Admin 4

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 89687 September 26, 1990
MARIA B. LUPO, petitioner,
vs
ADMINISTRATIVE ACTION BOARD (AAB) (Department of Transportation &
Communications Republic of the Philippines) and JUSTICE ONOFRE A.
VILLALUZ, respondents.
Baga, Castronuevo, Balitaan & Associates for petitioner.
PARAS, J.:
In this petition for prohibition, petitioner seeks the issuance of an order or writ of
prohibition which would direct public respondents Administrative Action Board
and Chairman Onofre A. Villaluz to permanently desist from assuming jurisdiction
over Adm. Case No. AAB-034-88 until the same is finally disposed of by the
Telecoms Office, Region V at Legaspi City and to refrain from issuing orders
setting the aforecited case for hearing.
Petitioner substantially assails the Resolution dated September 30, 1988 of then
Secretary Rainerio O. Reyes of the Department of Transportation and
Communications which suspended her for one year and disqualified her for
promotion for a period of one year and also, the Order of July 5, 1989 of
Chairman Onofre A. Villaluz of the Administrative Action Board of said
department which set Adm. Case No. AAB-034-88 for trial.
The prefatory facts are:
On November 5, 1987, Fructuoso B. Arroyo, OIC/CDO, Message Center and
then CDO of Telecom Office stationed at Buhi, Camarines Sur, filed a complaint
for Dishonesty Thru Falsification (Multiple) of Official Documents against Maria B.
Elsa M. Caete CPA, MBA, DBA 1
Lupo, herein petitioner, as Chief of Personnel Section, Telecom Office, Region V

at Legaspi City. The complaint was based on the alleged exclusion of several
names from the Certification (on the list of employees) submitted by petitioner in
compliance with a Confidential Memorandum of Director Claro Morante.
The aforesaid complaint was actually triggered off by the inquiry of Ignacio B.
Arroyo, brother of complainant Fructuoso B. Arroyo, into the alleged illegal
termination of the former's niece, Nenita Arroyo Noceda, as a daily wage clerk at
Buhi Telecom Exchange in Camarines Sur, in violation of a contract previously
entered into between a certain Gloria D. Palermo, lot donor and former Bureau
Director Ceferino S. Carreon, donee of the lot. The lot is located at Sta. Clara,
Buhi on which the Telecom Office was to be constructed. This inquiry of Ignacio
B. Arroyo was dismissed for lack of merit on September 16, 1987.
It appears that the basis for the complaint of Fructuoso Arroyo from whom
Ignacio sought assistance was petitioner's exclusion of certain names of newly
hired employees in Region V who appeared related to certain ranking officials of
the region, for the purpose of keeping under wraps the appointment of said
employees from Ignacio Arroyo who had previously complained of the alleged
illegal termination of his niece Nenita A. Noceda. Petitioner had to falsify the list
which she submitted in compliance with Regional Director Morante's Confidential
Memorandum to the alleged prejudice of Noceda and for the purpose of
protecting her future interest in the sense that those excluded (who should have
been included) were close relatives of ranking officials of the Telecommunications
Office of Region V. Telecom Investigator Florencio Calapano, acting on the
unverified complaint of Fructuoso Arroyo, conducted an informal fact-finding
inquiry and came out with a Memorandum recommending that petitioner be
sternly warned that a repetition of a similar offense in the future would be dealt
with more drastically and that the case should be considered closed.
Based solely on the aforesaid Memorandum, the Secretary of the Department of
Transportation and Communications handed down a Resolution on September
30, 1988 finding petitioner "guilty as charged" and suspending her for one year
and disqualify her for promotion for a period of one year. Petitioner moved for
reconsideration of the resolution but the same was denied. She thus appealed
the resolution and order of denial of the motion for reconsideration to the Civil
Service Commission for review, anchoring her appeal on lack of due process in
the proceedings.
On March 2, 1989 the Civil Service Commission, thru its Merit Systems Board,
issued the Order setting aside the resolution of the Department of Transportation
and Communications and remanding the case to the Telecom Office of Region V
for further investigation to conform with the procedural requirements of due
process.
Instead of complying with the above order, respondent Chairman Villaluz of the
AAB issued the Order of July 5, 1989 setting the case for trial on August 3, 1989.
On August 2, 1989, petitioner filed a Manifestation and Motion informing
respondent Villaluz that no formal charge had been instituted by the
Telecommunications Office against her and respondents, therefore, had no
jurisdiction over the case. Respondents denied said manifestation and motion for
lack of merit in the Order of August 7, 1989 and again set the case for hearing on
August 23, 1989.
Hence, this petition.
Petitioner avers that respondent AAB never acquired jurisdiction over Adm. Case
No. AAB-034-88 because of the absence of a formal charge against her and that
the proceedings conducted by Regional Investigator Florencio Calapano was a
mere fact-finding inquiry.
Respondent Chairman of the AAB however, contends that the Order of the Merit
Systems Board of the Civil Service Commission was rendered without lawful
authority since petitioner's appeal to said Board was filed when the assailed
resolution had already become final and executory; that the Board, not having
acquired jurisdiction to entertain the appeal for having been filed beyond the
reglementary period could not have legally rendered its decision in the said
administrative case. Likewise, respondents claim that Regional Office No. V
could no longer take cognizance of the case as per order of the Merit Systems
Board for the reason that the decision had already become final and executory.
Complaints against employees, like petitioner herein, who belong to the Civil
Service Career System are still governed by P.D. No. 807. This mandate of P.D.
No. 807 has been recognized and implemented by respondent Administrative
Action Board when it declared in Office Order No. 88-318 dated July 1, 1988 that
the Board shall observe the pertinent civil service rules and policies designed to
expedite action on cases referred to it. (Emphasis supplied)
The pertinent provisions of the aforecited Civil Service Law read as follows:
SECTION 37. Disciplinary Jurisdiction. (a) The Commission shall
decide upon appeal all administrative disciplinary cases involving the
imposition of a penalty of suspension for more than thirty days, or
fine in an amount, exceeding thirty days' salary, demotion in rank or
salary or transfer, removal or dismissal from office. A complaint may
be filed directly with the Commission by a private citizen against a
government official or employee in which case it may hear any
department or agency or and decide the case or it may deputize
official or group of officials to conduct the investigation. The results
of the investigation shall be submitted to the Commission with
recommendation as to the penalty to be imposed or other action to
be taken.
(b) The heads of departments, agencies and instrumentalities,
provinces, cities and municipalities shall have jurisdiction to
investigate and decide matters involving disciplinary action against
officers and employees under their jurisdiction. Their decisions shall
be final in case the penalty imposed is suspension for not more than
thirty days or fine in an amount not exceeding thirty days' salary. In
case the decision rendered by a bureau or office head is appealable
to the Commission, the same may be initially appealed to the
department and finally to the Commission and pending appeal, the
same shall be executory except when the penalty is removal, in
which case the same shall be executory only after confirmation by
the department head.
(c) An investigation may be entrusted to regional director or similar
officials who shall make the necessary report and recommendation
to the chief of bureau or office or department within the period
specified in Paragraph (d) of the following Section.
(d) An appeal shall not stop the decision from being executory, and
in case the penalty is suspension or removal, the respondent shall
be considered as having been under preventive suspension during
the pendency of the appeal in the event he wins an appeal.
SEC. 38. Procedure in Administrative Cases Against NonPresidential Appointees. a) Administrative proceedings may be
commenced against a subordinate officer or employee by the head
of department or office of equivalent rank, or head of local
government, or chiefs of agencies, or regional directors, or upon
sworn, written complaint of any other persons.
(b) In the case of a complaint filed by any other persons, the
complainant shall submit sworn statements covering his testimony
and those of his witnesses together with his documentary evidence.
If on the basis of such papers a prima facie case is found not to
exist, the disciplining authority shall dismiss the case. If a prima
facie case exist, he shall notify the respondent in writing, of the
charges against the latter, to which shall be attached copies of the
complaint, sworn statements and other documents submitted, and
the respondent shall be allowed not less than seventy-two hours
after receipt of the complaint to answer the charges in writing under
oath, together with supporting sworn statements and documents, in
which he shall indicate whether or not he elects a formal
investigation if his answer is not considered satisfactory. If the
answer is found satisfactory, the disciplining authority shall dismiss
the case.
(c) Although a respondent does not request a formal investigation,
one shall nevertheless be conducted when from the allegations of
the complaint and the answer of the respondent, including the
supporting documents, the merits of the case cannot be decided
judiciously without conducting such an investigation. . . .
Petitioner's contentions appear meritorious.
It should be noted that under Section 37 (b) as aforequoted, the decisions of
heads of departments become final only in cases where the penalty imposed is
suspension for not more than thirty (30) days or fine in an amount not exceeding
thirty (30) days' salary. In the case, therefore, of petitioner who had been made to
suffer the penalty of suspension for one (1) year, such penalty should not have
been implemented without the appeal to the Civil Service Commission for proper
review.
Notably, paragraph (a) of the above Section explicitly provides that the
Commission shall decide upon appeal all administrative disciplinary cases
involving the imposition of a penalty of suspension for more than 30 days, or fine
in an amount exceeding 30 days' salary. Clearly, the enforcement of the penalty
imposed upon petitioner under the resolution of the Secretary of the Department
of Transportation and Communications was premature.
From the very start, the basis upon which this case was investigated had been
defective and irregular. For, the letter-complaint of Fructuoso Arroyo was not
verified and yet, the same was haphazardly made the basis of the informal
inquiry. It should be stressed that par. (a) of Sec. 38 mandates that administrative
proceedings may be commenced against an employee by the head of the
department or office of equivalent rank or upon sworn written complaint of any
other person. It should also be noted that under paragraph (b) of said Section, a
respondent is given the option to elect a formal investigation of the charge
against him if his answer is not found satisfactory. In the case of petitioner, it
appears that when her answer to the unverified complaint was found
unsatisfactory, she was never given a chance to decide whether or not to submit
herself to a formal investigation.
The Memorandum of Telecom Investigator Calapano to the Regional Director is
merely recommendatory since it was only the outcome of a fact finding
investigation based on the unverified complaint. Note that the informal
investigation was only an inquiry into the alleged dishonest acts of petitioner in
which case, the Memorandum could not be made as the basis for any final
resolution of the case. The legal and proper procedure should have been for the
Regional Director of Region V, the alter ego of the department secretary to
initiate the formal complaint on the basis of the results of the inquiry of the
Telecom Investigator. Instead of observing the mandatory rules on formal
investigations as prescibed by PD No. 807, the DOTC Secretary cut corners and
apparently railroaded this case by rendering the assailed resolution.
Even the Telecom Investigator did not know what he was doing. He exceeded his
authority by imposing in the Memorandum a penalty in the form of a warning to
petitioner. His job was limited to an inquiry into the facts and a determination on
whether or not a prima facie case existed. His findings were merely preparatory
to the filing of the necessary formal administrative case by the Regional Director.
It should be noted with alarm that the Telecom Director who was supposed to
review the findings of the Telecom Investigator merely affixed his approval within
the Memorandum (p. 7 of Memorandum), thus obviously indicating that he never
reviewed the merits of the case.
It appears highly irregular that Asst. Secretary Sibal of the DOTC, in his letter
dated August 2, 1989 to Chairman Villaluz of the Administrative Action Board,
informed the latter that his Office did not file any administrative complaint against
petitioner nor had it filed a formal charge against her for whatever administrative
offense. Note that even with this letter, Chairman Villaluz proceeded to order the
hearing of this case. This is a clear indication that for lack of coordination among
the DOTC authorities and the Regional Office, the mandatory requirements of
due process to which petitioner was entitled were irreverently ignored.
Thus, in the case of Jose Rizal College v. National Labor Relations
Commission (G.R. No. 65482, December 1, 1987) this Court reiterated the
"cardinal primary" requirements of due process in administrative proceedings and
these are: (1) the right to a hearing which includes, the right to present one's
case and submit evidence in support thereof; (2) the tribunal must consider the
evidence presented; (3) the decision must have something to support itself, (4)
the evidence must be substantial, and substantial evidence means such
evidence as a reasonable mind must accept as adequate to support a
conclusion; (5) the decision must be based on the evidence presented at the
hearing, or at least contained in the record and disclosed to the parties affected;
(6) the tribunal or body or any of its judges must act on its or his own
independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate; (7) the board or body should in all
controversial questions, render its decision in such manner that the parties to the
proceeding can know the various issues involved, and the reason for the decision
rendered. (Emphasis supplied)
Evidently, respondents denied petitioner her right to a formal and full-blown
administrative proceedings which she never had.
WHEREFORE, the Resolution dated September 30, 1988 of the Secretary of the
Department of Transportation and Communications and the proceedings before
the Administrative Action Board are hereby declared NULL and VOID. The
Secretary of the DOTC is hereby directed to restore to petitioner's record of
service the period which she served under suspension and to delete from her
personnel file the period within which she was disqualified for promotion.
SO ORDERED
DIGEST
2. Lupo v. Administrative Action Board 190 SCRA 69Facts: Fructuso
Arroyo, the OIC/CDO, Message Center and former CDO of Telecom filed
a complaint fordishonesty thru falsification (multiple) of official
documents against Maria Lupo, who committed said transgression in
hercapacity as Chief of Personnel if Telecom, Region V. the telecom
investigator conducted an informal fact-finding inquiry.He came out
with a memorandum recommending that Lupo be sternly warned and
that a repeat of such offense will merither graver penalties.
The Secretary of the Department of Transportation and Communication
however, examined the memorandum.Based on said memorandum,
the secretary filed a resolution slipping6 Lupo with 1 year suspension
and suspending herfrom promotion for a period of 1 year.Lupo
appealed to the CSC. The CSC thru its Merit System Board ordered the
case to be remanded back to thetelecom office for further investigation
after which the administrative action board (AAB) was to hear the
merits of the casethru a trial.The AAB however proceeded with the trial
of the case without waiting for the investigation to commence.Lupo
now complains she was not accorded procedural due process because
no formal charge has been filedagainst her and that the investigation
conducted by the telecom investigation was not a formal investigation
but a merefact-fact finding inquiry.
Held:
Lupo is correct. Complaints against employees belonging to the CSC
system is governed by PD 807 saysthat a formal complaint that should
first be filed after which the respondent must be given the option to
submit her self to aformal investigation if her answer to the complaint
is found to be unsatisfactory. Here, not only was Lupo is given a
chanceto submit her self to a formal investigation, the DOTC secretary
immediately slapped her with a 1 year suspension basedonly a mere
informal inquiry. Also, the AAB started hearing her case without the
benefit of a formal investigation.The cardinal primary rights of due to
process in administrative hearings must always be observed. Lupo
must notbe denied her right to a formal and full blown administrative
proceeding.F. Read RA 6770 the Ombudsman Act of 1989Read the
case of Garcia v. Mojica (see p. 69) preferably in its entirely, in order to
best see how theOmbudsman Act was applied in an actual caseG. 1
Read AO No. 23, December 17, 1992Read the case Joson v. Torres, (see
p. 71) preferably in its entirely, in order to best see how AO 23
wasapplied in an actual case.G. 2 Read AO No. 121, March 10, 199

SUPREME COURT
Manila
EN BANC
G.R. No. 93868
February 19, 1991
ARDELIZA MEDENILLA, petitioner,

vs.
CIVIL SERVICE COMMISSION, AMPARO DELLOSA, ROSALINDA JURIA and
MARITA BURDEOS,respondents.
GUTIERREZ, JR., J.:

This is a petition seeking the annulment of the resolutions issued by the Civil
Service Commission which disapproved the appointment of the petitioner to the
position of Supervising Human Manpower Development Officer.
Petitioner Ardeliza Medenilla was a contractual employee of the Department of
Public Works and Highways (DPWH) occupying the position of Public Relations
Officer II.
In 1987, Medenilla was detailed as Technical Assistant in the Office of the
Assistant Secretary for Administration and Manpower Management.
Pursuant to Executive Order No. 124 dated January 30, 1987, a reorganization
ensued within the DPWH and all the positions therein were abolished. A revised
staffing pattern together with the guidelines on the selection and placement of
personnel was issued.
Included in the revised staffing pattern is the contested position of Supervising
Human Resource Development Officer.
On January 2, 1989, the petitioner was appointed to the disputed position.
On January 27, 1989, respondents Amparo Dellosa, Rosalinda Juria and Marita
Burdeos together with Matilde Angeles, Catalina Espinas, Alicia Nercelles and
Ramon Racela, all of whom are employees in the Human Resource Training and
Material Development Division, Administrative and Manpower Management
Service of the DPWH, jointly lodged a protest before the DPWH task force on
reorganization contesting the appointment of the petitioner to the position.
The protestants alleged that since they are next-in-rank employees, one of them
should have been appointed to the said position.
On August 2, 1989, the task force on reorganization dismissed the protest. The
dispositive portion of its decision reads as follows:
Premises considered, the Task Force on Reorganization Appeals finds the
instant protest of Matilde Angeles, et al. without merit and hereby
recommends to the Honorable Secretary that the appointment of Ardeliza
Medenilla to the contested position of Supervising Human Resource
Development Officer be upheld. (Rollo, p. 26)
Not satisfied, the private respondents appealed the decision to the Civil Service
Commission. The Commission found:
On the onset, it appears that protestee Medenilla does not possess the
required qualifications for the position. . . . Moreover, her eligibility is PD
907, being a cum laude graduate. Let it be considered appropriate only for
appointment to "second level positions" which require the application of
knowledge and skills within the appointee's field of study. (Rollo, p. 28-29)
xxx
xxx
xxx
Further, it also appears that Medenilla is a contractual employee assigned

or detailed with the Office of the Assistant Secretary for Administrations
and Manpower Management (the appointing authority) as Public Relations
Officer II, while protestants are all permanent employee of the Division
(Human Resources Planning) where the vancancy exist.
Indeed, RA 6656 does not preclude the appointment of contractuals to a
new staffing pattern, however, in the presence and availability of qualified
permanent next-in-rank employees in the organization, the latter has to be
preferred, unless a contractual employee possesses superior qualifications
that could justify her appointment. However, in this case, we see no
superior qualifications or any special reasons for preferring Medenilla over
the protestants. (Rollo, p. 29)
We find merit in the protest. While as earlier mentioned, the appointing
authority is given the wide latitude of discretion, to sustain the appointment
of Medenilla may give the appointing power unnecessary opportunities to
act capriciously and thus thwart the natural and reasonable expectation of
the officer next-in-rank to any vacant position, to be promoted to it As held
in Millares v. Subido, G.R. No. L-23281, promulgated August 10, 1967, the
Supreme Court held:
We, therefore, hold that in the event of there occurring a vacancy, the
officer next-in-rank must, as far as practicable and as the appointing
authority sees it in his best judgment and estimation, be promoted . . . and
that it is only in cases of promotion, where an employee other than the
ranking one is promoted, is the appointing power under duty to give
"special reason or reasons" for his action . . . .
Again, the special reasons advanced by the appointing authority in this
case is (sic) not enough. Considering further that appointee is not meeting
the minimum qualification standards set by his own office, she could not be
said to possess far superior qualification than those permanent next-inrank employees of the Department. (Rollo, pp. 30-31)
Thus, on February 28, 1990, the Commission promulgated the assailed
resolution, the dispositive portion of which reads:
WHEREFORE, foregoing premises considered, the Commission resolved
to disapprove the promotional appointment of Ardeliza Medenilla to the
position of Supervising Human Manpower Development Officer.
Accordingly, the appointing authority may choose from among protestants
Amparo Dellosa, Marita Burdeos and Rosalinda Juria who to promote to
the said position. The Civil Service Field Office is directed to implement
this resolution accordingly." (Rollo, p. 31)
The petitioner on March 23, 1990 filed a motion for reconsideration of the
resolution. On May 30, 1990 a supplement to the Motion for Reconsideration was
also filed. However, prior thereto, the Commission on May 23, 1990 denied the
petitioner's motion for reconsideration. The pertinent portions of the denial are:
xxx
xxx
xxx
2. Experience of Medenilla
Medenilla alleges that the Commission failed to appreciate her 3 years and
8 months of experience directly relevant to Human Resource
Development. Looking more deeply into her experience as reflected in her
CS Form 212, we could not distinguish her experience directly relevant to
the field of Human Resource Development. The certification of a certain
Elvira H. Villania stated her duties in the Guthrie-Jensen Consultants, Inc.
in her one (1) year and (7) months as Research and Publication Officer of
working included "providing research assistance to our Management
Consultants in drawing up performance appraisal system, merit promotion
system and conducting development for our client-companies."
Notwithstanding, assuming that her 1 year and 7 months experience in the
company is relevant, yet, compared to the experience of the protestants in
the field of Human Resource Development, said experience is obviously
outweighed. There is no dispute that Medenilla has experience as a
Researcher but said experience is basically on the field of journalism and
information. (Rollo, p. 35)
xxx
xxx
xxx
4. Education background and eligibility of Medenilla.

