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[March 16, 1994] / 231 SCRA 292

FACTS: In 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish filed a letter-
complaint with LLDA seeking to stop the operation of the open garbage dumpsite in Barangay
Camarin, Caloocan City due to its harmful effects on the health of the residents and the possibility of
pollution of the water content of the surrounding area. LLDA conducted an investigation and found
that the City Government of Caloocan was maintaining an open dumpsite without first securing an
Environmental Compliance Certificate from the EMB and clearance from LLDA. After a public
hearing, LLDA issued a Cease and Desist Order ordering the City Government of Caloocan to
completely desist from dumping any form of garbage at the Camarin dumpsite.

ISSUE: W/N LLDA has power and authority to issue a cease and desist order under RA 4850.

HELD: YES. By its express terms, RA 4850 authorizes the LLDA to "make, alter or modify order
requiring the discontinuance of pollution." Section 4(d) explicitly authorizes the LLDA
to make whatever order may be necessary in the exercise of its jurisdiction. EVEN THOUGH LLDA
was not expressly conferred the power "to issue an ex-parte cease and desist order" in a language
similar to the express grant to the defunct National Pollution Control Commission, it would be a
mistake to draw therefrom the conclusion that there is a denial of the power to issue the order in
question when the power "to make, alter or modify orders requiring the discontinuance of
pollution" is expressly and clearly bestowed upon the LLDA by EO 927, series of 1983.

While it is a fundamental rule that an administrative agency has only such powers as are expressly
granted to it by law, it is likewise a settled rule that an administrative agency has also such powers
as are necessarily implied in the exercise of its express powers. In the exercise, therefore, of its
express powers under its charter as a regulatory and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is,
perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency.
[May 29, 1987] / 150 SCRA 565

In 1977, Rogelio Coria was hired by Rizal Empire Insurance Group as a casual employee with a salary
of P10/day. In 1978, he was made a regular employee, having been appointed as clerk-typist.
However, in 1983, Coria was dismissed from work, allegedly on the grounds of tardiness and
unexcused absences. Accordingly, he filed a complaint with the Ministry of Labor and Employment.
The Labor Arbiter reinstated Coria to his position with back wages. NLRC dismissed the appeal of
RIZAL EMPIRE INSURANCE for having been filed out of time. RIZAL EMPIRE claims that NLRC
committed a grave abuse of discretion amounting to lack of jurisdiction in arbitrarily dismissing Rizal
Empire’s appeal on a technicality. It invokes the Rules of Court provision on liberal construction of
the Rules in the interest of substantial justice.

ISSUE: W/N the current case is still within the jurisdiction of the SUPREME COURT to review.

HELD: NO. Pursuant to the "no extension policy" of the NLRC, the aforesaid motion for extension
of time was denied in its resolution dated November 15, 1985 and the appeal was dismissed for
having been filed out of time. It is an elementary rule in administrative law that administrative
regulations and policies enacted by administrative bodies to interpret the law which they are
entrusted to enforce, have the force of law, and are entitled to great respect. Under the provisions of
the Revised NLRC Rules, the decision appealed from in this case has become final and executory and
can no longer be subject to appeal.
[June 18, 1987] / 151 SCRA 208

FACTS: Valentin Tio filed the present petition on his own behalf and purportedly on behalf of other
videogram operators adversely affected. It assails the constitutionality of PD 1987 entitled "An Act
Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the
videogram industry. The rationale behind the enactment of the DECREE points to the proliferation
and unregulated circulation of videograms, which consequently have greatly prejudiced the
operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by
at least 40%, and a tremendous drop in taxes, resulting in substantial losses in government revenues.

ISSUE: W/N PD 1987 contains “an undue delegation of legislative power. “

HELD: NO. The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct
assistance of other agencies and units of the government and deputize, for a fixed and limited
period, the heads or personnel of such agencies and units to perform enforcement functions for the
Board" is not a delegation of the power to legislate but merely a conferment of authority or
discretion as to its execution, enforcement, and implementation.

"The true distinction is between the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring authority or discretion as to its execution
to be exercised under and in pursuance of the law. The first cannot be done; to the latter, no valid
objection can be made."
[October 18, 1977] /79 SCRA 450

FACTS: The Secretary of Agriculture and Natural Resources, upon the recommendation of the
Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84, prohibiting electro
fishing in all Philippine waters. In 1969, five accused were charged in the municipal court of Sta.
Cruz, Laguna with having violated Fisheries AO no. 84-1. It was alleged that the five accused
resorted to electro fishing, using their motor banca and electrocuting device. With the use of these
devices or equipments, they would catch fish thru electric current, which would destroy any
aquatic animals within its cuffed reach, to the detriment and prejudice of the populace".

