Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 90482 August 5, 1991

REPUBLIC OF THE PHILIPPINES, acting through the SUGAR REGULATORY ADMINISTRATION, and REPUBLIC
PLANTERS BANK, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 15th Division, THE HONORABLE CORONA IBAY-SOMERA, in her official
capacity as Presiding Judge of the Regional Trial Court, National Capital Region, Branch 26, Manila, JORGE C.
VICTORINO and JAIME K. DEL ROSARIO, in their official capacities as RTC Deputy Sheriffs of Manila, ROGER Z.
REYES, ERNESTO L. TREYES, JR., and EUTIQUIO M. FUDOLIN, respondents.

Enrique V. Olmedo for Independent Sugar Farmers, Inc.

Reyes, Treyes & Fudolin Law Firm for respondents.

DAVIDE, JR., J.:

This is an appeal by certiorari under Rule 45 of the Revised Rules of Court, with prayer for a temporary restraining order or writ
of preliminary injunction, filed on 25 October 1989 by the Office of the Government Corporate Counsel (OGCC) in behalf of the
Republic of the Philippines "acting through the Sugar Regulatory Administration" (SRA) and the Republic Planters Bank (RPB)
seeking the review of the 13 October 1989 Decision of the Court of Appeals (15th Division) in CAGR No. 17188.

The assailed decision1 dismissed the petition for certiorari filed by Petitioners against herein public respondents Judge and
deputy sheriffs and private respondents for the nullification of the Orders of respondent Judge of 13 March 1989, 21 March 1989
and 27 March 1989 in Civil Case No. 86-35880 of Branch 26 of the Regional Trial Court of Manila on the following grounds: (a)
the funds upon which the attorney's fees are sought to be executed now belong to the Republic of the Philippines due to legal
subrogation, (b) execution is not proper against the Republic which is not a party to the case, (c) the issuance of a writ of
execution would violate the Constitution since according to it no money shall be paid out of the treasury except in pursuance to
an appropriations made by law, and (d) execution for attomey's fees is unwarranted.

Respondent Court of Appeals dismissed the petition for lack of merit principally because

(a) Under the compromise agreement petitioner (RPB) accepted the designation/appointment as Trustee whose obligation is to
pay; it received benefits by way of trustee's fees; it may not question the right of private respondents to attorney's fees;

(b) Petitioner (SRA) may not lawfully bring an action on behalf of the Republic of the Philippines since under Section 13 of
Executive Order No. 18 dated 28 May 1986, which created it, it simply was to take over the functions of the defunct PHILSUCOM;
however, the latter was to remain a judicial entity for three more years for the purpose of prosecuting and defending suits against
it; hence it is PHILSUCOM, being a party to the compromise agreement, which may properly contest the right of private
respondents to attomey's fees;

(c) The petition should have been filed through the Office of the Solicitor General OSG and not through the (OGCC); neither the
latter nor the (SRA) may lawfully represent the Government of the Philippines in any suit or proceeding such as the present
petition for administrative agencies may only perform such powers and functions as may be authorized by the laws which created
or gave them existence; and

(d) The respondent judge did not commit any error of jurisdiction in issuing the questioned orders; hence, the remedy should be
appeal.

The facts which gave rise to said petition are summarized by the Court of Appeals as follows:

On May 16,1986, Republic Planters Bank (hereafter referred to as RPB), Zosimo Maravilla, Rosendo de la Rama, Bibiano
Sabino, Roberto Mascufiana and Ernesto Kramer "for themselves and in representation of other sugar producers" filed a
Complaint with the respondent court, RTC Branch 26, docketed as C.C. 86-35880 "For Sum of Money and/or Delivery of
Personal Property with Restraining Order and/or Preliminary Injunction" against the Philippine Sugar Commission
(PHILSUCOM) and the National Sugar Trading Corporation (NASUTRA) with the prayer:
WHEREFORE PREMISES CONSIDERED, it is respectfully prayed of this Honorable Court that, after due hearing and trial,
judgment be rendered in favor of Plaintiffs and against Defendants ordering them to do the following:

1. To render a correct and faithful account of whatever amount of United States dollar accounts/deposits in different banks,
domestic and foreign, being held in agents and/or representatives.

2. To render a correct and faithful inventory of all the physical sugar stocks for crop year 1984-85 presently remaining in the
warehouses of the different sugar mills all over the country.

3. To deliver or remit to the Plaintiffs any and all United States dollar accounts/deposits in various banks, domestic or foreign,
held in the name of Defendants, their subsidiaries, conducts (sic), agents and/or representatives.

4. To deliver the entire remaining physical sugar stocks corresponding to crop year 1984-85 presently remaining in the
warehouses of the different sugar mills all over the country in favor of Plaintiffs who were unlawfully deprived of their possession
and control by Defendants, to be applied and deducted from Defendant's liability to Plaintiffs for the unaccounted sugar for crop
year 1984-85.

5. To jointly and severally pay Plaintiffs-Producers all interests and penalties imposed by Assignee-banks/creditors for accounts
covered by unpaid sugar quedans for crop year 1984-85.

6. To jointly and severally pay Plaintiffs claims for moral, compensatory and exemplary damages in such accounts to be
determined in the course of the trial.

7. To jointly and severally pay for the attorney's fees of twenty percent (20%) based on the total amount that may be recovered.

8. To jointly and severally pay for the costs and litigation expenses incurred by the Plaintiffs.

Plaintiffs likewise pray that, in order to prevent grave and irreparable injury, this Honorable Court shall issue a writ of preliminary
injunction enjoining and/or prohibiting the Defendants, their officers and/or agents from transferring, releasing or in any manner
disposing of all U.S. dollar deposits/accounts held in the name of Defendants, its subsidiaries, conduits agents and/or
representatives in the different banks, domestic and foreign, including the physical sugar corresponding to crop year 1984-85
presently remaining in the warehouses of the different sugar mills all over the country after requiring the Plaintiffs to post a bond
that may be determined by the Honorable Court to answer for the damages in the event judgment will be rendered in Defendant's
favor. Furthermore, Plaintiffs pray that a Restraining Order be immediately issued for the purpose of enjoining the Defendants
from committing and/or proceeding with the foregoing acts, pending hearing of the application for a writ of preliminary injunction.

Plaintiffs further pray for such other reliefs and remedies, just and equitable under the premises.

Before PHILSUCOM and NASUTRA could answer, a Compromise Agreement dated May 23, 1986 was submitted by the parties
which the lower court approved and based on it, the Judgment dated June 2,1986 (Annex "B", Petition, Id., pp. 22-36) was
issued. A motion for the issuance of writ of execution was filed (Annex "C", Petition, Id., pp, 37-50). PHILSUCOM and NASUTRA
filed their "Comment and Opposition (To Motion for Issuance of Writ of Execution)" (Annex D Petition, Id., pp. 51- 62). A Reply
was filed by the plaintiffs (Annex "E", Id., pp. 63- 72) and a Rejoinder was also filed by the defendants (Annex "E", Petition, Id.,
pp. 73-78). The lower court issued the Order dated March 13, 1989 which dismissed the separate petitions for relief from
judgment filed by Franklin Fuentebella, George Lacson, Fernando Ballesteros, and Antonio Lopez in one petition; Romeo
Guanzon as sugar producer and president of National Federation of Sugar Cane Planters; PASSI (Iloilo) Sugar Central, Inc.,
represented by Romeo Villavicencio; the Independent Sugar Planters represented by Corazon Sagimalet (In a Motion for
Intervention which substituted as a Petition for Relief from Judgment); and Zosimo Maravilla, Rosendo dela Rama and Bibiano
Sabino (Annex "G", Petition, Id., pp. 79-98). This Order dated March 13, 1989 (which as aforesaid, dismissed the petitions for
relief from judgment) is the first of the orders now being assailed.

On March 21, 1989, the lower court issued the second of the assailed orders which granted a second motion to resolve a pending
motion for issuance of a writ of execution and allowed the issuance of an alias writ of execution in words, thus:

Let an alias writ of execution be issued for the final implementation of the Judgment on Compromise Agreement, dated June 2,
1986, the only remaining provision of said judgment is the 10% attorney's fees of counsels for the plaintiffs (Paragraph 12 sub-
section Annex "H", Petition, Id., pp. 99-100).

Correspondingly, on that same date March 21, 1989, RTC Mala Deputy Sheriff Jaime K. del Rosario issued a "Notice of Delivery
of Money" asking the RPB to "pay in cash the 10% of P45,293,552.60 to Attys. Roger Reyes, Ernesto Treyes, Jr. and Eutiquio
Fudolin, Jr. ... immediately upon receipt of this notice" (Annex "I", Petition, Id., p. 101).

And on March 27, 1989, the third of the questioned orders was issued by the lower court, in response to the "Ex-Parte Motion
to Require Officers of Trustee Republic Planters Bank to Deliver Amount Subject of Alias Writ of Execution", requiring the officers
of the RPB named therein to "appear before the Court on March 29,1989 at 10:30 in the morning to explain why they should not
be cited for contempt of court for defying ... the alias writ of execution." (Annex "J", Petition, Id. pp. 102-103).

The instant petition was filed in this court on March 29, 1989, ...

Parenthetically, it may also be added that, as stated in paragraph 15 of the instant petition, the producers and producer
organizations who filed various petitions for relief from the judgment based on the compromise agreement have appealed to the
Court of Appeals the Order of 13 March 1989 denying their petitions. 2

In the instant petition petitioners limit their grounds to only two errors allegedly committed by respondent Court of Appeals,
namely: (a) it erred in holding that neither the OGCC nor the SRA can represent the Government of the Philippines in the action
before it and (b) it deviated from the decision of the Ninth Division of said court in CAGR SP No. 11046 (Kramer, et al. vs. Hon.
Doroteo, Cañeba, et al. promulgated on 16 March 1987), which declared that there was no valid class suit and the controversial
compromise agreement did not extend to the 40,000 unnamed sugar producers.3

In the resolution of 26 October 1989 We required respondents to comment on the petition and issued a temporary restraining
order directing respondent Judge to desist and refrain from further proceeding in Civil Case No. 86-35880, entitled Republic
Planters Bank, et al. vs. Philippine Sugar Commission, et al.4

On 23 November 1989 petitioners filed a manifestation informing this Court that at 9:30 a.m. on 26 October 1989, private
respondents, accompanied by respondents sheriff and a squad of police Special Action Force, swooped upon RPB's Bacolod
Branch and divested a teller of money from her booth allegedly because the branch manager had instructed the bank personnel
to close the bank vault while the enforcement of the court order was being verified - with the head office in Manila; the amount
taken was P179,955.31; these acts were allegedly done by virtue of, among others, the orders dated October 24 and 25, 1989
of respondent judge ordering the implementation of an alias Writ of Execution dated 21 March 1989 and the Writ of Execution
dated 21 March 1986; and claiming that what was enforced was an expired writ. 5

In Our resolution of 5 December 1989 respondents were required to comment on this manifestation. 6

After motions for extension of time to file their Comments on the petition, separately filed by the private respondents and the
Solicitor General for the public respondents, were granted, the former ultimately filed their Comment on 20 December 1989. 7 The
Solicitor General filed his Comment on 4 January 1990.8

In his Comment the Solicitor General maintains that the SRA has no legal personality to file the instant petition in the name of
the Republic of the Philippines for under its charter, Executive Order No. 18, the SRA is not vested with legal capacity to sue.
He further argues that the SRA was not a party to the court-approved compromise agreement in Civil Case No. 8635880 which
provided for the questioned 10% attorney's fees; PHILSUCOM and NASUTRA, which were parties thereto, did not file any action
to annul the compromise agreement; that while Executive Order No. 18 abolished the PHILSUCOM, the latter's juridical
personality was to continue for three (3) years, during which period it may prosecute and defend suits against it; and that, finally,
even if SRA has the capacity to sue, it cannot still bring any action on behalf of the Republic of the Philippines as this can be
done only by the Office of the Solicitor General per Section 1 of P.D. No. 478.

The Solicitor General likewise stresses that the interest of the national government in this case is confined only to the amount
remaining in RPB subject to legal subrogation; the judgment on the compromise agreement had long become final and
executory; and that no reversible error was committed by respondent judge and respondent Court of Appeals.

Private respondents assert that the SRA and RPB do not have the legal authority to sue for and in behalf of the Republic of the
Philippines. In respect to the former, their conclusion is supported by almost the same arguments as that asserted by the Solicitor
General. As regards the RPB, they maintain that it "is a government-controlled corporation engaged in the banking business
with corporate powers vested in a Board of Directors," hence, it is "legally untenable for such a banking institution, even assuming
that it is government-controlled, to initiate suits for and in behalf of the Republic of the Philippines." p.171, Rollo). They further
argued that petitioners have no legal personality to initiate the instant petition for (a) SRA is not a party in the case before the
trial court; the only reason why it became involved was because of the contempt proceedings initiated by private respondents
against SRA's Arsenio Yulo, Carlos Ledesma and Bibiano Sabino for issuing Sugar Orders No. 9 and 14; and that neither can
it be presumed that SRA had substituted defendants PHILSUCOM and the NASUTRA in the case as both continue to legally
exist for the purpose of prosecuting and defending suits in liquidation of its affairs; both did not file any petition for relief from
judgment questioning the validity of the judgment of the trial court approving the compromise agreement; and that, moreover,
RPB was a signatory to the Compromise Agreement as a Trustee and, as such, it regarded itself as only a nominal party and in
a series of pleadings it recognized the final and executory nature of the decision approving the compromise agreement.

As to the second assigned error, private respondents pointed out that the Ninth Division of the Court of Appeals did not rule in
C.A.-G.R. No. 11046 that Civil Case No. 86-35880 before the trial court was not a class suit, and whether or not it was a class
suit was not an issue therein.
On 15 January 1990 petitioners filed a motion for leave to file consolidated reply, which We granted in the resolution of 18
January 1990.9

On 18 January 1990 petitioners filed a Manifestation and Motion 10 "wherein they informed the Court that despite the temporary
restraining order issued on 26 October 1989, respondent Judge, to whom the Order was addressed, continued to hear the case,
particularly on the whereabouts of 177,087.14 piculs of sugar for the crop year 1984-1985 allegedly stored in the different
warehouses throughout the country".

In the resolution of 30 January 199011 We required respondent judge to show cause why no disciplinary action should be taken
against her for failure to comply with the resolution of 26 October 1989 ordering her to refrain from further proceeding with Civil
Case No. 86-35880 and to answer why she should not be cited for contempt of court for such failure, within ten (10) days from
notice.

On 8 March 1990 petitioners filed their Consolidated Reply to the Comment with Motion to Dismiss filed by private respondents
and the Comment of the Solicitor General.12

On 5 April 1990 private respondents filed a Rejoinder to the Consolidated Reply.13

On 16 April 1990 respondent judge, through the OSG, filed her Compliance as required by the Resolution of 30 January
1990.14 She claims that she did not defy the temporary restraining order issued by this Court on 26 October 1989 because the
petitioners sought for the issuance of the temporary restraining order to stop the enforcement of the decision of the respondent
Court of Appeals in CA GR No. 17188 dated October 13, 1989; hence, the temporary restraining order that this Court issued
"actually orders herein respondent judge to desist from enforcing the Decision of the respondent Court of Appeals in CAGR No.
17188 which is the subject of the instant petition for review". Consequently, she stresses, her 15 December 1989 order was not
issued in defiance of the restraining resolution; said order pertains exclusively to the whereabouts of the 177,087.14 piculs of
physical sugar for the crop year 1984-1985 and did not in any way attempt to enforce the questioned decisions of the court a
quo and the Court of Appeals to the prejudice of petitioner's right to appeal.

In Our resolution of 15 May 199015 We resolved to consider the comments of respondents as Answers to the petition, give due
course to the petition, require the parties to submit their respective memoranda within thirty days from notice, and to note the
compliance of respondent judge.

Petitioners filed their memorandum on 28 June 1990. 16 Private respondents sent theirs by registered mail on 22 August 1990
which this Court actually received on 8 September 1990. 17 We shall now take up the assigned errors.

I.

The Court of Appeals correctly ruled that petitioner Sugar Regulatory Administration may not lawfully bring an action on behalf
of the Republic of the Philippines and that the Office of the Government Corporate Counsel does not have the authority to
represent said petitioner in this case.

Executive Order No. 18, enacted on 28 May 1986 and which took effect immediately, abolished the Philippine Sugar Commission
(PHILSUCOM) and created the Sugar Regulatory Administration (SRA) which shall be under the Office of the President.
However, under the third paragraph of Section 13 thereof, the PHILSUCOM was allowed to continue as a juridical entity for three
(3) years for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to
dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the functions for which it was
established, under the supervision of the SRA.

Section 3 of said Executive Order enumerates the powers and functions of the SRA; but it does not specifically include the power
to represent the Republic of the Philippines in suits filed by or against it, nor the power to sue and be sued although it has the
power to "enter, make and execute routinary contracts as may be necessary for or incidental to the attainment of its purposes
between any persons, firms, public or private, and the Government of the Philippines" and "[t]o do all such other things, transact
such other businesses and perform such functions directly or indirectly incidental or conducive to the attainment of the purposes
of the Sugar Regulatory Administration."18

Section 4 thereof provides for the governing board of the Administration, known as the Sugar Board, which shall exercise "[a]ll
the corporate powers" of the SRA. Its specific functions are enumerated in Section 6; however, the enumeration does not include
the power to represent the Republic of the Philippines, although among such functions is "[t]o enter into contracts, transactions,
or undertakings of whatever nature which are necessary or incidental to its functions and objectives with any natural or juridical
persons and with any foreign government institutions, private corporations, partnership or private individuals. 19

It is apparent that its charter does not grant the SRA the power to represent the Republic of the Philippines in suits filed by or
against the latter.
It is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law and those that
are necessarily implied in the exercise thereof. (Guerzon vs Court of Appeals, et al., 77707, August 8, 1988, 164 SCRA 182,189,
citing Makati Stock Exchange, Inc. vs. SEC, 14 SCRA 620, and Sy vs. Central Bank, 70 SCRA 570.) 20

The SRA no doubt, is an administrative agency or body. An administrative agency is defined as "[a] government body charged
with administering and implementing particular legislation. Examples are workers' compensation commissions ... and the like. ...
The term 'agency' includes any department, independent establishment, commission, administration, authority board or bureau
...21

The power to represent the Republic of the Philippines in any suit by or against it having been withheld from SRA, it following
that the latter cannot institute the instant petition and the petition in C.A.-G.R. No. 17188 on behalf of the Republic of the
Philippines.

This conclusion does not, however, mean that the SRA cannot sued and be sued. This power can be implied from its powers to
make and execute routinary contracts as may be necessary for or incidental to the attainment of its purposes between any
persons, firms public or private, and the Government of the Philippines and to do all such other things, transact such other
businesses and perform such other functions directly or indirectly incidental or conducive to the attainment of the purposes of
the SRA and the powers of its governing board to enter into contracts, transactions, or undertaking of whatever nature which
are necessary or incidental to its functions and objectives with any natural or juridical persons and with any foreign government
institutions, private corporations, partnership or private individuals.

The Court of Appeals also correctly ruled that the OGCC can represent neither the SRA nor the Republic of the Philippines. We
do not, however, share the view that only the Office of the Solicitor General can represent the SRA.

The entry of appearance by the OGCC for the SRA was precipitated by the sudden turn-about of the Office of the Solicitor
General. Records show that the OSG eventually represented the PHILSUCOM, NASUTRA and SRA in the trial court. However,
on 29 January 1988 it filed a Manifestation dated January 27, 1988 informing the court that its appearance in the case "is limited
to the issues relating only to the contempt proceedings against the public respondents and is not concerned with the other issues
raised by various parties in their petitions for relief". 22 By reason thereof, the Chairman/Administrator of SRA, Mr. Arsenio Yulo,
Jr., sent a letter23 dated 6 April 1988 to the Solicitor General, informing him that since the appearance of the OSG is limited and
that it has taken a different position, SRA's only alternative is to seek another representative and that much to its regret, it is
constrained to terminate OSG's services. He further informed the Solicitor General that the case is being indorsed to the Office
of the Government Corporate Counsel for appropriate legal action pursuant to P.D. No. 478. There is, however, no showing that
the OSG withdrew its appearance for PHILSUCOM, NASUTRA or the SRA in the trial court. On the contrary, per its Manifestation
dated 8 February 1990, and filed with this Court on 12 February 1990, 24 it "has retained its appearance" "on behalf of the
Republic of the Philippines to recover whatever amount may be owing to the National Treasury by virtue of legal subrogation."

Also on April 6,1988, SRA sent a letter25 to OGCC to engage its legal services to represent SRA as successor agency of the
PHILSUCOM in the case pending before the trial court.

The OGCC, availing of P.D. No. 1415, the law creating it, particularly Section 1 which, as quoted by it on page 16 of the
Petition,26 reads:

SECTION 1. The Office of the Government Corporate Counsel shall be the principal law office of all government-owned and
controlled corporations, including their subsidiaries except as may otherwise be provided by their respective charters or
authorized by the President (Emphasis supplied).

sent a letter to the Office of the President, "in essence, requesting for authority for OGCC to represent SRA in the case before
the trial court," This was favorably acted by Executive Secretary Catalino Macaraig, Jr. 27

Indeed, under Section 35, Chapter 12, Title III of Book IV of the Administrative Code of 1987 (Executive Order No. 292) the
Solicitor General is the lawyer of the government, its agencies and instrumentalities, and its officials or agents. Said Section
reads as follows:

SECTION 35. Functions and Organization. — The Office of the Solicitor General shall represent the Government of the
Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation or matter
requiring the services of lawyers. When authorized by the President or head of the office concerned, it shall also represent
government-owned and controlled corporations. The Office of the Solicitor General shall constitute the law office of the
Government and, as such, shall discharge duties requiring the services of lawyers. ... .

This is similar to subsection (1) of Section 1 of P.D. No. 478.

In Republic, et al. vs. Partisala et al. (G.R. No. 61997, 15 November 1982, 118 SCRA 370, 373), We ruled that only the Solicitor
General can bring or defend actions on behalf of the Republic of the Philippines and that, henceforth, actions filed in the name
of the Republic if not initiated by the Solicitor General will be summarily dismissed.

However, in Secretary Oscar Orbos vs. Civil Service Commission, et al., G.R. No. 92561, 12 September 1990,28 We stated:

In the discharge of this task, the Solicitor General must see to it that the best interest of the government is upheld within the
limits set by law. When confronted with a situation where one government office takes an adverse position against another
government agency, as in this case, the Solicitor General should not refrain from performing his duty as the lawyer of the
government. It is incumbent upon him to present to the court what he considers should legally uphold the best interest of the
government although it may run counter to a client's position. In such an instance the government office adversely affected by
the position taken by the Solicitor General, if it still believes in the merit of its case, may appear in its own behalf through its legal
personnel or representative.

Consequently, the SRA need not be represented by the Office of the Solicitor General. It may appear in its own behalf through
its legal personnel or representative.

The question that logically crops up then is: May it be represented by the OGCC? Respondents hold the negative view.
Petitioners maintain otherwise, for the reason that pursuant to Section 1 of the charter of the OGCC (P.D. No. 1415), as they
quoted, the Office of the President, through the Executive Secretary, has authorized it to represent the SRA. The specific basis
for such authority is the alleged portion of the exceptionary clause therein, reading "... or authorized by the President."

The words or authorized by the President are not found in the law. We are not aware of any law, decree or executive order which
amended Section 1 of P.D. No. 1415 by inserting therein said words. Besides, even granting for the sake of argument that such
words are written into the law, such exception cannot confer upon the OGCC authority to represent the SRA. The exception
simply means that although the OGCC is the principal law office of all government-owned and controlled corporations including
their subsidiaries, the President may not allow it to act as lawyer for a specified government-owned or controlled corporation or
a subsidiary thereof. It will be noted that under Section 1 of P.D. No. 478 the President may authorize the OSG to represent
government-owned or controlled corporations. In short, the exception limits, rather than expands, the authority of the OGCC.
Thus, the so-called approval by the Executive Secretary of the request of OGCC to represent the SRA is based on an erroneous
interpretation of the law.

In any case, even if we grant that there was such an exception, as well construed in the manner urged by petitioners, it must be
deemed, nevertheless, to have been repealed by the Administrative Code of 1987. Section 10, Chapter 3, Title III, Book IV
thereof on the Office of the Government Corporate counsel does not contain the purported exception. It reads:

SECTION 10. Office of the Government Corporate Counsel. —The Office of the Government Corporate Counsel (OGCC) shall
act as the principal law office of all government-owned or controlled corporations, their subsidiaries, other corporate offsprings
and government acquired asset corporations and shall exercise control and supervision over all legal departments or divisions
maintained separately and such powers and functions as are now or may hereafter be provided by law. In the exercise of such
control or suspension, the Government Corporate Counsel shall promulgate rules and regulations to effectively implement the
objectives of the Office. ...

Since the SRA is neither a government-owned or controlled corporation nor a subsidiary thereof, OGCC does not have the
authority to represent it. As to who may represent it, the Orbos case29 provides the answer.

The case of the RPB is, however, different. It is admitted to be a government-owned corporation. The OGCC can, therefore,
legally represent RPB in actions filed by or against it. Unfortunately, this issue was not categorically and expressly addressed
by the Court of Appeals and has not been raised in the petition. Anyway, even if We have to rule that OGCC's appearance for
the RPB in the petition before the Court of Appeals in CAGR No. 17188 was proper, the result would be the same dismissal of
the petition. As also correctly pointed out by the Court of Appeals, having received benefits by way of trustee's fees, the RPB
may not question the right of private respondents to attorney's fees; its only obligation under the judgment based on compromise
was to pay the attorney's fees from out of the funds it held in trust.

II.

The second assigned error is without merit. Petitioners have misread the decision of the Court of Appeals in CAGR SP No. 11046 (Ernesto
Kramer, et al. vs. Hon. Doroteo Caneba et al. promulgated on 16 March 1987). 30 The case was a petition for certiorari and mandamus with a
prayer for preliminary injunction wherein petitioners principally prayed the Court to declare null and void the order of respondent judge of 16
December 1986 and to order him to issue the writ of execution of the judgment of 2 June 1986, require respondent NASUTRA to account and
turn over to petitioners any and all sales proceeds of 1984-1985 sugar from 2 June 1986 up to the present in favor of respondent Trustee Bank
RPB for proper distribution to petitioners, issue an order requiring respondent Trustee Bank to distribute without delay all the sales proceeds of
the 1984-1985 sugar in its possession in accordance with the judgment of respondent court, and issue a restraining order/preliminary injunction
enjoining the SRA, its agents/representatives from implementing Sugar Order No. 9 dated 25 September 1986. Although in the body of the
opinion a discussion was made on the matter of the sufficiency of representation to make Civil Case No. 86-35880 a class suit, the resolution of
the petition was not in any way based thereon or influenced by it. As a matter of fact, the Court categorically stated that it was premature to rule
on that issue because of the pendency of the petition for relief from judgment and interventions. The full disquisition of the Court of Appeals on
this point reads:

xxx xxx xxx

At the outset, let it be stated that the incidents which arose from the class suit before the respondent court are predominantly
related to the ten percent (10%) attorney's fees stipulated in the compromise agreement approved by the respondent court in
its June 2, 1986 judgment in favor of petitioner's counsels Atty. Roger Z. Reyes, Ernesto L. Treyes, Jr. and Eutiquio M. Fudolin,
Jr.

In the said class suit, only the five original plaintiffs and producers Zosimo Maravilla, for himself and in representation of Rosendo
dela Rama, Roberto Mascurafia and Bibiano Sabino per Special Power of Attorney, and Ernesto Kramer represented by Atty.
Roger Z. Reyes per Special Power of Attorney, have authorized said Attys. Reyes, Treyes, Jr. and Fudolin, Jr. to represent them
as counsel.

On page 18 of the instant petition, petitioners allege that there is no necessity to secure Special Powers of Attorney from the unnamed parties
in a class suit, and the failure of petitioners' counsel to do so does not constitute fraud, the named parties having contest over the class suit.' By
such statement, petitioners and their counsels admit their lack of authority from the rest of the alleged 40,000 sugar producers to file the class
suit and enter into the compromise agreement.

Section 12, Rule 3, Revised Rules of Court provides that in order that one or more may sue for the benefit of others as a class suit, it is necessary
that 'the court shall make sure that the parties actually before it are sufficiently numerous and representative so that all interests are fully
protected. (Dimayuga, et al. vs. CIR, et al., G.R. No. L-1 0213, May 27, 1957).

For that matter, in the case below, therein plaintiffs Zosimo Maravilla, Rosendo dela Rama and Bibiano Sabino filed with the respondent court
a motion to partially annul decision and/or petition for relief against the said ten (10%) percent attorney's fees on the allegation that they were
deceived into signing the compromise agreement believing, as was agreed upon during the negotiations, that the ten (10%) percent of whatever
would be collected would go to a trust fund for the benefit of the sugar farmers and producers and not as attorney's fees. Also, petition, for relief
was filed by thirteen other alleged sugar producers principally on the ground that the compromise agreement entered into was without their
express authority by way of Special Power of Attorney and that the class suit was unnecessary. Some of these sugar producers are the
Association de Agricultores de la Region Oesta de Batangas, Inc. (AAROB) with 742 members; the Samahang Mag-aasukal sa Kanluran
Batangas (SABA) with 4,000 members and Independent Sugar Farmers, Inc. with 200 members.

Here is a situation, as pointed out by respondent NASUTRA and SRA, where petitioners in filing the class suit claim to represent 40,000 sugar
producers all over the country and yet when some of these producers filed petition for relief and interventions, petitioners 'disowned' them,
stating that the other sugar producers have no personality to intervene, not having been named parties to the class suit.

It should not be overlooked that the said sugar producers, although not named parties in the class suit, are the very alleged persons represented
in the class suit. They certainly have interests in the subject matter of the controversy; in the contents of the compromise agreement.

The filing of petitions for relief from judgment has not been prohibited by B.P. 129. The remedy of petitions for relief from judgment is still available when a judgment
is rendered by an inferior court in a case, and a party thereto, by fraud, accident, mistake or excusable negligence, has been unjustly deprived of a hearing therein,
or has been prevented from taking an appeal. Section 9, paragraph 2 of BP 129 placing the original exclusive jurisdiction on the Court of Appeals to annul judgments
of Regional Trial Courts has no relation to (sic) all to the petition for relief provided for in Rule 38 because these two are completely different remedies.

The petitions for relief from judgment and interventions are still pending action by respondent court.1âwphi1 In view thereof, it would be
premature for this Court to resolve the issue of estoppel on the part of the said sugar producers to question the pertinent portion of the judgment
of compromise, and fraud on the part of the counsels for petitioners therein. (Emphasis supplied).

IV.

Having disposed of the main issues, We shall now consider the motion of petitioners of 16 January 1990 to hold in contempt respondent Judge Corona Ibay-Somera
for violating/defying the Temporary Restraining Order issued by Us on 26 October 1989. They allegedly "continued to hear the case particularly on the whereabouts
of 177,087.14 piculs of sugar for the crop year 1984-1985 allegedly stored in different warehouses throughout the country," and that she even further reset the
hearing of the case on January 19, 1990 notwithstanding the cautionary manifestation filed by petitioners during the 15 December 1989 hearing that said continued
hearing would be a violation of the TRO. In the resolution of 26 October 1989, this Court specifically ordered respondent Judge to desist and refrain from further
proceeding in Civil Case No. 86-35880, entitled Republic Planters Bank, et al. vs. Philippine Sugar Commission, et al.

In her Compliance, respondent judge explained that the TRO in question actually ordered her to desist from enforcing the Decision of the respondent Court of
Appeals in CAGR No. 17188, which is the subject of the instant petition, and that her "only honest motivation "in making the inquiry is to see to it that while the instant
petition is pending ... , whatever funds may be owing to the Republic of the Philippines is duly preserved and protected."

We find the explanation to be satisfactory. No malice attended the commission of the challenged act. We accord to respondent judge good faith in her claimed desire
to preserve and protect public funds. Moreover, petitioners failed to show that the act in question caused any injury or damage to their rights or interest.

IN VIEW OF ALL THE FOREGOING, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 116418 March 7, 1995

SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,

vs.
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA, Commissioner, Civil Service
Commission, respondents.

FELICIANO, J:

In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a Temporary Restraining Order, petitioners Salvador C.
Fernandez and Anicia M. de Lima assail the validity of Resolution No. 94-3710 of the Civil Service Commission ("Commission")
and the authority of the Commission to issue the same.

Petitioner Fernandez was serving as Director of the Office of Personnel Inspection and Audit ("OPIA") while petitioner de Lima
was serving as Director of the Office of the Personnel Relations ("OPR"), both at the Central Office of the Civil Service
Commission in Quezon City, Metropolitan Manila. While petitioners were so serving, Resolution No. 94-3710 signed by public
respondents Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman and Commissioner, respectively, of the Commission,
was issued on 7 June 1994.1 Resolution No. 94-3710 needs to be quoted in full:

RESOLUTION NO. 94-3710

WHEREAS, Section 17 of Book V of Executive Order 292 provides that ". . . as an independent constitutional body, the
Commission may effect changes in the organization as the need arises;"

WHEREAS, the Commission finds it imperative to effect changes in the organization to streamline its operations and improve
delivery of public service;

WHEREAS, the Commission finds it necessary to immediately effect changes in the organization of the Central Offices in view
of the need to implement new programs in lieu of those functions which were transferred to the Regional Offices;

WHEREFORE, foregoing premises considered, the Commission hereby RESOLVES to effect the following changes in its
organization, specifically in the Central Offices:

1. The OCSS [Office of Career Systems and Standards], OPIA [Office of Personnel Inspection and Audit] and OPR [Office of
Personnel Relations] are merged to form the Research and Development Office (RDO).

2. The Office for Human Resource Development (OHRD) is renamed Human Resource Development Office (HRDO).

3. The following functions and the personnel assigned to the unit performing said functions are hereby transferred to HRDO:

a. Administration of the Honor and Awards program under OCSS;

b. Registration and Accreditation of Unions under OPR; and

c. Accreditation of Agencies to take final action on appointments under OPIA.

4. The Office for Central Personnel Records (OCPR) is renamed Management Information Office (MIO).

5. The Information technology functions of OPM and the personnel assigned to the unit are transferred to MIO.

6. The following functions of OPM and the personnel assigned to the unit performing said functions are hereby transferred to
the Office of the Executive Director:

a. Financial Audit and Evaluation;

b. Internal Management and Improvement;

c. Research and Statistics; and

d. Planning and Programming.

7. The library service and its personnel under OCPR are transferred to the Central Administrative Office.

8. The budget allocated for the various functions shall be transferred to the Offices where the functions are transferred. Records,
fixtures and equipment that go with the functions shall be moved to where the functions are transferred.

Annex A contains the manning list for all the offices, except the OCES.

The changes in the organization and in operations shall take place before end of July 1994.

Done in Quezon City, July 07, 1994.

(Signed)
Patricia A. Sto. Tomas
Chairman

(Signed) Did not participate

Ramon P. Ereneta, Jr., Thelma P. Gaminde
Commissioner Commissioner

Attested by:
(Signed)
Carmencita Giselle B. Dayson
Board Secretary V 2

During the general assembly of officers and employees of the Commission held in the morning of 28 July 1994, Chairman Sto.
Tomas, when apprised of objections of petitioners, expressed the determination of the Commission to implement Resolution No.
94-3710 unless restrained by higher authority.

Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, the Court required public respondents to file a
Comment on the Petition. On 21 September 1994, petitioners filed an Urgent Motion for Issuance of a Temporary Restraining
Order, alleging that petitioners had received Office Orders from the Commission assigning petitioner Fernandez to Region V at
Legaspi City and petitioner de Lima to Region III in San Fernando, Pampanga and praying that public respondents be restrained
from enforcing these Office Orders. The Court, in a Resolution dated 27 September 1994, granted this Motion and issued the
Temporary Restraining Order prayed for by petitioners.

