EN BANC G.R. No. L-3881 August 31, 1950 EDUARDO DE LOS SANTOS, Petitioner, vs. GIL R.

MALLARE, LUIS P. TORRES, in his capacity as City Mayor, PANTALEON PIMENTEL, in his capacity as City Treasurer and RAFAEL USON, in his capacity as City Auditor, Respondents. Francisco S. Reyes for petitioner. Office of the Solicitor General Felix Bautista Angelo and Solicitor Augusto Luciano for respondents. Jose P. Laurel and Abelardo Subido as amici curiae. TUASON, J.: This is an original action of quo warranto questioning the legality of the appointment of respondent Gil R. Mallare to the office of city engineer for the City of Baguio which the petitioner occupied and claims to be still occupying. The real issue however is the legality of the petitioner's removal from the same office which would be the effect of Mallare's appointment if the same be allowed to stand. It is the petitioner's contention that under the Constitution he can not be removed against his will and without cause. The complaint against the other respondents has to do merely with their recognition of Mallare as the lawful holder of the disputed office and is entirely dependent upon the result of the basic action against the last-mentioned respondent (Mallare). Stripped of details unessential to the solution of the case, the facts are that Eduardo de los Santos, the petitioner, was appointed City Engineer of Baguio on July 16, 1946, by the President, appointment which was confirmed by the Commission on Appointments on August 6, and on the 23rd of that month, he qualified for and began to exercise the duties and functions of the position. On June 1, 1950, Gil R. Mallare was extended an ad interim appointment by the President to the same position, after which, on June 3, the Undersecretary of the Department of Public Works and Communications directed Santos to report to the Bureau of Public Works for another assignment. Santos refused to vacate the office, and when the City Mayor and the other officials named as Mallare's co-defendants ignored him and paid Mallare the salary corresponding to the position, he commenced these proceedings. The petitioner rests his case on Article XII of the Constitution, section 4 of which reads: "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law." It is admitted in respondents' answer that the City Engineer of Baguio "belongs to the unclassified service." And this Court, in an exhaustive opinion by Mr. Justice Montemayor in the case of Lacson vs. Romero, 47 Off. Gaz., 1778, involving the office of provincial fiscal, ruled that officers or employees in the unclassified as well as those in the classified service are protected by the above-cited provision of the organic law. But there is this difference between the Lacson case and the case at bar: Section 2545 of the Revised Administrative Code, which falls under Chapter 61 entitled "City of Baguio," authorizes the Governor General (now the President) to remove at pleasure any of the officers enumerated therein, one of whom is the city engineer. The first question that presents itself is, is this provision still in force? Section 2 of Article XVI of the Constitution declares that "All laws of the Philippine Islands shall continue in force until the inauguration of the Commonwealth of the Philippines; thereafter, such laws shall remain operative, unless inconsistent with this Constitution, until amended, altered, modified, or repealed by the Congress of the Philippines, . . . ." It seems plain beyond doubt that the provision of section 2545 of the Revised Administrative Code, he (GovernorGeneral now President) may remove at pleasure any of the said appointive officers," is incompatible with the

constitutional inhibition that "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law." The two provisions are mutually repugnant and absolutely irreconcilable. One in express terms permits what the other in similar terms prohibits. The Constitution leaves it to the Congress to provide for the cause of removal, and it is suggested that the President's pleasure is itself a cause. The phrase "for cause" in connection with the removals of public officers has acquired a well-defined concept. "It means for reasons which the law and sound public policy recognized as sufficient warrant for removal, that is, legal cause, and not merely causes which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must relate to and affect the administration of the office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public."(43 Am. Jur., 47, 48.) Reconsideration of the decision in Lacson vs. Romero as far as officers in the unclassified service are concerned is urged. It is contended that only officers and employees in the classified service should be brought within the purview of Article XII of the Constitution. Section 1 of this article ordains: "A Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination." The first clause is a definition of the scope of Civil Service, the men and women which section 4 protects. It seems obvious from that definition that the entire Civil Service is contemplated, except positions "which are policy-determining, primarily confidential or highly technical in nature." This theory is confirmed by the enactment of Commonwealth Act No. 177 on November 30, 1936 to implement Article XII of the Constitution. Commonwealth Act No. 177 explains Civil Service almost in the identical words of that article of the organic law. As a contemporaneous construction, this Act affords an index to the meaning of Civil Service as conceived by the framers of the Constitution. "The principle of contemporaneous construction may be applied to the construction given by the legislature to the constitutional provisions dealing with legislative powers and procedure. Though not conclusive, such interpretation is generally conceded as being entitled to great weight." (U.S. vs. Sprague, 282 U.S., 716; 75 L. ed. 640; 51 S. Ct., 220; 71 A.L.R., 1381; Den ex dem. Murray vs. Hoboken Land and Improv. Co., 18 How. [U.S.], 272; 15 L. ed., 372; Clark vs. Boyce, 20 Ariz., 544; 185 P., 136, citing R.C.L.; 11 Am. Jur. 699.) The principle of express mention and implied exclusion may be made use of also to drive home this point. We are led to the same conclusion by the existing provisions at the time of the adoption of the Constitution. Civil Service as embracing both classes of officers and employees possessed definite legal and statutory meaning when the Constitution was approved. Section 670 of the Revised Administrative Code already provided that "Persons in the Philippine civil service pertain either to the classified service," and went on to say that "The classified service embraces all not expressly declared to be in the unclassified service." Then section 671 described persons in the unclassified service as "officers, other than the provincial treasurers and assistant directors of bureaus or offices, appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, and all other officers of the government whose appointments are by law vested in the President of the Philippines alone." The rules of the construction inform us that the words use in the constitution are to be given the sense they have in common use. (Okanogan Indians vs. United States, 279, U.S., 665; 64 A.L.R., 1434; 73 Law ed., 894.) It has been said that we must look to the history of the times, examine the state of things existing when the Constitution was framed and adopted, (Rhode Islands vs. Massachusetts, 12 Pet., 657; 9 Law ed., 1233), and interpret it in the light of the law then in operation. (Mattox vs. United States, 156, U.S., 237; 39 Law ed., 409.)chanrobles virtual law library Attention is drawn to supposed inconveniences of tying the hands of the appointing power in changing and shifting officers in the unclassified service. "If - it is argued - all important officers and employees of the government falling within the unclassified service as enumerated in section 671 of the Revised Administrative Code as amended by

Commonwealth Act No. 177, may not be removed by the President except for cause as provided by law, . . . the President would be seriously crippled in the discharge of the grave duty and responsibility laid upon him by the Constitution to take care that the laws faithfully executed." Questions of expediency are, of course, beyond the province of the court to take into account in the interpretation of laws or of the Constitution where the language is otherwise clear. But the argument is, we think, unsound even if the case be approached from this angle. It contains its own refutation. The Constitution and the law implementing it afford adequate safeguards against such consequences as have been painted. The argument proceeds, contrary to its context, on the assumption that removes of civil service officers and employees are absolutely prohibited, which is not the case. The Constitution authorizes removals and only requires that they be for cause. And the occasions for removal would be greatly diminished if the injunction of section 1 of Article XII of the Constitution - that appointments in the civil service shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination - would be adhered of meticulously in the first place. By far greater mischiefs would be fomented by an unbridled authority to remove. Such license would thwart the very aims of the Constitution which are expounded by Dean Aruego, himself a member of the Constitutional Convention, in the following remarks copied with approval in Lacson vs. Romero, supra: The adoption of the "merit system" in government service has secured efficiency and social justice. It eliminates the political factor in the selection of civil employees which is the first essential to an efficient personnel system. It insures equality of opportunity to all deserving applicants desirous of a career in the public service. It advocates a new concept of the public office as a career open to all and not the exclusive patrimony of any party or faction to be doled out as a reward for party service. The "merit system" was adopted only after the nations of the world took cognizance of its merits. Political patronage in the government service was sanctioned in 1879 by the Constitutional right of President of the United States to act alone in the matter of removals. From the time of Andrew Jackson the principle of the "To the victor belongs the spoils' dominated the Federal Government. The system undermined moral values and destroyed administrative efficiency. Since the establishment of the American Regime in the Philippines we have enjoyed the benefits of the "merit system." The Schurmann Commission advocated in its reports that "the greatest care should be taken in the selection of the officials for administration. They should be men of the highest character and fitness, and partisan politics should be entirely separated from the government." The fifth act passed by the Philippine Commission created a Board of Civil Service. It instituted a system here that was far more radical and thorough than that in the United States. The Governor-General after William Taft adopted the policy of appointing Filipinos in the government regardless of their party affiliation. As the result of these the personnel of the Civil Service had gradually come to be one of which the people of the United States could feel justly proud. Necessity for Constitutional provision. - The inclusion in the constitution of provisions regarding the "merit system" is a necessity of modern times. As its establishment secures good government the citizens have a right to accept its guarantee as a permanent institution. Separation, suspension, demotions and transfers. - The "merit system" will be ineffective if no safeguards are placed around the separation and removal of public employees. The Committee's report requires that removals shall be made only for "causes and in the manner provided by law. This means that there should be bona fide reasons and action maybe taken only after the employee shall have been given a fair hearing. This affords the public employees reasonable security of tenure. (II Aruego's Framing of the Constitution, 886, 887, 890.) As has been seen, three specified classes of positions - policy-determining, primarily confidential and highly technical - are excluded from the merit system and dismissal at pleasure of officers and employees appointed therein is allowed by the Constitution. These positions involved the highest degree of confidence, or are closely

bound out with and dependent on other positions to which they are subordinate, or are temporary in nature. It may truly be said that the good of the service itself demands that appointments coming under this category determinable at the will of the officer that makes them. The office of city engineer is neither primarily confidential, policy-determining, nor highly technical. Every appointment implies confidence, but much more than ordinary confidence is reposed in the occupant of a position that is primarily confidential. The latter phrase denotes not only confidence in the aptitude of the appointee for the duties of the office but primarily close intimacy which insures freedom of intercourse without embarrassment or freedom from misgivings of betrayals of personal trust or confidential matters of state. Nor is the position of city engineer policy-determining. A city engineer does not formulate a method of action for the government or any its subdivisions. His job is to execute policy, not to make it. With specific reference to the City Engineer of Baguio, his powers and duties are carefully laid down for him be section 2557 of the Revised Administrative Code and are essentially ministerial in character. Finally, the position of city engineer is technical but not highly so. A city engineer is not required nor is he supposed to possess a technical skill or training in the supreme or superior degree, which is the sense in which "highly technical" is, we believe, employed in the Constitution. There are hundreds of technical men in the classified civil service whose technical competence is not lower than that of a city engineer. As a matter of fact, the duties of a city engineer are eminently administrative in character and could very well be discharged by non-technical men possessing executive ability. Section 10 of Article VIII of the Constitution requires that "All cases involving the constitutionality of a treaty or law shall be heard and decided by the Supreme Court in banc," and warns that "no treaty or law may be declared unconstitutional without the concurrence of two-thirds of all the members of the Court." The question arises as to whether this judgment operates as invalidation of section 2545 of the Revised Administrative Code or a part of it so as to need at least eight votes to make effective. The answer should be in negative. We are not declaring any part of section 2545 of the Revised Administrative Code unconstitutional. What we declare is that the particular provision thereof which gave the Chief Executive power to remove officers at pleasure has been repealed by the Constitution and ceased to be operative from the time that instrument went into effect. Unconstitutionally, as we understand it, denotes life and vigor, and unconstitutional legislation presupposes posteriority in point of time to the Constitution. It is a statute that "attempts to validate and legalize a course of conduct the effect of which the Constitution specifically forbids (State ex-rel. Mack vs. Guckenberger, 139 Ohio St., 273; 39 NE. [2d], 840.) A law that has been repealed is as good as if it had never been enacted, and can not, in the nature of things, contravene or pretend to contravene constitutional inhibition. So, unlike legislation that is passed in defiance of the Constitution, assertive and menacing, the questioned part of section 2545 of the Revised Administrative Code does not need a positive declaration of nullity by the court to put it out of the way. To all intents and purposes, it is non-existent, outlawed and eliminated from the statute book by the Constitution itself by express mandate before this petitioner was appointed. Incidentally, the last discussion answers and disposes of the proposition that in accepting appointment under section 2545 of the Revised Administrative Code, the petitioner must be deemed to have accepted the conditions and limitations attached to the appointment. If the clause of section 2545 which authorized the President to remove officers of the City of Baguio at pleasure had been abrogated when petitioner's appointment was issued, the appointee can not presumed to have abided by this condition. We therefore hold that the petitioner is entitled to remain in office as City Engineer of Baguio with all the emoluments, rights and privileges appurtenant thereto, until he resigns or is removed for cause, and that respondent Mallare's appointment is ineffective in so far as it may adversely affect those emoluments, rights and privileges. Without costs.

Santos v. Mallare Facts: Eduardo de los Santos was appointed City Engineer of Baguio on July 16, 1946 by the President of the Philippines. His appointment was confirmed by the Commission on Appointments on August 6, and on the 23rd, he qualified for and began to exercise the duties and functions of the position. On June 1, 1950, Gil R. Mallare was extended an Ad interim appointment by the President to the same position, after which, on June 3, the Undersecretary of the Department of Public Works and Communications directed Santos to report to the Bureau of Public Works for another assignment. Santos refused to vacate the office. The City Mayor and the other city officials ignored him and paid Mallare the salary corresponding to the position. Santos filed this quo warranto to question the legality of the appointment of respondent Gil R. Mallare to the office of city engineer for the City of Baguio which the petitioner occupied and claims to be still occupying. Issue: WON the removal of Santos as city engineer as he was appointment, confirmed and started to exercise his duties as such was legal. Held: No. It is illegal and he should remain as city engineer. The position of City Engineer of Baguio belongs to the category of unclassified service. In Lacson v. Romero, the Court held that officers or employees in the unclassified as well as those in the classified service are protected by Article XII, Sec. 4 of the 1935 Constitution which states that no officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law. However, Section2545 of the Revised Administrative Code, which falls under Chapter 61 entitled "City of Baguio, "authorizes the Governor General (now the President) to remove at pleasure any of the officers enumerated therein, one of whom is the city engineer. It is obvious that the aforequoted constitutional provision is contrary to the provision of the RAC. And Sec. 2 of Article XVI of the Constitution declares that all laws of the Philippine Islands shall continue in force until the inauguration of the Commonwealth of the Philippines; thereafter, such laws shall remain operative, unless inconsistent with this Constitution, until amended, altered, modified, or repealed by the Congress of the Philippines. The Constitution leaves it to the Congress to provide for the cause of removal, and it is suggested that the President's pleasure is itself a cause. The phrase "for cause" in connection with the removals of public officers has acquired a well-defined concept. It means for reasons which the law and sound public policy recognized as sufficient warrant for removal, that is, legal cause, and not merely causes which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must relate to and affect the administration of the office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public. Sec. 1 of Art. XII of the Constitution states that a Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination. The first clause is a definition of the scope of Civil Service, the men and women which section 4 protects. It seems obvious from that definition that the entire Civil Service is contemplated, except positions "which are policy-determining, primarily confidential or highly technical in nature. Hence, the existing provisions at the time of the adoption of the Constitution. Civil Service as embracing both classes of officers and employees possessed definite legal and statutory meaning when the Constitution was approved. Section 670 of the Revised Administrative Code already provided that "Persons in the Philippine civil service pertain either to the classified service," and went on to say that "The classified service embraces all not expressly declared to be in the unclassified service." Then section 671 described persons in the unclassified service as officers, other than the provincial treasurers and assistant directors of bureaus or offices, appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, and all other officers of the government whose appointments are by law vested in the President of the Philippines alone. The office of city engineer is neither primarily confidential, policydetermining, nor highly technical. Every appointment implies confidence, but much more than ordinary confidence is reposed in the occupant of a position that is primarily confidential. The latter phrase denotes not only confidence

in the aptitude of the appointee for the duties of the office but primarily close intimacy which insures freedom of intercourse without embarrassment or freedom from misgivings of betrayals of personal trust or confidential matters of state. Nor is the position of city engineer policy-determining. A city engineer does not formulate a method of action for the government or any its subdivisions. His job is to execute policy, not to make it. With specific reference to the City Engineer of Baguio, his powers and duties are carefully laid down for him be section 2557 of the Revised Administrative Code and are essentially ministerial in character. Finally, the position of city engineer is technical but not highly so. A city engineer is not required nor is he supposed to possess a technical skill or training in the supreme or superior degree, which is the sense in which "highly technical" is, we believe, employed in the Constitution. There are hundreds of technical men in the classified civil service whose technical competence is not lower than that of a city engineer. As a matter of fact, the duties of a city engineer are eminently administrative in character and could very well be discharged by non-technical men possessing executive ability. 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 ............................................................ 1 150 watt bulb per month ............................................................ 1 200 watt bulb per month ............................................................ METER RATE For the first 15

9.00 13.00 17.00

For the first 15 Kw. hrs. ............................................................ For the next 35 Kw. hrs. ............................................................ For the next 50 Kw. hrs. ............................................................ For all over 100 Kw. hrs. ............................................................ 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.

P0.40 .30 .25 .20

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

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.1wph1.t 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

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 letterpetition 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 the nature of 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. EN BANC [G.R. No. L-9223. June 30, 1956.] EDUARDO BRILLANTES, Plaintiff-Appellant, vs. LEONARDO CASTRO, doing business under the name and style of ALMACAS POLICE PROTECTIVE BUREAU, Defendant-Appellee.

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. Vigan Electric Light Co., Inc. v. Public Service Commission, 11 SCRA 317 (1964) FACTS: In an alleged letter-petition, petitioner was charged with black market of electric meters and that its meters were installed in bad faith to register excessive rates. Petitioner received a communication from General Auditing Office (GAO) that it will be audited. PSC issued subsequently a subpoena duces tecum requiring petitioners to produce before PSC, during a conference scheduled for April 10, 1962, certain book of accounts. Petitioner moved to quash such subpoena. The conference was postponed twice until it was finally cancelled. In May 1962, PSC issued an order, which after finding that petitioner had an excess of revenues by 18%, lowered the present meter rates of petitioner. Hence, this petition for certiorari is instituted. ISSUE: WON notice and hearing is required RULING: Yes. In support to its special defense, respondent PSC maintains that rate-fixing is a legislative function; that legislative or rule-making powers may constitutionally be exercised without previous notice or hearing. Although the rulemaking power and even the power to fix rates when such are meant to apply to all enterprises of a given kind throughout the Philippines may partake of legislative character, such is not the nature of the order complained of. Here, the order exclusively applies to petitioner. What is more, it is predicated upon the finding of fact, whether the petitioner is making a profit more than 12% of its invested capital which is denied by the petitioner. Obviously, the latter is entitled to cross-examine the maker of the said report, and to introduce evidence to disprove the contents thereof and/or explain or complement the same, as well as to refute the conclusions drawn therefrom by the respondent. In other words, in making said finding of fact, respondent performed a function partaking of a quasijudicial character, the valid exercise of which demands previous notice and hearing. Indeed, Sections 16(c) and 20 (a) of CA No. 146, explicitly require notice and hearing.