ISSUE: W/N Fisheries Administrative Orders Nos. 84 and 84-1, prohibiting electro fishing, is valid.

HELD: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceeded their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1, and those
orders are not warranted under the Fisheries Commission, RA 3512. The Fisheries Law does not
expressly prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of
Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. In
other words, AO nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis.

Administrative regulations adopted under legislative authority by a particular department must be in

harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its
general provisions. By such regulations, the law itself cannot be extended. An administrative agency
cannot amend an act of Congress. The rule-making power must be confined to details for regulating
the mode or proceeding to carry into effect the law as it his been enacted. The power cannot be
extended to amending or expanding the statutory requirements or to embrace matters not covered
by the statute. Rules that subvert the statute cannot be sanctioned.

A penal statute is strictly construed. While an administrative agency has the right to make ranks and
regulations to carry into effect a law already enacted, that power should not be confused with the
power to enact a criminal statute. An administrative agency can have only the administrative or
policing powers expressly or by necessary implication conferred upon it.
[August 29, 1996] / 261 SCRA 236

FACTS: Fortune Tobacco Corporation is engaged in the manufacture of different brands of cigarettes.
On various dates, the Philippine Patent Office issued to the corporation separate certificates of
trademark registration over "Champion," "Hope," and "More" cigarettes. The CIR initially classified
'Champion,' 'Hope,' and 'More' as foreign brands since they were listed in the World Tobacco
Directory as belonging to foreign companies. However, Fortune changed the names of 'Hope' to
Hope Luxury' and 'More' to 'Premium More,' thereby removing the said brands from the foreign
brand category. Ad Valorem taxes were imposed on these brands. In 1993, RA 7654 was enacted,
which provided that 55% ad valorem tax will be imposed on local brands carrying a foreign name. A
month after its enactment, BIR issued Revenue Memorandum Circular No. 37-93, which provided
that "HOPE," "MORE" and "CHAMPION" are considered locally manufactured cigarettes bearing a
foreign brand subject to the 55% ad valorem tax on cigarettes.

ISSUE: W/N RMC 37-93 was valid.

HELD: NO. When an administrative rule is merely interpretative in nature, its applicability needs
nothing further than its bare issuance for it gives no real consequence more than what the law itself
has already prescribed. When the administrative rule goes beyond merely providing for the means
that can facilitate or render least cumbersome the implementation of the law but substantially adds
to or increases the burden of those governed, it behooves the agency to accord at least to those
directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance
is given the force and effect of law.

A reading of RMC 37-93, particularly considering the circumstances under which it has been issued,
convinces the Court that the circular cannot be viewed simply as a corrective measure or merely as
construing Section 142(c)(1) of the NIRC, as amended, but has been made in order to place "Hope
Luxury," "Premium More" and "Champion" within the classification of locally manufactured
cigarettes bearing foreign brands and to thereby have them covered by RA 7654. In so doing, the BIR
has not simply interpreted the law; verily, it legislated under its quasi-legislative authority.
[August 10, 1992] / 212 SCRA 425

FACTS: Maynard Peralta was appointed Trade-Specialist II in DTI. In December 1989, Peralta received
his initial salary. Since he had no accumulated leave credits, DTI deducted from his salary the amount
corresponding to his absences. Upon inquiry, Peralta was informed that "when an employee is on
leave without pay on a day before or on a day immediately preceding a Saturday, Sunday or Holiday,
such Saturday, Sunday, or Holiday shall also be without pay.” Peralta argued that a reading of the
General Leave Law as contained in the Revised Administrative Code and the Civil Service Rules and
Regulation fails to disclose a specific provision which supports the CSC rule at issue. That being the
case, he contends that he cannot be deprived of his pay corresponding to the intervening Saturdays,
Sundays or Holidays.

ISSUE: W/N the CSC policy in question is valid.