. . . Notwithstanding, we are inclined to reconsider our position that the

educational background is not relevant. AB may therefore be taken as a
relevant degree for purposes of qualifying to the position. As such, her PD
907 eligibility may be considered appropriate." (Rollo, p. 37)
xxx
xxx
xxx
Granting for the sake of argument that the DPWH adhered to its rules
relative to reorganization, is at this point, no longer material and
controlling. What is now the issue is whether Medenilla indeed possesses
superior qualifications over any of the protestants. (Rollo, p. 38)
xxx
xxx
xxx
The edge of 1.30% of Medenilla over Dellosa cannot be considered by this

Commission significant enough to presume and declare that Medenilla
possesses far superior qualifications over the protestant and to warrant the
appointment of a contractual employee over a permanent employee of the
Department. (Rollo, p. 39)
Hence, this petition.
The petitioner interposes the following grounds:
I
The resolutions were issued by the Respondent Commission, without
giving notice to the petitioner of the existence of an appeal filed before the
CSC, thereby denying the petitioner due process of law.
II
The Civil Service Commission committed grave abuse of discretion
amounting to lack of jurisdiction in disapproving the appointment of the
petitioner. Its function, is limited only to determine whether the appointee
possesses the appropriate civil service eligibility and not whether another
is more qualified than the petitioner.
Without giving due course to the petition, the Court on July 10, 1990, issued a
temporary restraining order enjoining the Commission from implementing the
assailed resolutions.
Anent the first ground, the petitioner contends that she was not notified by the
Civil Service Commission of the existence of the appeal before it. The
resolutions, therefore, were allegedly issued in violation of the petitioner's

constitutionally guaranteed due process of law.
The public respondent, on the other hand, advances the argument that what due
process abhors is not lack of previous notice but the absolute lack of opportunity
to be heard. Since the petitioner filed a motion for reconsideration, she cannot
now complain that she was deprived of due process.
The petitioner's first contention is without merit.
"Due process of law implies the right of the person affected thereby to be present
before the tribunal which pronounces judgment upon the question of life, liberty,
and property in its most comprehensive sense; to be heard, by testimony or
otherwise, and to have the right of controverting, by proof, every material fact
which bears on the question of the light in the matter involved." (Black's Law
Dictionary, 4th Edition, p. 590)
The essence of due process is the opportunity to be heard. The presence of a
party is not always the cornerstone of due process. (Asprec v. Itchon, 16 SCRA
921 [1966]; Auyong Hian v. Court of Tax Appeals, 59 SCRA 110 [1974]; Assistant
Executive Secretary for Legal Affairs of the Office of the President of the
Philippines v. Court of Appeals, G.R. No. 76761, January 9, 1989). What the law
prohibits is not the absence of previous notice but the absolute absence thereof
and lack of opportunity to be heard. (Tajonero v. Lamarosa, 110 SCRA 438
[1981])
In the case at bar, any defect was cured by the filing of a motion for
reconsideration. (see De Leon v. Comelec, 129 SCRA 117 [1984])
The second contention of the petitioner alleges that the Commission acted with
grave abuse of discretion in disapproving her appointment.
The public respondent views it otherwise. The Civil Service Commission asserts
that being the Central Personnel Agency of the Government, it is the final arbiter
on civil service matters.
The Commission alleges, that, pursuant to RA 6656, the Commission is
authorized to act on appeals by aggrieved employees in the course of
reorganization and, therefore, it has the power to reverse or modify any decision
brought before it on appeal.
The petitioner's second contention is impressed with merit.
The qualification standards for the contested position are as follows:

EDUCATION EXPERIENCE CIVIL SERVICE
REQUIREMENT REQUIREMENT ELIGIBILITY
Bachelor's degree 2 years of Manpower-Youth
relevant to the job experience in Development
with at least human resource Officer
9 units in post development Manpower
Development
Officer
Relevant RA
1080
Relevant
Second Level
Eligibility
Career Service
(Professional)
First Grade
Supervisor
It is not disputed that the petitioner possesses the appropriate civil service
eligibility and requisite educational background. The public respondent itself, in
its resolution dated May 23, 1990, considered the petitioner's PD No. 907
eligibility appropriate for the position. (Rollo, p. 37)
The controversy then centers on the experience of the petitioner.
The Commission contends that the experience of Medenilla is basically in the

field of journalism and not in Human Resource Development. The Commission
also alleges that since the petitioner is merely a contractual employee, in the
absence of superior qualifications, the private respondents must be preferred not
only for the reason that they are permanent career service employees but most
especially because they are next-in-rank to the disputed position.
In support of its argument, the Commission cited in the disputed resolution, the
case of Millares v. Subido, 20 SCRA 954 where this Court held:
. . . A vacant position shall be filled by promotion of the ranking officer or
employee. And only where, for special reason or reasons of which the
affected officer or employee will be notified, this mode of recruitment on
selection cannot be observed, that the position may be filled by transfer, or
re-employment, or by getting from the certified list of appropriate eligibles,
in that order.
Finally, the public respondent advances the view that, since the Revised
Administrative Code of 1987 now provides that the Commission shall "take
appropriate action on all appointment" its authority, therefore, is no longer limited
to the mere approval or disapproval of appointments submitted to it.
A careful review of the records of the case, will reveal that the petitioner
possesses the requisite experience for the contested position.
The petitioner, not only was a cum laude graduate from the University of the
Philippines, she has also acquired plenty of experience in the field of Human
Resource Development, to wit:
She was rated and ranked number one in the Trainor's Training Program
(120 hours) conducted for the DPWH by the Phil-Tao, Inc., a private firm.
Ms. Dellosa was ranked number 7, Mrs. Juria was ranked number 10; Mrs.
Burdeos did not attend the seminar. This training program was undertaken
to strengthen the capabilities of HRD personnel, and to make them more
effective in the discharge of their functions.
She is a recipient of a special commendation, given by Executive Director
Remedios I. Rikken of the National Commission in the Role of Filipino
Woman, for her efficiency and exemplary performance as a facilitator in the
conduct of the workshops during the Second Congress of Women in
Government. (Letter of Ms. Rikken addressed to Sec. Estuar attached as
ANNEX "B".).
She obtained in her on-going MBA studies at the De La Salle University,

which she pursued as an entrance scholar, the highest grade of 4.0,
equivalent to "Excellent" in 2 HRD related subjects Organizational
Management which call for the integration of concepts with concrete
experience.
She participated in the preparation and dissemination of the corporate
planning processes installed and institutionalized in the DPWH. Corporate
Planning was introduced by Secretary Fiorello R. Estuar and is now being
implemented in all government offices as instructed by the President.
She conducted orientation/reorientation courses in DPWH Regional Offices
on (a) Management By Objectives and Results Evaluation, the
Performance Appraisal System, and (b) a specifically designed
Performance Appraisal System for DPWH District Engineers and Division
Chiefs, being officially used by the DPWH.
She participated in the conceptualizing and drafting of the Department
Order on the DPWH Incentives and Awards System, set up in compliance
with RA No. 6713." (Rollo, p. 63)
The public respondent failed to consider that the petitioner, in her one year and
seven months experience with Guthrie-Jensen was engaged in research relating
to performance appraisal systems and merit promotion systems which duties are
all related to Human Resource Development.
Precisely, it was because of her experience with Guthrie-Jensen that the
petitioner was detailed from January 1987 until December 1988 in the Office of
the Assistant Secretary for Administration and Manpower Management, where
she was asked to assist in human resource planning.
The rejoinder filed during the proceedings before the Commission, by the
Assistant Secretary for Administrative and Manpower Management, Carolina
Mangawang, is very revealing. The disputed position requires of the holder of the
office, skills in human resource developmental planning, research and statistics.
The petitioner possesses these skills in more than appropriate quantities.
The argument of the public respondent that the petitioner must possess superior
qualifications in order to be preferred over the private respondents deserves no
credit.
It can be readily seen that the petitioner possesses superior qualifications. As
earlier stated, she is a cum laude graduate of the University of the Philippines.
She was ranked No. 1 in the department wide training program handled by a
private firm. Two of the respondents were ranked way below while a third did not
even participate. She was commended for exemplary performance as facilitator
during the Second Congress of Women in Government. She received the highest
grades from De la Salle University in her MBA studies. She helped draft the
human resource program for the entire DPWH. Inspire of her being a new
employee, she was assigned to conduct seminars on Performance Appraisal
Systems and on Management by Objectives and Results for the DPWH. She was
precisely drafted from a private firm to assist in human resource planning for the
DPWH. Her work is apparently highly satisfactory as the top administrators of the
DPWH not only appointed her but have asked the respondent Commission to
validate the appointment.
The respondents rely on Section 4 of R.A. 6656, which reads:
xxx
xxx
xxx
Sec. 4. Officers and employees holding permanent appointments shall be

given preference for appointment to new positions in the approved staffing
pattern comparable to their former positions or if there are not enough
comparable positions, to position next lower in rank.
Undoubtedly, old employees should be considered first. But it does not
necessarily follow that they should then automatically be appointed.
The preference given to permanent employees assumes that employees working
in a Department for longer periods have gained not only superior skills but also
greater dedication to the public service. This is not always true and the law,
moreover, does not preclude the infusion of new blood, younger dynamism, or
necessary talents into the government service. If, after considering all the current
employees, the Department Secretary cannot find among them the person he
needs to revive a moribund office or to upgrade second rate performance, there
is nothing in the Civil Service Law to prevent him from reaching out to other
Departments or to the private sector provided all his acts are bona fide for the
best interest of the public service and the person chosen has the needed
qualifications. In the present case, there is no indication that the petitioner was
chosen for any other reason except to bring in a talented person with the
necessary eligibilities and qualifications for important assignments in the
Department.
The reason behind P.D. No. 907 (which grants civil service eligibility to college
graduates with at least cum laudehonors) of attracting honor graduates into the
public service would be negated if they always have to start as Clerk I and wait
for hundreds of deadwood above them to first go into retirement before they can
hope for significant and fulfilling assignments.
The Commission's reliance on the dictum in Millares v. Subido, 20 SCRA 954
[19671 is misplaced. The ruling inMillares has already been superseded by later
decisions. We have already held in cases subsequent to Millares that the next-inrank rule is not absolute; it only applies in cases of promotion (see Pineda v.
Claudio, 28 SCRA 34 [19691). And even in promotions, it can be disregarded for
sound reasons made known to the next-in-rank. The appointing authority, under
the Civil Service Law, is allowed to fill vacancies by promotion, transfer of present
employees, reinstatement, reemployment, and appointment of outsiders who
have appropriate civil service eligibility, not necessarily in that order. (see Pineda
v. Claudio, supra; Luego v. Civil Service Commission, 143 SCRA 327 [1986])
There is no legal fiat that a vacancy must be filled only by promotion; the
appointing authority is given wide discretion to fill a vacancy from among the
several alternatives provided for by law.
In this case, the contested position was created in the course of
reorganization.1wphi1 The position appears to be a new one. The applicability,
therefore, of the next-in-rank rule does not come in clearly. Besides, as earlier
stated, said rule is not absolute. There are valid exceptions.
Granting for the sake of argument that the case involves a promotional
appointment, the next-in-rank rule must give way to the exigencies of the public
service. The intent of the Civil Service Laws not merely to bestow upon
permanent employees the advantage arising from their long employment but
most specially, it is to foster a more efficient public service. Any other factor must,
therefore, yield to the demand for an effective government, which necessarily
entails the appointment of competent, qualified and proficient personnel. The
deliberation of this Court in the case of Aguilar v. Nieva, Jr., 40 SCRA 113 [19711
is illuminating, to wit:
xxx
xxx
xxx
. . . It is not enough that an aspirant is qualified and eligible or that he is

next-in-rank or in line for promotion, albeit by passive prescription. It is just
necessary, in order for public administration to be dynamic and responsive
to the needs of the times, that the local executive be allowed the choice of
men of its confidence, provided they are qualified and eligible, who in his
best estimation are possessed of the requisite reputation, integrity,
knowledgeability, energy and judgment. (Emphasis supplied, p. 121)
The point raised by the public respondent that, pursuant to the Revised
Administrative Code of 1987, it is authorized to revoke appointments, must
necessarily fail.
We have already ruled on several occasions that when the appointee is qualified,
the Civil Service Commission has no choice but to attest to the appointment. It is
not within its prerogative to revoke an appointee on the ground that substituting
its judgment for that of the appointing power, another person has better
qualifications for the job.
Once the function is discharged, the participation of the Civil Service Commission
in the appointment process ceases. The only purpose of attestation is to
determine whether the appointee possesses the requisite civil service eligibility,
no more than that is left for the Civil Service Commission to do. (see Luego v.
CSC, 143 SCRA 327 [1986]; Central Bank of the Philippines v. CSC, 171 SCRA
744 [1989]; Secretary Oscar Orbos v. CSC, G.R. No. 92561, September 12,
1990; Gaspar v. CSC, G.R. No. 90799, October 18, 1990).
The rationale of this doctrine is that the power of appointment is essentially
discretionary. The discretion to be granted to the appointing authority, if not
plenary must at least be sufficient.
After all, not only is the appointing authority the officer primarily responsible for
the administration of the office but he is also in the best position to determine
who among the prospective appointees can efficiently discharge the functions of
the position (see Villegas v. Subido, 30 SCRA 498 [1969]). As between the
Commission which only looks into paper qualifications and the appointing
authority who views not only the listed qualifications but also the prospective
appointees themselves, the work to be accomplished, the objectives of the
Department, etc., the Court sustains the Department Head.
WHEREFORE, the petition is hereby GRANTED. The resolutions issued by the
Civil Service Commission dated February 28, 1990 and May 23, 1990 are SET
ASIDE. The restraining order issued by this Court on July 10, 1990 is made
permanent.
SO ORDERED.
Digest
MEDENILLA v. CIVIL SERVICE COMMISSION
FACTS:
Petitioner was a contractual employee of the DPWH occupying

theposition of Public Relations Officer II. A reorganization ensu
ed within theDPWH and all the positions therein were
abolished. A revised staffing patterntogether with the
guidelines on the selection and placement of personnel
wasissued. This included the contested position of Supervising
Human ResourceDevelopment Officer to which
position petitioner was appointed. Respondentslodged a
protest before the DPWH task force on reorganization
contesting theappointment of the petitioner to the position.
CSC revoked appointment.
ISSUE/S:
Whether there is merit in the protest.
HELD:
No. While the appointing authority is given the wide latitude of
discretion, to sustain the appointment of Medenilla may give
the appointingpower unnecessary opportunities to act capricio
usly and thus thwart thenatural and reasonable expectation of
the officer next-in-rank to any vacantposition, to be promoted
to it.We have already ruled on several occasions that when the
appointee isqualified, the Civil Service Commission has no
choice but to attest to theappointment. It is not within its
prerogative to revoke an appointee on
theground that substituting its judgment for that of the appoin
ting power,another person has better qualifications for the
job.Once the function is discharged, the participation of the Ci
vil ServiceCommission in the appointment process ceases. The
only purpose of attestation is to determine whether the
appointee possesses the
requisitecivil service eligibility, no more than that is left for th
e Civil ServiceCommission to do. The rationale of this doctrine i
s that the power of appointment is essentially discretionary.
The discretion to be granted to theappointing authority, if not
plenary must at least be sufficient
SECOND DIVISION
[G.R. No. 126625. September 23, 1997]
KANLAON CONSTRUCTION ENTERPRISES CO., INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, 5TH DIVISION, and
BENJAMIN RELUYA, JR., EDGARDO GENAYAS, ERNESTO CANETE,
PROTACIO ROSALES, NESTOR BENOYA, RODOLFO GONGOB,
DARIO BINOYA, BENJAMIN BASMAYOR, ABELARDO SACURA,
FLORENCIO SACURA, ISABELO MIRA, NEMESIO LACAR, JOSEPH
CABIGKIS, RODRIGO CILLON, VIRGILIO QUIZON, GUARINO
EVANGELISTA, ALEJANDRO GATA, BENEDICTO CALAGO, NILO
GATA, DIONISIO PERMACIO, JUANITOSALUD, ADOR RIMPO, FELIPE
ORAEZ, JULIETO TEJADA, TEOTIMO LACIO, ONOFRE QUIZON,
RUDY ALVAREZ, CRESENCIO FLORES, ALFREDO PERMACIO,
CRESENCIO ALVIAR, HERNANI SURILA, DIOSDADO SOLON, CENON
ALBURO, ZACARIAS ORTIZ, EUSEBIO BUSTILLO, GREGORIO BAGO,
JERRY VARGAS, EDUARDO BUENO, PASCUAL HUDAYA, ROGELIO
NIETES, and REYNALDO NIETES, respondents.
DECISION
PUNO, J.:
In this petition for certiorari, petitioner Kanlaon Construction Enterprises Co.,
Inc. seeks to annul the decision of respondent National Labor Relations
Commission, Fifth Division and remand the cases to the Arbitration Branch for a
retrial on the merits.
Petitioner is a domestic corporation engaged in the construction business
nationwide with principal office at No. 11 Yakan St., La Vista Subdivision, Quezon
City. In 1988, petitioner was contracted by the National Steel Corporation to
construct residential houses for its plant employees in Steeltown, Sta. Elena,
Iligan City. Private respondents were hired by petitioner as laborers in the project
and worked under the supervision of Engineers Paulino Estacio and Mario
Dulatre. In 1989, the project neared its completion and petitioner started
terminating the services of private respondents and its other employees.
In 1990, private respondents filed separate complaints against petitioner

before Sub-Regional Arbitration Branch XII, Iligan City. Numbering forty-one (41)
in all, they claimed that petitioner paid them wages below the minimum and
sought payment of their salary differentials and thirteenth-month pay. Engineers
Estacio and Dulatre were named co-respondents.
Some of the cases were assigned to Labor Arbiter Guardson A. Siao while
the others were assigned to Labor Arbiter Nicodemus G. Palangan. Summonses
and notices of preliminary conference were issued and served on the two
engineers and petitioner through Engineer Estacio. The preliminary conferences
before the labor arbiters were attended by Engineers Estacio and Dulatre and
private respondents. At the conference of June 11, 1990 before Arbiter Siao,
Engineer Estacio admitted petitioner's liability to private respondents and agreed
to pay their wage differentials and thirteenth-month pay on June 19, 1990. As a
result of this agreement, Engineer Estacio allegedly waived petitioner's right to
file its position paper. [1] Private respondents declared that they, too, were
dispensing with their position papers and were adopting their complaints as their
position paper. [2]
On June 19, 1990, Engineer Estacio appeared but requested for another
week to settle the claims. Labor Arbiter Siao denied this request. On June 21,
1990, Arbiter Siao issued an order granting the complaint and directing petitioner
to pay private respondents' claims. Arbiter Siao held:
"x x x.
"Considering the length of time that has elapsed since these cases were filed, and what
the complainants might think as to how this branch operates and/or conducts
its proceedings as they are now restless, this Arbiter has no other alternative or recourse
but to order the respondent to pay the claims of the complainants, subject of course to the
computation of the Fiscal Examiner II of this Branch pursuant to the oral manifestation of
respondent. The Supreme Court ruled: 'Contracts though orally made are binding on the
parties.' (Lao Sok v. Sabaysabay, 138 SCRA 134).
"Similarly, this Branch would present in passing that 'a court cannot decide a case without
facts either admitted or agreed upon by the parties or proved by evidence.' (Yu Chin Piao
v. Lim Tuaco, 33 Phil. 92;Benedicto v. Yulo, 26 Phil. 160),
"WHEREFORE, premises considered, the respondent is hereby ordered to pay the

individual claims of the above-named complainants representing their wage differentials
within ten (10) days from receipt of this Order.
"The Fiscal Examiner II of this Branch is likewise hereby ordered to compute the
individual claims of the herein complainants.
"SO ORDERED." [3]
On June 29, 1990, Arbiter Palangan issued a similar order, thus:
"When the above-entitled cases were called for hearing on June 19, 1990 at 10:00 a.m.
respondent thru their representative manifested that they were willing to pay the claims of
the complainants and promised to pay the same on June 28, 1990 at 10:30 a.m.
"However, when these cases were called purposely to materialize the promise of the
respondent, the latter failed to appear without any valid reason.
"Considering therefore that the respondent has already admitted the claims of the
complainants, we believe that the issues raised herein have become moot and academic.
"WHEREFORE, premises considered, the above-entitled cases are hereby ordered Closed
and Terminated, however, the respondent is hereby ordered to pay the complainants their
differential pay and 13th-month pay within a period of ten (10) days from receipt hereof
based on the employment record on file with the respondent.
"SO ORDERED." [4]
Petitioner appealed to respondent National Labor Relations Commission. It
alleged that it was denied due process and that Engineers Estacio and Dulatre
had no authority to represent and bind petitioner. Petitioner's appeal was filed by
one Atty. Arthur Abundiente.
In a decision dated April 27, 1992, respondent Commission affirmed the
orders of the Arbiters.
Petitioner interposed this petition alleging that the decision of respondent
Commission was rendered without jurisdiction and in grave abuse of
discretion. Petitioner claims that:
"I
"THE QUESTIONED DECISION RENDERED BY THE HONORABLE
COMMISSION IS A NULLITY, IT HAVING BEEN ISSUED WITHOUT
JURISDICTION;
II
"PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION
GRAVELY ABUSED ITS DISCRETION IN ARBITRARILY, CAPRICIOUSLY AND
WHIMSICALLY MAKING THE FOLLOWING CONCLUSIONS BASED NOT ON
FACTS AND EVIDENCE BUT ON SPECULATION, SURMISE AND CONJECTURE:
A. Petitioner was deprived of the constitutional right to due process of law when it was
adjudged by the NLRC liable without trial on the merits and without its knowledge;
B. The NLRC erroneously, patently and unreasonably interpreted the principle that the
NLRC and its Arbitration Branch are not strictly bound by the rules of evidence;
C. There is no legal nor actual basis in the NLRC's ruling that petitioner is already in
estoppel to disclaim the authority of its alleged representatives.
D. The NLRC committed manifest error in relying merely on private respondents
unsubstantiated complaints to hold petitioner liable for damages." [5]
In brief, petitioner alleges that the decisions of the labor arbiters and
respondent Commission are void for the following reasons: (1) there was no valid
service of summons; (2) Engineers Estacio and Dulatre and Atty. Abundiente had
no authority to appear and represent petitioner at the hearings before the arbiters
and on appeal to respondent Commission; (3)the decisions of the arbiters and
respondent Commission are based on unsubstantiated and self-serving evidence
and were rendered in violation of petitioner's right to due process.
Service of summons in cases filed before the labor arbiters is governed by
Sections 4 and 5 of Rule IV of the New Rules of Procedure of the NLRC. They
provide:
"Section 4. Service of Notices and Resolutions.-- (a) Notices or summons and copies of
orders, resolutions or decisions shall be served on the parties to the case personally by the
bailiff or duly authorized public officer within three (3) days from receipt thereof or by
registered mail; Provided that where a party is represented by counsel or authorized
representative, service shall be made on such counsel or authorized
representative; provided further that in cases of decision and final awards, copies thereof
shall be served on both the parties and their counsel; provided finally, that in case where
the parties are so numerous, service shall be made on counsel and upon such number of
complainants as may be practicable, which shall be considered substantial compliance
with Article 224 (a) of the Labor Code, as amended.
"x x x.
"Section 5. Proof and completeness of service.-- The return is prima facie proof of the
facts indicated therein. Service by registered mail is complete upon receipt by the
addressee or his agent. x x x."
Under the NLRC Rules of Procedure, summons on the respondent shall be
served personally or by registered mail on the party himself. If the party is
represented by counsel or any other authorized representative or agent,
summons shall be served on such person.
It has been established that petitioner is a private domestic corporation with
principal address in Quezon City. The complaints against petitioner were filed in
Iligan City and summonsestherefore served on Engineer Estacio in Iligan City.
The question now is whether Engineer Estacio was an agent and
authorized representative of petitioner.
To determine the scope or meaning of the term "authorized representative" or
"agent" of parties on whom summons may be served, the provisions of the
Revised Rules of Court may be resorted to. [6]
Under the Revised Rules of Court, [7] service upon a private domestic
corporation or partnership must be made upon its officers, such as the president,
manager, secretary, cashier, agent, or any of its directors. These persons are
deemed so integrated with the corporation that they know their responsibilities
and immediately discern what to do with any legal papers served on them. [8]
In the case at bar, Engineer Estacio, assisted by Engineer Dulatre, managed
and supervised the construction project. [9] According to the Solicitor General and
private respondents, Engineer Estacio attended to the project in Iligan City and
supervised the work of the employees thereat. As manager, he had sufficient