DECISION MONTEMAYOR, J.: This is an appeal from the order of the Court of First Instance of Manila presided by Judge E. Soriano dated February 12, 1955, granting the motion to dismiss filed by the Defendant Leonardo Castro and dismissing the complaint of the Plaintiff Eduardo Brillantes. For a statement of the facts of the case we adopt that made by the trial court which we reproduce below:chanroblesvirtuallawlibrary It appears that on December 1, 1953, the Plaintiff filed a complaint against the Defendant before the Wage Administration Service for the recovery of alleged unpaid salary and overtime pay, the said case bearing No. C-1046; chan roblesvirtualawlibrarythat on February 15, 1954; chan roblesvirtualawlibrarythe Plaintiff and the Defendant entered into an ARBITRATION AGREEMENT whereby they agreed 1. That they submit their case to the Wage Administration Service for investigation; chan roblesvirtualawlibraryand 2. That they bind themselves to abide by whatever decision this Office may render on the case and that they recognize said decision to be final and conclusive; chan roblesvirtualawlibrarythat in accordance with the said agreement, the parties, assisted by their respective counsel, adduced evidence before the Wage Administrative Service; chan roblesvirtualawlibrarythat on May 31, 1954, the latter rendered a decision containing its findings and the following dispositive parts WHEREFORE, considering the evidence presented, the claim for overtime and underpayment is hereby dismissed but the Respondent is adjudged to pay to the claimant the amount of fifty pesos and eighty-eight centavos (P50.88) corresponding to his salary for services rendered in the month of November, 1953 and to deposit the same within five (5) days from receipt thereof; chan roblesvirtualawlibrarythat no appeal was taken from the said decision, and that on November 10, 1954, the Plaintiff filed a complaint against the Defendant with this Court over the same subject- matter and cause of action litigated between them before, and decided by, the Wage Administration Service. (pp. 22-23, Record on Appeal.) In support of its order of dismissal, the trial court made the following observations and conclusions which we quote with favor:chanroblesvirtuallawlibrary It is evident that the aforesaid decision rendered by the Hearing Officer of the Wage Administration Service was pursuant to the authority granted to the Secretary of Labor to delegate any or all of his powers in the administration or enforcement of the Minimum Wage Law to the Chief of the WAS, who may act personally or through duly authorized representative Republic Act No. 602, The Minimum Wage Law, section 12(e). Section 7 of the same Act also pertinently provides that Any person aggrieved by an order of the Secretary of Labor issued

under this Act may obtain a review of such order in the Supreme Court by filing in such court within fifteen (15) days after the entry and publication of such order a written petition praying that the order of the Secretary of Labor be modified or set aside in whole or in part cralaw The Jurisdiction of the Wage Administration Service to render the aforesaid decision, as well as the remedy of the aggrieved party against such a decision, is impliedly recognized by the Supreme Court in Gonzales vs. Hon. Secretary of Labor, et als., G.R. No. L- 6409, wherein it was said:chanroblesvirtuallawlibrary The point raised by the Solicitor General on behalf of the Respondent. Secretary of Labor that Petitioners remedy is to appeal to the President of the Philippines is not well taken. Section 7 of the law creating the WAS (Rep. Act No. 602) expressly authorized any person aggrieved by an order of the Secretary of Labor to obtain a review of such order in the Supreme Court. In view of the failure of the herein Plaintiff to avail himself of the remedy marked out by said Section 7 of Republic Act No. 602 within the time therein specified, the aforesaid decision of the Wage Administration Service became final and conclusive, not only by clear implication but also by express agreement of the parties That they bind themselves to abide by whatever decision this Office (WAS) may render on the case, and that they recognize said decision to be final and conclusive. To permit the herein Plaintiff to institute the present case before this Court, after the same had been finally and conclusively decided by the Wage Administration Service, is therefore to allow him to go back on his own solemn agreement, to set at naught the provisions of Republic Act No. 602; chan roblesvirtualawlibraryand to encourage duplication of work, if not conflicting judgments, by authorizing a party first to file his case with the Wage Administration Service and thereafter, in case of an adverse decision, to refile the same case with the Court of First Instance. This could not have been the legislators intention in the enactment of Republic Act No. 602. (pp. 23-24, Record on Appeal.) Attorney Manuel Y. Macias counsel for Appellant in his brief concedes that the decision rendered by the hearing officer of the WAS is an order issued pursuant to Section 7, above quoted, of the Minimum Wage Law in relation to Section 12 (a) which authorizes delegation by the Secretary of Labor of his powers in the administration or enforcement of the Minimum Wage Law to the Chief of the Wage Administrative Service. He, however, contends that the right to go to the Supreme Court for review of said order granted by Section 7 of the Minimum Wage Law is not exclusive, because according to him, under said Section 7 the review by this Tribunal is limited to questions of law and that the findings of fact contained in the appealed decision must be accepted. This is not entirely correct. The findings of fact made by the Secretary of Labor or his delegate are accepted and are conclusive only if supported by substantial evidence. So that Plaintiff could well have appealed from the decision of the WAS to this Tribunal, even on question of fact, if he was prepared and in a position to show that the findings of fact of the WAS were not supported by substantial evidence. Then counsel for Appellant, referring to the hearing officer of the WAS and his decision, says the following:chanroblesvirtuallawlibrary Appellant cannot accept the findings of fact in the decision of the Hearing Officer of the Wage Administration Service because they are not merely contrary to the facts but a scandalous distortion of them with no other end in view but to favor Appellee, the Respondent employer. The Hearing Officer, to promote this end, callously ignored Appellants evidence. His so-called decision is a mockery of justice, and absolute nullity for which no fair minded citizen can have any respect. (p. 5, Appellants Brief.) And of Judge Soriano who dismissed Plaintiffs complaint, the same counsel comments thus:chanroblesvirtuallawlibrary The court a quo refused to perform the functions of a trial court and rendered the foregoing ruling without any evidence having been first presented pro or con. It decided an Issue in favor of one party and against the other upon the mere representations of the favored party and refused absolutely to hear the other. The court a quos act in so doing is a plain violation of the right to due process p. 8, Appellants Brief.)

The above is couched in strong and disrespectful language unbecoming a lawyer who is an officer of the court, and highly improper in referring to an administrative official authorized to render decisions and especially to a Judge of the Court of First Instance. If Plaintiff-Appellant and his counsel were dissatisfied with the findings of the hearing officer of the WAS; chan roblesvirtualawlibraryif they believed that the findings were a distortion of the facts as contained in the evidence, they should have appealed from said decision to this Tribunal. And if they were really convinced that said hearing officer of the WAS deliberately distorted the facts to favor the employer, they should have prepared charges of partiality and malfeasance and lodged the same with the proper authorities for investigation. Now is neither the time nor the occasion to air said grievance, assuming for the moment that it is real and well founded. And as to the reference to the trial court, said court merely acted upon the motion to dismiss. It considered the complaint and the motion to dismiss. That was enough. There was no need for the presentation of any evidence. So, the action of the trial court was proper and warranted; chan roblesvirtualawlibrarywhich cannot be said of the comment and observations of counsel above reproduced. Said counsel is hereby admonished to use more temperate and respectful language and observe more proper conduct in the future. We fully agree with the trial court in its order dismissing the complaint on the ground that the action is barred by prior judgment. There is no question that the complaint filed by Plaintiff-Appellant with the WAS may be regarded as a suit by one party against another to enforce a right; chan roblesvirtualawlibrarythat the WAS in entertaining said suit, hearing the parties and deciding the case acted as a quasi-judicial body and the proceedings before it were quasi-judicial proceedings, and conducted in accordance with law, and so was the decision rendered. Not only this, but the parties before the commencement of the proceedings signed an agreement whereby they submitted their case to the WAS, binding themselves by whatever decision the WAS may render on the same, and that they recognized the decision to be final and conclusive. After signing that agreement or pledge, Plaintiff- Appellant may not now be heard to say that the decision rendered by the WAS has no legal effect on him. Besides, even assuming that despite the agreement the decision did not automatically become final, still Plaintiffs failure to appeal therefrom to the Supreme Court as provided by the Minimum Wage Law (Rep. Act 602) rendered it final and conclusive and served as a bar to another action between the same parties involving the same subject matter and cause of action and the same issues. In the case of Pealosa vs. Tuason, 22 Phil. 303, 314, we held:chanroblesvirtuallawlibrary cralaw a judgment rendered cralaw by a court of competent jurisdiction on the merits, is a bar to any future suit between the same parties or their privies upon the same cause of action so long as it remains unreserved; or in the language of Mr. Justice Field in the opinion just cited:chanroblesvirtuallawlibrary It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. And in the case of Tejedor vs. Palet, 61 Phil. 494, 502-503, we equally held:chanroblesvirtuallawlibrary The rule is often stated in general terms that a judgment is conclusive not only upon the questions actually contested and determined, but upon all matters which might have been litigated and decided in that suit; chan roblesvirtualawlibraryand this is undoubtedly true of all matters properly belonging to the subject of the controversy and within the scope of the issues cralaw . (citing 34 C.J., pp. 909-911.)

The authorities above cited on res adjudicata refer to decisions rendered by the courts. Are they applicable to decisions of a quasi-judicial body like the Wage Administration Service (WAS)? The answer is in the affirmative, as may be seen from the following authorities:chanroblesvirtuallawlibrary The rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive, or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers. This rule has been recognized as applying to the decisions of road or highway commissioners, commissioners of motor transportation, boards of audit, county boards, tax commissioners, boards, or officers, the federal trade commission, school commissioners, police commissioners, sewers commissioners, land commissioners or officers, collector of customs, referees in bankruptcy court commissioners, boards or other tribunals administering workmens compensation acts, and other like officers and boards. However, a particular decision or determination may not be conclusive, as where it was not a judicial, as distinguished from a legislative, executive, or ministerial, determination, or the matter was not within the jurisdiction of the officer or board cralaw . (50 C.J. S., Judgments, Sec. 690, pp. 148-149). cralaw There are, however, cases in which the doctrine of res judicata has been held applicable to judicial acts of public, executive, or administrative officers and boards. In this connection, it has been declared that whenever a final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata. (30 Am. Jur., Judgments, Sec. 164, p. 910). (Italics Supplied). In view of the foregoing, the order appealed from is affirmed. No costs.

the SC as provided by the Minimum wage law rendered it final and conclusive and served as a bar to another action between the same parties involving the same subject matter and cause of action and the same issues. Besides, the parties signed an agreement whereby they submitted their case to the WAS, binding themselves to abide by whatever decision it would validly render. Note: the principle of res judicata is applicable to decisions of a quasi-judicial body like the WAS. In this connection, it has been declared that whatever a final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the SC, upon a writ of error or a certiorari; such final adjudication may be pleaded as res judicata. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. Nos. 76142-43

December 27, 1993

VDA FISH BROKER and/or VENERANDO ALONZO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, RUPERTO BULA and VIRGILIO SALAC, respondents. Jose Edward L. Navarro for petitioners. Arellano, Malonzo & Capoyoc Law Offices for private respondents.

Eduardo Brillantes vs. Leonardo CastroGr. No. L-9223 June 30, 1956 Facts: On December 1, 1953, Brillantes filed a complaint against Castro before the Wage Administration Service (WAS) for the recovery of the alleged unpaid salary and overtime pay. On February 15, 1954 Brillantes and Castro entered into an Arbitration Agreement whereby they agreed 1. That they submit their case to the WAS for investigation; and 2. That they bind themselves to abide by whatever decision WAS may render over the case; and that they recognize said decision to be final and conclusive. WAS ruling: the claim for overtime and underpayment is hereby dismissed but the respondent is adjudged to pay the claimant P50.88 corresponding to his salary for services rendered in the month of November. No appeal was taken from this decision and on November 10, 1954, Brillantes filed a complaint against Castro with this Court over the same subject matter and cause of action litigated between them before and decided by the WAS. The counsel of Brillantes agreed that the decision rendered by the hearing officer of the WAS is an order issued pursuant to section 7 of Minimum Wage Law in relation section 12 which authorizes delegation by the Secretary of Labor of his powers in the administration or enforcement of the MWL to the Chief of the WAS, however he contends that the right to go to the Supreme Court for review of said order granted by section 7 of MWL is not exclusive because under said section the review by this Tribunal is limited to question of law and that the findings of fact contained in the appealed decision must be accepted. Trial Court ruling: dismissed the complaint on the ground that it is barred by prior judgment. Hence, this appeal. Issue: whether or not, the second complaint is barred by prior judgment. Held: affirmative; the SC fully agree with the decision of the trial court that the complaint is barred by prior judgment. There is no question that the complaint filed by Brillantes with the WAS may be regarded as a suit by one party as against another to enforce a right; that the WAS in entertaining said suit, hearing the parties and deciding the case acted as quasi-judicial body and the proceedings before it were quasi-judicial proceedings, and conducted in accordance with law, and so was the decision rendered. The failure of Brillantes to appeal from said decision to

BELLOSILLO, J.: The ruling of public respondent National Labor Relations Commission (NLRC) that "[t]he resolution of a corollary issue in a case does not constitute res judicata to a subsequent case involving the same question of a employeremployee relationship," 1 is disputed by the petitioner and the Office of the Solicitor General (OSG). Petitioner VDA Fish Broker (VDA), a duly licensed fish broker, owned, operated and represented herein by petitioner Venerando D. Alonzo, is in the business of selling fish. It engaged the services of private respondents Ruperto Bula and Virgilio Salac, among others, as batilyos "to arrange the fish in the baera . . . (including) emptying or filling the baera or pulling or dragging the baeras in or out of the designated area." 2 On 14 May 1982, a complaint for non-payment of service incentive leave pay, emergency cost of living allowance, thirteenth month pay, legal holiday and premium pay for rest day and holiday was filed against VDA, and Venerando and Corazon Alonzo by Samahan ng Nagkakaisang Batilyo-NFL represented by its local president and herein respondent Ruperto Bula. Respondent Virgilio Salac also signed the complaint, subsequently docketed as Case No. NLRC-NCR-5-3832-82.

On 26 May 1983, Labor Arbiter Porfirio E. Villanueva dismissed the case for lack of merit. He ruled that there was no employer-employee relationship between VDA and the batilyos as the latter did their tasks . . . in their own way so that they could earn more, as a matter of fact, a batilyo could earn from P60.00 to P150.00 a day for two to four hours work. They are paid by the results according to the number of baeras they have completed. Fish brokers have no control and supervision over the batilyos. After completing their job for two or four hours they could abandon the fish brokers and transfer to another fish broker. They don't observe any regular working hours nor (do) the accomplish any time record . . . . 3 The Labor Arbiter discarded the alleged written agreement of 20 March 1975 between Samahan ng Nagkakaisang Batilyo-NFL and the Fish Brokers Association of the Philippines which recognize the existence of direct employeremployee relationship between fish brokers and batilyos because it did not appear that VDA was a signatory therein. No appeal was taken from this decision. Claiming that they were terminated from the service by VDA on or about 1 January 1984, Salac and Bula filed separate complaints against VDA and/or Venerando Alonzo for illegal dismissal and for recovery of moral and exemplary damages docketed as Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84. On 28 August 1984, Labor Arbiter Adelaido F. Martinez dismissed the complaints on the ground that there was no employer-employee relationship between the opposing parties. He took note of the earlier decision in Case No. NLRC-NCR-5-3832-82 but nonetheless made his own finding that Salac and Bula . . . are independent contractors and they are, as such, laborers or employees of the respondents (VDA). They undertake to do a piece of work for their own account, under their own responsibility and with minimum interference on the part of the respondents . . . . They offer their services to the other fish brokers, dealers, catchers and the general public and are only paid only when they render service. They are without any employer. 4 This decision was appealed to the NLRC. On 8 August 1986, the NLRC reversed the decision of the Labor Arbiter, directed VDA and Alonzo to reinstate Salac and Bula to their former positions without loss of seniority rights and privileges, and to pay their back wages from 1 January 1984 until actual reinstatement. On 17 October 1986, this petition for certiorari, prohibition and mandamus with prayer for the issuance of a restraining order was filed seeking reversal of the decision of the NLRC primarily on the ground that a previous case ruling that no employment relationship existed between the private parties constituted a bar to the present suit. On 27 October 1986, we issued a temporary restraining order enjoining respondents from taking further action on the assailed decision. 5 In its comment, the OSG subscribed to the res judicata theory of petitioner. Consequently, the NLRC had to file its own comment sustaining its assailed decision. Private respondents did not submit any comment. We have several times applied the concept of res judicata to administrative decisions. In San Luis v. Court of Appeals, 6 through Mme. Justice Irene R. Cortes, we made the following pronouncement: . . . . It is well-established in our jurisprudence that the decisions and orders of administrative agencies, rendered pursuant to their quasi-judicial authority, have upon their finality, the force and binding effect of a final judgment within the purview of the doctrine of res judicata (Brillantes v. Castro, 99 Phil. 497 [1956], Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72). The rule of res judicata which

forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers (Brillantes v. Castro, supra at 503). Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to the judgments of what are ordinarily known as courts, but it extends to all bodies upon whom judicial powers had been conferred. Hence, whenever any board, tribunal or person is by law vested with authority to judicially determine a question . . . such determination, when it has become final, is as conclusive between the same parties litigating for the same cause as though the adjudication had been made by a court of general jurisdiction (Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, supra at 76). The NLRC however claims that res judicata cannot be applied here because the causes of action and issues in the two cases are different. For a while it is true that the earlier case, Case No. NLRC-NCR-5-3832-82, pertains to nonpayment of service incentive leave pay, emergency cost of living allowance, thirteenth month pay, legal holiday and premium pay for rest day and holiday, and the later case, Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84, is for illegal dismissal and for moral and exemplary damages, nonetheless, we find that the issue of employeremployee relationship is crucial in the determination of the rights of the parties in both cases. Moreover, it is erroneous to suggest that res judicata applies only where there are similar cases of action. In Nabus v. Court of Appeals, 7 we stated: The principle of res judicata actually embraces two different concepts: (1) bar by former judgment and (2) conclusiveness of judgment. There is "bar by former judgment" when, between the first case where the judgment was rendered, and the second case where such judgment is invoked, there is identity of parties, subject matter and cause of action. When the three identities are present, the judgment on the merits rendered in the first constitutes as absolute bar to the subsequent action. It is final as to the claim or demand in controversy, including the parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. But where between the first case wherein judgment is invoked, there is identity of parties, but there is no identity of cause of action, the judgment is conclusive in the second case, only as those matters actually and directly controverted and determined, and not as to matters merely involved therein. This is what is termed conclusiveness of the judgment (Viray, etc. vs. Marinas, etc., et al. 49 SCRA 44 [1973]). American jurisprudence on the matter, 8 although merely persuasive, is even more categorical: An administrative determination may also operate by way of collateral estoppel (or res judicata in a limited sense) in a subsequent proceeding in regard to the parties to a prior proceeding and as to matters actually and legally determined therein (Farm Invest. Co. v. Carpenter, 9 Wyo 110, 61 P 258 . . . .). Where the underlying issue in the two proceedings is the same, the adjudication of the issue in the first proceeding is determinative of the same issue in the second (United States v. Willard Tablet Co. [CA 7 Ind] 141 F2d 141, 152 ALR 1194 [where remedies sought by government in two proceedings were different, the first before the Federal Trade Commission and the second before a court, the identical issue of falsity of labeling was involved in each]. See also Federal Trade Com. v. Morton Salt Co. 334 US 37, 92 L ed 1196, 68 S Ct 822, 1 ALR 2d 269). An issue of fact litigated and determined by an administrative decision, and essential to the decision, is conclusive between the parties in a subsequent action, even though a different claim is involved (See People v. Western Airlines, Inc. 42 Cal 2d 621, 268 P2d 723, app dismd 348 US 859, 99 L ed 677, 75 S Ct 87. In an action at law, a party is estopped to deny the truth of a finding which was essential to the administrative determination, and may not offer evidence to show that the determination was not justified as matter of law Lumberman's Mut. Casualty Co. v. Bissell, 220 Mich 352, 190 NW

