules and regulations issued by the Bureau of Fisheries and Aquatic Resources. This investigation, therefore, pertains to, and within the exclusive jurisdiction of the Bureau of Fisheries. In this investigation of the protest, it might be shown that while defendants may have no right in the beginning, they might have acquired later on, equitable right which may lead to the approval of their fishpond applications on the land in question. It may likewise show, upon the other hand, that petitioner has not complied with the conditions of its lease agreement;

xxx

Besides, the petitioner in this case has an available, adequate and speedy remedy that is to appeal this matter of investigation to the proper superior official-which in this case is the Secretary of agriculture and Natural Resources. The plaintiff having failed to do this, the Court has no jurisdiction to entertain the present petition for prohibition. ...

Hence, this petition for review, which was previously denied for lack of merit by this Court in a 28 May 1976 Resolution. 17 Petitioner moved for the reconsideration of the said order of denial 18 and on 22 April 1977, the Court decided to give due course to the instant petition. 19

Petitioner's recourse to this Court is actually based on Section 2, Rule 65 of the Rules of Court, seeking to prevent public respondent Guieb from investigating the subject fishpond conflict, on the ground that this threatened act constitutes excess in the exercise of his jurisdiction. On the other hand, while respondents do not contest that the nature of the contemplated action (investigation) can be a proper subject of a petition for prohibition, it is nonetheless submitted that there being no prior exhaustion of administrative remedies on petitioner's part and in view of PD. No. 606, the respondent court cannot Properly take jurisdiction of the petition for prohibition.

We rule for the petitioner.

It is a well-settled rule that, for prohibition to lie against an executive officer, the petitioner must first exhaust administrative remedies. This doctrine rests upon the assumption that the administrative body, board or officer, if given the chance to correct its/his mistake or error, may amend its/his decision on a given matter. 20 It follows therefore that there has to be some sort of a decision, order or act, more or less final in character, that is ripe for review and properly the subject of an appeal to a higher administrative body or officer, for the principle of exhaustion of administrative remedies to operate. In the present case, however, there is no administrative order or act as above described, that can be appealed from. The respondent Regional Director has not rendered any decision, or made any final finding of any sort, and is in fact just about to conduct an investigation which happens to be the very act sought to be prevented. Consequently, administrative remedies that must be exhausted, although available, cannot be resorted to. There being urgency in stopping public respondent Guieb's investigation but no plain, speedy and adequate remedy in the ordinary course of law, petitioner's recourse to the respondent court for relief by way of a petition for prohibition was proper.

We now look into PD No. 605. Its evident purpose is to prevent the substitution of judicial judgments for those of public administrative officials in disputes involving the disposition or utilization of natural resources of the country. The decree seeks to leave to administrative agencies the authority to decide controversies involving licenses, permits, patents or public grants in connection with natural resources, obviously because of the expertise of such administrative officials in dealing with such problems.

The issuance of said decree (No. 605) does not, however, mean that courts cannot exercise jurisdiction where questions of law are involved, as in the case at bar. Here, what was assailed before respondent judge is Regional Director Guieb's move to conduct an investigation on Deypalubos' formal protest, the petitioner's theory being that to investigate the matter is to go beyond what the Director of the Bureau of Fisheries had authorized in his 3 January 1975 Memorandum, which is "to cause an immediate formal investigation of those issues involved in the foregoing resolution and the protest ... and not touched upon in Civil Case No. 1389. 21 (Emphasis supplied)

The situation, therefore, called for a determination of whether or not the proposed investigation was indeed an over-exercise of authority by respondent Regional Director as claimed by the petitioner; and if this was resolved in the negative, the investigation would have been allowed to proceed. The respondent court was called upon to look only into the propriety of the investigation regardless of the fact that the investigation could result in the issuance and/or revocation of fishpond lease permits of the contending parties.

As to the prohibition dictated by PD No. 605, the same pertains to the issuance by courts of injunctions or restraining orders against administrative acts on controversies which involve facts or exercise of discretion in technical cases, because to allow courts to judge these matters could disturb the smooth functioning of the administrative machinery. But on issues definitely outside of this dimension and involving questions of law, courts are not prevented by PD No. 605 from exercising their power to restrain or prohibit administrative acts.

Instead of remanding this case to respondent court for further proceedings, we win put a finish to it. At bottom line, the real legal issue here is whether public respondent Guieb should desist from investigating petitioner's fishpond lease No. 1902. It will be recalled that when respondent Guieb issued the notice of hearing of 24 February 1975 to the parties, the subjects of investigation, as indicated therein, were the 18 September 1973 Protest against FLA No. 1902 and the 2 June 1974 Barrio Council Resolution. The said Protest consists of Deypalubos' assertions that prior to his application for a fishpond permit for the area in question, he was assured of the absence of any improvements in the area he occupied, and that it was he who introduced all the substantial improvements therein until petitioner company began harassing him. These issues were however raised and, in fact, already passed upon in the decision rendered in Civil Case No. 1389, which became final and executory on 26 October 1980. 22Elaborating on these points, the court in said Civil Case No. 1389, in a 21-page decision, found the above allegations not credible and ordered, among others, the forfeiture in favor of petitioner of the improvements built and constructed by Deypalubos in the controverted area covered by FLA No. 1902. Said court findings are consistent with the results of the inspection by the former Philippine Fisheries Commission and Bureau of Fisheries conducted in 1973. 23

The insistence still of respondent Regional Director Guieb to proceed with the investigation, knowing fully well that there remain no other issues in Deypalubos' protest that were not previously raised in Civil Case No. 1389 and before the same Bureau, leads one to conclude that he is acting in excess of his delegated authority to investigate. After these issues had been tried and investigated, administratively and judicially, the same issues can no longer be reopened by public respondent Guieb.

The Barrio Council Resolution intended to be included in the investigation by public respondent Guieb likewise contains the very same averments made in the protest, the only new matter presented being that petitioner should have been awarded fifty (50) hectares only in view of a presidential decree limiting administrative grants of fishpond permits or leases to just this much. The provisions of the invoked decree have not however been set forth nor the decree number indicated. All that was said is that there is an existing decree to that effect, and nothing more. Such a broad statement does not justify a reinvestigation of this fishpond conflict.

Justice and fairness dictate that long-resolved matters be finally closed and laid to rest.

WHEREFORE, the 4 August 1975 decision in Sp. Civil Case No. 1426 is REVERSED and public respondent Guieb is hereby ordered to REFRAIN and DESIST from investigating the respondent Deypalubos' protest of 18 September 1973 and the Barrio Council Resolution of 2 June 1974 of Batu-Siay, Zamboanga del Sur questioning Fishpond Lease Agreement No. 1902 in favor of petitioner.

SO ORDERED.

Paras, Sarmiento and Regalado, JJ., concur.

Melencio-Herrera (Chairperson), took no part.

Footnotes

1 Annex "A", Petition for Prohibition, p. 35, Rollo.

2 Annex "C", Manifestation dated 16 November 1978, p. 408, Rollo.

3 Annex "C", Petition for Prohibition, p. 43, Rollo.

4 Annexes "C", "D", "E", 'E, Motion for Reconsideration, pp. 272276, Rollo.

5 Annex "AA", Petition for Review, p. 64, Rollo.

6 Annex "6", Comments to Petitioner's Motion for Reconsideration p. 332, Rollo.

7 Annex "D", Petition for Prohibition, p. 52, Rollo.

8 Annex "F", Petition for Prohibition, p. 56, Rollo.

9 Annex "O", Petition for Prohibition, p. 69, Rollo.

10 Annex "I", Petition for Prohibition, p. 61, Rollo.

11 Annex "J", Petition for Prohibition, p. 63, Rollo.

12 Annex "H" Petition for Prohibition, p. 60, Rollo.

13 Annex "A", Petition for Review, p. 28, Rollo.

14 Annex "B", Petition for Review, p. 68, Rollo.

15 Annexes "D" and "E', Petition for Review, pp. 80 and 83, Rollo.

16 Annex "H", Petition for Review, p. 95, Rollo.

17 P. 238, Rollo.

18 P. 248, Rollo.

19 P. 348, Rollo.

20 42 Am. Jur. 579.