The Commission filed its own Comment, dated 12 September 1994, on the Petition and then moved to lift the Temporary
Restraining Order. The Office of the Solicitor General filed a separate Comment dated 28 November 1994, defending the validity
of Resolution No. 94-3710 and urging dismissal of the Petition. Petitioners filed separate Replies to these Comments. The
Commission in turn filed a Rejoinder (denominated "Comment [on] the Reply").

The principal issues raised in this Petition are the following:

(1) Whether or not the Civil Service Commission had legal authority to issue Resolution No. 94-3710 to the extent it merged the
OCSS [Office of Career Systems and Standards], the OPIA [Office of Personnel Inspection and Audit] and the OPR [Office of
Personnel Relations], to form the RDO [Research and Development Office]; and

(2) Whether or not Resolution No. 94-3710 violated petitioners' constitutional right to security of tenure.

I.

The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25 July 1987) sets out, in Book V, Title I, Subtitle A,
Chapter 3, the internal structure and organization of the Commission in the following terms:

Sec. 16. Offices in the Commission — The Commission shall have the following offices:

(1) The Office of the Executive Director — . . .

(2) The Merit System Protection Board — . . .

(3) The Office of Legal Affairs — . . .

(4) The Office of Planning and Management — . . .

(5) The Central Administrative Office — . . .

(6) The Office of Central Personnel Records — . . .

(7) The Office of Position Classification and

Compensation — . . .

(8) The Office of Recruitment, Examination and

Placement — . . .

(9) The Office of Career Systems and Standards shall provide leadership and assistance in the formulation and evaluation of
personnel systems and standards relative to performance appraisal, merit promotion and employee incentive benefits and
awards.

(10) The Office of Human Resource Development — . . .

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations for the effective
conduct of inspection and audit of personnel and personnel management programs and the exercise of delegated authority;
provide technical and advisory services to Civil Service Regional Offices and government agencies in the implementation of
their personnel programs and evaluation systems.

(12) The Office of Personnel Relations shall provide leadership and assistance in the development and implementation of
policies, standards, rules and regulations governing corporate officials and employees in the areas of recruitment,
examination, placement, career development, merit and awards systems, position classification and compensation,
performance appraisal, employee welfare and benefits, discipline and other aspects of personnel management on the basis of
comparable industry practices.

(13) The Office of the Corporate Affairs — . . .

(14) The Office of Retirement Administration — . . .

(15) The Regional and Field Offices. — . . . (Emphases in the original)

Immediately after the foregoing listing of offices of the Commission and their respective functions, the 1987 Revised
Administrative Code goes on to provide as follows:

Sec. 17. Organizational Structure. — Each office of the Commission shall be headed by a Director with at least one (1)
Assistant Director, and may have such divisions as are necessary to carry out their respective functions. As an independent
constitutional body, the Commission may effect chances in the organization as the need arises.

xxx xxx xxx 3

(Emphasis supplied)

Examination of the foregoing statutory provisions reveals that the OCSS, OPIA and OPR, and as well each of the other Offices
listed in Section 16 above, consist of aggregations of Divisions, each of which Divisions is in turn a grouping of Sections. Each
Section, Division and Office comprises a group of positions within the agency called the Civil Service Commission, each group
being entrusted with a more or less definable function or functions. These functions are related to one another, each of them
being embraced by a common or general subject matter. Clearly, each Office is an internal department or organizational unit
within the Commission and that accordingly, the OCSS, OPIA and OPR, as well as all the other Offices within the Commission
constitute administrative subdivisions of the CSC. Put a little differently, these offices relate to the internal structure of the
Commission.

What did Resolution No. 94-3710 of the Commission do? Examination of Resolution No. 94-3710 shows that thereby the
Commission re-arranged some of the administrative units (i.e., Offices) within the Commission and, among other things, merged
three (3) of them (OCSS, OPIA and OPR) to form a new grouping called the "Research and Development Office (RDO)." The
same Resolution renamed some of the Offices of the Commission, e.g., the Office for Human Resource Development (OHRD)
was renamed Human Resource Development Office (HRDO); the Office for Central Personnel Records (OCPR) was renamed
Management Information Office (MIO). The Commission also re-allocated certain functions moving some functions from one
Office to another; e.g., the information technology function of OPM (Office of Planning and Management) was transferred to the
newly named Management Information Office (MIO). This re-allocation or re-assignment of some functions carried with it the
transfer of the budget earmarked for such function to the Office where the function was transferred. Moreover, the personnel,
records, fixtures and equipment that were devoted to the carrying out of such functions were moved to the Offices to where the
functions were transferred.

The objectives sought by the Commission in enacting Resolution No. 94-3710 were described in that Resolution in broad terms
as "effect[ing] changes in the organization to streamline [the Commission's] operations and improve delivery of service." These
changes in internal organization were rendered necessary by, on the one hand, the decentralization and devolution of the
Commission's functions effected by the creation of fourteen (14) Regional Offices and ninety-five (95) Field Offices of the
Commission throughout the country, to the end that the Commission and its staff may be brought closer physically to the
government employees that they are mandated to serve. In the past, its functions had been centralized in the Head Office of the
Commission in Metropolitan Manila and Civil Service employees all over the country were compelled to come to Manila for the
carrying out of personnel transactions. Upon the other hand, the dispersal of the functions of the Commission to the Regional
Offices and the Field Offices attached to various governmental agencies throughout the country makes possible the
implementation of new programs of the Commission at its Central Office in Metropolitan Manila.

The Commission's Office Order assigning petitioner de Lima to the CSC Regional Office No. 3 was precipitated by the incumbent
Regional Director filing an application for retirement, thus generating a need to find a replacement for him. Petitioner de Lima
was being assigned to that Regional Office while the incumbent Regional Director was still there to facilitate her take over of the
duties and functions of the incumbent Director. Petitioner de Lima's prior experience as a labor lawyer was also a factor in her
assignment to Regional Office No. 3 where public sector unions have been very active. Petitioner Fernandez's assignment to
the CSC Regional Office No. 5 had, upon the other hand, been necessitated by the fact that the then incumbent Director in
Region V was under investigation and needed to be transferred immediately to the Central Office. Petitioner Fernandez was
deemed the most likely designee for Director of Regional Office No. 5 considering that the functions previously assigned to him
had been substantially devolved to the Regional Offices such that his reassignment to a Regional Office would result in the least
disruption of the operations of the Central Office.4

It thus appears to the Court that the Commission was moved by quite legitimate considerations of administrative efficiency and
convenience in promulgating and implementing its Resolution No. 94-3710 and in assigning petitioner Salvador C. Fernandez
to the Regional Office of the Commission in Region V in Legaspi City and petitioner Anicia M. de Lima to the Commission's
Regional Office in Region III in San Fernando, Pampanga. It is also clear to
the Court that the changes introduced and formalized through Resolution No. 94-3710 — re-naming of existing Offices; re-
arrangement of the groupings of Divisions and Sections composing particular Offices; re-allocation of existing functions (and
related personnel; budget, etc.) among the re-arranged Offices — are precisely the kind of internal changes which are referred
to in Section 17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987 Revised Administrative Code), quoted above, as "chances in
the organization" of the Commission.

Petitioners argue that Resolution No. 94-3710 effected the "abolition" of public offices, something which may be done only by
the same legislative authority which had created those public offices in the first place.

The Court is unable, in the circumstances of this case, to accept this argument. The term "public office" is frequently used to
refer to the right, authority and duty, created and conferred by law, by which, for a given period either fixed by law or enduring
at the pleasure of the creating power, an individual is invested with some portion of the sovereign functions of government, to
be exercised by that individual for the benefit of the public. 5 We consider that Resolution No. 94-3710 has not abolished any
public office as that term is used in the law of public officers.6 It is essential to note that none of the "changes in organization"
introduced by Resolution No. 94-3710 carried with it or necessarily involved the termination of the relationship of public
employment between the Commission and any of its officers and employees. We find it very difficult to suppose that the 1987
Revised Administrative Code having mentioned fourteen (14) different "Offices" of the Civil Service Commission, meant to freeze
those Offices and to cast in concrete, as it were, the internal organization of the commission until it might please Congress to
change such internal organization regardless of the ever changing needs of the Civil Service as a whole. To the contrary, the
legislative authority had expressly authorized the Commission to carry out "changes in the organization," as the need [for such
changes] arises." 7 Assuming, for purposes of argument merely, that legislative authority was necessary to carry out the kinds
off changes contemplated in Resolution No. 94-3710 (and the Court is not saying that such authority is necessary), such
legislative authority was validly delegated to the Commission by Section 17 earlier quoted. The legislative standards to be
observed and respected in the exercise of such delegated authority are set out not only in Section 17 itself (i.e., "as the need
arises"), but also in the Declaration of Policies found in Book V, Title I, Subtitle A, Section 1 of the 1987 Revised Administrative
Code which required the Civil Service Commission

as the central personnel agency of the Government [to] establish a

career service, adopt measures to promote — efficiency — [and] responsiveness . . . in the civil service . . . and that personnel
functions shall be decentralized, delegating the corresponding authority to the departments, offices and agencies where such
functions can be effectively performed. (Emphasis supplied)
II.

We turn to the second claim of petitioners that their right to security of tenure was breached by the respondents in promulgating
Resolution No. 94-3710 and ordering petitioners' assignment to the Commission's Regional Offices in Regions III and V. Section
2(3) of Article IX(B) of the 1987 Constitution declared that "no officer or employee of the Civil Service shall be removed or
suspended except for cause provided by law." Petitioners in effect contend that they were unlawfully removed from their positions
in the OPIA and OPR by the implementation of Resolution No. 94-3710 and that they cannot, without their consent, be moved
out to the Regional Offices of the Commission.

We note, firstly, that appointments to the staff of the Commission are not appointments to a specified public office but rather
appointments to particular positions or ranks. Thus, a person may be appointed to the position of Director III or Director IV; or to
the position of Attorney IV or Attorney V; or to the position of Records Officer I or Records Officer II; and so forth. In the instant
case, petitioners were each appointed to the position of Director IV, without specification of any particular office or station. The
same is true with respect to the other persons holding the same position or rank of Director IV of the Commission.

Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative Code recognizes reassignment as a management
prerogative vested in the Commission and, for that matter, in any department or agency of government embraced in the civil
service:

Sec. 26. Personnel Actions. — . . .

xxx xxx xxx

As used in this Title, any action denoting the movement or progress of personnel in the civil service shall be known as personnel
action. Such action shall include appointment through certification, promotion, transfer, re-instatement, re-employment, detail,
reassignment, demotion, and separation. All personnel actions shall be in accordance with such rules, standards, and
regulations as may be promulgated by the Commission.

xxx xxx xxx

(7) Reassignment. An employee may be re-assigned from one organizational unit to another in the same agency, Provided, That
such re-assignment shall not involve a reduction in rank status and salary. (Emphasis supplied)

It follows that the reassignment of petitioners Fernandez and de Lima from their previous positions in OPIA and OPR,
respectively, to the Research and Development Office (RDO) in the Central Office of the Commission in Metropolitan Manila
and their subsequent assignment from the RDO to the Commission's Regional Offices in Regions V and III had been effected
with express statutory authority and did not constitute removals without lawful cause. It also follows that such re-assignment
did not involve any violation of the constitutional right of petitioners to security of tenure considering that they retained their
positions of Director IV and would continue to enjoy the same rank, status and salary at their new assigned stations which they
had enjoyed at the Head Office of the Commission in Metropolitan Manila. Petitioners had not, in other words, acquired a vested
right to serve at the Commission's Head Office.

Secondly, the above conclusion is compelled not only by the statutory provisions relevant in the instant case, but also by a long
line of cases decided by this Court in respect of different agencies or offices of government.

In one of the more recent of these cases, Department of Education Culture and Sports, etc., et al. v. Court of Appeals, et al.,8 this
Court held that a person who had been appointed as "Secondary School Principal II" in the Division of City Schools, District II,
Quezon City, National Capital Region, and who had been stationed as High School Principal in the Carlos Albert High School in
Quezon for a number of years, could lawfully be reassigned or transferred to the Manuel Roxas High School, also in Quezon
City, without demotion in rank or diminution of salry. This Court held:

The aforequoted provision of Republic Act No. 4670 particularly Section 6 thereof which provides that except for cause and in
the exigencies of the service no teacher shall be transferred without his consent from one station to another, finds no application
in the case at bar as this is predicated upon the theory that the teacher concerned is appointed — not merely assigned — to a
particular station. Thus:

The rule pursued by plaintiff only goes so far as

the appointed indicates a specification. Otherwise, the constitutionally ordained security of tenure cannot shield her. In
appointments of this nature, this Court has consistently rejected the officer's demand to remain — even as public service dictates
that a transfer be made — in a particular station. Judicial attitude toward transfers of this nature is expressed in the following
statement in Ibañez, et al. vs. Commission on Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);
That security of tenure is an essential and constitutionally guaranteed feature of our Civil Service System, is not open to debate.
The mantle of its protection extends not only against removals without cause but also against unconsented transfer which, as
repeatedly enunciatEd, are tantamount to removals which are within the ambit of the fundamental guarantee. However, the
availability of that security of tenure necessarily depends, in the first instance, upon the nature of the appointment (Hojilla vs.
Marino, 121 Phil. 280 [1965].) Such that the rule which proscribes transfers without consent as anathema to the security of
tenure is predicated upon the theory that the officer involved is appointed — not merely assigned — to a particular station(Miclat
v. Ganaden, et al., 108 Phil. 439 [1960]; Jaro v. Hon. Valencia, et al., 118 Phil. 728 [1963]). [Brillantes v. Guevarra, 27 SCRA
138 (1969)]

The appointment of Navarro as principal does not refer to any particular station or school. As such, she could be assigned to
any station and she is not entitled to stay permanently at any specific school. (Bongbong v. Parado, 57 SCRA 623) When she
was assigned to the Carlos Albert High School, it could not have been with the intention to let her stay in said school permanently.
Otherwise, her appointment would have so stated. Consequently, she may be assigned to any station or school in Quezon City
as the exigencies of public service require even without consent. As this Court ruled in Brillantes v. Guevarra, 27 SCRA 138,
143 —

Plaintiff's confident stride falters. She took too loose a view of the applicable jurisprudence. Her refuge behind the mantle of
security of tenure guaranteed by the Constitution is not impenetrable. She proceeds upon the assumption that she occupies her
station in Sinalang Elementary School by appointment. But her first appointment as Principal merely reads thus: "You are hereby
appointed a Principal (Elementary School) in the Bureau of Public Schools, Department of Education", without mentioning her
station. She cannot therefore claim security of tenure as Principal of Sinalang Elementary School or any particular station. She
may be assigned to any station as exigency of public service requires, even without her consent. She thus has no right of
choice.9 (Emphasis supplied; citation omitted)

In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
a1., 10 the Court addressed appointments of petitioners as "Mediators-Arbiters in the National Capital Region" in dismissing a
challenge on certiorari to resolutions of the CSC and orders of the Secretary of Labor. The Court said:

Petitioners were appointed as Mediator Arbiters in the National Capital Region. They were not, however, appointed to a specific
station or particular unit of the Department of Labor in the National Capital Region (DOLE-NCR). Consequently, they can always
be reassigned from one organizational unit to another of the same agency where, in the opinion of respondent Secretary, their
services may be used more effectively. As such they can neither claim a vested right to the station to which they were assigned
nor to security of tenure thereat. As correctly observed by the Solicitor General, petitioners' reassignment is not a transfer for
they were not removed from their position as med-arbiters. They were not given new appointments to new positions. It indubitably
follows, therefore, that Memorandum Order No. 4 ordering their reassignment in the interest of the service is legally in
order.11 (Emphases supplied)

In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the Bureau of Public Schools of the Department of
Education, Culture and Sports, ruled as follows:

After a careful scrutiny of the records, it is to be underscored that the appointment of private respondent Yap is simply that of a
District Supervisor of the Bureau of Public Schools which does not indicate a specific station (Rollo, p. 13). A such, she could
be assigned to any station and she is no entitled to stay permanently at any specific station (Bongbong v. Parado, 57 SCRA 623
[1974]; Department of Education, Culture and Sports v. Court of Appeals [G.R. 81032, March 22, 1990] citing Brillantes v.
Guevarra [27 SCRA 138 [1969]). 13

Again, in Ibañez v. Commission on Elections, 14 the Court had before it petitioners' appointments as "Election Registrars in the
Commission of Elections," without any intimation to what city, municipality or municipal district they had been appointed as
such. 15 The Court held that since petitioners "were not appointed to, and consequently not entitled to any security of tenure or
permanence in, any specific station," "on general principles, they [could] be transferred as the exigencies of the service required,"
and that they had no right to complain against any change in assignment. The Court further held that assignment to a particular
station after issuance of the appointment was not necessary to complete such appointment:

. . . . We cannot subscribe to the theory that an assignment to a particular station, in the light of the terms of the appointments
in question, was necessary to complete the said appointments. The approval thereof by the Commissioner of Civil Service gave
those appointments the stamp of finality.With the view that the respondent Commission then took of its power in the premises
and the demand of the mission it set out to accomplish with the appointments it extended, said appointments were definitely
meant to be complete as then issued. The subsequent assignment of the appointees thereunder that the said respondent
Commission held in reserve to be exercised as the needs of each locality justified did not in any way detract from the perfection
attained by the appointments beforehand. And the respective appointees were entitled only to such security of tenure as the
appointment papers concerned actually conferred — not in that of any place to which they may have been subsequently
assigned. . . . As things stand, in default of any particular station stated in their respective appointments, no security of tenure
can be asserted by the petitioners on the basis of the mere assignments which were given to them. A contrary rule will erase
altogether the demarcation line we have repeatedly drawn between appointment and assignment as two distinct concepts in the
law of public officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare Office Incharge, Division of Urban, Rural and
Community Administration, Social Welfare Administration." She was assigned as Social Welfare Incharge of the Mountain
Province, by an office order of the Administrator, Social Welfare Administration. After a little more than a year; petitioner was
assigned elsewhere and respondent Ganaden transferred to petitioner's first station in Baguio City. The Court ruled that petitioner
was not entitled to remain in her first station, In Jaro v. Hon. Valencia, et al., 18petitioner Dr. Jaro had been appointed "Physician
in the Municipal Maternity and Charity Clinics, Bureau of Hospitals." He was first assigned to the Municipal Maternity and Charity
Clinics in Batulati, Davao, and later to the corresponding clinic in Saug, Davao and then to Catil, Davao. He was later assigned
to the Municipality of Padada, also of Davao Province. He resisted his last assignment and brought mandamus against the
Secretary of Health to compel the latter to return him to his station in Catil, Davao as Municipal Health Officer thereof. The Court,
applying Miclat v. Ganaden dismissed this Petition holding that his appointment not being to any specific station but as a
physician in the Municipal Maternity and Charity Clinics, Bureau of Hospitals, he could be transferred or assigned to any station
where, in the opinion of the Secretary of Health, his services may be utilized more effectively. 19

Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of petitioner Sta. Maria as "Dean, College of Education,
University of the Philippines." Dean Sta. Maria was transferred by the President of the University of the Philippines to the Office
of the President, U.P., without demotion in rank or salary, thereby acceding to the demands of student activists who were
boycotting their classes in the U.P. College of Education. Dean Sta. Maria assailed his transfer as an illegal and unconstitutional
removal from office. In upholding Dean Sta. Maria's claim, the Court, speaking through Mr. Justice Sanchez, laid down the
applicable doctrine in the following terms:

4. Concededly, transfers there are which do not amount to removal. Some such transfer can be effected without the need for
charges being preferred, without trial or hering, and even without the consent of the employee.

The clue to such transfers may be found in the "nature of the appointment." Where the appointment does not indicate a specific
station, an employee may be transferred or reassigned provided the transfer affects no substantial change in title, rank and
salary. Thus one who is appointed "principal in the Bureau of Public Schools" and is designated to head a pilot school may be
transferred to the post of principal of another school.

And the rule that outlaws unconsented transfers as anathema to security of tenure applies only to an officer who is appointed —
not merely assigned — to a particular station. Such a rule does not prescribe a transfer carried out under a specific statute that
empowers the head of an agency to periodically reassign the employees and officers in order to improve the service of the
agency. The use of approved techniques or methods in personnel management to harness the abilities of employees to promote
optimum public service cannot-be objected to. . . .

5. The next point of inquiry is whether or not Administrative Order 77 would stand the test of validity vis-a-vis the principles just
enunciated.

xxx xxx xxx

To be stressed at this point, however, is that the appointment of Sta. Maria is that of "Dean, College of Education, University of
the Philippines." He is not merely a dean "in the university." His appointment is to a specific position; and, more importantly, to
a specific station. 21 (Citations omitted; emphases supplied)

For all the foregoing we conclude that the reassignment of petitioners Fernandez and de Lima from their stations in the OPIA
and OPR, respectively, to the Research Development Office (RDO) and from the RDO to the Commissions Regional Offices in
Regions V and III, respectively, without their consent, did not constitute a violation of their constitutional right to security of tenure.

WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with Prayer for Writ of Preliminary Injunction or Temporary
Restraining Order is hereby DISMISSED. The Temporary Restraining Order issued by this Court on 27 September 1994 is
hereby LIFTED. Costs against petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-30637 July 16, 1987

LIANGA BAY LOGGING, CO., INC., petitioner,

vs.
HON. MANUEL LOPEZ ENAGE, in his capacity as Presiding Judge of Branch II of the Court of First, Instance of
Agusan, and AGO TIMBER CORPORATION, respondents.

TEEHANKEE, C.J.:

The Court grants the petition for certiorari and prohibition and holds that respondent judge, absent any showing of grave abuse
of discretion, has no competence nor authority to review anew the decision in administrative proceedings of respondents public
officials (director of forestry, secretary of agriculture and natural resources and assistant executive secretaries of the Office of
the President) in determining the correct boundary line of the licensed timber areas of the contending parties. The Court reaffirms
the established principle that findings of fact by an administrative board or agency or official, following a hearing, are binding
upon the courts and will not be disturbed except where the board, agency and/or official(s) have gone beyond their statutory
authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to their duty or with grave abuse of
discretion.

The parties herein are both forest concessionaries whose licensed areas are adjacent to each other. The concession of petitioner
Lianga Bay Logging Corporation Co., Inc. (hereinafter referred to as petitioner Lianga) as described in its Timber License
Agreement No. 49, is located in the municipalities of Tago, Cagwait, Marihatag and Lianga, all in the Province of Surigao,
consisting of 110,406 hectares, more or less, while that of respondent Ago Timber Corporation (hereinafter referred to as
respondent Ago) granted under Ordinary Timber License No. 1323-60 [New] is located at Los Arcos and San Salvador, Province
of Agusan, with an approximate area of 4,000 hectares. It was a part of a forest area of 9,000 hectares originally licensed to one
Narciso Lansang under Ordinary Timber License No. 584-'52.

Since the concessions of petitioner and respondent are adjacent to each other, they have a common boundary-the Agusan-
Surigao Provincial boundary-whereby the eastern boundary of respondent Ago's concession is petitioner Lianga's western
boundary. The western boundary of petitioner Lianga is described as "... Corner 5, a point in the intersection of the Agusan-
Surigao Provincial boundary and Los Arcos-Lianga Road; thence following Agusan-Surigao Provincial boundary in a general
northerly and northwesterly and northerly directions about 39,500 meters to Corner 6, a point at the intersection of the Agusan-
Surigao Provincial boundary and Nalagdao Creek ..." The eastern boundary of respondent Ago's concession is described as "...
point 4, along the Agusan-Surigao boundary; thence following Agusan-Surigao boundary in a general southeasterly and
southerly directions about 12,000 meters to point 5, a point along Los Arcos-Lianga Road; ..." 1

Because of reports of encroachment by both parties on each other's concession areas, the Director of Forestry ordered a survey
to establish on the ground the common boundary of their respective concession areas. Forester Cipriano Melchor undertook the
survey and fixed the common boundary as "Corner 5 of Lianga Bay Logging Company at Km. 10.2 instead of Km. 9.7 on the
Lianga-Arcos Road and lines N900E, 21,000 meters; N12 W, 21,150 meters; N40 W, 3,000 meters; N31 W, 2,800 meters; N50
W, 1,700 meters" which respondent Ago protested claiming that "its eastern boundary should be the provincial boundary line of
Agusan-Surigao as described in Section 1 of Art. 1693 of the Philippine Commission as indicated in the green pencil in the
attached sketch" of the areas as prepared by the Bureau of Forestry. 2 The Director of Forestry, after considering the evidence,
found:

That the claim of the Ago Timber Corporation portrays a line (green line) far different in alignment with the line (red) as indicated
in the original License Control Map of this Office;

That the claim of the Ago Timber Corporation (green line does not conform to the distance of 6,800 meters from point 3 to point
4 of the original description of the area of Narciso Lansang but would project said line to a distance of approximately 13,800
meters;

That to follow the claim of the Ago Timber Corporation would increase the area of Narciso Lansang from 9,000 to 12,360
hectares;

That to follow the claim of the Ago Timber Corporation would reduce the area of the Lianga Bay Logging, Co., Inc. to 107,046
hectares instead of the area granted which is 110,406 hectares.
and ruled that "the claim of the Ago Timber Corporation runs counter to the intentions of this Office is granting the license of Mr.
Narciso Lansang; and further, that it also runs counter to the intentions of this Office in granting the Timber License Agreement
to the Lianga Bay Logging Co., Inc. The intentions of this Office in granting the two licenses (Lansang and Lianga Bay Logging
Co., Inc.) are patently manifest in that distances and bearings are the controlling factors. If mention was ever made of the
Agusan-Surigao boundary, as the common boundary line of both licensees, this Office could not have meant the Agusan-Surigao
boundary as described under Section 1 of Act 1693 of the Philippine Commission for were it so it could have been so easy for
this Office to mention the distance from point 3 to point 4 of Narciso Lansang as approximately 13,800 meters. This cannot be
considered a mistake considering that the percentage of error which is more or less 103% is too high an error to be committed
by an Office manned by competent technical men. The Agusan-Surigao boundary as mentioned in the technical descriptions of
both licensees, is, therefore, patently an imaginary line based on B.F. License Control Map. Such being the case, it is reiterated
that distance and bearings control the description where an imaginary line exists. 3The decision fixed the common boundary of
the licensed areas of the Ago Timber Corporation and Lianga Bay Logging Co., Inc. as that indicated in red pencil of the sketch
attached to the decision.

In an appeal interposed by respondent Ago, docketed in the Department of Agriculture and Natural Resources as DANR Case
No. 2268, the then Acting Secretary of Agriculture and Natural Resources Jose Y. Feliciano, in a decision dated August 9, 1965
set aside the appealed decision of the Director of Forestry and ruled that "(T)he common boundary line of the licensed areas of
the Ago Timber Corporation and the Lianga Bay Logging Co., Inc., should be that indicated by the green line on the same sketch
which had been made an integral part of the appealed decision." 4

Petitioner elevated the case to the Office of the President, where in a decision dated June 16, 1966, signed by then Assistant
Executive Secretary Jose J. Leido, Jr., the ruling of the then Secretary of Agriculture and Natural Resources was affirmed. 5 On
motion for reconsideration, the Office of the President issued another decision dated August 9, 1968 signed by then Assistant
Executive Secretary Gilberto Duavit reversing and overturning the decision of the then Acting Secretary of Agriculture and
Natural Resources and affirming in toto and reinstating the decision, dated March 20, 1961, of the Director of Forestry. 6

Respondent Ago filed a motion for reconsideration of the decision dated August 9, 1968 of the Office of the President but after
written opposition of petitioner Lianga, the same was denied in an order dated October 2, 1968, signed by then Assistant
Executive Secretary Jose J. Leido, Jr. 7

On October 21, 1968, a new action was commenced by Ago Timber Corporation, as plaintiff, in the Court of First Instance of
Agusan, Branch II, docketed thereat as Civil Case No. 1253, against Lianga Bay Logging Co., Inc., Assistant Executive
Secretaries Jose J. Leido, Jr. and Gilberto M. Duavit and Director of Forestry, as defendants, for "Determination of Correct
Boundary Line of License Timber Areas and Damages with Preliminary Injunction" reiterating once more the same question
raised and passed upon in DANR Case No. 2268 and insisting that "a judicial review of such divergent administrative decisions
is necessary in order to determine the correct boundary fine of the licensed areas in question." 8

As prayed for, respondent judge issued a temporary restraining order on October 28, 1968, on a bond of P20,000, enjoining the
defendants from carrying out the decision of the Office of the President. The corresponding writ was issued the next day, or on
October 29, 1968. 9

On November 10, 1968, defendant Lianga (herein petitioner) moved for dismissal of the complaint and for dissolution of the
temporary restraining order on grounds that the complaint states no cause of action and that the court has no jurisdiction over
the person of respondent public officials and respondent corporation. It also submitted its opposition to plaintiff's (herein
respondent prayer for the issuance of a writ of preliminary injunction. 10 A supplemental motion was filed on December 6, 1968. 11

On December 19, 1968, the lower court issued an order denying petitioner Lianga's motion to dismiss and granting the writ of
preliminary injunction prayed for by respondent Ago. 12 Lianga's Motion for Reconsideration of the Order was denied on May 9,
1969. 13 Hence, this petition praying of the Court (a) to declare that the Director of Forestry has the exclusive jurisdiction to
determine the common boundary of the licensed areas of petitioners and respondents and that the decision of the Office of the
President dated August 9, 1968 is final and executory; (b) to order the dismissal of Civil Case No. 1253 in the Court of First
Instance of Agusan; (c) to declare that respondent Judge acted without jurisdiction or in excess of jurisdiction and with grave
abuse of discretion, amounting to lack of jurisdiction, in issuing the temporary restraining order dated October 28, 1968 and
granting the preliminary injunction per its Order dated December 19, 1968; and (d) to annul the aforementioned orders.

After respondent's comments on the petition and petitioner's reply thereto, this Court on June 30, 1969 issued a restraining order
enjoining in turn the enforcement of the preliminary injunction and related orders issued by the respondent court in Civil Case
No. 1253. 14

The Court finds merit in the petition.

Respondent Judge erred in taking cognizance of the complaint filed by respondent Ago, asking for the determination anew of
the correct boundary fine of its licensed timber area, for the same issue had already been determined by the Director of Forestry,
the Secretary of Agriculture and Natural Resources and the Office of the President, administrative officials under whose
jurisdictions the matter properly belongs. Section 1816 of the Revised Administrative Code vests in the Bureau of Forestry, the
jurisdiction and authority over the demarcation, protection, management, reproduction, reforestation, occupancy, and use of all
public forests and forest reserves and over the granting of licenses for game and fish, and for the taking of forest products,
including stone and earth therefrom. The Secretary of Agriculture and Natural Resources, as department head, may repeal or
in the decision of the Director of Forestry when advisable in the public interests, 15 whose decision is in turn appealable to the
Office of the President. 16

In giving due course to the complaint below, the respondent court would necessarily have to assess and evaluate anew all the
evidence presented in the administrative proceedings, 17 which is beyond its competence and jurisdiction. For the respondent
court to consider and weigh again the evidence already presented and passed upon by said officials would be to allow it to
substitute its judgment for that of said officials who are in a better position to consider and weigh the same in the light of the
authority specifically vested in them by law. Such a posture cannot be entertained, for it is a well-settled doctrine that the courts
of justice will generally not interfere with purely administrative matters which are addressed to the sound discretion of government
agencies and their expertise unless there is a clear showing that the latter acted arbitrarily or with grave abuse of discretion or
when they have acted in a capricious and whimsical manner such that their action may amount to an excess or lack of
jurisdiction. 18

A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions
or matters, upon the facts to be presented, the jurisdiction of such office shall prevail over the courts. 19

The general rule, under the principles of administrative law in force in this jurisdiction, is that decisions of administrative officers
shall not be disturbed by the courts, except when the former have acted without or in excess of their jurisdiction, or with grave
abuse of discretion. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only respect but at times even finality of such findings are supported by
substantial evidence. 20 As recently stressed by the Court, "in this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly
disputes on technical matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has
become well nigh indispensable." 21

The facts and circumstances in the instant case are similar to the earlier case of Pajo, et al. v. Ago, et al. 22 (where therein
respondent Pastor Ago is the president of herein respondent Ago Timber Corporation). In the said case, therein respondent
Pastor Ago, after an adverse decision of the Director of Forestry, Secretary of Agriculture and Natural Resources and Executive
Secretary in connection with his application for renewal of his expired timber licenses, filed with the Court of First instance of
Agusan a petition for certiorari, prohibition and damages with preliminary injunction alleging that the rejection of his application
for renewal by the Director of Forestry and Secretary of Agriculture and Natural Resources and its affirmance by the Executive
Secretary constituted an abuse of discretion and was therefore illegal. The Court held that "there can be no question that
petitioner Director of Forestry has jurisdiction over the grant or renewal of respondent Ago's timber license (Sec. 1816, Rev.
Adm. Code); that petitioner Secretary of Agriculture and Natural Resources as department head, is empowered by law to affirm,
modify or reject said grant or renewal of respondent Ago's timber license by petitioner Director of Forestry (Sec. 79[c], Rev. Adm.
Code); and that petitioner Executive Secretary, acting for and in behalf and by authority of the President has, likewise, jurisdiction
to affirm, modify or reverse the orders regarding the grant or renewal of said timber license by the two aforementioned officials."
The Court went on to say that, "(I)n the case of Espinosa, et al. v. Makalintal, et al. (79 Phil. 134; 45 Off. Gaz. 712), we held that
the powers granted to the Secretary of Agriculture and Commerce (Natural Resources) by law regarding the disposition of public
lands such as granting of licenses, permits, leases, and contracts or approving, rejecting, reinstating, or cancelling applications
or deciding conflicting applications, are all executive and administrative in nature. It is a well-recognized principle that purely
administrative and discretionary functions may not be interfered with by the courts. In general, courts have no supervising power
over the proceedings and actions of the administrative departments of the government. This is generally true with respect to
acts involving the exercise of judgment or discretion, and findings of act. Findings of fact by an administrative board, agency or
official, following a hearing, are binding upon the courts and will not be disturbed except where the board, agency or official has
gone beyond his statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty
or with grave abuse of discretion. And we have repeatedly held that there is grave abuse of discretion justifying the issuance of
the writ of certiorari only when there is capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
(Abad Santos v. Province of Tarlac, 67 Phil. 480; Tan vs. People, 88 Phil. 609)"

Respondent Ago contends that the motion filed by petitioner Lianga for reconsideration of the decision of the Office of the
President was denied in an alleged "decision" dated August 15, 1966, allegedly signed by then Assistant Executive Secretary
Jose J. Leido, Jr. that, "however, for some mysterious, unknown if not anomalous reasons and/or illegal considerations, the
"decision" allegedly dated August 15, 1966(Annex "D") was never released" and instead a decision was released on August 9,
1968, signed by then Assistant Executive Secretary Gilberto M. Duavit, which reversed the findings and conclusions of the Office
of the President in its first decision dated June 16, 1966 and signed by then Assistant Executive Secretary Leido.

It is elementary that a draft of a decision does not operate as judgment on a case until the same is duly signed and delivered to
the clerk for filing and promulgation. A decision cannot be considered as binding on the parties until its
promulgation. 23 Respondent should be aware of this rule. In still another case of Ago v. Court of Appeals, 24 (where herein
respondent Ago was the petitioner) the Court held that, "While it is to be presumed that the judgment that was dictated in open
court will be the judgment of the court, the court may still modify said order as the same is being put into writing. And even if the
order or judgment has already been put into writing and signed, while it has not yet been delivered to the clerk for filing, it is stin
subject to amendment or change by the judge. It is only when the judgment signed by the judge is actually filed with the clerk of
court that it becomes a valid and binding judgment. Prior thereto, it could still be subject to amendment and change and may
not, therefore, constitute the real judgment of the court."

Respondent alleges "that in view of the hopelessly conflicting decisions of the administrative bodies and/or offices of the
Philippine government, and the important questions of law and fact involved therein, as well as the well-grounded fear and
suspicion that some anomalous, illicit and unlawful considerations had intervened in the concealment of the decision of August
15, 1966 (Annex "D") of Assistant Executive Secretary Gilberto M. Duavit, a judicial review of such divergent administrative
decisions is necessary in order to determine the correct boundary line of the licensed areas in question and restore the faith and
confidence of the people in the actuations of our public officials and in our system of administration of justice."