283, 28 ALR 874. As to matters of fact within the scope of the authority of the officers of the Land Department of the United States, their findings must be taken as conclusive in the absence of fraud and mistake, upon the principle of estoppel by former adjudication Whitehill v. Victoria Land & Cattle Co. 18 NM 520, 139 P 184). It is undisputed that the factual issue of the existence of employer-employee relationship has been determined with finality in the earlier case of Case No. NLRC-NCR-5-3832-82, hence, that same finding should have been deemed conclusive in Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84. Were we to ignore the principle of res judicata, an absurd situation would arise where the same administrative agency would have diametrically opposed conclusions based on apparently similar circumstances. The effect may even be more farcical in the sense that private respondents are given dual or conditional status, i.e., they are employees for the purpose of reinstatement, but independent contractors for purposes of entitlement to service incentive leave pay, etc. This is the dilemma the principle of res judicata seeks to avoid. Both private parties have already submitted the question of the existence of employer-employee relationship before the Labor Arbiter in Case No. NLRC-NCR-53832-82 which, incidentally, private respondents have allowed to become final by not appealing from it; consequently, they are precluded from disputing the same findings a second time. We thus rule that the administrative finding on the merit of the absence of employer-employee relationship between petitioner and private respondents in Case No. NLRC-NCR-5-3832-82, absent any showing of change in the circumstances of the parties, or that the decision in Case No. NLRC-NCR-5-3832-82 has been reversed or vacated, is conclusive upon Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84 should have been dismissed. Petitioner also disputes the ruling of the NLRC sustaining private respondents' argument that "since the complainants (herein private respondents) are bona fide members of Samahang Nagkakaisang Batilyos-NFL, certified as the sole and exclusive bargaining representative of the rank-and-file employees in VDA RC3 Fish Broker per Order of 10 August 1982 in Case No. NCR-LRD-M-4-143-82, the issue of their status as employees of respondent (herein petitioner) is rendered moot and academic." 9 Petitioner argues that no inference of employer-employee relation may be deduced from this alleged circumstance because no such relationship actually existed, and neither was there any order to that effect presented at the hearing. This is not wholly correct for photocopies of such copies were in the records and attached as annexes to two of private respondents' pleadings submitted for the consideration of the Labor Arbiter and the NLRC. 10 But the determination in Case No. NCR-LRD-M-4-143-82 (for certification election) cannot be considered more conclusive as to the existence of employer-employee relationship that the decision in Case No. NLRC-NCR-5-3832-82 (for money claims). In the decision of the Labor Arbiter, which was set aside by the assailed NLRC decision, it was stated: We note that the Order in Case NCR-LRD-183-82 relied upon the complainants was issued on August 10, 1982, while the Decision in Case NLRC-NCR-5-3832-82 relied upon by respondents was promulgated on May 20, 1983. The later pronouncement should prevail, according to which there is no employer-employee relationship between respondents and individual complainants. 11 We have checked their records and found correct the finding of the Labor Arbiter that the Order in Case No. NCRLRD-M-4-143-82 was issued on 10 August 1982, while the Order in Case No. NLRC-NCR-5-3832-82 was promulgated on 20 May 1983. Yet the NLRC, without showing why or how, casually concluded that Case No. NCR-LRD-M-4-14382 is "the later

case" which "put to rest the latter's (herein private respondents') status as employees." 12 NLRC justified its disregard of the findings of the Labor Arbiter in Case No. NLRC-NCR-5-3832-82 on the basis that the matter of employer-employee relation was allegedly only a corollary issue therein. We do not subscribe to this observation considering that the certification order in Case No. NCR-LRD-M-4-143-82 was a poor basis for concluding the existence of employer-employee relation not only because there was no categorical statement thereon but also because there was no finding of facts on which a determination of employment relation could be based. As regards the decision of the Labor Arbiter to ignore the earlier Order in Case No. NCR-LRD-M-4-143-82, the general rule is that, as between prior conflicting judgments involving the same parties or their privies, the last in point of time is controlling (Perkins v. Benguet Consol. Min. Co. 55 Cal App 2d 720 . . . .). In such case, it is the later, and not the earlier, judgment is operative as res judicata (California Bank v. Traeger, 215 Cal 346 . . . .). The rule is where in two successive actions between the same parties inconsistent judgments are rendered, the judgment in the second action is controlling in a third action between the parties. 13 While the foregoing may already be sufficient to warrant reversal of the assailed decision and to grant the writ prayed for in the petition, a discussion on the application of the ruling in RJL Martinez Fishing Corporation v. NLRC 14 is in order to correct any misimpression thereon. The statement in RJL Martinez Fishing Corporation v. NLRC that "the continuity of employment is not the determining factor, but rather, whether the work of the laborer is part of the regular business or occupation of the employer," 15 citing Art. 281 (now 280) of the Labor Code and Philippine Fishing Boat Officers and Engineers Union v. CIR, 16 does not mean that the essential elements of employer-employee relationship are done away with. The statement simply means that where the elements are present, the existence of employer-employee relationship is not affected by the fact that the work is seasonal or intermittent or in the meantime suspended. Otherwise, agents and independent contractors, e.g., playing bands in bars, would be comprehended whenever their services are said to be necessary to the business of one who engages or hires them. Moreover, in view of the unreversed finding of the Arbiter that the control requirement was wanting in this case, there is no occasion to apply the ruling in RJL Martinez Fishing Corporation v. NLRC. There obviously being grave abuse of discretion, the assailed decision of respondent NLRC must be set aside. WHEREFORE, the petition for issuance of a writ of certiorari is granted and the assailed decision of respondent National Labor Relations Commission of 8 August 1986 is SET ASIDE. The decision of Labor Arbiter Adelaido F. Martinez dated 28 August 1984 in Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84 is REINSTATED and AFFIRMED. The restraining order we issued on 27 October 1986 is made permanent. SO ORDERED. G.R. No. 162784 June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner, vs. SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents. DECISION

PUNO, C.J.: This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority (NHA) against the Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and private respondent Segunda Almeida. On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by virtue of Presidential Decree No. 757.2 NHA as the successor agency of LTA is the petitioner in this case. The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left heirs. Margarita Herrera passed away on October 27, 1971.3 On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a Deed of SelfAdjudication claiming that she is the only remaining relative, being the sole surviving daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera. The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The pertinent portions of which are as follows: SINUMPAANG SALAYSAY SA SINO MAN KINAUUKULAN; Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod: 1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land Tenure Administration; 2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No. 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G. Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959; 3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran ng kaniyang sariling cuarta sa Land Tenure Administration;

4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA, Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana at; 5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si Francisca Herrera ang loteng nasasabi sa unahan. SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960.4 The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand side of both pages of the document with the said document having 2 pages in total. Margarita Herrera placed her thumbmark5 above her name in the second page and at the left-hand margin of the first page of the document. The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-Adjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now, Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263.6 On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) was rendered and the deed was declared null and void.7 During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed an application with the NHA to purchase the same lots submitting therewith a copy of the "Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the application. In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding that: From the evidence of the parties and the records of the lots in question, we gathered the following facts: the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz Herrera Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the Tunasan Homesite since birth; protestee was born on the lots in question; protestee left the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee) son Roberto Herrera has been occupying the lots in question; he has been there even before the death of the late Margarita Herrera; on October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or transferred all her rights and interest over the lots in question in favor of the protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land Tenure Administration. This Office finds that protestee has a better preferential right to purchase the lots in question.9 Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was affirmed by the Office of the President in a Decision dated January 23, 1987.11

On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.12 The NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued in their favor.13 Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave the premises that she was occupying. Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government Lot's Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31. In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed properties, and reraised the fact that Francisca Herrera's declaration of self-adjudication has been adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged that the complaint was barred by laches and that the decision of the Office of the President was already final and executory.14 They also contended that the transfer of purchase of the subject lots is perfectly valid as the same was supported by a consideration and that Francisca Herrera paid for the property with the use of her own money.15 Further, they argued that plaintiff's occupation of the property was by mere tolerance and that they had been paying taxes thereon.16 The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989 reversed and held that the Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to real property within its jurisdiction."18 The case was then remanded for further proceedings on the merits. A pre-trial was set after which trial ensued. On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the decision of the Office of the President awarding the subject lots in favor of Francisca Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded to private respondent. The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It then held that the said document must first be submitted to probate before it can transfer property. Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration which were both denied on July 21, 1998 for lack of merit. They both appealed to the Court of Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late. On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz: There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and interest over the subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and grammatical sense that the

document is a simple disposition of her estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to the defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was questioned in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject lots and presented the "Sinumpaang Salaysay" stating that it is a deed of assignment of rights.19 The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld the trial court ruling that the "Sinumpaang Salaysay" was not an assignment of rights but one that involved disposition of property which shall take effect upon death. The issue of whether it was a valid will must first be determined by probate. Petitioner NHA elevated the case to this Court. Petitioner NHA raised the following issues: A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS; B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT LOTS; AND C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY. We rule for the respondents. Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence were already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably circumscribing the scope thereof and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred. In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule prescribing that "administrative orders cannot be enforced in the courts in the absence of an express statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies.

In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial powerthat which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative agency for the "formulation of a final order."22 This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.23 However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branchesthe legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."24 Courts have an expanded role under the 1987 Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of government committed an act that falls under the category of grave abuse of discretion amounting to lack or excess of jurisdiction.25 Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and QuasiJudicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of the Supreme Court in accordance with the Constitution"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA. Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per entry of judgment dated October 10, 1989).28 We find no reason to disturb this ruling. Courts are duty-bound to put an end to controversies. The system of judicial review should not be misused and abused to evade the operation of a final and executory judgment.29 The appellate court's decision becomes the law of the case which must be adhered to by the parties by reason of policy.30 Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her application on the subject lot; that it considered the respective application and inquired whether she had all the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award was not done arbitrarily. The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the NHA.31 That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same before it."32 We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted that the effectivity of the said document commences at the time of death of the author of the instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay" Hence, in such period, all the interests of the person should

cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides that: Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.33 By considering the document, petitioner NHA should have noted that the original applicant has already passed away. Margarita Herrera passed away on October 27, 1971.34 The NHA issued its resolution35 on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without considering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirsin accordance with a will or by operation of law. The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an existing Contract to Sell36 with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both partiesMargarita Herrera and NHA. Obligations are transmissible.37 Margarita Herrera's obligation to pay became transmissible at the time of her death either by will or by operation of law. If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property already initially paid for by the decedent. Such would be an act contrary to the law on succession and the law on sales and obligations.38 When the original buyer died, the NHA should have considered the estate of the decedent as the next "person"39 likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots. We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall transpire upon the death of the instrument maker.41 IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED. No cost. SO ORDERED.

SINUMPAANG SALAYSAY NHA v. Segunda Almeida, CAG.R. No. 162784; June 22, 2007 Facts: The Land Tenure Administration awarded to Margarita Herrera several portions of land inSan Pedro, Laguna. She had two children, Francisca and Beatriz(she died before her mom;mother of PR). When Margarita passed away, Francisca executed a deed of self-adjudication claiming that she was the only remaining relative of Margarita. The deed of was based on a 'Sinumpaang Salaysay' allegedly executed by Margarita. The surviving heirs of Beatriz filed a case for annulment of the deed. A decision was rendered and the deed was declared null and void. During the trial, Francisca filed an application with the NHA to purchase the same lots. The NHA granted the application. The PR appealed to the Office of the President. The NHA reso was affirmed. When Francisca died, her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. The transfer of rights was approved by the NHA. The heirs of Francisca directed PR to leave the premises that she was occupying. Feeling aggrieved, PR sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed a complaint in the RTC of San Pedro, Laguna. She invoked her 40 year occupation of the property and re-raised the fact that Francisca's declaration is a nullity because the other heirs were disregarded. The RTC dismissed the case for lack of jurisdiction. The CA reversed the decision and remanded the case for further hearing. The RTC rendered a decision setting aside the resolution of the NHA and the decision of the Office of the President. The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It then held that the said document must first be submitted to probate before it can transfer property. The NHA and the heirs of Francisca filed their respective motions which were both denied. The CA affirmed the decision of the trial court. Issue: WON the decision of NHA is arbitrary. Ruling: Yes. The NHA gave due course to the application made by Francisca Herrera without considering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirs in accordance with a will or by operation of law. When the original buyer died, the NHA should have considered the estate of the decedent as the next "person" likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of SelfAdjudication) which rendered the deed therein null and void should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots.

HON. HILARION U. JARENCIO, as Presiding Judge, Court of First Instance of Manila, Branch XXIII, and FERNANDO MANALASTAS, Assistant City Public Service Officer of Manila, and ALL OTHER CITY OFFICIALS AND EMPLOYEES SIMILARLY SITUATED, respondents. Office of the Solicitor General Antonio P. Barredo, Ist. Assistant Solicitor General Esmeraldo Umali and Solicitor Bernardo P. Pardo for petitioners. Gregorio A. Ejercito and Felix C. Chavez for respondents.

MARTIN, J.: This is an original action for certiorari and prohibition with preliminary injunction, under Rule 65 of the Rules of Court, seeking to annul and set aside the order of respondent Judge, the Honorable Hilarion J. Jarencio, Presiding Judge of the Court of First Instance of Manila, dated July 1, 1968, in Civil Case No. 73305, entitled "Fernando Manalastas vs. Sec. Ramon D. Bagatsing, etc.", which reads as follows: IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary injunction prayed for by the petitioner [private respondent] be issued restraining the respondents [petitioners], their agents, representatives, attorneys and/or other persons acting in their behalf from further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private respondent] and from instituting contempt proceedings against the petitioner [private respondent] under Section 580 of the Revised Administrative Code. (Stress supplied). Pursuant to his special powers and duties under Section 64 of the Revised Administrative Code, 1 the President of the Philippines created the Presidential Agency on Reforms and Government Operations (PARGO) under Executive Order No. 4 of January 7, 1966. 2 Purposedly, he charged the Agency with the following functions and responsibilities: 3 b. To investigate all activities involving or affecting immoral practices, graft and corruptions, smuggling (physical or technical), lawlessness, subversion, and all other activities which are prejudicial to the government and the public interests, and to submit proper recommendations to the President of the Philippines. c. To investigate cases of graft and corruption and violations of Republic Acts Nos. 1379 and 3019, and gather necessary evidence to establish prima facie, acts of graft and acquisition of unlawfully amassed wealth ... . h. To receive and evaluate, and to conduct fact-finding investigations of sworn complaints against the acts, conduct or behavior of any public official or employee and to file and prosecute the proper charges with the appropriate agency. For a realistic performance of these functions, the President vested in the Agency all the powers of an investigating committee under Sections 71 and 580 of the Revised Administrative Code, including the power to summon witnesses by subpoena or subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation. 4

G.R. No. L-29274

November 27, 1975

SEC. QUIRICO P. EVANGELISTA, in his capacity as Secretary of the Presidential Agency on Reforms and Government Operations, and the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT OPERATIONS (PARGO), petitioner, vs.

Whereupon, on June 7, 1968, petitioner Quirico Evangelista, as Undersecretary of the Agency, issued to respondent Fernando Manalastas, then Acting City Public Service Officer of Manila, a subpoena ad testificandum commanding him "to be and appear as witness at the Office of the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT OPERATIONS ... then and there to declare and testify in a certain investigation pending therein." Instead of obeying the subpoena, respondent Fernando Manalastas filed on June 25, 1968 with the Court of First Instance of Manila an Amended Petition for prohibition, certiorari and/or injunction with preliminary injunction and/or restraining order docketed as Civil Case No. 73305 and assailed its legality. On July 1, 1968, respondent Judge issued the aforementioned Order: IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary injunction prayed for by the petitioner [private respondent] be issued restraining the respondents [petitioners], their agents, representatives, attorneys and/or other persons acting in their behalf from further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private respondent] and from instituting contempt proceedings against the petitioner [private respondent] under Section 530 of the Revised Administrative Code. (Stress supplied). Because of this, petitioners 5 elevated the matter direct to Us without a motion for reconsideration first filed on the fundamental submission that the Order is a patent nullity. 6 As unfurled, the dominant issue in this case is whether the Agency, acting thru its officials, enjoys the authority to issue subpoenas in its conduct of fact-finding investigations. It has been essayed that the life blood of the administrative process is the flow of fact, the gathering, the organization and the analysis of evidence. 7 Investigations are useful for all administrative functions, not only for rule making, adjudication, and licensing, but also for prosecuting, for supervising and directing, for determining general policy, for recommending, legislation, and for purposes no more specific than illuminating obscure areas to find out what if anything should be done. 8 An administrative agency may be authorized to make investigations, not only in proceedings of a legislative or judicial nature, but also in proceedings whose sole purpose is to obtain information upon which future action of a legislative or judicial nature may be taken 9 and may require the attendance of witnesses in proceedings of a purely investigatory nature. It may conduct general inquiries into evils calling for correction, and to report findings to appropriate bodies and make recommendations for actions. 10 We recognize that in the case before Us, petitioner Agency draws its subpoena power from Executive Order No. 4, para. 5 which, in an effectuating mood, empowered it to "summon witness, administer oaths, and take testimony relevant to the investigation" 11 with the authority "to require the production of documents under a subpoena duces tecum or otherwise, subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a similar character." 12 Such subpoena power operates in extenso to all the functions of the Agency as laid out in the aforequoted sub-paragraphs (b),(e), and (h). It is not bordered by nor is it merely exercisable, as respondents would have it, in quasi-judicial or adjudicatory function under sub-paragraph (b). The functions enumerated in all these sub-paragraphs (b), (e), and (h) interlink or intertwine with one another with the principal aim of meeting the very purpose of the creation of the Agency, which is to forestall and erode nefarious activities and anomalies in the civil service. To hold that the subpoena power of the Agency is confined to mere quasi-judicial or adjudicatory functions would therefore imperil or inactiviate the Agency in its investigatory functions under