21 Annex "J", Petition for Prohibition, p. 63, Rollo.

22 Annex "A-1", Petitioner's Manifestation dated 15 June 1981, p. 437, Rollo.

23 Annexes "C", "E", Motion for Reconsideration, pp- 272 and 274, Rollo.

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-39655 March 21, 1975

ARROW TRANSPORTATION CORPORATION, petitioner, vs.BOARD OF TRANSPORTATION and SULTAN RENT-A-CAR, INC., respondents.

Manuel Imbong for petitioner.

Office of the Solicitor General Estelito P. Mendoza and Assistant Solicitor General Reynato S. Puno for respondent Board.

Pastor C. Bacani and Ernesto Ganiban for private respondent.

FERNANDO, J.:ñé+.£ªwph!1

It must have been the realization that a challenge to a provisional permit issued by respondent Board of Transportation  1 based on the absence of a hearing is not likely to be attended with success that prompted petitioner to rely on another aspect of procedural due process, the infirmity alleged being traceable to what it considered lack of jurisdiction.  2 There is the invocation of Philippine Long Distance Telephone Company v. Medina 3 with its mention of both competitors and the public being notified. It does not suffice. Something more, which more, is necessary. The reliance is misplaced. Its applicability is by no means obvious. As was pointed out in the answer of respondent Board of Transportation, such a claim is hardly persuasive with the procedure set forth in Presidential Decree No. 101 being followed and the provisional authority to operate being based on an urgent public need. Such a contention merits the approval of the Court. The petition cannot prosper.

Both petitioner and private respondent Sultan Rent-a-Car are domestic corporations. 4 The former has in his favor a certificate of public convenience to operate a public utility bus air-conditioned-auto-truck service from Cebu City to Mactan International Airport and vice-versa with the use of twenty (20) units. 5 Private respondent on September 12, 1974 filed a petition with the respondent Board for the issuance of a certificate of public convenience to operate a similar service on the same line.  6 Eight days later, without the required publication, the Board issued an order granting it provisional permit to operate such auto-truck service on the line applied for. 7There was a motion for reconsideration and for the cancellation of such provisional permit filed on October 21, 1974, 8 but without awaiting final action thereon, this petition was filed. 9 This is the explanation: "That petitioner has not waited for the resolution of his Motion for Reconsideration before going to this Court considering that the question involved herein is purely a legal one, aside from the fact that the issuance of the Order without the Board having acquired jurisdiction of the case yet, is patently illegal or was performed without jurisdiction." 10

So it was set forth in the petition filed on November 16, 1974. As a preliminary injunction was likewise sought, a hearing was scheduled for November 29, 1974. It was cancelled, this Court issuing a resolution instead, requiring respondents to file an answer not later than December 6, 1974 and setting the hearing on the merits of the case on Wednesday, December 11, 1974. In the answer submitted the facts alleged were substantially admitted. 11 It denied the allegation that there must be a publication before a provisional permit can be issued, reference being made, as noted, to Presidential Decree No. 101, which authorized respondent Board to grant provisional permits when warranted by compelling circumstances and to proceed promptly along the method of legislative inquiry. 12The case was then argued on December 11, 1974, Attorney Manuel Imbong appearing for petitioner and Assistant Solicitor General Reynato S. Puno appearing for respondent Board of Transportation. 13 Thereafter, the parties were given twenty days to file their respective memoranda and an additional ten-day period to submit replies thereto if so minded. In time all the pleadings were submitted, and the case was ready for decision.

The petition, to repeat, cannot prosper.

1. It is to be, admitted that the claim for relief on the asserted constitutional deficiency based on procedural due process, not from the standpoint of the absence of a hearing but from the lack of jurisdiction without the required publication having been made, was argued vigorously and developed exhaustively in the memoranda of petitioner. The arguments set forth, while impressed with plausibility, do not suffice to justify the grant of certiorari. Moreover, the doctrine announced in the Philippine Long Distance Telephone Company decision, heavily leaned on by petitioner is, at the most, a frail and insubstantial support and gives way to decisions of this Court that have an even more specific bearing on this litigation.

2. A barrier to petitioner's pretension, not only formidable but also insurmountable, is the well-settled doctrine that for a provisional permit, an ex parte hearing suffices. 14 The decisive consideration is the existence of the public need. 15 That was shown in this case, respondent Board, on the basis of demonstrable data, being satisfied of the pressing necessity for the grant of the provisional permit sought. There is no warrant for the nullification of what was ordered by it. It must have been, as already noted, this state of the law that did lead petitioner to harp on its interpretation of what for it is the teaching of the Philippine Long Distance Telephone Company decision. 16 There was therein stated that one of the compelling reasons that led this Court to hold that the defunct Public Service Commission did not acquire jurisdiction was that no provision was made for bringing in as parties thereto the competitors of the Philippine Long Distance Telephone Company. 17 That is the basis for the objection on procedural due process ground. While no doubt such a holding was necessary for the decision of that case which dealt with a petition for the reexamination of a decision that was held to be final and executory, it finds no application to this controversy dealing with a provisional permit. This is made clear by this portion of the opinion of Justice Sanchez: "Araneta seeks reexamination of the rates approved by the Commission. Araneta avers that PLDT can carry out its improvement and expansion program at less onerous terms to the subscribers. But Araneta [University] was not a party to the rate-fixing case or to any of the other proceedings below. These rate-fixing and allied cases terminated with the final judgment of January 9, 1964. Not being a party, it could not have moved to reconsider said decision. Nor could it have appealed from that decision — it had no standing in that case. Even if we treat Araneta's reexamination petition as one for reconsideration, the time therefor has long passed. 18 It was then stated: The reexamination herein sought by Araneta, perforce seeks the fixing of new and different rates. 19Further: Araneta in effect, institutes a freshpetition — for new rates different from those already established. Such petition is a proceeding separate and distinct from those concluded by the final judgment of PSC of January 9, 1964. 20 The conclusion, therefore, necessarily follows:" We hold that the

Public Service Commission may not reduce or increase rates established in a judgment that has become final, without proper notice; and that a Commission order reducing or increasing said rates without such notice is void." 21 Under the facts of that case, the procedural due process infirmity amounting to lack of jurisdiction is quite apparent. The opposite is true with this present petition which deals with a grant of provisional permit. It would be to lift out of context the reference made in the aforesaid opinion with reference to notification to the competitors to give a color of applicability to the situation before us. Clearly then, the allegation of a failure to follow the command of the due process guarantee is bereft of any legal foundation.

3. The question of whether the controversy is ripe for judicial determination was likewise argued by the parties. For it is undeniable that at the time the petition was filed. there was pending with the respondent Board a motion for reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection grounded on prematurity can be raised. Nonetheless, counsel for petitioner would stress that certiorari lies as the failure to observe procedural due process ousted respondent Board of whatever jurisdiction it could have had in the premises. This Court was impelled to go into the merits of the controversy at this stage, not only because of the importance of the issue raised but also because of the strong public interest in having the matter settled. As was set forth in Executive Order No. 101 which prescribes the procedure to be followed by respondent Board, it is the policy of the State, as swiftly as possible, to improve the deplorable condition of vehicular traffic, obtain maximum utilization of existing public motor vehicles and eradicate the harmful and unlawful trade of clandestine operators, as well as update the standard of those carrying such business, making it "imperative to provide, among other urgently needed measures, more expeditious methods in prescribing, redefining, or modifying the lines and mode of operation of public utility motor vehicles that now or thereafter, may operate in this country. 22 It is essential then both from the standpoint of the firms engaged as well as of the riding public to ascertain whether or not the procedure followed in this case and very likely in others of a similar nature satisfies the procedural due process requirement. Thus its ripeness for adjudication becomes apparent.