The mere suspicion of respondent that there were anomalies in the non-release of the Leido "decision" allegedly denying
petitioner's motion for reconsideration and the substitution thereof by the Duavit decision granting reconsideration does not
justify judicial review. Beliefs, suspicions and conjectures cannot overcome the presumption of regularity and legality of official
actions. 25 It is presumed that an official of a department performs his official duties regularly. 26 It should be noted, furthermore,
that as hereinabove stated with regard to the case history in the Office of the President, Ago's motion for reconsideration of the
Duavit decision dated August 9, 1968 was denied in the Order dated October 2, 1968 and signed by Assistant Executive
Secretary Leido himself (who thereby joined in the reversal of his own first decision dated June 16, 1966 and signed by himself).

The Ordinary Timber License No. 1323-'60[New] which approved the transfer to respondent Ago of the 4,000 hectares from the
forest area originally licensed to Narciso Lansang, stipulates certain conditions, terms and limitations, among which were: that
the decision of the Director of Forestry as to the exact location of its licensed areas is final; that the license is subject to whatever
decision that may be rendered on the boundary conflict between the Lianga Bay Logging Co. and the Ago Timber Corporation;
that the terms and conditions of the license are subject to change at the discretion of the Director of Forestry and the license
may be made to expire at an earlier date. Under Section 1834 of the Revised Administrative Code, the Director of Forestry, upon
granting any license, may prescribe and insert therein such terms, conditions, and limitations, not inconsistent with law, as may
be deemed by him to be in the public interest. The license operates as a contract between the government and respondent.
Respondent, therefore, is estopped from questioning the terms and stipulation thereof.

Clearly, the injunctive writ should not have been issued. The provisions of law explicitly provide that Courts of First Instance shall
have the power to issue writ of injunction, mandamus, certiorari, prohibition, quo warranto and habeas corpus in their respective
places, 27 if the petition filed relates to the acts or omissions of an inferior court, or of a corporation, board, officer or person,
within their jurisdiction. 28

The jurisdiction or authority of the Court of First Instance to control or restrain acts by means of the writ of injunction is limited
only to acts which are being committed within the territorial boundaries of their respective provinces or districts 29 except where
the sole issue is the legality of the decision of the administrative officials. 30

In the leading case of Palanan Lumber Plywood Co., Inc. v. Arranz 31 which involved a petition for certiorari and prohibition filed
in the Court of First Instance of Isabela against the same respondent public officials as here and where the administrative
proceedings taken were similar to the case at bar, the Court laid down the rule that: "We agree with the petitioner that the
respondent Court acted without jurisdiction in issuing a preliminary injunction against the petitioners Executive Secretary,
Secretary of Agriculture and Natural Resources and the Director of Forestry, who have their official residences in Manila and
Quezon City, outside of the territorial jurisdiction of the respondent Court of First Instance of Isabela. Both the statutory provisions
and the settled jurisdiction of this Court unanimously affirm that the extraordinary writs issued by the Court of First Instance are
limited to and operative only within their respective provinces and districts."

A different rule applies only when the point in controversy relates solely to a determination of a question of law whether the
decision of the respondent administrative officials was legally correct or not. 32 We thus declared in Director of Forestry v.
Ruiz. 33 "In Palanan Lumber & Plywood Co., Inc., supra, we reaffirmed the rule of non-jurisdiction of courts of first instance to
issue injunctive writs in order to control acts outside of their premises or districts. We went further and said that when the petition
filed with the courts of first instance not only questions the legal correctness of the decision of administrative officials but
also seeks to enjoin the enforcement of the said decision, the court could not validly issue the writ of injunction when the officials
sought to be restrained from enforcing the decision are not stationed within its territory.1avvphi1

"To recapitulate, insofar as injunctive or prohibitory writs are concerned, the rule still stands that courts of first instance have the
power to issue writs limited to and operative only within their respective provinces or districts. "

The writ of preliminary injunction issued by respondent court is furthermore void, since it appears that the forest area described
in the injunctive writ includes areas not licensed to respondent Ago. The forest area referred to and described therein comprises
the whole area originally licensed to Narciso Lansang under the earlier Ordinary Timber License No. 58452. Only a portion of
this area was in fact transferred to respondent Ago as described in its Ordinary Timber License No. 1323-'60[New].

It is abundantly clear that respondent court has no jurisdiction over the subject matter of Civil Case No. 1253 of the Court of First
Instance of Agusan nor has it jurisdiction to decide on the common boundary of the licensed areas of petitioner Lianga and
respondent Ago, as determined by respondents public officials against whom no case of grave abuse of discretion has been
made. Absent a cause of action and jurisdiction, respondent Judge acted with grave abuse of discretion and excess, if not lack,
of jurisdiction in refusing to dismiss the case under review and in issuing the writ of preliminary injunction enjoining the
enforcement of the final decision dated August 9, 1968 and the order affirming the same dated October 2, 1968 of the Office of
the President.

ACCORDINGLY, the petition for certiorari and prohibition is granted. The restraining order heretofore issued by the Court against
enforcement of the preliminary injunction and related orders issued by respondent judge is the case below is made permanent
and the respondent judge or whoever has taken his place is hereby ordered to dismiss Civil Case No. 1253.

SO ORDERED.

Narvasa, Cruz, Paras and Gancayco, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 84811 August 29, 1989

SOLID HOMES, INC., petitioner,

vs.
TERESITA PAYAWAL and COURT OF APPEALS, respondents

CRUZ, J.:

We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the Regional Trial Court of Quezon City
over a complaint filed by a buyer, the herein private respondent, against the petitioner, for delivery of title to a subdivision lot.
The position of the petitioner, the defendant in that action, is that the decision of the trial court is null and void ab initio because
the case should have been heard and decided by what is now called the Housing and Land Use Regulatory Board.

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before the Regional Trial Court of
Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged that the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the agreed price of P 28,080.00, and that by September 10, 1981, she had
already paid the defendant the total amount of P 38,949.87 in monthly installments and interests. Solid Homes subsequently
executed a deed of sale over the land but failed to deliver the corresponding certificate of title despite her repeated demands
because, as it appeared later, the defendant had mortgaged the property in bad faith to a financing company. The plaintiff asked
for delivery of the title to the lot or, alternatively, the return of all the amounts paid by her plus interest. She also claimed moral
and exemplary damages, attorney's fees and the costs of the suit.

Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this being vested in the National
Housing Authority under PD No. 957. The motion was denied. The defendant repleaded the objection in its answer, citing Section
3 of the said decree providing that "the National Housing Authority shall have exclusive jurisdiction to regulate the real estate
trade and business in accordance with the provisions of this Decree." After trial, judgment was rendered in favor of the plaintiff
and the defendant was ordered to deliver to her the title to the land or, failing this, to refund to her the sum of P 38,949.87 plus
interest from 1975 and until the full amount was paid. She was also awarded P 5,000.00 moral damages, P 5,000.00 exemplary
damages, P 10,000.00 attorney's fees, and the costs of the suit. 1

Solid Homes appealed but the decision was affirmed by the respondent court, 2 which also berated the appellant for its obvious
efforts to evade a legitimate obligation, including its dilatory tactics during the trial. The petitioner was also reproved for its "gall"
in collecting the further amount of P 1,238.47 from the plaintiff purportedly for realty taxes and registration expenses despite its
inability to deliver the title to the land.

In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of PD No. 957 itself providing that:

SEC. 41. Other remedies.-The rights and remedies provided in this Decree shall be in addition to any and all other rights and
remedies that may be available under existing laws.

and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that the court a quowas bereft of
jurisdiction." The decision also dismissed the contrary opinion of the Secretary of Justice as impinging on the authority of the
courts of justice. While we are disturbed by the findings of fact of the trial court and the respondent court on the dubious conduct
of the petitioner, we nevertheless must sustain it on the jurisdictional issue.
The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the National Housing Authority to Issue
Writs of Execution in the Enforcement of Its Decisions Under Presidential Decree No. 957." Section 1 of the latter decree provides
as follows:

SECTION 1. In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing Authority shall haveexclusive jurisdiction to hear and decide cases of
the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractuala statutory obligations filed by buyers of subdivision lot or condominium
unit against the owner, developer, dealer, broker or salesman. (Emphasis supplied.)

The language of this section, especially the italicized portions, leaves no room for doubt that "exclusive jurisdiction" over the
case between the petitioner and the private respondent is vested not in the Regional Trial Court but in the National Housing
Authority. 3

The private respondent contends that the applicable law is BP No. 129, which confers on regional trial courts jurisdiction to hear
and decide cases mentioned in its Section 19, reading in part as follows:

SEC. 19. Jurisdiction in civil cases.-Regional Trial Courts shall exercise exclusive original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible
entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;

xxx xxx xxx

(8) In all other cases in which the demand, exclusive of interest and cost or the value of the property in controversy, amounts to
more than twenty thousand pesos (P 20,000.00).

It stresses, additionally, that BP No. 129 should control as the later enactment, having been promulgated in 1981, after PD No.
957 was issued in 1975 and PD No. 1344 in 1978.

This construction must yield to the familiar canon that in case of conflict between a general law and a special law, the latter must
prevail regardless of the dates of their enactment. Thus, it has been held that-

The fact that one law is special and the other general creates a presumption that the special act is to be considered as remaining
an exception of the general act, one as a general law of the land and the other as the law of the particular case. 4

xxx xxx xxx

The circumstance that the special law is passed before or after the general act does not change the principle. Where the special
law is later, it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later,
the special statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary
implication. 5

It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special law.

The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. 957, earlier quoted, is also
unacceptable. We do not read that provision as vesting concurrent jurisdiction on the Regional Trial Court and the Board over
the complaint mentioned in PD No. 1344 if only because grants of power are not to be lightly inferred or merely implied. The
only purpose of this section, as we see it, is to reserve. to the aggrieved party such other remedies as may be provided by
existing law, like a prosecution for the act complained of under the Revised Penal Code. 6
On the competence of the Board to award damages, we find that this is part of the exclusive power conferred upon it by PD No.
1344 to hear and decide "claims involving refund and any other claims filed by subdivision lot or condominium unit buyers against
the project owner, developer, dealer, broker or salesman." It was therefore erroneous for the respondent to brush aside the well-
taken opinion of the Secretary of Justice that-

Such claim for damages which the subdivision/condominium buyer may have against the owner, developer, dealer or salesman,
being a necessary consequence of an adjudication of liability for non-performance of contractual or statutory obligation, may be
deemed necessarily included in the phrase "claims involving refund and any other claims" used in the aforequoted subparagraph
C of Section 1 of PD No. 1344. The phrase "any other claims" is, we believe, sufficiently broad to include any and all claims
which are incidental to or a necessary consequence of the claims/cases specifically included in the grant of jurisdiction to the
National Housing Authority under the subject provisions.

The same may be said with respect to claims for attorney's fees which are recoverable either by agreement of the parties or
pursuant to Art. 2208 of the Civil Code (1) when exemplary damages are awarded and (2) where the defendant acted in gross
and evident bad faith in refusing to satisfy the plaintiff 's plainly valid, just and demandable claim.

xxx xxx xxx

Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the HSRC the authority to adjudicate
claims for damages and for damages and for attorney's fees would result in multiplicity of suits in that the subdivision
condominium buyer who wins a case in the HSRC and who is thereby deemed entitled to claim damages and attorney's fees
would be forced to litigate in the regular courts for the purpose, a situation which is obviously not in the contemplation of the law.
(Emphasis supplied.)7

As a result of the growing complexity of the modern society, it has become necessary to create more and more administrative
bodies to help in the regulation of its ramified activities. Specialized in the particular fields assigned to them, they can deal with
the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice. This is
the reason for the increasing vesture of quasi-legislative and quasi-judicial powers in what is now not unreasonably called the
fourth department of the government.

Statutes conferring powers on their administrative agencies must be liberally construed to enable them to discharge their
assigned duties in accordance with the legislative purpose. 8 Following this policy in Antipolo Realty Corporation v. National
Housing Authority, 9 the Court sustained the competence of the respondent administrative body, in the exercise of the exclusive
jurisdiction vested in it by PD No. 957 and PD No. 1344, to determine the rights of the parties under a contract to sell a subdivision
lot.

It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v. National Housing Authority 10 is
not in point. We upheld in that case the constitutionality of the procedure for appeal provided for in PD No. 1344, but we did not
rule there that the National Housing Authority and not the Regional Trial Court had exclusive jurisdiction over the cases
enumerated in Section I of the said decree. That is what we are doing now.

It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal
before this Court. 11 The only exception is where the party raising the issue is barred by estoppel, 12 which does not appear in
the case before us. On the contrary, the issue was raised as early as in the motion to dismiss filed in the trial court by the
petitioner, which continued to plead it in its answer and, later, on appeal to the respondent court. We have no choice, therefore,
notwithstanding the delay this decision will entail, to nullify the proceedings in the trial court for lack of jurisdiction.

WHEREFORE, the challenged decision of the respondent court is REVERSED and the decision of the Regional Trial Court of
Quezon City in Civil Case No. Q-36119 is SET ASIDE, without prejudice to the filing of the appropriate complaint before the
Housing and Land Use Regulatory Board. No costs.

SO ORDERED.
 EN BANC

[G.R. No. L-47051. July 29, 1988.]

BLUE BAR COCONUT PHILIPPINES; CAGAYAN DE ORO OIL CO; CENTRAL VEGETABLE OIL MANUFACTURING CO.;
COCONUT OIL MANUFACTURING (PHIL.) INC.; GRANE EXPORT CORPORATION; IMPERIAL VEGETABLE OIL CO.;
INTERNATIONAL OIL FACTORY; LEGASPI OIL CO., INC.; LIBERTY OIL FACTORY; LUCENA OIL FACTORY, INC., AND
14 OTHER CORPORATIONS, Petitioners, v. THE HONORABLE FRANCISCO S. TANTUICO, JR., Acting Chairman of
the Commission on Audit; and DR. GREGORIO YU, Auditor of the Philippine Coconut Authority, Respondents.

Teodulo R. Diño and Quiason, De Guzman, Makalintal, & Barot for petitioners.

SYLLABUS

1. REMEDIAL LAW; APPEAL; MOOT AND ACADEMIC; ISSUE RAISED IN THE PETITION RENDERED MOOT AND
ACADEMIC; CASE AT BAR. — In short, whether or not the respondent COA Chairman was correct in disregarding the two
resolutions of the PCA Governing Board for being ultra vires is the main issue in this petition. This issue became academic when
the then President of the Philippines informed the Solicitor General that the Governing Board of the PCA would continue to
function until the formal organization of the new Governing Board. Following this ruling, the respondent COA Chairman
reconsidered his earlier stand and allowed the petitioners to get their subsidy claims which he had earlier refused. In effect, the
respondent COA Chairman eventually acknowledged the validity of the two questioned PCA resolutions. The issue, therefore,
on whether or not the respondent COA Chairman may disregard the PCA rules and decisions has become moot.

2. ID.; ID.; FACTUAL ISSUES; NOT COGNIZABLE BY THE SUPREME COURT; CASE AT BAR. — It is readily apparent that
we cannot resolve these issues on the basis of what appears in this petition. There must be substantial evidence on record from
where the Court’s conclusions may be drawn. As pointed out by the Solicitor General, there are no established facts presented
which are intimately related to the legal issues raised by the petitioners. The well-settled principle is that this Court is not a trier
of facts. "Its sole role is to apply the law based on the findings of facts brought before it." (Aspacio v. Hon. Amado G. Inciong,
Et. Al. G.R. No. L-49893, May 9, 1988).

3. CONSTITUTIONAL LAW; COMMISSION ON AUDIT; JURISDICTION; SECTION 2(1), ART. IX-D, PHILIPPINE
CONSTITUTION; AUTHORITY TO EXAMINE AND AUDIT FUNDS INCLUDES SUCH NON-GOVERNMENTAL ENTITIES
RECEIVING SUBSIDY OR EQUITY FROM THE GOVERNMENT. — The petitioners also question the respondents’ authority
to audit them. They contend that they are outside the ambit of respondents’ "audit" power which is confined to government-
owned or controlled corporations. This argument has no merit. Section 2 (1) of Article IX-D of the Constitution provides that "The
Commission on Audit shall have the power, authority and duty to examine, audit, and settle all accounts pertaining to the
revenues and receipts of, and expenditures or uses of funds and property, owned or held in trust by or pertaining to, the
Government, or any of its subdivisions, agencies or instrumentalities, including government-owned or controlled corporation with
original charters, and on a post-audit basis . . . (d) such non-governmental entities receiving subsidy or equity directly or indirectly
from or through the Government which are required by law or the granting institution to submit to such audit as a condition of
subsidy or equity." (Italics supplied) The Constitution formally embodies the long established rule that private entities who handle
government funds or subsidies in trust may be examined or audited in their handling of said funds by government auditors.

4. ADMINISTRATIVE LAW; ADMINISTRATIVE TRIBUNALS; JURISDICTION; DOCTRINE OF PRIMARY JURISDICTION;

EXPLAINED; RULING IN SAAVEDRA, JR., ET. AL. VS. SECURITIES AND EXCHANGE COMMISSION, ET. AL., G.R. NO.
80879, MARCH 21, 1988 CITED. — In view of the above considerations, we apply the principle of primary jurisdiction: "In cases
involving specialized disputes, the trend has been to refer the same to an administrative agency of special competence. As early
as 1954, the Court in Pambujan Sur United Mine Workers v. Samar Mining Co., Inc. (94 Phil. 932, 941), held that under the
sense-making and expeditious doctrine of primary jurisdiction’ .. the courts cannot or will not determine a controversy involving
a question which is within the jurisdiction of an administrative tribunal prior to the decision of that question by the administrative
tribunal, 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, and a uniformity of
ruling is essential to comply with the purposes of the regulatory statute administered.’ Recently, this Court speaking thru Mr.
Chief Justice Claudio Teehankee said:" ‘In this era of clogged court dockets, the need for specialized administrative boards or
commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical
matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has become well nigh
indispensable.’ (Abejo v. de la Cruz, 149 SCRA 654, 675)." (Saavedra, Jr., Et. Al. v. Securities and Exchange Commission, Et
Al., G.R. No. 80879, March 21, 1988).

5. ID.; ADMINISTRATIVE DECISIONS; GIVEN GREAT WEIGHT AND RESPECT BY COURTS; EXCEPTION. — It has also
been the policy of the courts not to ignore or reject as incorrect the acts and determinations of administrative agencies unless
there is a clear showing of arbitrary action or palpable and serious error.

DECISION

GUTIERREZ, JR., J.:

This is a petition for certiorari, prohibition and mandamus with preliminary mandatory injunction to annul certain actions of
respondents, the then Acting Chairman of the Commission on Audit and the Auditor of the Philippine Coconut Authority (PCA);
to prevent them from doing specified acts and to compel them to allow the payment by the PCA of the petitioners’ subsidy
claims.

On June 30, 1973, the then President of the Philippines issued Presidential Decree No. 232 creating a Philippine Coconut
Authority, with a governing board of eleven members, which was later reduced to nine by Presidential Decree No. 271 and
finally to only seven by Presidential Decree No. 623.

On August 20, 1973, the President issued Presidential Decree No. 276 establishing a coconut stabilization fund. Under this
decree, the Philippine Coconut Authority, in addition to its powers granted under Presidential Decree No. 232, was authorized
to formulate and immediately implement a stabilization scheme for coconut-based consumer goods, along the following
general guidelines:jgc:chanrobles.com.ph

"a) A levy, initially, of P15.00 per 100 kilograms of copra resecada or its equivalent in other coconut products, shall be imposed
on every first sale, in accordance with the mechanics established under R.A. 6260, effective at the start of business hours on
August 10, 1973.

"The proceeds from the levy shall be deposited with the Philippine National Bank or any other government bank to the account
of the Coconut Consumers Stabilization Fund, as a separate trust fund which shall not form part of the general fund of the
government.

"b) The Fund shall be utilized to subsidize the sale of coconut based products at prices set by the Price Control Council, under
rules and regulations to be promulgated by the Philippine Consumers Stabilization Committee." (Section 1, subparagraphs a
and b, P.D. 276).

Section 1 of the Rules and Regulations governing the collection and disposition of the Coconut Consumers Stabilization Fund
(CCSF) promulgated by the Coconut Consumer Stabilization Committee provides that the collection of levy in every first sale
of copra resecada or its equivalent in terms of whole nuts shall take effect on August 10, 1973 . Section 2 of the Rules also
states:
"Start of Collection. — Starting Monday, August 20, 1973, all copra exporters, oil millers and desiccators (hereinafter referred
to as end-users) shall remit the collection of the levy to the Committee on the basis of their receipt of delivery starting August
10, 1973 up to and including Friday, August 17, 1973. Every Monday thereafter, the end-user shall remit to the Committee all
collections on their weekly receipt of deliveries from Saturday through Friday . . .

"Further, that contracts entered into on or before August 9, 1973 shall not be subject to levy; provided, however, that balances
undelivered to warehouses by September 10, 1973, and balances undelivered shipside by September 30, 1973 of such
contracts shall be subject to the levy (Annex "A" of petition)." (pp. 484-485, Rollo).cralawnad

The petitioners are all end-users and as such, are levy-collectors and remitters.

On January 8, 1975, the Governing Board of the PCA issued Resolution No. 01-75 which reduced the rate of levy from P70.00
to P40.00 per 100 kilograms of copra and P110.00 to P70.00 per metric ton of husked nuts. The resolution was effective
January 11, 1975.
In the meantime, on December 26, 1974, the President issued Presidential Decree No. 623 further amending Presidential
Decree No. 232, as amended, by reducing the number and changing the composition of the PCA Governing Board to seven
(7) members only.

On January 29, 1975, the same Governing Board of the PCA which issued the January 8, 1975 Resolution No. 01-75 issued
Resolution No. 018-75 which deferred collection of the CCSF levies from the desiccated coconut industry for a period not
exceeding six (6) months.

The reduced Governing Board of the PCA, constituted under PD No. 623, qualified only on February 26, 1975.

Sometime in 1976, the respondent Acting Chairman of the Commission on Audit initiated a special audit of coconut end-user
companies, which include herein petitioners, with respect to their Coconut Consumers Stabilization Fund levy collections and
the subsidies they had received. As a result of the initial findings of the Performance Audit Office with respect only to the
petitioners, respondent Acting COA Chairman directed the Chairman, the Administrator, and the Military Supervisor of PCA
and the Manager of the Coconut Consumers Stabilization Fund, in various letters to them (Annexes G-2, H, I, J, L and N of
petition) to collect the short levies and overpaid subsidies, and to apply subsidy claims to the settlement of short levies should
the petitioners fail to remit the amount due.

Reacting to published reports in the issue of Bulletin Today dated March 5, 1977 regarding the above findings of the
respondent COA Chairman, the petitioners, as members of the Coconut Oil Refiners Association, Inc., and other allied
associations, wrote on March 8, 1977 a letter to the said Chairman requesting reconsideration of his action. The petitioners
alleged that the supposed overpayments and/or deficiencies in their remittances were due to the Chairman’s refusal to
recognize the validity of the resolution passed in January 1975 by the then Governing Board of the PCA.

A follow-up letter contesting the bases for the COA findings was sent by the petitioners to the respondent COA Chairman on
April 14, 1977.

On March 11, 1977, PCA Administrator Luis R. Baltazar wrote the petitioners’ counsel informing him that the management of
the PCA was willing to pay the disputed subsidy claims provided they are approved by the representative of the Commission
on Audit, herein respondent PCA Auditor.

The respondent PCA Auditor, however, refused to act on the matter on the ground that the petitioners’ counsel had already
written the respondent Acting COA Chairman.

On April 4, 1977, the petitioners’ counsel wrote respondent COA Chairman a letter stating their arguments regarding the
disputed subsidy claims.

On May 9, 1977, the petitioners’ counsel wrote the respondent COA Chairman requesting early action on their March 8, 1977
letter of reconsideration.

On July 15, 1977, the Chairman of the COA Issue Committee composed of the Philippine Coconut Oil Producers Association,
inc. (PCOPA), Coconut Oil Refiners Association (CORA), Association of Philippine Coconut Desiccators (APCD), and Soap
Detergent Association of the Philippines (SDAP) wrote a letter to PCA Administrator Luis Baltazar requesting him to make
representations with the COA to release the disputed subsidy payments "pending resolution of the assessments" and
proposing that they be allowed to put up an appropriate bond equivalent to the amounts withheld. Baltazar indorsed the letter
to the respondent COA Chairman.

On August 24, 1977, the COA Chairman wrote PCA Administrator Baltazar that the COA had no objection to the release of the
subsidy payments pending final resolution of the issues involved in the claims provided that the end-users posted a bond
equal to the aggregate amount of the disputed claims, issued by a surety company mutually acceptable to the COA and PCA
and certified to be in good standing by the Insurance Commission.

On September 5, 1977, the COA Chairman again wrote the PCA Administrator. In his letter, the COA Chairman enumerated
the following conditions under which the bonds to be posted by the coconut end-users companies would be accepted

"a. That what will be covered by the bond shall pertain to the short levy relating to ‘ultra vires’ — ‘void ab initio’ — issued only.
Deficiencies based on other reasons shall be settled immediately by direct payment to CCSF or applying what has been
withheld, if any.

"b. That the amount of the bond shall be equivalent to the total short levy (not merely on the amounts withheld).

"c. That the bond shall be issued by a surety company of good standing duly certified by the Insurance Commissioner and
acceptable to both the PCA and the COA.

"d. That the bond shall have no expiry date but will be contingent upon the final decision of the issue by the President of the
Philippines.

"e. That it shall be a condition in the bond that if the decision of the President is adverse to the coconut end-user companies,
they shall unconditionally agree as principals to pay in cash immediately the full amount of short levy.

"f. That what has already been withheld as of July 13, 1977 and applied to the short levy shall not be refunded, the filing and
approval of bond notwithstanding." (p. 34, Rollo)

A copy of the letter was sent to the United Coconut Association of the Philippines.

On September 20, 1977, the petitioners through the Chairman (COA Issue Committee, SDAP/CORA/APCD PCOPA) wrote
the PCA Administrator informing him that in a meeting of all those concerned, "it was the consensus that the terms and
conditions set by Acting Chairman Tantuico are unacceptable.

On the ground that their letter request for reconsideration dated March 8, 1977 was deemed denied by the September 5, 1977
letter of the COA Chairman to PCA Administrator Baltazar, the petitioners instituted the instant petition for certiorari, prohibition
and mandamus with preliminary injunction.

The petitioners contend that the respondents, COA Acting Chairman Francisco Tantuico, Jr., and PCA Auditor have absolutely
no jurisdiction to —

"1. Assess the CCSF levy against petitioners and to make them personally liable for the payment thereof;

"2. Cause the withholding of the payments of petitioners subsidy reimbursement claims;

"3. Set-off petitioners’ subsidy reimbursement payments against alleged CCSF levy remittance shortages;

"4. Institute a retention scheme of subsidy reimbursement claims which adversely affect even companies not subject to levy;

"5. Audit private corporations like petitioners;

"6. Deny to the petitioners, in effect, their constitutional right to appeal to the Supreme Court an adverse decision of the
Commission on Audit." (p. 41, Rollo).

In a resolution dated August 2, 1978, the case was endorsed to the Court en banc which set the case for hearing. However,
before the actual hearing could be held, the Solicitor General filed a motion to cancel hearing and suspend proceedings,
stating

"This case is set for hearing on November 21, 1978 at 3:00 o’clock in the afternoon.

"The principal issue in this case is whether or not the two resolutions of the Philippine Coconut Authority (Resolutions Nos. 01-
75 and 018-75) issued by its governing board after December 26, 1974 when Presidential Decree No. 623 was promulgated
but before February 26, 1975 when the PCA Board was formally reorganized under PD 623, are null and void, which issue is
dependent on the intent behind said Decree.

"The Solicitor General has consulted the President of the Philippines on the intent behind Presidential Decree No. 623, which
he has conveyed to the Commission on Audit, on the basis of which the Commission on Audit is now reviewing the matter.

"The undersigned counsel are therefore constrained to move, as they hereby move, that action on the instant proceedings be
suspended or held in abeyance until the COA shall have acted on the matter, which action the undersigned counsel will bring
to the Court’s attention as soon as received, to aid the Court in the resolution of this case." (pp. 345-346, Rollo).

The motion was granted. The petitioners had no objection but manifested that considering the length of time that this case has
been pending, the COA should be required to act and finish reviewing the matter within a reasonable period of time.

Thereafter, the Solicitor General filed a motion praying that the matter in issue be remanded to the Commission on Audit for
appropriate action consistent with the intent behind PD No. 623 based on the following ground:

x x x

"After having been apprised by undersigned counsel that it was not the intention of the President of the Philippines by the
issuance of said P.D. No. 623 to abolish the Governing Board of the Philippine Coconut Authority (PCA) as originally
constituted but merely to reorganize it by including in its composition the required management and financial expertise, and
neither was it the intention to paralyze the conduct of PCA’s business and operations by rendering it without a Governing
Board in the interim period, from the effectivity of said P.D. No. 623 on December 26, 1974, until the formal organization on
February 26, 1975 of the Board, as reconstituted under said P.D. No. 623, the respondent Acting Chairman of the Commission
on Audit informed undersigned counsel that the Commission was reconsidering its earlier stand on the matter and that it would
take appropriate action in the premises consistent with its reconsidered position." (pp. 357-358, Rollo)

After considering the aforesaid motion and the petitioners comment that "instead of the case being remanded to the
Commission on Audit, the respondents just be given leave to take the `appropriate action,’ consistent with the Presidential
intent in enacting P.D. No. 623, they contemplate to do, and after the appropriate action will have been taken by respondents,
the parties shall submit to this Court the appropriate motion and manifestation," as well as the reply of the respondents, we
resolved to grant the motion. We directed the Commission on Audit to review the matters raised in this case, to take
appropriate action in the premises, and, thereafter, to submit the appropriate action taken to the Court within thirty (30) days
from notice of resolution.

The Solicitor General then filed a manifestation to the effect that:

x x x

"2. In a Memorandum dated May 7, 1979, respondent Acting Chairman of the Commission on Audit, thru the Commission’s
General Counsel, directed the Corporate Auditor of the Philippine Coconut Authority `to release the amount withheld from the
subsidy claims of coconut end-user companies for their short levy deficiencies as affected by the two resolutions in question,’
copy of which memorandum said respondent also furnished the administrator of the Authority under a letter to him dated May
14, 1979.

3. The PCA Administrator had already ordered the department concerned to prepare the necessary vouchers. For his part, the
Auditor-in-Charge of the PCA informed the undersigned counsel that his office ‘would process claims for the release of subsidy
payments withheld’ but that as of yesterday, May 31, 1979 `none has been submitted for audit.’ He has, moreover, requested
the proper officials of the COA Central Office to file specimen signature cards with the PCA depository, United Coconut
Planters Bank, since he anticipates that the claims checks would, in some cases, be beyond the countersigning authority of
the Resident Auditor." (pp. 374-375. Rollo).

x x x

The Solicitor General filed another manifestation that the petitioners have already started refiling their claims and that about
50% of them had been/or are being processed by the Corporate Auditor’s Office.

Because of the foregoing, the Solicitor General filed a motion to dismiss the petition giving two (2) grounds: (1) the primary
issue respecting the validity of the Resolutions Nos. 01-75 and 018-75 issued by the Governing Board of the Philippine
Coconut Authority is now moot and academic; and (2) the incidental issues are factual in nature, the resolution of which
requires presentation of evidence, and petitioners may file appropriate pleadings with the Commission on Audit where they
may adduce evidence relevant to the issues. The Solicitor General manifested that on the basis of present evidence, or lack of
it, the respondent COA Chairman is not in a position to change his stand on the incidental issues.

It is to be noted that the petitioners opposed the motion to dismiss which was filed on the ground "that there are no factual
issues left. The remaining issues all revolve on the question — After the Philippine Coconut Authority — the authority vested
by law to implement the stabilization scheme for the coconut industry under P.D. 276, which includes the collection of the levy
to support the Stabilization Fund — had acted, can the Commission on Audit say that the rules and decisions of the PCA are
erroneous and nullify them, to the prejudice of petitioners who obediently complied with said rules and decisions?"

The above issue was raised when the respondent COA Chairman disregarded the two resolutions (Resolution Nos. 01-75 and
018-75) of the PCA Governing Board on the ground that the latter had no more authority to issue such resolutions because of
P.D. 623 which reduced the composition of the Governing Board. The respondent COA Chairman contended that the
questioned resolutions were ultra vires, hence cannot be enforced. It was actually the refusal of the COA Chairman to
recognize the two questioned resolutions which led to the filing of this petition.

In short, whether or not the respondent COA Chairman was correct in disregarding the two resolutions of the PCA Governing
Board for being ultra vires is the main issue in this petition. This issue became academic when the then President of the
Philippines informed the Solicitor General that the Governing Board of the PCA would continue to function until the formal
organization of the new Governing Board. Following this ruling, the respondent COA Chairman reconsidered his earlier stand
and allowed the petitioners to get their subsidy claims which he had earlier refused. In effect, the respondent COA Chairman
eventually acknowledged the validity of the two questioned PCA resolutions.

The issue, therefore, on whether or not the respondent COA Chairman may disregard the PCA rules and decisions has
become moot.

In their Comment to the motion of the Solicitor General praying that the matter in issue be remanded to the Commission on
Audit for appropriate action consistent with the aforementioned Presidential intent behind P.D. 623, and in their Memorandum
the petitioners listed the other issues involved in the petition as follows:

"Whether or not the respondent Acting Chairman and respondent PCA Auditor acted without jurisdiction and/or with grave
abuse of discretion when they imposed the Coconut Consumers Stabilization Fund (CCFS) levy on oral contracts which the
PCA itself the government agency implementing P.D. 276 considered as exempt because they were perfected prior to the
levy;

"Whether or not the respondents acted without jurisdiction and/or grave abuse of discretion in that they applied and continued
to apply the CCFS levy rate prevailing at the time of delivery and refused to apply the rate prevailing at the time of the
perfection of the contract as decided by PCA

"Whether or not the respondents acted without jurisdiction and/or with grave abuse of discretion when they imposed the CCFS
levy on a delivery under an exempt contract just because such delivery was slightly delayed whereas the PCA did not impose
the levy under the circumstances in view of force majeure situation;

"Whether or not the respondent Acting Chairman acted with lack of jurisdiction and/or with grave abuse of discretion in
disallowing the moisture content deduction on the ground that the moisture meter used by one of the petitioners was not
certified and in thus imposing the CCFS levy on such disallowed deduction, whereas the PCA allowed the moisture content
deduction and did not impose the levy on the ground that the transaction was not the one contemplated in RA. 1365 where a
registered moisture meter is to be used

"Whether or not the respondent Acting Chairman acted without jurisdiction and/or grave abuse of discretion when he declared
that there were subsidy overpayments

"a) On deliveries beyond the allocation period, whereas delivery on these sales was authorized by the PCA Military
Supervisor, which authorization was approved by the Coconut Consumers Stabilization Committee, such delivery beyond the
allocation period being the practice; and because he insists that the settlement price should be based on open market prices in
all coconut trading areas, whereas the Price Settlement Committee constituted by PCA, which is charged with the function of
determining the settlement price, determines the settlement price by considering the price in Metro Manila only, said practice
having been adopted for reasons of convenience and necessity; otherwise the PCA has to check the prices all over the
Philippines." (pp. 360-362, Rollo)

Undoubtedly, the issues raised involve both actual and legal considerations aside from requiring specialized and technical
knowledge.

As the Solicitor General observed

"Not all the issues raised in the petition are purely legal. Thus, petitioners contend:

"1. That respondents acted arbitrarily when they withheld 20% of subsidy reimbursement claims of petitioners Liberty Oil
Factory and Pacific Oil Products, Inc., since said petitioners were allegedly only refiners, and therefore, not levy-remitters. The
matter of whether or not said petitioners were only refiners is a question of fact.