responsibility and discretion to realize the importance of the legal papers served
on him and to relay the same to the president or other responsible officer of
petitioner. Summons for petitioner was therefore validly served on him.
Engineer Estacio's appearance before the labor arbiters and his promise to
settle the claims of private respondents is another matter.
The general rule is that only lawyers are allowed to appear before the labor
arbiter and respondent Commission in cases before them. The Labor Code and
the New Rules of Procedure of the NLRC, nonetheless, lists three (3) exceptions
to the rule, viz:
"Section 6. Appearances.-- x x x.
"A non-lawyer may appear before the Commission or any Labor Arbiter only if:
"(a) he represents himself as party to the case;
"(b) he represents the organization or its members, provided that he shall be made to
present written proof that he is properly authorized; or
"(c) he is a duly-accredited member of any legal aid office duly recognized by the
Department of Justice or the Integrated Bar of the Philippines in cases referred thereto by
the latter. x x x." [10]
A non-lawyer may appear before the labor arbiters and the NLRC only if: (a)
he represents himself as a party to the case; (b) he represents an organization or
its members, with written authorization from them; or (c) he is a duly accredited
member of any legal aid office duly recognized by the Department of Justice or
the Integrated Bar of the Philippines in cases referred to by the latter. [11]
Engineers Estacio and Dulatre were not lawyers. Neither were they dulyaccredited members of a legal aid office. Their appearance before the labor
arbiters in their capacity as parties to the cases was authorized under the first
exception to the rule. However, their appearance on behalf of petitioner required
written proof of authorization. It was incumbent upon the arbiters to ascertain this
authority especially since both engineers were named co-respondents in the
cases before the arbiters. Absent this authority, whatever statements and
declarations Engineer Estacio made before the arbiters could not bind petitioner.
The appearance of Atty. Arthur Abundiente in the cases appealed to
respondent Commission did not cure Engineer Estacio's representation. Atty.
Abundiente, in the first place, had no authority to appear before the respondent
Commission. The appellants' brief he filed was verified by him, not by
petitioner. [12] Moreover, respondent Commission did not delve into the merits of
Atty. Abundiente's appeal and determine whether Engineer Estacio was duly
authorized to make such promise. It dismissed the appeal on the ground that
notices were served on petitioner and that the latter was estopped from denying
its promise to pay.
Nevertheless, even assuming that Engineer Estacio and Atty. Abundiente
were authorized to appear as representatives of petitioner, they could bind the
latter only in procedural matters before the arbiters and respondent
Commission. Petitioner's liability arose from Engineer Estacio's alleged promise
to pay. A promise to pay amounts to an offer to compromise and requires a
special power of attorney or the express consent of petitioner. The authority to
compromise cannot be lightly presumed and should be duly established by
evidence. [13] This is explicit from Section 7 of Rule III of the NLRC Rules of
Procedure, viz:
"Section 7. Authority to bind party.-- Attorneys and other representatives of parties shall
have authority to bind their clients in all matters of procedure; but they cannot, without a
special power of attorney or express consent, enter into a compromise agreement with the
opposing party in full or partial discharge of a client's claim."
The promise to pay allegedly made by Engineer Estacio was made at the
preliminary conference and constituted an offer to settle the case amicably. The
promise to pay could not be presumed to be a single unilateral act, contrary to
the claim of the Solicitor General. [14] A defendant's promise to pay and settle the
plaintiff's claims ordinarily requires a reciprocal obligation from the plaintiff to
withdraw the complaint and discharge the defendant from liability. [15] In effect, the
offer to pay was an offer to compromise the cases.
In civil cases, an offer to compromise is not an admission of any liability, and
is not admissible in evidence against the offeror. [16] If this rule were otherwise, no
attempt to settle litigation could safely be made. [17] Settlement of disputes by way
of compromise is an accepted and desirable practice in courts of law and
administrative tribunals. [18] In fact, the Labor Code mandates the labor arbiter to
exert all efforts to enable the parties to arrive at an amicable settlement of the
dispute within his jurisdiction on or before the first hearing. [19]
Clearly, respondent Commission gravely abused its discretion in affirming the
decisions of the labor arbiters which were not only based on unauthorized
representations, but were also made in violation of petitioner's right to due
process.
Section 3 of Rule V of the NLRC Rules of Procedure provides:
"Section 3. Submission of Position Papers/Memorandum.-- Should the parties fail to
agree upon an amicable settlement, in whole or in part, during the conferences, the Labor
Arbiter shall issue an order stating therein the matters taken up and agreed upon during
the conferences and directing the parties to simultaneously file their respective verified
position papers.
"x x x."
After petitioner's alleged representative failed to pay the workers' claims as
promised, Labor Arbiters Siao and Palangan did not order the parties to file their
respective position papers.The arbiters forthwith rendered a decision on the
merits without at least requiring private respondents to substantiate their
complaints. The parties may have earlier waived their right to fileposition papers
but petitioner's waiver was made by Engineer Estacio on the premise that
petitioner shall have paid and settled the claims of private respondents at the
scheduled conference. Since petitioner reneged on its "promise," there was a
failure to settle the case amicably. This should have prompted the arbiters to
order the parties to file their position papers.
Article 221 of the Labor Code mandates that in cases before labor arbiters
and respondent Commission, they "shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and without regard to
technicalities of law or procedure, all in the interest of due process." The rule that
respondent Commission and the Labor Arbiters are not bound by technical rules
of evidence and procedure should not be interpreted so as to dispense with the
fundamental and essential right of due process. [20] And this right is satisfied, at
the very least, ' when the parties are given the opportunity to submit position
papers. [21] Labor Arbiters Siao and Palangan erred in dispensing with this
requirement.
Indeed, the labor arbiters and the NLRC must not, at the expense of due
process, be the first to arbitrarily disregard specific provisions of the Rules which
are precisely intended to assist the parties in obtaining the just, expeditious and
inexpensive settlement of labor disputes. [22]
IN VIEW WHEREOF, the petition for certiorari is granted. The decision of the
National Labor Relations Commission, Fifth Division, is annulled and set aside
and the case is remanded to the Regional Arbitration Branch, Iligan City for
further proceedings.
SO ORDERED.
DIGEST
Kanlaon Construction Enterprises vs NLRC 279 SCRA 337
Facts:
This is a labor case involving Kanlaon for illegal termination of employment of
publics respondents. The arbitrations decision is appealed to the NLRC. Public
respondents in their
appeal questioned the validity of the NLRCs decision on the ground
that the NLRC erroneously, patently and unreasonably interpreted the principle that theNLRC and its
Arbitration Branch are not strictly bound by the rules of evidence.In brief, it was alleged that the the
decision is void for the following reasons: (1) therewas no valid service of summons; (2) Engineers
Estacio and Dulatre and Atty.Abundiente had no authority to appear and represent petitioner at the
hearings before thearbiters and on appeal to respondent Commission; (3) the decisions of the arbiters
andrespondent Commission are based on unsubstantiated and self-serving evidence and wererendered
in violation of petitioner's right to due process.
Issue: WON publics respondents claim
is tenable.
Held: The labor arbiters and the NLRC must not, at the expense of due process, be thefirst to arbitrarily
disregard specific provisions of the Rules which are precisely intendedto assist the parties in obtaining
the just, expeditious and inexpensive settlement of labordisputes. The decision of the National Labor
Relations Commission, Fifth Division, isannulled and set aside and the case is remanded to the Regional
Arbitration Branch,Iligan City for further proceedings

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110571 March 10, 1994

FIRST LEPANTO CERAMICS, INC., petitioner,
vs.
THE COURT OF APPEALS and MARIWASA MANUFACTURING,
INC., respondents.
Castillo, Laman, Tan & Pantaleon for petitioner.
De Borja, Medialdea, Ata, Bello, Guevarra & Serapio for private respondent.
NOCON, J.:
Brought to fore in this petition for certiorari and prohibition with application for
preliminary injunction is the novel question of where and in what manner appeals
from decisions of the Board of Investments (BOI) should be filed. A thorough
scrutiny of the conflicting provisions of Batas Pambansa Bilang 129, otherwise
known as the "Judiciary Reorganization Act of 1980," Executive Order No. 226,
also known as the Omnibus Investments Code of 1987 and Supreme Court
Circular No. 1-91 is, thus, called for.
Briefly, this question of law arose when BOI, in its decision dated December 10,
1992 in BOI Case No. 92-005 granted petitioner First Lepanto Ceramics, Inc.'s
application to amend its BOI certificate of registration by changing the scope of

its registered product from "glazed floor tiles" to "ceramic tiles." Eventually,
oppositor Mariwasa filed a motion for reconsideration of the said BOI decision
while oppositor Fil-Hispano Ceramics, Inc. did not move to reconsider the same
nor appeal therefrom. Soon rebuffed in its bid for reconsideration, Mariwasa filed
a petition for review with respondent Court of Appeals pursuant to Circular 1-91.
Acting on the petition, respondent court required the BOI and petitioner to
comment on Mariwasa's petition and to show cause why no injunction should
issue. On February 17, 1993, respondent court temporarily restrained the BOI
from implementing its decision. This temporary restraining order lapsed by its
own terms on March 9, 1993, twenty (20) days after its issuance, without
respondent court issuing any preliminary injunction.
On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift
Restraining Order" on the ground that respondent court has no appellate
jurisdiction over BOI Case No. 92-005, the same being exclusively vested with
the Supreme Court pursuant to Article 82 of the Omnibus Investments Code of
1987.
On May 25, 1993, respondent court denied petitioner's motion to dismiss, the
dispositive portion of which reads as follows:
WHEREFORE, private respondent's motion to dismiss the petition is
hereby DENIED, for lack of merit.
Private respondent is hereby given an inextendible period of ten (10)
days from receipt hereof within which to file its comment to the
petition. 1
Upon receipt of a copy of the above resolution on June 4, 1993, petitioner
decided not to file any motion for reconsideration as the question involved is
essentially legal in nature and immediately filed a petition for certiorariand
prohibition before this Court.
Petitioner posits the view that respondent court acted without or in excess of its
jurisdiction in issuing the questioned resolution of May 25, 1993, for the following
reasons:
I. Respondent court has no jurisdiction to entertain Mariwasa's

appeal from the BOI's decision in BOI Case No. 92-005, which has
become final.
II. The appellate jurisdiction conferred by statute upon this
Honorable Court cannot be amended or superseded by Circular No.
1-91. 2
Petitioner then concludes that:
III. Mariwasa has lost it right to appeal . . . in this case. 3
Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas
Pambansa Bilang 129 and Circular 1-91, "Prescribing the Rules Governing
Appeals to the Court of Appeals from a Final Order or Decision of the Court of
Tax Appeals and Quasi-Judicial Agencies" cannot be the basis of Mariwasa's
appeal to respondent court because the procedure for appeal laid down therein
runs contrary to Article 82 of E.O. 226, which provides that appeals from
decisions or orders of the BOI shall be filed directly with this Court, to wit:
Judicial relief. All orders or decisions of the Board
(of Investments) in cases involving the provisions of this Code shall
immediately be executory. No appeal from the order or decision of
the Board by the party adversely affected shall stay such an order or
decision; Provided, that all appeals shall be filed directly with the
Supreme Court within thirty (30) days from receipt of the order or
decision.
On the other hand, Mariwasa maintains that whatever "obvious inconsistency" or
"irreconcilable repugnancy" there may have been between B.P. 129 and Article
82 of E.O. 226 on the question of venue for appeal has already been resolved by
Circular 1-91 of the Supreme Court, which was promulgated on February 27,
1991 or four (4) years after E.O. 226 was enacted.
Sections 1, 2 and 3 of Circular 1-91, is herein quoted below:
1. Scope. These rules shall apply to appeals from final orders or
decisions of the Court of Tax Appeals. They shall also apply to
appeals from final orders or decisions of any quasi-judicial agency
from which an appeal is now allowed by statute to the Court of

Appeals or the Supreme Court. Among these agencies are the
Securities and Exchange Commission, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Secretary of Agrarian Reform and
Special Agrarian Courts under RA 6657, Government Service
Insurance System, Employees Compensation Commission,
Agricultural Inventions Board, Insurance Commission and Philippine
Atomic Energy Commission.
2. Cases not covered. These rules shall not apply to decisions
and interlocutory orders of the National Labor Relations Commission
or the Secretary of Labor and Employment under the Labor Code of
the Philippines, the Central Board of Assessment Appeals, and other
quasi-judicial agencies from which no appeal to the courts is
prescribed or allowed by statute.
3. Who may appeal and where to appeal. The appeal of a party
affected by a final order, decision, or judgment of the Court of Tax
Appeals or of a quasi-judicial agency shall be taken to the Court of
Appeals within the period and in the manner herein provided,
whether the appeal involves questions of fact or of law or mixed
questions of fact and law. From final judgments or decisions of the
Court of Appeals, the aggrieved party may appeal by certiorari to the
Supreme Court as provided in Rule 45 of the Rules of Court.
It may be called that Section 9(3) of B.P. 129 vests appellate jurisdiction over all
final judgments, decisions, resolutions, orders or awards of quasi-judicial
agencies on the Court of Appeals, to wit:
(3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders, awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions,
except those falling within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, 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 Intermediate Appellate Court 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 further proceedings.
These provisions shall not apply to decisions and interlocutory
orders issued under the Labor Code of the Philippines and by the
Central Board of Assessment Appeals.
Clearly evident in the aforequoted provision of B.P. 129 is the laudable objective
of providing a uniform procedure of appeal from decisions of all quasi-judicial
agencies for the benefit of the bench and the bar. Equally laudable is the twin
objective of B.P. 129 of unclogging the docket of this Court to enable it to attend
to more important tasks, which in the words of Dean Vicente G. Sinco, as quoted
in our decision in Conde v. Intermediate Appellate Court 4is "less concerned with
the decisions of cases that begin and end with the transient rights and obligations
of particular individuals but is more intertwined with the direction of national
policies, momentous economic and social problems, the delimitation of
governmental authority and its impact upon fundamental rights.
In Development Bank of the Philippines vs. Court of Appeals, 5 this Court noted
that B.P. 129 did not deal only with "changes in the rules on procedures" and that
not only was the Court of Appeals reorganized, but its jurisdiction and powers
were also broadened by Section 9 thereof. Explaining the changes, this Court
said:
. . . Its original jurisdiction to issue writs of mandamus,
prohibition, certiorari and habeas corpus, which theretofore could be
exercised only in aid of its appellate jurisdiction, was expanded by
(1) extending it so as to include the writ of quo warranto, and also (2)
empowering it to issue all said extraordinary writs "whether or not in
aid of its appellate jurisdiction." Its appellate jurisdiction was also
extended to cover not only final judgments of Regional Trial Courts,
but also "all final judgments, decisions, resolutions, orders or awards
of . . . quasi-judicial agencies, instrumentalities, boards or

commissions, except those falling within the appellate jurisdiction of
the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of sub-paragraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948," it being noteworthy in this
connection that the text of the law is broad and comprehensive, and
the explicitly stated exceptions have no reference whatever to the
Court of Tax Appeals. Indeed, the intention to expand the original
and appellate jurisdiction of the Court of Appeals over quasi-judicial
agencies, instrumentalities, boards, or commissions, is further
stressed by the last paragraph of Section 9 which excludes from its
provisions, only the "decisions and interlocutory orders issued under
the Labor Code of the Philippines and by the Central Board of
Assessment Appeals." 6
However, it cannot be denied that the lawmaking system of the country is far
from perfect. During the transitional period after the country emerged from the
Marcos regime, the lawmaking power was lodged on the Executive Department.
The obvious lack of deliberation in the drafting of our laws could perhaps explain
the deviation of some of our laws from the goal of uniform procedure which B.P.
129 sought to promote.
In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of
1987 provides that all appeals shall be filed directly with the Supreme Court
within thirty (30) days from receipt of the order or decision.
Noteworthy is the fact that presently, the Supreme Court entertains ordinary
appeals only from decisions of the Regional Trial Courts in criminal cases where
the penalty imposed is reclusion perpetua or higher. Judgments of regional trial
courts may be appealed to the Supreme Court only by petition for review
on certiorari within fifteen (15) days from notice of judgment in accordance with
Rule 45 of the Rules of Court in relation to Section 17 of the Judiciary Act of
1948, as amended, this being the clear intendment of the provision of the Interim
Rules that "(a)ppeals to the Supreme Court shall be taken by petition
for certiorari which shall be governed by Rule 45 of the Rules of Court." Thus, the
right of appeal provided in E.O. 226 within thirty (30) days from receipt of the
order or decision is clearly not in consonance with the present procedure before
this Court. Only decisions, orders or rulings of a Constitutional Commission (Civil

Service Commission, Commission on Elections or Commission on Audit), may be
brought to the Supreme Court on original petitions for certiorari under Rule 65 by
the aggrieved party within thirty (30) days form receipt of a copy thereof. 7
Under this contextual backdrop, this Court, pursuant to its Constitutional power
under Section 5(5), Article VIII of the 1987 Constitution to promulgate rules
concerning pleading, practice and procedure in all courts, and by way of
implementation of B.P. 129, issued Circular 1-91 prescribing the rules governing
appeals to the Court of Appeals from final orders or decisions of the Court of Tax
Appeals and quasi-judicial agencies to eliminate unnecessary contradictions and
confusing rules of procedure.
Contrary to petitioner's contention, although a circular is not strictly a statute or
law, it has, however, the force and effect of law according to settled
jurisprudence. 8 In Inciong v. de Guia, 9 a circular of this Court was treated as law.
In adopting the recommendation of the Investigating Judge to impose a sanction
on a judge who violated Circular No. 7 of this Court dated
September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and
Circular No. 20 dated October 4, 1979, requiring raffling of cases, this Court
quoted the ratiocination of the Investigating Judge, brushing aside the contention
of respondent judge that assigning cases instead of raffling is a common practice
and holding that respondent could not go against the circular of this Court until it
is repealed or otherwise modified, as "(L)aws are repealed only by subsequent
ones, and their violation or non-observance shall not be excused by disuse, or
customs or practice to the contrary." 10
The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular
1-91 because the former grants a substantive right which, under the Constitution
cannot be modified, diminished or increased by this Court in the exercise of its
rule-making powers is not entirely defensible as it seems. Respondent correctly
argued that Article 82 of E.O. 226 grants the right of appeal from decisions or
final orders of the BOI and in granting such right, it also provided where and in
what manner such appeal can be brought. These latter portions simply deal with
procedural aspects which this Court has the power to regulate by virtue of its
constitutional rule-making powers.
The case of Bustos v. Lucero 11 distinguished between rights created by a

substantive law and those arising from procedural law:
Substantive law creates substantive rights . . . . Substantive rights is
a term which includes those rights which one enjoys under the legal
system prior to the disturbance of normal relations (60 C.J., 980).
Substantive law is that part of the law which creates, defines and
regulates rights, or which regulates rights and duties which give rise
to a cause of action, as oppossed to adjective or remedial law, which
prescribes the method of enforcing rights or obtains a redress for
their invasion. 12
Indeed, the question of where and in what manner appeals from decisions of the
BOI should be brought pertains only to procedure or the method of enforcing the
substantive right to appeal granted by E.O. 226. In other words, the right to
appeal from decisions or final orders of the BOI under E.O. 226 remains and
continues to be respected. Circular 1-91 simply transferred the venue of appeals
from decisions of this agency to respondent Court of Appeals and provided a
different period of appeal, i.e., fifteen (15) days from notice. It did not make an
incursion into the substantive right to appeal.
The fact that BOI is not expressly included in the list of quasi-judicial agencies
found in the third sentence of Section 1 of Circular 1-91 does not mean that said
circular does not apply to appeals from final orders or decision of the BOI. The
second sentence of Section 1 thereof expressly states that "(T)hey shall also
apply to appeals from final orders or decisions of any quasi-judicial agency from
which an appeal is now allowed by statute to the Court of Appeals or the
Supreme Court." E.O. 266 is one such statute. Besides, the enumeration is
preceded by the words "(A)mong these agencies are . . . ," strongly implying that
there are other quasi-judicial agencies which are covered by the Circular but
which have not been expressly listed therein. More importantly, BOI does not fall
within the purview of the exclusions listed in Section 2 of the circular. Only the
following final decisions and interlocutory orders are expressly excluded from the
circular, namely, those of: (1) the National Labor Relations Commission; (2) the
Secretary of Labor and Employment; (3) the Central Board of Assessment
Appeals and (4) other quasi-judicial agencies from which no appeal to the courts
is prescribed or allowed by statute. Since in DBP v. CA 13 we upheld the appellate
jurisdiction of the Court of Appeals over the Court of Tax Appeals despite the fact
that the same is not among the agencies reorganized by B.P. 129, on the ground
that B.P. 129 is broad and comprehensive, there is no reason why BOI should be
excluded from
Circular 1-91, which is but implementary of said law.
Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226
insofar as the manner and method of enforcing the right to appeal from decisions
of the BOI are concerned. Appeals from decisions of the BOI, which by statute
was previously allowed to be filed directly with the Supreme Court, should now
be brought to the Court of Appeals.
WHEREFORE, in view of the foregoing reasons, the instant petition
for certiorari and prohibition with application for temporary restraining order and
preliminary injunction is hereby DISMISSED for lack of merit. The Temporary
Restraining Order issued on July 19, 1993 is hereby LIFTED.
SO ORDERED.
DIGEST
FIRST LEPANTO CERAMICS V. COURT OF APPEALS AND MARIWASA
MANUFACTURINGINC. (1994) (J. NOCON)FACTS:
The case arose when the Bureau of Investments (BOI) granted the
petitioner
s application to
amend its BOI certificate by changing the scope of its registered product
from
glazed floor tiles toceramic tiles. Eventually,
Mariwasa filed an MR of the said BOI decision. Soon rebuffed in its bid
forreconsideration, Mariwasa filed an petition for review with respondent
Court of Appeals pursuan toCircular 1-91.CA temporarily restrained the BOI
from implementing its decision. The TRO lapsed by its own termstwenty (20)
days after its issuance, without issuing any preliminary injunction.Petitioner
filed a motion to dismiss and to lift the restraining order contending that CA
does not have jurisdiction over the BOI case, since the same is
exclusively vested with the Supreme Court pursuant toArticle 82 of EO
226 (the Omnibus Investments Code of 1987).Petitioner argued that the
Judiciary Reorganization Act of 1980 or B.P. 129 and Circular 1-91,

"Prescribingthe Rules Governing Appeals to the Court of Appeals from a
Final Order or Decision of the Court of TaxAppeals and Quasi-Judicial
Agencies" cannot be the basis of Mariwasa's appeal to respondent
court because the procedure for appeal laid down therein runs contrary
to Article 82 of E.O. 226 , a substantiveright which under the constitution
cannot be modified.While Mariwasa maintains that whatever inconsistency
there may have been between B.P. 129 andArticle 82 of E.O. 226 on the
question of venue for appeal, has already been resolved by Circular 1-91
ofthe Supreme Court, which was promulgated on February 27, 1991 or four
(4) years after E.O. 226 wasenacted.
ISSUE:
Whether or not the Court of Appeals has jurisdiction over the case
HELD:
YES. Circular 1-91 effectively repealed or superseded Article 82 of E.O.
226 insofar as the mannerand method of enforcing the right to appeal from
decisions of the BOI are concerned. Appeals fromdecisions of the BOI,
which by statute was previously allowed to be filed directly with the
SupremeCourt, should now be brought to the Court of Appeals.The
substantive right to appeal from decisions or orders of the BOI under EO
226 remains and continuesto be respected. Circular I-91 simply transferred
the venue of the appeals from the decisions of thisagency to respondent CA
and a different period of appeal 15 days from notice (sa EO 226 30 days
fromreceipt of decision). It did not make an incursion into the right to
appeal
EN BANC
[G.R. No. L-28218. February 27, 1971.]
MAGNO MANUEL, Plaintiff-Appellant, v. MARIANO VILLENA, THE
DIRECTOR OF FORESTRY, THE SECRETARY OF DEPARTMENT OF
AGRICULTURE AND NATURAL RESOURCES, DefendantsAppellees.
Tirso U. Aganon, for Plaintiff-Appellant.
Solicitor General Antonio P. Barredo, Assistant Solicitor General
Antonio A. Torres and Solicitor Alicia V. Sempio-Diy
for Defendants-Appellees.
DECISION
MAKALINTAL, J.:
This is an appeal from the order of the Court of First Instance of Tarlac
dismissing the complaint in Civil Case No. 4226 entitled "Magno
Manuel v. Mariano Villena, the Director of Forestry and the Secretary of
Agriculture and Natural Resources," wherein the plaintiff sought
annulment of the decision of said public officials rejecting his
application for a Tree Farm Permit over a 20-hectare parcel of public
land, which was included in a 66-hectare area covered by a similar
application of private defendant Mariano Villena.
The main thrust of the complaint is that the administrative decision
sought to be set aside violated the plaintiffs right to due process. The
averments in support thereof are substantially as follows: that the
plaintiff had been in continuous possession of the land in question
since 1939; that being an ignorant farmer he did not file his Tree Farm
application (No. 13312) until June 1954; that the Director of Forestry
rejected the same because a prior application (No. 3852) had been
filed by Mariano Villena in November 1955; that two motions for

reconsideration of the rejection order were turned down; that the
plaintiff thereafter appealed to the Secretary of Agriculture and Natural
Resources, but the appeal was dismissed by him; that on motion for
reconsideration the Secretary found that the previous investigation
conducted by the District Forester was not in accordance with the rules
and regulations of the Bureau, and so ordered another investigation to
be made; but that before said investigation was terminated the
Secretary rendered a decision dismissing the appeal.
The complaint was filed on July 14, 1966. The defendants filed their
respective answers alleging inter alia that the complaint averred no
sufficient facts to show the courts jurisdiction. On December 6, 1966
the court issued an order finding the defendants objection
meritorious, but allowing the plaintiff to file an amended complaint
within a period of ten days. The pertinent portion of the said order
reads as follows:jgc:chanrobles.com.ph
"Section 1816 of the Administrative Code vests in the Director of
Forestry the . . . jurisdiction and authority over the demarcation,
protection, management, reproduction, reforestation, occupancy, and
use of all public forests and forest reserves and over the granting of
licenses for game and fish, and for the taking of forest products,
including stone and earth, therefrom. The decision of the Director of
Forestry on the subject is not subject to judicial review unless in the
exercise of such jurisdiction he committed a grave abuse of his
discretion which amounts to a denial of due process of law to the party
adversely affected. While the complaint alleges that the Director of
Forestry acted with grave abuse of his discretion and in violation of
due process of law provision of the Constitution of the Philippines this
allegation alone is insufficient for the court to intervene and review the
actuation of the Director of Forestry. Specific acts and instances from
which the grave abuse of discretion amounting to a denial of due
process of law may be deduced, must be alleged. The complaint does
not allege any such fact. On the contrary, the complaint states that
two motions for reconsideration were denied by the Director of
Forestry; that an appeal was made to the Secretary of Agriculture and
Natural Resources, who likewise sustained the decision of the Director
of Forestry. The fact that the Secretary of Agriculture and Natural
Resources decided the appeal without waiting for the completion of the
reinvestigation that he ordered does not constitute a violation of the
due process of law provision of the Constitution as in the appeal the