To paraphrase what was said in Edu v. Ericta 23 where the validity of a legislation was passed upon in a certiorari proceeding to annul and set aside a writ of preliminary injunction, to so act would be to conserve both time and effort. Those desiring to engage in public utility business as well as the public are both vitally concerned with the final determination of the standards to be followed in the procedure that must be observed. There is, to repeat, a great public interest in a definitive outcome of the crucial issue involved. One of the most noted authorities on Administrative Law, professor Kenneth Culp Davis, discussing the ripeness concept, is of the view that the resolution of what could be a debilitating uncertainty with the conceded ability of the judiciary to work out a solution of the problem posed is a potent argument for minimizing the emphasis laid on its technical aspect. 24

WHEREFORE, the petition for certiorari is dismissed. No costs.

Makalintal, C.J., Barredo, Antonio and Fernandez, JJ., concur. 1äwphï1.ñët

Aquino, J., is on leave.

Footnotes têñ.£îhqwâ£

1 The other respondent is Sultan Rent-a-Car, Inc.

2 Cf. Banco Espanol-Filipino v. Palanca, 37 Phil. 921 (1918), through Justice Street: "As applied to a judicial proceeding, however, it may be laid down with certainty that the requirement of due process is satisfied if the following conditions are present, namely; (1) There must be a court or tribunal clothed with judicial power to hear and determine the matter before it; (2) jurisdiction must be lawfully acquired over the person of the defendant or over the property which is the subject of the proceeding; (3) the defendant must be given an opportunity to be heard; and (4) judgment must be rendered upon lawful hearing." At 934.

3 L-24340, July 18,1967, 20 SCRA 659.

4 Petition, par. 1.

5 Ibid, par. 2.

6 Ibid, par. 3.

7 Ibid, par. 4.

8 Ibid, par. 5.

9 Ibid, par. 6.

10 Ibid, par. 7.

11 Ibid, par. 3.

12 Ibid, par. 4 and par. 2, Special and Affirmative Defenses.

13 Attorneys Pastor C. Bacani and Ernesto Ganiban appeared for private respondent.

14 Cf. Javellana v. La Paz Ice Plant, 64 Phil. 893 (1937); Ablaza Trans. Co. v. Ocampo, 88 Phil, 412 (1951); Silva v. Ocampo, 90 Phil, 777 (1952); Javier v. De Leon, 109 Phil. 751 (1960).

15 Cf. Halili v. Semaña L-15108, Oct. 26,1961, 3 SCRA 260; Vda. de Cruz v. Marcelo, L-15301, March 30, 1962, 4 SCRA 694; Cababa v. Remigio, L-17832, May 29, 1963, 8 SCRA 50; Mandaluyong Bus Co. Enrique L-21964, Oct. 19, 1966, 18 SCRA 352; Papa v. Santiago, L-16204. April 24, l967, 19 SCRA 760; Teresa Electric & Power Co. v. Public Service Commission, L-21804, Sept. 25, 1967, 21 SCRA 198; Robles v. Blaylock L-24123, March 27, 1968, 22 SCRA 1284; Phil. Rabbit Bus Lines v. Gabatin, L-24472, July 31, 1968, 24 SCRA 411; Republic Tel. Co. v. Phil. Long Distance Telephone Co., L-21070, Sept. 23, 1968, 25 SCRA 80; Intestate Testate of Teofilo M. Tiongson v. Public Service Commission, L-24701, Dec. 16, 1970, 36 SCRA 241; Dizon v. Public Service Commission, L-34820, April 30, 1973, 50 SCRA 500.

16 L-24340, 20 SCRA 659.

17 Cf. Ibid, 678.

18 Ibid, 672-673.

19 Ibid, 675.

20 Ibid, 676.

21 Ibid, 677.

22 Presidential Decree No. 101 (1973).

23 L-32096, October 24, 1970, 35 SCRA 481.

24 Cf. 3 Davis, Administrative Law Treatise, 125-128 (1958).

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lawphilToday is Friday, March 08, 2013

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-22333             February 27, 1969

LUCIANO AZUR and NICOLAS BULALACAO, petitioners-appellants, vs.THE PROVINCIAL BOARD, THE PROVINCIAL TREASURER, THE PROVINCIAL AUDITOR, and THE PROVINCIAL WARDEN, CAMARINES SUR, respondents-appellees.

Pedro M. Templo for petitioners-appellants.2nd Assistant Provincial Fiscal of Camarines Sur Jose F. Madara for respondents-appellees.

BARREDO J.:

          Appeal from an order of the Court of First Instance of Camarines Sur, in its Civil Case No. 4871, dismissing the complaint and the subsequent order denying the motion for reconsideration of said order of dismissal.

            On March 17, 1960, a complaint for reinstatement and collection of salaries and damages was filed before the Court of First Instance of Camarines Sur by plaintiffs-appellants Luciano Azur and Nicolas Bulalacao and one Pedro Pasilaban, 1 against the Provincial Board and the above-named officials of the Province of Camarines Sur. The complaint alleged that:

            Plaintiffs are provincial guards who have been holding their positions continuously for more than five years; they took the Patrolman Qualifying Examination at Naga City on February 27, 1960; on or about January 15, 1960, they were notified by the Secretary if the defendant-appellee Provincial Board that their positions had been abolished by its Resolution No. 16, Series of 1960, and that thirty (30) days thereafter their work "is already terminated"; on January 30, 1960, Resolution No. 16 was amended by Resolution No. 45 which, "in order to economize", reduced the forty-five (45) existing positions of provincial guards to thirty-five (35), ten (10) positions eliminated and their items abolished "subject to the approval of the Secretary of Finance"; said Resolution No. 45 had not been approved by the Secretary of Finance and, was, therefore, still ineffectual; the real

purpose in separating the ten (10) persons occupying the positions abolished was not to economize but to have them replaced by persons belonging to the political party of the new provincial administration; prior to the separation of plaintiffs from the service, the provincial administration hired five (5) new provincial guards who were later on separated for sometime to conceal defendants' intention to replace plaintiffs, as in fact, they were again allowed to work on March 16, 1960; the appointment of said five (5) new provincial guards is illegal; plaintiffs have been rendering service continuously from February 15, 1960 up to the filing of the complaint but had not received their salaries because defendants were compelling them to submit their resignations and clearances before they would be paid; on February 23, 1960, plaintiffs informed defendants of the illegality of their separation from the service and demanded their pay for services rendered until they are legally separated by competent authority but they had not yet been paid on the date the complaint was filed; due to their illegal separation from the service and the refusal of defendants to pay their salaries, they have suffered damages and have, therefore, engaged the services of counsel, for a fee, for the protection of their rights. The complaint ends with the prayer that defendants be ordered to reinstate them and, on the other hand, to separate from the service the five (5) new provincial guards whose appointments are illegal; to pay them the salaries to which they are entitled until they resign or are legally separated; and to pay them P600.00 as attorney's fees and P6,000.00 in moral damages.

            In due time, defendants-appellees filed their answer to the complaint. In said answer, defendants-appellees admitted the employment and subsequent dismissal of plaintiffs-appellants and the approval of Resolutions 16 and 45. The rest of the allegations of the complaint were denied. As affirmative defenses, they alleged that (1) plaintiff, had no cause of action since the complaint admitted that they were still rendering service; (2) they have not exhausted all administrative remedies; (3) the abolition of their positions was legal; and (4) not being civil service eligibles, they were merely temporary employees whose tenure of office could not be more than three (3) months unless reappointed at every end of the three months period, and they were not reappointed "at the beginning of the present administration".