"2. That respondents acted without jurisdiction and/or with grave abuse of discretion when they imposed levy on alleged oral
contracts which are exempt because the same were allegedly perfected prior to the imposition of levy (pp. 60-61 of petition).
Respondent COA Acting Chairman (thru his Audit Team) did not believe that there were such oral contracts at all on or before
August 9, 1973 on the sole basis of a purported certification of the Manager of petitioner Royal Manufacturing Company, Inc.,
as to the existence of the alleged oral contracts (pp. 6-7 of Annex G-2 of petition). Whether or not such alleged oral contracts
really existed is a question of fact that was likewise raised in petitioners’ motion for reconsideration which should first be finally
resolved by respondents.

"3. That respondents acted without jurisdiction and/or grave abuse of discretion when they imposed levy on a delivery under
an alleged exempt contract, `just because such delivery was slightly delayed’ allegedly due to ‘ force majeure’ (pp. 68-69 of
petition). Whether or not the delay was really caused by ‘ force majeure’ presents a factual issue.

"4. That respondents acted without jurisdiction when they ruled that the settlement price of copra in some provinces or places
exceeds the open market price, which situation resulted in the overpayment of subsidy to petitioners (pp. 74-75, id.) Petitioners
further contend that respondent COA Acting Chairman has no authority to substitute his judgment on the settlement price
since that is allegedly the sole prerogative of the Price Settlement Committee constituted by PCA (pp. 74-75, id.) But if this
contention of petitioners is not upheld by this Honorable Court, can this Honorable Court completely resolve the matter raised
when there is no fact admitted by the petitioners as to whether the settlement price of copra indeed exceeded the open market
price of the same and by how much?" (pp. 490-491, Rollo).

It is readily apparent that we cannot resolve these issues on the basis of what appears in this petition. There must be
substantial evidence on record from where the Court’s conclusions may be drawn. As pointed out by the Solicitor General,
there are no established facts presented which are intimately related to the legal issues raised by the petitioners. The well-
settled principle is that this Court is not a trier of facts. "Its sole role is to apply the law based on the findings of facts brought
before it." (Aspacio v. Hon. Amado G. Inciong, Et. Al. G.R. No. L-49893, May 9, 1988).

The petitioners also question the respondents’ authority to audit them. They contend that they are outside the ambit of
respondents’ "audit" power which is confined to government-owned or controlled corporations. This argument has no merit.
Section 2 (1) of Article IX-D of the Constitution provides that "The Commission on Audit shall have the power, authority and
duty to examine, audit, and settle all accounts pertaining to the revenues and receipts of, and expenditures or uses of funds
and property, owned or held in trust by or pertaining to, the Government, or any of its subdivisions, agencies or
instrumentalities, including government-owned or controlled corporation with original charters, and on a post-audit basis . . . (d)
such non-governmental entities receiving subsidy or equity directly or indirectly from or through the Government which are
required by law or the granting institution to submit to such audit as a condition of subsidy or equity." (Italics supplied) The
Constitution formally embodies the long established rule that private entities who handle government funds or subsidies in
trust may be examined or audited in their handling of said funds by government auditors

In view of the above considerations, we apply the principle of primary jurisdiction

"In cases involving specialized disputes, the trend has been to refer the same to an administrative agency of special
competence. As early as 1954, the Court in Pambujan Sur United Mine Workers v. Samar Mining Co., Inc. (94 Phil. 932, 941),
held that under the sense-making and expeditious doctrine of primary jurisdiction’ .. the courts cannot or will not determine a
controversy involving a question which is within the jurisdiction of an administrative tribunal prior to the decision of that
question by the administrative tribunal, 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, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered.’ Recently, this
Court speaking thru Mr. Chief Justice Claudio Teehankee said

"‘In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special
knowledge, experience and capability to hear and determine promptly disputes on technical matters or essentially factual
matters, subject to judicial review in case of grave abuse of discretion, has become well nigh indispensable.’ (Abejo v. de la
Cruz, 149 SCRA 654, 675)." (Saavedra, Jr., Et. Al. v. Securities and Exchange Commission, Et Al., G.R. No. 80879, March 21,
1988).

It has also been the policy of the courts not to ignore or reject as incorrect the acts and determinations of administrative agencies unless there
is a clear showing of arbitrary action or palpable and serious error. Thus, we ruled in the recent case of Beautifont, Inc., Et. Al. v. Court of
Appeals, Et. Al. (G.R. No. 50141, January 29, 1988):

x x x

". . . The legal presumption is that official duty has been duly performed; (Sec. 5, m, 121 Rules of Court) and it is ‘particularly strong as
regards administrative agencies . . . vested with powers said to be quasi-judicial in nature, in connection with the enforcement of laws affecting
particular fields of activity, the proper regulation and/or promotion of which requires a technical or special training, aside from a good
knowledge and grasp of the overall conditions, relevant to said fields, containing in the nation (Pangasinan Transportation v. Public Utility
Commission, 70 Phil. 221). The consequent policy and practice underlying our Administrative Law is that courts of justice should respect the
findings of fact of said administrative agencies, unless there is absolutely no evidence in support thereof or such evidence is clearly, manifestly
and patently insubstantial (Heacock v. NLU, 95 Phil. 553).’ (Ganitano v. Secretary of Agriculture, etc., 16 SCRA 543, citing Pajo v. Ago, G.R.
No. L-15414, June 30, 1960; see also, Central Bank v. Cloribel, 44 SCRA 307, 317; Macatangay v. Sec. of Public Works, 17 SCRA 31, citing
Lovina v. Moreno, G.R. No. L-17821, Nov. 29, 1963; Bachrach Transportation v. Camunayan, 18 SCRA 920 citing cases; Santos v. Sec. of
Public Works, 19 SCRA 637; Atlas Development Corp. v. Gozon, 20 SCRA 886; Gravador v. Mamigo, 20 SCRA 742; Rio y Cia v. WCC, 20
SCRA 1196.
In the case at bar, the petitioners have not shown through the laying down of concrete factual foundations that the respondents’ questioned acts were done
with grave abuse of discretion amounting to lack of jurisdiction.

WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is hereby DISMISSED for lack of merit. No costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 102976 October 25, 1995

IRON AND STEEL AUTHORITY, petitioner,

vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.

FELICIANO, J.:

Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272 dated 9 August 1973 in order,
generally, to develop and promote the iron and steel industry in the Philippines. The objectives of the ISA are spelled out in the
following terms:

Sec. 2. Objectives — The Authority shall have the following objectives:

(a) to strengthen the iron and steel industry of the Philippines and to expand the domestic and export markets for the products
of the industry;

(b) to promote the consolidation, integration and rationalization of the industry in order to increase industry capability and viability
to service the domestic market and to compete in international markets;

(c) to rationalize the marketing and distribution of steel products in order to achieve a balance between demand and supply of
iron and steel products for the country and to ensure that industry prices and profits are at levels that provide a fair balance
between the interests of investors, consumers suppliers, and the public at large;

(d) to promote full utilization of the existing capacity of the industry, to discourage investment in excess capacity, and in
coordination, with appropriate government agencies to encourage capital investment in priority areas of the industry;

(e) to assist the industry in securing adequate and low-cost supplies of raw materials and to reduce the excessive dependence
of the country on imports of iron and steel.

The list of powers and functions of the ISA included the following:

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

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the companies
involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed
for the attainment of the objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973. 1 When ISA's original term
expired on 10 October 1978, its term was extended for another ten (10) years by Executive Order No. 555 dated 31 August
1979.

The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development Corporation which is itself
an entity wholly owned by the National Government, embarked on an expansion program embracing, among other things, the
construction of an integrated steel mill in Iligan City. The construction of such a steel mill was considered a priority and major
industrial project of the Government. Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the
President of the Philippines on 16 November 1982 withdrawing from sale or settlement a large tract of public land (totalling about
30.25 hectares in area) located in Iligan City, and reserving that land for the use and immediate occupancy of NSC.

Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a non-operational chemical
fertilizer plant and related facilities owned by private respondent Maria Cristina Fertilizer Corporation ("MCFC"), Letter of
Instruction (LOI), No. 1277, also dated 16 November 1982, was issued directing the NSC to "negotiate with the owners of
MCFC, for and on behalf of the Government, for the compensation of MCFC's present occupancy rights on the subject land."
LOI No. 1277 also directed that should NSC and private respondent MCFC fail to reach an agreement within a period of sixty
(60) days from the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent domain under P.D. No. 272 and to
initiate expropriation proceedings in respect of occupancy rights of private respondent MCFC relating to the subject public land
as well as the plant itself and related facilities and to cede the same to the NSC.2

Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August 1983, petitioner ISA commenced
eminent domain proceedings against private respondent MCFC in the Regional Trial Court, Branch 1, of Iligan City, praying that
it (ISA) be places in possession of the property involved upon depositing in court the amount of P1,760,789.69 representing ten
percent (10%) of the declared market values of that property. The Philippine National Bank, as mortgagee of the plant facilities
and improvements involved in the expropriation proceedings, was also impleaded as party-defendant.

On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA in turn placed NSC in possession
and control of the land occupied by MCFC's fertilizer plant installation.

The case proceeded to trial. While the trial was ongoing, however, the statutory existence of petitioner ISA expired on 11 August
1988. MCFC then filed a motion to dismiss, contending that no valid judgment could be rendered against ISA which had ceased
to be a juridical person. Petitioner ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did dismiss the case. The dismissal
was anchored on the provision of the Rules of Court stating that "only natural or juridical persons or entities authorized by law
may be parties in a civil case."3 The trial court also referred to non-compliance by petitioner ISA with the requirements of Section
16, Rule 3 of the Rules of Court.4

Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the expiration of its term, its juridical
existence continued until the winding up of its affairs could be completed. In the alternative, petitioner ISA urged that the Republic
of the Philippines, being the real party-in-interest, should be allowed to be substituted for petitioner ISA. In this connection, ISA
referred to a letter from the Office of the President dated 28 September 1988 which especially directed the Solicitor General to
continue the expropriation case.

The trial court denied the motion for reconsideration, stating, among other things that:

The property to be expropriated is not for public use or benefit [__] but for the use and benefit [__] of NSC, a government
controlled private corporation engaged in private business and for profit, specially now that the government, according to
newspaper reports, is offering for sale to the public its [shares of stock] in the National Steel Corporation in line with the
pronounced policy of the present administration to disengage the government from its private business ventures. 5 (Brackets
supplied)

Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of Appeals affirmed the order
of dismissal of the trial court. The Court of Appeals held that petitioner ISA, "a government regulatory agency exercising
sovereign functions," did not have the same rights as an ordinary corporation and that the ISA, unlike corporations organized
under the Corporation Code, was not entitled to a period for winding up its affairs after expiration of its legally mandated term,
with the result that upon expiration of its term on 11 August 1987, ISA was "abolished and [had] no more legal authority to
perform governmental functions." The Court of Appeals went on to say that the action for expropriation could not prosper because
the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate, had become ineffective as a result of
the delegate's dissolution, and could not be continued in the name of Republic of the Philippines, represented by the Solicitor
General:

It is our considered opinion that under the law, the complaint cannot prosper, and therefore, has to be dismissed without
prejudice to the refiling of a new complaint for expropriation if the Congress sees it fit." (Emphases supplied)

At the same time, however, the Court of Appeals held that it was premature for the trial court to have ruled that the expropriation
suit was not for a public purpose, considering that the parties had not yet rested their respective cases.

In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the action for expropriation in its
capacity as agent of the Republic of the Philippines, the Republic, as principal of ISA, is entitled to be substituted and to be
made a party-plaintiff after the agent ISA's term had expired.

Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law further extending the term of
ISA after 11 August 1988 evinced a "clear legislative intent to terminate the juridical existence of ISA," and that the authorization
issued by the Office of the President to the Solicitor General for continued prosecution of the expropriation suit could not prevail
over such negative intent. It is also contended that the exercise of the eminent domain by ISA or the Republic is improper, since
that power would be exercised "not on behalf of the National Government but for the benefit of NSC."

The principal issue which we must address in this case is whether or not the Republic of the Philippines is entitled to be
substituted for ISA in view of the expiration of ISA's term. As will be made clear below, this is really the only issue which we must
resolve at this time.

Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:

Sec. 1. Who May Be Parties. — Only natural or juridical persons or entities authorized by law may be parties in a civil action.

Under the above quoted provision, it will be seen that those who can be parties to a civil action may be broadly categorized into
two (2) groups:

(a) those who are recognized as persons under the law whether natural, i.e., biological persons, on the one hand, or juridical
person such as corporations, on the other hand; and

(b) entities authorized by law to institute actions.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No. 272, as already
noted, contains express authorization to ISA to commence expropriation proceedings like those here involved:
Sec. 4. Powers and Functions. — The Authority shall have the following powers and functions:

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease to the companies
involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed
for the attainment of the objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain kinds of contracts "for and in
behalf of the Government" in the following terms:

xxx xxx xxx

(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the government, for the bulk purchase of
materials, supplies or services for any sectors in the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of such sector;

xxx xxx xxx

(Emphasis supplied)

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality. There is, however,
no provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive juridical personality separate and distinct
from that of the Government. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality of the
Republic of the Philippines, or more precisely of the Government of the Republic of the Philippines. It is common knowledge that
other agencies or instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated
agencies or instrumentalities, sometimes with and at other times without capital stock, and accordingly vested with a juridical
personality distinct from the personality of the Republic. Among such incorporated agencies or instrumentalities are: National
Power Corporation;6 Philippine Ports Authority;7 National Housing Authority;8 Philippine National Oil Company;9 Philippine
National Railways; 10 Public Estates Authority; 11 Philippine Virginia Tobacco Administration,12 and so forth. It is worth noting
that the term "Authority" has been used to designate both incorporated and non-incorporated agencies or instrumentalities of
the Government.

We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. The Republic itself is
a body corporate and juridical person vested with the full panoply of powers and attributes which are compendiously described
as "legal personality." The relevant definitions are found in the Administrative Code of 1987:

Sec. 2. General Terms Defined. — Unless the specific words of the text, or the context as a whole, or a particular statute, require
a different meaning:

(1) Government of the Republic of the Philippines refers to the corporate governmental entity through which the functions of
government are exercised throughout the Philippines, including, save as the contrary appears from the context, the various arms
through which political authority is made effective in the Philippines, whether pertaining to the autonomous regions, the
provincial, city, municipal or barangay subdivisions or other forms of local government.

xxx xxx xxx

(4) Agency of the Government refers to any of the various units of the Government, including a department, bureau, office,
instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein.

xxx xxx xxx

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

xxx xxx xxx

(Emphases supplied)

When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the assets and
liabilities of that agency revert back to, and are re-assumed by, the Republic of the Philippines, in the absence of special
provisions of law specifying some other disposition thereof such as, e.g., devolution or transmission of such powers, duties,
functions, etc. to some other identified successor agency or instrumentality of the Republic of the Philippines. When the expiring
agency is an incorporated one, the consequences of such expiry must be looked for, in the first instance, in the charter of that
agency and, by way of supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a non-
incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets and liabilities are properly regarded
as folded back into the Government of the Republic of the Philippines and hence assumed once again by the Republic, no
special statutory provision having been shown to have mandated succession thereto by some other entity or agency of the
Republic.

The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines and the Republic
itself are, at least in part, spelled out in the Rules of Court. The general rule is, of course, that an action must be prosecuted and
defended in the name of the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of the
expropriation proceedings, a real party in interest, having been explicitly authorized by its enabling statute to institute
expropriation proceedings. The Rules of Court at the same time expressly recognize the role of representative parties:

Sec. 3. Representative Parties. — A trustee of an expressed trust, a guardian, an executor or administrator, or a party authorized
by statute may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may,
at any stage of the proceedings, order such beneficiary to be made a party. . . . . (Emphasis supplied)

In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or delegate or representative of the
Republic of the Philippines pursuant to its authority under P.D. No. 272. The present expropriation suit was brought on behalf of
and for the benefit of the Republic as the principal of ISA. Paragraph 7 of the complaint stated:

7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for the construction and installation of iron
and steel manufacturing facilities that are indispensable to the integration of the iron and steel making industry which is vital to
the promotion of public interest and welfare. (Emphasis supplied)

The principal or the real party in interest is thus the Republic of the Philippines and not the National Steel Corporation, even
though the latter may be an ultimate user of the properties involved should the condemnation suit be eventually successful.

From the foregoing premises, it follows that the Republic of the Philippines is entitled to be substituted in the expropriation
proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the expiration of ISA's
statutory term did not by itself require or justify the dismissal of the eminent domain proceedings.

It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's statutory term, was not
a ground for dismissal of such proceedings since a party may be dropped or added by order of the court, on motion of any
party or on the court's own initiative at any stage of the action and on such terms as are just. 13 In the instant case, the Republic
has precisely moved to take over the proceedings as party-plaintiff.

In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court recognized that the Republic may initiate
or participate in actions involving its agents. There the Republic of the Philippines was held to be a proper party to sue for
recovery of possession of property although the "real" or registered owner of the property was the Philippine Ports Authority, a
government agency vested with a separate juridical personality. The Court said:

It can be said that in suing for the recovery of the rentals, the Republic of the Philippines acted as principal of the Philippine
Ports Authority, directly exercising the commission it had earlier conferred on the latter as its agent. . . .15 (Emphasis supplied)

In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again another proceeding, as the trial
court and Court of Appeals had required, was to generate unwarranted delay and create needless repetition of proceedings:

More importantly, as we see it, dismissing the complaint on the ground that the Republic of the Philippines is not the proper
party would result in needless delay in the settlement of this matter and also in derogation of the policy against multiplicity of
suits. Such a decision would require the Philippine Ports Authority to refile the very same complaint already proved by the
Republic of the Philippines and bring back as it were to square one.16 (Emphasis supplied)

As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the Philippines for the ISA upon the ground that the
action for expropriation could not prosper because the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate,
had become legally ineffective by reason of the expiration of the statutory term of the agent or delegated i.e., ISA. Since, as we have held above,
the powers and functions of ISA have reverted to the Republic of the Philippines upon the termination of the statutory term of ISA, the question
should be addressed whether fresh legislative authority is necessary before the Republic of the Philippines may continue the expropriation
proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the legislative department of the government, we believe and so hold that
no new legislative act is necessary should the Republic decide, upon being substituted for ISA, in fact to continue to prosecute the expropriation
proceedings. For the legislative authority, a long time ago, enacted a continuing or standing delegation of authority to the President of the
Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of the Republic of the Philippines.
The 1917 Revised Administrative Code, which was in effect at the time of the commencement of the present expropriation proceedings before
the Iligan Regional Trial Court, provided that:

Sec. 64. Particular powers and duties of the President of the Philippines. — In addition to his general supervisory authority, the President of the
Philippines shall have such other specific powers and duties as are expressly conferred or imposed on him by law, and also, in particular, the
powers and duties set forth in this Chapter.

Among such special powers and duties shall be:

xxx xxx xxx

(h) To determine when it is necessary or advantageous to exercise the right of eminent domain in behalf of the Government of the
Philippines; and to direct the Secretary of Justice, where such act is deemed advisable, to cause the condemnation proceedings to be begun in
the court having proper jurisdiction. (Emphasis supplied)

The Revised Administrative Code of 1987 currently in force has substantially reproduced the foregoing provision in the following terms:

Sec. 12. Power of eminent domain. — The President shall determine when it is necessary or advantageous to exercise the power of eminent
domain in behalf of the National Government, and direct the Solicitor General, whenever he deems the action advisable, to institute expopriation
proceedings in the proper court. (Emphasis supplied)

In the present case, the President, exercising the power duly delegated under both the 1917 and 1987 Revised Administrative Codes in effect
made a determination that it was necessary and advantageous to exercise the power of eminent domain in behalf of the Government of the
Republic and accordingly directed the Solicitor General to proceed with the suit. 17

It is argued by private respondent MCFC that, because Congress after becoming once more the depository of primary legislative power, had
not enacted a statute extending the term of ISA, such non-enactment must be deemed a manifestation of a legislative design to discontinue or
abort the present expropriation suit. We find this argument much too speculative; it rests too much upon simple silence on the part of Congress
and casually disregards the existence of Section 12 of the 1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of "public use" or "public purpose" is not
present in the instant case, and that the indispensable element of just compensation is also absent. We agree with the Court of Appeals in this
connection that these contentions, which were adopted and set out by the Regional Trial Court in its order of dismissal, are premature and are
appropriately addressed in the proceedings before the trial court. Those proceedings have yet to produce a decision on the merits, since trial
was still on going at the time the Regional Trial Court precipitously dismissed the expropriation proceedings. Moreover, as a pragmatic matter,
the Republic is, by such substitution as party-plaintiff, accorded an opportunity to determine whether or not, or to what extent, the proceedings
should be continued in view of all the subsequent developments in the iron and steel sector of the country including, though not limited to, the
partial privatization of the NSC.

WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent that it affirmed the trial court's order
dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the court a quo which shall
allow the substitution of the Republic of the Philippines for petitioner Iron and Steel Authority and for further proceedings consistent with this
Decision. No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 1051 May 19, 1903

THE UNITED STATES, complainant-appellee,

vs.
FRED L. DORR, ET AL., defendants-appellants.

F. G. Waite for appellants.

Solicitor-General Araneta for appellee.

LADD, J.:
The defendants have been convicted upon a complaint charging them with the offense of writing, publishing, and circulating a
scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands. The complaint
is based upon section 8 of Act No. 292 of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous libels against the Government
of the United States or the Insular Government of the Philippine Islands, or which tend to disturb or obstruct any lawful officer in
executing his office, or which tend to instigate others to cabal or meet together for unlawful purposes, or which suggest or incite
rebellious conspiracies or riots, or which tend to stir up the people against the lawful authorities, or to disturb the peace of the
community, the safety and order of the Government, or who shall knowingly conceal such evil practices, shall be punished by a
fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or both, in the discretion of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under the caption of "A few
hard facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which he relies to sustain the
conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of the Civil Commission in appointing
rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through its ex-insurgent office holders, and by its
continual disregard for the records of natives obtained during the military rule of the Islands, has, in its distribution of offices,
constituted a protectorate over a set of men who should be in jail or deported. . . . [Reference is then made to the appointment
of one Tecson as justice of the peace.] This is the kind of foolish work that the Commission is doing all over the Islands, reinstating
insurgents and rogues and turning down the men who have during the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good many instances rascals.

xxx xxx xxx

The commission has exalted to the highest positions in the Islands Filipinos who are alleged to be notoriously corrupt and
rascally, and men of no personal character.

xxx xxx xxx

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners — charges against Trinidad H. Pardo
de Tavera, which, if true, would brand the man as a coward and a rascal, and with what result? . . . [Reference is then made to
the prosecution and conviction of Valdez for libel "under a law which specifies that the greater the truth the greater the libel."] Is
it the desire of the people of the United States that the natives against whom these charges have been made (which, if true,
absolutely vilify their personal characters) be permitted to retain their seats on the Civil Commission, the executive body of the
Philippine Government, without an investigation?

xxx xxx xxx

It is a notorious fact that many branches of the Government organized by the Civil Commission are rotten and corrupt. The fiscal
system, upon which life, liberty, and justice depends, is admitted by the Attorney-General himself to be most unsatisfactory. It is
a fact that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be persuaded to convict
insurgents when they wish to protect them.

xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and especially the northern end of it; it is
said that it is impossible to secure the conviction of lawbreakers and outlaws by the native justices, or a prosecution by the native
fiscals.

xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government, especially when evidences of carpetbagging
and rumors of graft are too thick to be pleasant.
We do not understand that it is claimed that the defendants succeeded in establishing at the trial the truth of any of the foregoing
statements. The only question which we have considered is whether their publication constitutes an offense under section 8 of
Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1) The uttering of seditious
words or speeches; (2) the writing, publishing, or circulating of scurrilous libels against the Government of the United States or
the Insular Government of the Philippine Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct
any lawful officer in executing his office; (4) or which tend to instigate others to cabal or meet together for unlawful purposes; (5)
or which suggest or incite rebellious conspiracies or riots; (6) or which tend to stir up the people against the lawful authorities or
to disturb the peace of the community, the safety and order of the Government; (7) knowingly concealing such evil practices.

The complaint appears to be framed upon the theory that a writing, in order to be punishable as a libel under this section, must
be of a scurrilous nature and directed against the Government of the United States or the Insular Government of the Philippine
Islands, and must, in addition, tend to some one of the results enumerated in the section. The article in question is described in
the complaint as "a scurrilous libel against the Government of the United States and the Insular Government of the Philippine
Islands, which tends to obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in
the execution of their offices, and which tends to instigate others to cabal and meet together for unlawful purposes, and which
suggests and incites rebellious conspiracies, and which tends to stir up the people against the lawful authorities, and which
disturbs the safety and order of the Government of the United States and the Insular Government of the Philippine Islands." But
it is "a well-settled rule in considering indictments that where an offense may be committed in any of several different modes,
and the offense, in any particular instance, is alleged to have been committed in two or more modes specified, it is sufficient to
prove the offense committed in any one of them, provided that it be such as to constitute the substantive offense"
(Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may, therefore, be convicted if any one of the substantive
charges into which the complaint may be separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable tendency to "disturb or obstruct
any lawful officer in executing his office," or to "instigate" any person or class of persons "to cabal or meet together for unlawful
purposes," or to "suggest or incite rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to
disturb the peace of the community, the safety and order of the Government." All these various tendencies, which are described
in section 8 of Act No. 292, each one of which is made an element of a certain form of libel, may be characterized in general
terms as seditious tendencies. This is recognized in the description of the offenses punished by this section, which is found in
the title of the act, where they are defined as the crimes of the "seditious utterances, whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of the United States or the
Insular Government of the Philippine Islands," which may conceivably stand on a somewhat different footing, the offenses
punished by this section all consist in inciting, orally or in writing, to acts of disloyalty or disobedience to the lawfully constituted
authorities in these Islands. And while the article in question, which is, in the main, a virulent attack against the policy of the Civil
Commission in appointing natives to office, may have had the effect of exciting among certain classes dissatisfaction with the
Commission and its measures, we are unable to discover anything in it which can be regarded as having a tendency to produce
anything like what may be called disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal
to the Government and obedient to the laws. There can be no conviction, therefore, for any of the offenses described in the
section on which the complaint is based, unless it is for the offense of publishing a scurrilous libel against the Government of
the of the United States or the Insular Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the Government of the United States
or the Insular Government of the Philippine Islands?" In the determination of this question we have encountered great difficulty,
by reason of the almost entire lack of American precedents which might serve as a guide in the construction of the law. There
are, indeed, numerous English decisions, most of them of the eighteenth century, on the subject of libelous attacks upon the
"Government, the constitution, or the law generally," attacks upon the Houses of Parliament, the Cabinet, the Established
Church, and other governmental organisms, but these decisions are not now accessible to us, and, if they were, they were made
under such different conditions from those which prevail at the present day, and are founded upon theories of government so
foreign to those which have inspired the legislation of which the enactment in question forms a part, that they would probably
afford but little light in the present inquiry. In England, in the latter part of the eighteenth century, any "written censure upon
public men for their conduct as such," as well as any written censure "upon the laws or upon the institutions of the country,"
would probably have been regarded as a libel upon the Government. (2 Stephen, History of the Criminal Law of England, 348.)
This has ceased to be the law in England, and it is doubtful whether it was ever the common law of any American State. "It is
true that there are ancient dicta to the effect that any publication tending to "possess the people with an ill opinion of the
Government" is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in R. vs. Cobbett,
1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the words used directly tend to foment riot or
rebellion or otherwise to disturb the peace and tranquility of the Kingdom, the utmost latitude is allowed in the discussion of all
public affairs." (11 Enc. of the Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule
which made libels on the constitution or the government indictable, as it was administered by the courts, seems to us unsuited
to the condition and circumstances of the people of America, and therefore never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the only existing American statute
of a similar character to that in question, and from which much of the phraseology of then latter appears to have been taken,
though with some essential modifications.
The important question is to determine what is meant in section 8 of Act No. 292 by the expression "the Insular Government of
the Philippine Islands." Does it mean in a general and abstract sense the existing laws and institutions of the Islands, or does it
mean the aggregate of the individuals by whom the government of the Islands is, for the time being, administered? Either sense
would doubtless be admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate of institutions by which an
independent society makes and carries out those rules of action which are unnecessary to enable men to live in a social state,
or which are imposed upon the people forming that society by those who possess the power or authority of prescribing them.
Government is the aggregate of authorities which rule a society. By "dministration, again, we understand in modern times, and
especially in more or less free countries, the aggregate of those persons in whose hands the reins of government are for the
time being (the chief ministers or heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the terms
"government" and "administration" are not always used in their strictness, and that "government" is often used for
"administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense to "write, print, utter, or
published," or to "knowingly and willingly assist or aid in writing, printing, uttering, or publishing any false, scandalous, and
malicious writing or writings against the Government of the United States, or either House of the Congress of the United States,
or the President of the United States, with intent to defame the said Government, or either House of the said Congress, or the
said President, or to bring them, or either of them, into contempt or disrepute, or to excite against them or either or any of them
the hatred of the good people of the United States," etc. The term "government" would appear to be used here in the abstract
sense of the existing political system, as distinguished from the concrete organisms of the Government — the Houses of
Congress and the Executive — which are also specially mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an abstraction like the Government
in the sense of the laws and institutions of a country, but we think an answer to this suggestion is that the expression "scurrilous
libel" is not used in section 8 of Act No. 292 in the sense in which it is used in the general libel law (Act No. 277) — that is, in the
sense of written defamation of individuals — but in the wider sense, in which it is applied in the common law to blasphemous,
obscene, or seditious publications in which there may be no element of defamation whatever. "The word 'libel' as popularly used,
seems to mean only defamatory words; but words written, if obscene, blasphemous, or seditious, are technically called libels,
and the publication of them is, by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627,
per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the nature of things be of uncommon
occurrence, the offense is by no means an imaginary one. An instance of a prosecution for an offense essentially of this nature
is Republica vs. Dennie, 4 Yeates (Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked
mind and unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully intending, as much as in him
lay, to bring into contempt and hatred the independence of the United States, the constitution of this Commonwealth and of the
United States, to excite popular discontent and dissatisfaction against the scheme of polity instituted, and upon trial in the said
United States and in the said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said United States
and of the said Commonwealth, to condemn the principles of the Revolution, and revile, depreciate, and scandalize the
characters of the Revolutionary patriots and statesmen, to endanger, subvert, and totally destroy the republican constitutions
and free governments of the said United States and this Commonwealth, to involve the said United States and this
Commonwealth in civil war, desolation, and anarchy, and to procure by art and force a radical change and alteration in the
principles and forms of the said constitutions and governments, without the free will, wish, and concurrence of the people of the
said United States and this Commonwealth, respectively," the charge being that "to fulfill, perfect, and bring to effect his wicked,
seditious, and detestable intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose, write,
and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national history. Its omens are always
sinister and its powers are unpropitious. With all the lights or experience blazing before our eyes, it is impossible not to discover
the futility of this form of government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has been
tried in France and terminated in despotism. it was tried in England and rejected with the utmost loathing and abhorrence. It is
on its trial here and its issue will be civil war, desolation, and anarchy. No wise man but discerns its imperfections; no good man
but shudders at its miseries; no honest man but proclaims its fraud, and no brave man but draws his sword against its force.
The institution of a scheme of polity so radically contemptible and vicious is a memorable example of what the villainy of some
men can devise, the folly of others receive, and both establish, in despite of reason, reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that which Dennie was accused
of making upon the republican form of government lawfully established in the United States and in the State of Pennsylvania
would, we think, if couched in scandalous language, constitute the precise offense described in section 8 of Act No. 292 as a
scurrilous libel against the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to their public conduct or to their private
life, may always be adequately punished under the general libel law. Defamation of the Civil Commission as an aggregation, it
being "a body of persons definite and small enough for its individual members to be recognized as such" (Stephen, Digest of
the Criminal Law, art. 277), as well as defamation of any of the individual members of the Commission or of the Civil Governor,
either in his public capacity or as a private individual, may be so punished. The general libel law enacted by the Commission
was in force when Act No. 292, was passed. There was no occasion for any further legislation on the subject of libels against
the individuals by whom the Insular Government is administered — against the Insular Government in the sense of the aggregate
of such individuals. There was occasion for stringent legislation against seditious words or libels, and that is the main if not the
sole purpose of the section under consideration. It is not unreasonable to suppose that the Commission, in enacting this section,
may have conceived of attacks of a malignant or scurrilous nature upon the existing political system of the United States, or the
political system established in these Islands by the authority of the United States, as necessarily of a seditious tendency, but it
is not so reasonable to suppose that they conceived of attacks upon the personnel of the government as necessarily tending to
sedition. Had this been their view it seems probable that they would, like the framers of the Sedition Act of 1798, have expressly
and specifically mentioned the various public officials and collegiate governmental bodies defamation of which they meant to
punish as sedition.

The article in question contains no attack upon the governmental system of the United States, and it is quite apparent that,
though grossly abusive as respects both the Commission as a body and some of its individual members, it contains no attack
upon the governmental system by which the authority of the United States is enforced in these Islands. The form of government
by a Civil Commission and a Civil Governor is not assailed. It is the character of the men who are intrusted with the administration
of the government that the writer is seeking to bring into disrepute by impugning the purity of their motives, their public integrity,
and their private morals, and the wisdom of their policy. The publication of the article, therefore, no seditious tendency being
apparent, constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

Arellano, C.J. Torres, Willard and Mapa, JJ., concur.

SECOND DIVISION

[G.R. NO. 155320. February 5, 2004]

RENATO F. HERRERA, Petitioner, v. PLARIDEL ELMER J. BOHOL, Respondent.

DECISION

PUNO, J.:
Before us is a Petition for Review under Rule 45 assailing the Decision dated March 15, 2002 of the Court of Appeals in CA-
G.R. SP No. 638731 which affirmed the decision of the Ombudsman in OMB-ADM-0-99-00272 finding petitioner guilty of simple
misconduct and suspending him for one (1) month without pay as well as its Resolution dated September 19, 2002 which denied
petitioners motion for reconsideration.

Petitioner Renato F. Herrera was a former Director III at the Department of Agrarian Reform (DAR) Central Office, now DAR
Regional Director at San Fernando, Pampanga. He approved in January 1997 a request for shift of item number of respondent
Plaridel Elmer J. Bohol, Senior Agrarian Reform Program Officer at the Bureau of Agrarian Reform Information and Education
(BARIE) of the DAR, from Item 577-1 of Fund 108 to 562-3 of Fund 101. Respondent then drew his salary under Fund 101 until
April 17, 1997 when he was informed by the Department Cashier that he may no longer draw his salary thereunder because his
item had been recalled and given to one Gregoria Ancheta. Respondent protested to petitioner but the latter referred him to
BARIE Director Sharon Joy Berlin-Chao, respondents immediate supervisor, who allegedly was the one who caused the recall.
Respondent subsequently charged the petitioner in the Office of the Ombudsman with Grave Misconduct for allegedly giving
unwarranted benefit to Gregoria Ancheta and/or Inefficiency and Incompetence for illegally recalling his item.

On June 11, 1999 the Ombudsman rendered a decision,3 the dispositive portion of which reads

WHEREFORE, PREMISES CONSIDERED, this Office finds respondent RENATO F. HERRERA guilty of Simple Misconduct
and is hereby meted the penalty of Suspension for One (1) Month Without Pay to take effect immediately upon receipt of this
Decision by the respondent, the same being final and executory in accordance with Sections 7 and 10 of Administrative Order
No. 07, in relation to Section 25 (sic) of Republic Act No. 6770.