sub-paragraphs (e) and (h). More than that, the enabling authority itself (Executive Order No. 4, para. 5) fixes no distinction when and in what function should the subpoena power be exercised. Similarly, We see no reason to depart from the established rule that forbids differentiation when the law itself makes none. Nor could We impress upon this subpoena power the alleged strictures of a subpoena issued under the Rules of Court 13 to abridge its application. The seeming proviso in Section 580 of the Revised Administrative Code that the right to summon witnesses and the authority to require the production of documents under a subpoena duces tecum or otherwise shall be "subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a similar character" cannot be validly seized upon to require, in respondents' formulation, that, as in a subpoena under the Rules, a specific case must be pending before a court for hearing or trial and that the hearing or trial must be in connection with the exercise of the court's judicial or adjudicatory functions 14 before a nonjudicial subpoena can be issued by an administrative agency like petitioner Agency. It must be emphasized, however, that an administrative subpoena differs in essence from a judicial subpoena. Clearly, what the Rules speaks of is a judicial subpoena, one procurable from and issuable by a competent court, and not an administrative subpoena. To an extent, therefore, the "restrictions and qualifications" referred to in Section 580 of the Revised Administrative Code could mean the restraints against infringement of constitutional rights or when the subpoena is unreasonable or oppressive and when the relevancy of the books, documents or things does not appear. 15 Rightly, administrative agencies may enforce subpoenas issued in the course of investigations, whether or not adjudication is involved, and whether or not probable cause is shown 16 and even before the issuance of a complaint. 17 It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a lawfully authorized purpose. 18 The purpose of the subpoena is to discover evidence, not to prove a pending charge, but upon which to make one if the discovered evidence so justifies. 19 Its obligation cannot rest on a trial of the value of testimony sought; it is enough that the proposed investigation be for a lawfully authorized purpose, and that the proposed witness be claimed to have information that might shed some helpful light. 20 Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues on litigations it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. The administrative agency has the power of inquisition which is not dependent upon a case or controversy in order to get evidence, but can investigate merely on suspicion that the law is being violated or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too may take steps to inform itself as to whether there is probable violation of the law. 21 In sum, it may be stated that a subpoena meets the requirements for enforcement if the inquiry is (1) within the authority of the agency; (2) the demand is not too indefinite; and (3) the information is reasonably relevant. 22 There is no doubt that the fact-finding investigations being conducted by the Agency upon sworn statements implicating certain public officials of the City Government of Manila in anomalous transactions 23 fall within the Agency's sphere of authority and that the information sought to be elicited from respondent Fernando Manalastas, of which he is claimed to be in possession, 24 is reasonably relevant to the investigations. We are mindful that the privilege against self-incrimination extends in administrative investigations, generally, in scope similar to adversary proceedings. 25 In Cabal v. Kapunan, Jr., 26 the Court ruled that since the administrative charge of unexplained wealth against the respondent therein may result in the forfeiture of the property under the Anti-Graft and Corrupt Practices Act, a proceeding criminal or penal in nature, the complainant cannot call the respondent to the witness stand without encroaching upon his constitutional privilege against self-incrimination. Later, in Pascual, Jr. v. Board of Medical Examiners, 27 the same approach was followed in the administrative proceedings against a medical practitioner that could possibly result in the loss of his privilege to practice the

medical profession. Nevertheless, in the present case, We find that respondent Fernando Manalastas is not facing any administrative charge. 28 He is merely cited as a witness in connection with the fact-finding investigation of anomalies and irregularities in the City Government of Manila with the object of submitting the assembled facts to the President of the Philippines or to file the corresponding charges. 29 Since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege would thus be unwise. 30 Anyway, by all means, respondent Fernando Manalastas may contest any attempt in the investigation that tends to disregard his privilege against self-incrimination. A question of constitutional dimension is raised by respondents on the inherent power of the President of the Philippines to issue subpoena. 31 More tersely stated, respondents would now challenge, in a collateral way, the validity of the basic authority, Executive Order No. 4, as amended in part by Executive Order No. 88. Unfortunately, for reasons of public policy, the constitutionality of executive orders, which are commonly said to have the force and effect of statutes 32 cannot be collaterally impeached. 33 Much more when the issue was not duly pleaded in the court below as to be acceptable for adjudication now. 34 The settled rule is that the Court will not anticipate a question of constitutional law in advance of the necessity of deciding it. 35 Nothing then appears conclusive than that the disputed subpoena issued by petitioner Quirico Evangelista to respondent Fernando Manalastas is well within the legal competence of the Agency to issue. WHEREFORE, the aforequoted order of respondent Judge, dated July 1, 1968, is hereby set aside and declared of no force and effect. Without pronouncement as to costs.

shown to be relevant to issues on litigations, it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry (2) Authority delegated by statute. The administrative agency has the power of inquisition which is not dependent upon a case of controversy in order to get evidence, but can investigate merely on suspicion that the law is being violated or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it too may take steps to inform itself as to whether there is probable violation of the law. In sum, it may be stated that the subpoena meets the requirements for enforcement if the inquiry is:(a) within the authority of the agency(b) the demand is not too indefinite (c) the information is reasonable relevant (3) Information sought reasonably relevant to the investigations. There is no doubt that the fact-finding investigations being conducted by the PARGO upon sworn statements implicating certain public officials of the City Govt of Manila in anomalous transactions fall within the PARGOs sphere of authority and that the information sought to be elicited from respondent Manalastas of which he is claimed to be in possession, is reasonably relevant to the investigations. G.R. No. 164403 March 4, 2008

COSMOS BOTTLING CORPORATION, Petitioner, vs. PABLO NAGRAMA, JR., Respondent. DECISION

SO ORDERED. REYES, R.T., J.: Evangelista vs Jarencio Facts : Evalengista, petitioner, is head of the Presidential Agency on Reforms and Government Operations (PARGO) created by Executive Order No. 4, which, among others, provides: The agency is hereby vested with all the powers of an investigating committee under Sections 71 and 580 of the Revised Administrative Code, including the power to summon witnesses by subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation. Respondent Manalastas (Asst. City Public Service Officer of Manila) was issued a subpoena ad testificandum commanding him to appear as witness at the office of the PARGO to testify in a certain investigation pending therein. Instead of obeying it, he filed a petition with the CFI of Manila for prohibition, certiorari and restraining order assailing its legality. Judge Jarencio issued a restraining order. Hence, this action. Issue : WON the PARGO enjoys the authority to issue subpoena in its conduct of fact-finding investigation Held : YES(1) Agency is with authority to enforce subpoenas issued. Rightly, administrative agencies may enforce subpoenas issued in the course of investigations, WON adjudication is involved, and WON probable cause is shown and even before the issuance of a complaint. It is enough that the investigation be for a lawfully authorized purpose. The purpose of the subpoena is to discover evidence, not to prove a pending charge, but upon which to make one if discovered evidence so justifies. Because judicial power is reluctant if not unable to summon evidence until it is LABOR disputes are often filled with acrimony. It is inevitable when the interest of labor clashes with that of capital. This one showcases labor and industry trading charges of abandonment, insubordination and illegal dismissal. In resolving the controversy, We take another look at the dichotomies between question of law and question of fact, on one hand, and the doctrine of conclusive finality and doctrine of great respect and finality, on the other. Sought to be set aside in this petition for review on certiorari are the following dispositions of the Court of Appeals (CA) in CA-G.R. SP No. 71229:1 (a) Decision2 dated April 6, 2004 which reversed and set aside the June 29, 2001 Resolution of the NLRC; and (b) Resolution3 dated July 2, 2004 which denied the motion for reconsideration of petitioner. The Facts Petitioner Cosmos Bottling Corporation is a domestic corporation engaged in the business of manufacturing, bottling and selling soft drinks.4 Respondent Pablo Nagrama, Jr. was initially employed by petitioner as a maintenance mechanic on June 24, 1993 at the Cosmos Plant in Cauayan, Isabela.5 On September 17, 1996, he was elected by the local union as chief shop steward. Respondent was designated by petitioner as waste water treatment operator effective September 27, 1999.6 Petitioner hired Clean Flow Philippines, Inc. to conduct training seminars to acquaint petitioners personnel on the

operations of the water treatment plant.7 Respondent was instructed to attend the seminar to be held on September 27-30, 1999.8 He failed to attend the first two (2) days of the seminar.9 In a letter by his immediate supervisor, Josephine D. Calacien, dated September 29, 1999, respondent was informed that charges of abandonment of duty and gross insubordination had been lodged against him. He was required to submit his written explanation.10 Respondent filed his explanation on September 30, 1999. He contended that he had to attend to an administrative hearing for fellow unionists which were held at Santiago, Isabela; that before he went, he first secured permission from the plant controller.11 He averred that as a union official, he is obligated to attend to the problems of his fellow union members. Hearing was held on the twin charges against him. Respondent and officers of petitioner corporation testified. On October 29, 1999, he was formally terminated from service. Respondent filed a complaint before the Labor Arbiter, contending that he was illegally dismissed and that petitioner had committed unfair labor practices. In his Position Paper,12 he explained his absences as follows: 8. As Co-Chairman of the Grievance Committee of the Union, the scope of my responsibility included union members from the Cosmos Warehouse at Santiago, Isabela. Furthermore, there was no shop steward from the said warehouse who was available for the said hearing; 9. I asked the permission of all of our managers for my attendance in the said administrative hearing as representative of the Union. Our managers (Mr. Gabuco, Mr. Guina, Mr. Lelis, Mrs. Orosco, and Mr. Pangon) all gave their consent; 10. Accordingly, I attended the hearing on Arnel Brazuelas case on September 24, 1999, as Union representative. The said hearing started on 9:00 A.M. and ended at about noon. After the said hearing, I immediately went back to my post and resumed my work (I was still assigned at the advertising department during that time); 11. Nobody questioned my attendance during the hearing. My immediate supervisor or anybody for that matter did not inform me that what I was doing was a violation of company policy; 12. On September 28, 1999, another hearing was conducted regarding two other companions of Arnel Brazuela namely Joseph Salvador and Marcelino Estimada. They also sought my attendance and after obtaining the consent of our five managers, I attended the said hearing as union representative; 13. As in previous instance, I immediately returned to my post after the termination of the hearing and resumed whatever tasks I was doing. Again, nobody questioned my appearance during the hearing. Neither was I warned that what I was doing was contrary to company rules; 14. Another administrative hearing for the same case was conducted on September 29, 1999. With consent from my managers, I also attended the hearing. Nobody questioned my attendance therein; 15. Another administrative hearing was conducted on September 30, 1999 and I again represented the union during the said hearing with my attendance therein having been previously cleared by our managers.13

On August 4, 1999, Labor Arbiter Ricardo N. Olarirez rendered judgment sustaining the legality of the dismissal of respondent. In ruling against him, the Labor Arbiter held: WHEREFORE, premises considered, judgment is hereby rendered dismissing the above-entitled case for lack of merit. All other claims are hereby dismissed.14 The Labor Arbiter predicated the finding of abandonment on the admission made by respondent in a letter addressed to petitioners management. The letter reads: Ako po at ang aking buong sambahayan ay humihingi ng paumanhin sa nalabag kong batas paggawa sa Cosmos Bottling Corp. bunga lamang ito ng aking ginawang sobrang malasakit sa aking mga kasamahang sales force ng Santiago na sa kasalukuyan ay may hinaharap na kaso, dahil sila po ay humihingi ng payo kung ano ang dapat na pakikiharap na gagawin at ito po ang naging sanhi na pati ako ay hindi ko namalayan na nakagawa na rin pala ako ng paglabag sa batas paggawa. Kayat kung mamarapatin po ninyo ay humihingi pa po ako ng pagkakataon pa na sana ay manatili pa po ang mga kabutihan na ipinakita ninyo sa akin, at ipinangangako ko po sa inyo na hindi na mauulit ang mga pangyayaring ito at idinadalangin ko po sa Dios naway pagpalain po kayong lahat ng ating panginoong Dios sampu ng inyong buong sambahayan.15 Invoking Rule 129, Section 4 of the Rules of Court, the Labor Arbiter considered the letter as a judicial admission of guilt.16 The Arbiter also ruled that the charge of unfair labor practice was without merit because it was not sufficiently shown that he was dismissed for his union activities. Respondent appealed the matter to the National Labor Relations Commission (NLRC). In a Resolution17 dated June 29, 2001, the NLRC affirmed the decision of the Labor Arbiter, thus: WHEREFORE, finding no cogent reason to modify, alter, much less reverse the decision appealed from, the same is AFFIRMED en toto and the instant appeal is DISMISSED for lack of merit.18 In denying the appeal, the NLRC stated: Upon Our review of the record of the case, We conceive no abuse of discretion as to compel a reversal. Appellant failed to adduce convincing evidence to show that the Labor Arbiter in rendering the assailed decision had acted in a manner inconsistent with the criteria set forth in the foregoing pronouncement. Neither are We persuaded to disturb the factual findings of the Labor Arbiter a quo. The material facts as found are all in accordance with the evidence presented during the hearing as shown by the record.19 Respondents motion for reconsideration was to no avail. Undaunted, he elevated the matter to the CA via petition for certiorari, seeking to annul and reverse the NLRC Resolutions.20 On April 6, 2004, the CA reversed the NLRC ruling and granted the reliefs sought,21 disposing as follows: WHEREFORE, premises considered, the Court hereby GRANTS the petition and the assailed June 29, 2001 decision of the National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new one is entered directing private respondents to:

(1) Pay the petitioner full backwages, plus all other benefits, bonuses and general increases to which he would have been normally entitled, had he not been dismissed and had he not been forced to stop working; (2) Reinstate the petitioner without loss of seniority rights and other privileges. If reinstatement is no longer feasible, then separation pay equivalent to one (1) month for every year of service in addition to full backwages is mandated; (3) Pay the petitioner an amount equivalent to 10% of the judgment award as attorneys fees; (4) Pay the cost of the suit. SO ORDERED.22 The CA opined that the record is bare of any evidence to justify the termination of respondent Nagramas employment.23 It reiterated the rule that the burden was on the employer to prove abandonment.24 It found that there was no evidence presented to show that the first requisite of abandonment, which is absence without a valid or justified reason, was present.25 The justification of attendance at the administrative hearing of fellow union members in Santiago, Isabela was not refuted.26 Nor was the fact that respondent was given permission by his managers to attend controverted.27 The second requisite, which is a clear intention to sever the employee-employer relationship, is also absent. The letter cited by the Labor Arbiter as proof of abandonment shows that respondent had no intention of severing the employee-employer relationship.28 Moreover, the complaint for illegal dismissal shows a desire to return to work.29 Anent the issue of gross insubordination,30 the CA found that respondent displayed a most commendable attitude by seeking consent from five (5) managers before absenting himself.31 Although the second requisite of gross insubordination, which is willful disobedience, was present,32 there was still no ground to terminate respondents services since the crucial requisite of perverse mental attitude was lacking. His disobedience cannot be taken as just cause for dismissal due to gross insubordination.33 Issues Dissatisfied, petitioner has come to Us via Rule 45, submitting the following questions for Our consideration: A. THE COURT OF APPEALS GRAVELY ERRED WHEN IT IGNORED THE FACT THAT THE EVIDENCE ON RECORD SUPPORTED THE DISMISSAL OF THE PETITIONER ON ACCOUNT OF ABANDONMENT AND GROSS INSUBORDINATION. B. THE COURT OF APPEALS VIOLATED THE DOCTRINE OF CONCLUSIVE FINALITY.34 Three (3) issues are hoisted for resolution. The first is whether or not the CA gravely erred in its judgment. The second is whether or not the CA violated the doctrine of conclusive finality. The third is whether or not the petition is violative of Rule 45 in that only questions of law should be raised. We shall resolve them in the reverse order, dealing with the procedural ahead of the substantive question. Our Ruling

I. Questions of law and fact distinguished Respondent claims that petitioner is raising questions of fact and not of law. Petitioner, for its part, claims that the propriety of the reversal of the CA of the factual findings of the NLRC and Labor Arbiter is a question of law insofar as the CA should have given finality to the factual findings of the administrative agencies. It is likewise argued that the CA committed an error in the application of the law when it reversed the factual findings of the NLRC. The Court has made numerous dichotomies between questions of law and fact. A reading of these dichotomies shows that labels attached to law and fact are descriptive rather than definitive. We are not alone in Our difficult task of clearly distinguishing questions of fact from questions of law. The United States Supreme Court has ruled that: "we [do not] yet know of any other rule or principle that will unerringly distinguish a factual finding from a legal conclusion."35 In Ramos v. Pepsi-Cola Bottling Co. of the P.I.,36 the Court ruled: There is a question of law in a given case when the doubt or difference arises as to what the law is on a certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts.37 We shall label this the doubt dichotomy. In Republic v. Sandiganbayan,38 the Court ruled: x x x A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being admitted. In contrast, a question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of the witnesses, the existence and relevancy of specific surrounding circumstances as well as their relation to each other and to the whole, and the probability of the situation.39 For the sake of brevity, We shall label this the law application and calibration dichotomy. In contrast, the dynamic legal scholarship in the United States has birthed many commentaries on the question of law and question of fact dichotomy. As early as 1944, the law was described as growing downward toward "roots of fact" which grew upward to meet it.40 In 1950, the late Professor Louis Jaffe saw fact and law as a spectrum, with one shade blending imperceptibly into the other.41 Others have defined questions of law as those that deal with the general body of legal principles; questions of fact deal with "all other phenomena x x x."42 Kenneth Culp Davis also weighed in and noted that the difference between fact and law has been characterized as that between "ought" questions and "is" questions.43 A look back at the rationale behind appellate review provides some insight. Appellate review may be characterized by two (2) extremes.44 The first is that an appellate court will defer in large part to a trial courts or administrative tribunals determination where the lower tribunal is in a better position to make that determination than the appellate court. Conversely, where the appellate court is as capable of determining the question as is the trial court there is little or no deference accorded to the lower tribunal. Hence, questions of fact are accorded deference because the lower tribunal was present at the reception of evidence and had an opportunity to view the demeanor of witnesses and assess their credibility.