            Accordingly, the case was thereafter set for trial on June 15, 1960, but this was postponed until the next assignment. On August 11, 1960, the date next set for the trial of the case, the court postponed the hearing to give the Provincial Fiscal time to file a motion to dismiss on behalf of defendants-appellees. The motion referred to was subsequently filed and defendants-appellants prayed therein for the dismissal of the complaint on the grounds that: (a) the complaint states no cause of action; (b) the plaintiffs have no legal right to demand for reinstatement; (c) the abolition of their positions by Resolution No. 16, as amended by Resolution No. 45, is legal and authorized by Republic Act No. 2260; and (d) petitioners did not exhaust administrative remedies as required by law, which grounds, as can be readily noted, were mere reiterations of the affirmative defenses in their answer and in effect, all of them amount to only one, i.e., that the complaint stated no cause of action.

            Plaintiffs-appellants opposed the motion for dismissal, alleging, that defendants-appellees have already filed their answer and, therefore, the motion was filed out of time; that except for ground (a), the others relied upon are not grounds provided for in the Rules; that there was no merit in defendants-appellants' contention that the petition states no cause of action; that they have a right to reinstatement under the Civil Service-Law, as the abolition of their positions is illegal because the purpose was to replace them with others chosen by the Provincial Board; and that exhaustion of administrative remedies is not applicable to the case which is "for reinstatement orquo warranto proceedings".

            Resolving the motion to dismiss, the trial court issued the questioned order of dismissal sustaining the ground relied upon by respondents that the complaint states no cause of action. His Honor reasoned thus:

            In paragraph 12 of the petition it is alleged that the petitioners have been rendering service continuously from September 16, 1950 (sic) to the present time, indicating thereby that they did not vacate their positions. They do not have, therefore, a right to demand for reinstatement since by their own allegation they are still holding their positions.

            But even conceding that they have vacated their positions, they still have no cause of action. Since they are temporary employees whose employment automatically expires after 3 months if no new appointment is extended to them, they cannot demand reinstatement (Civil Service Law). Appointments which are temporary in character can be terminated at pleasure by the appointing power. (Mariano Quitiquit vs. Salvador Villacorta, G.R. No. L-15048, April 29, 1960; Alfredo Cuadra vs. Teofisto Cordova, G.R. No. L-11602, April 21, 1958). Temporary employees may be replaced by others even if the latter are not themselves civil service eligibles (Jose Montero vs. Cuido de Castellanos, G.R. No. L-12694, June 30, 1960).

            It is thus obvious that the petitioners have no cause of action....

            In a subsequent order, the trial court denied the motion for reconsideration of the above-mentioned order of dismissal, hence the instant appeal 2 interposed by petitioners who maintain that the dismissal of the petition is not in accordance with law

and jurisprudence.

            Appellants now contend that the court below erred in holding that they have no cause of action. They maintain that the dismissed complaint contained sufficient allegations of fact which, if proven, constitute a sufficient cause of action against appellees who have unjustly and illegally terminated their services. We hold there is merit in this contention and, therefore, the order of dismissal appealed from should be set aside.

            In order to sustain a dismissal on the ground that the complaint states no cause of action, the insufficiency of the cause of action must appear on the face of the complaint, 3 and the test of the sufficiency of the facts alleged in the complaint, to constitute a cause of action, is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. 4 For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint. 5

            Examining the allegations of the complaint in question in the light of the foregoing rules, there can be no doubt that appellants are correct. The averments in their complaint show, in synthesis, that they are invoking a right to stay in office on the basis of their allegation that they have been duly appointed thereto and have been holding their positions continuously for more than five (5) years, that they claim a violation of that right by appellees' act of abolishing their positions and terminating their services in bad faith, as shown by their averment that the excuse of economy put forth by appellees was belied by the fact that soon after their separation from the service, five (5) new provincial guards were appointed, that they have consequently suffered injury since they were not being paid and were being disemployed and that on this basis, they would be entitled to the reliefs of retention or reinstatement and payment of back salaries prayed for.

            It is obvious that if the above, allegations are assumed to be true, appellants have a cause of action stated in their complaint. They have alleged facts showing that appellees have committed acts constituting "a delict or wrong by which one party violates the rights of another causing him loss or injury," hence a cause of action has been alleged by them. (I Moran, Comments on the Rules of Court, p. 91, 1963 ed.) When the ultimate facts alleged in the complaint show that plaintiff has a right and that right has been violated by the defendant, then there is a cause of action. (Community Investment, et al. v. Garcia 88 Phil. 215, 217-218) .

            Appellees maintain, on the other hand, that the lower court was right in dismissing the action by reason of appellants own allegation in the complaint "that they have been rendering service continuously from February 15, 1960 to the present time" which shows, it is asserted, that they have not vacated their positions and, consequently, cannot demand reinstatement. This contention is untenable. The allegation referred to may indeed appear inconsistent with the demand for reinstatement, but the same should be overlooked in the light of the more prominent and positive averments in the complaint that the services of appellants have been terminated by appellees. (Cf. Worldwide Ins. & Surety Co., Inc. v. Manuel, 98 Phil. 46, 4849) To warrant the dismissal of a complaint for insufficiency, it should appear that a claim for relief does not exist rather than that a claim has been defectively stated. A complaint should not be dismissed for insufficiency unless it appears to a certainty, from the face of the complaint, that plaintiff would be entitled to no relief under any state of facts which could be proved within the facts alleged therein. 6 Stated otherwise, though the allegations of the complaint are ambiguous, indefinite, or uncertain, but, nevertheless, a cause of action can, in any manner, be made out therefrom, and plaintiff would be entitled to recover in any aspect of the facts or any combination of the facts alleged, if they were to be proved, then the motion to dismiss should be denied.  7

            As to appellants' allegation in their complaint that they have been continuously rendering service up to its filing, the same should not be given any legal significance, in view of their other averment that they were duly notified by the Secretary of the Provincial Board that their services were terminated. Appellants may have continued discharging the functions of their office, but the same does not detract from the fact that they had been dismissed and that said dismissal had been implemented, also alleged in the complaint under consideration, by non-recognition of their official capacity or non-payment of their salaries. 8 Consequently, admitting the truth of both averments, appellants would still be entitled to reinstatement under the circumstances.

            Appellants next assail the reasoning of the lower court that conceding they have been disemployed, still they could not demand for reinstatement because, being temporary employees, their employment automatically expired after every three (3) months and had to be given new appointments at the end of each such period, and that, in any event, their tenures were terminable at the pleasure of the appointing power. Appellants maintain, on the other hand, that even if they may be considered as temporary employees, they are still protected under the Civil Service Law by reason of the fact that they have been continuously holding their positions for more than five (5) years.

            This position of appellants also deserves approval. There is nothing in the complaint to sustain the view that appellants' appointment had lapsed. From the allegation in their complaint that appellants had been continuously holding their positions for more than five years, it is not legally deducible that from their first appointment as provincial guards, no new appointments had been extended to them during their more than five years of continuous service. To conclude otherwise would be to go beyond

the allegations of the complaint and the presumption of regularity which arises therefrom, and to dismiss the complaint under such circumstances is not legally sustainable.