HELD: NO. When an administrative or executive agency renders an opinion or issues a statement of
policy, it merely interprets a pre-existing law. The administrative interpretation of the law is at best
advisory, for it is the courts that finally determine what the law means. Administrative construction
is not necessarily binding upon the courts. Action of an administrative agency may be disturbed or
set aside by the judicial department if there is an error of law, or abuse of power or lack of
jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a
legislative enactment. In promulgating the questioned policy, CSC interpreted the provisions of RA
2625 amending the Revised Administrative Code. R.A. 2625 specifically provides that government
employees are entitled to 15 days vacation leave of absence with full pay and 15 days sick leave with
full pay, exclusive of Saturdays, Sundays and Holidays in both cases. Thus, the law speaks of the
granting of a right and the law does not provide for a distinction between those who have
accumulated leave credits and those who have exhausted their leave credits in order to enjoy such
[July 21, 2006] / GR no. 148083

FACTS: RA 7432 granted senior citizens several privileges, one of which was obtaining a 20% discount
from all establishments relative to the use of transportation services, hotels and similar lodging
establishments, restaurants and recreation centers and purchase of medicines anywhere in the
country. The law also provided that the private establishments giving the discount to senior citizens
may claim the cost as tax credit. In compliance with the law, the Bureau of Internal Revenue issued
Revenue Regulations No. 2-94, which defined "tax credit" as synonymous with tax deduction.
Bicolandia Drug Corporation argued that since Section 4 of R.A. 7432 provided that discounts granted
to senior citizens may be claimed as tax credit, Section 2(i) of Revenue Regulations No. 2-94, which
referred to the tax credit as the amount representing the 20% discount that "shall be deducted by
the said establishments from their gross income for income tax purposes and from their gross sales
for value-added tax or other percentage tax purposes," is illegal, void and without effect for being
inconsistent with the statute it implements.

ISSUE: W/N Revised Regulations no. 2-94, which defined "tax credit" as synonymous with tax
deduction, is valid.

HELD: NO. The interpretation of an administrative government agency, which is tasked to implement
the statute, is accorded great respect and ordinarily controls the construction of the courts. Be that
as it may, the definition laid down in the questioned Revenue Regulations can still be subjected to
scrutiny. Courts will not hesitate to set aside an executive interpretation when it is clearly erroneous.
Thus, RR 2-94 is null and void for failing to conform to the law it sought to implement. In case of
discrepancy between the basic law and a rule or regulation issued to implement said law, the basic
law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic
as Chairman of the Housing and Urban Development Coordinating Council (HUDCC)
[August 3, 2006]

The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with prayer
for the issuance of a temporary restraining order and/or writ of preliminary injunction, seeks to
prevent respondents from enforcing the implementing rules and regulations (IRR) of Republic Act No.
9207, otherwise known as the "National Government Center (NGC) Housing and Land Utilization Act
of 2003."

Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners association from
the West Side of the NGC. It is represented by its president, Nestorio F. Apolinario, Jr., who is a co-
petitioner in his own personal capacity and on behalf of the association.

Named respondents are the ex-officio members of the National Government Center Administration
Committee (Committee). At the filing of the instant petition, the Committee was composed of
Secretary Michael Defensor, Chairman of the Housing and Urban Development Coordinating Council
(HUDCC), Atty. Edgardo Pamintuan, General Manager of the National Housing Authority (NHA), Mr.
Percival Chavez, Chairman of the Presidential Commission for Urban Poor (PCUP), Mayor Feliciano
Belmonte of Quezon City, Secretary Elisea Gozun of the Department of Environment and Natural
Resources (DENR), and Secretary Florante Soriquez of the Department of Public Works and Highways

Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized the creation and
development of what is now known as the National Government Center (NGC).

On March 5, 1972, former President Ferdinand Marcos issued Proclamation No. 1826, reserving a
parcel of land in Constitution Hills, Quezon City, covering a little over 440 hectares as a national
government site to be known as the NGC. 1

On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137, excluding 150 of
the 440 hectares of the reserved site from the coverage of Proclamation No. 1826 and authorizing
instead the disposition of the excluded portion by direct sale to the bona fide residents therein. 2

In view of the rapid increase in population density in the portion excluded by Proclamation No. 137
from the coverage of Proclamation No. 1826, former President Fidel Ramos issued Proclamation No.
248 on September 7, 1993, authorizing the vertical development of the excluded portion to
maximize the number of families who can effectively become beneficiaries of the government’s
socialized housing program. 3

On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No. 9207. Among the
salient provisions of the law are the following:

Sec. 2. Declaration of Policy. – It is hereby declared the policy of the State to secure the land tenure
of the urban poor. Toward this end, lands located in the NGC, Quezon City shall be utilized for
housing, socioeconomic, civic, educational, religious and other purposes.
Sec. 3. Disposition of Certain Portions of the National Government Center Site to Bona Fide Residents.
– Proclamation No. 1826, Series of 1979, is hereby amended by excluding from the coverage thereof,
184 hectares on the west side and 238 hectares on the east side of Commonwealth Avenue, and
declaring the same open for disposition to bona fide residents therein: Provided, That the
determination of the bona fide residents on the west side shall be based on the census survey
conducted in 1994 and the determination of the bona fide residents on the east side shall be based
on the census survey conducted in 1994 and occupancy verification survey conducted in 2000:
Provided, further, That all existing legal agreements, programs and plans signed, drawn up or
implemented and actions taken, consistent with the provisions of this Act are hereby adopted.

Sec. 4. Disposition of Certain Portions of the National Government Center Site for Local Government
or Community Facilities, Socioeconomic, Charitable, Educational and Religious Purposes. – Certain
portions of land within the aforesaid area for local government or community facilities,
socioeconomic, charitable, educational and religious institutions are hereby reserved for disposition
for such purposes: Provided, That only those institutions already operating and with existing facilities
or structures, or those occupying the land may avail of the disposition program established under the
provisions this Act; Provided, further, That in ascertaining the specific areas that may be disposed of
in favor of these institutions, the existing site allocation shall be used as basis
therefore: Provided, finally. That in determining the reasonable lot allocation of
such institutions without specific lot allocations, the land area that may be allocated to them shall be
based on the area actually used by said institutions at the time of effectivity of this Act. (Emphasis

In accordance with Section 5 of R.A. No. 9207, 4 the Committee formulated the Implementing Rules
and Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Petitioners subsequently filed the instant
petition, raising the following issues:

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND

WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1) AND 3.2 (C.1) OF THE RULES AND

First, the procedural matters.

The Office of the Solicitor General (OSG) argues that petitioner Association cannot question the
implementation of Section 3.1 (b.2) and Section 3.2 (c.1) since it does not claim any right over the
NGC East Side. Section 3.1 (b.2) provides for the maximum lot area that may be awarded to a
resident-beneficiary of the NGC East Side, while Section 3.2 (c.1) imposes a lot price escalation
penalty to a qualified beneficiary who fails to execute a contract to sell within the prescribed
period. 6 Also, the OSG contends that since petitioner association is not the duly recognized people’s
organization in the NGC and since petitioners not qualify as beneficiaries, they cannot question the
manner of disposition of lots in the NGC. 7
"Legal standing" or locus standi has been defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that
is being challenged…. The gist of the question of standing is whether a party alleges "such personal
stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional
questions." 8

Petitioner association has the legal standing to institute the instant petition, whether or not it is the
duly recognized association of homeowners in the NGC. There is no dispute that the individual
members of petitioner association are residents of the NGC. As such they are covered and stand to
be either benefited or injured by the enforcement of the IRR, particularly as regards the selection
process of beneficiaries and lot allocation to qualified beneficiaries. Thus, petitioner association may
assail those provisions in the IRR which it believes to be unfavorable to the rights of its members.
Contrary to the OSG’s allegation that the failure of petitioner association and its members to qualify
as beneficiaries effectively bars them from questioning the provisions of the IRR, such circumstance
precisely operates to confer on them the legal personality to assail the IRR. Certainly, petitioner and
its members have sustained direct injury arising from the enforcement of the IRR in that they have
been disqualified and eliminated from the selection process. While it is true that petitioners claim
rights over the NGC West Side only and thus cannot be affected by the implementation of Section 3.1
(b.2), which refers to the NGC East Side, the rest of the assailed provisions of the IRR, namely,
Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots in the West Side itself or all
the lots in the NGC.

We cannot, therefore, agree with the OSG on the issue of locus standi. The petition does not merit
dismissal on that ground.