Questions of law, on the other hand, are traditionally accorded little or no deference because there is nothing intrinsic to their determination which gives the trial court any advantage over an appellate court.45 As stated by Professor Davis: "those who see and hear the witnesses testify are in a better position to determine some aspects of fact questions than those who are limited to a cold record x x x."46 With Our own jurisprudence and United States commentaries in mind, the question raised by petitioner is simply a question of fact. Petitioner is not asking Us to reassess the pleadings it submitted to the CA.47 Petitioner is, in fact, asking Us to re-examine the evidence. It claims evidence was ignored by the CA which would prove abandonment and gross insubordination.1avvphi1 Ordinarily, We would not touch this issue. The findings of facts of the CA are as a general rule, conclusive and binding on the Supreme Court.48 Our power of review is limited to questions of law. It is well established that the Court is not a trier of facts and does not routinely undertake the re-examination of the evidence presented by the contending parties during the trial of the case. The Court, however, may determine the factual milieu of cases or controversies under specific circumstances, as follows: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of discretion; (3) when the finding is grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.49 The fifth cited circumstance is pertinent to the case at bar, in that petitioner asserts that the CA made findings of fact in conflict with those of the Labor Arbiter and NLRC. In Philippine American Life and General Insurance Co. v. Gramaje,50 the Court, speaking through Justice Chico-Nazario, held:

As borne by the records, it appears that there is a divergence between the findings of facts of the Labor Arbiter as affirmed by the NLRC, and that of the Court of Appeals. Therefore, for the purpose of clarity and intelligibility, this Court will make an infinitesimal scrutiny of the findings of facts of the Labor Arbiter and the NLRC.51 Hence, despite petitioner raising a question of fact, We opt to take cognizance of the questions brought to Us by petitioner. II. The doctrine of conclusive finality is not applicable. Petitioner next asserts that the CA violated the doctrine of conclusive finality when it reviewed the factual findings of the Labor Arbiter and the NLRC.52 The doctrine of conclusive finality is defined as the comity that courts extend to the executive branch and the recognition of the expertise of administrative agencies in dealing with particular questions of fact.53 Simply put, the appellate court may defer to the factual findings of the administrative agency due to comity. However, the prevailing doctrine with respect to administrative findings of fact has no conclusive finality. Rather, factual findings made by quasi-judicial and administrative bodies when supported by substantial evidence are accorded great respect and even finality by the appellate courts.54 In Ignacio v. Coca-Cola Bottlers Phils., Inc.,55 the Court held: x x x Factual findings of the NLRC affirming those of the Labor Arbiter, both bodies deemed to have acquired expertise in matters within their jurisdictions, when sufficiently supported by evidence on record, are accorded respect if not finality, and are considered binding on this Court. As long as their decisions are devoid of any unfairness or arbitrariness in the process of their deduction from the evidence proffered by the parties, all that is left is for the Court to stamp its affirmation and declare its finality.56 (Underscoring supplied) This was reiterated in German Marine Agencies, Inc. v. National Labor Relations Commission:57 The Supreme Court has always accorded respect and finality to the findings of fact of the NLRC, particularly if they coincide with those of the Labor Arbiter, when supported by substantial evidence. The reason for this is that a quasi-judicial agency like the NLRC has acquired a unique expertise because its jurisdiction is confined to specific matters. Whether or not petitioners actually paid the balance of the sickness wages to private respondent is a factual question. In the absence of proof that the labor arbiter or the NLRC had gravely abused their discretion, the Court shall deem conclusive and cannot be compelled to overturn this particular factual finding.58 (Underscoring supplied) The doctrine of conclusive finality and doctrine of great respect and finality both apply to factual findings of administrative agencies in the exercise of their quasi-judicial function. The former has no evidentiary requirement while the latter must be supported by substantial evidence.59 The former is based on comity, the latter is based on the doctrine that administrative agencies possess specialized knowledge and expertise in their respective fields.60 The former is not used in the Philippine legal system while the latter is the established standard.61 Appellate courts may still review the factual findings of administrative agencies. The CA may resolve factual issues by express mandate of law. Batas Pambansa Blg. 129, as amended, expressly provides: Section 9. Jurisdiction. The Court of Appeals shall exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; 2. Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and 3. Exclusive appellate jurisdiction over all final judgments, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, Except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or Appeals must be continuous and must be completed within three (3) months, unless extended by the Chief Justice. Despite the respect given by the appellate courts to administrative findings of fact, the CA is empowered to resolve factual issues. A mere doctrine espousing comity cannot overcome the statutory mandate of the CA to resolve factual issues. Moreover, neither the doctrine of conclusive finality nor the doctrine of great respect and finality has direct application to the case at bar. The CA did not simply review the decision of the NLRC. The CA took cognizance of a special civil action of certiorari. Verily, the CA did not per se review the facts found or the law applied by the NLRC. The CA reviewed the discretion of the NLRC. By the very nature of a petition for certiorari, the appellate court reviews the exercise of jurisdiction of the lower tribunal.62 In the case at bar, Nagrama, as petitioner, alleged that the NLRC acted with grave abuse of discretion in affirming the findings of the Labor Arbiter.63 In a petition for certiorari, the correctness of the legal conclusions of the tribunal is not in issue per se. Rather, it is the exercise of jurisdiction by the tribunal. As often repeated by this Court, for the special civil action of certiorari to lie, it must be shown that the tribunal, board or officer exercising judicial functions acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction, and that there is no appeal nor any plain, speedy and adequate remedy in the ordinary course of law for the purpose of amending or nullifying the proceeding.64 The sole purpose of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack of jurisdiction.65 A special civil action of certiorari does not include correction of public respondents evaluation of the evidence and factual findings thereon.66 The oft-quoted trichotomy proposed by Professor Rosenberg is informative: "[A]ll appellate Gaul is divided into three parts for review purposes: questions of fact, of law and of discretion."67 The CA reviewed the discretion of the NLRC in the instant case, not the facts or the law. The CA found that the NLRC acted with grave abuse of discretion since the decision lacked factual proof and also ignored established jurisprudence.68 Thus, the CA concluded that the NLRC acted capriciously and whimsically in

the exercise of its judgment.69 The result of this error of jurisdiction was that the judgment of the NLRC was rendered void or at least voidable.70 This is in sharp contrast to an error of judgment which is reversible only if it can be shown that prejudice has been caused thereby.71 III. There is no abandonment and gross insubordination. Petitioner asserts that the CA gravely erred when it ignored evidence on record that would prove respondents abandonment and gross insubordination.72 We yield to petitioners call for a recalibration of the evidence because the factual findings of the NLRC and Labor Arbiter conflict with that of the CA.73 Two (2) elements must be satisfied for an employee to be guilty of abandonment.74 The first is the failure to report for work or absence without valid or justifiable reason. The second is a clear intention to sever the employeremployee relationship. The second element is the more determinative factor and must be evinced by overt acts. Likewise, the burden of proof is on the employer to show the employees clear and deliberate intent to discontinue his employment without any intention of returning; mere absence is not sufficient. A review of the facts discloses that these twin elements are not present here. First, respondents absence was justified under the circumstances. He was a shop steward, which recent jurisprudence qualifies as a union officer.75 As an officer, he had a valid reason to attend the hearing of his union brothers. He also asked for and was given permission as can be seen from the minutes of his hearing.76 Petitioner does not contest this fact. Permission negates any possibility of respondent abandoning his job. As to the second requisite, We are not convinced that respondent intended to sever the employer-employee relationship with Cosmos. He immediately complied with the memo requiring him to explain his absence.77 His failure to report directly to his Quality Assurance Supervisor and Analyst can be dismissed as failure to properly understand the instructions he was given, to wit: JRF: Apat ang pumirma dito. Hinde, may report kasi sa akin, kung hindi mo pa nakikita, eto ang report ng mga QA Analysts "this is to inform you that Mr. Pablo A. Nagrama, was transferred to a new assignment from Maintenance Mechanic to Waste Water Treatment operator is not reporting to the QA Department since the effectivity of the memo, up to this date of writing." Ibig sabihin, mula pa nung date na ginagawa nila ito. PN: So mali pala ang ginagawa ko, Sir, na nagpupunta, dumidiretso ako sa Waste Water? JRF & JBL: Mali yon. PN: Pasensiyahan nyo ako, Sir, kasi dumidiretso ako sa Clean Flow. JBL: Binasa mo ba yung appointment letter mo? Nakalagay doon na dapat magrereport ka sa QA. PN: Kaya nga sinasabi ko kangina (JBL: Maliwanag naman sa memo mo) nagkulang ako diyan, may report ang QA na hindi ako nag-a-appear, hindi, Sir, nagpupunta ako ng Clean Flow eh. JBL: Kaya nga, di inaamin mo itong pangyayaring ito.

PN: Inaamin ko, Sir. JBL: Okey. JRF: Okey, go to the next case.78 Moreover, respondent filed a complaint for illegal dismissal.79 A complaint for illegal dismissal shows a desire to continue work.80 Verily, a review of the evidence shows that both elements of abandonment are lacking. For gross insubordination, also called "willful disobedience of a lawful order," to lie, two (2) requisites are also necessary.81 First, the assailed conduct must have been intentional and characterized by a wrongful and perverse attitude.82 Second, the order violated must have been reasonable, lawful, and made known to the employee and should pertain to the duties which he has been engaged to discharge.83 There is no question that orders to attend the seminar are lawful instructions by petitioner. Respondent himself admitted his failure to obey these lawful instructions in his letter, to wit: Ako po at ang aking buong sambahayan ay humihingi ng paumanhin sa nalabag kong batas paggawa sa Cosmos Bottling Corp. bunga lamang ito ng aking ginawang sobrang malasakit sa aking mga kasamahang sales force ng Santiago na sa kasalukuyan ay may hinaharap na kaso, dahil sila po ay humihingi ng payo kung ano ang dapat na pakikiharap na gagawin at ito po ang naging sanhi na pati ako ay hindi ko namalayan na nakagawa na rin pala ako ng paglabag sa batas paggawa. x x x84 The first element of gross insubordination, however, is lacking. A review of the records shows that respondents failure to report to his quality assurance supervisor and failure to fully attend the seminar was in no way tainted by a wrongful or perverse attitude. His failure to secure a clearance from Clean Flow was due to his attendance to his union duties. Hence, there is no gross insubordination. IV. A few words on motion to withdraw Petitioner has filed a motion to withdraw dated December 27, 2007. However, it was brought to Our attention only recently. Petitioner prayed that "the instant case be closed, terminated and forever withdrawn from the business calendar of the Honorable Courts Third Division by virtue of the Compromise Agreement entered into by the parties herein." We deny the motion to withdraw on three grounds: First. The case has been submitted for decision on December 14, 2005.85 The time for withdrawal of the appeal is governed by Section 3, Rule 50 of the 1997 Rules of Civil Procedure, viz.: Sec. 3. Withdrawal of appeal. An appeal may be withdrawn as of right at any time before the filing of appellees brief. Thereafter, the withdrawal may be allowed in the discretion of the court. Verily, the withdrawal of this petition for review on certiorari, which is in the nature of an appeal, may be done as a matter of right at any time before the filing of the appellees brief or memorandum. After that period, the withdrawal may only be done with the consent of the court.86

The records unveil that the motion to withdraw was filed on December 27, 2007. At that time, the case has long been submitted for decision. The draft ponencia in this case has already been written and deliberated upon by the Division when the motion for withdrawal was brought to its attention. The Court encourages parties to suits to settle their differences amicably through compromise. However, as far as practicable, compromises should be pursued at the earliest possible opportunity, and with notice to the court that the parties are exploring avenues towards a settlement. This is to avoid wasting the precious time of the court in deciding the case. Second. The motion to withdraw petition is founded on a release, waiver and quitclaim, not on a compromise agreement. It is not a joint motion. A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and thus avoid or put an end to a lawsuit.87 In forging a compromise, the parties adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing.88 Petitioner anchors the motion to withdraw on a compromise agreement it allegedly entered into with respondent Nagrama. However, what is apparent is that respondent had allegedly executed a Release, Waiver and Quitclaim in petitioners favor. The record is bereft of a compromise agreement. To put an end to a litigation already submitted for decision, the submission of a compromise agreement validly executed and voluntarily signed by the parties is necessary. Here, the motion to withdraw was made at the sole instance of petitioner. The motion would have been more persuasive if both parties manifested a joint desire to terminate the proceedings. Third. The parties may execute a compromise agreement even after the finality of this decision. They are not precluded from doing so. In a catena of cases, the Court has consistently ruled that even final and executory judgments may be compromised. In Northern Lines, Inc. v. Court of Tax Appeals,89 the Court recognized the right to compromise final and executory judgments, as long as such right was exercised by the proper party litigants.90 In Gatchalian v. Arlegui,91 the Court upheld the right to compromise prior to the execution of a final judgment. The Court held that the final judgment had been novated and superseded by a compromise agreement. Palanca v. Court of Industrial Relations92 also sustained a compromise agreement, notwithstanding a final judgment in which only the amount of back wages was left to be determined. The Court found no evidence of fraud or of any showing that the agreement was contrary to law, morals, good customs, public order, or public policy. WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED. G.R. No. 174674 October 20, 2010

NESTLE PHILIPPINES, INC. and NESTLE WATERS PHILIPPINES, INC. (formerly HIDDEN SPRINGS & PERRIER, INC.), Petitioners, vs.

UNIWIDE SALES, INC., UNIWIDE HOLDINGS, INC., NAIC RESOURCES AND DEVELOPMENT CORPORATION, UNIWIDE SALES REALTY AND RESOURCES CLUB, INC., FIRST PARAGON CORPORATION, and UNIWIDE SALES WAREHOUSE CLUB, INC., Respondents. RESOLUTION CARPIO, J.: The Case This is a petition for review1 of the 10 January 2006 Decision2 and the 13 September 2006 Resolution3 of the Court of Appeals in CA-G.R. SP No. 82184. The 10 January 2006 Decision denied for lack of merit the petition for review filed by petitioners. The 13 September 2006 Resolution denied petitioners' motion for reconsideration and referred to the Securities and Exchange Commission petitioners' supplemental motion for reconsideration. The Facts The petitioners in this case are Nestle Philippines, Inc. and Nestle Waters Philippines, Inc., formerly Hidden Springs & Perrier Inc. The respondents are Uniwide Sales, Inc., Uniwide Holdings, Inc., Naic Resources and Development Corporation, Uniwide Sales Realty and Resources Club, Inc., First Paragon Corporation, and Uniwide Sales Warehouse Club, Inc. On 25 June 1999, respondents filed in the Securities and Exchange Commission (SEC) a petition for declaration of suspension of payment, formation and appointment of rehabilitation receiver, and approval of rehabilitation plan. The petition was docketed as SEC Case No. 06-99-6340.4 The SEC approved the petition on 29 June 1999. On 18 October 1999, the newly appointed Interim Receivership Committee filed a rehabilitation plan in the SEC. The plan was anchored on return to core business of retailing; debt reduction via cash settlement and dacion en pago; loan restructuring; waiver of penalties and charges; freezing of interest payments; and restructuring of credit of suppliers, contractors, and private lenders. On 14 February 2000, the Interim Receivership Committee filed in the SEC an Amended Rehabilitation Plan (ARP). The ARP took into account the planned entry of Casino Guichard Perrachon, envisioned to infuse P3.57 billion in fresh capital. On 11 April 2001, the SEC approved the ARP. On 11 October 2001, the Interim Receivership Committee filed in the SEC a Second Amendment to the Rehabilitation Plan (SARP) in view of Casino Guichard Perrachon's withdrawal. In its Order dated 23 December 2002, the SEC approved the SARP. Petitioners, as unsecured creditors of respondents, appealed to the SEC praying that the 23 December 2002 Order approving the SARP be set aside and a new one be issued directing the Interim Receivership Committee, in consultation with all the unsecured creditors, to improve the terms and conditions of the SARP. The Ruling of the SEC In its 13 January 2004 Order, the SEC denied petitioners' appeal for lack of merit. Petitioners then filed in the Court of Appeals a petition for review of the 13 January 2004 Order of the SEC.

The Ruling of the Court of Appeals In its assailed 10 January 2006 Decision, the Court of Appeals denied for lack of merit the petition for review filed by petitioners, thus: In reviewing administrative decisions, the findings of fact made therein must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant; that it is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses, or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of the evidence; that the administrative decision in matters within the executive jurisdiction can only be set aside on proof of grave abuse of discretion, fraud, or error of law. WHEREFORE, the petition for review is DENIED for lack of merit. SO ORDERED.5 Petitioners moved for reconsideration. They also filed a supplemental motion for reconsideration alleging that they received a letter on 25 January 2006, from the president of the Uniwide Sales Group of Companies, informing them of the decision to transfer, by way of full concession, the operation of respondents' supermarkets to Suy Sing Commercial Corporation starting 1 March 2006. In its questioned 13 September 2006 Resolution, the Court of Appeals denied for lack of merit petitioners' motion for reconsideration and referred to the SEC petitioners' supplemental motion for reconsideration. Dissatisfied, petitioners filed in this Court on 3 November 2006 the present petition for review. The Issue Before us, petitioners raise the issue of whether the SARP should be revoked and the rehabilitation proceedings terminated.1avvphi1 The Court's Ruling The petition lacks merit. Petitioners contend that the transfer of respondents' supermarket operations to Suy Sing Commercial Corporation has made the SARP incapable of implementation. Petitioners point out that since the SARP may no longer be implemented, the rehabilitation case should be terminated pursuant to Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate Recovery. Petitioners claim that the terms and conditions of the SARP are unreasonable, biased in favor of respondents, prejudicial to the interests of petitioners, and incapable of a determination of feasibility. Respondents maintain that the SARP is feasible and that the SEC Hearing Panel did not violate any rule or law in approving it. Respondents stress that the lack of majority objection to the SARP bolsters the SEC's findings that the SARP is feasible. Respondents insist that the terms and conditions of the SARP are in accord with the Constitution and the law.

The Court takes judicial notice of the fact that from the time of the filing in this Court of the instant petition, supervening events have unfolded substantially changing the factual backdrop of this rehabilitation case. As found by the SEC, several factors prevented the realization of the desired goals of the SARP, to wit: (1) unexpected refusal of some creditors to comply with all the terms of the SARP; (2) unexpected closure of Uniwide EDSA due to the renovation of EDSA Central Mall; (3) closure of Uniwide Cabuyao and Uniwide Baclaran; (4) lack of supplier support for supermarket operations; and (5) increased expenses.6 On 11 July 2007, the rehabilitation receiver filed in the SEC a Third Amendment to the Rehabilitation Plan (TARP). But before the SEC could act on the TARP, the rehabilitation receiver filed on 29 September 2008 a Revised Third Amendment to the Rehabilitation Plan (revised TARP). A majority of the secured creditors strongly opposed the revised TARP, which focused on the immediate settlement of all the obligations accruing to the unsecured creditors through a dacion of part of respondents' Metro Mall property.7 Since some creditors claimed that the value of the Metro Mall property had gone down since 1999, the Hearing Panel issued its 30 July 2009 Order directing the reappraisal of the Metro Mall property.8 In its 17 September 2009 Order, the Hearing Panel directed respondents to show cause why the rehabilitation case should not be terminated considering that the rehabilitation plan had undergone several revisions. The Hearing Panel also directed the creditors to manifest whether they still wanted the rehabilitation proceedings to continue. Respondents moved for reconsideration of the 30 July 2009 and the 17 September 2009 Orders. The Hearing Panel, in its 6 November 2009 Order, denied the motion for reconsideration for being a prohibited pleading. Respondents then filed in the SEC a petition for certiorari assailing the 30 July 2009, the 17 September 2009, and the 6 November 2009 Orders of the Hearing Panel. The petition was docketed as SEC En Banc Case No. 12-09-183. Meanwhile, in its 13 January 2010 Resolution, the Hearing Panel disapproved the revised TARP and terminated the rehabilitation case as a consequence. The dispositive portion of the Resolution reads: WHEREFORE, premises considered: 1. Petitioners' Motion to Approve Revised Third Amendment to the Group Rehabilitation Plan (Revised TARP) is DENIED. 2. The motions to declare petitioners' rehabilitation plan "not feasible" are GRANTED. Consequently, the instant rehabilitation case is TERMINATED and the stay order is lifted and dissolved. This case is deemed finally disposed of pursuant to Section 5.2 of Republic Act No. 8799.9 On 22 January 2010, respondents filed another petition appealing the Hearing Panel's 13 January 2010 Resolution. The petition was docketed as SEC En Banc Case No. 01-10-193. In order to preserve the parties' rights during the pendency of the appeal, the SEC en banc in its Order dated 18 March 2010 directed the parties to observe the status quo prevailing before the issuance of the 13 January 2010 Resolution of the Hearing Panel. Meanwhile, on 27 April 2010, the SEC en banc issued an Order directing the rehabilitation receiver, Atty. Julio C. Elamparo, to submit a comprehensive report on the progress of the implementation of the SARP.