            On the contrary, precisely because of the allegation in their complaint that they had been serving for more than five (5) years already, and there being no allegation therein that those who have been appointed to replace them were eligibles, appellants are entitled to the preferential rights under the following provisions of the Civil Service Law:

            SEC. 23 ....

x x x           x x x           x x x

            Qualification in an appropriate examination shall be required for appointment to positions in the competitive or classified service in accordance with the civil service rules, except as otherwise provided for in this Act: Provided, That whenever there is a civil service eligible available for appointment, no person who is not such an eligible shall be appointed even in a temporary capacity to any vacant position in the competitive or classified service in the government or in any government-owned or controlled corporation:Provided, further, That non-eligible employees who, upon the approval of this Act, have rendered five years or more of continuous and satisfactory service in classified positions and who meet the other qualifications for appointment to their positions, shall, within one year from the approval of this Act, be given qualifying examinations in which their length of satisfactory service shall be accorded preferred consideration: Provided, further, That those who fail in those examinations as well as those who fail or refuse to take the examinations when offered shall be replaced by eligibles.... [Emphasis Ours]

            Thus, under the facts alleged by them, which, as already stated have to be hypothetically assumed to be true by the motion to dismiss, appellants have the right to await the results of the qualifying examinations they alleged in their complaint they had taken on February 27, 1960, which was well within the one year grace period fixed by the above provision, from the approval of the Civil Service Law, Republic Act 2260 on June 19, 1959, and only if they had failed therein, which does not appear in said complaint, that they can be replaced, and more importantly, only by eligibles. Parenthetically, We note that in the motion for reconsideration appellants filed with the lower court on July 26, 1961, they alleged that they had passed the examination, and the interesting sequel thereto is related by them thus:

            The provision of Republic Act 2260 is very clear and petitioners fall squarely under the provision of Section 23 for the reason that they have rendered more than five years satisfactory service. They took the civil service examination within the required period and luckily they passed said examination. As a matter of fact, on March 19, 1960, the Provincial Governor of Camarines Sur thru the Provincial Warden wrote Pvt. Nicolas Bulalacao to report for duty, but he refused to return to work because one of the conditions was to first get a clearance from the President of the Liberal Party of his municipality. It is then very plain that the motive in the abolition of petitioners' positions is political, but even if it is not political, still said abolition are illegal in accordance with the executive power, law and decision of the Supreme Court previously cited. (Record on Appeal, pp. 23-24.)

            Of course, We are not taking these acts into account because they are not alleged in the complaint. They are quoted only to make it more evident that, in any event, We are on the right track in going along with appeIlants.

            For the same reasons We have just discussed, the holding of His Honor that appellants' temporary appointments are terminable at the pleasure of the appointing power, cannot stand. Insofar as appellants were concerned, the rule invoked by His Honor was subject to the above quoted Section 23 of the Civil Service Law regarding an appointee who has already served more than five years under a temporary appointment at the time of the approval of the Act. Under the said provision, it is indeed clear that, as already stated, after an employee who had been given a temporary appointment had, for any reason, already served under said appointment, upon the approval of the Civil Service Law, he acquired a right to continue holding his position until three conditions have been complied with, namely, (1) he must have been given a qualifying examination within one year from said approval, (2) he either failed in said examination or failed or refused to take it, and (3) he could be replaced only by one who has the requisite or appropriate civil service eligibility. Without these conditions, he had the right to continue in his position even permanently.

            Appellees contend, nevertheless, that the abolition of appellants' positions by respondent Provincial Board is legal, because the same is authorized by the provisions of the Civil Service Law itself which authorize that the staff of any office, bureau or agency may be reduced whenever it is advisable in the interest of economy. (Section 24 [G], Republic Act 2260) Again, appellees must be overruled. The complaint alleges that the abolition of their positions was made by appellees in bad faith, i.e., not for the bona fide purpose of economy, but for the purpose of replacing appellants, as, in fact, they were replaced

by at least five other guards, in violation of their preferential rights to continue holding their positions We have just discussed. Upon such factual basis, the veracity of which We are to assume, the following rulings laid down by this Court are squarely applicable:

            There is no statute expressly empowering the Board to abolish the office or positions it has created; however, it is a well-established principle in the law of public administration that the power to establish an office includes the authority to abolish it — unless there are constitutional or statutory rules expressly or impliedly providing otherwise. And the abolition of the office terminates the right of the incumbent to exercise the rights and duties thereof. (Castillo vs. Pajo, etc., et al., L-11262, April 28, 1958)

            ... while abolition of the office does not imply removal of the incumbent, the rule is true only where the abolition is made in good faith; that the right to abolish can not be used to discharge employees in violation of the civil service law nor can it be exercised for personal or political reasons.... (Briones, et al. vs. Osmeña, Jr., etc., et al., No. L-12536, Sept. 24, 1958)

            This Court has held that it is a well established principle in the law of public administration that the power to establish an office includes the authority to abolish it unless there are constitutional or statutory rules expressly or impliedly providing otherwise. Likewise, this Court has held that the power of a local government to abolish an office that it had created is subject to limitations, that is, that that power must be exercised in good faith, not for personal or political reasons, and not in violation of the civil service law. (Ocampo, et al. vs. Duque, et al., G.R. No. L-23812, April 30, 1966)

            ... what were abolished were the petitioning employees, not their positions. Their removal was in bad faith. Courts are duty bound to honor the constitutionally protected security of tenure in observance, not in breach.... (Abanilla, et al. vs. Ticao, et al., G.R. No. L-22271, July 26, 1966)

            It is of no moment that the above-quoted precedents involved employees who were dismissed despite the fact that they were eligibles holding permanent positions, for as We have already explained, since the appellants had already more than five years of service to their credit, their right to continue in office is as fully protected under the Civil Service Law as those of eligibles with permanent appointments unless the conditions imposed by Section 23 above-quoted are complied with.

            It may not be amiss to add here that in the lower court, appellants questioned the propriety of the motion to dismiss on the ground that appellees had already filed an answer. They have not, however, reiterated the same argument here, realizing perhaps and correctly that the rules expressly provide that the ground of dismissal herein involved that the complaint states no cause of action, may be alleged in a latter pleading or even at the trial, so much so that in the latter case, the motion is to be resolved in the light of the evidence which may have been received. (Sec. 2, Rule 9 [Sec. 10, Rule 9 in the Rules of 1940]; Community Investment & Finance Corporation v. Garcia, supra.)lawphi1.nêt

            Finally, the contention of appellees that appellants have not exhausted available administrative remedies, is as groundless as all their other previously discussed claims. It is settled that the invoked rule of exhaustion of administrative remedies is not a hard and fast rule; it admits of exceptions. Admitting the truth of appellants' allegations in their complaint to the effect that they were separated from the service in patent violation of the Civil Service Law, which contentions We are upholding on the hypothetical assumption that the facts alleged in the complaint are true, immediate recourse to the courts of justice by appellants is not objectionable. One of the well-known exceptions to the rule of exhaustion of administrative remedies is when the controverted act is patently illegal. 9

            In view of all the foregoing, We declare that the court below fell into error in dismissing the complaint of appellants. We find that if the facts alleged in said complaint are true, and they must be assumed to be so, for the purposes of the appellees' motion to dismiss, they constitute a sufficient cause of action entitling appellants to the reliefs prayed for.

            WHEREFORE, the orders of the trial court of June 30, 1961 dismissing the complaint of appellants and of August 30, 1961 denying appellants' motion for reconsideration of the first order, both appealed from herein, are hereby set aside, and this case is remanded to the lower court for further proceedings.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano and Teehankee, JJ., concur.

Footnotes

1Pedro Pasilaban was allowed by the court to withdraw as petitioner on April 8, 1960.

2The clerk of the lower court erroneously transmitted the record of the case to the Court of Appeals which, upon discovery of the mistake, certified the appeal to this Court on December 16, 1963.

3Garcon vs. Redemptorist Fathers, L-23510, May 30, 1966; Convets, Inc. vs. NDC, L-10232, February 28, 1957.

4See Ramos, et al. vs. Condez et al., L-22072, August 30, 1967; Garcon vs. Redemptorist Fathers, supra; Wise & Co. vs. City of Manila, L-9156, April 29, 1957.

5Garcon vs. Redemptorist Fathers, supra; PNB vs. Hipolito, L-16463, January 30, 1965; Alquique vs. De Leon, L-15069, March 30, 1963; Republic vs. Ramos, L-15484, January 31, 1963.

6I Francisco, Revised Rules of Court, p. 685, citing French vs. French Paper Co., 4 Fed. Rules Service, p. 148; See also I Moran, Rules of Court, 1963 ed., 423.

7Pangan, et al. vs. The Evening News Publishing Co., Inc., et al., L-13308, December 29, 1960.

8Morales, Jr. vs. Patriarca L-21280, October 21, 1965.

9See Mitra vs. Subido, et al., L-21961, Sept. 16, 1967, and cases therein cited.