There are, however, other procedural impediments to the granting of the instant petition. The OSG
claims that the instant petition for prohibition is an improper remedy because the writ of prohibition
does not lie against the exercise of a quasi-legislative function. 9 Since in issuing the questioned IRR
of R.A. No. 9207, the Committee was not exercising judicial, quasi-judicial or ministerial function,
which is the scope of a petition for prohibition under Section 2, Rule 65 of the 1997 Rules of Civil
Procedure, the instant prohibition should be dismissed outright, the OSG contends. For their part,
respondent Mayor of Quezon City 10 and respondent NHA 11 contend that petitioners violated the
doctrine of hierarchy of courts in filing the instant petition with this Court and not with the Court of
Appeals, which has concurrent jurisdiction over a petition for prohibition.

The cited breaches are mortal. The petition deserves to be spurned as a consequence.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or

administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make
rules and regulations which results in delegated legislation that is within the confines of the granting
statute and the doctrine of non-delegability and separability of powers. 12

In questioning the validity or constitutionality of a rule or regulation issued by an administrative

agency, a party need not exhaust administrative remedies before going to court. This principle,
however, applies only where the act of the administrative agency concerned was performed
pursuant to its quasi-judicial function, and not when the assailed act pertained to its rule-making or
quasi-legislative power. 13

The assailed IRR was issued pursuant to the quasi-legislative power of the Committee expressly
authorized by R.A. No. 9207. The petition rests mainly on the theory that the assailed IRR issued by
the Committee is invalid on the ground that it is not germane to the object and purpose of the
statute it seeks to implement. Where what is assailed is the validity or constitutionality of a rule or
regulation issued by the administrative agency in the performance of its quasi-legislative function,
the regular courts have jurisdiction to pass upon the same. 14

Since the regular courts have jurisdiction to pass upon the validity of the assailed IRR issued by the
Committee in the exercise of its quasi-legislative power, the judicial course to assail its validity must
follow the doctrine of hierarchy of courts. Although the Supreme Court, Court of Appeals and the
Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not
give the petitioner unrestricted freedom of choice of court forum. 15

True, this Court has the full discretionary power to take cognizance of the petition filed directly with
it if compelling reasons, or the nature and importance of the issues raised, so warrant. 16 A direct
invocation of the Court’s original jurisdiction to issue these writs should be allowed only when there
are special and important reasons therefor, clearly and specifically set out in the petition. 17

In Heirs of Bertuldo Hinog v. Melicor, 18 the Court said that it will not entertain direct resort to it
unless the redress desired cannot be obtained in the appropriate courts, and exceptional and
compelling circumstances, such as cases of national interest and of serious implications, justify the
availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary
jurisdiction. 19 A perusal, however, of the petition for prohibition shows no compelling, special or
important reasons to warrant the Court’s taking cognizance of the petition in the first instance.
Petitioner also failed to state any reason that precludes the lower courts from passing upon the
validity of the questioned IRR. Moreover, as provided in Section 5, Article VIII of the

Constitution, 20 the Court’s power to evaluate the validity of an implementing rule or regulation is
generally appellate in nature. Thus, following the doctrine of hierarchy of courts, the instant petition
should have been initially filed with the Regional Trial Court.

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a
quasi-legislative function. Prohibition is an extraordinary writ directed against any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, ordering said entity or person to desist from further proceedings when said proceedings
are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with grave abuse
of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law. 21 Prohibition lies against judicial or ministerial functions, but not against legislative or
quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a lower court
within the limits of its jurisdiction in order to maintain the administration of justice in orderly
channels. 22 Prohibition is the proper remedy to afford relief against usurpation of jurisdiction or
power by an inferior court, or when, in the exercise of jurisdiction in handling matters clearly within
its cognizance the inferior court transgresses the bounds prescribed to it by the law, or where there
is no adequate remedy available in the ordinary course of law by which such relief can be
obtained. 23 Where the principal relief sought is to invalidate an IRR, petitioners’ remedy is an
ordinary action for its nullification, an action which properly falls under the jurisdiction of the
Regional Trial Court. In any case, petitioners’ allegation that "respondents are performing or
threatening to perform functions without or in excess of their jurisdiction" may appropriately be
enjoined by the trial court through a writ of injunction or a temporary restraining order.