Finally, in its 30 September 2010 Order, the SEC consolidated SEC En Banc Case No. 01-10-193 with SEC En Banc Case No. 12-09-183, the parties being identical and the issues in both petitions being in reference to the same rehabilitation case. Considering the pendency of SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193, recently filed in the SEC, involving the very same rehabilitation case subject of this petition, the present petition has been rendered premature. SEC En Banc Case No. 12-09-183 deals with the Order of the Hearing Panel directing respondents to show cause why the rehabilitation case should not be terminated and the creditors to manifest whether they still want the rehabilitation proceedings to continue. On the other hand, SEC En Banc Case No. 01-10-193 is an appeal of the Hearing Panel's Resolution disapproving the revised TARP and terminating the rehabilitation proceedings. In light of supervening events that have emerged from the time the SEC approved the SARP on 23 December 2002 and from the time the present petition was filed on 3 November 2006, any determination by this Court as to whether the SARP should be revoked and the rehabilitation proceedings terminated, would be premature. Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no longer capable of implementation and whether the rehabilitation case should be terminated as a consequence. Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for resolution demand 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.10 In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if the matter may well be within the latter's proper jurisdiction.11 The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.12 It is not for this Court to intrude, at this stage of the rehabilitation proceedings, into the primary administrative jurisdiction of the SEC on a matter requiring its technical expertise. Pending a decision of the SEC on SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193, which both seek to resolve the issue of whether the rehabilitation proceedings in this case should be terminated, we are constrained to dismiss this petition for prematurity. WHEREFORE, we DISMISS the instant petition for having been rendered premature pending a decision of the Securities and Exchange Commission (SEC) in SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193. No pronouncement as to costs. SO ORDERED.

NESTLE PHILIPPINES, INC. vs. UNIWIDE SALES Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for resolution demand 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. In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if the matter may well be within the latter's proper jurisdiction. The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. G.R. No. 191427 May 30, 2011

In early 2003, petitioner notified LLDA of its plan to upgrade the wastewater treatment facility (WTF) of its corn oil refinery plant in an effort to comply with environmental laws, an upgrade that was completed only in 2007. On May 9, 2007 on its request,2 a re-sampling of petitioners wastewater was conducted which showed that petitioners plant finally complied with government standards. Petitioner soon requested for a reduction of penalties, by Manifestation and Motion3 filed on August 24, 2007 to which it attached copies of its Daily Operation Reports and Certifications4 to show that accrued daily penalties should only cover a period of 560 days. After conducting hearings, the LLDA issued its Order to Pay5 (OP) dated January 21, 2008, the pertinent portion of which reads: After careful evaluation of the case, respondent is found to be discharging pollutive wastewater computed in two periods reckoned from March 14, 2000 the date of initial sampling until November 3, 2003 the date it requested for a re-sampling covering 932 days in consideration of the interval of time when subsequent monitoring was conducted after an interval of more than 2 years and from March 15, 2006 the date when re-sampling was done until April 17, 2007 covering 448 days6 for a total of 1,247 days. WHEREFORE, premises considered, respondent is hereby ordered to pay within fifteen (15) days from receipt hereof the accumulated daily penalties amounting to a total of Pesos: One Million Two Hundred Forty-Seven (Thousand) Pesos Only (PHP 1,247,000.00) prior to dismissal of the case and without prejudice of filing another case for its subsequent violations. (emphasis and underscoring supplied) Petitioner moved to reconsider, praying that it be ordered to pay only accumulated daily penalties in the sum of Five Hundred Sixty Thousand (P560,000) Pesos7 on grounds that the LLDA erred in first, adopting a straight computation of the periods of violation based on the flawed assumption that petitioner was operating on a daily basis without excluding, among others, the period during which the LLDA Laboratory underwent rehabilitation work from December 1, 2000 to June 30, 2001 (covering 212 days); and second, in disregarding the Daily Operation Reports and Certifications which petitioner submitted to attest to the actual number of its operating days, i.e., 560 days. By Order8 of July 11, 2008, the LLDA denied petitioners motion for reconsideration and reiterated its order to pay the aforestated penalties, disposing of the issues thusly: On the first issue, while it is true that the Authority failed to state in its OP dated 21 January 2008 the basis for actual computation of the accumulated daily penalties, the Authority would like to explain that its computation was based on the following, to wit: The computation of accumulated daily penalties was reckoned period [sic] from 14 March 2000 the date of initial sampling to 03 November 2003 the date when its letter request for re-sampling was received which covers 932 days computed at 6 days per week operation as reflected in the Reports of Inspection. Since subsequent inspection conducted after two (2) years and four (4) months, such period was deducted from the computation. Likewise, the period when the LLDA Laboratory was rehabilitated from December 1, 2000 to June 30, 2001 was also deducted with a total of Two Hundred Twelve (212) days.

UNIVERSAL ROBINA CORP. (CORN DIVISION), Petitioner, vs. LAGUNA LAKE DEVELOPMENT AUTHORITY, Respondent. DECISION CARPIO MORALES, J.: The present petition for review on certiorari assails the Court of Appeals Decision1 dated October 27, 2009 and Resolution dated February 23, 2010 in CA-G. R. SP No. 107449. Universal Robina Corp. (petitioner) is engaged in, among other things, the manufacture of animal feeds at its plant in Bagong Ilog, Pasig City. Laguna Lake Development Authority (LLDA), respondent, through its Pollution Control Division Monitoring and Enforcement Section, after conducting on March 14, 2000 a laboratory analysis of petitioners corn oil refinery plants wastewater, found that it failed to comply with government standards provided under Department of Environment and Natural Resources (DENR) Administrative Orders (DAOs) Nos. 34 and 35, series of 1990. LLDA later issued on May 30, 2000 an Ex-Parte Order requiring petitioner to explain why no order should be issued for the cessation of its operations due to its discharge of pollutive effluents into the Pasig River and why it was operating without a clearance/permit from the LLDA. Still later, the LLDA, after receiving a phone-in complaint conducted on August 31, 2000, another analysis of petitioners wastewater, which showed its continued failure to conform to its effluent standard in terms of Total Suspended Solids (TSS), Biochemical Oxygen Demand (BOD), Color and Oil/Grease. Hearings on petitioners pollution case were thereafter commenced on March 1, 2001. Despite subsequent compliance monitoring and inspections conducted by the LLDA, petitioners wastewater failed to conform to the parameters set by the aforementioned DAOs.

On the second claim, the same cannot be granted for lack of legal basis since the documents submitted are selfserving. The period from 15 March 2006 to 17 April 2007 was computed from the date of re-sampling when it failed to conform to the standards set by law up to the date of receipt of its letter request for re-sampling prior to its compliance on May 9, 2007. The period covers 342 days. Hence, respondent is found to be discharging pollutive wastewater not conforming with the standards set by law computed from March 14, 2000 November 3, 2003 covering 932 days and from March 15, 2006 April 17, 2007 covering 342 days for a total of 1,274 days. Petitioner challenged by certiorari the twin orders before the Court of Appeals, attributing to LLDA grave abuse of discretion in disregarding its documentary evidence, and maintaining that the lack of any plain, speedy or adequate remedy from the enforcement of LLDAs order justified such recourse as an exception to the rule requiring exhaustion of administrative remedies prior to judicial action. By Decision of October 27, 2009 the appellate court affirmed both LLDA orders, which it found to be amply supported by substantial evidence, the computation of the accumulated daily penalties being in accord with prevailing DENR guidelines. The appellate court held that while petitioner may have offered documentary evidence to support its assertion that the days when it did not operate must be excluded from the computation, the LLDA has the prerogative to disregard the same for being unverified, hence, unreliable. The appellate court went on to chide petitioners petition for certiorari as premature since the law provides for an appeal from decisions or orders of the LLDA to the DENR Secretary or the Office of the President, a remedy which should have first been exhausted before invoking judicial intervention.9 Petitioners motion for reconsideration having been denied by Resolution of February 23, 2010, it filed the present petition. Petitioner cites deprivation of due process and lack of any plain, speedy or adequate remedy as grounds which exempted it from complying with the rule on exhaustion of administrative remedies. The petition fails. The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence.10 The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.11 Executive Order No. 19212 (EO 192) was issued on June 10, 1987 for the salutary purpose of reorganizing the DENR, charging it with the task of promulgating rules and regulations for the control of water, air and land pollution as well as of promulgating ambient and effluent standards for water and air quality including the allowable levels of other pollutants and radiations. EO 192 also created the Pollution Adjudication Board under the Office of the DENR Secretary which took over the powers and functions of the National Pollution Control Commission with respect to the adjudication of pollution cases, including the latters role as arbitrator for determining reparation, or restitution of the damages and losses resulting from pollution.13

Petitioner had thus available administrative remedy of appeal to the DENR Secretary. Its contrary arguments to show that an appeal to the DENR Secretary would be an exercise in futility as the latter merely adopts the LLDAs findings is at best, speculative and presumptuous. As for petitioners invocation of due process, it fails too. The appellate court thus aptly brushed aside this c laim, in this wise: Due process, as a constitutional precept, does not always and in all situations require a trial-type proceeding. Due process is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process. The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain ones side, or an opportunity to seek a reconsideration of the action or ruling complained of. . . . Administrative due process cannot be fully equated with due process in its strict judicial sense for it is enough that the party is given the chance to be heard before the case against him is decided. Here, petitioner URC was given ample opportunities to be heard it was given show cause orders and allowed to participate in hearing to rebut the allegation against it of discharging pollutive wastewater to the Pasig River, it was given the chance to present evidences in support of its claims, it was notified of the assailed "Order to Pay," and it was allowed to file a motion for reconsideration. Given these, we are of the view that the minimum requirements of administrative due process have been complied with in this case.14 (emphasis in the original) In fine, the assailed LLDA orders of January 21, 2008 and July 11, 2008 correctly reckoned the two periods within which petitioner was found to have continued discharging pollutive wastewater and applied the penalty as provided for under Article VI, Section 32 of LLDA Resolution No. 33, Series of 1996.15 LLDAs explanation that behind its inclusion of certain days in its computation of the imposable penalties that it had already deducted not just the period during which the LLDA Laboratory underwent rehabilitation work from December 1, 2000 to June 30, 2001 (covering 212 days) but had also excluded from the computation the period during which no inspections or compliance monitorings were conducted (a period covering two years and four months) is well-taken. It is noted that during the hearing on June 19, 2007, the LLDA gave petitioner the opportunity "to submit within fifteen (15) days.any valid documents to show proof of its non-operating dates that would be necessary for the possible reduction of the accumulated daily penalties,"16 but petitioner failed to comply therewith. As earlier noted, petitioner filed a Manifestation and Motion to which it attached Daily Operation Reports and Certifications, which voluminous documents were, however, unverified in derogation of Rule X, Section 217 of the 2004 Revised Rules, Regulations and Procedures Implementing Republic Act No. 4850. Absent such verification, the LLDA may not be faulted for treating such evidence to be purely self-serving. Respecting LLDAs decision not to attach any evidentiary weight to the Daily Operation Reports or Certi fications, recall that the LLDA conducted an analysis of petitioners wastewater discharge on August 31, 2000, upon receiving a phone-in complaint. And it conducted too an analysis on May 3, 2002 in the course of periodic compliance monitoring. The Daily Operation Reports for both August 31, 200018 and May 3, 200219 submitted by petitioner clearly manifest that the plant did not operate on those dates. On the other hand, LLDAs Investigation Report and Report of Inspection20 dated August 31, 2000 and May 3, 2002, respectively, disclose otherwise. Petitioner never

disputed the factual findings reflected in these reports. Thus spawns doubts on the veracity and accuracy of the Daily Operation Reports.lawphi1 Petitioner asserts that LLDA had not credited it for undertaking remedial measures to rehabilitate its wastewater treatment facility, despite the prohibitive costs and at a time when its income from the agro-industrial business was already severely affected by a poor business climate; and that the enforcement of the assailed LLDA orders amounted to a gross disincentive to its business. Without belaboring petitioners assertions, it must be underscored that the protection of the environment, including bodies of water, is no less urgent or vital than the pressing concerns of private enterprises, big or small. Everyone must do their share to conserve the national patrimonys meager resources for the benefit of not only this generation, but of those to follow. The length of time alone it took petitioner to upgrade its WTF (from 2003 to 2007), a move arrived at only under threat of continuing sanctions, militates against any genuine concern for the well-being of the countrys waterways. WHEREFORE, the petition is DENIED. The October 27, 2009 Decision and the February 23, 2010 Resolution, of the Court of Appeals in CA-G. R. SP No. 107449, are AFFIRMED. SO ORDERED. UNIVERSAL ROBINA CORP. (CORN DIVISION), VS. LAGUNA LAKE DEVELOPMENT AUTHORITY,[G.R. NO. 191427, MAY 30, 2011]Doctrines: The thrust of the doctrine of exhaustion of administrative remedies is that courts must allowadministrative agencies to carry out their functions and discharge their responsibilities within thespecialized areas of their respective competence. Administrative due process cannot be fully equated with due process in its strict judicial sense for it isenough that the party is given the chance to be heard before the case against him is decided. Facts: Laguna Lake Development Authority (LLDA), respondent, found that Universal Robina Corp. failed to complywith government standards provided under Department of Environment and Natural Resources (DENR) Administrative Orders (DAOs) Nos. 34 and 35, series of 1990. After conducting hearings, the LLDA resolvedthat respondent is found to be discharging pollutive wastewater. Petitioner moved to reconsider however theLLDA denied petitioners motion for reconsideration and reiterated its order to pay the penalties. Petitioner challenged by certiorari the orders before the Court of Appeals. The appellate court went on to chidepetitioners petition for certiorari as premature since the law provides for an appeal from decisions or orders of the LLDA to the DENR Secretary or the Office of the President, a remedy which should have first beenexhausted before invoking judicial intervention. Issue: Whether petitioner was deprived of due process and lack of any plain, speedy or adequate remedy as groundswhich exempted it from complying with the rule on exhaustion of administrative remedies. Held: No. The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine isobvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity andconvenience also impel courts of justice to shy away from a dispute until the system of administrative redresshas been completed.Petitioner had

thus available administrative remedy of appeal to the DENR Secretary. Itscontrary arguments to show that an appeal to the DENR Secretary would be an exercise in futility as the latter merely adopts the LLDAs findings is at best, speculative and presumptuous.The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunityto explain ones side, or an opportunity to seek a reconsideration of the action or ruling complained of. Administrative due process cannot be fully equated with due process in its strict judicial sense for it is enoughthat the party is given the chance to be heard before the case against him is decided. G.R. No. 173840 April 25, 2012

SAMAR II ELECTRIC COOPERATIVE, INC. (SAMELCO II) AND ITS BOARD OF DIRECTORS, composed of DEBORAH T. MARCO (Immediate Past President), ATTY. MEDINO L. ACUBA, ENGR. MANUEL C. OREJOLA, ALFONSO F. QUILAPIO, RAUL DE GUZMAN and PONCIANO R. ROSALES (General Manager and Ex Officio Director), Petitioners, vs. ANANIAS D. SELUDO, JR., Respondent. DECISION PERALTA, J.: Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court are the Decision1 and Resolution2 dated January 26, 2006 and July 12, 2006, respectively, of the Court of Appeals (CA) in CA-G.R. CEB SP No. 01175. The CA Decision dismissed petitioners' petition for certiorari and affirmed the Orders of the Regional Trial Court (RTC) of Calbiga, Samar, Branch 33, dated May 6, 2005 and September 15, 2005, while the CA Resolution denied petitioners' Motion for Reconsideration. Herein petitioner Samar II Electric Cooperative, Inc. (SAMELCO II) was organized under the provisions of Presidential Decree (P.D.) No. 269, otherwise known as the "National Electrification Administration Decree," as amended by P.D. No. 1645. The individual petitioners are members of SAMELCO II's Board of Directors. Respondent was also a member of the SAMELCO II Board of Directors having been elected thereto in 2002 and whose term of office expired in May 2005. The antecedent facts, as summarized by the CA, are as follows: As members of the Board of Directors (BOD) of the petitioner Samar II Electric Cooperative, Inc. (SAMELCO II), an electric cooperative providing electric service to all members-consumers in all municipalities within the Second Congressional District of the Province of Samar, individual petitioners passed Resolution No. 5 [Series] of 2005 on January 22, 2005. The said resolution disallowed the private respondent to attend succeeding meetings of the BOD effective February 2005 until the end of his term as director. The same resolution also disqualified him for one (1) term to run as a candidate for director in the upcoming district elections. Convinced that his rights as a director of petitioner SAMELCO II had been curtailed by the subject board resolution, private respondent filed an Urgent Petition for Prohibition against petitioner SAMELCO II, impleading individual petitioners as directors thereof, in the Regional Trial Court (RTC) in Calbiga, Samar. The case was docketed as Special Civil Case No. C-2005-1085 and was raffled to Branch 33 of the said court x x x.

In his petition, private respondent prayed for the nullification of Resolution No. 5, [Series] of 2005, contending that it was issued without any legal and factual bases. He likewise prayed that a temporary restraining order (TRO) and/or a writ of preliminary injunction be issued to enjoin the individual petitioners from enforcing the assailed board resolution. Granting private respondent's prayer for a TRO, the public respondent issued one, effective for seventy-two (72) hours which effectivity was later on extended for another seventeen (17) days. In their answer to the petition for prohibition, individual petitioners raised the affirmative defense of lack of jurisdiction of the RTC over the subject matter of the case. Individual petitioners assert that, since the matter involved an electric cooperative, SAMELCO II, primary jurisdiction is vested on the National Electrification Administration (NEA). In her assailed Order dated May 6, 2005, [the RTC judge] sustained the jurisdiction of the court over the petition for prohibition and barred the petitioners and/or their representatives from enforcing Resolution No. 5 [Series] of 2005. x x x3 Petitioners filed a motion for reconsideration, but the same was denied by the RTC in its September 15, 2005 Order. Petitioners then elevated the case to the CA via a special civil action for certiorari, imputing grave abuse of discretion on the part of the RTC in issuing its assailed Orders. On January 26, 2006, the CA rendered its Decision dismissing petitioners' petition for certiorari and affirming the assailed Orders of the RTC. Petitioners filed a motion for reconsideration, but it was denied by the CA in its July 12, 2006 Resolution. Hence, the instant petition with the following assigned errors: (1) IN ITS INTERPRETATION AND APPLICATION OF THE DOCTRINE OF PRIMARY JURISDICTION, THE HONORABLE COURT OF APPEALS COMMITTED LEGAL ERRORS IN LIMITING THE DOCTRINE TO "CERTAIN MATTERS IN CONTROVERSIES INVOLVING SPECIALIZED DISPUTES" AND IN UPHOLDING THE JURISDICTION OF THE TRIAL COURT OVER THE URGENT PETITION FOR PROHIBITION FILED BY RESPONDENT SELUDO ON THE GROUND THAT THE ISSUES RAISED THEREIN "DO NOT REQUIRE THE TECHNICAL EXPERTISE OF THE NEA" (2) THE HONORABLE COURT OF APPEALS, IN SUSTAINING THE JURISDICTION OF THE TRIAL COURT, COMMITTED AN ERROR OF LAW BY HOLDING THAT "A PERUSAL OF THE LAW CREATING THE NEA DISCLOSES THAT THE NEA WAS NOT GRANTED THE POWER TO HEAR AND DECIDE CASES INVOLVING THE VALIDITY OF BOARD RESOLUTIONS UNSEATING ANY MEMBER OF THE BOARD OF DIRECTORS" AND THAT "NEITHER WAS IT GRANTED JURISDICTION OVER PETITIONS FOR CERTIORARI, PROHIBITION OR MANDAMUS."