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 152214             September 19, 2006

EQUI-ASIA PLACEMENT, INC., petitioner, vs.DEPARTMENT OF FOREIGN AFFAIRS (DFA) represented by the HON. DOMINGO L. SIAZON, JR., SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), represented by HON. BIENVENIDO LAGUESMA, respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari of the Decision dated 4 October 20011 and Resolution dated 18 February 2002 of the Court of Appeals in CA-G.R. SP No. 61904. The Decision denied petitioner's petition forcertiorari while the Resolution denied its Motion for Reconsideration.

The Court of Appeals summarized the facts of this case in this wise:

On September 16, 2000, Manny dela Rosa Razon, a native of Lemery, Batangas and an overseas Filipino worker, died of acute cardiac arrest while asleep at the dormitory of the Samsong Textile Processing Factory in South Korea. Informed thereof, the Philippine Overseas Labor Office (POLO) at South Korea immediately relayed the incident to the Philippine Embassy in South Korea. Forthwith, the [Labor] Attaché of the Philippine Embassy dispatched a letter to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare Administration (OWWA). The letter reads:

"VERY URGENT, POLO has recently received a report that OFW Manny dela Rosa RAZON, an undocumented worker, died last Saturday, 16 September, from an apparent pancreatic attack or 'bangungot.'

According to the verbal reports of Moises and Ronald Recarde, Manny's co-workers, he was found already lifeless inside their quarters at around 11:00 in the morning of the above date. They rushed him to Uri Hospital where the Doctor declared him dead on arrival.

Per information gathered, the deceased is single, 29 years old, from Bukal, Lemery, Batangas. His next-of-kins are Mrs. Rowena Razon (Auntie) and Mr. Razon (Uncle) with telephone number (043)411-2308.

POLO is awaiting signed statements from the aforementioned workers who promised to send it by fax this afternoon.

We are also coordinating with the deceased's employer for documentation requirements and financial assistance for the repatriation of the remains.

We will highly appreciate if Home Office could advise the next-of-kins of the urgent need to issue a Special Power of Attorney (SPA) to facilitate the repatriation requirements of the subject.

In anticipation of the next-of-kins' likely move to seek financial assistance from OWWA for the repatriation of their loved [one], please be advised in advance that we will need about US$4,000.00 to repatriate the cadaver (to include hospital and morgue costs) to Manila. xxx"

In turn, the OWWA, through Atty. Cesar L. Chavez, indorsed the matter, for appropriate action, to Director R. Casco of the Welfare Employment Office of the Philippine Overseas Employment Administration (WEO-POEA).

Upon verification by the WEO-POEA on its data base, it was discovered that Manny Razon was recruited and deployed by petitioner Equi-Asia Placement, Inc., and was sent to South Korea on April 3, 2000 to work-train at Yeongjin Machinery, Inc. Thereupon, POEA addressed the herein first assailed telegram-directive dated September 22, 2000 to the President/General Manager of the petitioner. We quote the telegram:

"PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE REPATRIATION OF REMAINS AND BELONGINGS OF OFW MANNY DELA ROSA RAZON AS PER REQUEST OF PHILIPPINE EMBASSY, KOREA, YOU CAN COORDINATE WITH YOUR FOREIGN EMPLOYER AND TO WAD/OWWA (MLA) AS REGARDS TO THIS MATTER. YOU ARE GIVEN TWO (2) DAYS FROM RECEIPT HEREOF WITHIN WHICH TO PROVIDE SAID TICKET AND ASSISTANCE, KINDLY SUBMIT YOUR REPORT TO ASSISTANCE AND WELFARE DIVISION (AWD), 2/F POEA, FAILURE TO DO SO WILL CONSTRAIN US TO IMPOSE APPROPRIATE SANCTION UNDER OUR RULES"

Responding thereto, petitioner, thru its President Daniel Morga, Jr., faxed on September 26, 2000 the following message to the Assistance and Welfare Division of the POEA:

"In connection with your telegram, dated 09/22/2000, requiring us to report the circumstances surrounding the death of OFW MANNY DELA ROSA RAZON in Korea and requesting us to issue a PTA, etc., for the repatriation of the remains of said OFW, this is to report to your good office the following:

1. The deceased was deployed by our agency on April 3, 2000 to Yeongjin Machine Company in South Korea;

2. He violated his employment/training/dispatching contracts on June 25, 2000 by unlawfully escaping/running away (TNT) from his company assignment without prior KFSMB authorization and working/staying in unknown company/place;

3. He allegedly died of 'bangungot' thereafter;

In view thereof, we cannot heed your requests as embodied in your telegram. However, his relatives can avail of the benefits provided for by OWWA in cases involving undocumented/illegal Filipino workers abroad.

Trusting for your kind understanding"

On the same date – September 26, 2000 – Director Ricardo R. Casco of the WEO-POEA sent to the petitioner the herein second assailed letter-directive, which pertinently reads:

"We have received a copy of your fax message dated 26 September 2000 as regards to your response to our request for PTA for aforesaid deceased OFW. Nevertheless, may we remind you that pursuant to Sections 52, 53, 54 and 55 of the Implementing Rules Governing RA 8042, otherwise known as the Migrant Workers and Overseas Filipino Act of 1995, the repatriation of OFW, his/her remains and transport of his personal effects is the primary responsibility of the principal or agency and to immediately advance the cost of plane fare without prior determination of the cause of worker's repatriation. The Rules further provide for the procedure to be followed in cases when the foreign employer/agency fails to provide for the cost of the repatriation, compliance of which is punishable by suspension of the license of the agency or such sanction as the Administration shall deem proper. Hence, you are required to provide the PTA for the deceased OFW in compliance with the requirement in accordance with R.A. 8042. You are given forty-eight (48) hours upon receipt hereof within which to provide said ticket. Failure in this regard will constrain us to impose the appropriate sanction under our rules."

On September 27, 2000, petitioner wrote back Director Ricardo R. Casco, thus:

"In connection with your fax letter dated September 26, 2000, re: the repatriation of the remains of the deceased, ex-trainee (OFW) MANNY DELA ROSA RAZON, please be informed that the provisions of Section 53 as well as, and in relation to, Section 55 of the Omnibus Rules and

Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 on the matters covering the following:

1. The responsibility of the agency to advance the cost of plane fare without prior determination of the cause of the deceased worker's termination.

2. The recovery of the same costs from the estate of the dead worker before the NLRC.

3. The action to be imposed by POEA for non-compliance therewith within 48 hours are violative of due process and/or the principle on due delegation of power.

This is so because Sec. 15 of R.A. 8042 clearly contemplates prior notice and hearing before responsibility thereunder could be established against the agency that sets up the defense of sole fault – in avoidance of said responsibility -. Besides, the sections in question unduly grant the powers to require advance payment of the plane fare, to impose the corresponding penalty of suspension in case of non-compliance therewith, within 48 hours and to recover said advance payment from the dead worker's estate upon the return of his remains to the country before the NLRC, when the law itself does not expressly provide for the grant of such powers.

x x x x x x x x x.

Please provide us immediately with the death certificate/post mortem report/police report pertinent to above as proof of death and cause thereof."

Nonetheless, and apprehensive of the adverse repercussions which may ensue on account of its non-compliance with the directive, petitioner, on September 29, 2000, advanced under protest the costs for the repatriation of the remains of the late Manny dela Rosa Razon.