Secretary of Agriculture and Natural Resources was only called upon to
pass on the sufficiency of the evidence before the Director of Forestry.
The Secretary of Agriculture and Natural Resources was not required
to conduct a new investigation of the case. He and the Director of
Forestry may have committed an error in the appreciation of the
evidence before them. But such an error is not sufficient ground for
the intervention of the court who likewise may fall into a similar
mistake. There is no allegation that the plaintiff was not heard nor that
the Director of Forestry decided the case without taking evidence. On
the contrary, reinvestigations were even made after which the Director
of Forestry arrived at the conclusion subject of the present action.
Clearly the plaintiff was given due process."cralaw virtua1aw library
On March 3, 1967 the plaintiff filed an amended complaint,
incorporating the amendments in paragraphs 7 and 8 of the original
complaint, as shown in the following underlined
recitals:jgc:chanrobles.com.ph
"7. That on February 2, 1957, with grave abuse of discretion and in
violation of the due process of law provision of the Constitution of the
Philippines, in that from the very inception of this case in the Bureau of
Forestry up to the filing of his appeal in the Department of Agriculture
and Natural Resources appellant (Magno Manuel) has not really been
assisted or formally represented by counsel in any of the proceedings
therein; and that in the investigation conducted by the District Forester
concerned there was no showing that a notice has been sent to him so
as to have afforded him an opportunity to solicit for the services of a
lawyer . . ."cralaw virtua1aw library
"8. That the legal staff of the said Department began and conducted a
formal investigation of the case, but the investigation was not
completed, thus, said investigation, not being completed, was not in
accordance with the due process of law provision of the Constitution to
which constitutional right herein plaintiff is entitled and of which he
was deprived; that despite the incomplete investigation, which was
against the due process provision of the Constitution and the
Administrative circulars and orders pertinent thereto, the defendant
Secretary of Agriculture and Natural Resources, with grave abuse of
discretion and in violation of the due process provision of the
Constitution rendered a decision on August 12, 1965, arbitrarily,
capriciously, and illegally dismissing the appeal of plaintiff Magno

Manuel, saying that there is no merit in his appeal."cralaw virtua1aw
library
On March 21, 1967 defendant Villena moved to dismiss the amended
complaint on the ground that it did not cure the defects of the original
one, and still contained sufficient allegations to make out a cause of
action or to confer jurisdiction upon the court to set aside or annul the
administrative decision complained of. The court found the motion
meritorious and hence dismissed the complaint in its order of June 24,
1967. The said order of dismissal is the subject of the present appeal.
The proceedings challenged in the complaint refer to the approval or
rejection of an application for a Tree Farm Permit. Under Section 1838
of the Revised Administrative Code, quoted below, this function falls
within the jurisdiction of the Director of Forestry with the approval of
the Secretary of Agriculture and Natural Resources.
"SECTION 1838. Leasing of forest land for special purposes. The
Director of Forestry with the approval of the Secretary of Agriculture
and Natural Resources, may, upon such terms as he may deem
reasonable, lease or grant go any Filipino citizen or association of
persons duly incorporated and authorized by the Constitution to
acquire lands of the public domain, permits for the use of forest lands
or vacant public lands not declared agricultural land for a period not
exceeding twenty-five years, for the establishment of sawmills, lumber
yards, timber depots, logging camps, rights-of-way and plantations for
the raising of nipa and/or other palms, bacauan, medicinal plants or
trees of economic value . . ."cralaw virtua1aw library
The power thus conferred on the Director of Forestry with the approval
of the Secretary of Agriculture and Natural Resources is basically
executive or administrative in nature. 1 And courts, as a rule, refuse to
interfere with proceedings undertaken by administrative bodies or
officials in the exercise of administrative functions. This is so because
such bodies are generally better equipped technically to decide
administrative questions and that non-legal factors, such as
government policy on the matter, are usually involved in the decisions.
There are, of course, limits to the exercise of administrative discretion.
Administrative proceedings may be reviewed by the courts upon a
showing that "the board or official has gone beyond his statutory
authority, exercised unconstitutional powers or clearly acted arbitrarily
and without regard to his duty or with grave abuse of discretion" 2 or
that the decision is vitiated by fraud, imposition or mistake. 3
The complaint here alleges denial of due process and grave abuse of
discretion, in that appellant was not formally represented by counsel at
any stage of the proceedings before the Director of Forestry and the
Secretary of Agriculture and Natural Resources; that there was no
showing that notice was sent to him so as to afford him an opportunity
to obtain the services of a lawyer; and that the Secretary dismissed
the appeal before the completion of the reinvestigation he had
ordered.
The above circumstances however do not necessarily constitute a
violation of due process or grave abuse of discretion. Section 1838 of
the Revised Administrative Code does not require that the
investigation be in the nature of a court trial. In deciding
administrative questions, administrative bodies or officials generally
enjoy wide discretion. Technical rules of procedure are not strictly
enforced, and due process of law in the strict judicial sense is not
indispensable. 4 It is sufficient that the substantive due process
requirement of fairness and reasonableness be observed.
Appellant does not allege that he was denied opportunity to be heardonly that "there was no showing that a notice was sent to him so as to
afford him opportunity to solicit the services of a lawyer" to represent
him in all stages of the investigation. Absence of previous notice is not
of itself a substantial defect; what the law abhors is the lack of
opportunity to be heard. 5 In this case the plaintiff was not denied
such opportunity, as it appears that he filed two separate motions for
reconsideration before the Director of Forestry and then upon their
denial appealed to the Secretary of Agriculture and Natural Resources.
It was not essential, either, that appellant be represented by a lawyer.
The investigation conducted by the Bureau of Forestry under Section
1838 of the Revised Administrative Code was purely fact-finding. It
was not required to be in the form of a trial where both parties, each
represented by counsel, confront each other and their witnesses. In
any case, appellant does not allege that the presence of a lawyer could
have altered the result of the investigation. He does not even cite any
substantial error in the findings of the Director of Forestry which could

have been avoided, if a lawyer had represented him.
It should be noted that in the order of the Acting Secretary of
Agriculture and Natural Resources dated March 15, 1960, a formal
investigation of the case was ordered. That the investigation was
actually conducted is not denied, and is borne out by the decision of
the Secretary dismissing the plaintiffs appeal, in which it is
stated:jgc:chanrobles.com.ph
"An investigation pursuant to the standing rules and regulations was
duly conducted by an attorney of the Legal Staff of this Department
and the pertinent portions of his report are hereunder quoted as
follows:"
Appellant says that the investigation was incomplete. He does not,
however, point out how incomplete it was, or in what aspect it had not
been completed, or in what manner the incompleteness constituted
grave abuse of discretion or violated the requirement of due process.
We have examined the documents and pleadings reproduced in the
appellants record on appeal, particularly the decision of the Secretary
of Agriculture and Natural Resources which is sought to be set aside,
and we find that said decision is based on a thorough analysis of the
facts as revealed by the evidence. Thus the Secretary
concluded:jgc:chanrobles.com.ph
"We have thoroughly and carefully checked the findings of facts
enumerated above against the reverberating backdrop of the
voluminous proofs, oral, documentary, presented and adduced by the
contending parties herein, and we found that the said findings of facts
are sufficiently and fully sustained by the evidence of the record. We
are also in complete accord with the evaluation and appreciation of the
evidence and the discussion and elucidation on the merits of the case
contained in the investigators Remarks and Comments."cralaw
virtua1aw library
In order to justify a review of the aforesaid decision on the ground that
it was based on an investigation which was incomplete, it is not
enough to make a bare allegation of incompleteness. Was the
appellant for instance, denied the right to present his evidence? If so,
what evidence was it, and how would it affect the result? What vital
phase of the hearing if any, was omitted? No facts of this or similar

nature are alleged in the complaint. The trial court consequently did
not err in ruling as it did and issuing an order of dismissal.
WHEREFORE the order appealed from is affirmed, with costs
against Appellant.
DIGEST
Manuel v. Villena, 37 SCRA 745 (1971)
FACTS: This is an appeal from the order of the CFI of Tarlac dismissing
the case entitled Manuel v. Villena, the Director of Forest and the
Secretary of ANR, wherein the plaintiff sought the annulment of the
decision of the said public official rejecting his application for a Tree
Farm Permit over a 20-hectare parcel of land, which was included in a
66-hectare are covered by a similar application of private defendant
Villena.
ISSUE: WON the decision of the Secretary of DENR should be set aside
RULING: Under Section 1838 of the RAC, this function falls within the
jurisdiction of the Director of Forestry with the approval of the
Secretary of ANR.
The power thus conferred on the Director of Forestry with the approval
of the Secretary of ANR is basically executive or administrative in
nature. And courts, as a rule, refuse to interfere with the proceedings
undertaken by the administrative bodies or officials in the exercise of
administrative functions. This is so because such bodies are generally
better equipped technically to decide administrative questions and
that non-legal factors, such as government policy on the matter, are
usually involved in the decisions.
There are of course, limits to the exercise of administrative discretion.

Administrative proceedings may be reviewed by the courts upon the
showing that the board or officialhas gone beyond his statutory
authority, exercised unconstitutional powers or clearly acted arbitrarily
and without regard to his duty or with grave abuse of discretion or
that the decision is vitiated by fraud, imposition or mistake.
Since 1838 of the RAC does not require the investigation be in the
nature of a court trial. In deciding administrative questions,
administrative bodies or officials generally enjoy wide
discretion. Technical rule of procedure are not strictly enforced and due
process of law in the strict judicial sense is not indispensable. It is
sufficient that substantive due process requirement of fairness and
reasonableness be observed.
Absence of previous notice is not itself a substantial defect; what the

law abhors is the lack of opportunity to be heard.
It was not essential that the appellant be represented by a lawyer. The

investigation conducted by Bureau of Forestry was purely fact-finding.
It was not required to be in a form of a trial where both parties, each
represented by a counsel, confront each other and their witnesses. In
any case, appellant does not allege that the presence of a lawyer could
have altered the result of the investigation. He does not even cite any
substantial error in the findings of the Director of Forestry which could
have been avoided, if a lawyer had represented him.
It should be noted that the order of the Acting Secretary of ANR, a

formal investigation of the case was ordered. That the investigation
was actually conducted was not denied, and is borne out by the
decision of the Secretary dismissing the plaintiffs appeal.
We have examined the documents and pleadings reproduced in the

appellants record on appeal, particularly the decision of the Secretary
of ANR which is sought to be set aside, and we find that the said
decision is based on a thorough analysis of the facts as revealed by
evidence.
THIRD DIVISION
[A.M. No. MTJ-02-1404. December 14, 2004]
EXEC. JUDGE HENRY B. BASILLA, complainant, vs. JUDGE AMADO L.
BECAMON, Clerk of Court LOLITA DELOS REYES and Junior Process
Server EDDIE DELOS REYES, MCTC, Placer-Esperanza-Cawayan,
Masbate, respondents.
RESOLUTION
GARCIA, J.:
Under consideration is the sworn letter-complaint [1] (with enclosures) dated
December 6, 2000 filed with the Office of the Court Administrator by herein
complainant, Executive Judge Henry B. Basilla, of the Regional Trial Court,
Branch 49, Cataingan, Masbate against herein respondents, namely: Judge
Amado L. Becamon of the Municipal Circuit Trial Court (MCTC) of PlacerEsperanza-Cawayan, Masbate; his clerk of court Lolita delos Reyes; and
process server Eddie delos Reyes, charging them with gross neglect of duty
and/or grave misconduct, gross ignorance of the law and violation of Canon 3 of
the Code of Judicial Conduct on the part of respondent judge, relative to Civil
Case No. 288 (MCTC Case No. 263-C), entitledVisitacion Mahusay vda. de Du
vs. Benjamin Du, et al., an action for recovery of possession and ownership of
land.
In an earlier administrative case filed by the same complainant against the
three (3) herein respondents, priorly docketed as A.M. No. MTJ-02-1438,
entitled Exec. Judge Henry B. Basilia[2] vs. Judge Amado L. Becamon, Clerk of
Court Lolita delos Reyes and Process Server Eddie delos Reyes, this Court, in
an en banc Resolution promulgated on January 22, 2004 (420 SCRA 608), found
respondent Judge Amado L. Becamon liable for gross ignorance of the law and
procedure and imposed upon him a fine in the amount of P21,000, while his corespondents therein, Lolita delos Reyes and Eddie delos Reyes, were found
guilty of simple neglect of duty and were each fined in the amount equivalent to
one month and one day of their respective salaries.
A close examination of A.M. No. MTJ-02-1438 and the present case, A.M.
No. MTJ-02-1404, reveals that the latter case presents the same matter and
raises the same issues as that of the earlier administrative case. Hereunder is
our comparative study anent the complaint in both cases:
A.M. No. MTJ-02- 1438 arose from an Order dated April 5, 2000 issued by
Executive Judge Henry B. Basilla dismissing the appeal in Civil Case No. 288
(MCTC Case No. 263-C) for being frivolous and filed out of time. In that same
Order, Judge Basilla likewise required herein respondents to explain in writing
why they should not be dealt with administratively. In full, said Order reads:
ORDER
After considering the following facts in the record:
1. Judgment of the court a quo dated January 15, 1999 (mailed to counsels only
on March 2, 1999) was received by defendants-appellants thru counsel
on March 12, 1999 (p. 369, rec.);
2. Motion for reconsideration of the decision by defendants-appellants thru
counsel was filed with the court a quo on March 15, 1999 by registered
mail (p. 371, registry receipt, rec.);
3. Order of the court a quo dated May 7, 1999 denying the motion for
reconsideration (p. 381, rec.);
4. Motion for execution of judgment dated September 9, 1999 filed with the
court a quo on September 14, 1999 (rec.);
5. Order dated February 14, 2000 of the court a quo denying motion for
execution of judgment and granting defendants fifteen (15) days to appeal
(p. 400, rec.);
6. Notice of appeal filed with the court a quo on November 3, 1999 (p. 412, rec.);
7. Appeal fee paid after four (4) months on March 14, 2000 (p. 427, rec.); and
8. Order of the court a quo dated March 14, 2000 approving the appeal. (p. 429,
rec.)
the court hereby resolved to dismiss the appeal for being filed out of time and frivolous.
The court has observed that:
1. Judge Amado L. Becamon, Mrs. Lolita delos Reyes and Mr. Eddie delos Reyes
released the decision only after one month and a half (1 1/2) (p. 365,
registry receipt, rec.) and the order dated May 7, 1999 denying the motion
for reconsideration only after five (5) months (p. 381, registry receipt, rec.);
2. Judge Amado L. Becamon extended the period of appeal fixed by the Rules (p.
400, rec.);
3. The court still received the appeal fee on March 14, 2000 despite the lapse of
the period of appeal (p. 427, rec.); and
4. Judge Amado L. Becamon still approved the appeal despite the lapse of the
period of appeal (p. 429, rec.).
And, considering the gross irregularity in the record, Judge Amado L. Becamon, Mrs.
Lolita delos Reyes, Clerk of Court II, and Eddie delos Reyes, Process Server, of the
4th MCTC of Placer-Cawayan-Esperanza, Masbate are hereby ordered to explain in
writing within ten (10) days from notice why they should not be dealt with
administratively for grave misconduct, ignorance of law and dishonesty.
Furnish a copy of this order to Honorable Court Administrator for his information.
So ordered.
On the other hand, the present case - A.M. No. MTJ-02-1404 - stemmed
from a sworn letter-complaint of the same complainant against the very same
respondents addressed to then Court Administrator Alfredo L. Benipayo. In said
sworn letter-complaint, Judge Henry B. Basilla averred:
In compliance with your letter dated October 25, 2000, I, in my capacity as Executive
Judge, after a careful study of the record in Civil Case No. 288 (MCTC Case No. 263-C)
entitled Visitacion Mahusay vda. de Du, Plaintiff vs. Benjamin Du, et al., Defendants for
Recovery of Possession and Ownership of Land, hereby formally charge administratively
Judge Amado L. Becamon, Mrs. Lolita delos Reyes, Clerk of Court II and Mr. Eddie
delos Reyes, Junior Process Server, of MCTC of Placer-Cawayan-Esperanza, Masbate,
for Gross Neglect of Duty and/or Grave Misconduct, for Ignorance of Law and for
violation of Canon 3 of the Code of Judicial Conduct of 1989 (specially for Judge Amado
L. Becamon) --- committed by freezing and delaying the release of the decision and the
order denying to reconsider it, for one and a half months and five months, respectively,
and extending the period of appeal fixed by the rules, and for receiving the appeal fee and
after which approving the appeal despite the time to do so had long elapsed.
Attached herewith are the following documents:
1.) Annex A Order dated April 5, 2000;
2.) Annex B Judgment of the court a quo dated January 15, 1999 (mailed to
counsel only on March 2, 1999, p. 365, registry receipt, rec.) was received
by defendants-appellants thru counsel on March 12, 1999 (p. 369, rec.);
3.) Annex C Motion for Reconsideration of the decision by defendants-appellants
thru counsel was filed with the court a quo on March 15, 1999 by registered
mail (p. 371, registry receipt, rec.);
4.) Annex D Order of the court a quo dated May 7, 1999 denying the motion for
reconsideration (p. 381, registry receipt, rec.);
5.) Annex E Motion for execution of judgment dated September 9, 1999 filed
with the court a quo on September 14, 1999 (rec.);
6.) Annex F Order dated February 14, 2000 of the court a quo denying motion
for execution of judgment and granting defendants fifteen (15) days to
appeal (p. 400, rec.);
6.) Annex G Notice of appeal filed with the court a quo on November 3, 1999 (p.
412, rec.);
8.) Annex H Appeal fee paid after four (4) months on March 14, 2000 (p. 427,
rec.);
9.) Annex I Order of the court a quo dated March 14, 2000 approving the appeal
(p. 429, rec.).
Clear it is from the above that both A.M. No. MTJ-02-1438 and the instant
administrative case - A.M. No. MTJ-02-1404 - refer to the same subject matter,
raise the same issues and involve the same parties.
Applying the principle of res judicata or bar by prior judgment, the present
administrative case becomes dismissible. Section 47, Rule 39 of the Rules of
Court enunciates the rule of res judicata or bar by prior judgment, thus:
SEC. 47. Effect of judgments or final orders. - The effect of a judgment or
final order rendered by a court of the Philippines, having jurisdiction to pronounce the
judgment or final order, may be as follows:
xxx xxx xxx
(b) In other cases, the judgment or final order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors-in-interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and
under the same title and in the same capacity;
Under the said doctrine, a matter that has been adjudicated by a court of
competent jurisdiction must be deemed to have been finally and conclusively
settled if it arises in any subsequent litigation between the same parties and for
the same cause.[3] It provides that [a] final judgment on the merits rendered by a
court of competent jurisdiction is conclusive as to the rights of the parties and
their privies; and constitutes an absolute bar to subsequent actions involving the
same claim, demand, or cause of action.[4] Res judicata is based on the ground
that the party to be affected, or some other with whom he is in privity, has
litigated the same matter in the former action in a court of competent jurisdiction,
and should not be permitted to litigate it again.[5]
This principle frees the parties from undergoing all over again the rigors of
unnecessary suits and repetitious trials. At the same time, it prevents the
clogging of court dockets. Equally important, res judicata stabilizes rights and
promotes the rule of law.[6]
The records reveal that the two (2) administrative cases stemmed from the
same factual circumstances between the same parties. The earlier administrative
case (A.M. No. MTJ-02-1438) which was already terminated in our en
banc Resolution of January 22, 2004, arose when the OCA was furnished with a
copy of the order dated April 5, 2000 issued by complainant Judge Henry B.
Basilla. Complete record of MCTC Case No. 263-C was also transmitted to the
said office, and, after evaluating the matter, Deputy Court Administrator Jose P.
Perez, in his Report dated April 19, 2002, recommended that the same be redocketed as a regular administrative matter, which recommendation was adopted
by this Court in its Resolution of July 10, 2002, and accordingly had the matter
docketed as A.M. No. MTJ-02-1438.
Meanwhile, on December 6, 2000, Executive Judge Henry B. Basilla, in
compliance with then Court Administrator Alfredo L. Benipayos letter dated
October 25, 2000, filed his sworn letter-complaint formally charging herein
respondents for the same irregularities committed by them relative to the same
MCTC Case No. 263-C. Later, in his January 16, 2002 Report, the incumbent
Court Administrator, Presbitero J. Velasco, Jr., recommended the re-docketing of
the present complaint as a regular administrative matter. And, in our Resolution
datedFebruary 27, 2002, we adopted said recommendation and thus docketed
that very same letter-complaint as A.M. No. MTJ-02-1404. This explain why two
(2) administrative cases, having identical subject matter, cause of action and
involving the same parties existed.
WHEREFORE, the instant administrative complaint is DISMISSED for being
a mere duplication of the complaint in A.M. No. MTJ-02-1438 which, to stress,
was already resolved by this Court in its en banc Resolution promulgated
on January 22, 2004 (420 SCRA 608).
SO ORDERED.
Panganiban,
JJ., concur.
(Chairman),
Sandoval-Gutierrez, and Carpio-Morales,
Corona, J., on leave.
NO digest
epublic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
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 HerreraMercado (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 Self-Adjudication 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 re-raised 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."18The 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 Quasi-Judicial 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"39likely 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.
DIGEST
NHA v. Segunda Almeida, CAG.R. No. 162784; June 22, 2007Facts:
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 survivingheirs of Beatriz filed a case for annulment of
the deed. A decision was rendered and thedeed was declared null and void.
During the trial, Francisca filed an application with theNHA 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 whichthey 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 yearoccupation
of the property and re-raised the fact that Francisca's declaration is a
nullitybecause 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 upondeath. It then held that the
said document must first be submitted to probate before it cantransfer
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 thedisputed properties. To the extent of the interest that the original owner
had over theproperty, the same should go to her estate. Margarita Herrera had an
interest in theproperty and that interest should go to her estate upon her demise
so as to be able toproperly 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 purchaseprice. The
opposition of other heirs to the repurchase by Francisca Herrera should haveput
the NHA on guard as to the award of the lots. Further, the Decision in the said
CivilCase No. B-1263 (questioning the Deed of Self-Adjudication) which rendered
the deedtherein null and void should have alerted the NHA that there are other
heirs to theinterests and properties of the decedent who may claim the property
after a testate orintestate proceeding is concluded. The NHA therefore acted
arbitrarily in the award of thelots
FIRST DIVISION
JUDGE FELIMON ABELITA III, G.R. No. 170672
Petitioner,
Present:
PUNO, C.J., Chairperson,
- versus - CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.
P/SUPT. GERMAN B. DORIA Promulgated:
and SPO3 CESAR RAMIREZ,
Respondents. August 14, 2009
x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 10 July 2004 Decision[2] and 18
October 2004 Order[3] of the Regional Trial Court of Quezon City, Branch 217 (trial
court), in Civil Case No. Q-98-33442 for Damages.
The Antecedent Facts

Judge Felimon Abelita III (petitioner) filed a complaint for Damages under Articles 32(4)
and (9) of the Civil Code against P/Supt. German B. Doria (P/Supt. Doria) and SPO3
Cesar Ramirez (SPO3 Ramirez). Petitioner alleged in his complaint that on 24 March
1996, at around 12 noon, he and his wife were on their way to their house in
Bagumbayan, Masbate, Masbate when P/Supt. Doria and SPO3 Ramirez (respondents),
accompanied by 10 unidentified police officers, requested them to proceed to the
Provincial PNP Headquarters at Camp Boni Serrano, Masbate, Masbate. Petitioner was
suspicious of the request and told respondents that he would proceed to the PNP
Headquarters after he had brought his wife home. Petitioner alleged that when he parked
his car in front of their house, SPO3 Ramirez grabbed him, forcibly took the key to his
Totoya Lite Ace van, barged into the vehicle, and conducted a search without a
warrant. The search resulted to the seizure of a licensed shotgun. Petitioner presented the
shotguns license to respondents. Thereafter, SPO3 Ramirez continued his search and then
produced a .45 caliber pistol which he allegedly found inside the vehicle. Respondents
arrested petitioner and detained him, without any appropriate charge, at the PNP special
detention cell.
P/Supt. Doria alleged that his office received a telephone call from a relative of Rosa Sia
about a shooting incident in Barangay Nursery. He dispatched a team headed by SPO3
Ramirez to investigate the incident. SPO3 Ramirez later reported that a certain William
Sia was wounded while petitioner, who was implicated in the incident, and his wife just
left the place of the incident. P/Supt. Doria looked for petitioner and when he found him,
he informed him of the incident report. P/Supt. Doria requested petitioner to go with him
to the police headquarters as he was reported to be involved in the incident. Petitioner
agreed but suddenly sped up his vehicle and proceeded to his residence. P/Supt. Doria
and his companions chased petitioner. Upon reaching petitioners residence, they caught
up with petitioner as he was about to run towards his house. The police officers saw a gun
in the front seat of the vehicle beside the drivers seat as petitioner opened the door. They
also saw a shotgun at the back of the drivers seat. The police officers confiscated the
firearms and arrested petitioner. P/Supt. Doria alleged that his men also arrested other
persons who were identified to be with petitioner during the shooting incident.Petitioner
was charged with illegal possession of firearms and frustrated murder. An administrative
case was also filed against petitioner before this Court.[4]
The Decision of the Trial Court
In its 10 July 2004 Decision, the trial court dismissed petitioners complaint.
The trial court found that petitioner was at the scene of the shooting incident in Barangay
Nursery. The trial court ruled that the police officers who conducted the search were of
the belief, based on reasonable grounds, that petitioner was involved in the incident and
that the firearm used in the commission of the offense was in his possession. The trial
court ruled that petitioners warrantless arrest and the warrantless seizure of the firearms
were valid and legal. The trial court gave more credence to the testimonies of respondents
who were presumed to have performed their duties in accordance with law. The trial court
rejected petitioners claim of frame-up as weak and insufficient to overthrow the positive
testimonies of the police officers who conducted the arrest and the incidental search. The
trial court
concluded that petitioners claim for damages under Article 32 of the Civil Code is not
warranted under the circumstances.
Petitioner filed a motion for reconsideration.
In its 18 October 2004 Order, the trial court denied the motion.
Hence, the petition before this Court.