Petitioner appealed to the Court of Appeals contending that the decision of the Ombudsman was premature, and contesting
some of its factual findings. The Court of Appeals denied the appeal. 4 It ruled that the questioned decision of the Ombudsman
is unappealable citing Lapid v. Court of Appeals.5 It also debunked petitioners defense of prematurity and his claim that he did
not fail to take measures to correct respondents recall. Petitioners motion for reconsideration was denied in the Resolution dated
September 19, 2002.6 cralawred

In this Petition for Review , petitioner contends: First, that the penalty imposed upon him by the Ombudsman, that is, suspension
for one (1) month without pay, is appealable because it is not among those enumerated as final and unappealable under Sec.
27 of Republic Act No. 6770, otherwise known as The Ombudsman Act of 1989, viz:

x x x Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one
months salary shall be final and unappealable. x x x

Petitioner insists that suspension for one (1) month without pay imposed upon him by the Ombudsman, and suspension of not
more than one months salary stated in the above law are different. To support his argument, petitioner cites the following excerpt
from Lapid v. Court of Appeals7 -

It is clear from the above provisions that the punishment imposed upon petitioner, i.e., suspension without pay for one
month, is not among those listed as final and unappealable x x x x (underscoring ours)

Second, petitioner contendsthat the Court of Appeals erred in affirming the finding of the Ombudsman that respondent was not
informed beforehand of the recall of his item, and that petitioner did not take any corrective measure to address respondents
complaint. Petitioner insists that he was assured by BARIE Director Chao that she had informed respondent of the impending
recall of his item as proven by Director Chaos letter to him dated March 12, 1997. 8 In addition, he claims he immediately directed
Director Chao to act on the problem through the BARIE Local Selection Board after respondent and his lawyer wrote to him
protesting the recall.

Third, petitioner contends that the Court of Appeals erred in finding him guilty of misconduct despite lack of proof that he acted
deliberately and with evil intent.9 cralawred

We deny the appeal.

In enumerating the penalties which are final and unappealable, Sec. 27 of R.A. No. 6770states: [a]ny order, directive or decision
imposing the penalty of public censure, reprimand, suspension of not more than one months salary shall be final and
unappealable. We hold that the phrase suspension of not more than one months salary includes that imposed upon
petitioner, i.e., suspension for one month without pay. There is no penalty as suspension of salary in our administrative law,
rules and regulations. Salaries are simply not suspended. Rather it is the official or employee concerned who is suspended with
a corresponding withholding of salaries following the principle of no work, no pay. Or, an official or employee may be fined an
amount equivalent to his or her monthly salary as penalty without an accompanying suspension from work.
In truth, the Office of the Ombudsman, pursuant to its authority to promulgate rules to implement R.A. No. 6770, has clarified
this ambiguity of its Sec. 27. Sec. 7, Rule III of its Rules of Procedure, Administrative Order No. 7,
provides, viz:chanroblesvirtua1awlibrary

Where the respondent is absolved of the charge, and in case of conviction where the penalty imposed is public censure or
reprimand, suspension of not more than one month, or a fine equivalent to one month salary, the decision shall be final
and unappealable x x x x (underscoring ours)

The cited excerpt in the Lapid decision that the punishment imposed upon petitioner, i.e., suspension without pay for one month,
is not among those listed as final and unappealable is of no comfort to the petitioner. A reading of the decision will show that the
penalty imposed upon the petitioner therein, Gov. Manuel M. Lapid of Pampanga, was not suspension for one month but
suspension for one year.In fact, in the statement immediately preceding the dispositive portion of the decision, the Court, after
applying Sec. 27 of R.A. No. 6770and Sec. 7, Rule III of the Rules of Procedure of the Office of the Ombudsman,ruled that the
decision imposing a penalty of one year suspension without pay on petitioner Lapid is not immediately executory.

Indeed, in the later case of Lopez v. Court of Appeals ,10 the Court, again citing Sec. 27 of R.A. No. 6770, Sec. 7, Rule III of
the Rules of Procedure of the Office of the Ombudsmanand Lapid v. Court of Appeals, reiterated that decisions of the
Ombudsman in administrative cases imposing the penalty of public censure, reprimand, or suspension of not more than one
month, or a fine equivalent to one month salary shall be final and unappealable. The penalty imposed upon herein petitioner
being suspension for one month without pay, we hold the same final and unappealable, as correctly ruled by the Court of
Appeals.

We shall refrain from delving into the merits of petitioners other contentions as they present factual issues not reviewable on
appeal via certiorari.11 This Court has always accorded due respect and weight to the factual findings of the Office of the
Ombudsman12 especially when such findings have been affirmed by the Court of Appeals, as in the instant case.

IN VIEW WHEREOF, the petition is DENIED. The questioned Decision dated March 15, 2002 of the Court of Appeals in CA-
G.R. SP No. 63873 as well as its Resolution dated September 9, 2002 denying petitioners motion for reconsideration are
AFFIRMED.

SO ORDERED.

Quisumbing, Austria-Martinez, Callejo, Sr., and TINGA, JJ., concur.

FIRST DIVISION

[G.R. No. 47800. December 2, 1940.]

 MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.

Maximo Calalang in his own behalf.

Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams, Fragante and
Bayan

City Fiscal Mabanag for the other respondents.

SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648; DELEGATION OF LEGISLATIVE
POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND SECRETARY OF PUBLIC WORKS AND
COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. — The provisions of section 1 of Commonwealth Act
No. 648 do not confer legislative power upon the Director of Public Works and the Secretary of Public Works and
Communications. The authority therein conferred upon them and under which they promulgated the rules and regulations now
complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads and streets designated
as national roads by acts of the National Assembly or by executive orders of the President of the Philippines" and to close
them temporarily to any or all classes of traffic "whenever the condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest." The delegated power, if at all, therefore, is not the
determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine
when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the
National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of
determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion
is the making of the law.

2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. — Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount police power of the state. Said Act, by virtue of which the
rules and regulations complained of were promulgated, aims to promote safe transit upon and avoid obstructions on national
roads, in the interest and convenience of the public. In enacting said law, therefore, the National Assembly was prompted by
considerations of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic, which is, to say
the least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty, with property, and with business and occupations. Persons
and property may be subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state (U.S. v. Gomer Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the
individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over
authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through
education and, personal discipline, so that there may be established the resultant equilibrium, which means peace and order
and happiness for all. The moment greater authority is conferred upon the government, logically so much is withdrawn from
the residuum of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preservation.

3. ID.; ID.; SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise
of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social
justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet
of all persons, and of bringing about "the greatest good to the greatest number."

DECISION

LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court this petition for a
writ of prohibition against the respondents, A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante,
as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as
Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to
the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be
prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m.
to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street
to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to
traffic; that the Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director of Public Works
the adoption of the measure proposed in the resolution aforementioned, in pursuance of the provisions of Commonwealth Act
No. 548 which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and
Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads; that on
August 2, 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications,
recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission as
aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion
thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the Secretary of
Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the
recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the
points and during the hours as above indicated, for a period of one year from the date of the opening of the Colgante Bridge to
traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules
and regulations thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are not allowed to pass
and pick up passengers in the places above-mentioned to the detriment not only of their owners but of the riding public as
well.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works, with the approval of
the Secretary of Public Works and Communications, is authorized to promulgate rules and regulations for the regulation and
control of the use of and traffic on national roads and streets is unconstitutional because it constitutes an undue delegation of
legislative power. This contention is untenable. As was observed by this court in Rubi v. Provincial Board of Mindoro (39 Phil,
660, 700), "The rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since followed
in a multitude of cases, namely: ’The true distinction therefore is between the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.’
(Cincinnati, W. & Z. R. Co. v. Comm’rs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in
Wayman v. Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or official. The
Legislature may make decisions of executive departments or subordinate officials thereof, to whom it has committed the
execution of certain acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is
to give prominence to the ’necessity’ of the case."cralaw virtua1aw library

Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by acts
of the National Assembly or by executive orders of the President of the Philippines, the Director of Public Works, with the
approval of the Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such rules and regulations, with the approval of the
President, may contain provisions controlling or regulating the construction of buildings or other structures within a reasonable
distance from along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of
Public Works and his duly authorized representatives whenever the condition of the road or the traffic thereon makes such
action necessary or advisable in the public convenience and interest, or for a specified period, with the approval of the
Secretary of Public Works and Communications."cralaw virtua1aw library

The above provisions of law do not confer legislative power upon the Director of Public Works and the Secretary of Public
Works and Communications. The authority therein conferred upon them and under which they promulgated the rules and
regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid
down by the National Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines" and
to close them temporarily to any or all classes of traffic "whenever the condition of the road or the traffic makes such action
necessary or advisable in the public convenience and interest." The delegated power, if at all, therefore, is not the
determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine
when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the
National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of
determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion
is the making of the law. As was said in Locke’s Appeal (72 Pa. 491): "To assert that a law is less than a law, because it is
made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public welfare whenever a
law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know." The proper
distinction the court said was this: "The Legislature cannot delegate its power to make the law; but it can make a law to
delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful
legislation must depend which cannot be known to the law-making power, and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077, promulgated June 12, 1939, and in Pangasinan
Transportation v. The Public Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court had occasion to
observe that the principle of separation of powers has been made to adapt itself to the complexities of modern governments,
giving rise to the adoption, within certain limits, of the principle of "subordinate legislation," not only in the United States and
England but in practically all modern governments. Accordingly, with the growing complexity of modern life, the multiplication
of the subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of the theory of
separation of governmental powers has, to a large extent, been relaxed by permitting the delegation of greater powers by the
legislative and vesting a larger amount of discretion in administrative and executive officials, not only in the execution of the
laws, but also in the promulgation of certain rules and regulations calculated to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to the provisions of
Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or trade and abridge the right to
personal liberty and freedom of locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise
of the paramount police power of the state.

Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote safe transit upon and
avoid obstructions on national roads, in the interest and convenience of the public. In enacting said law, therefore, the National
Assembly was prompted by considerations of public convenience and welfare. It was inspired by a desire to relieve congestion
of traffic. which is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said
law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with business
and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the general
comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this fundamental aim of our Government
the rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made
to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty
because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there may be established the resultant equilibrium, which means
peace and order and happiness for all. The moment greater authority is conferred upon the government, logically so much is
withdrawn from the residuum of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of
liberty is precisely the very means of insuring its preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins v. Los Angeles (195
U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is a continuing one, and a business lawful today may in
the future, because of the changed situation, the growth of population or other causes, become a menace to the public health
and welfare, and be required to yield to the public good." And in People v. Pomar (46 Phil., 440), it was observed that
"advancing civilization is bringing within the police power of the state today things which were not thought of as being within
such power yesterday. The development of civilization, the rapidly increasing population, the growth of public opinion, with an
increasing desire on the part of the masses and of the government to look after and care for the interests of the individuals of
the state, have brought within the police power many questions for regulation which formerly were not so considered."cralaw
virtua1aw library

The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic security of all the people. The promotion of social justice,
however, is to be achieved not through a mistaken sympathy towards any given group. Social justice is "neither communism,
nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces by
the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means
the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of
salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse
units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the petitioner. So ordered.

Avanceña, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19850 January 30, 1964

VIGAN ELECTRIC LIGHT COMPANY, INC., petitioner,

vs.
THE PUBLIC SERVICE COMMISSION, respondent.

Raymundo A. Armovit for petitioner.

Federico S. Arlos and P. H. del Pilar for respondent.

CONCEPCION, J.:

This is an original action for certiorari to annul an order of respondent Public Service Commission. Upon the filing of the petition
and the submission and approval of the corresponding bond, we issued a writ of injunction restraining said respondent from
enforcing the order complained of Republic Act No. 316, approved on June 19, 1948, granted petitioner Vigan Electric Light
Company, Inc., a franchise to construct, maintain and operate an electric light, heat and/or power plant for the purpose of
generating and distributing light, heat and/or power, for sale within the limits of several municipalities of the province of Ilocos
Sur. Accordingly, petitioner secured from respondent on May 31, 1950, a certificate of public convenience to render electric light,
heat and/or power services in said municipalities and to charge its customers and/or consumers the following rates:

FLAT RATE

1 — 20 watt bulb per month ............................................................ P2.30

1 — 25 watt bulb per month ............................................................ 3.00

1 — 40 watt bulb per month ............................................................ 4.50

1 — 50 watt bulb per month ............................................................ 5.50

1 — 60 watt bulb per month ............................................................ 6.50

1 — 75 watt bulb per month ............................................................ 7.50

1 — 80 watt bulb per month ............................................................ 8.00

1 — 100 watt bulb per month ............................................................ 9.00

1 — 150 watt bulb per month ............................................................ 13.00

1 — 200 watt bulb per month ............................................................ 17.00

METER RATE

For the first 15

For the first 15 Kw. hrs. ............................................................ P0.40

For the next 35 Kw. hrs. ............................................................ .30

For the next 50 Kw. hrs. ............................................................ .25

For all over 100 Kw. hrs. ............................................................ .20

 Minimum Charge: P6.00 per month for connection of 200 watts
or less; plus P0.01 per watt per month for connection in excess
of 200 watts.

TEMPORARY RATE

P0.01 per watt per night.

On May 22, 1957, petitioner, acting with respondent's approval, entered into a contract for the purchase of electric power and
energy from the National Power Corporation, for resale, in the course of the business of said petitioner, to its customers, to
whom, in fact, petitioner resold said electric power and energy, in accordance with the above schedule of rates. About five (5)
years later, or on January 16, 1962, respondent advised petitioner of a conference to be held on February 12, 1962 for the
purpose of revising its authorized rates. Soon thereafter, petitioner received a letter of respondent informing the former of an
alleged letter-petition of "Congressman Floro Crisologo and 107 alleged residents of Vigan Ilocos Sur", charging the following:

We also denounce the sale of TWO THOUSAND (2,000) ELECTRIC METERS in blackmarket by the Vigan Electric Light
Company to Avegon Co., as anomalous and illegal. Said electric meters were imported from Japan by the Vigan Electric Light
Company in behalf of the consumers of electric current from said electric company. The Vigan Electric Light Company has
commercialized these privilege which property belong to the people.

We also report that the electric meters in Vigan used by the consumers had been installed in bad faith and they register excessive
rates much more than the actual consumption.1äwphï1.ñët

and directing the petitioner to comment on these charges. In reply to said communications, petitioner's counsel wrote to
respondent, on February 1, 1962, a letter asking that the conference scheduled for February 12 be postponed to March 12, and
another letter stating inter alia:

In connection therewith, please be informed that my client, the Vigan Electric Light Co., Inc., has not had any dealing with the
Avegon Co., Inc., relative to the 2,000 electric meter mentioned in the petition. Attached hereto as Annex "1" and made an
integral part thereof is a certification to that effect by Avegon Co., Inc.

Furthermore, as counsel for Vigan Electric Light Co., Inc., I wish to inform this Honorable Commission that the charge that said
company installed the electric meters in bad faith and that said meters registered excessive rates could have no valid basis
because all of these meters have been inspected checked, tested and sealed by your office.

On March 15, 1962, petitioner received a communication form the General Auditing Office notifying him that one Mr. Cesar A.
Damole had "been instructed to make an audit and examination of the books and other records of account" of said petitioner,
"under the provisions of Commonwealth Act No. 325 and in accordance with the request of the Public Service Commission
contained in its letter dated March 12, 1962", and directing petitioner to cooperate with said Mr. Damole "for the successful
accomplishment of his work". Subsequently, respondent issued a subpoena duces tecum requiring petitioner to produce before
the former, during a conference scheduled for April 10, 1962, certain books of account and financial statements specified in said
process. On the date last mentioned petitioner moved to quash the subpoena duces tecum. The motion was not acted upon in
said conference of April 10, 1962. However, it was then decided that the next conference be held on April 30, 1962, which was
later postponed to May 21, 1962. When petitioner's representatives appeared before respondent, on the date last mentioned,
they were advised by the latter that the scheduled conference had been cancelled, that the petition to quash the subpoena duces
tecum had been granted, and that, on May 17, 1962, respondent had issued an order, from which we quote:

We now have the audit report of the General Auditing Office dated May 4, 1962, covering the operation of the Vigan Electric
Light Co., Inc. in Vigan, Bantay and Cagayan, Ilocos Sur, for the period from January 1 to December 31, 1961. We find from the
report that the total invested capital of the utility as of December 31, 1961, entitled to return amounted to P118,132.55, and its
net operating income for rate purposes of P53,692.34 represents 45.45% of its invested capital; that in order to earn 12% per
annum, the utility should have a computed revenue by rates of P182,012.78; and that since it realized an actual revenue by
rates of P221,529.17, it had an excess revenue by rates of P39,516.39, which is 17.84% of the actual revenue by rates and
33.45% of the invested capital. In other words, the present rates of the Vigan Electric Light Co., Inc. may be reduced by 17.84%,
or in round figure, by 18%.

Upon consideration of the foregoing, and finding that the Vigan Electric Light Co., Inc. is making a net operating profit in excess
of the allowable return of 12% on its invested capital, we believe that it is in the public interest and in consonance with Section
3 of Republic Act No. 3043 that reduction of its rates to the extent of its excess revenue be put into effect immediately.

WHEREFORE, Vigan Electric Light Co., Inc. is hereby ordered to reduce the present meter rates for its electric service effective
upon the billing for the month of June, 1962, to wit:
METER RATE — 24-HOUR SERVICE

For the first 15 kwh per month at P0.328 per kwh

For the next 35 kwh per month at P0.246 per kwh

For the next 50 kwh per month at P0.205 per kwh

For all over 100 kwh per month at P0.164 per kwh

Minimum Charge: P4.90 per month for connection of 200 was or less plus P0.01 per watt per month for connection in excess
of 200 watts.

TEMPORARY LIGHTING

P0.01 per watt per night.

Minimum Charge: P1.00

Billings to customers shall be made to the nearest multiple of five centavos. The above rates may be revised, modified or altered
at anytime for any just cause and/or in the public service.

Soon later, or on June 25, 1962, petitioner herein instituted the present action for certiorari to annul said order of May 17, 1962,
upon the ground that, since its Corporate inception in 1948, petitioner it "never was able to give and never made a single dividend
declaration in favor of its stockholders" because its operation from 1949 to 1961 had resulted in an aggregate loss of
P113,351.523; that in the conference above mentioned petitioner had called the attention of respondent to the fact that the latter
had not furnished the former a "copy of the alleged letter-petition of Congressman Crisologo and others"; that respondent then
expressed the view that there was no necessity of serving copy of said letter to petitioner, because respondent was merely
holding informal conferences to ascertain whether petitioner would consent to the reduction of its rates; that petitioner objected
to said reduction without a hearing, alleging that its rates could be reduced only if proven by evidence validly adduced to be
excessive; that petitioner offered to introduce evidence to show the reasonableness of its aforementioned rates, and even the
fairness of its increase; that petitioner was then assured that it would be furnished a copy of the aforementioned letter-petition
and that a hearing would be held, if a reduction of its rates could not be agreed upon; that petitioner had not even been served
a copy of the auditor's report upon which the order complained of is based; that such order had been issued without notice and
hearing; and that, accordingly, petitioner had been denied due process.

In its answer respondent admitted some allegations of the complaint and denied other allegations thereof, particularly the
conclusions drawn by petitioner. Likewise, respondent alleged that it granted petitioner's motion to quash the
aforementioned subpoena duces tecum because the documents therein referred to had already been audited and examined by
the General Auditing Office, the report on which was on file with said respondent; that the latter had directed that petitioner be
served a copy of said report; and that, although this has not, as yet, been actually done, petitioner could have seen and examined
said report had it really wanted to do so. By way of special defenses, respondent, moreover, alleged that the disputed order had
been issued under its delegated legislative authority, the exercise of which does not require previous notice and hearing; and
that petitioner had not sought a reconsideration of said order, and had, accordingly, failed to exhaust all administrative remedies.

In support of its first special defense respondent maintains that rate-fixing is a legislative function; that legislative or rule-making
powers may constitutionally be exercised without previous notice of hearing; and that the decision in Ang Tibay vs. Court of
Industrial Relations (69 Phil., 635) — in which we held that such notice and hearing are essential to the validity of a decision of
the Public Service Commission — is not in point because, unlike the order complained of — which respondent claims to be
legislative in nature — the Ang Tibay case referred to a proceeding involving the exercise of judicial functions.

At the outset, it should be noted, however, that, consistently with the principle of separation of powers, which underlies our
constitutional system, legislative powers may not be delegated except to local governments, and only to matters purely of local
concern (Rubi vs. Provincia Board, 39 Phil., 660; U.S. vs. Heinszen, 206 U.S. 370). However, Congress may delegate to
administrative agencies of the government the power to supply the details in the execution or enforcement of a policy laid down
by a which is complete in itself (Calalang vs. Williams, 70 Phil. 726; Pangasinan Trans. Co. vs. Public Service Commission, 70
Phil., 221; People vs. Rosenthal, 68 Phil., 328; People vs. Vera, 65 Phil., 56; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs.
Collector of Customs, 53 Phil., 394; U.S. vs. Ang Tang Ho 43 Phil., 1; Schechter vs. U.S., 295 U.S., 495 Mulford vs. Smith, 307
U.S., 38; Bowles vs. Willingham, 321 U.S., 503). Such law is not deemed complete unless it lays down a standard or pattern
sufficiently fixed or determinate, or, at least, determinable without requiring another legislation, to guide the administrative body
concerned in the performance of its duty to implement or enforce said Policy (People vs. Lim Ho, L-12091, January 28, 1960;
Araneta vs. Gatmaitan, L-8895, April 30, 1957; Cervantes vs. Auditor General, L-4043, May 26, 1952; Philippine Association of
Colleges vs. Secretary of Education, 51 Off. Gaz., 6230; People vs. Arnault, 48 Off. Gaz., 4805; Antamok Gold Fields vs. Court
of Industrial Relations, 68 Phil., 340; U.S. vs. Barrias, 11 Phil., 327; Yakus vs. White, 321 U.S., 414; Ammann vs. Mallonce, 332
U.S., 245; U.S. vs. Rock Royal Corp. 307 U.S., 533; Mutual Film Corp. vs. Industrial Commission, 276 U.S., 230). Otherwise,
there would be no reasonable means to ascertain whether or not said body has acted within the scope of its authority, and, as
a consequence, the power of legislation would eventually be exercised by a branch of the Government other than that in which
it is lodged by the Constitution, in violation, not only of the allocation of powers therein made, but, also, of the principle of
separation of powers. Hence, Congress his not delegated, and cannot delegate legislative powers to the Public Service
Commission.

Moreover, although the rule-making power and even the power to fix rates — when such rules and/or rates are meant to apply
to all enterprises of a given kind throughout the Philippines — may partake of a legislative character, such is not the nature of
the order complained of. Indeed, the same applies exclusively to petitioner herein. What is more, it is predicated upon the finding
of fact — based upon a report submitted by the General Auditing Office — that petitioner is making a profit of more than 12% of
its invested capital, which is denied by petitioner. Obviously, the latter is entitled to cross-examine the maker of said report, and
to introduce evidence to disprove the contents thereof and/or explain or complement the same, as well as to refute the conclusion
drawn therefrom by the respondent. In other words, in making said finding of fact, respondent performed a function partaking of
a quasi-judicial character the valid exercise of which demands previous notice and hearing.

Indeed, sections 16(c) and 20 (a) of Commonwealth Act No. 146, explicitly require notice Indeed hearing. The pertinent parts
thereof provide:

SEC. 16. The Commission shall have the power, upon proper notice and hearing in accordance with the rules and provision of
this Act, subject to the limitations and exception mentioned and saving provisions to the contrary:

xxx xxx xxx

(c) To fix and determine individual or joint rates, tolls charges, classifications, or schedules thereof, as well as commutation,
mileage kilometrage, and other special rates which shall be imposed, observed, and followed thereafter by any public
service: Provided, That the Commission may in its discretion approve rates proposed by public services provisionally and without
necessity of any hearing; but it shall call a hearing thereof within thirty days thereafter, upon publication and notice to the
concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is use
principally or secondarily for the promotion of a private business the net profits of said private business shall be considered in
relation with the public service of such operator for the purpose of fixing the rates.

SEC. 20. Acts requiring the approval of the Commission. — Subject to established limitations and exception and saving
provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the
approval and authorization of the Commission previously had —

(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation mileage or
other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only those that are just and
reasonable and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services
and other parties concerned, giving them reasonable opportunity to be heard, ... . (Emphasis supplied.)

Since compliance with law must be presumed, it should be assumed that petitioner's current rates were fixed by respondent
after proper notice and hearing. Hence, modification of such rates cannot be made, over petitioner's objection, without such
notice and hearing, particularly considering that the factual basis of the action taken by respondent is assailed by petitioner. The
rule applicable is set forth in the American Jurisprudence the following language:

Whether notice and a hearing in proceedings before a public service commission are necessary depends chiefly upon statutory
or constitutional provisions applicable to such proceedings, which make notice and hearing, prerequisite to action by the
commission, and upon the nature and object of such proceedings, that is, whether the proceedings, are, on the one hand,
legislative and rule-making in character, or are, on the other hand, determinative and judicial or quasi-judicial, affecting the rights
an property of private or specific persons. As a general rule, a public utility must be afforded some opportunity to be heard as to
the propriety and reasonableness of rates fixed for its services by a public service commission.(43 Am. Jur. 716; Emphasis
supplied.)

Wherefore, we hold that the determination of the issue involved in the order complained of partakes of the nature of a quasi-
judicial function and that having been issued without previous notice and hearing said order is clearly violative of the due process
clause, and, hence, null and void, so that a motion for reconsideration thereof is not an absolute prerequisite to the institution of
the present action for certiorari (Ayson vs. Republic. 50 Off. Gaz., 5810). For this reason considering that said order was being
made effective on June 1, 1962, or almost immediately after its issuance (on May 17, 1962), we find that petitioner was justified
in commencing this proceedings without first filing said motion (Guerrero vs. Carbonell, L-7180, March 15, 1955).

WHEREFORE, the writ prayed for is granted and the preliminary injunction issued by this Court hereby made permanent. It is
so ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes, Dizon, Regala and Makalintal, JJ., concur.
Barrera, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 192935 December 7, 2010

LOUIS "BAROK" C. BIRAOGO, Petitioner,

vs.
THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent.

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

G.R. No. 193036

REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B.
FUA, SR., Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY
FLORENCIO B. ABAD, Respondents.

DECISION

MENDOZA, J.:

When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments;
it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to
it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to them.

--- Justice Jose P. Laurel1

The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are distributed among the several departments. 2 The Constitution
is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of
the land, must defer.3 Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply
made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and
the people who run it.4

For consideration before the Court are two consolidated cases 5 both of which essentially assail the validity and constitutionality
of Executive Order No. 1, dated July 30, 2010, entitled "Creating the Philippine Truth Commission of 2010."

The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his
capacity as a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress
under Section 1, Article VI of the Constitution6 as it usurps the constitutional authority of the legislature to create a public office
and to appropriate funds therefor.7

The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman,
Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the
House of Representatives.
The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator
Benigno Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, "Kung walang corrupt,
walang mahirap." The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the
good senator to the presidency.

To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases
of graft and corruption allegedly committed during the previous administration.

Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing
the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read:

EXECUTIVE ORDER NO. 1

CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010

WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a public office
is a public trust and mandates that public officers and employees, who are servants of the people, must at all times be
accountable to the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice,
and lead modest lives;

WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this mandate;

WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation; in a very
special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector of society;

WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the people’s trust and confidence
in the Government and its institutions;

WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption
in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to
deter others from committing the evil, restore the people’s faith and confidence in the Government and in their public servants;

WHEREAS, the President’s battlecry during his campaign for the Presidency in the last elections "kung walang corrupt, walang
mahirap" expresses a solemn pledge that if elected, he would end corruption and the evil it breeds;

WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported
cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and
secure justice for all;

WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised Administrative Code
of the Philippines, gives the President the continuing authority to reorganize the Office of the President.

NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the powers
vested in me by law, do hereby order:

SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter
referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of
graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people,
committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any,
during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure
that the full measure of justice shall be served without fear or favor.

The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial body.

SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an investigative body under Section
37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of
reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals,
accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding
and recommendations to the President, Congress and the Ombudsman.

In particular, it shall:

a) Identify and determine the reported cases of such graft and corruption which it will investigate;
b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen
to investigate, and to this end require any agency, official or employee of the Executive Branch, including government-owned or
controlled corporations, to produce documents, books, records and other papers;

c) Upon proper request or representation, obtain information and documents from the Senate and the House of Representatives
records of investigations conducted by committees thereof relating to matters or subjects being investigated by the Commission;

d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and the Office of
the Court Administrator, information or documents in respect to corruption cases filed with the Sandiganbayan or the regular
courts, as the case may be;

e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations as the case
may be;

f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of justice be fully
served, that such person who qualifies as a state witness under the Revised Rules of Court of the Philippines be admitted for
that purpose;

g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special
or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector co-
principals, accomplices or accessories, if any, when in the course of its investigation the Commission finds that there is
reasonable ground to believe that they are liable for graft and corruption under pertinent applicable laws;

h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the agencies
under it, and the Presidential Anti-Graft Commission, for such assistance and cooperation as it may require in the discharge of
its functions and duties;

i) Engage or contract the services of resource persons, professionals and other personnel determined by it as necessary to carry
out its mandate;

j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry out the
objectives of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and hearings, including
the presentation of evidence;

k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and purposes of this
Order.

SECTION 3. Staffing Requirements. – x x x.

SECTION 4. Detail of Employees. – x x x.

SECTION 5. Engagement of Experts. – x x x

SECTION 6. Conduct of Proceedings. – x x x.

SECTION 7. Right to Counsel of Witnesses/Resource Persons. – x x x.

SECTION 8. Protection of Witnesses/Resource Persons. – x x x.

SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. – Any government official or personnel who, without
lawful excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the Commission refuses to
take oath or affirmation, give testimony or produce documents for inspection, when required, shall be subject to administrative
disciplinary action. Any private person who does the same may be dealt with in accordance with law.

SECTION 10. Duty to Extend Assistance to the Commission. – x x x.

SECTION 11. Budget for the Commission. – The Office of the President shall provide the necessary funds for the Commission
to ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities as effectively, efficiently,
and expeditiously as possible.

SECTION 12. Office. – x x x.

SECTION 13. Furniture/Equipment. – x x x.

SECTION 14. Term of the Commission. – The Commission shall accomplish its mission on or before December 31, 2012.

SECTION 15. Publication of Final Report. – x x x.

SECTION 16. Transfer of Records and Facilities of the Commission. – x x x.

SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand
the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and
corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive
Order.

SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect the
validity and effectivity of the other provisions hereof.

SECTION 19. Effectivity. – This Executive Order shall take effect immediately.

DONE in the City of Manila, Philippines, this 30th day of July 2010.

(SGD.) BENIGNO S. AQUINO III

By the President:

(SGD.) PAQUITO N. OCHOA, JR.

Executive Secretary

Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed
under the Office of the President with the primary task to investigate reports of graft and corruption committed by third-level
public officers and employees, their co-principals, accomplices and accessories during the previous administration, and
thereafter to submit its finding and recommendations to the President, Congress and the Ombudsman. Though it has been
described as an "independent collegial body," it is essentially an entity within the Office of the President Proper and subject to
his control. Doubtless, it constitutes a public office, as an ad hoc body is one. 8

To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the
Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render
awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and
make recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their
arrest. Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of
an information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions.

The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-judicial
fact-finding bodies "to establish the facts and context of serious violations of human rights or of international humanitarian law
in a country’s past."9 They are usually established by states emerging from periods of internal unrest, civil strife or
authoritarianism to serve as mechanisms for transitional justice.

Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events;
(2) they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary
bodies that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are
officially sanctioned, authorized or empowered by the State. 10 "Commission’s members are usually empowered to conduct
research, support victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations,
the commissions may aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to
prepare the way for prosecutions and recommend institutional reforms." 11

Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples of
a retributory or vindicatory body set up to try and punish those responsible for crimes against humanity. A form of a reconciliatory
tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of
past violence and to prevent future conflict by providing a cathartic experience for victims.

The PTC is a far cry from South Africa’s model. The latter placed more emphasis on reconciliation than on judicial retribution,
while the marching order of the PTC is the identification and punishment of perpetrators. As one writer12puts it:
The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural speech: "To those who
talk about reconciliation, if they mean that they would like us to simply forget about the wrongs that they have committed in the
past, we have this to say: There can be no reconciliation without justice. When we allow crimes to go unpunished, we give
consent to their occurring over and over again."

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and to
enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are
essentially the same. The petitioners-legislators summarized them in the following manner:

(a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public office and appropriate
funds for its operation.

(b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize E.O. No. 1 because
the delegated authority of the President to structurally reorganize the Office of the President to achieve economy, simplicity and
efficiency does not include the power to create an entirely new public office which was hitherto inexistent like the "Truth
Commission."

(c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the "Truth Commission" with quasi-judicial
powers duplicating, if not superseding, those of the Office of the Ombudsman created under the 1987 Constitution and the
Department of Justice created under the Administrative Code of 1987.

(d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution officials and personnel
of the previous administration as if corruption is their peculiar species even as it excludes those of the other administrations,
past and present, who may be indictable.

(e) The creation of the "Philippine Truth Commission of 2010" violates the consistent and general international practice of four
decades wherein States constitute truth commissions to exclusively investigate human rights violations, which customary
practice forms part of the generally accepted principles of international law which the Philippines is mandated to adhere to
pursuant to the Declaration of Principles enshrined in the Constitution.

(f) The creation of the "Truth Commission" is an exercise in futility, an adventure in partisan hostility, a launching pad for
trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that widespread poverty will
altogether vanish if corruption is eliminated without even addressing the other major causes of poverty.

(g) The mere fact that previous commissions were not constitutionally challenged is of no moment because neither laches nor
estoppel can bar an eventual question on the constitutionality and validity of an executive issuance or even a statute." 13

In their Consolidated Comment,14 the respondents, through the Office of the Solicitor General (OSG), essentially questioned the
legal standing of petitioners and defended the assailed executive order with the following arguments:

1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the President’s executive power and
power of control necessarily include the inherent power to conduct investigations to ensure that laws are faithfully executed and
that, in any event, the Constitution, Revised Administrative Code of 1987 (E.O. No. 292), 15 Presidential Decree (P.D.) No.
141616 (as amended by P.D. No. 1772), R.A. No. 9970,17 and settled jurisprudence that authorize the President to create or form
such bodies.

2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation but a mere allocation
of funds already appropriated by Congress.

3] The Truth Commission does not duplicate or supersede the functions of the Office of the Ombudsman (Ombudsman) and the
Department of Justice (DOJ), because it is a fact-finding body and not a quasi-judicial body and its functions do not duplicate,
supplant or erode the latter’s jurisdiction.

4] The Truth Commission does not violate the equal protection clause because it was validly created for laudable purposes.

The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating similar
bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon
B. Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE) by President Carlos P. Garcia and
Presidential Agency on Reform and Government Operations (PARGO)by President Ferdinand E. Marcos.18

From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved:
1. Whether or not the petitioners have the legal standing to file their respective petitions and question Executive Order No. 1;

2. Whether or not Executive Order No. 1 violates the principle of separation of powers by usurping the powers of Congress to
create and to appropriate funds for public offices, agencies and commissions;

3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ;

4. Whether or not Executive Order No. 1 violates the equal protection clause; and

5. Whether or not petitioners are entitled to injunctive relief.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether
the requisites for a valid exercise of its power of judicial review are present.

Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must
be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the
standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest
in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of
constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the
case.19

Among all these limitations, only the legal standing of the petitioners has been put at issue.

Legal Standing of the Petitioners

The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their personal
stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of
sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commission’s
investigations, petitioners will not sustain injury in its creation or as a result of its proceedings. 20

The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to assail Executive Order No.
1. Evidently, their petition primarily invokes usurpation of the power of the Congress as a body to which they belong as members.
This certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the
usurpation of their power and rights as members of the legislature before the Court. As held in Philippine Constitution Association
v. Enriquez,21

To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.

An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which
can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts.

Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in
their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on
their prerogatives as legislators.22

With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the
budget for its operations.23 It emphasizes that the funds to be used for the creation and operation of the commission are to be
taken from those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission
will not entail congressional action but will simply be an exercise of the President’s power over contingent funds.

As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and
direct injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right
that may justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of
the Constitution. The case of David v. Arroyo24 explained the deep-seated rules on locus standi. Thus:

Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, standing is governed
by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It
provides that "every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the
"real-party-in interest" is "the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the
avails of the suit." Succinctly put, the plaintiff’s standing is based on his own right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an
allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently
from any other person. He could be suing as a "stranger," or in the category of a "citizen," or ‘taxpayer." In either case, he has
to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the
vindication of the public order and the securing of relief as a "citizen" or "taxpayer.

Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The distinction was first laid
down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a
citizen’s suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere
instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: "In matter of mere
public right, however…the people are the real parties…It is at least the right, if not the duty, of every citizen to interfere and see
that a public offence be properly pursued and punished, and that a public grievance be remedied." With respect to taxpayer’s
suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of
public funds to his injury cannot be denied."

However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed
with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid
down the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that
for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show
that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest
common to all members of the public.

This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity
of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct
injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila
Race Horse Trainers’ Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the
Philippines v. Felix. [Emphases included. Citations omitted]

Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of procedure, hence, can be relaxed for
nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the
matter is of transcendental importance, of overreaching significance to society, or of paramount public interest." 25

Thus, in Coconut Oil Refiners Association, Inc. v. Torres,26 the Court held that in cases of paramount importance where serious
constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even
where there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers Cases, 27 ordinary
citizens and taxpayers were allowed to question the constitutionality of several executive orders although they had only an
indirect and general interest shared in common with the public.

The OSG claims that the determinants of transcendental importance28 laid down in CREBA v. ERC and Meralco29are non-
existent in this case. The Court, however, finds reason in Biraogo’s assertion that the petition covers matters of transcendental
importance to justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the
attention of this Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental
and paramount importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of
all.30 Undoubtedly, the Filipino people are more than interested to know the status of the President’s first effort to bring about a
promised change to the country. The Court takes cognizance of the petition not due to overwhelming political undertones that
clothe the issue in the eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle
legal controversies with overreaching significance to society.

Power of the President to Create the Truth Commission

In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct
body of the Office of the President.31 Thus, in order that the President may create a public office he must be empowered by the
Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed 32 since
there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.33 He adds
that Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office,
cannot serve as basis for the creation of a truth commission considering the aforesaid provision merely uses verbs such as
"reorganize," "transfer," "consolidate," "merge," and "abolish." 34 Insofar as it vests in the President the plenary power to
reorganize the Office of the President to the extent of creating a public office, Section 31 is inconsistent with the principle of
separation of powers enshrined in the Constitution and must be deemed repealed upon the effectivity thereof. 35

Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of Congress
and not with the executive branch of government. They maintain that the delegated authority of the President to reorganize
under Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a
truth commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to
the restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and
4) only to achieve simplicity, economy and efficiency. 36Such continuing authority of the President to reorganize his office is
limited, and by issuing Executive Order No. 1, the President overstepped the limits of this delegated authority.

The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such as
a truth commission. Pointing to numerous offices created by past presidents, it argues that the authority of the President to
create public offices within the Office of the President Proper has long been recognized. 37 According to the OSG, the Executive,
just like the other two branches of government, possesses the inherent authority to create fact-finding committees to assist it in
the performance of its constitutionally mandated functions and in the exercise of its administrative functions. 38 This power, as
the OSG explains it, is but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control
under Section 17, both of Article VII of the Constitution.39

It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty to
ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to
assume directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials. 40 The
power of the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive
branch, but extends further in the exercise of his other powers, such as his power to discipline subordinates, 41 his power for rule
making, adjudication and licensing purposes 42 and in order to be informed on matters which he is entitled to know.43

The OSG also cites the recent case of Banda v. Ermita, 44 where it was held that the President has the power to reorganize the
offices and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid
delegation of the legislative power to reorganize executive offices under existing statutes.

Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President
may create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government. 45

The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize as
expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates "reorganization" as limited by the
following functional and structural lines: (1) restructuring the internal organization of the Office of the President Proper by
abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function
under the Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office
of the President to any other Department/Agency or vice versa. Clearly, the provision refers to reduction of personnel,
consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. These point to situations where
a body or an office is already existent but a modification or alteration thereof has to be effected. The creation of an office is
nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question is in the negative.

To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition,
even in the plainest meaning attributable to the term "restructure"– an "alteration of an existing structure." Evidently, the PTC
was not part of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng
Kawaning EIIB v. Hon. Executive Secretary,46

But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch
does not have to end here. We must not lose sight of the very source of the power – that which constitutes an express grant of
power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the
President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the
continuing authority to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer
the functions of other Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)],
we ruled that reorganization "involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of
economy or redundancy of functions." It takes place when there is an alteration of the existing structure of government offices
or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the
Department of Finance. It falls under the Office of the President. Hence, it is subject to the President’s continuing authority to
reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by the President’s power of control. Control is essentially the power to
alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former with that of the latter.47 Clearly, the power of control is entirely different from the power to create public
offices. The former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his
inherent duty to faithfully execute the laws.

The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office?

According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under P.D.
1416, as amended by P.D. No. 1772.48 The said law granted the President the continuing authority to reorganize the national
government, including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create
and classify functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in
relation to Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.49
The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree
is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to
reorganize the administrative structure of the national government including the power to create offices and transfer
appropriations pursuant to one of the purposes of the decree, embodied in its last "Whereas" clause:

WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the organization of the
national government.

Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended
by P.D. No. 1772, became functus oficio upon the convening of the First Congress, as expressly provided in Section 6, Article
XVIII of the 1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus:

ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says "it was
enacted to prepare the transition from presidential to parliamentary. Now, in a parliamentary form of government, the legislative
and executive powers are fused, correct?

SOLICITOR GENERAL CADIZ: Yes, Your Honor.

ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416 should
not be considered effective anymore upon the promulgation, adoption, ratification of the 1987 Constitution.

SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor.

ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed repealed,
at least, upon the adoption of the 1987 Constitution, correct.

SOLICITOR GENERAL CADIZ: Yes, Your Honor.50

While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772,
the creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty
to ensure that the laws are faithfully executed. Section 17 reads:

Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the
laws be faithfully executed. (Emphasis supplied).

As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant of
all powers inherent in them. The President’s power to conduct investigations to aid him in ensuring the faithful execution of laws
– in this case, fundamental laws on public accountability and transparency – is inherent in the President’s powers as the Chief
Executive. That the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly
mentioned in the Constitution or in statutes does not mean that he is bereft of such authority. 51 As explained in the landmark
case of Marcos v. Manglapus:52

x x x. The 1987 Constitution, however, brought back the presidential system of government and restored the separation of
legislative, executive and judicial powers by their actual distribution among three distinct branches of government with provision
for checks and balances.

It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for the President is head of
state as well as head of government and whatever powers inhere in such positions pertain to the office unless the Constitution
itself withholds it. Furthermore, the Constitution itself provides that the execution of the laws is only one of the powers of the
President. It also grants the President other powers that do not involve the execution of any provision of law, e.g., his power
over the country's foreign relations.

On these premises, we hold the view that although the 1987 Constitution imposes limitations on the exercise of specific powers
of the President, it maintains intact what is traditionally considered as within the scope of "executive power." Corollarily, the
powers of the President cannot be said to be limited only to the specific powers enumerated in the Constitution. In other words,
executive power is more than the sum of specific powers so enumerated.

It has been advanced that whatever power inherent in the government that is neither legislative nor judicial has to be executive.
x x x.

Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the
President are not limited to those specific powers under the Constitution. 53 One of the recognized powers of the President
granted pursuant to this constitutionally-mandated duty is the power to create ad hoc committees. This flows from the obvious
need to ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,54 the
authority of the President to issue Administrative Order No. 298, creating an investigative committee to look into the
administrative charges filed against the employees of the Department of Health for the anomalous purchase of medicines was
upheld. In said case, it was ruled:

The Chief Executive’s power to create the Ad hoc Investigating Committee cannot be doubted. Having been
constitutionally granted full control of the Executive Department, to which respondents belong, the President has the obligation
to ensure that all executive officials and employees faithfully comply with the law. With AO 298 as mandate, the legality of the
investigation is sustained. Such validity is not affected by the fact that the investigating team and the PCAGC had the same
composition, or that the former used the offices and facilities of the latter in conducting the inquiry. [Emphasis supplied]

It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which
the President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the
execution and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative
bodies created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission and the Zenarosa
Commission. There being no changes in the government structure, the Court is not inclined to declare such executive power as
non-existent just because the direction of the political winds have changed.

On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a public
office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already
appropriated. Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds.
Further, there is no need to specify the amount to be earmarked for the operation of the commission because, in the words of
the Solicitor General, "whatever funds the Congress has provided for the Office of the President will be the very source of the
funds for the commission."55 Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing
rules and regulations, there is no impropriety in the funding.

Power of the Truth Commission to Investigate

The President’s power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the
faithful-execution clause of the Constitution under Article VII, Section 17 thereof. 56 As the Chief Executive, the president
represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department.
He has the authority to directly assume the functions of the executive department.57

Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to
recommend the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot
adjudicate rights of persons who come before it. It has been said that "Quasi-judicial powers involve the power to hear and
determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down
by law itself in enforcing and administering the same law." 58 In simpler terms, judicial discretion is involved in the exercise of
these quasi-judicial power, such that it is exclusively vested in the judiciary and must be clearly authorized by the legislature in
the case of administrative agencies.

The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cariño v.
Commission on Human Rights.59 Thus:

"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The
dictionary definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or inquire into: x x to
subject to an official probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out,
to learn, obtain information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved
in the facts inquired into by application of the law to the facts established by the inquiry.

The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace
or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n
administrative function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry,
judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters."

"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle.
The dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues
raised: x x to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or rule upon as a judge or
with judicial or quasi-judicial powers: x x to award or grant judicially in a case of controversy x x."

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous
with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or
condemn. x x. Implies a judicial determination of a fact, and the entry of a judgment." [Italics included. Citations Omitted]
Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency
or office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To
be considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied
by the authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved
authoritatively, finally and definitively, subject to appeals or modes of review as may be provided by law. 60 Even respondents
themselves admit that the commission is bereft of any quasi-judicial power.61

Contrary to petitioners’ apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers.
If at all, the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor
General, the recommendation to prosecute is but a consequence of the overall task of the commission to conduct a fact-finding
investigation."62 The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against
them,63 is certainly not a function given to the commission. The phrase, "when in the course of its investigation," under Section
2(g), highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining
probable cause for the filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman. 64

At any rate, the Ombudsman’s power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly
authorized government agencies. Thus, in the case of Ombudsman v. Galicia,65 it was written:

This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not exclusive but
is shared with other similarly authorized government agencies such as the PCGG and judges of municipal trial courts and
municipal circuit trial courts. The power to conduct preliminary investigation on charges against public employees and officials
is likewise concurrently shared with the Department of Justice. Despite the passage of the Local Government Code in 1991, the
Ombudsman retains concurrent jurisdiction with the Office of the President and the local Sanggunians to investigate complaints
against local elective officials. [Emphasis supplied].

Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1)
of R.A. No. 6770, which states:

(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee,
office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over
cases cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any
investigatory agency of government, the investigation of such cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or the
determination of the existence of probable cause. This is categorically out of the PTC’s sphere of functions. Its power to
investigate is limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to
the execution and enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsman’s
primordial duties.

The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised
Administrative Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission
of crimes.

Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness.
Much like its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings
would, at best, be recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to
decide whether or not to reject the recommendation. These offices, therefore, are not deprived of their mandated duties but will
instead be aided by the reports of the PTC for possible indictments for violations of graft laws.

Violation of the Equal Protection Clause

Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty in
upholding the constitutionality of Executive Order No. 1 in view of its apparent transgression of the equal protection clause
enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads:

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied
the equal protection of the laws.

The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does not
apply equally to all members of the same class such that the intent of singling out the "previous administration" as its sole object
makes the PTC an "adventure in partisan hostility." 66 Thus, in order to be accorded with validity, the commission must also cover
reports of graft and corruption in virtually all administrations previous to that of former President Arroyo. 67

The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed
not only during the administration of former President Arroyo but also during prior administrations where the "same magnitude
of controversies and anomalies"68 were reported to have been committed against the Filipino people. They assail the
classification formulated by the respondents as it does not fall under the recognized exceptions because first, "there is no
substantial distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or
persons who abused their public office for personal gain; and second, the selective classification is not germane to the purpose
of Executive Order No. 1 to end corruption." 69 In order to attain constitutional permission, the petitioners advocate that the
commission should deal with "graft and grafters prior and subsequent to the Arroyo administration with the strong arm of the law
with equal force."70

Position of respondents

According to respondents, while Executive Order No. 1 identifies the "previous administration" as the initial subject of the
investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during
the said administration.71 Assuming arguendo that the commission would confine its proceedings to officials of the previous
administration, the petitioners argue that no offense is committed against the equal protection clause for "the segregation of the
transactions of public officers during the previous administration as possible subjects of investigation is a valid classification
based on substantial distinctions and is germane to the evils which the Executive Order seeks to correct." 72 To distinguish the
Arroyo administration from past administrations, it recited the following:

First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous administration which
have eroded public confidence in public institutions. There is, therefore, an urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate
cases against those involved, if warranted, and to deter others from committing the evil, restore the people’s faith and confidence
in the Government and in their public servants.

Second. The segregation of the preceding administration as the object of fact-finding is warranted by the reality that unlike with
administrations long gone, the current administration will most likely bear the immediate consequence of the policies of the
previous administration.

Third. The classification of the previous administration as a separate class for investigation lies in the reality that the evidence of
possible criminal activity, the evidence that could lead to recovery of public monies illegally dissipated, the policy lessons to be
learned to ensure that anti-corruption laws are faithfully executed, are more easily established in the regime that immediately
precede the current administration.

Fourth. Many administrations subject the transactions of their predecessors to investigations to provide closure to issues that
are pivotal to national life or even as a routine measure of due diligence and good housekeeping by a nascent administration
like the Presidential Commission on Good Government (PCGG), created by the late President Corazon C. Aquino under
Executive Order No. 1 to pursue the recovery of ill-gotten wealth of her predecessor former President Ferdinand Marcos and his
cronies, and the Saguisag Commission created by former President Joseph Estrada under Administrative Order No, 53, to form
an ad-hoc and independent citizens’ committee to investigate all the facts and circumstances surrounding "Philippine Centennial
projects" of his predecessor, former President Fidel V. Ramos. 73 [Emphases supplied]

Concept of the Equal Protection Clause

One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section
1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair
discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide
for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may
be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or
prejudice, the sharper weapon to cut it down is the equal protection clause.74

"According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities imposed." 75 It "requires public bodies and institutions to treat
similarly situated individuals in a similar manner." 76 "The purpose of the equal protection clause is to secure every person within
a state’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by
its improper execution through the state’s duly constituted authorities." 77 "In other words, the concept of equal justice under the
law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are
irrelevant to a legitimate governmental objective." 78
The equal protection clause is aimed at all official state actions, not just those of the legislature. 79 Its inhibitions cover all the
departments of the government including the political and executive departments, and extend to all actions of a state denying
equal protection of the laws, through whatever agency or whatever guise is taken. 80

It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply
requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits
classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1)
The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing
conditions only; and

(4) It applies equally to all members of the same class. 81 "Superficial differences do not make for a valid classification." 82

For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to
the class.83 "The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights
conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that
the members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as
long as this is achieved, all those covered by the classification are to be treated equally. The mere fact that an individual
belonging to a class differs from the other members, as long as that class is substantially distinguishable from all others, does
not justify the non-application of the law to him."84

The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number
included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and
conditions. It must not leave out or "underinclude" those that should otherwise fall into a certain classification. As elucidated in
Victoriano v. Elizalde Rope Workers' Union85 and reiterated in a long line of cases,86

The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the
state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman
and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity
of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same.
The equal protection clause does not forbid discrimination as to things that are different. It does not prohibit legislation which is
limited either in the object to which it is directed or by the territory within which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments
of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain
particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes
without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a
valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which
make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions
only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted]

Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection clause.
The clear mandate of the envisioned truth commission is to investigate and find out the truth "concerning the reported cases of
graft and corruption during the previous administration"87 only. The intent to single out the previous administration is plain, patent
and manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are:

WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported
cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and
secure justice for all;

SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter
referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of
graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people,
committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any,
during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure
that the full measure of justice shall be served without fear or favor.

SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an investigative body under Section
37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of
reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals,
accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding
and recommendations to the President, Congress and the Ombudsman. [Emphases supplied]
In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past
administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which
the equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as
a vehicle for vindictiveness and selective retribution.

Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these
distinctions are not substantial enough to merit the restriction of the investigation to the "previous administration" only. The
reports of widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration
from earlier administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in,
and do not inure solely to, the Arroyo administration. As Justice Isagani Cruz put it, "Superficial differences do not make for a
valid classification."88

The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the
previous administration only. The OSG ventures to opine that "to include other past administrations, at this point, may
unnecessarily overburden the commission and lead it to lose its effectiveness." 89The reason given is specious. It is without doubt
irrelevant to the legitimate and noble objective of the PTC to stamp out or "end corruption and the evil it breeds." 90

The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier administrations
were already inquired into is beside the point. Obviously, deceased presidents and cases which have already prescribed can no
longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of previous
administrations, given the body’s limited time and resources. "The law does not require the impossible" (Lex non cogit ad
impossibilia).91

Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a
century’s worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The
PTC, to be true to its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at
least, have the authority to investigate all past administrations. While reasonable prioritization is permitted, it should not be
arbitrary lest it be struck down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins, 92

Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by public authority with an
evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar
circumstances, material to their rights, the denial of equal justice is still within the prohibition of the constitution. [Emphasis
supplied]

It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the considered
view that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any way
be circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and
in accordance with which all private rights determined and all public authority administered. 93 Laws that do not conform to the
Constitution should be stricken down for being unconstitutional.94While the thrust of the PTC is specific, that is, for investigation
of acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution.
To exclude the earlier administrations in the guise of "substantial distinctions" would only confirm the petitioners’ lament that the
subject executive order is only an "adventure in partisan hostility." In the case of US v. Cyprian,95 it was written: "A rather limited
number of such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin,
gender, political activity or membership in a political party, union activity or membership in a labor union, or more generally the
exercise of first amendment rights."

To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons who
naturally belong to the class.96 "Such a classification must not be based on existing circumstances only, or so constituted as to
preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter
be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the
discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the
influence of the law and treated by it in the same way as are the members of the class."97

The Court is not unaware that "mere underinclusiveness is not fatal to the validity of a law under the equal protection
clause."98 "Legislation is not unconstitutional merely because it is not all-embracing and does not include all the evils within its
reach."99 It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate
simply because it happens to be incomplete.100 In several instances, the underinclusiveness was not considered a valid reason
to strike down a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to
the "step by step" process.101 "With regard to equal protection claims, a legislature does not run the risk of losing the entire
remedial scheme simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have
been attacked."102

In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate
and intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It
must be noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the
investigative commissions created in the past. "The equal protection clause is violated by purposeful and intentional
discrimination."103

To disprove petitioners’ contention that there is deliberate discrimination, the OSG clarifies that the commission does not only
confine itself to cases of large scale graft and corruption committed during the previous administration. 104The OSG points to
Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand
the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and
corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive
Order.

The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of the
PTC so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they
would be covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the
President. If he would decide not to include them, the section would then be meaningless. This will only fortify the fears of the
petitioners that the Executive Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities of the Arroyo
administration."105

The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,106 that the "PCGG Charter
(composed of Executive Orders Nos. 1, 2 and 14) does not violate the equal protection clause." The decision, however, was
devoid of any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the
sufficiency of a cause of action.

A final word

The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its constitutionally
mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department, is exercising
undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of violating
fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court, but
it seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be
accused of being a hindrance to the nation’s thrust to progress.

The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that
"includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave of abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the government."

Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty,
international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation
unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential
decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile
grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many
times the Court has been accused of asserting superiority over the other departments.

To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: "And when the judiciary
mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution
to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the
rights which that instrument secures and guarantees to them."107

Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply
making sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution.
And, if after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the
actions under review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional.

It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of the
nation and its people. But then again, it is important to remember this ethical principle: "The end does not justify the means." No
matter how noble and worthy of admiration the purpose of an act, but if the means to be employed in accomplishing it is simply
irreconcilable with constitutional parameters, then it cannot still be allowed. 108 The Court cannot just turn a blind eye and simply
let it pass. It will continue to uphold the Constitution and its enshrined principles.

"The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap
its strength nor greed for power debase its rectitude." 109
 Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present administration.
Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass the test of
reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which is the
most interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must, however,
be emphasized that the search for the truth must be within constitutional bounds for "ours is still a government of laws and not
of men."110

WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is
violative of the equal protection clause of the Constitution.

As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive Order
No. 1.

SO ORDERED.

Lacson-Magallanes Co. Inc. v Paño

GR No. L-27811 November 17, 1967

Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the
laws be faithfully executed.cralaw

SANCHEZ, J:

FACTS:
· 1932 - Jose Magallanes was a permittee and actual occupant of a 1,103-hectare pasture land situated inTamlangon,
Municipality of Bansalan, Province of Davao.
· January 9, 1953 -Magallanes ceded his rights and interests to a portion (392,7569 hectares) of the abovepublic land to plaintiff.
· April 13, 1954 - the portion Magallanes ceded to plaintiff was officially released from the forest zone as pastureland and declared
agricultural land.
· January 26, 1955 - Jose Paño and nineteen other claimantsapplied for the purchase of ninety (90) hectares of thereleased area.
· March 29, 1955 -Plaintiff Corporation in turn filed its own sales application covering the entire released area.This was protested
by Jose Paño and his nineteen companions upon the averment that they are actual occupantsof the part thereof covered by
their own sales application.
· July 31, 1956 - The Director of Lands, following an investigation of the conflict, rendered a decision on giving duecourse to the
application of plaintiff corporation, and dismissing the claim of Jose Paño and his companions. Amove to reconsider failed.
· July 5, 1957 - the Secretary of Agriculture and Natural Resources — on appeal by Jose Paño for himself andhis companions
— held that the appeal was without merit and dismissed the same.
· June 25, 1958 -Executive Secretary Juan Pajo, "[b]y authority of the President" decided the controversy, modified the decision
of the Director of Lands as affirmed by the Secretary of Agriculture and Natural Resources, and
(1) declared that "it would be for the public interest that appellants, who are mostly landless farmers who depend on the land for
their existence, be allocated that portion on which they have made improvements;" and
(2)directed that the controverted land (northern portion of Block I, LC Map 1749, Project No. 27, of Bansalan, Davao,with Latian
River as the dividing line) "should be subdivided into lots of convenient sizes and allocated to actualoccupants, without prejudice
to the corporation's right to reimbursement for the cost of surveying this portion.”

Plaintiff corporation took the foregoing decision to the Court of First Instance praying that judgment be rendered declaring:
(1) that the decision of the Secretary of Agriculture and Natural Resources has full force and effect; and
(2) that the decision of the Executive Secretary is contrary to law and of no legal force and effect.

ISSUE:
Whether or not the Executive Secretary, acting by authority of the President, reverse a decision of the
Director of Lands that had been affirmed by the Executive Secretary of Agriculture and Natural Resources —yielded an
affirmative answer from the lower court

HELD:
Judgment under review is hereby affirmed. Executive Secretary’s act cannot be assailed and therefore has full force and effect.

RATIO:
(1) The President's duty to execute the law is of constitutional origin.So, too, is his control of all executive departments.Thus it
is, that department heads are men of his confidence. His is the power to appoint them; his, too, is the privilege to dismiss them
at pleasure. Naturally, he controls and directs their acts. Implicit then is his authority to go over, confirm, modify or reverse the
action taken by his department secretaries.
In this context, it may not be said that the President cannot rule on the correctness of a decision of a department secretary.
(2) Parenthetically, it may be stated that the right to appeal to the President reposes upon the President's power of control over
the executive departments.
Control simply means "the power of an officer to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute thejudgment of the former for that of the
latter."
(3) The rule which has thus gained recognition is that "under our constitutional setup the Executive Secretary who acts for and
in behalf and by authority of the President has an undisputed jurisdiction to affirm, modify, or even reverse any order" that the
Secretary of Agriculture and Natural Resources, including the Director of Lands, may issue.

(4) The action taken is "disapproved or reprobated by the Chief Executive," that remains the act of the Chief Executive, and
cannot be successfully assailed.No such disapproval or reprobation is even intimated in the record of this case.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. L-32370 & 32767 April 20, 1983

SIERRA MADRE TRUST, petitioner,

vs.
HONORABLE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, DIRECTOR OF MINES, JUSAN TRUST
MINING COMPANY, and J & S PARTNERSHIP, respondents.

Lobruga Rondoz & Cardenas Law Offices for petitioner.

Fortunato de Leon for respondents

ABAD SANTOS, J.:

This is a petition to review a decision of the Secretary of Agriculture and Natural Resources dated July 8, 1970, in DANR Cases
Numbered 3502 and 3502-A. The decision affirmed a decision of the Director of Mines dated November 6, 1969.

The appeal was made pursuant to Sec. 61 of the Mining Law (C.A. No. 137, as amended) which provides: "... Findings of facts
in the decision or order of the Director of Mines when affirmed by the Secretary of Agriculture and Natural Resources shall be
final and conclusive, and the aggrieved party or parties desiring to appeal from such decision or order shall file in the Supreme
Court a petition for review wherein only questions of law may be raised."

The factual background is given in the brief of the petitioner-appellant which has not been contradicted by the respondents-
appellees and is as follows:

On July 26, 1962, the Sierra Madre Trust filed with the Bureau of Mines an Adverse Claim against LLA No. V-7872 (Amd) of the
Jusan Trust Mining Company over six (6) lode mineral claims, viz.: (1) Finland 2, (2) Finland 3, (3) Finland 5, (4) Finland 6, (5)
Finland 8 and (6) Finland 9, all registered on December 11, 1964 with the office of the Mining Recorder of Nueva Vizcaya, and
all situated in Sitio Maghanay, Barrio Abaca Municipality of Dupax, Province of Nueva Vizcaya.

The adverse claim alleged that the aforementioned six (6) lode minerals claims covered by LLA No. V-7872 (Amd) encroached
and overlapped the eleven (11) lode mineral claims of the herein petitioner Sierra Madre Trust, viz., (1) A-12, (2) H-12, (3) JC-
11, (4) W-11, (5) JN-11, (6)WM-11, (7) F-10, (8) A-9, (9) N-9, (10) W-8, and (11) JN-8, all situated in Sitio Taduan Barrio of
Abaca, Municipality of Dupax, Province of Nueva Vizcaya, and duly registered with the office of the Mining Recorder at
Bayombong, Nueva Vizcaya on May 14, 1965.

The adverse claim prayed for an order or decision declaring the above- mentioned six (6) lode mineral claims of respondent
Jusan Trust Mining Company, null, void, and illegal; and denying lode lease application LLA No. V-7872 over said claims.
Further, the adverse claimant prayed for such other reliefs and remedies available in the premises.

This adverse claim was docketed in the Bureau of Mines as Mines Administrative Case No. V-404, and on appeal to the
Department of Agriculture and Natural Resources as DANR Case No. 3502.

Likewise, on the same date July 26, 1966, the same Sierra Madre Trust filed with the Bureau of Mines an Adverse Claim against
LLA No. V-9028 of the J & S Partnership over six (6) lode mineral claims viz.: (1) A-19, (2) A-20, (3) A-24, (4) A-25, (5) A-29,
and (6) A-30, all registered on March 30, 1965 and amended August 5, 1965, with the office of the Mining Recorder of Nueva
Vizcaya, and situated in Sitio Gatid, Barrio of Abaca Municipality of Dupax, Province of Nueva Vizcaya.

The adverse claim alleged that the aforementioned six (6) lode mineral claim covered by LLA No. V-9028, encroached and
overlapped the thirteen (13) lode mineral claims of herein petitioner Sierra Madre Trust, viz.: (1) Wm-14, (2) F-14, (3) A-13, (4)
H-12 (5) Jc-12, (6) W-12, (7) Jn-11, (8) Wm-11, (9) F-11, (10) Wm-11, (11) F-11; (12) H-9 and (13) Jc-9, all situated in Sitio
Taduan, Barrio of Abaca Municipality of Dupax, Province of Nueva Vizcaya and duly registered with the office of the Mining
Recorder at Bayombong, Nueva Vizcaya, on May 14,1965.

The adverse claim prayed for an order or decision declaring the above- mentioned six (6) claims of respondent J & S Partnership,
null void, and illegal; and denying lode lease application LLA No. V-9028 over the said claims. Further, the adverse claimant
prayed for such other reliefs and remedies available in the premises.

This adverse claim was docketed in the Bureau of Mines as Mines Administrative Case No. V-404, and on appeal to the
Department of Agriculture and Natural Resources as DANR Case No. 3502A.

These two (2) adverse claims, MAC Nos. V-403 and V-404 were jointly heard in the Bureau of Mines, and also jointly considered
in the appeal in the Department of Agriculture and Natural Resources.

The dispositive portion of the decision rendered by the Director of Mines reads:

IN VIEW OF THE FOREGOING, this Office believes and so holds that the respondents have the preferential right over their
"Finland-2", "Finland- 3", "Finland-5", "Finland-6", "Finland-8", "Finland-9", "A-19", "A-20", "A-24", "A-25", "A-29" and "A-30"
mining claims. Accordingly, the protests (adverse claims) filed by protestant Sierra Madre Trust should be, as hereby they are,
DISMISSED.

And that of the Secretary of Agriculture and Natural Resources reads:

IN THE LIGHT OF ALL THE FOREGOING, the appeal interposed by the appellant, Sierra Madre Trust is hereby dismissed and
the decision of the Director of Mines dated November 6, 1969, affirmed. "
The adverse claims of Sierra Madre Trust against Jusan Trust Mining Company and J and S Partnership were based on the
allegation that the lode lease applications (LLA) of the latter "encroached and overlapped" the former's mineral claims, However,
acting on the adverse claims, the Director of Mines found that, "By sheer force of evidence, this Office is constrained to believe
that there exists no conflict or overlapping between the protestant's and respondents' mining claims. " And this finding was
affirmed by the Secretary of Agriculture and Natural Resources thus: "Anent the first allegation, this Office finds that the Director
of Mines did not err when he found that the twelve (12) claims of respondents Jusan Trust Mining Company and J & S Partnership
did not encroach and overlap the eighteen (18) lode mineral claims of the appellant Sierra Madre Trust. For this fact has been
incotrovertibly proven by the records appertaining to the case."

It should be noted that according to the Director of Mines in his decision, "during the intervening period from the 31st day after
the discovery [by the respondents] to the date of location nobody else located the area covered thereby. ... the protestant
[petitioner herein] did not establish any intervening right as it is our findings that their mining claims do not overlap respondents'
mining claims."

After the Secretary of Agriculture and Natural Resources had affirmed the factual findings of the Director of Mines to the effect
that there was no overlapping of claims and which findings were final and conclusive, Sierra Madre Trust should have kept its
peace for obviously it suffered no material injury and had no pecuniary interest to protect. But it was obstinate and raised this
legal question before Us: "May there be a valid location of mining claims after the lapse of thirty (30) days from date of discovery,
in contravention to the mandatory provision of Section 33 of the New Mining Law (Com. Act No. 137, as amended)?" It also
raised ancillary questions.

We see no reason why We have to answer the questions in this petition considering that there is no justiciable issue between
the parties. The officers of the Executive Department tasked with administering the Mining Law have found that there is neither
encroachment nor overlapping in respect of the claims involved. Accordingly, whatever may be the answers to the questions will
not materially serve the interests of the petitioner. In closing it is useful to remind litigation prone individuals that the interpretation
by officers of laws which are entrusted to their administration is entitled to great respect.' In his decision, the Secretary of
Agriculture and Natural Resources said: "This Office is in conformity with the findings of the Director of Mines that the mining
claims of the appellees were validly located, surveyed and registered."

Finally, the petitioner also asks: "May an association and/or partnership registered with the Mining Recorder of a province, but
not registered with the Securities and Exchange Commission, be vested with juridical personality to enable it to locate and then
lease mining claims from the government?" Suffice it to state that this question was not raised before the Director of Mines and
the Secretary of Agriculture and Natural Resources. There is also nothing in the record to indicate whether or not the appellees
are registered with the Securities and Exchange Commission. For these reasons, even assuming that there is a justiciable issue
between the parties, this question cannot be passed upon.

WHEREFORE, the petition for review is hereby dismissed for lack of merit. Costs against the petitioner.

SO ORDERED.

Makasiar (Chairman), Concepcion Jr., Guerrero, De Castro and Escolin JJ., concur.

Aquino, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-50444 August 31, 1987

ANTIPOLO REALTY CORPORATION, petitioner,

vs.
THE NATIONAL HOUSING AUTHORITY, HON. G.V. TOBIAS, in his capacity as General Manager of the National Housing Authority,
THE HON. JACOBO C. CLAVE, in his capacity as Presidential Executive Assistant and VIRGILIO A. YUSON, respondents

FELICIANO, J.:

By virtue of a Contract to Sell dated 18 August 1970, Jose Hernando acquired prospective and beneficial ownership over Lot.
No. 15, Block IV of the Ponderosa Heights Subdivision in Antipolo, Rizal, from the petitioner Antipolo Realty Corporation.

On 28 August 1974, Mr. Hernando transferred his rights over Lot No. 15 to private respondent Virgilio Yuson. The transfer was
embodied in a Deed of Assignment and Substitution of Obligor (Delegacion), executed with the consent of Antipolo Realty, in
which Mr. Yuson assumed the performance of the vendee's obligations under the original contract, including payment of his
predecessor's installments in arrears. However, for failure of Antipolo Realty to develop the subdivision project in accordance
with its undertaking under Clause 17 of the Contract to Sell, Mr. Yuson paid only the arrearages pertaining to the period up to,
and including, the month of August 1972 and stopped all monthly installment payments falling due thereafter Clause 17 reads:

Clause 17. — SUBDIVISION BEAUTIFICATION. To insure the beauty of the subdivision in line with the modern trend of urban
development, the SELLER hereby obligates itself to provide the subdivision with:

a) Concrete curbs and gutters

b) Underground drainage system

c) Asphalt paved roads

d) Independent water system

e) Electrical installation with concrete posts.

f) Landscaping and concrete sidewall

g) Developed park or amphi-theatre

h) 24-hour security guard service.

These improvements shall be complete within a period of two (2) years from date of this contract. Failure by the SELLER shall
permit the BUYER to suspend his monthly installments without any penalties or interest charges until such time that such
improvements shall have been completed. 1

On 14 October 1976, the president of Antipolo Realty sent a notice to private respondent Yuson advising that the required
improvements in the subdivision had already been completed, and requesting resumption of payment of the monthly installments
on Lot No. 15. For his part, Mr. Yuson replied that he would conform with the request as soon as he was able to verify the truth
of the representation in the notice.

In a second letter dated 27 November 1976, Antipolo Realty reiterated its request that Mr. Yuson resume payment of his monthly
installments, citing the decision rendered by the National Housing Authority (NHA) on 25 October 1976 in Case No. 252 (entitled
"Jose B. Viado Jr., complainant vs. Conrado S. Reyes, respondent") declaring Antipolo Realty to have "substantially complied
with its commitment to the lot buyers pursuant to the Contract to Sell executed by and between the lot buyers and the
respondent." In addition, a formal demand was made for full and immediate payment of the amount of P16,994.73, representing
installments which, Antipolo Realty alleged, had accrued during the period while the improvements were being completed —
i.e., between September 1972 and October 1976.

Mr. Yuson refused to pay the September 1972-October 1976 monthly installments but agreed to pay the post October 1976
installments. Antipolo Realty responded by rescinding the Contract to Sell, and claiming the forfeiture of all installment payments
previously made by Mr. Yuson.

Aggrieved by the rescission of the Contract to Sell, Mr. Yuson brought his dispute with Antipolo Realty before public respondent
NHA through a letter-complaint dated 10 May 1977 which complaint was docketed in NHA as Case No. 2123.