Thereafter, petitioner went to this Court via the instant petition for certiorari, posing, for Our consideration, the sole issue of –

"WHETHER OR NOT SECTIONS 52, 53, 54 AND 55 OF THE OMNIBUS RULES AND REGULATIONS IMPLEMENTING THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042), ISSUED BY DFA AND POEA, WHICH POEA SUMMARILY ORDERED THE HEREIN PETITIONER TO COMPLY VIZ-A-VIZ THE PAYMENT IN ADVANCE OF THE EXPENSES FOR THE REPATRIATION OF THE REMAINS OF A DECEASED WORKER-TRAINEE WHO, AT THE TIME OF HIS DEATH, HAS NO EXISTING EMPLOYMENT (DISPATCHING) CONTRACT WITH EITHER SAID PETITIONER OR HIS FOREIGN PRINCIPAL AND NO VALID VISA OR IS NOT WORKING WITH THE FOREIGN PRINCIPAL TO WHICH PETITIONER DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE OF DUE PROCESS SUCH THAT POEA ACTED WITHOUT [OR IN] EXCESS OF ITS JURISDICTION AND/OR IN GRAVE ABUSE OF DISCRETION IN ISSUING SAID ORDER TO PAY SAID EXPENSES."2

On 4 October 2001, the Court of Appeals rendered the Decision which is now the subject of the present petition. The dispositive portion of the Court of Appeals' Decision states:

WHEREFORE, for lack of merit, the instant petition is DENIED and is accordingly DISMISSED.3

In dismissing the petition for certiorari, the Court of Appeals stated that petitioner was mainly accusing the Philippine Overseas Employment Administration (POEA) of grave abuse of discretion when it ordered petitioner to pay, in advance, the costs for the repatriation of the remains of the deceased Manny dela Rosa Razon.

The Court of Appeals ruled that the POEA did not commit any grave abuse of discretion as its directives to petitioner were issued pursuant to existing laws and regulations.4 It likewise held that a petition for certiorari, which was the remedy availed of by petitioner, is not the proper remedy as the same is only available when "there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law."5 Section 62 of the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995 or Republic Act 8042 ("Omnibus Rules") states that "the Labor Arbiters of NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary

and other forms of damages, subject to the rules and procedures of the NLRC." There is, therefore, an adequate remedy available to petitioner.

Lastly, the Court of Appeals declared that it could not strike down as unconstitutional Sections 52, 53, 54, and 55 of the Omnibus Rules as the unconstitutionality of a statute or rules may not be passed upon unless the issue is directly raised in an appropriate proceeding.6

In the present recourse, petitioner submits the following issues for our consideration:

1. The Court of Appeals erred in the appreciation of the issue as it mistakenly considered, in dismissing the petition before it, that petitioner is contesting the compliance and conformity of the POEA directives with Sections 52, 53, 54, and 55 of the Omnibus Rules and Regulations implementing in particular Section 15 of RA 8042;

2. The Court of Appeals, in dismissing the petition, again erred in ruling that constitutional questions cannot be passed upon and adjudged in a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure;

3. The Court of Appeals erred in not holding that, under the facts of the case that gave rise to the petition before it, the same sections of the said rules and regulations are illegal, invalid and/or violative of the right of petitioner to due process of law and, therefore, the POEA directives issued pursuant thereto constitute acts committed without, or in excess of, jurisdiction and/or in grave abuse of discretion.7

In Our Resolution of 20 November 2002, we gave due course to the present petition and directed the parties to submit their respective memoranda.8 On 28 August 2006, we resolved to dispense with the memorandum of the estate/heirs of deceased Manny dela Rosa Razon.

At the center of this petition are the following provisions of the omnibus rules:

Section 52. Primary Responsibility for Repatriation. – The repatriation of the worker, or his/her remains, and the transport of his/her personal effects shall be the primary responsibility of the principal or agency which recruited or deployed him/her abroad. All costs attendant thereto shall be borne by the principal or the agency concerned.

Section 53. Repatriation of Workers. – The primary responsibility to repatriate entails the obligation on the part of principal or agency to advance the cost of plane fare and to immediately repatriate the worker should the need for it arise, without a prior determination of the cause of the termination of the worker's employment. However, after the worker has returned to the country, the principal or agency may recover the cost of repatriation from the worker if the termination of employment was due solely to his/her fault.

Every contract for overseas employment shall provide for the primary responsibility of agency to advance the cost of plane fare, and the obligation of the worker to refund the cost thereof in case his/her fault is determined by the Labor Arbiter.

Section 54. Repatriation Procedure. – When a need for repatriation arises and the foreign employer fails to provide for it cost, the responsible personnel at site shall simultaneously notify OWWA and the POEA of such need. The POEA shall notify the agency concerned of the need for repatriation. The agency shall provide the plane ticket or the prepaid ticket advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine Embassy; and notify POEA of such compliance. The POEA shall inform OWWA of the action of the agency.

Section 55. Action on Non-Compliance. – If the employment agency fails to provide the ticket or PTA within 48 hours from receipt of the notice, the POEA shall suspend the license of the agency or impose such sanctions as it may deem necessary. Upon notice from the POEA, OWWA shall advance the costs of repatriation with recourse to the agency or principal. The administrative sanction shall not be lifted until the agency reimburses the OWWA of the cost of repatriation with legal interest.

Said provisions, on the other hand, are supposed to implement Section 15 of Republic Act No. 80429 which provides:

SEC. 15. Repatriation of Workers; Emergency Repatriation Fund. – The repatriation of the worker and the transport of his personal belongings shall be the primary responsibility of the agency which, recruited or deployed the worker overseas. All costs attendant to repatriation shall be borne by or charged to the agency concerned and/or its principal. Likewise, the repatriation of remains and transport of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency. However, in cases where the termination of employment is due solely to the fault of the worker, the principal/employer or agency shall not in any manner be responsible for the repatriation of the former and/or his belongings.

Petitioner contends that the Court of Appeals misappreciated the issue it presented in its petition for certiorariwhen, instead of resolving whether Sections 52, 53, 54, and 55 of the Omnibus Rules are illegal and violative of due process, it merely confined itself to the question of whether or not the POEA committed grave abuse of discretion in issuing its directives of 22 September 2000 and 27 September 2000.

Petitioner also contends that, contrary to the finding of the Court of Appeals, a special civil action for certiorari is the appropriate remedy to raise constitutional issues.

Also, petitioner insists that the subject portions of the omnibus rules are invalid on the ground that Section 15 of Republic Act No. 8042 does not impose on a recruitment agency the primary responsibility for the repatriation of a deceased Overseas Filipino Worker (OFW), while Section 52 of the Omnibus Rules unduly imposes such burden on a placement agency.

Moreover, petitioner argues that the word "likewise" at the start of the third sentence of Section 15 of Republic Act No. 8042 is used merely as a connective word indicating the similarity between a recruitment agency's financial obligation in the repatriation of living and a deceased OFW. It does not, however, necessarily make a placement agency primarily responsible for the repatriation of a deceased OFW unlike in the case of an OFW who is alive.

As for Section 53 of the Omnibus Rules, petitioner submits that the same is invalid as Section 15 of Republic Act No. 8042 clearly states that a placement agency shall not in any manner be responsible for the repatriation of the deceased OFW and his or her belongings should the termination of the OFW's employment be due to his or her fault. However, as Section 53 of the Omnibus Rules stipulates that a placement agency or principal shall bear the primary responsibility of repatriating an OFW and of advancing the payment for his or her plane fare, the omibus rules, as far as this section is concerned, is an invalid exercise of legislative power by an administrative agency.

In addition, petitioner claims Section 53 of the Omnibus Rules violates the due process clause of the constitution as it deprives the deploying agency of the right to prior notice and hearing through which it can prove that it should not bear the burden of repatriating an OFW.

Finally, petitioner points out that it should be the Overseas Workers Welfare Administration which should advance the costs of repatriation of the deceased Razon with the resources coming out of the emergency repatriation fund of said agency.

The Solicitor General for its part counters that Sections 52, 53, 54, and 55 of the Omnibus Rules are valid quasi-legislative acts of respondents Department of Foreign Affairs and Department of Labor and Employment.10Because of this, the requirements of prior notice and hearing are not essential. Besides, there are cases where even in the exercise of quasi-judicial power, administrative agencies are allowed, sans prior notice and hearing, to effectuate measures affecting private property, such as:

1) [F]or the summary abatement of nuisance per se which affects the immediate safety of persons and property, or 2) in summary proceedings of distraint and levy upon the property of delinquent taxpayers in the collection of internal revenue taxes, fees or charges or any increment thereto, or 3) in the preventive suspension of a public officer pending investigation. x x x.11

The Solicitor General also adds that since petitioner is engaged in the recruitment of Filipino workers for work abroad, the nature of its business calls for the exercise of the state's police power in order to safeguard the rights and welfare of the Filipino laborers. One such measure is the primary responsibility imposed upon placement agencies with regard to the repatriation of an OFW or of his remains.