The Issues
The issues in this case are the following:
1.
Whether the warrantless arrest and warrantless search

and seizure were illegal under Section 5, Rule 113 of the
1985 Rules on Criminal Procedure;
2.
Whether respondents are civilly liable for damages under

Articles 32(4) and (9) of the Civil Code; and
3.
Whether the findings in the administrative case against

petitioner are conclusive in this case.
The Ruling of this Court
The petition has no merit.

Application of Section 5, Rule 113 of the
1985 Rules on Criminal Procedure
Petitioner alleges that his arrest and the search were unlawful under Section 5, Rule 113
of the 1985 Rules on Criminal Procedure. Petitioner alleges that for the warrantless arrest
to be lawful, the arresting officer must have personal knowledge of facts that the person
to be arrested has committed, is actually committing, or is attempting to commit an
offense. Petitioner alleges that the alleged shooting incident was just relayed to the
arresting officers, and thus they have no personal knowledge of facts as required by the
Rules.
We do not agree.
Section 5, Rule 113 of the 1985 Rules on Criminal Procedure states:
Sec. 5. Arrest without warrant; when lawful. A peace officer or a private
person may, without a warrant, arrest a person:
(a) When, in his presence, the person to be arrested has committed, is

actually committing, or is attempting to commit an offense;
(b) When an offense has in fact just been committed and he
has personal knowledge of facts indicating that the person to be arrested has committed
it; and
(c) When the person to be arrested is a prisoner who has escaped from a
penal establishment or place where he is serving final judgment or
temporarily confined while his case is pending, or has escaped while being
transferred from one confinement to another.
For the warrantless arrest under this Rule to be valid, two requisites must concur: (1) the
offender has just committed an offense; and (2) the arresting peace officer or private
person has personal knowledge of facts indicating that the person to be arrested has
committed it.[5]
Personal knowledge of facts must be based on probable cause, which means an actual
belief or reasonable grounds of suspicion. [6] The grounds of suspicion are reasonable
when, in the absence of actual belief of the arresting officers, the suspicion that the
person to be arrested is probably guilty of committing the offense is based on actual
facts, i.e., supported by circumstances sufficiently strong in themselves to create the
probable cause of guilt of the person to be arrested. [7] A reasonable suspicion, therefore,
must be founded on probable cause, coupled with good faith on the part of the peace
officers making the arrest.[8]
Section 5, Rule 113 of the 1985 Rules on Criminal Procedure does not require the
arresting officers to personally witness the commission of the offense with their own
eyes. In this case, P/Supt. Doria received a report about the alleged shooting
incident. SPO3 Ramirez investigated the report and learned from witnesses that petitioner
was involved in the incident. They were able to track down petitioner, but when invited
to the police headquarters to shed light on the incident, petitioner initially agreed then
sped up his vehicle, prompting the police authorities to give chase. Petitioners act of
trying to get away, coupled with the incident report which they investigated, is enough to
raise a reasonable suspicion on the part of the police authorities as to the existence of
probable cause.
Plain View Doctrine
The seizure of the firearms was justified under the plain view doctrine.
Under the plain view doctrine, objects falling in the plain view of an officer who has a
right to be in the position to have that view are subject to seizure and may be presented as
evidence.[9] The plain view doctrine applies when the following requisites concur: (1) the
law enforcement officer in search of the evidence has a prior justification for an intrusion
or is in a position from which he can view a particular area; (2) the discovery of the
evidence in plain view is inadvertent; and (3) it is immediately apparent to the officer that
the item he observes may be evidence of a crime, contraband or otherwise subject to
seizure.[10]
In this case, the police authorities were in the area because that was where they caught up
with petitioner after the chase. They saw the firearms inside the vehicle when petitioner
opened the door. Since a shooting incident just took place and it was reported that
petitioner was involved in the incident, it was apparent to the police officers that the
firearms may be evidence of a crime. Hence, they were justified in seizing the firearms.
Civil Liability Under Article 32 of the Civil Code
Petitioner alleges that respondents are civilly liable under paragraphs (4) and (9) of
Article 32 of the Civil Code.
Paragraphs (4) and (9) of Article 32 of the Civil Code respectively state:
Art. 32. Any public officer or employee, or any private individual, who
directly or indirectly obstructs, defeats, violates or in any manner impedes
or impairs any of the following rights and liberties of another person shall
be liable to the latter for damages:
xxxx
(4) Freedom from arbitrary or illegal detention;
xxxx
(9) The right to be secure in ones person, house, papers, and effects against unreasonable
searches and seizures;
xxxx
In this case, it was established that petitioner was lawfully arrested
without a warrant and that firearms were validly seized from his
possession. The trial court found that petitioner was charged with
illegal possession of firearms and frustrated murder. We agree with
the trial court in rejecting petitioners allegation that he was merely
framed-up. We also agree with the trial court that respondents were
presumed to be performing their duties in accordance with
law. Hence, respondents should not be held civilly liable for their
actions.
Res Judicata Does Not Apply
Respondents raise the defense of res judicata against petitioners claim for damages.
Res judicata has two aspects: bar by prior judgment and conclusiveness of judgment
provided under Section 47(b) and (c), Rule 39, respectively, of the 1997 Rules of Civil
Procedure[11] which provide:
Sec. 47. Effect of judgments or final orders. The effect of a judgment or
final order rendered by a court of the Philippines, having jurisdiction to
pronounce the judgment or final order, may be as follows:
xxx
(b) In other cases, the judgment or final order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and
under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that
only is deemed to have been adjudged in a former judgment or final order which appears
upon its face to have been so adjudged, or which was actually and necessarily included
therein or necessary thereto.
Bar by prior judgment and conclusiveness of judgment differ as follows:
There is bar by prior judgment when, as between the first case where the
judgment was rendered and the second case that is sought to be barred,
there is identity of parties, subject matter, and causes of action. In this
instance, the judgment in the first case constitutes an absolute bar to the
second action. Otherwise put, the judgment or decree of the court of
competent jurisdiction on the merits concludes the litigation between the
parties, as well as their privies, and constitutes a bar to a new action or suit
involving the same cause of action before the same or other tribunal.
But where there is identity of parties in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to
matters merely involved therein. This is the concept of res judicata known
as conclusiveness of judgment. Stated differently, any right, fact or matter
in issue directly adjudicated or necessarily involved in the determination of
an action before a competent court in which judgment is rendered on the
merits is conclusively settled by the judgment therein and cannot again be
litigated between the parties and their privies whether or not the claim,
demand, purpose, or subject matter of the two actions is the same.[12]
For res judicata to apply, the following requisites must be present:

(a) the former judgment or order must be final;
(b) it must be a judgment or order on the merits, that is, it was rendered after a
consideration of the evidence or stipulations submitted by the parties at the trial of the
case;
(c) it must have been rendered by a court having jurisdiction over the subject matter and
the parties; and
(d) there must be, between the first and second actions, identity of parties, of subject
matter, and of cause of action; this requisite is satisfied if the two actions are substantially
between the same parties.[13]
While the present case and the administrative case are based on the same essential facts
and circumstances, the doctrine of res judicata will not apply. An administrative case
deals with the administrative liability which may be incurred by the respondent for the
commission of the acts complained of.[14] The case before us deals with the civil liability
for damages of the police authorities. There is no identity of causes of action in the
cases. While identity of causes of action is not required in the application of res
judicata in the concept of conclusiveness of judgment,[15] it is required that there must
always be identity of parties in the first and second cases.
There is no identity of parties between the present case and the administrative case. The
administrative case was filed by Benjamin Sia Lao (Sia Lao) against petitioner. Sia Lao is
not a party to this case. Respondents in the present case were not parties to the
administrative case between Sia Lao and petitioner. In the present case, petitioner is the
complainant against respondents. Hence, while res judicata is not a defense to petitioners
complaint for damages, respondents nevertheless cannot be held liable for damages as
discussed above.
WHEREFORE, we DENY the petition. We AFFIRM the 10 July 2004 Decision and 18
October 2004 Order of the Regional Trial Court of Quezon City, Branch 217, in Civil
Case No. Q-98-33442.
SO ORDERED.
DIGEST
Judge Felimon Abelita III vs P/Supt German Doria & SPO3 Cesar
Ramirez
GR No. 170627
August 14, 2009
Facts:
Petitioner (Judge Abelita) filed a complaint for damages under Art.
32(4) and (9) of the Civil Code against Respondents (Doria and
Ramirez). Petitioner alleged that he and his wife was on their home
when the respondents accompanied by 10 unidentified police
officers,requested them to proceed to the PNP headquarters. Petitioner
alleged that he would proceed to to the PNP HQ after he had brought
his wife home. Petitoner alleged that when she parked his car in front
of their house, SPO3 Ramirez grabbed him and took his car keys, bared
into the vehicle and conducted as search without a warrant. The search
resulted to the seizure of a licensed shotgun and a unlicensed .45
caliber pistol allegedly found inside the vehicle.
However, the respondent has a different version of the case. Doria

alleged that they received a telephone call from a relative of Rosa Sia
about a shooting incident. He dispatched a team headed by Ramirez to
investigate the incident. Ramirez reported that a certain William Sia is
wounded while Petitioner and his wife just left the place of the incident.
Doria looked for the petitioner and when he found him, he informed
him about the incident, he requested Petitioner to go with him in the
PNP HQ but the petitioner suddenly sped up his vehicle and proceeded
to his residence, they caught up with petitioner as he was about to run
towards his house. The police offices saw a gun in the form seat and a
shotgun at the back. They confiscated the firearms and charged
Petitioner for illegal possession of firearms and frustrated murder and
an administrative case.
Issue:
Whether or not the arrest and seizure was valid.
Whether or not the Respondents are liable for damages.
Whether the findings in the administrative case against petitioner is
conclusive in this case.
Ruling:
Yes, the seizure was valid under plain view doctrine, objects falling in
the plain view of an officer who has a right to be in the position to have
that view are subject to seizure and may be presented as evidence.
The requisites of plain view are:
the law enforcement officer in search of the evidence has a prior
justification for an intrusion or is in a position from which he can view a
particular area;
the discovery of evidence in plain view is inadvertent; and
it is immediately apparent to the police officers that the firearm may

be an evidence of a crime.
Hence, they were justified in seizing the firearms.
No, the court did not agree that petitioner was framed-up and that the
respondents were presumed to be performing their duties in
accordance with law. They should not be held liable for damages.
While the present case and the administrative case are based on the
same essential facts and circumstances, the doctrine of res judicata
will not apply. The requisites of res judicata are:
the former judgment must be final;
it must be a judgment or order on the merits, that is, it was rendered
after a consideration of the evidence or stipulation submitted by the
parties at the trial of the case;
it must have been rendered by a court having jurisdiction over the
subject matter and the parties;
there must be, between the first and second actions, identity of the
parties, of subject matter, and cause of action; this requisite is satisfied
f the two actions are substantially between the same parties.
A administrative case deals with the administrative liability which may
be incurred by the respondent for the commission of the acts
complained of. This case deals with the civil liability for damages of the
police officers. There is no identity of causes of action in the cases.
While identity of causes of action is not required in the application of
res judicata in the concept of conclusiveness of judgment, it is required
that there must always be identity of parties in the first and second
cases. There is no identity of parties since the administrative case was
filed by Bejamin Sia Lao against petitioner and Benjamin is not a party
to this case.
SECURITIES AND EXCHANGE

COMMISSION,
G.R. No. 135808
Petitioner,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
- versus -
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,*
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
INTERPORT
RESOURCES
CORPORATION, MANUEL S.
RECTO, RENE S. VILLARICA,
PELAGIO RICALDE, ANTONIO
REINA,
FRANCISCO
ANONUEVO, JOSEPH SY and
SANTIAGO TANCHAN, JR.,
VELASCO, JR.,
NACHURA,**
REYES,
DE CASTRO, and
BRION,** JJ.
Respondents.
Promulgated:
October 6, 2008
x-------------------------------------------------x
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, assailing the Decision,[1] dated 20 August 1998, rendered by the
Court of Appeals in C.A.-G.R. SP No. 37036, enjoining petitioner
Securities and Exchange Commission (SEC) from taking cognizance of
or
initiating
any
action
against
the
respondent
corporation InterportResources Corporation (IRC) and members of its
board
of
directors,
respondents
Manuel
S.
Recto,
Rene
S. Villarica, Pelagio Ricalde,
Antonio Reina,
Francisco Anonuevo,
Joseph Sy and Santiago Tanchan, Jr., with respect to Sections 8, 30 and
36 of the Revised Securities Act. In the same Decision of the appellate
court, all the proceedings taken against the respondents, including the
assailed SEC Omnibus Orders of 25 January 1995 and 30 March 1995,
were declared void.
The antecedent facts of the present case are as follows.
On 6 August 1994, the Board of Directors of IRC approved a

Memorandum
of
Agreement
with Ganda Holdings Berhad (GHB). Under the Memorandum
of
Agreement, IRC acquired 100% or the entire capital stock
of Ganda Energy Holdings, Inc. (GEHI),[2] which would own and
operate a 102 megawatt (MW) gas turbine power-generating
barge. The agreement also stipulates that GEHI would assume a fiveyear power purchase contract with National Power Corporation. At
that time, GEHIs power-generating barge was 97% complete and
would go on-line by mid-September of 1994. In exchange, IRC will
issue to GHB 55% of the expanded capital stock of IRC amounting to
40.88 billion shares which had a total par value of P488.44 million.[3]
On the side, IRC would acquire 67% of the entire capital stock of
Philippine Racing Club, Inc. (PRCI). PRCI owns 25.724 hectares of real
estate property in Makati.Under the Agreement, GHB, a member of
the Westmont Group of Companies in Malaysia, shall extend or
arrange a loan required to pay for the proposed acquisition by IRC of
PRCI.[4]
IRC alleged that on 8 August 1994, a press release announcing the

approval of the agreement was sent through facsimile transmission to
the Philippine Stock Exchange and the SEC, but that the facsimile
machine of the SEC could not receive it. Upon the advice of the SEC,
the IRC sent the press release on the morning of 9 August 1994.[5]
The SEC averred that it received reports that IRC failed to make
timely public disclosures of its negotiations with GHB and that some
of its directors, respondents herein, heavily traded IRC shares utilizing
this material insider information. On 16 August 1994, the SEC
Chairman issued a directive requiring IRC to submit to the SEC a copy
of its aforesaid Memorandum of Agreement with GHB. The SEC
Chairman further directed all principal officers of IRC to appear at a

hearing before the Brokers and Exchanges Department (BED) of the
SEC to explain IRCs failure to immediately disclose the information as
required by the Rules on Disclosure of Material Facts. [6]
In compliance with the SEC Chairmans directive, the IRC sent a letter
dated 16 August 1994 to the SEC, attaching thereto copies of the
Memorandum
of
Agreement. Its
directors,
Manuel
Recto,
Rene Villarica and Pelagio Ricalde, also appeared before the SEC
on 22 August 1994 to explain IRCs alleged failure to immediately
disclose material information as required under the Rules on
Disclosure of Material Facts.[7]
On 19 September 1994, the SEC Chairman issued an Order finding

that IRC violated the Rules on Disclosure of Material Facts, in
connection with the Old Securities Act of 1936, when it failed to make
timely disclosure of its negotiations with GHB. In addition, the SEC
pronounced that some of the officers and directors of IRC entered into
transactions involving IRC shares in violation of Section 30, in relation
to Section 36, of the Revised Securities Act.[8]
Respondents filed an Omnibus Motion, dated 21 September 1994,

which was superseded by an Amended Omnibus Motion, filed on 18
October 1994, alleging that the SEC had no authority to investigate
the subject matter, since under Section 8 of Presidential Decree No.
902-A,[9] as amended by Presidential Decree No. 1758, jurisdiction
was conferred upon the Prosecution and Enforcement Department
(PED) of the SEC. Respondents also claimed that the SEC violated
their right to due process when it ordered that the respondents
appear before the SEC and show cause why no administrative, civil or
criminal sanctions should be imposed on them, and, thus, shifted the
burden of proof to the respondents. Lastly, they sought to have their
cases tried jointly given the identical factual situations surrounding

the alleged violation committed by the respondents.[10]
Respondents also filed a Motion for Continuance of Proceedings on 24

October 1994, wherein they moved for discontinuance of the
investigations and the proceedings before the SEC until the undue
publicity had abated and the investigating officials had become
reasonably free from prejudice and public pressure. [11]
No formal hearings were conducted in connection with the

aforementioned motions, but on 25 January 1995, the SEC issued an
Omnibus Order which thus disposed of the same in this wise: [12]
WHEREFORE, premised on the foregoing considerations,

the Commission resolves and hereby rules:
1. To create a special investigating panel to hear and decide

the instant case in accordance with the Rules of Practice and
Procedure Before the Prosecution and Enforcement
Department (PED), Securities and Exchange Commission, to
be
composed
of
Attys.
James
K. Abugan, Medardo Devera (Prosecution and Enforcement
Department), and Jose Aquino (Brokers and Exchanges
Department), which is hereby directed to expeditiously
resolve the case by conducting continuous hearings, if
possible.
2. To recall the show cause orders dated September 19,

1994 requiring the respondents to appear and show cause
why no administrative, civil or criminal sanctions should be
imposed on them.
3. To deny the Motion for Continuance for lack of merit.
Respondents filed an Omnibus Motion for Partial Reconsideration,

[13]
questioning the creation of the special investigating panel to hear
the case and the denial of the Motion for Continuance. The SEC
denied reconsideration in its Omnibus Order dated 30 March 1995.[14]
The respondents filed a petition before the Court of Appeals docketed
as C.A.-G.R. SP No. 37036, questioning the Omnibus Orders dated 25
January 1995 and 30 March 1995.[15] During the proceedings before
the Court of Appeals, respondents filed a Supplemental
Motion[16] dated 16 May 1995, wherein they prayed for the issuance of
a writ of preliminary injunction enjoining the SEC and its agents from
investigating and proceeding with the hearing of the case against
respondents herein. On 5 May 1995, the Court of Appeals granted
their motion and issued a writ of preliminary injunction, which
effectively enjoined the SEC from filing any criminal, civil or
administrative case against the respondents herein.[17]
On 23 October 1995, the SEC filed a Motion for Leave to Quash

SEC Omnibus Orders so that the case may be investigated by the PED
in accordance with the SEC Rules and Presidential Decree No. 902-A,
and not by the special body whose creation the SEC had earlier
ordered.[18]
The Court of Appeals promulgated a Decision[19] on 20 August

1998. It determined that there were no implementing rules and
regulations regarding disclosure, insider trading, or any of the
provisions of the Revised Securities Acts which the respondents
allegedly violated. The Court of Appeals likewise noted that it found
no statutory authority for the SEC to initiate and file any suit for civil
liability under Sections 8, 30 and 36 of the Revised Securities
Act. Thus, it ruled that no civil, criminal or administrative proceedings
may possibly be held against the respondents without violating their
rights to due process and equal protection. It further resolved that
absent any implementing rules, the SEC cannot be allowed to quash
the assailed Omnibus Orders for the sole purpose of re-filing the same
case against the respondents.[20]
The Court of Appeals further decided that the Rules of Practice
and Procedure Before the PED, which took effect on 14 April 1990, did
not comply with the statutory requirements contained in the
Administrative Code of 1997. Section 8, Rule V of the Rules of Practice
and Procedure Before the PED affords a party the right to be present
but without the right to cross-examine witnesses presented against
him, in violation of Section 12(3), Chapter 3, Book VII of the
Administrative Code. [21]
In the dispositive portion of its Decision, dated 20 August 1998,

the Court of Appeals ruled that[22]:
WHEREFORE, [herein petitioner SECs] Motion for Leave to

Quash SEC Omnibus Orders is hereby DENIED. The petition
for
certiorari,
prohibition
and
mandamus
is
GRANTED.Consequently, all proceedings taken against
[herein respondents] in this case, including the Omnibus
Orders of January 25, 1995 and March 30, 1995 are declared
null and void. The writ of preliminary injunction is
hereby made permanent and, accordingly, [SEC] is
hereby prohibited from taking cognizance or
initiating any action, be they civil, criminal, or
administrative against [respondents] with respect to
Sections 8 (Procedure for Registration), 30 (Insiders duty to
disclose when trading) and 36 (Directors, Officers and
Principal Stockholders) in relation to Sections 46

(Administrative sanctions) 56 (Penalties) 44 (Liabilities of
Controlling persons) and 45 (Investigations, injunctions and
prosecution of offenses) of the Revised Securities Act and
Section 144 (Violations of the Code) of the Corporation
Code. (Emphasis provided.)
The SEC filed a Motion for Reconsideration, which the Court of

Appeals denied in a Resolution[23] issued on 30 September 1998.
Hence, the present petition, which relies on the following

grounds[24]:
THE COURT OF APPEALS ERRED WHEN IT DENIED

PETITIONERS MOTION FOR LEAVE TO QUASH THE ASSAILED
SEC OMNIBUS ORDERS DATED JANUARY 25 ANDMARCH 30,
1995.
II
THE COURT OF APPEALS ERRED WHEN IT RULED THAT