(3) THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT SUSTAINED THE JURISDICTION OF [THE] TRIAL COURT OVER THE PETITION FOR PROHIBITION DESPITE THE EXISTENCE OF APPEAL OR OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY AVAILABLE TO THEREIN PETITIONER SELUDO.4 In their first assigned error, petitioners contend that the CA erred in interpreting the doctrine of primary jurisdiction in a very limited sense. Petitioners aver that in a number of cases, this Court applied the doctrine of primary jurisdiction even in cases where the issues involved do not require the technical expertise of administrative bodies. Petitioners also argue, in their second assignment of error, that it is wrong for the CA to rule that there is nothing under the law creating the National Electrification Administration (NEA), which grants the said administrative body the power to ascertain the validity of board resolutions unseating any member of the Board of Directors of an electric cooperative. Citing the provisions of P.D. Nos. 269 and 1645, petitioners aver that the NEA is empowered to determine the validity of resolutions passed by electric cooperatives. In their third assigned error, petitioners assert that respondent is precluded from filing a petition for prohibition considering that, under the applicable laws, it has an adequate remedy in the ordinary course of law. The Court finds the petition meritorious. As the assigned errors are interrelated, the Court will discuss them jointly. Section 10, Chapter II of P.D. No. 269, as amended by Section 5 of P.D. No. 1645, provides: Section 5. Section 10, Chapter II of Presidential Decree No. 269 is hereby amended to read as follows: Section 10. Enforcement Powers and Remedies. In the exercise of its power of supervision and control over electric cooperatives and other borrower, supervised or controlled entities, the NEA is empowered to issue orders, rules and regulations and motu proprio or upon petition of third parties, to conduct investigations, referenda and other similar actions in all matters affecting said electric cooperatives and other borrower, or supervised or controlled entities. If the electric cooperative concerned or other similar entity fails after due notice to comply with NEA orders, rules and regulations and/or decisions, or with any of the terms of the Loan Agreement, the NEA Board of Administrators may avail of any or all of the following remedies: x x x x. (e) Take preventive and/or disciplinary measures including suspension and/or removal and replacement of any or all of the members of the Board of Directors, officers or employees of the Cooperative, other borrower institutions or supervised or controlled entities as the NEA Board of Administrators may deem fit and necessary and to take any other remedial measures as the law or the Loan Agreement may provide. x x x x (Emphasis supplied.) In addition, Subsection (a), Section 24, Chapter III of P.D. No. 269, as amended by Section 7 of P.D. No. 1645, states:

Section 7. Subsection (a), Section 24, Chapter III of Presidential Decree No. 269 is hereby amended to read as follows: Section 24. Board of Directors. (a) The Management of a Cooperative shall be vested in its Board, subject to the supervision and control of NEA which shall have the right to be represented and to participate in all Board meetings and deliberations and to approve all policies and resolutions. The composition, qualifications, the manner of elections and filling of vacancies, the procedures for holding meetings and other similar provisions shall be defined in the by-laws of the Cooperative subject to NEA policies, rules and regulations. x x x. (Emphasis supplied.) A comparison of the original provisions of Sections 10 and 24 of P.D. No. 269 and the amendatory provisions under Sections 5 and 7 of P.D. No. 1645 would readily show that the intention of the framers of the amendatory law is to broaden the powers of the NEA. A clear proof of such expanded powers is that, unlike P.D. No. 269, P.D. No. 1645 expressly provides for the authority of the NEA to exercise supervision and control over electric cooperatives. In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties.5 If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties.6 Control, on the other hand, 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 the judgment of the former for that of the latter.7 Section 38 (1), Chapter 7, Book 4 of Executive Order No. 292, otherwise known as the Administrative Code of 1987 provides, thus: Supervision and control shall include the authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts and decisions of subordinate officials or units; determine priorities in the execution of plans and programs; and prescribe standards, guidelines, plans and programs x x x. (Emphasis supplied.) The Court, therefore, finds it erroneous on the part of the CA to rule that the doctrine of primary jurisdiction does not apply in the present case. It is true that the RTC has jurisdiction over the petition for prohibition filed by respondent.8 However, the basic issue in the present case is not whether the RTC has jurisdiction over the petition for prohibition filed by respondent; rather, the issue is who between the RTC and the NEA has primary jurisdiction over the question of the validity of the Board Resolution issued by SAMELCO II. A careful reading of the abovequoted provisions of P.D. No. 1645 clearly show that, pursuant to its power of supervision and control, the NEA is granted the authority to conduct investigations and other similar actions as well as to issue orders, rules and regulations with respect to all matters affecting electric cooperatives. Certainly, the matter as to the validity of the resolution issued by the Board of Directors of SAMELCO II, which practically removed respondent from his position as a member of the Board of Directors and further disqualified him to run as such in the ensuing election, is a matter which affects the said electric cooperative and, thus, comes within the ambit of the powers of the NEA as expressed in Sections 5 and 7 of P.D. No. 1645. In this regard, the Court agrees with petitioners' argument that to sustain the petition for prohibition filed by respondent with the RTC would constitute an unnecessary intrusion into the NEA's power of supervision and control

over electric cooperatives.

Based on the foregoing discussions, the necessary conclusion that can be arrived at is that, while the RTC has jurisdiction over the petition for prohibition filed by respondent, the NEA, in the exercise of its power of supervision and control, has primary jurisdiction to determine the issue of the validity of the subject resolution. It may not be amiss to reiterate the prevailing rule that the doctrine of primary jurisdiction applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative agency.9 In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice.10 Corollary to the doctrine of primary jurisdiction is the principle of exhaustion of administrative remedies.1wphi1 The Court, in a long line of cases,11 has held that before a party is allowed to seek the intervention of the courts, it is a pre-condition that he avail himself of all administrative processes afforded him. Hence, if a remedy within the administrative machinery can be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the courts power of judicial review can be sought.12 The premature resort to the court is fatal to ones cause of action.13 Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for lack of cause of action.14 The doctrine of exhaustion of administrative remedies is based on practical and legal reasons.15 The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies.16 Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until the system of administrative redress has been completed and complied with, so as to give the administrative agency concerned every opportunity to correct its error and dispose of the case.17 True, the doctrines of primary jurisdiction and exhaustion of administrative remedies are subject to certain exceptions, to wit: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings.18 Respondent, however, failed to show that the instant case falls under any of the above-enumerated exceptions. While respondent alleged in his Urgent Petition for Prohibition that the subject resolution was issued with grave abuse of discretion and in violation of his right to due process, mere allegation of arbitrariness will not suffice to vest in the trial court the power that has been specifically granted by law to special government agencies.19 Moreover, the issues raised in the petition for prohibition, particularly the issue of whether or not there are valid grounds to disallow respondent from attending SAMELCO's Board meetings and to disqualify him from running for re-election as a director of the said Board, are not purely legal questions. Instead, they involve a determination of factual matters which fall within the competence of the NEA to ascertain.

Finally, the Court agrees with petitioners' contention that the availability of an administrative remedy via a complaint filed before the NEA precludes respondent from filing a petition for prohibition before the court. It is settled that one of the requisites for a writ of prohibition to issue is that there is no plain, speedy and adequate remedy in the ordinary course of law.20 In order that prohibition will lie, the petitioner must first exhaust all administrative remedies.21 Thus, respondent's failure to file a complaint before the NEA prevents him from filing a petition for prohibition before the RTC. WHEREFORE, the instant petition is GRANTED. The questioned Decision and Resolution of the Court of Appeals dated January 26, 2006 and July 12, 2006, respectively, as well as the Orders of the Regional Trial Court of Calbiga, Samar, Branch 33, dated May 6, 2005 and September 15, 2005, are REVERSED and SET ASIDE. A new judgment is entered DISMISSING the Urgent Petition for Prohibition (Special Civil Action No. C-2005-1085) filed by respondent Ananias D. Seludo, Jr. SO ORDERED.

Director of Lands, subject to review by the DENR Secretary. While the powers given to the DENR, through the Bureau of Lands, to alienate and dispose of public land do not divest regular courts of jurisdiction over possessory actions instituted by occupants or applicants (to protect their respective possessions and occupations), the respondents' complaint-in-intervention does not simply raise the issue of possession whether de jure or de facto but likewise raised the issue of ownership as basis to recover possession. G.R. No. 85502 February 24, 1992

SUNVILLE TIMBER PRODUCTS, INC., petitioner, vs. HON. ALFONSO G. ABAD, as Judge RTC, Br. 22 of Pagadian City, COURT OF APPEALS, ISIDRO GILBOLINGO AND ROBUSTIANO BUGTAI, respondents. Manuel V. Trinida for petitioner. Adolf Leo P. Boncavil for private respondents.

Samar II Electric Coop., Inc., et al. vs. Ananias D. Seludo, Jr., G.R. No. 173840, April 25, 2012 Corollary to the doctrine of primary jurisdiction is the principle of exhaustion of administrative remedies. The Court, in a long line of cases, has held that before a party is allowed to seek the intervention of the courts, it is a precondition that he avail himself of all administrative processes afforded him. Hence, if a remedy within the administrative machinery can be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court's power of judicial review can be sought. The premature resort to the court is fatal to one's cause of action. Accordingly, absent any finding of waiver or estoppel, the case may be dismissed for lack of cause of action. Samar II Electric Coop., Inc., et al. vs. Ananias D. Seludo, Jr., G.R. No. 173840, April 25, 2012 The doctrine of exhaustion of administrative remedies is based on practical and legal reasons. The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until the system of administrative redress has been completed and complied with, so as to give the administrative agency concerned every opportunity to correct its error and dispose of the case. Samar II Electric Coop., Inc., et al. vs. Ananias D. Seludo, Jr., G.R. No. 173840, April 25, 2012 True, the doctrines of primary jurisdiction and exhaustion of administrative remedies are subject to certain exceptions, to wit: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) inquo warranto proceedings. Samar II Electric Coop., Inc., et al. vs. Ananias D. Seludo, Jr., G.R. No. 173840, April 25, 2012 The resolution of conflicting claims of ownership over real property is within the regular courts' area of competence and, concededly, this issue is judicial in character. However, regular courts would have no power to conclusively resolve this issue of ownership given the public character of the land, since under C.A. No. 141, in relation to Executive Order No. 192, the disposition and management of public lands fall within the exclusive jurisdiction of the

CRUZ, J.: The Court will focus its attention only on one of the issues raised in this petition the correct application of the doctrine of exhaustion of administrative remedies. The petitioner was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize timber within the concession area covering 29,500 hectares of forest land in Zamboanga del Sur, for a period of ten years expiring on September 31, 1992. On July 31, 1987, the herein private respondents filed a petition with the Department of Environment and Natural Resources for the cancellation of the TLA on the ground of serious violations of its conditions and the provisions of forestry laws and regulations. The same charges were subsequently made, also by the herein private respondents, in a complaint for injunction with damages against the petitioner, which was docketed as Civil Case No. 2732 in the Regional Trial Court of Pagadian City. The petitioner moved to dismiss this case on three grounds, to wit: 1) the court had no jurisdiction over the complaint; 2) the plaintiffs had not yet exhausted administrative remedies; and 3) the injunction sought was expressly prohibited by section 1 of PD 605. Judge Alfonso G. Abad denied the motion to dismiss on December 11, 1987, 1 and the motion for reconsideration on February 15, 1988. 2 The petitioner then elevated the matter to the respondent Court of Appeals, which sustained the trial court in a decision dated July 4, 1988, 3 and in its resolution of September 27, 1988, denying the motion for reconsideration. 4 The Court of Appeals held that the doctrine of exhaustion of administrative remedies was not without exception and pointed to the several instances approved by this Court where it could be dispensed with. The respondent court

found that in the case before it, the applicable exception was the urgent need for judicial intervention, which it explained thus: The lower court found out that sometime on July 1981, the City Council of Pagadian in its Resolution No. 111 requested the Bureau of Forest Development to reserve 1,000 hectares in Lison Valley. This request remained unacted upon. Instead in 1982, a TLA covering 29,500 hectares, including the area requested, was given to petitioner. Then the fear expressed by the City Council of Pagadian in its resolution became reality. "As averred in the complaint, the erosion caused by the logging operations of the defendant has caused heavy siltation not only in the Labangan River (as predicted by the City Council of Pagadian City in 1981) but also in the Tukuran River, Salug River, Sindangan River, and Sibuguey River. In other words, the adverse effects of the logging operations of the defendant have already covered a wider area than that feared to be adversely affected by the City Council of Pagadian City. Floods are unknown phenomena in heavily forested areas years back, particularly in the Island of Mindanao. When the grant of logging concessions started, so was the denudation of forests. . . . It is common knowledge that heavy floods have occurred in areas/places adjoining logging concessions. (Resolution dated December 11, 1987, p. 5). Thus, it is urgent that indiscriminate logging be stopped. Irreparable damage would ensue unless the court intervenes. Reliance on the DENR may not be enough, judging from its inaction on the council's request seven years back. The respondent court cited in support of this conclusion the case of De Lara v. Cloribel, 5 where "irreparable damage and injury" was allowed as an exceptional ground, and Arrow Transportation Corporation v. Board of Transportation, 6 where the doctrine was waived because of "the strong public interest in having the matter settled" as soon as possible. The decision also declared invalid Section 1 of PD 605, which provides: Sec. 1. No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary mandatory injunction in any case involving or growing out of the issuance, approval or disapproval, revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions, licenses, permits, patents, or public grants of any kind in connection with the disposition, exploitation, utilization, exploration and/or development of the natural resources of the Philippines. This was held to be an encroachment on the judicial power vested in the Supreme Court and the lower courts by Article VIII, Section 1, of the Constitution. The respondent court cited Export Processing Zone Authority v. Dulay, 7 where several presidential decrees were declared unconstitutional for divesting the courts of the judicial power to determine just compensation in expropriation cases. The petitioner is now before the Court, contending that the doctrine of exhaustion of administrative remedies was not correctly applied and that the declaration of the unconstitutionality of Section 1 of PD 605 was improper. The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the

courts of justice for review. Non-observance of the doctrine results in lack of a cause of action, 8 which is one of the grounds allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection as a ground for a motion to dismiss and the court may then proceed with the case as if the doctrine had been observed. One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so. A no less important consideration is that administrative decisions are usually questioned in the special civil actions of certiorari, prohibition and mandamus, which are allowed only when there is no other plain, speedy and adequate remedy available to the petitioner. It may be added that strict enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their heavily loaded dockets. 9 As correctly suggested by he respondent court, however, there are a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: 1) when the question raised is purely legal; 10 2) when the administrative body is in estoppel; 11 3) when the act complained of is patently illegal; 12 4) when there is urgent need for judicial intervention; 13 5) when the claim involved is small; 14 6) when irreparable damage will be suffered; 15 7) when there is no other plain, speedy and adequate remedy; 16 8) when strong public interest is involved; 17 9) when the subject of the controversy is private land; 18 and 10) in quo warranto proceedings. 19 The private respondents now submit that their complaint comes under the exceptions because forestry laws do not require observance of the doctrine as a condition precedent to judicial action; the question they are raising is purely legal; application of the doctrine will cause great and irreparable damage; and public interest is involved. We rule for the petitioner. Even if it be assumed that the forestry laws do not expressly require prior resort to administrative remedies, the reasons for the doctrine above given, if nothing else, would suffice to still require its observance. Even if such reasons were disregarded, there would still be the explicit language of pertinent laws vesting in the DENR the power and function "to regulate the development, disposition, extraction, exploration and use of the country's forests" and "to exercise exclusive jurisdiction" in the "management and disposition of all lands of the public domain," 20 and in the Forest Management Bureau (formerly the Bureau of Forest Development) the responsibility for the enforcement of the forestry laws aid regulations 21 here claimed to have been violated. This comprehensive conferment clearly implies at the very least that the DENR should be allowed to rule in the first instance on any controversy coming under its express powers before the courts of justice may intervene. The argument that the questions raised in the petition are purely legal is also not acceptable. The private respondents have charged, both in the administrative case before the DENR and in the civil case before the Regional Trial Court of Pagadian City, that the petitioner has violated the terms and conditions of the TLA and the provisions of forestry laws and regulations. The charge involves factual issues calling for the presentation of supporting evidence. Such evidence is best evaluated first by the administrative authorities, employing their specialized knowledge of the agreement and the rules allegedly violated, before the courts may step in to exercise their powers of review.