The Solicitor General also argues that the wording of Section 15 of Republic Act No. 8042 leaves no doubt that a recruitment

agency shall bear the primary responsibility for the repatriation of an OFW whether the latter is dead or alive.

Lastly, the Solicitor General insists that actions assailing the validity of implementing rules and regulations are within the original jurisdiction of the regional trial courts.

We shall first address the procedural question involved in the present petition.

There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.12

Section 1, Rule 65 of the 1997 Rules of Civil Procedure states:

SECTION 1. Petition for Certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46.

From this, it is clear that in order for a petition for certiorari to prosper, the following requisites must be present: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.

It bears emphasizing that administrative bodies are vested with two basic powers, the quasi-legislative and the quasi-judicial.13 In Abella, Jr. v. Civil Service Commission,14 we discussed the nature of these powers to be –

In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in accordance with the standards laid down by the law. The determination of facts and the applicable law, as basis for official action and the exercise of judicial discretion, are essential for the performance of this function. On these considerations, it is elementary that due process requirements, as enumerated in Ang Tibay, must be observed. These requirements include prior notice and hearing.

On the other hand, quasi-legislative power is exercised by administrative agencies through the promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great branches of the government. Prior notice to and hearing of every affected party, as elements of due process, are not required since there is no determination of past events or facts that have to be established or ascertained. As a general rule, prior notice and hearing are not essential to the validity of rules or regulations promulgated to govern future conduct.

In this case, petitioner assails certain provisions of the Omnibus Rules. However, these rules were clearly promulgated by respondents Department of Foreign Affairs and Department of Labor and Employment in the exercise of their quasi-legislative powers or the authority to promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in availing himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-judicial acts are proper subjects thereof. If only for these, the petition deserves outright dismissal. Be that as it may, we shall proceed to resolve the substantive issues raised in this petition for review in order to finally remove the doubt over the validity of Sections 52, 53, 54, and 55 of the Omnibus Rules.

It is now well-settled that delegation of legislative power to various specialized administrative agencies is allowed in the face of increasing complexity of modern life. Given the volume and variety of interactions involving the members of today's society, it is doubtful if the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the need to delegate

to administrative bodies, as the principal agencies tasked to execute laws with respect to their specialized fields, the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.15 All that is required for the valid exercise of this power of subordinate legislation is that the regulation must be germane to the objects and purposes of the law; and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law.16 Under the first test or the so-called completeness test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.17 The second test or the sufficient standard test, mandates that there should be adequate guidelines or limitations in the law to determine the boundaries of the delegate's authority and prevent the delegation from running riot.18

We resolve that the questioned provisions of the Omnibus Rules meet these requirements.

Basically, petitioner is impugning the subject provisions of the Omnibus Rules for allegedly expanding the scope of Section 15 of Republic Act No. 8042 by: first, imposing upon it the primary obligation to repatriate the remains of the deceased Razon including the duty to advance the cost of the plane fare for the transport of Razon's remains; and second, by ordering it to do so without prior determination of the existence of employer-employee relationship between itself and Razon.

Petitioner's argument that Section 15 does not provide that it shall be primarily responsible for the repatriation of a deceased OFW is specious and plain nitpicking. While Republic Act No. 8042 does not expressly state that petitioner shall be primarily obligated to transport back here to the Philippines the remains of the deceased Razon, nevertheless, such duty is imposed upon him as the statute clearly dictates that "the repatriation of remains and transport of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency." The mandatory nature of said obligation is characterized by the legislature's use of the word "shall." That the concerned government agencies opted to demand the performance of said responsibility solely upon petitioner does not make said directives invalid as the law plainly obliges a local placement agency such as herein petitioner to bear the burden of repatriating the remains of a deceased OFW with or without recourse to the principal abroad. In this regard, we see no reason to invalidate Section 52 of the omnibus rules as Republic Act No. 8042 itself permits the situation wherein a local recruitment agency can be held exclusively responsible for the repatriation of a deceased OFW.

Nor do we see any reason to stamp Section 53 of the Omnibus Rules as invalid for allegedly contravening Section 15 of the law which states that a placement agency shall not be responsible for a worker's repatriation should the termination of the employer-employee relationship be due to the fault of the OFW. To our mind, the statute merely states the general principle that in case the severance of the employment was because of the OFW's own undoing, it is only fair that he or she should shoulder the costs of his or her homecoming. Section 15 of Republic Act No. 8042, however, certainly does not preclude a placement agency from establishing the circumstances surrounding an OFW's dismissal from service in an appropriate proceeding. As such determination would most likely take some time, it is only proper that an OFW be brought back here in our country at the soonest possible time lest he remains stranded in a foreign land during the whole time that recruitment agency contests its liability for repatriation. As aptly pointed out by the Solicitor General –

Such a situation is unacceptable.

24. This is the same reason why repatriation is made by law an obligation of the agency and/or its principal without the need of first determining the cause of the termination of the worker's employment. Repatriation is in effect an unconditional responsibility of the agency and/or its principal that cannot be delayed by an investigation of why the worker was terminated from employment. To be left stranded in a foreign land without the financial means to return home and being at the mercy of unscrupulous individuals is a violation of the OFW's dignity and his human rights. These are the same rights R.A. No. 8042 seeks to protect.19

As for the sufficiency of standard test, this Court had, in the past, accepted as sufficient standards the following: "public interest," "justice and equity," "public convenience and welfare," and "simplicity, economy and welfare."20

In this case, we hold that the legislature's pronouncements that Republic Act No. 8042 was enacted with the thought of upholding the dignity of the Filipinos may they be here or abroad and that the State shall at all times afford full protection to labor, both here and abroad, meet the requirement and provide enough guidance for the formulation of the omnibus rules.

WHEREFORE, the Petition for Review is DENIED. The Court of Appeals' Decision dated 4 October 2001 and Resolution dated 18 February 2002 are hereby AFFIRMED. With costs.

SO ORDERED.

Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concur.

Footnotes

1 Penned by Associate Justice Cancio C. Garcia (now a member of this Court) and Associate Justices Hilarion L. Aquino and Edgardo P. Cruz, concurring; rollo, pp. 44-55.

2 Rollo, pp. 45-50.

3 Id. at 55.

4 Id. at 53.

5 Id. at 11.

6 Id. at 12.

7 Id. at 267-268.

8 Id. at 241-242.

9 AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS EMPLOYMENT AND ESTABLISH A HIGHER STANDARD OF PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN DISTRESS, AND FOR OTHER PURPOSES.

10 Signed by Secretary Domingo L. Siazon, Jr. for the Department of Foreign Affairs and Secretary Leonardo A. Quisumbing for the Department of Labor and Employment.

11 Rollo, p. 294.

12 Smart Communications, Inc. (SMART) v. National Telecommunications Commission (NTC), G.R. No. 151908, 12 August 2003, 408 SCRA 678, 689.

13 Eastern Shipping Lines, Inc. v. Philippine Overseas Employment Agency, G.R. No. L-76633, 18 October 1988, 166 SCRA 533, 546-547.

14 G.R. No. 152574, 17 November 2004, 442 SCRA 507, 529-530.

15 Beltran v. Secretary of Health, G.R. No. 133640, 25 November 2005, 476 SCRA 168, 191.

16 The Conference of Maritime Manning Agencies v. Philippine Overseas Employment Agency, 313 Phil. 592, 606 (1995).

17 Eastern Shipping Lines, Inc. v. Philippine Overseas Employment Agency, supra note 13 at 543.

18 Id.

19 Rollo, p. 300.

20 Supra note 13 at 537.

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