THERE IS NO STATUTORY AUTHORITY WHATSOEVER FOR
PETITIONER SEC TO INITIATE AND FILE ANY SUIT BE THEY
CIVIL, CRIMINAL OR ADMINISTRATIVE AGAINST RESPONDENT
CORPORATION AND ITS DIRECTORS WITH RESPECT TO
SECTION 30 (INSIDERS DUTY TO DISCOLSED [sic] WHEN
TRADING) AND 36 (DIRECTORS OFFICERS AND PRINCIPAL

STOCKHOLDERS) OF THE REVISED SECURITIES ACT; AND
III
THE COURT OF APPEALS ERRED WHEN IT RULED THAT

RULES OF PRACTICE AND PROSECUTION BEFORE THE PED
AND THE SICD RULES OF PROCEDURE ON ADMINISTRATIVE
ACTIONS/PROCEEDINGS[25] ARE INVALID AS THEY FAIL TO
COMPLY WITH THE STATUTORY REQUIREMENTS CONTAINED
IN THE ADMINISTRATIVE CODE OF 1987.
The petition is impressed with merit.
Before discussing the merits of this case, it should be noted

that while this case was pending in this Court, Republic Act No.
8799, otherwise known as the Securities Regulation Code, took
effect on 8 August 2000. Section 8 of Presidential Decree No. 902-A,
as amended, which created the PED, was already repealed as
provided for in Section 76 of the Securities Regulation Code:
SEC. 76. Repealing Clause. The Revised Securities Act
(Batas Pambansa Blg. 178), as amended, in its entirety, and
Sections 2, 4 and 8 of Presidential Decree 902-A, as
amended, are hereby repealed. All other laws, orders, rules
and regulations, or parts thereof, inconsistent with any
provision of this Code are hereby repealed or modified
accordingly.
Thus, under the new law, the PED has been abolished, and the
Securities Regulation Code has taken the place of the Revised
Securities Act.
The Court now proceeds with a discussion of the present case.
I. Sctions 8, 30 and 36 of the Revised Securities Act

do not require the enactment of implementing
rules to make them binding and effective.
The Court of Appeals ruled that absent any implementing rules

for Sections 8, 30 and 36 of the Revised Securities Act, no civil,
criminal or administrative actions can possibly be had against the
respondents without violating their right to due process and equal
protection, citing as its basis the case Yick Wo v. Hopkins.[26] This is
untenable.
In the absence of any constitutional or statutory infirmity, which

may concern Sections 30 and 36 of the Revised Securities Act, this
Court upholds these provisions as legal and binding. It is well settled
that every law has in its favor the presumption of validity. Unless and
until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and binding for all intents and
purposes.[27] The mere absence of implementing rules cannot
effectively invalidate provisions of law, where a reasonable
construction that will support the law may be given. In People v.
Rosenthal,[28] this Court ruled that:
In this connection we cannot pretermit reference to the rule

that legislation should not be held invalid on the ground of
uncertainty if susceptible of any reasonable construction
that will support and give it effect. An Act will not be
declared inoperative and ineffectual on the ground that it
furnishes no adequate means to secure the purpose for
which it is passed, if men of common sense and reason can
devise and provide the means, and all the instrumentalities
necessary for its execution are within the reach of
those intrusted therewith. (25 R.C.L., pp. 810, 811)
In Garcia v. Executive Secretary,[29] the Court underlined the

importance of the presumption of validity of laws and the careful
consideration with which the judiciary strikes down as invalid acts of
the legislature:
The policy of the courts is to avoid ruling on constitutional

questions and to presume that the acts of the political
departments are valid in the absence of a clear and
unmistakable showing to the contrary. To doubt is to
sustain. This presumption is based on the doctrine of
separation of powers which enjoins upon each department a
becoming
respect
for
the
acts
of
the
other
departments. The theory is that as the joint act of Congress
and the President of the Philippines, a law has been
carefully studied and determined to be in accordance with
the fundamental law before it was finally enacted.
The necessity for vesting administrative authorities with power to

make rules and regulations is based on the impracticability of
lawmakers providing general regulations for various and varying
details of management.[30] To rule that the absence of implementing
rules can render ineffective an act of Congress, such as the Revised
Securities Act, would empower the administrative bodies to defeat the
legislative will by delaying the implementing rules. To assert that a law
is less than a law, because it is made to depend on a future event or
act, is to rob the Legislature of the power to act wisely for the public
welfare whenever a law is passed relating to a state of affairs not yet
developed, or to things future and impossible to fully know. [31] It is well
established that administrative authorities have the power to
promulgate rules and regulations to implement a given statute and to
effectuate its policies, provided such rules and regulations conform to
the terms and standards prescribed by the statute as well as purport to
carry into effect its general policies. Nevertheless, it is undisputable
that the rules and regulations cannot assert for themselves a more
extensive prerogative or deviate from the mandate of the statute.
[32]
Moreover, where the statute contains sufficient standards and an
unmistakable intent, as in the case of Sections 30 and 36 of the
Revised Securities Act, there should be no impediment to its
implementation.
The reliance placed by the Court of Appeals in Yick Wo v.

Hopkins[33] shows a glaring error. In the cited case, this Court found
unconstitutional an ordinance which gave the board of supervisors
authority to refuse permission to carry on laundries located in buildings
that were not made of brick and stone, because it violated the equal
protection clause and was highly discriminatory and hostile to Chinese
residents and not because the standards provided therein were vague
or ambiguous.
This Court does not discern any vagueness or ambiguity

in Sections 30 and 36 of the Revised Securities Act, such that the
acts proscribed and/or required would not be understood by a person
of ordinary intelligence.
Section 30 of the Revised Securities Act

Section 30 of the Revised Securities Act reads:
Sec. 30. Insiders duty to disclose when trading.

(a) It shall be unlawful for an insider to sell or buy a security
of the issuer, if he knows a fact of special significance with
respect to the issuer or the security that is not generally
available, unless (1) the insider proves that the fact is
generally available or (2) if the other party to the
transaction (or his agent) is identified, (a) the insider proves
that the other party knows it, or (b) that other party in fact
knows it from the insider or otherwise.
(b) Insider means (1) the issuer, (2) a director or

officer of, or a person controlling, controlled by, or under
common control with, the issuer, (3) a person whose
relationship or former relationship to the issuer gives or
gave him access to a fact of special significance about the
issuer or the security that is not generally available, or (4) a
person who learns such a fact from any of the foregoing
insiders as defined in this subsection, with knowledge that
the person from whom he learns the fact is such an insider.
(c) A fact is of special significance if (a) in addition to

being material it would be likely, on being made generally
available, to affect the market price of a security to a

significant extent, or (b) a reasonable person would
consider it especially important under the circumstances in
determining his course of action in the light of such factors
as the degree of its specificity, the extent of its difference
from information generally available previously, and its
nature and reliability.
(d) This section shall apply to an insider as defined in

subsection (b) (3) hereof only to the extent that he knows of
a fact of special significance by virtue of his being an
insider.
The provision explains in simple terms that the insider's misuse of

nonpublic and undisclosed information is the gravamen of illegal
conduct. The intent of the law is the protection of investors against
fraud, committed when an insider, using secret information, takes
advantage of an uninformed investor. Insiders are obligated to disclose
material information to the other party or abstain from trading the
shares of his corporation. This duty to disclose or abstain is based on
two factors: first, the existence of a relationship giving access, directly
or indirectly, to information intended to be available only for a
corporate purpose and not for the personal benefit of anyone; and
second, the inherent unfairness involved when a party takes advantage
of such information knowing it is unavailable to those with whom he is
dealing.[34]
In the United States (U.S.), the obligation to disclose or abstain

has been traditionally imposed on corporate insiders, particularly
officers, directors, or controlling stockholders, but that definition has
since been expanded.[35] The term insiders now includes persons whose
relationship or former relationship to the issuer gives or gave them

access to a fact of special significance about the issuer or the security
that is not generally available, and one who learns such a fact from an
insider knowing that the person from whom he learns the fact is such
an insider. Insiders have the duty to disclose material facts which are
known to them by virtue of their position but which are not known to
persons with whom they deal and which, if known, would affect their
investment judgment. In some cases, however, there may be valid
corporate reasons for the nondisclosure of material information. Where
such reasons exist, an issuers decision not to make any public
disclosures is not ordinarily considered as a violation of insider
trading. At the same time, the undisclosed information should not be
improperly used for non-corporate purposes, particularly to
disadvantage other persons with whom an insider might transact, and
therefore the insider must abstain from entering into transactions
involving such securities.[36]
Respondents further aver that under Section 30 of the Revised

Securities Act, the SEC still needed to define the following
terms: material
fact,
reasonable
person,
nature
and
[37]
reliability and generally available.
In determining whether or
not these terms are vague, these terms must be evaluated in the
context of Section 30 of the RevisedSecurties Act. To fully understand
how the terms were used in the aforementioned provision, a discussion
of what the law recognizes as a fact of special significance is required,
since the duty to disclose such fact or to abstain from any transaction
is imposed on the insider only in connection with a fact of special
significance.
Under the law, what is required to be disclosed is a fact of

special significance which may be (a) a material fact which would be
likely, on being made generally available, to affect the market price of
a security to a significant extent, or (b) one which a reasonable person
would consider especially important in determining his course of action

with regard to the shares of stock.
(a) Material Fact The concept of a material fact is not a new

one. As early as 1973, the Rules Requiring Disclosure of Material Facts
by Corporations Whose Securities Are Listed In Any Stock Exchange or
Registered/Licensed Under the Securities Act, issued by the SEC on 29
January 1973, explained that [a] fact is material if it induces or tends to
induce or otherwise affect the sale or purchase of its securities. Thus,
Section 30 of the Revised Securities Act provides that if a fact affects
the sale or purchase of securities, as well as its price, then the insider
would be required to disclose such information to the other party to the
transaction involving the securities. This is the first definition given to a
fact of special significance.
(b.1) Reasonable Person The second definition given to a fact of
special significance involves the judgment of a reasonable person.
Contrary to the allegations of the respondents, a reasonable person is
not a problematic legal concept that needs to be clarified for the
purpose of giving effect to a statute; rather, it is the standard on which
most of our legal doctrines stand. The doctrine on negligence uses the
discretion of the reasonable man as the standard. [38] A purchaser in
good faith must also take into account facts which put a reasonable
man on his guard.[39] In addition, it is the belief of the reasonable and
prudent man that an offense was committed that sets the criteria for
probable cause for a warrant of arrest. [40] This Court, in such cases,
differentiated the reasonable and prudent man from a person with
training in the law such as a prosecutor or a judge, and identified him
as the average man on the street, who weighs facts and circumstances
without resorting to the calibrations of our technical rules of evidence
of which his knowledge is nil. Rather, he relies on the calculus of
common sense of which all reasonable men have in abundance. [41] In
the same vein, the U.S. Supreme Court similarly determined its
standards by the actual significance in the deliberations of a
reasonable investor, when it ruled in TSC Industries, Inc. v. Northway,

Inc.,[42] that the determination of materiality requires delicate
assessments of the inferences a reasonable shareholder would draw
from a given set of facts and the significance of those inferences to
him.
(b.2) Nature and Reliability The factors affecting the second

definition of a fact of special significance, which is of such importance
that it is expected to affect the judgment of a reasonable man, were
substantially lifted from a test of materiality pronounced in the case In
the Matter of Investors Management Co., Inc.[43]:
Among the factors to be considered in determining whether

information is material under this test are the degree of its
specificity, the extent to which it differs from information
previously publicly disseminated, and its reliability in light of
its nature and source and the circumstances under which it
was received.
It can be deduced from the foregoing that the nature and reliability of a
significant fact in determining the course of action a reasonable person
takes regarding securities must be clearly viewed in connection with
the particular circumstances of a case. To enumerate all circumstances
that would render the nature and reliability of a fact to be of special
significance is close to impossible. Nevertheless, the proper
adjudicative body would undoubtedly be able to determine if facts of a
certain nature and reliability can influence a reasonable persons
decision to retain, sell or buy securities, and thereafter explain and
justify its factual findings in its decision.
(c) Materiality Concept A discussion of the materiality concept

would be relevant to both a material fact which would affect the
market price of a security to a significant extent and/or a fact which a
reasonable person would consider in determining his or her cause of
action with regard to the shares of stock. Significantly, what is referred
to in our laws as a fact of special significance is referred to in
the U.S. as the materiality concept and the latter is similarly not
provided with a precise definition. In Basic v. Levinson,[44]the U.S.
Supreme Court cautioned against confining materiality to a rigid
formula, stating thus:
A bright-line rule indeed is easier to follow than a standard

that requires the exercise of judgment in the light of all the
circumstances. But ease of application alone is not an
excuse for ignoring the purposes of the Securities Act and
Congress policy decisions. Any approach that designates a
single fact or occurrence as always determinative of an
inherently fact-specific finding such as materiality, must
necessarily be overinclusive or underinclusive.
Moreover, materiality will depend at any given time upon a balancing

of both the indicated probability that the event will occur and the
anticipated magnitude of the event in light of the totality of the
company activity.[45] In drafting the Securities Act of 1934, the U.S.
Congress put emphasis on the limitations to the definition of
materiality:
Although the Committee believes that ideally it would be

desirable to have absolute certainty in the application of the
materiality concept, it is its view that such a goal is illusory
and unrealistic. The materiality concept is judgmental
in nature and it is not possible to translate this into a

numerical formula. The Committee's advice to the
[SEC] is to avoid this quest for certainty and to
continue consideration of materiality on a case-bycase
basis
as
disclosure
problems
are
identified. House Committee on Interstate and Foreign
Commerce, Report of the Advisory Committee on Corporate
Disclosure to the Securities and Exchange Commission, 95th
Cong., 1st Sess., 327 (Comm.Print 1977). (Emphasis
provided.)[46]
(d) Generally Available Section 30 of the Revised Securities

Act allows the insider the defense that in a transaction of
securities, where the insider is in possession of facts of special
significance, such information is generally available to the
public. Whether information found in a newspaper, a specialized
magazine, or any cyberspace media be sufficient for the term
generally available is a matter which may be adjudged given the
particular circumstances of the case. The standards cannot remain
at a standstill. A medium, which is widely used today was, at some
previous point in time, inaccessible to most. Furthermore, it would
be difficult to approximate how the rules may be applied to the
instant case, where investigation has not even been
started. Respondents failed to allege that the negotiations of their
agreement with GHB were made known to the public through any
form of media for there to be a proper appreciation of the issue
presented.
Section 36(a) of the Revised Securities Act
As regards Section 36(a) of the Revised Securities Act,

respondents claim that the term beneficial ownership is vague and that
it requires implementing rules to give effect to the law. Section 36(a) of
the Revised Securities Act is a straightforward provision that imposes
upon (1) a beneficial owner of more than ten percent of any class of
any equity security or (2) a director or any officer of the issuer of such
security, the obligation to submit a statement indicating his or her
ownership of the issuers securities and such changes in his or her
ownership thereof. The said provision reads:
Sec. 36. Directors, officers and principal stockholders.

(a) Every person who is directly or indirectly the beneficial
owner of more than ten per centum of any [class] of any
equity security which is registered pursuant to this Act, or
who is [a] director or an officer of the issuer of such
security, shall file, at the time of the registration of such
security on a securities exchange or by the effective date of
a registration statement or within ten days after he
becomes such a beneficial owner, director or officer, a
statement with the Commission and, if such security is
registered on a securities exchange, also with the exchange,
of the amount of all equity securities of such issuer of which
he is the beneficial owner, and within ten days after the
close of each calendar month thereafter, if there has been a
change in such ownership during such month, shall file with
the Commission, and if such security is registered on a
securities exchange, shall also file with the exchange, a
statement indicating his ownership at the close of the
calendar month and such changes in his ownership as have
occurred during such calendar month. (Emphasis provided.)
Section 36(a) refers to the beneficial owner. Beneficial owner has been
defined in the following manner:
[F]irst, to indicate the interest of a beneficiary in trust

property (also called equitable ownership); and second, to
refer to the power of a corporate shareholder to buy or sell
the shares, though the shareholder is not registered in the
corporations books as the owner. Usually, beneficial
ownership is distinguished from naked ownership, which is
the enjoyment of all the benefits and privileges of
ownership, as against possession of the bare title to
property.[47]
Even assuming that the term beneficial ownership was vague, it would
not affect respondents case, where the respondents are directors
and/or officers of the corporation, who are specifically required to
comply with the reportorial requirements under Section 36(a) of the
Revised Securities Act. The validity of a statute may be contested only
by one who will sustain a direct injury as a result of its enforcement. [48]
Sections 30 and 36 of the Revised Securities Act were enacted to

promote full disclosure in the securities market and prevent
unscrupulous individuals, who by their positions obtain non-public
information, from taking advantage of an uninformed public. No
individual would invest in a market which can be manipulated by a
limited number of corporate insiders. Such reaction would stifle, if not
stunt, the growth of the securities market. To avert the occurrence of
such an event, Section 30 of the Revised Securities Act prevented the
unfair use of non-public information in securities transactions, while
Section 36 allowed the SEC to monitor the transactions entered into by
corporate officers and directors as regards the securities of their
companies.
In the case In the Matter of Investors Management Co.,[49] it was

cautioned that the broad language of the anti-fraud provisions, which
include the provisions on insider trading, should not be circumscribed
by fine distinctions and rigid classifications. The ambit of anti-fraud
provisions is necessarily broad so as to embrace the infinite variety of
deceptive conduct.[50]
In Tatad v. Secretary of Department of Energy,[51] this Court

brushed aside a contention, similar to that made by the respondents in
this case, that certain words or phrases used in a statute do not set
determinate standards, declaring that:
Petitioners contend that the words as far as practicable,

declining and stable should have been defined in R.A.
No. 8180 as they do not set determinate and determinable
standards. This stubborn submission deserves scant
consideration. The dictionary meanings of these words are
well settled and cannot confuse men of reasonable
intelligence. x x x. The fear of petitioners that these words
will result in the exercise of executive discretion that will run
riot is thus groundless. To be sure, the Court has sustained
the validity of similar, if not more general standards in other
cases.
Among the words or phrases that this Court upheld as valid standards
were simplicity and dignity,[52] public interest,[53] and interests of law
and order.[54]
The Revised Securities Act was approved on 23 February

1982. The fact that the Full Disclosure Rules were promulgated by the
SEC only on 24 July 1996 does not render ineffective in the meantime
Section 36 of the Revised Securities Act. It is already unequivocal that
the Revised Securities Act requires full disclosure and the Full
Disclosure Rules were issued to make the enforcement of the law more
consistent, efficient and effective. It is equally reasonable to state that
the disclosure forms later provided by the SEC, do not, in any way
imply that no compliance was required before the forms were
provided. The effectivity of a statute which imposes reportorial
requirements cannot be suspended by the issuance of specified forms,
especially where compliance therewith may be made even without
such forms. The forms merely made more efficient the processing of
requirements already identified by the statute.
For the same reason, the Court of Appeals made an evident mistake
when it ruled that no civil, criminal or administrative actions can
possibly be had against the respondents in connection with Sections 8,
30 and 36 of the Revised Securities Act due to the absence of
implementing rules. These provisions are sufficiently clear and
complete by themselves. Their requirements are specifically set out,
and the acts which are enjoined are determinable. In particular, Section
8[55] of the Revised Securities Act is a straightforward enumeration of
the procedure for the registration of securities and the particular
matters which need to be reported in the registration statement
thereof. The Decision, dated 20 August 1998, provides no valid reason
to exempt the respondent IRC from such requirements. The lack of
implementing rules cannot suspend the effectivityof these provisions.
Thus, this Court cannot find any cogent reason to prevent the SEC from
exercising its authority to investigate respondents for violation of
Section 8 of the Revised Securities Act.
II. The right to cross-examination is not absolute and

cannot be demanded during investigative
proceedings before the PED.
In its assailed Decision dated 20 August 1998, the Court of

Appeals pronounced that the PED Rules of Practice and Procedure was
invalid since Section 8, Rule V[56]thereof failed to provide for the parties
right to cross-examination, in violation of the Administrative Code of
1987 particularly Section 12(3), Chapter 3, Book VII thereof. This ruling
is incorrect.
Firstly, Section 4, Rule I of the PED Rules of Practice and

Procedure, categorically stated that the proceedings before the PED
are summary in nature:
Section 4. Nature of Proceedings Subject to the

requirements of due process, proceedings before the PED
shall be summary in nature not necessarily adhering to or
following the technical rules of evidence obtaining in the
courts of law. The Rules of Court may apply in said
proceedings in suppletory character whenever practicable.
Rule V of the PED Rules of Practice and Procedure further specified

that:
Section 5. Submission of Documents During the preliminary

conference/hearing, or immediately thereafter, the Hearing
Officer may require the parties to simultaneously submit
their respective verified position papers accompanied by all
supporting documents and the affidavits of their witnesses,
if any which shall take the place of their direct
testimony. The parties shall furnish each other with copies
of the position papers together with the supporting
affidavits and documents submitted by them.
Section 6. Determination of necessity of hearing.