As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national interest, the record does not show that the petitioners have satisfactorily established these extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative remedies and immediate resort to the courts of justice. In fact, this particular submission must fall flat against the petitioner's uncontested contention that it has since 1988 stopped its operations under the TLA in compliance with the order of the DENR. In the Petition for prohibition filed with the respondent court, the petitioner alleged that its logging operations had been suspended pursuant to a telegram 22 received on February 23, 1988, by the District Forester from the Regional Executive Director of the DENR, Zamboanga City; reading as follows: DISTRICT FORESTER PAGADIAN CITY QUOTED HEREUNDER IS RADIO MESSAGE DATED FEBRUARY 22, 1988 FROM SECRETARY FULGENCIO S. FACTORAN, JR. QUOTE EFFECTIVE IMMEDIATELY CMA SUSPEND ALL LOGGING OPERATIONS OF SUNVILLE IN VIEW OF SERIOUS VIOLATIONS OF FOREST PROTECTION AND REFORESTATION UNQUOTE SUBMIT REPORT ASAP. RED BATCAGAN The petition now before us contains the allegations that the "petition for cancellation of petitioner's TLA is still pending up to this date and that petitioner's logging operations (were) ordered suspended by the Secretary of the DENR pending further investigation." 23 In the memorandum filed by the petitioner with this Court, it is informed that "the Secretary of the DENR suspended petitioner's logging operations until further investigation. The suspension is still in force up to this date after the lapse of almost 3 years." 24 These statements have not been disputed by the private respondents in their pleadings before the respondent court and this Court and are therefore deemed admitted. There in no question that Civil Case No. 2732 comes within the jurisdiction of the respondent court. Nevertheless, as the wrong alleged in the complaint was supposedly committed as a result of the unlawful logging activities of the petitioner, it will be necessary first to determine whether or not the TLA and the forestry laws and regulations had indeed been violated. To repeat for emphasis, determination of this question is the primary responsibility of the Forest Management Bureau of the DENR. The application of the expertise of the administrative agency in the resolution of the issue raised is a condition precedent for the eventual examination, if still necessary, of the same question by a court of justice. In view of the above observations, we find that there was no need for the respondent court to declare the unconstitutionality of Section 1 of PD 605. The rule is that a question of constitutionality must be avoided where the case can be decided on some other available ground, 25 as we have done in the case before us. The resolution of this same question must await another case, where all the indispensable requisites of a judicial inquiry into a constitutional question are satisfactorily established. In such an event, it will be time for the Court "to make the hammer fall, and heavily," in the words of Justice Laurel, if such action is warranted. WHEREFORE, the petition is GRANTED. The decision of the respondent court dated July 4, 1988, and its resolution dated September 27, 1988, as well as the resolutions of the trial court dated December 11, 1987 and February 15,

1988, are all REVERSED and SET ASIDE. Civil Case No. 2732 in the Regional Trial Court of Pagadian City is hereby DISMISSED. SO ORDERED. SUNVILLE VS JUDGE ABAD The application of the expertise of the administrative agency in the resolution of the issue raised is a condition precedent for the eventual examination, if still necessary, of the same question by a court of justice. FACTS: Sunville was granted a Timber License Agreement (TLA) authorizing it to exploit timber in Lison Valley, Zamboanga del Sur. Respondents filed a petition with the DENR to annul the said TLA due to some serious violations of its conditions and provisions of forestry laws, carried out by petitioner. They likewise filed a complaint for injunction in the RTC, based on the same causes of action. Sunville filed a motion to dismiss for lack of jurisdiction of the court and non-exhaustion of administrative remedies. The motion was denied by Judge Abad of the RTC. The CA affirmed and held that the the doctrine of exhaustion of administrative remedies was not without exception and pointed to the several instances approved by this Court where it could be dispensed with. The respondent court found that in the case before it, the applicable exception was the urgent need for judicial intervention given the petitioners operations have caused heavy siltation in various rivers. ISSUE: Whether the respondents should first exhaust administrative remedies? HELD: YES. The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. As correctly suggested by the respondent court, however, there are a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: (1) when the question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the claim involved is small; (6) when irreparable damage will be suffered; (7) when there is no other plain, speedy and adequate remedy; (8) when strong public interest is involved; (9) when the subject of the controversy is private land; and 10) in quo warranto proceedings. In this case, the Forest Management Bureau of the DENR should be allowed to rule in the first instance on this controversy coming under its express powers before the courts of justice may intervene. The respondents have failed to satisfactorily establish that the extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative remedies and immediate resort to the courts. In fact, Sunville has stopped its operations in compliance with the order of the DENR. G.R. No. 165788 February 7, 2007

ALEJANDRO V. DONATO, JR. Petitioner, vs. CIVIL SERVICE COMMISSION REGIONAL OFFICE NO. 1, Respondent. DECISION CALLEJO, SR., J.: Before the Court is the Petition for Review on Certiorari filed by Alejandro V. Donato, Jr. which seeks to reverse and set aside the Decision1 dated October 11, 2004 of the Court of Appeals in CA-G.R. SP No. 73854. The assailed decision affirmed Resolution No. 020348 dated March 7, 2002 and Resolution No. 021423 dated October 23, 2002

of the Civil Service Commission (CSC) which had, in turn, affirmed the decision of the Civil Service Commission Regional Office No. 1 (CSCRO 1) finding petitioner Donato, Jr. guilty of dishonesty and falsification of official document and ordering his dismissal from the service. The case arose from the following facts: Donato, Jr. was a secondary school teacher at the San Pedro Apartado National High School in Alcala, Pangasinan while Gil C. Arce held the position of Assessment Clerk II at the Office of the Municipal Treasurer of the said municipality. On October 5, 1998, the Management Information Office of the CSC in Diliman, Quezon City received an anonymous letter-complaint requesting an investigation on the alleged dishonest act committed by Donato, Jr. It was alleged that Donato, Jr., falsely representing himself as Arce during the Career Service Sub-Professional Examination held in 1995,2 took the said examination in behalf of the latter.1avvphi1.net The anonymous complaint stated in part: I have the honor to request your good Office to investigate the dishonesty committed by Mr. Alejandro V. Donato, Jr. who impersonated Mr. Gil C. Arce during the Sub-Professional Examination taken in 1995. They are working in San Pedro Apartado National High School, Alcala, Pangasinan and in the Municipality of Alcala, respectively. They are cheating the government and as far as rumors this is not only the examination anomaly he committed. x x x x3 Attached thereto was a photograph of Donato, Jr. The letter-complaint was immediately forwarded to the CSCRO 1, City of San Fernando, La Union, which required Donato, Jr. and Arce to submit their respective answers thereto. In his Answer dated May 19, 1999, Arce vehemently denied committing such act of dishonesty. He claimed that he was "the same person who took the said examination and through [his] own merit successfully passed the same." In support thereof, he attached the joint-affidavit of Gerry Cabrera and David Arce attesting that, on August 5, 1990, they all, including Arce, took the Career Service Sub-Professional Examination given by the CSC at the Binmaley Catholic High School, Binmaley, Pangasinan. Donato, Jr., for his part, averred in his Answer dated May 24, 1999 that: I was greatly troubled that my picture appeared in the Seat Plan. The appearance of my picture would substantiate the allegation of the anonymous complaint, whoever he/she is. The truth is that Mr. Arce asked me once to take the test for him, but I vehemently refused the offer knowing that this would [be] tantamount to cheating, and that it would put me in hot waters. Mr. Arce told me that he had taken the examination, but did not make it. It was then that he asked me to take the examination for him, of which I refused knowing that the Honorable Commission has some pertinent records of myself such as copies of my Appointment Papers, PDS, PBET, and other similar documents. The fact is, I advised him to try again, which he did. He even asked me to accompany him in Binmaley to help him locate his testing room. After we had found his testing room, I immediately left him knowing that there was nothing else I could do. I proceeded to Lingayen to visit my mother. After some time, Mr. Arce announced to me that he passed the test with a very high rating.

How my picture was used, I have no idea. All I know is that I used that picture when I took my PBET in November 1998 in Dagupan City. I had other copies of that picture, two of which I submitted to Mrs. Erlinda C. Tadeo, my former principal, for loan purposes. As for the rest, I could no longer locate them because I either misplaced them or lost them. I suspect that my picture was used for personal vendetta against me, to harass me in order that I desist from furthering my case filed before the Honorable Commission against my former principal. I, therefore, vehemently deny the allegation of the Honorable Anonymous Complaint, whoever he/she is.4 The Picture Seat Plan (PSP) of Examination Room No. 24 in Binmaley Catholic High School for the August 5, 1990 Career Service Sub-Professional Examination (where the name Gil Arce appeared) showed that the identification (ID) picture pasted above the name Gil Arce was that of Donato, Jr. It was also observed that the signature appearing thereon was different from the signature of Arce in his Answer. Taking into consideration the foregoing, a Formal Charge dated October 12, 1999 was filed by Romeo C. De Leon, Director IV of CSCRO 1, against Donato, Jr. and Arce for dishonesty and falsification of official document. The case was docketed as Administrative Case No. 99-27. Donato, Jr. and Arce were, accordingly, required to file their respective answers to the said formal charge. In his Answer5 dated December 14, 1999, Arce basically adopted the allegations in his previous answer. In addition thereto, he claimed that ever since he was a child, it was his habit to keep photographs of members of his family and friends in his wallet, including that of Donato, Jr. According to Arce, during the said examination, he may have mistakenly submitted the ID picture of Donato, Jr. With respect to the signature, Arce maintained that the signature on the PSP was one of his signatures and that the one that appeared on his answer was what he was using at the time. In his Answer6 dated December 24, 1999, Donato, Jr. adopted the averments in his previous answer. Additionally, he harped on the apparent discrepancy in the dates considering that the anonymous letter-complaint stated that the date of examination was in 1995 while in the formal charge, two different dates were mentioned: August 5, 1990 and August 5, 1999. The discrepancy in the dates allegedly rendered him incapable of addressing head-on the charges against him. He vigorously denied that he misrepresented himself as Arce and that he took the said government examination in the latters stead. He claimed that he was at his residence in Poblacion East, Alcala, Pangasinan the whole day of August 5, 1990 and, in fact, he received some visitors thereat. He submitted the affidavits of Diosdado Tamayo and Baldomino Batuan attesting that they went to see him at his house on the said date. Subsequently, a trial-type hearing was conducted where the parties, particularly Donato, Jr. and Arce, were given the opportunity to proffer documentary and testimonial evidence. Thereafter, the CSCRO 1, through Lorenzo S. Danipog, Director IV, rendered Decision No. 2001-1137 dated May 30, 2001 in Administrative Case No. 99-27, dismissing Donato, Jr. and Arce from the service for dishonesty and falsification of official document. Donato, Jr. and Arce sought reconsideration of the said decision and/or new trial but their respective motions were denied by the CSCRO 1 for lack of merit. By way of appeal, they elevated the case to the CSC.

After due consideration of the pleadings, the CSC promulgated Resolution No. 020348 dated March 7, 2002, affirming the earlier decision of the CSCRO 1. The CSC ruled that there was substantial evidence to hold both Donato, Jr. and Arce guilty of the charges of dishonesty and falsification of official document. Specifically, the ID picture of Donato, Jr. pasted on the PSP during the August 5, 1990 Career Service Sub-Professional Examination above Arces name and the marked dissimilarity between Arces purported signature thereon and his signature as appearing in his answer were taken by the CSC as indicative of the fact that it was Donato, Jr. who actually took the said examination in behalf of Arce. The dispositive portion of CSC Resolution No. 020348 reads: WHEREFORE, the appeal of Gil Arce and Alejandro Donato, Jr. is hereby DISMISSED. Accordingly, the Decision dated May 30, 2001 of the Civil Service Commission Regional Office (CSCRO) No. 1, San Fernando City, La Union, finding them guilty of Dishonesty and Falsification of Official Document and dismissing them from the service stands. IRMO and CSCRO 1 are directed to effect the revocation of the civil service eligibilities of Gil Arce and Alejandro Donato, Jr. in the implementation of this resolution.8 A motion for reconsideration thereof was filed by Donato, Jr. and Arce but it was denied by the CSC in its Resolution No. 021423 dated October 23, 2002. In this resolution, the CSC stressed that "the guilt of Arce and Donato, Jr. was sufficiently proven by substantial evidence; hence, there is no cogent reason to warrant the reversal or modification of CSC Resolution No. 020348 dated March 7, 2002."9 Donato, Jr. and Arce forthwith filed with the Court of Appeals (CA) a petition for review assailing the aforesaid resolutions of the CSC. The CA, however, in the assailed Decision dated October 11, 2004, affirmed CSC Resolution Nos. 020348 and 021423. The CA did not give credence to their insistence that the letter-complaint should have been dismissed outright for non-compliance with Section 8,10 Rule II of the Uniform Rules on Administrative Cases in the Civil Service. In particular, it was Donato, Jr. and Arces contention that the CSC should have dismissed outright the anonymous letter-complaint. Addressing this argument, the CA, echoing the reasoning of the CSC, pointed out that the basis for the formal investigation against them was not the anonymous complaint but the finding of a prima facie case against them after a fact-finding investigation.11 The CA, likewise, considered as puerile Donato, Jr. and Arces claim that the documentary evidence against them had no probative value as the public officials who were in custody of these documents were not presented. The CA reasoned that the documentary evidence against Donato, Jr. and Arce are public documents and the probative weight accorded these documents is enunciated in Section 23, Rule 132 of the Revised Rules on Evidence, to wit: SEC. 23. Public documents as evidence. Documents consisting of entries in public records made in the performance of a duty by a public officer are prima facie evidence of the facts therein stated. All other public documents are evidence, even against a third person, of the fact which gave rise to their execution and of the date of the latter. Specifically, the evidentiary value of the PSP for Examination Room No. 24 of the Binmaley Catholic High School in which the ID picture of Donato, Jr. was pasted above Arces name was, according to the CA, correctly given evidentiary weight by the CSC in consonance with the above-quoted provision, and especially when viewed in the context of Arces assertion that he may have mistakenly submitted Donato Jr.s ID picture when he took the said

government examination. Lacking a satisfactory explanation for Donato, Jr.s ID picture on the said PSP and the variance between Arces purported signature thereon and that on the answer that he filed with the CSCRO 1, the CA held that Donato, Jr. and Arce were correctly found liable for dishonesty and falsification of official document. Donato, Jr. and Arces claim of violation of their right to due process when they were found administratively liable, allegedly despite the absence of witnesses against them, was given short shrift by the CA. It pointed out that the records clearly showed that they were accorded the opportunity to present their side and, in fact, they submitted evidence to controvert the charges against them. The CA ruled that under the circumstances the requirements of due process had been sufficiently met. The dispositive portion of the assailed CA decision reads: WHEREFORE, the petition for review is DENIED for lack of merit and respondents assailed Resolution Nos. 020348 and 021423 are AFFIRMED in toto. SO ORDERED.12 Only Donato, Jr. (the petitioner) filed the present petition for review seeking to reverse and set aside the Decision dated October 11, 2004 of the CA. He raises the following issues for the Courts resolution: I WHETHER OR NOT THE PROCEEDINGS, UNDERTAKEN BY THE RESPONDENT, THE FORUM OF ORIGIN, ARE TAINTED WITH IRREGULARITY, INCLUDING DENIAL TO PETITIONER OF THE RIGHT OF CONFRONTATION, SUCH THAT THERE IS NOT A SINGLE PIECE OF EVIDENCE ADDUCED AGAINST PETITIONER; II WHETHER OR NOT THE FORUM OF ORIGIN AND THE SUBSEQUENT FORA IN WHICH THIS CASE PASSED THROUGH ON APPEAL ARE CORRECT IN CONCLUDING THAT PETITIONER IMPERSONATED GIL C. ARCE BECAUSE OF THE PRESENCE OF THE FORMERS PICTURE IN THE SPACE INTENDED FOR THE PICTURE OF THE LATTER IN THE PICTURE SEAT PLAN (EXHIBIT "C") OF THE AUGUST 5, 1990 CIVIL SERVICE EXAMINATION AT ROOM 24, BINMALEY CATHOLIC HIGH SCHOOL, BINMALEY, PANGASINAN.13 The petitioner mainly assails the reliance by the CSCRO 1, the CSC and the CA on the Picture Seat Plan (marked as Exhibit "C"), which contained his ID picture above the name of Arce, in finding them both guilty of the administrative charges of dishonesty and falsification of official document. It is his contention that the PSP was erroneously considered as evidence when what was presented during the proceedings conducted by the CSCRO 1 was only a photocopy thereof. Upon the petitioners demand, at the hearing of August 8, 2000, the counsel of CSCRO 1 produced a document which he claimed was an original copy of the PSP. However, the petitioner objected to the manner of presentation because the counsel was not allegedly the custodian of the said document. Moreover, he was not put on the witness stand and, consequently, was not subjected to cross-examination. The petitioner emphasizes that the PSP was not identified and formally offered in evidence. The petitioner claims violation of his right to due process because he was not able to confront the person who prepared, and who was in custody of, the PSP. He maintains that the presence of his ID picture above Arces name could be made by any person by simply pasting it over another ID picture for an evil purpose. In this connection, he

accuses his former principal, Mrs. Erlinda Tadeo, as the one responsible therefor because he (the petitioner), together with his co-teachers, filed an administrative case against her, for which she was meted a fine equivalent to her six months salary. The petition is bereft of merit. It must be stated, at the outset, that the CSCRO 1, the CSC and the CA uniformly found the petitioner liable for the charges of dishonesty and falsification of official document. In so doing, the PSP, on which the ID picture of the petitioner appeared above the name of Arce, was given credence by the CSCRO 1, the CSC and the CA to support the administrative charges against the petitioner and Arce. No rule is more entrenched in this jurisdiction than that the findings of facts of administrative bodies, if based on substantial evidence, are controlling on the reviewing authority.14 Stated in another manner, as a general rule, factual findings of administrative agencies, such as the CSC, that are affirmed by the CA, are conclusive upon and generally not reviewable by this Court.15 To be sure, there are recognized exceptions to this rule, to wit: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of facts are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.16 None of these exceptions has been shown to be attendant in the present case. On the other hand, petitioner would like this Court to re-examine the evidence against him as he impugns, in particular, the PSP which contained his ID picture above Arces name. However, it is not the function of this Court to analyze or weigh all over again the evidence and credibility of witnesses presented before the lower court, tribunal or office. This flows from the basic principle that the Supreme Court is not a trier of facts. Its jurisdiction is limited to reviewing and revising errors of law imputed to the lower court, the latters findings of fact being conclusive and not reviewable by this Court.17 The petitioners contention that his right to due process was violated because he was not able to cross-examine the person who had custody of the PSP is unavailing. In another case, the Court addressed a similar contention by stating that the petitioner therein could not argue that she had been deprived of due process merely because no cross-examination took place.18 Indeed, in administrative proceedings, due process is satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy or given opportunity to move for a reconsideration of the action or ruling complained of.19 Such minimum requirements have been satisfied in this case for, in fact, hearings were conducted by the CSCRO 1 and the petitioner and Arce actively participated therein and even submitted their respective evidence. Moreover, they were able to seek reconsideration of the decision of the CSCRO 1 and, subsequently, to elevate the case for review to the CSC and the CA. Likewise unavailing is the petitioners protestation that the PSP was not identified and formally offered in evidence. The CSC, including the CSCRO 1 in this case, being an administrative body with quasi-judicial powers, is not bound

by technical rules of procedure and evidence in the adjudication of cases, subject only to limitations imposed by basic requirements of due process.20 As earlier opined, these basic requirements of due process have been complied with by the CSC, including the CSCRO 1. It is well, at this point, to quote with approval the following ratiocination made by the CSC: The picture of Donato pasted over the name of Gil Arce in the PSP during the Career Service Sub-professsional Examination on August 5, 1990 is indicative of the fact that respondent Arce did not personally take the said examination but Donato in his behalf. This is so because as a matter of procedure, the room examiners assigned to supervise the conduct of examination closely examine the pictures submitted by the examinees. An examinee is not allowed by the examiners to take the examination if he does not look like the person in the picture he submitted and affixed in the PSP (CSC Resolution No. 95-3694 dated June 20, 1995 cited in CSC Resolution No. 97-0217 dated January 14, 1997). Obviously, the person whose picture is pasted on the PSP was the one who took the examination for and in behalf of Arce. In the offense of impersonation, there are always two persons involved. The offense cannot prosper without the active participation of both persons (CSC Resolution No. 94-6582). Further, by engaging or colluding with another person to take the test in his behalf and thereafter by claiming the resultant passing rate as his, clinches the case against him. In cases of impersonation, the Commission has consistently rejected claims of good faith, for "it is contrary to human nature that a person will do (impersonation) without the consent of the person being impersonated." (CSC resolution No. 94-0826) It has been a settled rule in this jurisdiction that the duly accomplished form of the Civil Service is an official document of the Commission, which, by its very nature is considered in the same category as that of a public document, admissible in evidence without need of further proof. As official document, the contents/entries therein made in the course of official duty are prima facie evidence of the facts stated therein (Maradial vs. CSC, CA-G.R. SP No. 40764 dated September 27, 1996).21 Additionally, the petitioners proposition that the matter could be the handiwork of his former principal, who had an axe to grind against him, is utterly preposterous. This bare and gratuitous allegation cannot stand against the ruinous evidence against him and Arce. Those government employees who prepared the PSP and who supervised the conduct of the Career Service Sub-Professional Examination on August 5, 1990, enjoy the presumption that they regularly performed their duties and this presumption cannot be disputed by mere conjectures and speculations.22 In fine, the CA committed no reversible error when it affirmed the resolutions of the CSC finding the petitioner guilty of dishonesty and falsification of official document. The petitioner has miserably failed to present any cogent reason for the Court to deviate from the salutary rule that factual findings of administrative agencies, especially when affirmed by the CA, are generally held to be binding and final so long as they are supported by substantial evidence in the record of the case.23 WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Decision dated October 11, 2004 of the Court of Appeals in CA-G.R. SP No. 73854 is AFFIRMED in toto. SO ORDERED.