Antipolo Realty filed a Motion to Dismiss which was heard on 2 September 1977. Antipolo Realty, without presenting any
evidence, moved for the consolidation of Case No. 2123 with several other cases filed against it by other subdivision lot buyers,
then pending before the NHA. In an Order issued on 7 February 1978, the NHA denied the motion to dismiss and scheduled
Case No. 2123 for hearing.

After hearing, the NHA rendered a decision on 9 March 1978 ordering the reinstatement of the Contract to Sell under the following
conditions:

l) Antipolo Realty Corporation shall sent [sic] to Virgilio Yuzon a statement of account for the monthly amortizations from
November 1976 to the present;

m) No penalty interest shall be charged for the period from November 1976 to the date of the statement of account; and

n) Virgilio Yuzon shall be given sixty (60) days to pay the arrears shown in the statement of account. 2
Antipolo Realty filed a Motion for Reconsideration asserting: (a) that it had been denied due process of law since it had not been
served with notice of the scheduled hearing; and (b) that the jurisdiction to hear and decide Mr. Yuson's complaint was lodged
in the regular courts, not in the NHA, since that complaint involved the interpretation and application of the Contract to Sell.

The motion for reconsideration was denied on 28 June 1978 by respondent NHA General Manager G.V. Tobias, who sustained
the jurisdiction of the NHA to hear and decide the Yuson complaint. He also found that Antipolo Realty had in fact been served
with notice of the date of the hearing, but that its counsel had failed to attend the hearing. 3 The case was submitted for decision,
and eventually decided, solely on the evidence presented by the complainant.

On 2 October 1978, Antipolo Realty came to this Court with a Petition for certiorari and Prohibition with Writ of Preliminary
Injunction, which was docketed as G.R. No. L-49051. Once more, the jurisdiction of the NHA was assailed. Petitioner further
asserted that, under Clause 7 of the Contract to Sell, it could validly terminate its agreement with Mr. Yuson and, as a
consequence thereof, retain all the prior installment payments made by the latter. 4

This Court denied certiorari in a minute resolution issued on 11 December 1978, "without prejudice to petitioner's pursuing the
administrative remedy." 5 A motion for reconsideration was denied on 29 January 1979.

Thereafter, petitioner interposed an appeal from the NHA decision with the Office of the President which, on 9 March 1979,
dismissed the same through public respondent Presidential Executive Assistant Jacobo C. Clave. 6

In the present petition, Antipolo Realty again asserts that, in hearing the complaint of private respondent Yuson and in ordering
the reinstatement of the Contract to Sell between the parties, the NHA had not only acted on a matter beyond its competence,
but had also, in effect, assumed the performance of judicial or quasi-judicial functions which the NHA was not authorized to
perform.

We find the petitioner's arguments lacking in merit.

It is by now commonplace learning that many administrative agencies exercise and perform adjudicatory powers and functions,
though to a limited extent only. Limited delegation of judicial or quasi-judicial authority to administrative agencies (e.g., the
Securities and Exchange Commission and the National Labor Relations Commission) is well recognized in our
jurisdiction,7 basically because the need for special competence and experience has been recognized as essential in the
resolution of questions of complex or specialized character and because of a companion recognition that the dockets of our
regular courts have remained crowded and clogged. In Spouses Jose Abejo and Aurora Abejo, et al. vs. Hon. Rafael dela Cruz,
etc., et al., 8 the Court, through Mr. Chief Justice Teehankee, said:

In the fifties, the Court taking cognizance of the move to vest jurisdiction in administrative commissions and boards the power
to resolve specialized disputes in the field of labor (as in corporations, public transportation and public utilities) ruled that
Congress in requiring the Industrial Court's intervention in the resolution of labor management controversies likely to cause
strikes or lockouts meant such jurisdiction to be exclusive, although it did not so expressly state in the law. The Court held that
under the "sense-making and expeditious doctrine of primary jurisdiction . . . the courts cannot or will not determine a controversy
involving a question which is within the jurisdiction of an administrative tribunal 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, and a uniformity of ruling is essential to comply with the purposes of the
regulatory statute administered" (Pambujan Sur United Mine Workers v. Samar Mining Co., Inc., 94 Phil, 932, 941 [1954]).

In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge,
experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters, subject
to judicial review in case of grave abuse of discretion has become well nigh indispensable. Thus, in 1984, the Court noted that
'between the power lodged in an administrative body and a court, the unmistakeable trend has been to refer it to the former,
"Increasingly, this Court has been committed to the view that unless the law speaks clearly and unequivocably, the choice should
fall on fan administrative agency]" ' (NFL v. Eisma, 127 SCRA 419, 428, citing precedents). The Court in the earlier case of Ebon
vs. De Guzman (113 SCRA 52, 56 [1982]), noted that the lawmaking authority, in restoring to the labor arbiters and the NLRC
their jurisdiction to award all kinds of damages in labor cases, as against the previous P.D. amendment splitting their jurisdiction
with the regular courts, "evidently, . . . had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction
to award damages in labor cases because that setup would mean duplicity of suits, splitting the cause of action and possible
conflicting findings and conclusions by two tribunals on one and the same claim."

In an even more recent case, Tropical Homes, Inc. vs. National Housing Authority, et al., 9 Mr. Justice Gutierrez, speaking for
the Court, observed that:

There is no question that a statute may vest exclusive original jurisdiction in an administrative agency over certain disputes and
controversies falling within the agency's special expertise. The very definition of an administrative agency includes its being
vested with quasi-judicial powers. The ever increasing variety of powers and functions given to administrative agencies
recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed
in countless controversies which cannot possibly be handled by regular courts.
In general the quantum of judicial or quasi-judicial powers which an administrative agency may exercise is defined in the enabling
act of such agency. In other words, the extent to which an administrative entity may exercise such powers depends largely, if
not wholly, on the provisions of the statute creating or empowering such agency. 10 In the exercise of such powers, the agency
concerned must commonly interpret and apply contracts and determine the rights of private parties under such contracts. 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.

Thus, the extent to which the NHA has been vested with quasi-judicial authority must be determined by referring to the terms of
Presidential Decree No. 957, known as "The Subdivision and Condominium Buyers' Decree." 11 Section 3 of this statute
provides as follows:

National Housing Authority. — The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade
and business in accordance with the provisions of this decree (emphasis supplied)

The need for and therefore the scope of the regulatory authority thus lodged in the NHA are indicated in the second and third
preambular paragraphs of the statute which provide:

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers
have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems lighting systems and other similar basic requirements, thus endangering the health and safety of home and lot
buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent
purchasers for value — . (emphasis supplied)

Presidential Decree No. 1344 12 clarified and spelled out the quasi-judicial dimensions of the grant of regulatory authority to the
NHA in the following quite specific terms:

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of
the following nature:

A. Unsound real estate business practices:

B. Claims involving refund and any other claims filed by sub- division lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker or salesman.(emphasis supplied.)

The substantive provisions being applied and enforced by the NHA in the instant case are found in Section 23 of Presidential
Decree No. 957 which reads:

Sec. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a subdivision or condominium project for
the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the
owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or
condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at
his option, be reimbursed the total amount paid including amortization and interests but excluding delinquency interests, with
interest thereon at the legal rate. (emphasis supplied.)

Having failed to comply with its contractual obligation to complete certain specified improvements in the subdivision within the
specified period of two years from the date of the execution of the Contract to Sell, petitioner was not entitled to exercise its
options under Clause 7 of the Contract. Hence, petitioner could neither rescind the Contract to Sell nor treat the installment
payments made by the private respondent as forfeited in its favor. Indeed, under the general Civil Law, 13 in view of petitioner's
breach of its contract with private respondent, it is the latter who is vested with the option either to rescind the contract and
receive reimbursement of an installment payments (with legal interest) made for the purchase of the subdivision lot in question,
or to suspend payment of further purchase installments until such time as the petitioner had fulfilled its obligations to the buyer.
The NHA was therefore correct in holding that private respondent's prior installment payments could not be forfeited in favor of
petitioner.

Neither did the NHA commit any abuse, let alone a grave abuse of discretion or act in excess of its jurisdiction when it ordered
the reinstatement of the Contract to Sell between the parties. Such reinstatement is no more than a logical consequence of the
NHA's correct ruling, just noted, that the petitioner was not entitled to rescind the Contract to Sell. There is, in any case, no
question that under Presidential Decree No. 957, the NHA was legally empowered to determine and protect the rights of
contracting parties under the law administered by it and under the respective agreements, as well as to ensure that their
obligations thereunder are faithfully performed.

We turn to petitioner's assertion that it had been denied the right to due process. This assertion lacks substance. The record
shows that a copy of the order denying the Motion to Dismiss and scheduling the hearing of the complaint for the morning of 6
March 1978, was duly served on counsel for petitioner, as evidenced by the annotation appearing at the bottom of said copy
indicating that such service had been effected. 14 But even if it be assumed, arguendo, that such notice had not been served
on the petitioner, nevertheless the latter was not deprived of due process, for what the fundamental law abhors is not the absence
of previous notice but rather the absolute lack of opportunity to be heard. 15 In the instant case, petitioner was given ample
opportunity to present its side and to be heard on a motion for reconsideration as well, and not just on a motion to dismiss; the
claim of denial of due process must hence sound even more hollow. 16

We turn finally to the question of the amount of P16,994.73 which petitioner insists had accrued during the period from September
1972 to October 1976, when private respondent had suspended payment of his monthly installments on his chosen subdivision
lot. The NHA in its 9 March 1978 resolution ruled that the regular monthly installments under the Contract to Sell did not accrue
during the September 1972 — October 1976 period:

[R]espondent allowed the complainant to suspend payment of his monthly installments until the improvements in the subdivision
shall have been completed. Respondent informed complainant on November 1976 that the improvements have been
completed. Monthly installments during the period of suspension of payment did not become due and demandable Neither did
they accrue Such must be the case, otherwise, there is no sense in suspending payments. If the suspension is lifted the debtor
shall resume payments but never did he incur any arrears.

Such being the case, the demand of respondent for complainant to pay the arrears due during the period of suspension of
payment is null and void. Consequently, the notice of cancellation based on the refusal to pay the s that were not due and
demandable is also null and void. 17

The NHA resolution is probably too terse and in need of certification and amplification. The NHA correctly held that no installment
payments should be considered as having accrued during the period of suspension of payments. Clearly, the critical issue is
what happens to the installment payments which would have accrued and fallen due during the period of suspension had no
default on the part of the petitioner intervened. To our mind, the NHA resolution is most appropriately read as directing that
the original period of payment in the Contract to Sell must be deemed extended by a period of time equal to the period of
suspension (i.e., by four (4) years and two (2) months) during which extended time (tacked on to the original contract period)
private respondent buyer must continue to pay the monthly installment payments until the entire original contract price shall have
been paid. We think that such is the intent of the NHA resolution which directed that "[i]f the suspension is lifted, the debtor shall
resume payments" and that such is the most equitable and just reading that may be given to the NHA resolution. To permit
Antipolo Realty to collect the disputed amount in a lump sum after it had defaulted on its obligations to its lot buyers, would tend
to defeat the purpose of the authorization (under Sec. 23 of Presidential Decree No. 957, supra) to lot buyers to suspend
installment payments. As the NHA resolution pointed out, [s]uch must be the case, otherwise, there is no sense in suspending
payments." Upon the other hand, to condone the entire amount that would have become due would be an expressively harsh
penalty upon the petitioner and would result in the unjust enrichment of the private respondent at the expense of the petitioner.
It should be recalled that the latter had already fulfilled, albeit tardily, its obligations to its lot buyers under their Contracts to Sell.
At the same time, the lot buyer should not be regarded as delinquent and as such charged penalty interest. The suspension of
installment payments was attributable to the petitioner, not the private respondent. The tacking on of the period of suspension
to the end of the original period precisely prevents default on the part of the lot buyer. In the words of the NHA resolution, "never
would [the buyer] incur any arrears."

WHEREFORE, the Petition for certiorari is DISMISSED. The NHA decision appealed from is hereby AFFIRMED and clarified
as providing for the lengthening of the original contract period for payment of installments under the Contract to Sell by four (4)
years and two (2) months, during which extended time private respondent shall continue to pay the regular monthly installment
payments until the entire original contract price shall have been paid. No pronouncement as to costs.

SO ORDERED.
 G.R. No. 161811 April 12, 2006

THE CITY OF BAGUIO, MAURICIO DOMOGAN, and ORLANDO GENOVE, Petitioners,

vs.
FRANCISCO NIÑO, JOSEFINA NIÑO, EMMANUEL NIÑO, and EURLIE OCAMPO, Respondents.

DECISION

CARPIO MORALES, J.:

The Bureau of Lands awarded on May 13, 1966 to Narcisa A. Placino (Narcisa) a parcel of land identified as Lot No. 10 (the lot)
located at Saint Anthony Road, Dominican-Mirador Barangay, Baguio City.

Francisco Niño (Niño), one of the herein respondents, who has been occupying the lot, contested the award by filing a Petition
Protest on December 23, 1975 before the Bureau of Lands.

The Director of Lands dismissed the Petition Protest by Order of November 11, 1976.

Niño appealed the dismissal all the way to the Supreme Court but he did not succeed.
The decision of the Director of Lands dated November 11, 1976 having become final and executory, 1 the then-Executive Director
of the Department of Environment and Natural Resources-Cordillera Autonomous Region (DENR-CAR), on petition of Narcisa,
issued an Order of Execution dated February 1, 1993 directing the Community Environment and Natural Resources Office
(CENRO) Officer to enforce the decision "by ordering Petitioner Niño and those acting in his behalf to refrain from continuously
occupying the area and remove whatever improvements they may have introduced thereto." 2

Attempts to enforce the Order of Execution failed, prompting Narcisa to file a complaint for ejectment before the Baguio City
Municipal Trial Court in Cities (MTCC). The MTCC dismissed Narcisa’s complaint, however, by Order 3of August 7, 1996.

Narcisa’s counsel, Atty. Edilberto Claravall (Atty. Claravall), later petitioned the DENR-CAR for the issuance of a Special Order
authorizing the City Sheriff of Baguio, the City Police Station, and the Demolition Team of the City Government to demolish or
remove the improvements on the lot introduced by Niño. The DENR-CAR denied the petition, citing lack of jurisdiction over the
City Sheriff of Baguio, the City Police Station, and the Demolition Team of the City Government. The DENR-CAR also invoked
Section 14 (now Section 10 (d)) of Rule 39 of the Rules of Court.4

Atty. Claravall thereupon moved to have the Order of Execution previously issued by the DENR-CAR amended, which was
granted. As amended, the Order of Execution addressed to the CENRO Officer read:

WHEREFORE, pursuant to the provisions of Section 1844 of the Revised Administrative Code as amended by Act No. 3077,
you are hereby enjoined to enforce the aforementioned order, with the assistance upon request of the City Sheriff of Baguio
City, the Demolition Team of Baguio City and the Baguio City Police Station, by Ordering Petitioner Niño and those acting in his
behalf to refrain from continuously occupying the area and remove whatever improvements they may have introduced
thereto.

xxxx

SO ORDERED.5 (Emphasis and underscoring supplied)

The DENR-CENRO, together with the Demolition Team of Baguio City and the Baguio City police, desisted, however, in their
earlier attempt to enforce the Amended Order of Execution. 6

On July 16, 1997, the Demolition Team of Baguio City headed by Engineer Orlando Genove and the Baguio City Police, on
orders of then Baguio City Police Officer-In-Charge (OIC) Donato Bacquian, started demolishing the houses of Niño and his
herein co-respondents.7

The demolition was, however, temporarily stopped upon the instructions of DENR-CENR Officer Guillermo Fianza, who later
advised Niño that the DENR-CENRO would implement the Amended Order of Execution on August 4, 1997.8

Niño and his wife Josefina Niño thereupon filed a Petition 9 for Certiorari and Prohibition with Prayer for Temporary Restraining
Order before the Regional Trial Court (RTC) of Baguio City against Guillermo Fianza, Teofilo Olimpo of the DENR-CENRO,
Mayor Mauricio Domogan (hereafter petitioner), Atty. Claravall, Engr. Orlando Genove (hereafter petitioner), Rolando Angara,
and Police Officer Donato Bacquian challenging the Amended Order of Execution issued by the DENR-CENRO.1avvphil.net

The Niño spouses later filed an Amended Petition10 by impleading Emmanuel Niño and Eurlie Ocampo as therein co-petitioners
and the City of Baguio (hereafter petitioner) and Narcisa as therein additional respondents, and further praying for damages.

Branch 6 of the Baguio RTC dismissed the petition of Niño et al. (hereafter respondents) for lack of merit. 11Respondents’ Motion
for Reconsideration12 having been denied, they filed a Petition for Review13 under Rule 42 of the Rules before the Court of
Appeals.

By Decision14 of December 11, 2002, the Court of Appeals granted the Petition for Review, holding that Sec. 10(d) of Rule 39
of the Rules reading:

SEC. 10. Execution of judgments for specific act.

xxxx

(d) Removal of improvements on property subject of execution. — When the property subject of the execution contains
improvements constructed or planted by the judgment obligor or his agent, the officer shall not destroy, demolish or remove said
improvements except upon special order of the court, issued upon motion of the judgment obligee after due hearing and after
the former has failed to remove the same within a reasonable time fixed by the court. (Underscoring supplied)

applies.
Thus disposed the appellate court:

WHEREFORE, the instant appeal is hereby GRANTED and the Orders dated September 24, 1997 and November 23, 1998 are
hereby SET ASIDE. Public respondent City Mayor Mauricio Domogan thru the Demolition Team and City Engineer’s Office are
hereby ordered to cease and desist from enforcing the amended order of execution issued by Oscar N. Hamada, Regional
Executive Director of the Department of Environmental and Natural Resources, concerning the demolition or removal of the
structures made by petitioners until private respondent applied for a special order abovementioned with the proper
court.1avvphil.net

SO ORDERED.15 (Underscoring supplied)

Respondents filed before the appellate court an Ex-Parte Motion for Reconsideration16 on January 9, 2003, alleging that some
of the reliefs they prayed for in their petition were left unacted upon. 17 Petitioners too filed a Motion for Reconsideration 18 on
January 28, 2003, raising the following grounds:

1. THE HONORABLE COURT FAILED TO CONSIDER THAT THE CITY MAYOR HAS THE POWER TO ORDER THE
DEMOLITION OF ILLEGALLY-BUILT STRUCTURES;

2. THE HONORABLE COURT GRAVELY ERRED IN GIVING DUE COURSE TO THE PETITION FOR REVIEW;

3. THE HONORABLE COURT MISAPPLIED SEC. 10 (d), RULE 39 of the RULES OF COURT.19(Underscoring supplied)

In support of the first ground, petitioners raised before the appellate court, in their Motion for Reconsideration, for the first time,
the power of the City Mayor to validly order the demolition of a structure constructed without a building permit pursuant to Sec.
455(b) 3(vi) of the Local Government Code of 1991 in relation to the National Building Code of the Philippines.

Alleging that respondents built their house without the required entry and building permits, petitioners argued that the City Mayor
may order the demolition of a house without a special court order. 20

The Court of Appeals denied both parties’ motions for reconsideration by Resolution 21 of December 17, 2003.

Hence, the present petition of the City of Baguio, Mayor Domogan (now a Congressman), and Orlando Genove, faulting the
appellate court:

1. . . . IN RULING THAT A SPECIAL COURT ORDER IS NEEDED FOR THE DEMOLITION OF RESPONDENTS’
STRUCTURES;

2. . . . IN APPLYING SEC. 10(d) RULE 39 OF THE RULES OF COURT IN THIS CASE;

3. . . . IN ENTERTAINING RESPONDENTS’ PETITION FOR REVIEW.22

The petition fails.

While it is noted that respondent’s appeal to the Court of Appeals was erroneously brought under Rule 42 of the Rules of Court,
instead of under Rule 41, the RTC having rendered the questioned decision in the exercise of its original, not appellate,
jurisdiction, this Court overlooks the error in view of the merits of respondents’ case. 23

Petitioners’ contention that the enforcement of the Amended Order of Execution does not need a hearing and court order which
Sec. 10(d) of Rule 39 of the Rules of Court requires does not lie. That an administrative agency which is clothed with quasi-
judicial functions issued the Amended Order of Execution is of no moment, since the requirement in Sec. 10 (d) of Rule 39 of
the Rules of Court echoes the constitutional provision that "no person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the laws."24

Antipolo Realty Corporation v. National Housing Authority teaches:

In general, the quantum of judicial or quasi-judicial powers which an administrative agency may exercise is defined in the
enabling act of such agency. In other words, the extent to which an administrative entity may exercise such powers depends
largely, if not wholly, on the provisions of the statute creating or empowering such agency.25(Underscoring supplied)

There is, however, no explicit provision granting the Bureau of Lands (now the Land Management Bureau) or the DENR (which
exercises control over the Land Management Bureau) the authority to issue an order of demolition 26— which the Amended Order
of Execution, in substance, is.
Indeed,

[w]hile the jurisdiction of the Bureau of Lands is confined to the determination of the respective rights of rival claimants to public
lands or to cases which involve the disposition of public lands, the power to determine who has the actual, physical
possession or occupation or the better right of possession over public lands remains with the courts.

The rationale is evident. The Bureau of Lands does not have the wherewithal to police public lands. Neither does it have the
means to prevent disorders or breaches of peace among the occupants. Its power is clearly limited to disposition and alienation
and while it may decide disputes over possession, this is but in aid of making the proper awards. The ultimate power to resolve
conflicts of possession is recognized to be within the legal competence of the civil courts and its purpose is to extend
protection to the actual possessors and occupants with a view to quell social unrest.27 (Emphasis added)

Consequently, this Court held:28

x x x the power to order the sheriff to remove improvements and turn over the possession of the land to the party
adjudged entitled thereto, belongs only to the courts of justice and not to the Bureau of Lands.29(Emphasis and
underscoring supplied)

In fine, it is the court sheriff which is empowered to remove improvements introduced by respondents on, and turn over
possession of, the lot to Narcisa.

Petitioners’ invocation of the City Mayor’s authority under Sec. 455(b) 3(vi) of the Local Government Code to order the demolition
or removal of an illegally constructed house, building, or structure within the period prescribed by law or ordinance and their
allegation that respondents’ structures were constructed without building permits 30 were not raised before the trial court.
Petitioners having, for the first time, invoked said section of the Local Government Code and respondents’ lack of building entry
permits in their Motion for Reconsideration of the Court of Appeals’ decision, it was correctly denied of merit, 31 it being settled
that matters, theories or arguments not brought out in the proceedings below will ordinarily not be considered by a reviewing
court as they cannot be raised for the first time on appeal. 32

WHEREFORE, the petition is DISMISSED. The questioned Decision and Resolution of the Court of Appeals are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

EN BANC

G.R. No. 162070 October 19, 2005

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B. PONCE (OIC), Petitioner
vs.
DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, Respondents.

DECISION

PUNO, J.:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision and Resolution of the Court of
Appeals, dated September 19, 2003 and February 4, 2004, respectively, which declared DAR Administrative Order (A.O.) No.
9, series of 1993, null and void for being violative of the Constitution.
The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and
calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents
made a voluntary offer to sell (VOS)1 their landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law
(CARL) of 1988, took effect. It included in its coverage farms used for raising livestock, poultry and swine.

On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR,2 this Court ruled that lands
devoted to livestock and poultry-raising are not included in the definition of agricultural land. Hence, we declared as
unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their
landholding was devoted exclusively to cattle-raising and thus exempted from the coverage of the CARL. 3

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents’ land and found that
it was devoted solely to cattle-raising and breeding. He recommended to the DAR Secretary that it be exempted from the
coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the
supporting papers they submitted in connection therewith. 4 Petitioner ignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5 which provided that only portions of private agricultural lands
used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In
determining the area of land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare
of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for
every 21 heads of cattle shall likewise be excluded from the operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal
of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL. 6

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order 7 partially granting the application of
respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner
exempted 1,209 hectares of respondents’ land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure.
Petitioner ordered the rest of respondents’ landholding to be segregated and placed under Compulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding should be exempted as it is devoted
exclusively to cattle-raising. Their motion was denied.8 They filed a notice of appeal9 with the Office of the President assailing:
(1) the reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in
determining the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view
of the Luz Farms case which declared cattle-raising lands excluded from the coverage of agrarian reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. 10 It ruled that DAR A.O. No. 9,
s. 1993, does not run counter to the Luz Farms case as the A.O. provided the guidelines to determine whether a certain parcel
of land is being used for cattle-raising. However, the issue on the constitutionality of the assailed A.O. was left for the
determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary
to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government.
The dispositive portion reads:

WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 is hereby DECLARED null and void.
The assailed order of the Office of the President dated 09 October 2001 in so far as it affirmed the Department of Agrarian
Reform’s ruling that petitioners’ landholding is covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.

SO ORDERED.11

Hence, this petition.

The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention
limit for owners of lands devoted to livestock raising.
Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issued DAR A.O. No. 9 to limit the area
of livestock farm that may be retained by a landowner pursuant to its mandate to place all public and private agricultural lands
under the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulous
landowners have converted their agricultural farms to livestock farms in order to evade their coverage in the agrarian reform
program.

Petitioner’s arguments fail to impress.

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have
been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated
rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public
functions. However, while administrative rules and regulations have the force and effect of law, they are not immune from judicial
review.12 They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave
abuse of administrative discretion is committed by the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by
authority of a law and must not contravene the provisions of the Constitution.13 The rule-making power of an administrative
agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge
the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control
with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their
regulations.14

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate
livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their
ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter
alia, all lands exclusively devoted to livestock, swine and poultry- raising. The Court clarified in the Luz Farms case that
livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural
activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural,
activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing
structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants
augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological
appurtenances.15

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from
the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.

The subsequent case of Natalia Realty, Inc. v. DAR16 reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court
held that industrial, commercial and residential lands are not covered by the CARL.17 We stressed anew that while Section 4
of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural lands, the term "agricultural land"
does not include lands classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even
portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural lands
subject to agrarian reform as these lots were already classified as residential lands.

A similar logical deduction should be followed in the case at bar. Lands devoted to raising of livestock, poultry and swine have
been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing
the impugned A.O., it was seeking to address the reports it has received that some unscrupulous landowners have been
converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit
nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O.
clearly does not apply in this case. Respondents’ family acquired their landholdings as early as 1948. They have long been
in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the
Philippines.18 Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that respondents have just
recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect
that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of
agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business
interest in the case of respondents.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial
change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress
seeks to supersede an earlier one.19 In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No.
788120 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms
"agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial
livestock, poultry and swine-raising.21 With this significant modification, Congress clearly sought to align the
provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from
the coverage of agrarian reform.
In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot
amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict
between an administrative order and the provisions of the Constitution, the latter prevails.22 The assailed A.O. of petitioner DAR
was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the
1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals, dated
September 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 148579 February 5, 2007

GMA NETWORK, INC., Petitioner,
vs.
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD, Respondent.

DECISION

CORONA, J.:

Subject of this petition for review under Rule 45 of the Rules of Court is the June 18, 2001 decision 1 of the Court of Appeals
(CA) affirming the January 7, 2000 order2 of respondent Movie and Television Review and Classification Board (MTRCB) which
read:

In view thereof, the BOARD, by the undersigned, hereby imposes the administrative penalty of SUSPENSION FROM
AIRING/BROADCASTING any program on EMC Channel 27 for a period of seven (7) days which period shall commence
immediately upon receipt of this Order. Your failure to comply with this ORDER shall be construed by the BOARD as defiance
on your part of a lawful order of the BOARD.

The facts follow.

Petitioner GMA Network, Inc. operates and manages the UHF television station, EMC Channel 27. On January 7, 2000,
respondent MTRCB issued an order of suspension against petitioner for airing "Muro Ami: The Making" without first securing a
permit from it as provided in Section 7 of PD 1986.3

The penalty of suspension was based on Memorandum Circular 98-17 dated December 15, 19984 which provided for the
penalties for exhibiting a program without a valid permit from the MTRCB.

Petitioner moved for reconsideration of the suspension order and, at the same time, informed MTRCB that Channel 27 had
complied with the suspension order by going off the air since midnight of January 11, 2000. It also filed a letter-protest which
was merely "noted" by the MTRCB thereby, in effect, denying both the motion for reconsideration and letter-protest.

Petitioner then filed with the CA a petition for certiorari which was dismissed in the now assailed June 18, 2001 decision. The
January 7, 2000 suspension order issued by MTRCB was affirmed in toto.

Hence, this recourse.

The pivotal issues for our resolution are:

(1) whether the MTRCB has the power or authority to review the show "Muro Ami: The Making" prior to its broadcast by television
and

(2) whether Memorandum Circular No. 98-17 was enforceable and binding on petitioner.

First, Section 3 of PD 19865 empowers the MTRCB to screen, review and examine all motion pictures, television programs
including publicity materials. This power of prior review is highlighted in its Rules and Regulations, particularly Section 7 thereof,
which reads:

SECTION 7. REQUIREMENT OF PRIOR REVIEW. -- No motion picture, television program or related publicity material shall
be imported, exported, produced, copied, distributed, sold, leased, exhibited or broadcasted by television without prior permit
issued by the BOARD after review of the motion picture, television program or publicity material.

The only exemptions from the MTRCB’s power of review are those expressly mentioned in Section 7, 6 such as (1) television
programs imprinted or exhibited by the Philippine Government and/or departments and agencies, and (2) newsreels.

According to the CA, the subject program was a publicity for the movie, "Muro Ami." In adopting this finding, we hold that "Muro
Ami: The Making," did not fall under any of the exemptions and was therefore within the power of review of MTRCB.

On the other hand, petitioner claims that "Muro Ami: The Making" was a public affairs program.7 Even if that were so, our
resolution of this issue would not change. This Court has already ruled that a public affairs program -- described as a variety of
news treatment; a cross between pure television news and news-related commentaries, analysis and/or exchange of opinions -
- is within the MTRCB’s power of review.8 Clearly, "Muro Ami: The Making" (which petitioner claims to be a public affairs program)
was well within the purview of MTRCB’s power of prior review.1awphi1.net
However, while MTRCB had jurisdiction over the subject program, Memorandum Circular 98-17, which was the basis of the
suspension order, was not binding on petitioner. The Administrative Code of 1987, particularly Section 3 thereof, expressly
requires each agency to file with the Office of the National Administrative Register (ONAR) of the University of the Philippines
Law Center three certified copies of every rule adopted by it. Administrative issuances which are not published or filed with the
ONAR are ineffective and may not be enforced.9

Memorandum Circular No. 98-17, which provides for the penalties for the first, second and third offenses for exhibiting programs
without valid permit to exhibit, has not been registered with the ONAR as of January 27, 2000. 10 Hence, the same is yet to be
effective.11 It is thus unenforceable since it has not been filed in the ONAR. 12Consequently, petitioner was not bound by said
circular and should not have been meted the sanction provided thereunder.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The decision of the Court of Appeals dated June 18, 2001, insofar
as it affirmed the public respondent Movie and Television Review and Classification Board’s jurisdiction over "Muro Ami: The
Making," is hereby AFFIRMED with the MODIFICATION that the suspension order issued against petitioner GMA Network, Inc.
pursuant to Memorandum Circular No. 98-17 is hereby declared null and void.

No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
 EN BANC

G.R. No. L-15138 July 31, 1961

BILL MILLER, petitioner-appellee,

vs.
ATANACIO A. MARDO, and MANUEL GONZALES, respondents-appellants.

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

G.R. No. L-15377 July 31, 1961

NUMERIANA RAGANAS, plaintiff-appellant,

vs.
SEN BEE TRADING COMPANY, MACARIO TAN, and SERGIO TAN, defendants-appellees.

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

G.R. No. L-16660 July 31, 1961

VICENTE ROMERO, petitioner-appellee,

vs.
ANGEL HERNANDO ETC., and SIA SENG, respondents-appellants.

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

G.R. No. L-16781 July 31, 1961

CHIN HUA TRADING COMPANY, and LAO KANG SUY, petitioners-appellees,

vs.
ATANACIO A. MARDO, JORGE BENEDICTO, and CRESENCIO ESTAÑO, respondents-appellants.

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

G.R. No. L-17056 July 31, 1961

FRED WILSON & CO., INC., petitioner-appellant,

vs.
MELITON C. PARDUCHO, ETC., and MARIANO PABILIARE, respondents-appellees.

R. L. Resurreccion for petitioner-appellee.

Paciano C. C. Villavieja for respondents-appellants.

BARRERA, J.:

These appeals, although originating from different Courts of First Instance, are here treated together in this single decision
because they present but one identical question of law, namely, the validity of Reorganization Plan No. 20-A, prepared and
submitted by the Government Survey and Reorganization Commission under the authority of Republic Act No. 997, as
amended by Republic Act No. 1241, insofar as it confers jurisdiction to the Regional Offices of the Department of Labor
created in said Plan to decide claims of laborers for wages, overtime and separation pay, etc.

In G.R. No. L-15138, Manuel Gonzales filed with Regional Office No. 3 of the Department of Labor, in Manila, a complaint (IS-
1148) against Bill Miller (owner and manager of Miller Motors) claiming to be a driver of Miller from December 1, 1956 to
October 31, 1957, on which latter date he was allegedly arbitrarily dismissed, without being paid separation pay. He prayed for
judgement for the amount due him as separation pay plus damages. Upon receipt of said complaint, Chief Hearing Officer
Atanacio Mardo of Regional Office No. 3 of the Department of Labor required Miller to file an answer. Whereupon, Miller filed
with the Court of First Instance of Baguio a petition (Civil Case No. 759) praying for judgment prohibiting the Hearing Officer
from proceeding with the case, for the reason that said Hearing Officer had no jurisdiction to hear and decide the subject
matter of the complaint. The court then required the Hearing Officer and Gonzales to answer and, as prayed for, issued a writ
of preliminary injunction. The latter file their separate motions to dismiss the petition, on the ground of lack of jurisdiction,
improper venue, and non-exhaustion of administrative remedies, it being argued that pursuant to Republic Acts Nos. 997 and
1241, as implemented by Executive Order No. 218, series of 1956 and Reorganization Plan No. 20-A, regional offices of the
Department of labor have exclusive and original jurisdiction over all cases affecting money claims arising from violations of
labor standards or working conditions. Said motions to dismiss were denied by the court. Answers were then filed and the
case was heard. Thereafter, the court rendered a decision holding that Republic Acts Nos. 997 and 1241, as well as Executive
Order No. 218, series of 1956 and Reorganization Plan No. 20-A issued pursuant thereto, did not repeal the provision of the
Judiciary Act conferring on courts of first instance original jurisdiction to take cognizance of money claims arising from
violations of labor standards. The question of venue was also dismissed for being moot, the same having been already raised
and decided in a petition for certiorari and prohibition previously filed with this Court in G.R. No. L-14007 (Mardo, etc. v. De
Veyra, etc.) which was dismissed for lack of merit in our resolution of July 7, 1958. From the decision of the Court of First
Instance of Baguio, respondents Hearing Officer and Gonzales interposed the present appeal now before us.

In G.R. No. L-16781, Cresencio Estano filed with Regional Office No. 3 of the Department of Labor, a complaint (RO 3 Ls.
Case No. 874) against Chin Hua Trading Co. and/or Lao Kang Suy and Ke Bon Chiong, as Manager and Assistant Manager
thereof, respectively, claiming to have been their driver from June 17, 1947 to June 4, 1955, for which service he was not paid
overtime pay (for work in excess of 8 hours and for Sundays and legal holidays) and vacation leave pay. He prayed for
judgment for the amount due him, plus attorney's fees. Chin Hua Trading, et al., filed their answer and, issues having been
joined, hearing thereof was started before Chief Hearing Officer Atanacio Mardo and Hearing Officer Jorge Benedicto. Before
trial of the case could be terminated, however, Chin Hua Trading, et al., filed with the Court of First Instance of Manila a
petition for prohibition with preliminary injunction (Civil Case No. 26826)), to restrain the hearing officers from proceeding with
the disposition of the case, on the ground that they have no jurisdiction to entertain the same, as Reorganization Plan No. 20-
A and Executive Order No. 218, series of 1956, in relation to Republic Act No. 997, as amended by Republic Act No. 1241,
empowering them to adjudicate the complaint, is invalid or unconstitutional. As prayed for, a preliminary injunction was issued
by the court. After due hearing the court rendered a decision holding that Reorganization Plan No. 20-A is null and void and
therefore, granted the writ of prohibition making permanent the preliminary injunction previously issued. From this decision, the
claimant and the hearing officers appealed to the Court of Appeals, which certified the case to us, as it involves only questions
of law.