Immediately after the submission by the parties of their
position papers and supporting documents, the Hearing
Officer shall determine whether there is a need for a formal
hearing. At this stage, he may, in his discretion, and for the
purpose of making such determination, elicit pertinent facts
or information, including documentary evidence, if any,
from any party or witness to complete, as far as possible,
the facts of the case. Facts or information so elicited may
serve as basis for his clarification or simplifications of the
issues in the case. Admissions and stipulation of facts to
abbreviate the proceedings shall be encouraged.
Section 7. Disposition of Case. If the Hearing Officer finds no

necessity of further hearing after the parties have
submitted their position papers and supporting documents,
he
shall
so
inform
the
parties
stating
the
reasons therefor and shall ask them to acknowledge the fact
that they were so informed by signing the minutes of the
hearing and the case shall be deemed submitted for
resolution.
As such, the PED Rules provided that the Hearing Officer may require
the parties to submit their respective verified position papers, together
with all supporting documents and affidavits of witnesses. A formal
hearing was not mandatory; it was within the discretion of the Hearing
Officer to determine whether there was a need for a formal
hearing.Since, according to the foregoing rules, the holding of a
hearing before the PED is discretionary, then the right to crossexamination could not have been demanded by either party.
Secondly, it must be pointed out that Chapter 3, Book VII of the

Administrative Code, entitled Adjudication, does not affect the
investigatory functions of the agencies.The law creating the PED,
Section 8 of Presidential Decree No. 902-A, as amended, defines the
authority granted to the PED, thus:
SEC. 8. The Prosecution and Enforcement Department shall have, subject

to the Commissions control and supervision, the exclusive authority to
investigate, on complaint or motu proprio, any act or omission of the Board
of Directors/Trustees of corporations, or of partnerships, or of other
associations, or of their stockholders, officers or partners, including any
fraudulent devices, schemes or representations, in violation of any law or
rules and regulations administered and enforced by the Commission; to file
and prosecute in accordance with law and rules and regulations issued by
the Commission and in appropriate cases, the corresponding criminal or
civil case before the Commission or the proper court or body upon prima
facie finding of violation of any laws or rules and regulations administered
and enforced by the Commission; and to perform such other powers and
functions as may be provided by law or duly delegated to it by the
Commission. (Emphasis provided.)
The law creating PED empowers it to investigate violations of the rules

and regulations promulgated by the SEC and to file and prosecute such
cases. It fails to mention any adjudicatory functions insofar as the PED
is concerned. Thus, the PED Rules of Practice and Procedure need not
comply with the provisions of the Administrative Code on adjudication,
particularly Section 12(3), Chapter 3, Book VII.
In Cario v. Commission on Human Rights,[57] this Court sets out the

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

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

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

xx to award or grant judicially in a case of controversy x x x.
In a legal sense, adjudicate means: To settle in the

exercise
of
judicial
authority.
To
determine
finally. Synonymous with adjudge in its strictest sense; and
adjudge means: To pass on judicially, to decide, settle, or
decree, or to sentence or condemn. x x x Implies a judicial
determination of a fact, and the entry of a judgment.
There is no merit to the respondents averment that the sections

under Chapter 3, Book VII of the Administrative Code, do not
distinguish between investigative and adjudicatory functions. Chapter
3, Book VII of the Administrative Code, is unequivocally entitled
Adjudication.
Respondents insist that the PED performs adjudicative functions,

as enumerated under Section 1(h) and (j), Rule II; and Section 2(4),
Rule VII of the PED Rules of Practice and Procedure:
Section 1. Authority of the Prosecution and Enforcement

Department Pursuant to Presidential Decree No. 902-A, as
amended by Presidential Decree No. 1758, the Prosecution
and Enforcement Department is primarily charged with the
following:
xxxx
(h) Suspends or revokes, after proper notice and hearing in

accordance with these Rules, the franchise or certificate of
registration of corporations, partnerships or associations,
upon any of the following grounds:
1. Fraud in procuring its certificate of registration;
2. Serious misrepresentation as to what the corporation can

do or is doing to the great prejudice of or damage to the
general public;
3. Refusal to comply or defiance of any lawful order of the

Commission restraining commission of acts which would
amount to a grave violation of its franchise;
xxxx
(j)
Imposes charges, fines and fees, which by law, it is

authorized to collect;
xxxx
Section 2. Powers of the Hearing Officer. The Hearing Officer

shall have the following powers:
xxxx
4. To cite and/or declare any person in direct or indirect

contempt in accordance with pertinent provisions of the
Rules of Court.
Even assuming that these are adjudicative functions, the PED, in

the instant case, exercised its investigative powers; thus, respondents
do not have the requisite standing to assail the validity of the rules on
adjudication. A valid source of a statute or a rule can only be contested
by one who will sustain a direct injury as a result of its enforcement.
[58]
In the instant case, respondents are only being investigated by the
PED for their alleged failure to disclose their negotiations with GHB and
the transactions entered into by its directors involving IRC shares. The
respondents have not shown themselves to be under any imminent
danger of sustaining any personal injury attributable to the exercise of
adjudicative functions by the SEC. They are not being or about to be
subjected by the PED to charges, fees or fines; to citations for
contempt; or to the cancellation of their certificate of registration
under Section 1(h), Rule II of the PED Rules of Practice and Procedure.
To repeat, the only powers which the PED was likely to exercise
over the respondents were investigative in nature, to wit:
Section 1. Authority of the Prosecution and Enforcement

Department Pursuant to Presidential Decree No. 902-A, as
amended by Presidential Decree No. 1758, the Prosecution
and Enforcement Department is primarily charged with the
following:
xxxx
b.
Initiates proper investigation of corporations and

partnerships or persons, their books, records and other
properties and assets, involving their business
transactions, in coordination with the operating
department involved;
xxxx
e.
Files and prosecutes civil or criminal cases before the

Commission and other courts of justice involving
violations of laws and decrees enforced by the
Commission
and
the
rules
and
regulations
promulgated thereunder;
f.
Prosecutes erring directors, officers and stockholders

of corporations and partnerships, commercial paper
issuers or persons in accordance with the pertinent rules
on procedures;
The authority granted to the PED under Section 1(b), (e), and (f), Rule II
of the PED Rules of Practice and Procedure, need not comply with
Section 12, Chapter 3, Rule VII of the Administrative Code, which
affects only the adjudicatory functions of administrative bodies. Thus,
the PED would still be able to investigate the respondents under its
rules for their alleged failure to disclose their negotiations with GHB
and the transactions entered into by its directors involving IRC shares.
This is not to say that administrative bodies performing

adjudicative functions are required to strictly comply with the
requirements of Chapter 3, Rule VII of the Administrative Code,

particularly, the right to cross-examination. It should be noted that
under Section 2.2 of Executive Order No. 26, issued on 7 October 1992,
abbreviated proceedings are prescribed in the disposition of
administrative cases:
2. Abbreviation of Proceedings. All administrative agencies

are hereby directed to adopt and include in their respective
Rules of Procedure the following provisions:
xxxx
2.2 Rules adopting, unless otherwise provided by special

laws and without prejudice to Section 12, Chapter 3, Book
VII of the Administrative Code of 1987, the mandatory use
of affidavits in lieu of direct testimonies and the preferred
use of depositions whenever practicable and convenient.
As a consequence, in proceedings before administrative or quasijudicial bodies, such as the National Labor Relations Commission and
the Philippine Overseas Employment Agency, created under laws which
authorize summary proceedings, decisions may be reached on the
basis of position papers or other documentary evidence only.They are
not bound by technical rules of procedure and evidence. [59] In fact, the
hearings before such agencies do not connote full adversarial
proceedings.[60] Thus, it is not necessary for the rules to require affiants
to appear and testify and to be cross-examined by the counsel of the
adverse party. To require otherwise would negate the summary nature
of the administrative or quasi-judicial proceedings. [61] In Atlas
Consolidated Mining and Development Corporation v. Factoran, Jr.,
[62]
this Court stated that:
[I]t is sufficient that administrative findings of fact are

supported by evidence, or negatively stated, it is sufficient
that findings of fact are not shown to be unsupported by
evidence. Substantial evidence is all that is needed to
support an administrative finding of fact, and substantial
evidence is such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.
In order to comply with the requirements of due process, what is

required, among other things, is that every litigant be given reasonable
opportunity to appear and defend his right and to introduce relevant
evidence in his favor.[63]
III. The Securities Regulations Code

did not repeal Sections 8, 30 and
36 of the Revised Securities Act
since
said
provisions
were
reenacted in the new law.
The Securities Regulations Code absolutely repealed the Revised

Securities Act. While the absolute repeal of a law generally deprives a
court of its authority to penalize the person charged with the violation
of the old law prior to its appeal, an exception to this rule comes about
when the repealing law punishes the act previously penalized under
the old law. The Court, in Benedicto v. Court of Appeals, sets down the
rules in such instances:[64]
As a rule, an absolute repeal of a penal law has the

effect of depriving the court of its authority to punish a
person charged with violation of the old law prior to its
repeal. This is because an unqualified repeal of a penal law
constitutes a legislative act of rendering legal what had
been previously declared as illegal, such that the offense no
longer exists and it is as if the person who committed it
never did so. There are, however, exceptions to the
rule. One is the inclusion of a saving clause in the repealing
statute that provides that the repeal shall have no effect on
pending actions. Another exception is where the repealing
act reenacts the former statute and punishes the act
previously penalized under the old law. In such instance, the
act committed before the reenactment continues to be an
offense in the statute books and pending cases are not
affected, regardless of whether the new penalty to be
imposed is more favorable to the accused. (Emphasis
provided.)
In the present case, a criminal case may still be filed against the
respondents despite the repeal, since Sections 8, [65] 12,[66] 26,
[67]
27[68] and 23[69] of the Securities Regulations Code impose duties
that are substantially similar to Sections 8, 30 and 36 of the repealed
Revised Securities Act.
Section 8 of the Revised Securities Act, which previously provided

for the registration of securities and the information that needs to be
included in the registration statements, was expanded under Section
12, in connection with Section 8 of the Securities Regulations
Code. Further details of the information required to be disclosed by the
registrant are explained in the Amended Implementing Rules and
Regulations of the Securities Regulations Code, issued on 30 December
2003, particularly Sections 8 and 12 thereof.
Section 30 of the Revised Securities Act has been reenacted as

Section 27 of the Securities Regulations Code, still penalizing an
insiders misuse of material and non-public information about the
issuer, for the purpose of protecting public investors. Section 26 of the
Securities Regulations Code even widens the coverage of punishable
acts, which intend to defraud public investors through various devices,
misinformation and omissions.
Section 23 of the Securities Regulations Code was practically

lifted from Section 36(a) of the Revised Securities Act. Both provisions
impose upon (1) a beneficial owner of more than ten percent of any
class of any equity security or (2) a director or any officer of the issuer
of such security, the obligation to submit a statement indicating his or
her ownership of the issuers securities and such changes in his or her
ownership thereof.
Clearly, the legislature had not intended to deprive the courts of

their authority to punish a person charged with violation of the old law
that was repealed; in this case, the Revised Securities Act.
IV. The SEC retained the jurisdiction to

investigate violations of the
Revised Securities Act, reenacted
in the Securities Regulations
Code, despite the abolition of the
PED.
Section 53 of the Securities Regulations Code clearly provides

that criminal complaints for violations of rules and regulations enforced
or administered by the SEC shall be referred to the Department of
Justice (DOJ) for preliminary investigation, while the SEC nevertheless

retains limited investigatory powers. [70] Additionally, the SEC may still
impose the appropriate administrative sanctions under Section 54 of
the aforementioned law.[71]
In Morato v. Court of Appeals,[72] the cases therein were still

pending before the PED for investigation and the SEC for resolution
when the Securities Regulations Code was enacted. The case before
the SEC involved an intra-corporate dispute, while the subject matter
of the other case investigated by the PED involved the schemes,
devices, and violations of pertinent rules and laws of the companys
board of directors. The enactment of the Securities Regulations Code
did not result in the dismissal of the cases; rather, this Court ordered
the transfer of one case to the proper regional trial court and the SEC
to continue with the investigation of the other case.
The case at bar is comparable to the aforecited case. In this case, the
SEC already commenced the investigative proceedings against
respondents as early as 1994. Respondents were called to appear
before the SEC and explain their failure to disclose pertinent
information on 14 August 1994. Thereafter, the SEC Chairman, having
already made initial findings that respondents failed to make timely
disclosures of their negotiations with GHB, ordered a special
investigating panel to hear the case. The investigative proceedings
were interrupted only by the writ of preliminary injunction issued by
the Court of Appeals, which became permanent by virtue of the
Decision, dated 20 August 1998, in C.A.-G.R. SP No. 37036. During
the pendency of this case, the Securities Regulations Code repealed
the Revised Securities Act. As in Morato v. Court of Appeals, the repeal
cannot deprive SEC of its jurisdiction to continue investigating the
case; or the regional trial court, to hear any case which may later be
filed against the respondents.
V. The instant case

prescribed.
has
not
yet
Respondents have taken the position that this case is moot and
academic, since any criminal complaint that may be filed against them
resulting from the SECs investigation of this case has already
prescribed.[73] They point out that the prescription period applicable to
offenses punished under special laws, such as violations of the Revised
Securities Act, is twelve years under Section 1 of Act No. 3326, as
amended by Act No. 3585 and Act No. 3763, entitled An Act to
Establish Periods of Prescription for Violations Penalized by Special Acts
and Municipal Ordinances and to Provide When Prescription Shall Begin
to Act.[74] Since the offense was committed in 1994, they reasoned that
prescription set in as early as 2006 and rendered this case moot. Such
position, however, is incongruent with the factual circumstances of this
case, as well as the applicable laws and jurisprudence.
It is an established doctrine that a preliminary investigation

interrupts the prescription period.[75] A preliminary investigation is
essentially a determination whether an offense has been committed,
and whether there is probable cause for the accused to have
committed an offense:
A preliminary investigation is merely inquisitorial, and it is

often the only means of discovering the persons who may be
reasonably charged with a crime, to enable the fiscal to
prepare the complaint or information. It is not a trial of the
case on the merits and has no purpose except that of
determining whether a crime has been committed or whether
there is probable cause to believe that the accused is guilty
thereof.[76]
Under Section 45 of the Revised Securities Act, which is

entitled Investigations, Injunctions and Prosecution of Offenses, the
Securities Exchange Commission (SEC) has the authority to make such
investigations as it deems necessary to determine whether any person
has violated or is about to violate any provision of this Act XXX. After a
finding that a person has violated the Revised Securities Act, the SEC
may refer the case to the DOJ for preliminary investigation and
prosecution.
While the SEC investigation serves the same purpose and entails
substantially similar duties as the preliminary investigation conducted
by
the
DOJ,
this
process
cannot
simply
be
[77]
disregarded. In Baviera v. Paglinawan,
this Court enunciated that a
criminal complaint is first filed with the SEC, which determines the
existence of probable cause, before a preliminary investigation can
be commenced by the DOJ. In the aforecited case, the complaint filed
directly with the DOJ was dismissed on the ground that it should have
been filed first with the SEC. Similarly, the offense was a violation of
the Securities Regulations Code, wherein the procedure for criminal
prosecution was reproduced from Section 45 of the Revised Securities
Act. [78] This Court affirmed the dismissal, which it explained thus:
The Court of Appeals held that under the above

provision, a criminal complaint for violation of any law or
rule administered by the SEC must first be filed with the
latter. If the Commission finds that there is probable cause,
then it should refer the case to the DOJ. Since petitioner
failed to comply with the foregoing procedural requirement,
the DOJ did not gravely abuse its discretion in dismissing his
complaint in I.S. No. 2004-229.
A criminal charge for violation of the Securities

Regulation Code is a specialized dispute. Hence, it must
first be referred to an administrative agency of special
competence, i.e., the SEC. Under the doctrine of primary
jurisdiction, courts will not determine a controversy
involving a question within the jurisdiction of the
administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the
specialized knowledge and expertise of said administrative
tribunal to determine technical and intricate matters of fact.
The Securities Regulation Code is a special law.
Its
enforcement is particularly vested in the SEC. Hence, all
complaints for any violation of the Code and its
implementing rules and regulations should be filed with the
SEC. Where the complaint is criminal in nature, the SEC
shall indorse the complaint to the DOJ for preliminary
investigation and prosecution as provided in Section 53.1
earlier quoted.
We thus agree with the Court of Appeals that

petitioner committed a fatal procedural lapse when he filed
his criminal complaint directly with the DOJ. Verily, no grave
abuse of discretion can be ascribed to the DOJ in dismissing
petitioners complaint.
The said case puts in perspective the nature of the investigation undertaken by the
SEC, which is a requisite before a criminal case may be referred to the DOJ. The Court
declared that it is imperative that the criminal prosecution be initiated before the SEC, the
administrative agency with the special competence.
It should be noted that the SEC started investigative proceedings

against the respondents as early as 1994. This investigation effectively
interrupted the prescription period.However, said proceedings were

disrupted by a preliminary injunction issued by the Court of Appeals
on 5 May 1995, which effectively enjoined the SEC from filing any
criminal, civil, or administrative case against the respondents herein.
[79]
Thereafter, on 20 August 1998, the appellate court issued the
assailed Decision in C.A. G.R. SP. No. 37036 ordering that the writ of
injunction be made permanent and prohibiting the SEC from taking
cognizance of and initiating any action against herein respondents. The
SEC was bound to comply with the aforementioned writ of preliminary
injunction and writ of injunction issued by the Court of Appeals
enjoining it from continuing with the investigation of respondents for
12 years. Any deviation by the SEC from the injunctive writs would be
sufficient ground for contempt. Moreover, any step the SEC takes in
defiance of such orders will be considered void for having been taken
against an order issued by a court of competent jurisdiction.
An investigation of the case by any other administrative or

judicial body would likewise be impossible pending the injunctive writs
issued by the Court of Appeals. Given the ruling of this Court
in Baviera v. Paglinawan,[80] the DOJ itself could not have taken
cognizance of the case and conducted its preliminary investigation
without a prior determination of probable cause by the SEC. Thus, even
presuming that the DOJ was not enjoined by the Court of Appeals from
conducting a preliminary investigation, any preliminary investigation
conducted by the DOJ would have been a futile effort since the SEC
had only started with its investigation when respondents themselves
applied for and were granted an injunction by the Court of Appeals.
Moreover, the DOJ could not have conducted a preliminary

investigation or filed a criminal case against the respondents during
the time that issues on the effectivity of Sections 8, 30 and 36 of the
Revised Securities Act and the PED Rules of Practice and Procedure
were still pending before the Court of Appeals. After the Court of
Appeals declared the aforementioned statutory and regulatory

provisions invalid and, thus, no civil, criminal or administrative case
may be filed against the respondents for violations thereof, the DOJ
would have been at a loss, as there was no statutory provision which
respondents could be accused of violating.
Accordingly, it is only after this Court corrects the erroneous
ruling of the Court of Appeals in its Decision dated 20 August 1998 that
either the SEC or DOJ may properly conduct any kind of investigation
against the respondents for violations of Sections 8, 30 and 36 of the
Revised Securities Act. Until then, the prescription period is deemed
interrupted.
To reiterate, the SEC must first conduct its investigations and

make a finding of probable cause in accordance with the doctrine
pronounced in Baviera v. Paglinawan.[81]In this case, the DOJ was
precluded from initiating a preliminary investigation since the SEC was
halted by the Court of Appeals from continuing with its
investigation. Such a situation leaves the prosecution of the case at a
standstill, and neither the SEC nor the DOJ can conduct any
investigation against the respondents, who, in the first place, sought
the injunction to prevent their prosecution. All that the SEC could do in
order to break the impasse was to have the Decision of the Court of
Appeals overturned, as it had done at the earliest opportunity in this
case. Therefore, the period during which the SEC was prevented from
continuing with its investigation should not be counted against it. The
law on the prescription period was never intended to put the
prosecuting bodies in an impossible bind in which the prosecution of a
case would be placed way beyond their control; for even if they avail
themselves of the proper remedy, they would still be barred from
investigating and prosecuting the case.
Indubitably, the prescription period is interrupted by commencing

the proceedings for the prosecution of the accused. In criminal cases,
this is accomplished by initiating the preliminary investigation. The
prosecution of offenses punishable under the Revised Securities Act
and the Securities Regulations Code is initiated by the filing of a
complaint with the SEC or by an investigation conducted by the
SEC motu proprio. Only after a finding of probable cause is made by
the SEC can the DOJ instigate a preliminary investigation. Thus, the
investigation that was commenced by the SEC in 1995, soon after it
discovered the questionable acts of the respondents, effectively
interrupted the prescription period. Given the nature and purpose of
the investigation conducted by the SEC, which is equivalent to the
preliminary investigation conducted by the DOJ in criminal cases, such
investigation would surely interrupt the prescription period.
VI. The Court of Appeals was justified

in denying SECs Motion for Leave
to Quash SEC Omnibus Orders
dated 23 October 1995.
The SEC avers that the Court of Appeals erred when it denied its
Motion for Leave to Quash SEC Omnibus Orders, dated 23 October
1995, in the light of its admission that the PED had the sole authority
to investigate the present case. On this matter, this Court cannot agree
with the SEC.
In the assailed decision, the Court of Appeals denied the SECs

Motion for Leave to Quash SEC Omnibus Orders, since it found other
issues that were more important than whether or not the PED was the
proper body to investigate the matter. Its refusal was premised on its
earlier finding that no criminal, civil, or administrative case may be
filed against the respondents under Sections 8, 30 and 36 of the
Revised Securities Act, due to the absence of any implementing rules
and regulations. Moreover, the validity of the PED Rules on Practice
and Procedure was also raised as an issue. The Court of Appeals, thus,
reasoned that if the quashal of the orders was granted, then it would
be deprived of the opportunity to determine the validity of the
aforementioned rules and statutory provisions. In addition, the SEC
would merely pursue the same case without the Court of Appeals
having determined whether or not it may do so in accordance with due
process requirements. Absent a determination of whether the SEC may
file a case against the respondents based on the assailed provisions of
the Revised Securities Act, it would have been improper for the Court
of Appeals to grant the SECs Motion for Leave to Quash SEC Omnibus
Orders.
IN ALL, this Court rules that no implementing rules were needed

to render effective Sections 8, 30 and 36 of the Revised Securities Act;
nor was the PED Rules of Practice and Procedure invalid, prior to the
enactment of the Securities Regulations Code, for failure to provide
parties with the right to cross-examine the witnesses presented against
them. Thus, the respondents may be investigated by the appropriate
authority under the proper rules of procedure of the Securities
Regulations Code for violations of Sections 8, 30, and 36 of the Revised
Securities Act.[82]
IN VIEW OF THE FOREGOING, the instant Petition

is GRANTED. This Court hereby REVERSES the assailed Decision of
the Court of Appeals promulgated on 20 August 1998 in CA-G.R. SP No.
37036 and LIFTS the permanent injunction issued pursuant
thereto. This Court further DECLARES that the investigation of the
respondents for violations of Sections 8, 30 and 36 of the Revised
Securities Act may be undertaken by the proper authorities in
accordance with the Securities Regulations Code. No costs.
SO ORDERED.
DIGEST
Securities and Exchange Commission v. Interport Resources CorporationNATURE:
Petition for Review on
Certiorari
under Rule 45 of the Rules of Court,assailing the Decision,
1
dated 20 August 1998, rendered by the Court of Appeals inC.A.-G.R. SP No. 37036,
enjoining petitioner Securities and Exchange Commission(SEC) from taking cognizance of
or initiating any action against the respondentcorporation Interport Resources Corporation
(IRC) and members of its board of directors, respondents Manuel S. Recto, Rene S.
Villarica, Pelagio Ricalde, AntonioReina, Francisco Anonuevo, Joseph Sy and Santiago
Tanchan, Jr., with respect toSections 8, 30 and 36 of the Revised Securities Act.
Doctrine
: The mere absence of implementing rules cannot effectively invalidate provisions of law
where a reasonable construction that will support the law may begiven. It is well
established that administrative authorities have the power to promulgate rules and
regulations to confirm to the terms and standards prescribed by the statute as well
as purport to carry into effect its general policies.The insider's misuse of nonpublic and
undisclosed information is the gravamen of illegal conduct. The intent of the law is the
protection of investors against fraud,committed when an insider, using secret information,
takes advantage of anuninformed investor. Insiders are obligated to disclose material
information to theother party or abstain from trading the shares of his corporation. This duty
todisclose or abstain is based n 2 factors: 1) the existence of a relationship giving access,
directly or indirectly to information intended to be available only for acorporate purpose and
not for the personal benefit of anyone and 2) the inherent unfairness involved when a party
takes advantage of such information knowing it isunavailable to those with whom he is
dealing.
Facts:
- The Board of Directors of IRC approved a Memorandum of Agreement with GHB(Ganda
Holdings Berhad). Under said memorandum of agreement,
IRC acquired100% of the entire capital stock of GEHI (Ganda Energy Holdings Inc.)
whichwould own and operate a 102 megawatt gas turbine power generating barge.
Inexchange, IRC will issue to GHB 55% of the expanded capital stock of IRC.
Onthe side, IRC would acquire 67% of the entire capital of PRCI (Philippine RacingClub).- It
is alleged herein that a press release announcing the approval of the agreementwas sent to
the Philippine Stock Exchange through facsimile and the SEC, but thefacsimile machine of
the SEC could not receive it. However, the
SEC receivedreports that the IRC failed to make timely public disclosures of its
negotiationswith GHB and that some of its directors, heavily traded IRC shares
utilizingthis material insider information.
For this reason, the SEC required the directorsto appear before the SEC to explain the
alleged failure to disclose materialinformation as required by the Rules on Disclosure of
Material Facts. Unsatisfiedwith the explanation, the
SEC issued an order finding that the IRC violated theRules in connection with the
then Old Securities Act when it failed to maketimely disclosures of its negotiations
with GHB. In addition, the SEC foundthat the directors of IRC entered into
transactions involving IRC shares inviolation of the Revised Securities Act.
- Respondents, however, questioned the authority of the SEC to investigate on saidmatter
since according to PD 902-A, jurisdiction upon the matter was conferred uponthe PED
(Prosecution and Enforcement Department) of the SEC however, thisissue is already moot
since pending the disposition of the case, the SecuritiesRegulation Code was passed
thereby effectively repealing PD 902-A and abolishingthe PED. They also contended that
their right to due process was violated when theSEC required them to appear before the
SEC to show cause why sanctions shouldnot be imposed upon them since such
requirement shifted the burden of proof torespondents.The case reached the CA and said
court ruled in favor of the respondents andeffectively enjoined the SEC from filing any
criminal, civil or administrative casesagainst respondents. In its resolution, the CA stated that
since there are no rulesand regulations implementing the rules regarding
DISCLOSURE, INSIDERTRADING OR ANY OF THE PROVISIONS OF THE REVISED
SECURITIES ACT,
the SEC has no statutory authority to file any suit against respondents. The CA,therefore,
prohibited the SEC from taking cognizance or initiating any action againstthe respondents for
the alleged violations of the Revised Securities Act.
Issue:
1.) Whether or not the SEC has authority to file suit against respondents for violations of the
RSA.2.) Whether or not their right to due process was violated when the SEC denied
theparties of their right to cross examination.
Ratio:- The Revised Securities Act does not require the enactment of
implementingrules to make it binding and effective. The provisions of the RSA
aresufficiently clear and complete by themselves. The requirements arespecifically
set out and the acts which are enjoined are determinable.
To tulethat absence of implementing rules can render ineffective an act of Congress
wouldempower administrative bodies to defeat the legislative will by delaying
theimplementing rules. Where the statute contains sufficient standards and anunmistakable
intent (as in this case, the RSA) there should be no impediment as toits implementation.- The
court does not discern any vagueness or ambiguity in the RSA such that theacts proscribed
and/or required would not be understood by a person of ordinaryintelligence

SUPREME COURT
Manila
EN BANC
G.R. No. L-19850
January 30, 1964
VIGAN ELECTRIC LIGHT COMPANY, INC., petitioner,

vs.
THE PUBLIC SERVICE COMMISSION, respondent.
Raymundo A. Armovit for petitioner.
Federico S. Arlos and P. H. del Pilar for respondent.
CONCEPCION, J.:
This is an original action for certiorari to annul an order of respondent Public
Service Commission. Upon the filing of the petition and the submission and
approval of the corresponding bond, we issued a writ of injunction restraining
said respondent from enforcing the order complained of Republic Act No. 316,
approved on June 19, 1948, granted petitioner Vigan Electric Light Company,
Inc., a franchise to construct, maintain and operate an electric light, heat and/or
power plant for the purpose of generating and distributing light, heat and/or
power, for sale within the limits of several municipalities of the province of Ilocos
Sur. Accordingly, petitioner secured from respondent on May 31, 1950, a
certificate of public convenience to render electric light, heat and/or power
services in said municipalities and to charge its customers and/or consumers the
following rates:
FLAT RATE
1 20 watt bulb per month ............................................................
P2.30
3.00
4.50
5.50
6.50
7.50
8.00
9.00
13.00
17.00
METER RATE
For the first 15
For the first 15 Kw. hrs. ............................................................
P0.40
For the next 35 Kw. hrs. ............................................................
.30
For the next 50 Kw. hrs. ............................................................
.25
For all over 100 Kw. hrs. ............................................................
.20
Minimum Charge: P6.00 per month for connection of 200 watts

or less; plus P0.01 per watt per month for connection in excess
of 200 watts.
TEMPORARY RATE
P0.01 per watt per night.
On May 22, 1957, petitioner, acting with respondent's approval, entered into a
contract for the purchase of electric power and energy from the National Power
Corporation, for resale, in the course of the business of said petitioner, to its
customers, to whom, in fact, petitioner resold said electric power and energy, in
accordance with the above schedule of rates. About five (5) years later, or on
January 16, 1962, respondent advised petitioner of a conference to be held on
February 12, 1962 for the purpose of revising its authorized rates. Soon
thereafter, petitioner received a letter of respondent informing the former of an
alleged letter-petition of "Congressman Floro Crisologo and 107 alleged
residents of Vigan Ilocos Sur", charging the following:
We also denounce the sale of TWO THOUSAND (2,000) ELECTRIC
METERS in blackmarket by the Vigan Electric Light Company to Avegon
Co., as anomalous and illegal. Said electric meters were imported from
Japan by the Vigan Electric Light Company in behalf of the consumers of
electric current from said electric company. The Vigan Electric Light
Company has commercialized these privilege which property belong to the
people.
We also report that the electric meters in Vigan used by the consumers
had been installed in bad faith and they register excessive rates much
more than the actual consumption.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 petitioner moved to quash the subpoena duces tecum. The
motion was not acted upon in said conference of April 10, 1962. However, it was
then decided that the next conference be held on April 30, 1962, which was later
postponed to May 21, 1962. When petitioner's representatives appeared before
respondent, on the date last mentioned, they were advised by the latter that the
scheduled conference had been cancelled, that the petition to quash
the subpoena duces tecum had been granted, and that, on May 17, 1962,
respondent had issued an order, from which we quote:
We now have the audit report of the General Auditing Office dated May 4,
1962, covering the operation of the Vigan Electric Light Co., Inc. in Vigan,
Bantay and Cagayan, Ilocos Sur, for the period from January 1 to
December 31, 1961. We find from the report that the total invested capital
of the utility as of December 31, 1961, entitled to return amounted to
P118,132.55, and its net operating income for rate purposes of P53,692.34
represents 45.45% of its invested capital; that in order to earn 12% per
annum, the utility should have a computed revenue by rates of
P182,012.78; and that since it realized an actual revenue by rates of
P221,529.17, it had an excess revenue by rates of P39,516.39, which is
17.84% of the actual revenue by rates and 33.45% of the invested capital.
In other words, the present rates of the Vigan Electric Light Co., Inc. may
be reduced by 17.84%, or in round figure, by 18%.
Upon consideration of the foregoing, and finding that the Vigan Electric
Light Co., Inc. is making a net operating profit in excess of the allowable
return of 12% on its invested capital, we believe that it is in the public
interest and in consonance with Section 3 of Republic Act No. 3043 that
reduction of its rates to the extent of its excess revenue be put into effect
immediately.
WHEREFORE, Vigan Electric Light Co., Inc. is hereby ordered to reduce
the present meter rates for its electric service effective upon the billing for
the month of June, 1962, to wit:
METER RATE 24-HOUR SERVICE
For the first 15 kwh per month at P0.328 per kwh
For the next 35 kwh per month at P0.246 per kwh
For the next 50 kwh per month at P0.205 per kwh
For all over 100 kwh per month at P0.164 per kwh
Minimum Charge: P4.90 per month for connection of 200 was or
less plus P0.01 per watt per month for connection in excess of 200
watts.
TEMPORARY LIGHTING
P0.01 per watt per night.
Minimum Charge: P1.00
Billings to customers shall be made to the nearest multiple of five centavos. The
above rates may be revised, modified or altered at anytime for any just cause
and/or in the public service.
Soon later, or on June 25, 1962, petitioner herein instituted the present action
for certiorari to annul said order of May 17, 1962, upon the ground that, since its
Corporate inception in 1948, petitioner it "never was able to give and never made
a single dividend declaration in favor of its stockholders" because its operation
from 1949 to 1961 had resulted in an aggregate loss of P113,351.523; that in the
conference above mentioned petitioner had called the attention of respondent to
the fact that the latter had not furnished the former a "copy of the alleged letterElsa M. Caete CPA, MBA, DBA 127
petition of Congressman Crisologo and others"; that respondent then expressed

the view that there was no necessity of serving copy of said letter to petitioner,
because respondent was merely holding informal conferences to ascertain
whether petitioner would consent to the reduction of its rates; that petitioner
objected to said reduction without a hearing, alleging that its rates could be
reduced only if proven by evidence validly adduced to be excessive; that
petitioner offered to introduce evidence to show the reasonableness of its
aforementioned rates, and even the fairness of its increase; that petitioner was
then assured that it would be furnished a copy of the aforementioned letterpetition 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 functionpartaking of a quasi-judicial character the valid
exercise of which demands previous notice and hearing.
Indeed, sections 16(c) and 20 (a) of Commonwealth Act No. 146, explicitly
require notice Indeed hearing. The pertinent parts thereof provide:
SEC. 16. The Commission shall have the power, upon proper notice and
hearing in accordance with the rules and provision of this Act, subject to
the limitations and exception mentioned and saving provisions to the
contrary:
xxx
xxx
xxx
(c) To fix and determine individual or joint rates, tolls charges,

classifications, or schedules thereof, as well as commutation, mileage
kilometrage, and other special rates which shall be imposed, observed,
and followed thereafter by any public service: Provided, That the
Commission may in its discretion approve rates proposed by public
services provisionally and without necessity of any hearing; but it shall call
a hearing thereof within thirty days thereafter, upon publication and
notice to the concerns operating in the territory affected: Provided, further,
That in case the public service equipment of an operator is use principally
or secondarily for the promotion of a private business the net profits of said
private business shall be considered in relation with the public service of
such operator for the purpose of fixing the rates.
SEC. 20. Acts requiring the approval of the Commission. Subject to
established limitations and exception and saving provisions to the contrary,
it shall be unlawful for any public service or for the owner, lessee or
operator thereof, without the approval and authorization of the Commission
previously had
(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any
individual or joint rates, commutation mileage or other special rate, toll,
fare, charge, classification or itinerary. The Commission shall approve only
those that are just and reasonable and not any that are unjustly
discriminatory or unduly preferential, only upon reasonable notice to the
public services and other parties concerned, giving them reasonable
opportunity to be heard, ... . (Emphasis supplied.)
Since compliance with law must be presumed, it should be assumed that
petitioner's current rates were fixed by respondent after proper notice and
hearing. Hence, modification of such rates cannot be made, over petitioner's
objection, without such notice and hearing, particularly considering that the
factual basis of the action taken by respondent is assailed by petitioner. The rule
applicable is set forth in the American Jurisprudence the following language:
Whether notice and a hearing in proceedings before a public service
commission are necessary depends chiefly upon statutory or constitutional
provisions applicable to such proceedings, which make notice and hearing,

prerequisite to action by the commission, and upon the nature and object
of such proceedings, that is, whether the proceedings, are, on the one
hand, legislative and rule-making in character, or are, on the other hand,
determinative and judicial or quasi-judicial, affecting the rights an property
of private or specific persons. As a general rule, a public utility must be
afforded some opportunity to be heard as to the propriety and
reasonableness of rates fixed for its services by a public service
commission.(43 Am. Jur. 716; Emphasis supplied.)
Wherefore, we hold that the determination of the issue involved in the order
complained of partakes of the nature of a quasi-judicial function and that having
been issued without previous notice and hearing said order is clearly violative of
the due process clause, and, hence, null and void, so that a motion for
reconsideration thereof is not an absolute prerequisite to the institution of the
present action for certiorari (Ayson vs. Republic. 50 Off. Gaz., 5810). For this
reason considering that said order was being made effective on June 1, 1962, or
almost immediately after its issuance (on May 17, 1962), we find that petitioner
was justified in commencing this proceedings without first filing said motion
(Guerrero vs. Carbonell, L-7180, March 15, 1955).
WHEREFORE, the writ prayed for is granted and the preliminary injunction
issued by this Court hereby made permanent. It is so ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Paredes,
Dizon, Regala and Makalintal, JJ., concur.
Barrera, J., took no part.
DIGEST
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 ratefixing is a legislative function; that legislative or rule-making powers
may constitutionally be exercised without previous notice or hearing.
Although the rule-making 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 quasi-judicial
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.
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.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 164026
December 23, 2008
SECURITIES AND EXCHANGE COMMISSION, petitioner,

vs.
GMA NETWORK, INC., respondent.
DECISION
TINGA, J.:
Petitioner Securities and Exchange Commission (SEC) assails the
Decision1 dated February 20, 2004 of the Court of Appeals in CA-G.R. SP No.
68163, which directed that SEC Memorandum Circular No. 1, Series of 1986
should be the basis for computing the filing fee relative to GMA Network, Inc.s
(GMAs) application for the amendment of its articles of incorporation for
purposes of extending its corporate term.
The undisputed facts as narrated by the appellate court are as follows:
On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for
brevity), a domestic corporation, filed an application for collective approval
of various amendments to its Articles of Incorporation and By-Laws with
the respondent Securities and Exchange Commission, (SEC, for brevity).
The amendments applied for include, among others, the change in the
corporate name of petitioner from "Republic Broadcasting System, Inc." to
"GMA Network, Inc." as well as the extension of the corporate term for
another fifty (50) years from and after June 16, 2000.
Upon such filing, the petitioner had been assessed by the SECs Corporate
and Legal Department a separate filing fee for the application for extension
of corporate term equivalent to 1/10 of 1% of its authorized capital stock
plus 20% thereof or an amount of P1,212,200.00.
On September 26, 1995, the petitioner informed the SEC of its intention to
contest the legality and propriety of the said assessment. However, the
petitioner requested the SEC to approve the other amendments being
requested by the petitioner without being deemed to have withdrawn its

application for extension of corporate term.
On October 20, 1995, the petitioner formally protested the assessment
amounting to P1,212,200.00 for its application for extension of corporate
term.
On February 20, 1996, the SEC approved the other amendments to the
petitioners Articles of Incorporation, specifically Article 1 thereof referring
to the corporate name of the petitioner as well as Article 2 thereof referring
to the principal purpose for which the petitioner was formed.
On March 19, 1996, the petitioner requested for an official opinion/ruling
from the SEC on the validity and propriety of the assessment for
application for extension of its corporate term.
Consequently, the respondent SEC, through Associate Commissioner Fe
Eloisa C. Gloria, on April 18, 1996, issued its ruling upholding the validity of
the questioned assessment, the dispositive portion of which states:
"In light of the foregoing, we believe that the questioned assessment
is in accordance with law. Accordingly, you are hereby required to
comply with the required filing fee."
An appeal from the aforequoted ruling of the respondent SEC was
subsequently taken by the petitioner on the ground that the assessment of
filing fees for the petitioners application for extension of corporate term
equivalent to 1/10 of 1% of the authorized capital stock plus 20% thereof is
not in accordance with law.
On September 26, 2001, following three (3) motions for early resolution
filed by the petitioner, the respondent SEC En Banc issued the assailed
order dismissing the petitioners appeal, the dispositive portion of which
provides as follows:
WHEREFORE, for lack of merit, the instant Appeal is hereby
dismissed.
SO ORDERED.2
In its petition for review3 with the Court of Appeals, GMA argued that its
application for the extension of its corporate term is akin to an amendment and
not to a filing of new articles of incorporation. It further averred that SEC
Memorandum Circular No. 2, Series of 1994, which the SEC used as basis for
assessing P1,212,200.00 as filing fee for the extension of GMAs corporate term,
is not valid.
The appellate court agreed with the SECs submission that an extension of the
corporate term is a grant of a fresh license for a corporation to act as a juridical
being endowed with the powers expressly bestowed by the State. As such, it is
not an ordinary amendment but is analogous to the filing of new articles of
incorporation.
However, the Court of Appeals ruled that Memorandum Circular No. 2, Series of
1994 is legally invalid and ineffective for not having been published in
accordance with law. The challenged memorandum circular, according to the
appellate court, is not merely an internal or interpretative rule, but affects the
public in general. Hence, its publication is required for its effectivity.
The appellate court denied reconsideration in a Resolution4 dated June 9, 2004.
In its Memorandum5 dated September 6, 2005, the SEC argues that it issued the
questioned memorandum circular in the exercise of its delegated legislative
power to fix fees and charges. The filing fees required by it are allegedly
uniformly imposed on the transacting public and are essential to its supervisory
and regulatory functions. The fees are not a form of penalty or sanction and,
therefore, require no publication.
For its part, GMA points out in its Memorandum,6 dated September 23, 2005, that
SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fees for
amended articles of incorporation where the amendment consists of extending
the term of corporate existence. The questioned circular, on the other hand,
refers only to filing fees for articles of incorporation. Thus, GMA argues that the
former circular, being the one that specifically treats of applications for the
extension of corporate term, should apply to its case.
Assuming that Memorandum Circular No. 2, Series of 1994 is applicable, GMA
avers that the latter did not take effect and cannot be the basis for the imposition
of the fees stated therein for the reasons that it was neither filed with the
University of the Philippines Law Center nor published either in the Official
Gazette or in a newspaper of general circulation as required under existing laws.
It should be mentioned at the outset that the authority of the SEC to collect and
receive fees as authorized by law is not in question.7 Its power to collect fees for
examining and filing articles of incorporation and by-laws and amendments
thereto, certificates of increase or decrease of the capital stock, among others, is
recognized. Likewise established is its power under Sec. 7 of P.D. No. 902-A to
recommend to the President the revision, alteration, amendment or adjustment of
the charges which it is authorized to collect.
The subject of the present inquiry is not the authority of the SEC to collect and
receive fees and charges, but rather the validity of its imposition on the basis of a
memorandum circular which, the Court of Appeals held, is ineffective.
Republic Act No. 3531 (R.A. No. 3531) provides that where the amendment
consists in extending the term of corporate existence, the SEC "shall be entitled
to collect and receive for the filing of the amended articles of incorporation the
same fees collectible under existing law as the filing of articles of
incorporation."8 As is clearly the import of this law, the SEC shall be entitled to
collect and receive the same fees it assesses and collects both for the filing of
articles of incorporation and the filing of an amended articles of incorporation for
purposes of extending the term of corporate existence.
The SEC, effectuating its mandate under the aforequoted law and other pertinent
laws,9 issued SEC Memorandum Circular No. 1, Series of 1986, imposing the
filing fee of 1/10 of 1% of the authorized capital stock but not less than P300.00
nor more than P100,000.00 for stock corporations, and 1/10 of 1% of the
authorized capital stock but not less than P200.00 nor more than P100,000.00 for
stock corporations without par value, for the filing of amended articles of
incorporation where the amendment consists of extending the term of corporate
existence.
Several years after, the SEC issued Memorandum Circular No. 2, Series of 1994,
imposing new fees and charges and deleting the maximum filing fee set forth in
SEC Circular No. 1, Series of 1986, such that the fee for the filing of articles of
incorporation became 1/10 of 1% of the authorized capital stock plus 20% thereof
but not less thanP500.00.
A reading of the two circulars readily reveals that they indeed pertain to different
matters, as GMA points out. SEC Memorandum Circular No. 1, Series of 1986
refers to the filing fee for the amendment of articles of incorporation to extend
corporate life, while Memorandum Circular No. 2, Series of 1994 pertains to the
filing fee for articles of incorporation. Thus, as GMA argues, the former circular,
being squarely applicable and, more importantly, being more favorable to it,
should be followed.
What this proposition fails to consider, however, is the clear directive of R.A. No.
3531 to impose the same fees for the filing of articles of incorporation and the
filing of amended articles of incorporation to reflect an extension of corporate
term. R.A. No. 3531 provides an unmistakable standard which should guide the
SEC in fixing and imposing its rates and fees. If such mandate were the only
consideration, the Court would have been inclined to rule that the SEC was
correct in imposing the filing fees as outlined in the questioned memorandum
circular, GMAs argument notwithstanding.
However, we agree with the Court of Appeals that the questioned memorandum
circular is invalid as it does not appear from the records that it has been
published in the Official Gazette or in a newspaper of general circulation.
Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that
"laws shall take effect after fifteen days following the completion of their
publication either in the Official Gazette or in a newspaper of general circulation
in the Philippines, unless it is otherwise provided."
In Taada v. Tuvera,10 the Court, expounding on the publication requirement,
held:
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which
shall begin fifteen days after publication unless a different effectivity date is
fixed by the legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers
whenever the same are validly delegated by the legislature, or, at present,
directly conferred by the Constitution. Administrative rules and regulations
must also be published if their purpose is to enforce or implement existing
law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not the
public, need not be published. Neither is publication required of the socalled letters of instructions issued by administrative superiors concerning
the rules or guidelines to be followed by their subordinates in the
performance of their duties.11
The questioned memorandum circular, furthermore, has not been filed with the
Office of the National Administrative Register of the University of the Philippines
Law Center as required in the Administrative Code of 1987.12
In Philsa International Placement and Services Corp. v. Secretary of Labor and
Employment,13 Memorandum Circular No. 2, Series of 1983 of the Philippine
Overseas Employment Administration, which provided for the schedule of
placement and documentation fees for private employment agencies or authority

holders, was struck down as it was not published or filed with the National
Administrative Register.
The questioned memorandum circular, it should be emphasized, cannot be
construed as simply interpretative of R.A. No. 3531. This administrative issuance
is an implementation of the mandate of R.A.
No. 3531 and indubitably regulates and affects the public at large. It cannot,
therefore, be considered a mere internal rule or regulation, nor an interpretation
of the law, but a rule which must be declared ineffective as it was neither
published nor filed with the Office of the National Administrative Register.
A related factor which precludes consideration of the questioned issuance as
interpretative in nature merely is the fact the SECs assessment amounting
to P1,212,200.00 is exceedingly unreasonable and amounts to an imposition. A
filing fee, by legal definition, is that charged by a public official to accept a
document for processing. The fee should be just, fair, and proportionate to the
service for which the fee is being collected, in this case, the examination and
verification of the documents submitted by GMA to warrant an extension of its
corporate term.
Rate-fixing is a legislative function which concededly has been delegated to the
SEC by R.A. No. 3531 and other pertinent laws. The due process clause,
however, permits the courts to determine whether the regulation issued by the
SEC is reasonable and within the bounds of its rate-fixing authority and to strike it
down when it arbitrarily infringes on a persons right to property.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in
CA-G.R. SP No. 68163, dated February 20, 2004, and its Resolution, dated June
9, 2004, are AFFIRMED. No pronouncement as to costs.
SO ORDERED.
DIGEST
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Republic of the Philippines

Lupo, herein petitioner, as Chief of Personnel Section, Telecom Office, Region V

Elsa M. Caete CPA, MBA, DBA 4

Elsa M. Caete CPA, MBA, DBA 6

Republic of the Philippines

February 19, 1991

ARDELIZA MEDENILLA, petitioner,

Elsa M. Caete CPA, MBA, DBA 9

GUTIERREZ, JR., J.:

Further, it also appears that Medenilla is a contractual employee assigned

4. Education background and eligibility of Medenilla.

. . . Notwithstanding, we are inclined to reconsider our position that the

The edge of 1.30% of Medenilla over Dellosa cannot be considered by this

resolutions, therefore, were allegedly issued in violation of the petitioner's

Elsa M. Caete CPA, MBA, DBA 14

The qualification standards for the contested position are as follows:

Elsa M. Caete CPA, MBA, DBA 15

The Commission contends that the experience of Medenilla is basically in the

Elsa M. Caete CPA, MBA, DBA 16

She obtained in her on-going MBA studies at the De La Salle University,

Sec. 4. Officers and employees holding permanent appointments shall be

. . . It is not enough that an aspirant is qualified and eligible or that he is

Elsa M. Caete CPA, MBA, DBA 19

Petitioner was a contractual employee of the DPWH occupying

Elsa M. Caete CPA, MBA, DBA 21

Elsa M. Caete CPA, MBA, DBA 22

In 1990, private respondents filed separate complaints against petitioner

Elsa M. Caete CPA, MBA, DBA 23

"WHEREFORE, premises considered, the respondent is hereby ordered to pay the

supervised the work of the employees thereat. As manager, he had sufficient

Elsa M. Caete CPA, MBA, DBA 27

Elsa M. Caete CPA, MBA, DBA 30

Republic of the Philippines

G.R. No. 110571 March 10, 1994

application to amend its BOI certificate of registration by changing the scope of

I. Respondent court has no jurisdiction to entertain Mariwasa's

from which an appeal is now allowed by statute to the Court of

Elsa M. Caete CPA, MBA, DBA 34

and of subparagraph (1) of the third paragraph and subparagraph

of . . . quasi-judicial agencies, instrumentalities, boards or

this Court. Only decisions, orders or rulings of a Constitutional Commission (Civil

Elsa M. Caete CPA, MBA, DBA 37

The case of Bustos v. Lucero 11 distinguished between rights created by a

Judiciary Reorganization Act of 1980 or B.P. 129 and Circular 1-91,

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filed by Mariano Villena in November 1955; that two motions for

due process of law provision of the Constitution as in the appeal the

capriciously, and illegally dismissing the appeal of plaintiff Magno

substantial error in the findings of the Director of Forestry which could

phase of the hearing if any, was omitted? No facts of this or similar

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There are of course, limits to the exercise of administrative discretion.

Absence of previous notice is not itself a substantial defect; what the

It was not essential that the appellant be represented by a lawyer. The

It should be noted that the order of the Acting Secretary of ANR, a

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We have examined the documents and pleadings reproduced in the

Elsa M. Caete CPA, MBA, DBA 50

Elsa M. Caete CPA, MBA, DBA 51

Sandoval-Gutierrez, and Carpio-Morales,

Elsa M. Caete CPA, MBA, DBA 54

Corona, J., on leave.