In G.R. No. L-15377, appellant Numeriana Raganas filed with the Court of First Instance of Cebu a complaint (Civil Case No.
R-5535) against appellees Sen Bee Trading Company, Macario Tan and Sergio Tan, claiming that she was employed by
appellees as a seamstress from June 5, 1952 to January 11, 1958, for which service she was underpaid and was not given
overtime, as well as vacation and sick leave pay. She prayed for judgment on the amount due her for the same plus damages.
To said complaint, appellees filed a motion to dismiss, on the ground that the trial court has no jurisdiction to hear the case as
it involves a money claim and should, under Reorganization Plan No. 20-A be filed with the Regional Office of the Department
of Labor; and there is pending before the regional office of the Department of Labor, a claim for separation vacation, sick and
maternity leave pay filed by the same plaintiff (appellant) against the same defendants-appellees). Acting on said motion, the
court dismissed the case, relying on the provision of Section 25, Article VI of Reorganization Plan No. 20-A and on our
resolution in the case of NASSCO v. Arca, et al. (G.R. No. L-12249, May 6, 1957). From this order, appellant Raganas
appealed to the Court of Appeals, but said court certified the case to us.

In G.R. No. L-16660, Vicente B. Romero filed with Regional Officer No. 2 of the Department of Labor a complaint (Wage Case
No. 196-W) against Sia Seng, for recovery of alleged unpaid wages, overtime and separation pay. Sia Seng, filed an answer.
At the date set for hearing the latter did not appear despite due notice to him and counsel. Upon his petition, Romero was
allowed to present his evidence. Thereafter, a decision was rendered by the Hearing Officer in favor of Romero. Upon the
latter's motion for execution, the records of the case were referred to Regional Labor Administrator Angel Hernando for
issuance of said writ of execution, being the officer charged with the duty of issuing the same. Hernando, believing that Sia
Seng should be given a chance to present his evidence, refused to issue the writ of execution and ordered a re-hearing. As a
consequence, Romero filed with the Court of First Instance of Isabela a petition for mandamus (Case No. Br. II-35) praying
that an order be issued commanding respondent Regional Labor Administrator to immediately issue a writ of execution of the
decision in Wage Case No. 196-W. To this petition, respondent Regional Labor Administrator filed a motion to dismiss, on the
ground that it states no cause of action, but action thereon was deferred until the case is decided on the merits. Sia Seng filed
his answer questioning the validity of the rules and regulations issued under the authority of Reorganization Plan No. 20-A.
After hearing, the court rendered a decision ordering, inter alia, respondent Regional Labor Administrator to forthwith issue the
corresponding writ of execution, as enjoined by Section 48, of the Rules and Regulations No. 1 of the Labor Standards
Commission. From this decision of the Court of First Instance, Sia Seng and Regional Labor Administrator Hernando appealed
to us. Appellant Sia Seng urges in his appeal that the trial court erred in not dismissing the petition, in spite of the fact that the
decision sought to be enforced by appellee Romero was rendered by a hearing officer who had no authority to render the
same, and in failing to hold that Reorganization Plan No. 20-A was not validly passed as a statute and is unconstitutional.

In G.R. No. L-17056, Mariano Pabillare instituted in Regional Office No. 3 of the Department of Labor a complaint (IS-2168)
against petitioner Fred Wilson & Co., Inc., alleging that petitioner engaged his services as Chief Mechanic, Air conditioning
Department, from October 1947 to February 19, 1959, when he was summarily dismissed without cause and without sufficient
notice and separation pay. He also claimed that during his employment he was not paid for overtime rendered by him. He
prayed for judgment for the amount due him for such overtime and separation pay. Petitioner moved to dismiss the complaint,
on the ground that said regional office "being purely an administrative body, has no power, authority, nor jurisdiction to
adjudicate the claim sought to be recovered in the action." Said motion to dismiss having been denied by respondent Hearing
Officer Meliton Parducho, petitioner Fred Wilson & Co., Inc. filed with the Court of First Instance of Manila a petition
for certiorari and prohibition, with preliminary injunction (Civil Case No. 41954) to restrain respondent hearing officer from
proceeding with the case, and praying, among others, that Reorganization Plan No. 20-A, insofar as it vests original and
exclusive jurisdiction over money claims (to the exclusion of regular courts of justice) on the Labor Standards Commission or
the Regional Offices of the Department of Labor, be declared null and void and unconstitutional. As prayed for, the court
granted a writ of preliminary injunction. Respondents Hearing Officer and Pabillare filed answer and the case was heard. After
hearing, the court rendered a decision declaring that "by the force of Section 6 of R.A. No. 997, as amended by R.A. 1241,
Plan No. 20-A was deemed approved by Congress when it adjourned its session in 1956' (Res. of May 6, 1957 in National
Shipyards Steel Corporation v. Vicente Area, G.R. No. L-12249). It follows that the questioned reorganization Plan No. 20-A is
valid.".

Petitioner Fred Wilson & Co., Inc. appealed directly to us from this decision.

The specific legal provision invoked for the authority of the regional offices to take cognizance of the subject matter involved in
these cases is paragraph 25 of Article VI of Reorganization Plan No. 20-A, which is hereunder quoted:

25 Each regional office shall have original and exclusive jurisdiction over all cases falling under the Workmen's Compensation
law, and cases affecting all money claims arising from violations of labor standards on working conditions including but not
restrictive to: unpaid wages, underpayment, overtime, separation pay and maternity leave of employees and laborers; and
unpaid wages, overtime, separation pay, vacation pay and payment for medical services of domestic help.

Under this provision, the regional offices have been given original and exclusive jurisdiction over:

(a) all cases falling under the Workmen's Compensation law;

(b) all cases affecting money claims arising from violations of labor standards on working conditions, unpaid wages,
underpayment, overtime, separation pay and maternity leave of employees and laborers; and .

(c) all cases for unpaid wages, overtime, separation pay, vacation pay and payment for medical services of domestic help.

Before the effectivity of Reorganization Plan No. 20-A, however, the Department of Labor, except the Workmen's
Compensation Commission with respect to claims for compensation under the Workmen's Compensation law, had no
compulsory power to settle cases under (b) and (c) above, the only authority it had being to mediate merely or arbitrate when
the parties so agree in writing, In case of refusal by a party to submit to such settlement, the remedy is to file a complaint in the
proper court.1

It is evident, therefore, that the jurisdiction to take cognizance of cases affecting money claims such as those sought to be
enforced in these proceedings, is a new conferment of power to the Department of Labor not theretofore exercised by it. The
question thus presented by these cases is whether this is valid under our Constitution and applicable statutes.

It is true that in Republic Act No. 1241, amending Section 4 of Republic Act 997, which created the Government Survey and
Reorganization Commission, the latter was empowered —

(2) To abolish departments, offices, agencies, or functions which may not be necessary, or create those which way be
necessary for the efficient conduct of the government service, activities, and functions. (Emphasis supplied.)

But these "functions" which could thus be created, obviously refer merely to administrative, not judicial functions. For the
Government Survey and Reorganization Commission was created to carry out the reorganization of the Executive Branch of
the National Government (See Section 3 of R.A. No. 997, as amended by R.A. No. 1241), which plainly did not include the
creation of courts. And the Constitution expressly provides that "the Judicial power shall be vested in one Supreme Court and
in such inferior courts as may be established by law.(Sec. 1, Art. VII of the Constitution). Thus, judicial power rests exclusively
in the judiciary. It may be conceded that the legislature may confer on administrative boards or bodies quasi-judicial powers
involving the exercise of judgment and discretion, as incident to the performance of administrative functions.2 But in so doing,
the legislature must state its intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives
must be limited, if they are to be valid, only to those incidental to or in connection with the performance of jurisdiction over a
matter exclusively vested in the courts.3

If a statute itself actually passed by the Congress must be clear in its terms when clothing administrative bodies with quasi-
judicial functions, then certainly such conferment can not be implied from a mere grant of power to a body such as the
Government Survey and Reorganization Commission to create "functions" in connection with the reorganization of the
Executive Branch of the Government.

And so we held in Corominas et al. v. Labor Standards Commission, et al. (G.R. No. L-14837 and companion cases, June 30,
1961);

. . . it was not the intention of Congress, in enacting Republic Act No. 997, to authorize the transfer of powers and jurisdiction
granted to the courts of justice, from these to the officials to be appointed or offices to be created by the Reorganization Plan.
Congress is well aware of the provisions of the Constitution that judicial powers are vested 'only in the Supreme Court and in
such courts as the law may establish'. The Commission was not authorized to create courts of justice, or to take away from
these their jurisdiction and transfer said jurisdiction to the officials appointed or offices created under the Reorganization Plan.
The Legislature could not have intended to grant such powers to the Reorganization Commission, an executive body, as the
Legislature may not and cannot delegate its power to legislate or create courts of justice any other agency of the Government.
(Chinese Flour Importers Assoc. vs. Price Stabilization Board, G.R. No. L-4465, July 12, 1951; Surigao Consolidated vs.
Collector of Internal Revenue G.R. No. L-5692, March 5, 1954; U.S. vs. Shreveport, 287 U.S. 77, 77 L. ed 175, and Johnson
vs. San Diego, 42 P. 249, cited in 11 Am. Jur 921-922.) (Emphasis supplied.)

But it is urged, in one of the cases, that the defect in the conferment of judicial or quasi-judicial functions to the Regional
offices, emanating from the lack of authority of the Reorganization Commission has been cured by the non-disapproval of
Reorganization Plan No. 20-A by Congress under the provisions of Section 6(a) of Republic Act No. 997, as amended. It is, in
effect, argued that Reorganization Plan No. 20-A is not merely the creation of the Reorganization Commission, exercising its
delegated powers, but is in fact an act of Congress itself, a regular statute directly and duly passed by Congress in the
exercise of its legislative powers in the mode provided in the enabling act.

The pertinent provision of Republic Act No. 997, as amended, invoked in favor of this argument reads as follows:

SEC. 6 (a) The provisions of the reorganization plan or plans submitted by the President during the Second Session of the
Third Congress shall be deemed approved after the adjournment of the said session, and those of the plan or plans or
modifications of any plan or plans to be submitted after the adjournment of the Second Session, shall be deemed approved
after the expiration of the seventy session days of the Congress following the date on which the plan is transmitted to it, unless
between the date of transmittal and the expiration of such period, either House by simple resolution disapproves the
reorganization plan or any, modification thereof. The said plan of reorganization or any modification thereof may, likewise, be
approved by Congress in a concurrent Resolution within such period.

It is an established fact that the Reorganization Commission submitted Reorganization Plan No. 20-A to the President who, in
turn, transmitted the same to Congress on February 14, 1956. Congress adjourned its sessions without passing a resolution
disapproving or adopting the said reorganization plan. It is now contended that, independent of the matter of delegation of
legislative authority (discussed earlier in this opinion), said plan, nevertheless became a law by non-action on the part of
Congress, pursuant to the above-quoted provision.

Such a procedure of enactment of law by legislative in action is not countenanced in this jurisdiction. By specific provision of
the Constitution —

No bill shall be passed or become a law unless it shall have been printed and copies thereof in its final form furnished the
Members at least three calendar clays prior to its passage by the National Assembly (Congress), except when the President
shall have certified to the necessity of its immediate enactment. Upon the last reading of a bill no amendment thereof shall be
allowed, and the question upon its final passage shall be taken immediately thereafter, and the yeas and nays entered on the
Journal. (Sec. 21-[a], Art. VI).

Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he
shall sign it, but if not, he shall return it with his objections to the House where it originated, which shall enter the objections at
large on its Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House
shall agree to pass the bill, it shall be sent, together with the objections, to the other House by which it shall likewise be
reconsidered, and if approved by two-thirds of all the Members voting for and against shall be entered on its journal. If any bill
shall not be returned by the President as herein provided within twenty days (Sundays excepted) after it shall have been
presented to him, the same shall become a law in like manner as if he has signed it, unless the Congress by adjournment
prevent its return, in which case it shall become a law unless vetoed by the President within thirty days after adjournment.
(Sec. 20[1]. Art. VI of the Constitution).

A comparison between the procedure of enactment provided in section 6 (a) of the Reorganization Act and that prescribed by
the Constitution will show that the former is in distinct contrast to the latter. Under the first, consent or approval is to be
manifested by silence or adjournment or by "concurrent resolution." In either case, the contemplated procedure violates the
constitutional provisions requiring positive and separate action by each House of Congress. It is contrary to the "settled and
well-understood parliamentary law (which requires that the) two houses are to hold separate sessions for their deliberations,
and the determination of the one upon a proposed law is to be submitted to the separate determination of the other," (Cooley,
Constitutional Limitations, 7th ed., p. 187).

Furthermore, Section 6 (a) of the Act would dispense with the "passage" of any measure, as that word is commonly used and
understood, and with the requirement presentation to the President. In a sense, the section, if given the effect suggested in
counsel's argument, would be a reversal of the democratic processes required by the Constitution, for under it, the President
would propose the legislative action by action taken by Congress. Such a procedure would constitute a very dangerous
precedent opening the way, if Congress is so disposed, because of weakness or indifference, to eventual abdication of its
legislative prerogatives to the Executive who, under our Constitution, is already one of the strongest among constitutional
heads of state. To sanction such a procedure will be to strike at the very root of the tri-departmental scheme four democracy.
Even in the United States (in whose Federal Constitution there is no counterpart to the specific method of passaging laws
prescribed in Section 21[2] of our Constitution) and in England (under whose parliamentary system the Prime Minister, real
head of the Government, is a member of Parliament), the procedure outlined in Section 6(a) herein before quoted, is but a
technique adopted in the delegation of the rule-making power, to preserve the control of the legislature and its share in the
responsibility for the adoption of proposed regulations. 4 The procedure has ever been intended or utilized or interpreted as
another mode of passing or enacting any law or measure by the legislature, as seems to be the impression expressed in one
these cases.

On the basis of the foregoing considerations, we hold ad declare that Reorganization Plan No. 20-A, insofar as confers judicial
power to the Regional Offices over cases other than these falling under the Workmen's Compensation on Law, is invalid and
of no effect.

This ruling does not affect the resolution of this Court in the case of National Steel & Shipyards Corporation v. Arca et al., G.R.
No. L-12249, dated May 6, 1957, considering that the said case refers to a claim before the Workmen's Compensation
Commission, which exercised quasi-judicial powers even before the reorganization of the Department of Labor.

WHEREFORE

(a) The decision of the Court of First Instance of Baguio involved in case G.R. No. L-15138 is hereby affirmed, without costs;

(b) The decision of the Court of First Instance of Manila questioned in case G.R. No. L-16781 is hereby affirmed, without costs;

(c) The order of dismissal issued by the Court of First Instance of Cebu appealed from in case G.R. No. L-15377 is set aside
and the case remanded to the court of origin for further proceedings, without costs;

(d) In case G.R. No. L-16660, the decision of the Court of First Instance of Isabela, directing the Regional Labor Administrator
to issue a writ of execution of the order of the Regional Office No. 2, is hereby reversed, without costs; and .

(e) In case G.R. No. L-17056, the decision rendered after hearing by the Court of First Instance of Manila, dismissing the
complaint for annulment of the proceedings before the Regional office No. 3, is hereby reversed and the preliminary injunction
at first issued by the trial court is revived and made permanents without costs. SO ORDERED.

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Dizon, De Leon and Natividad, JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion and Paredes JJ., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-43653 November 29, 1977
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,
vs.
BOARD OF COMMUNICATIONS and DIEGO MORALES, respondents.
G.R. No. L-45378 November 29, 1977
RADIO COMMUNICATIONS OF THE PHILIPPINES. INC. (RCPI), petitioner,
vs.
BOARD OF COMMUNICATIONS and PACIFICO INNOCENCIO, respondents.
Treñas & Aligaen for petitioner.
R. Mag. Bernardo for respondent Morales.
Silvestre T. de la Cruz for respondent Innocencio.
Primitivo C. Santos for respondent Board.

MARTIN, J.,

These two petitions (G.R. No. L-43653 and G.R. No. L-45378) for review by certiorari of the decisions of the Board of
Communications in BC Case No. 75-01-OC, entitled "Diego T Morales vs. Radio Communications of the Philippines, Inc.
(RCPI)" and BC Case No. 75-08-OC, entitled "Pacifica Innocencio vs. Radio Communications of the Philippines, Inc.
(RCPI)," have been Consolidated as per resolution of this Court dated March 21, 1977, as they involve the same issue as to
whether the Board of Communications has jurisdiction over claims for damages allegedly suffered by private respondents for
failure to receive telegrams sent thru the petitioner Radio Communications of the Philippines, Inc., RCPI for short.

In BC Case No. 75-01-OC (G.R. No. L-43653) complainant respondent Diego Morales claims that while he was in Manila his
daughter sent him a telegram on October 15, 1974 from Santiago, Isabela, informing him of the death of his wife, Mrs. Diego T.
Morales. The telegram sent thru the petitioner RCPI however never reached him. He had to be informed personally about the
death of his wife and so to catch up with the burial of his wife, he had to take the trip by airplane to Isabela. In its answer petitioner
RCPI claims that the telegram sent by respondent was transmitted from Santiago, lsabela to its Message Center at Cubao,
Quezon City but when it was relayed from Cubao, the radio signal became intermittent making the copy received at Sta. Cruz,
Manila unreadable and unintelligible. Because of the failure of the RCPI to transmit said telegram to him, respondent allegedly
suffered inconvenience and additional expenses and prays for damages.

In BC Case No. 75-08-OC (G.R. No. L-45378) complainant respondent Pacifico Innocencio claim that on July 13, 1975 Lourdes
Innocencio sent a telegram from Paniqui, Tarlac, thru the facilities of the petitioner RCPI to him at Barrio Lomot, Cavinti, Laguna
for the Purpose of informing him about the death of their father. The telegram was never received by Pacifico Innocencio. Inspite
of the non-receipt and/or non-delivery of the message sent to said address, the sender (Lourdes Innocencio has not been notified
about its non-delivery, As a consequence Pacifica Innocencio was not able to attend the internment of their father at Moncada,
Tarlac. Because of the failure of RCPI to deliver to him said telegram he allegedly was "shocked when he learned about the
death of their father when he visited his hometown Moncada Tarlac on August 14, 1975," and thus suffered mental anguish and
personal inconveniences. Likewise, he prays for damages.

After hearing. the respondent Board in both cases held that the service rendered by petitioner was inadequate and unsatisfactory
and imposed upon the petitioner in each case a disciplinary fine of P200 pursuant to Section 21 of Commonwealth Act 146, as
amended, by Presidential Decree No. I and Letter of Implementation No. 1.

The main thrust of the argument of petitioner is that respondent Board has no jurisdiction to entertain and take cognizance of
complaints for injury caused by breach of contractual obligation arising from negligence covered by Article 1170 of the Civil
Code 1 and injury caused by quasi delict or tort liability under Article 2176 of the Civil Code 2 which according to it should be
ventilated in the proper courts of justice and not in the Board of Communications.

We agree with petitioner RCPI. In one case We have ruled that the Public Service Commission and its successor in interest, the
Board of Communications, "being a creature of the legislature and not a court, can exercise only such jurisdiction and powers
as are expressly or by necessary implication,. conferred upon it by statute". 3 The functions of the Public Service Commission
are limited and administrative in nature and it has only jurisdiction and power as are expressly or by necessary implication
conferred upon it by statute. 4 As successor in interest of the Public Service Commission, the Board of Communications
exercises the same powers jurisdiction and functions as that provided for in the Public Service Act for the Public Service
Commission. One of these powers as provided under Section 129 of the Public Service Act governing the organization of the
Specialized Regulatory Board, is to issue certificate of public convenience. But this power to issue certificate of public
convenience does not carry with it the power of supervision and control over matters not related to the issuance of certificate of
public convenience or in the performance therewith in a manner suitable to promote public interest. But even assuming that the
respondent Board of Communications has the power or jurisdiction over petitioner in the exercise of its supervision to insure
adequate public service, petitioner cannot be subjected to payment of fine under Section 21 of the Public Service Act, because
this provision of the law subjects to a fine every public service that violates or falls to comply with the terms and conditions of
any certificate or any orders, decisions or regulations of the Commission. In the two cases before us petitioner is not being
charged nor investigated for violation of the terms and conditions of its certificate of public convenience or of any order, decision
or regulations of the respondent Board of Communications. The complaint of respondents in the two case was that they were
allegedly inconvenienced or injured by the failure of the petitioner to transmit to them telegrams informing them of the deaths of
close relatives which according to them constitute breach of contractual obligation through negligence under the Civil Code. The
charges however, do not necessarily involve petitioners failure to comply with its certificate of public convenience or any order,
decision or regulation of respondent Board of Communication. It is clear from the record that petitioner has not been charge of
any violation or failure to comply with the terms and condition of its certificates of public convenience or of any order, decision
or regulation of the respondent Board. The charge does not relate to the management of the facilities and system of transmission
of messages by petitioner in accordance with its certificate of public convenience. If in the two cases before Us complainants
Diego Morales and Pacifica Innocencio allegedly suffered injury due to petitioner's breach of contractual obligation arising from
negligence, the proper forum for them to ventilate their grievances for possible recovery of damages against petitioner should
be in the courts and not in the respondent Board of Communications. Much less can it impose the disciplinary fine of P200 upon
the petitioner. In Francisco Santiago vs. RCPI (G.R. No. L-29236) and Constancio Langan vs. RCPI (G.R. No. L-29247), this
Court speaking thru Justice Enrique Fernando, ruled:

There can be no justification then for the Public Service Commission (now the Board of Communications as successor in interest)
imposing the fines in these two petitions. The law cannot be any clearer . The only power it possessed over radio companies as
noted was to fix rates It could not take to task a radio company for an negligence or misfeasance. It was not vested with such
authority. That it did then in these two petitions lacked the impress of validity.

In the face of the provision itself, it is rather apparent that the Public Service Commission lacked the required power to proceed
against petitioner. There is nothing in Section 21 thereof which empowers it to impose a fine that calls for a different conclusion.

WHEREFORE. both decisions of respondent Board of Communications in BC Case No. 75-01 OC and BC Case No. 75- 08-0C
are hereby reversed, set aside, declared null and void for lack of jurisdiction to take cognizance of both cases. Without costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 147525 February 26, 2007

BONIFACIO ESPINOZA, Petitioner,

vs.
PROVINCIAL ADJUDICATOR OF THE PROVINCIAL AGRARIAN REFORM ADJUDICATION OFFICE OF PAMPANGA
andMARIA QUIBULOY, Respondents.

DECISION

CORONA, J.:

Under review are the January 14, 1994 decision1 and June 01, 2000 resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
502 UDK. The CA dismissed petitioner Bonifacio Espinoza’s petition for certiorari imputing grave abuse of discretion on the part
of the provincial adjudicator of the Provincial Agrarian Reform Adjudication Office (PARAD) of San Fernando, Pampanga in
deciding DARAB Case No. 203-P-90.

The events leading to this petition for review on certiorari stemmed from an agrarian dispute before the PARAD, San Fernando,
Pampanga. A complaint3 for ejectment was filed against petitioner by private respondent Maria V. Quibuloy, as co-owner and
administratrix of three parcels of land covered by Transfer Certificate of Title No. 3676. She alleged that petitioner had reneged
on his obligations as tenant to pay the rent and till the subject landholding.

Instead of answering the complaint, petitioner moved to dismiss the case for lack of jurisdiction. He cited Section 1, Rule III of
the 1989 Rules of Procedure of the Department of Agrarian Reform Adjudication Board (1989 DARAB Rules), providing for
conciliation proceedings before the Barangay Agrarian Reform Council (BARC) prior to initiating the case. He contended that
presentation of a certification from the BARC, attesting that the dispute had been submitted to it for mediation or conciliation
without any success of settlement, was a jurisdictional requirement. On that note, he concluded that the provincial adjudicator
could not take cognizance of the agrarian dispute due to Quibuloy’s failure to present the required certificate.

The hearing on the motion to dismiss was set on November 7, 1990. 4 On the said date, petitioner or his counsel failed to appear,
hence the motion was submitted for resolution.5

Without issuing a ruling on petitioner’s motion, the provincial adjudicator set the case for hearing on May 22, 1991. Again, neither
petitioner nor his counsel attended the hearing. Thus, Quibuloy was allowed to present her evidence ex-parte. Thereafter, the
dispute was ordered submitted for decision.6

Just before the decision was rendered, petitioner filed his answer assailing Quibuloy’s personality to bring suit. Petitioner also
offered unsubstantiated denials of Quibuloy’s charges. As his defense, he denied allegations of non-payment of rents and non-
tillage of the land for lack of knowledge and information to form a belief as to the veracity thereof.

The provincial adjudicator was sufficiently convinced that Quibuloy’s allegations were true and correct. Accordingly, he decided
the case against petitioner.7

Instead of immediately appealing from the adjudicator’s decision, petitioner allowed the reglementary period to lapse. Thereafter,
he filed a petition for certiorari with the CA.

The appellate court dismissed the petition as "unavailing and vacuous."8 It reiterated the well-settled rule that certiorari lies only
in cases of errors of jurisdiction and not errors of judgment. It stressed that certiorari cannot be a substitute for a lost appeal.

Now, petitioner comes to us with practically a rehash of the issues already raised in the CA, to wit:

I.

WHETHER OR NOT PUBLIC RESPONDENT PROVINCIAL ADJUDICATOR OF THE [PARAD] OF PAMPANGA IS

CORRECT IN PROCEEDING WITH DARAB CASE NO. 203-P-90 WITHOUT FIRST COMPLYING WITH THE
JURISDICTIONAL REQUIREMENTS SET FORTH IN SECTION 1, RULE III OF THE [1989] DARAB REVISED RULES OF
PROCEDURE.
 II.

WHETHER OR NOT PUBLIC RESPONDENT PROVINCIAL ADJUDICATOR OF THE [PARAD] OF PAMPANGA IS

CORRECT IN DECIDING DARAB CASE NO. 203-P-90 WITHOUT FIRST RESOLVING PETITIONER’S MOTION TO
DISMISS.

III.

WHETHER OR NOT PUBLIC RESPONDENT ERRED IN RULING THAT PETITIONER’S ANSWER TO PRIVATE
RESPONDENT’S COMPLAINT IN DARAB CASE NO. 203-P-90 WAS FILED OUT OF TIME AND IN NOT CONSIDERING
THE SAME.

IV.

WHETHER OR NOT PUBLIC RESPONDENT IS CORRECT IN DECIDING DARAB CASE NO. 203-P-90 IN FAVOR OF
PRIVATE RESPONDENT ON THE BASIS OF THE SELF-SERVING AFFIDAVIT OF THE LATTER AND HER LONE
WITNESS CONSIDERING HER FAILURE TO PRESENT THE TITLE OF THE LAND IN QUESTION (TCT NO. 3676) OR ANY
DOCUMENT TO SHOW HER AUTHORITY TO ACT AS ADMINISTRATOR OF THE SAME.

V.

WHETHER OR NOT THE [CA’s] DISMISSAL OF THE PETITION FOR CERTIORARI AND DENIAL OF [PETITIONER’S]
MOTION FOR RECONSIDERATION IS PROPER.9

We deny the petition.

A special civil action of certiorari is an independent action, raising the question of jurisdiction where the tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction.10 The ultimate purpose of such action is to keep an inferior tribunal within the bounds
of its jurisdiction or relieve parties from arbitrary acts of courts. 111awphi1.net

A petition for certiorari was never meant as a mode of reviewing errors of judgment committed by an inferior tribunal. Thus, it
has been settled that the remedy of certiorari is not a substitute for an appeal lost by the party entitled thereto especially if the
right of appeal was lost through negligence. 12 When the remedy of appeal is available but is lost due to petitioner’s own
negligence or error in the choice of remedies, resort to certiorari is precluded.

Under the 1989 DARAB Rules,13 an aggrieved party may appeal the decision of a provincial adjudicator to the Adjudication
Board within 15 days from receipt. In this case, petitioner allowed the appeal period to lapse and instead filed a petition for
certiorari in the CA roughly three months after the assailed decision was rendered.

It is evident that the CA acted on the petition properly.

Even if, in the greater interest of substantial justice, certiorari may be availed of, it must be shown that the adjudicator acted with
grave abuse of discretion amounting to lack or excess of jurisdiction, that is, that the adjudicator exercised his powers in an
arbitrary or despotic manner by reason of passion or personal hostilities, so patent and gross as to amount to an evasion or
virtual refusal to perform the duty enjoined or to act in contemplation of law.14

As correctly found by the appellate court, there is no showing that errors of jurisdiction or grave abuse of discretion were
committed by public respondent.

On the first assigned error, the 1989 DARAB Rules exempted parties residing in non-adjoining barangays from presenting the
BARC certification.15 Since it is undisputed that Quibuloy resided in San Nicolas 1ST, Lubao, Pampanga while petitioner stayed
in San Agustin, Lubao, Pampanga, the former was not required to present the BARC certification before the adjudicator taking
cognizance of the agrarian dispute. Needless to say, the provincial adjudicator did not err in entertaining the dispute
notwithstanding the absence of the BARC certification.

On the second issue, administrative agencies exercising quasi-judicial functions are not bound by technical rules followed in
courts of law. The adjudicator is given enough latitude, subject to the essential requirements of administrative due process, to
be able to expeditiously ascertain the facts of the agrarian dispute. 16

While there may have been a technical lapse on the part of the adjudicator in disposing of the motion to dismiss, the assailed
acts of the adjudicator did not amount to a grave abuse of discretion justifying a writ of certiorari. Considering the technical
flexibility afforded to agrarian adjudicators, the order may easily be construed as a denial of the motion to dismiss. What would
have been the prudent recourse under the rules was to submit an answer immediately, participate in the hearing and appeal an
adverse decision. Sadly, petitioner failed to do any of these. It is now too late for him to dispute the adjudicator’s decision.

Moving on to the third assignment of error, we hold that petitioner’s answer was indeed filed out of time. While the 1989 DARAB
Rules provides that the non-answering respondent (petitioner) may be allowed to belatedly file his answer, it also provides that
the answer should be filed before the matter is submitted for decision. Here, petitioner submitted his answer after the case was
submitted for decision.

Lastly, on the fourth assignment of error, it cannot be overemphasized that only errors of jurisdiction may be reviewed by the
CA in a petition for certiorari. "Where the issue or question involved affects the wisdom or legal soundness of the decision – not
the jurisdiction of the court to render said decision – the same is beyond the province of a special civil action for certiorari." 17

In sum, the petition failed to prove that the CA committed any reversible error in denying petitioner’s petition for certiorari as well
as his motion for reconsideration.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SPECIAL THIRD DIVISION

G.R. No. 154243 December 22, 2007

DEPUTY DIRECTOR GENERAL ROBERTO LASTIMOSO, ACTING CHIEF PHILIPPINE NATIONAL POLICE (PNP),
DIRECTORATE FOR PERSONNEL AND RECORDS MANAGEMENT (DPRM), INSPECTOR GENERAL, P/CHIEF SUPT.
RAMSEY OCAMPO and P/SUPT. ELMER REJANO, petitioners,
vs.
P/SENIOR INSPECTOR JOSE J. ASAYO, respondent.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

Before the Court is respondent’s Motion for Reconsideration of the Decision promulgated on March 6, 2007. In said Decision,
the Court granted the petition, holding that the Philippine National Police (PNP) Chief had jurisdiction to take cognizance of the
civilian complaint against respondent and that the latter was accorded due process during the summary hearing.

Respondent argues that the decision should be reconsidered for the following reasons:

1. The summary proceeding was null and void because no hearing was conducted; and

2. The evidence presented at the summary hearing does not prove that respondent is guilty of the charges against him.

Respondent insists that the summary hearing officer did not conduct any hearing at all but only relied on the affidavits and
pleadings submitted to him, without propounding further questions to complainant's witnesses, or calling in other witnesses such
as PO2 Villarama. It should, however, be borne in mind that the fact that there was no full-blown trial before the summary hearing
officer does not invalidate said proceedings. In Samalio v. Court of Appeals,1 the Court reiterated the time-honored principle
that:

Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice.
Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural
due process. A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied
where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. The standard of
due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. In
other words, it is not legally objectionable for being violative of due process for an administrative agency to resolve a
case based solely on position papers, affidavits or documentary evidence submitted by the parties as affidavits of
witnesses may take the place of their direct testimony.2(Emphasis supplied)

The first issue presented by respondent must, therefore, be struck down.

To resolve the second issue, respondent would have the Court re-calibrate the weight of evidence presented before the summary
hearing officer, arguing that said evidence is insufficient to prove respondent's guilt of the charges against him.

However, it must be emphasized that the action commenced by respondent before the Regional Trial Court is one
for certiorari under Rule 65 of the Rules of Court and as held in People v. Court of Appeals,3 where the issue or question involved
affects the wisdom or legal soundness of the decision – not the jurisdiction of the court to render said decision – the same is
beyond the province of a special civil action for certiorari.

Yet, respondent-movant's arguments and the fact that the administrative case against respondent was filed way back in 1997,
convinced the Court to suspend the rules of procedure.

The general rule is that the filing of a petition for certiorari does not toll the running of the period to appeal.4
However, Section 1, Rule 1 of the Rules of Court provides that the Rules shall be liberally construed in order to promote their
objective of securing a just, speedy and inexpensive disposition of every action and proceeding. In Ginete v. Court of
Appeals5 and Sanchez v. Court of Appeals,6 the Court saw it proper to suspend rules of procedure in order to promote substantial
justice where matters of life, liberty, honor or property, among other instances, are at stake.

The present case clearly involves the honor of a police officer who has rendered years of service to the country.

In addition, it is also understandable why respondent immediately resorted to the remedy of certiorari instead of pursuing his
motion for reconsideration of the PNP Chief’s decision as an appeal before the National Appellate Board (NAB). It was quite
easy to get confused as to which body had jurisdiction over his case. The complaint filed against respondent could fall under
both Sections 41 and 42 of Republic Act (R.A.) No. 6975 or the Department of the Interior and Local Government Act of 1990.
Section 41 states that citizens' complaints should be brought before the People's Law Enforcement Board (PLEB), while Section
42 states that it is the PNP Chief who has authority to immediately remove or dismiss a PNP member who is guilty of conduct
unbecoming a police officer.

It was only in Quiambao v. Court of Appeals,7 promulgated in 2005 or after respondent had already filed the petition
for certiorari with the trial court, when the Court resolved the issue of which body has jurisdiction over cases that fall under
both Sections 41 and 42 of R.A. No. 6975. The Court held that the PLEB and the PNP Chief and regional directors
have concurrent jurisdiction over administrative cases filed against members of the PNP which may warrant dismissal from
service, but once a complaint is filed with the PNP Chief or regional directors, said authorities shall acquire exclusive original
jurisdiction over the case.

With the foregoing peculiar circumstances in this case, respondent should not be deprived of the opportunity to fully ventilate his
arguments against the factual findings of the PNP Chief. He may file an appeal before the NAB, pursuant to Section 45, R.A.
No. 6925. It is a settled jurisprudence that in administrative proceedings, technical rules of procedure and evidence are not
strictly applied.8 In Land Bank of the Philippines v. Celada,9 the Court stressed thus:

After all, technical rules of procedure are not ends in themselves but are primarily devised to help in the proper and expedient
dispensation of justice. In appropriate cases, therefore, the rules may be construed liberally in order to meet and advance the
cause of substantial justice.10

Thus, the opportunity to pursue an appeal before the NAB should be deemed available to respondent in the higher interest of
substantial justice.

WHEREFORE, respondent's Motion for Reconsideration is partly GRANTED. The Decision of the Court dated March 6, 2007
is MODIFIED such that respondent is hereby allowed to file his appeal with the National Appellate Board within ten (10) days
from finality of herein Resolution.

SO ORDERED.