In a number of petitions, 24 the Court adequately resolved them on other grounds without
adjudicating on the constitutionality issue when there were no compelling reasons to pass upon the
same. In like manner, the instant petition may be dismissed based on the foregoing procedural
grounds. Yet, the Court will not shirk from its duty to rule on the merits of this petition to facilitate
the speedy resolution of this case. In proper cases, procedural rules may be relaxed or suspended in
the interest of substantial justice. And the power of the Court to except a particular case from its
rules whenever the purposes of justice require it cannot be questioned. 25

Now, we turn to the substantive aspects of the petition. The outcome, however, is just as dismal for

Petitioners assail the following provisions of the IRR:

Section 3. Disposition of Certain portions of the NGC Site to the bonafide residents

3.1. Period for Qualification of Beneficiaries


(a.4) Processing and evaluation of qualifications shall be based on the Code of Policies and subject to
the condition that a beneficiary is qualified to acquire only one (1) lot with a minimum of 36 sq. m.
and maximum of 54 sq. m. and subject further to the availability of lots.


(b.2) Applications for qualification as beneficiary shall be processed and evaluated based on the Code
of Policies including the minimum and maximum lot allocation of 35 sq. m. and 60 sq. m.


3.2. Execution of the Contract to Sell

(a) Westside

(a.1) All qualified beneficiaries shall execute Contract to Sell (CTS) within sixty (60) days from the
effectivity of the IRR in order to avail of the lot at P700.00 per sq. m.


(c) for both eastside and westside

(c.1) Qualified beneficiaries who failed to execute CTS on the deadline set in item a.1 above in case
of westside and in case of eastside six (6) months after approval of the subdivision plan shall be
subjected to lot price escalation.

The rate shall be based on the formula to be set by the National Housing Authority factoring therein
the affordability criteria. The new rate shall be approved by the NGC-Administration Committee

Petitioners contend that the aforequoted provisions of the IRR are constitutionally infirm as they are
not germane to and/or are in conflict with the object and purpose of the law sought to be

First. According to petitioners, the limitation on the areas to be awarded to qualified beneficiaries
under Sec. 3.1 (a.4) and (b.2) of the IRR is not in harmony with the provisions of R.A. No. 9207, which
mandates that the lot allocation to qualified beneficiaries shall be based on the area actually used or
occupied by bona fide residents without limitation to area. The argument is utterly baseless.

The beneficiaries of lot allocations in the NGC may be classified into two groups, namely, the urban
poor or the bona fide residents within the NGC site and certain government institutions including the
local government. Section 3, R.A. No. 9207 mandates the allocation of additional property within the
NGC for disposition to its bona fide residents and the manner by which this area may be distributed
to qualified beneficiaries. Section 4, R.A. No. 9207, on the other hand, governs the lot disposition to
government institutions. While it is true that Section 4 of R.A. No. 9207 has a proviso mandating that
the lot allocation shall be based on the land area actually used or occupied at the time of the law’s
effectivity, this proviso applies only to institutional beneficiaries consisting of the local government,
socioeconomic, charitable, educational and religious institutions which do not have specific lot
allocations, and not to the bona fide residents of NGC. There is no proviso which even hints that
a bona fide resident of the NGC is likewise entitled to the lot area actually occupied by him.

Petitioners’ interpretation is also not supported by the policy of R.A. No. 9207 and the prior
proclamations establishing the NGC. The government’s policy to set aside public property aims to
benefit not only the urban poor but also the local government and various government institutions
devoted to socioeconomic, charitable, educational and

religious purposes. 26 Thus, although Proclamation No. 137 authorized the sale of lots to bona
fide residents in the NGC, only a third of the entire area of the NGC was declared open for disposition
subject to the condition that those portions being used or earmarked for public or quasi-public
purposes would be excluded from the housing program for NGC residents. The same policy
of rational and optimal land use can be read in Proclamation No. 248 issued by then President
Ramos. Although the proclamation recognized the rapid increase in the population density in the
NGC, it did not allocate additional property within the NGC for urban poor housing but instead
authorized the vertical development of the same 150 hectares identified previously by Proclamation
No. 137 since the distribution of individual lots would not adequately provide for the housing needs
of all the bona fide residents in the NGC.

In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries shall be allocated
the areas actually occupied by them; hence, the portions intended for the institutional beneficiaries
is fixed and cannot be allocated for other non-institutional beneficiaries. Thus, the areas not
intended for institutional beneficiaries would have to be equitably distributed among the bona
fide residents of the NGC. In order to accommodate all qualified residents, a limitation on the area to
be awarded to each beneficiary must be fixed as a necessary consequence.

Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate of a lot at P700.00
per sq. m., R.A. No. 9207 does not provide for the price. They add Sec. 3.2 (c.1) penalizes a
beneficiary who fails to execute a contract to sell within six (6) months from the approval of the
subdivision plan by imposing a price escalation, while there is no such penalty imposed by R.A. No.
9207. Thus, they conclude that the assailed provisions conflict with R.A. No. 9207 and should be
nullified. The argument deserves scant consideration.

Where a rule or regulation has a provision not expressly stated or contained in the statute being
implemented, that provision does not necessarily contradict the statute. A legislative rule is in the
nature of subordinate legislation, designed to implement a primary legislation by providing the
details thereof. 27 All that is required is that the regulation should be germane to the objects and
purposes of the law; that the regulation be not in contradiction to but in conformity with the
standards prescribed by the law. 28

In Section 5 of R.A. No. 9207, the Committee is granted the power to administer, formulate
guidelines and policies, and implement the disposition of the areas covered by the law. Implicit in
this authority and the statute’s objective of urban poor housing is the power of the Committee to
formulate the manner by which the reserved property may be allocated to the beneficiaries. Under
this broad power, the Committee is mandated to fill in the details such as the qualifications of
beneficiaries, the selling price of the lots, the terms and conditions governing the sale and other key
particulars necessary to implement the objective of the law. These details are purposely omitted
from the statute and their determination is left to the discretion of the Committee because the latter
possesses special knowledge and technical expertise over these matters.

The Committee’s authority to fix the selling price of the lots may be likened to the rate-fixing power
of administrative agencies. In case of a delegation of rate-fixing power, the only standard which the
legislature is required to prescribe for the guidance of the administrative authority is that the rate be
reasonable and just. However, it has been held that even in the absence of an express requirement
as to reasonableness, this standard may be implied. 29 In this regard, petitioners do not even claim
that the selling price of the lots is unreasonable.

The provision on the price escalation clause as a penalty imposed to a beneficiary who fails to
execute a contract to sell within the prescribed period is also within the Committee’s authority to
formulate guidelines and policies to implement R.A. No. 9207. The Committee has the power to lay
down the terms and conditions governing the disposition of said lots, provided that these are
reasonable and just. There is nothing objectionable about prescribing a period within which the
parties must execute the contract to sell. This condition can ordinarily be found in a contract to sell
and is not contrary to law, morals, good customs, public order, or public policy.

Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a procedural flaw.
According to them the IRR was adopted and concurred in by several representatives of people’s
organizations contrary to the express mandate of R.A. No. 9207 that only two representatives from
duly recognized peoples’ organizations must compose the NGCAC which promulgated the assailed
IRR. It is worth noting that petitioner association is not a duly recognized people’s organization.

In subordinate legislation, as long as the passage of the rule or regulation had the benefit of a
hearing, the procedural due process requirement is deemed complied with. That there is observance
of more than the minimum requirements of due process in the adoption of the questioned IRR is not
a ground to invalidate the same.

In sum, the petition lacks merit and suffers from procedural deficiencies.

WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against petitioners.



[March 30, 1970]

Appeal from the order of the Court of First Instance of Cotabato dismissing, on a motion to dismiss,
its Civil Case No. 2012 — for certiorari, injunction and damages — on the ground that the complaint
therein states no cause of action, and from the subsequent order of the court a quo denying the
motion for the reconsideration of the said order of dismissal.

The record shows that at the time Civil Case No. 2012 was commenced in the court below, appellant
Teodoro Santiago, Jr. was a pupil in Grade Six at the public school named Sero Elementary School in
Cotabato City. As the school year 1964-1965 was then about to end, the "Committee On The Rating
Of Students For Honor" was constituted by the teachers concerned at said school for the purpose of
selecting the "honor students" of its graduating class. With the school Principal, Mrs. Aurora Lorena,
as chairman, and Juanita Bautista, Rosalinda Alpas, Rebecca Matugas, Milkita Inamac, Romeo
Agustin, Aida Camino and Luna Sarmago, as members, the above-named committee deliberated and
finally adjudged Socorro Medina, Patricia Liñgat and Teodoro C. Santiago, Jr. as first, second and third
honors, respectively. The school's graduation exercises were thereafter set for May 21, 1965; but
three days before that date, the "third placer" Teodoro Santiago, Jr., represented by his mother, and
with his father as counsel, sought the invalidation of the "ranking of honor students" thus made, by
instituting the above-mentioned civil case in the Court of First Instance of Cotabato, against the
above-named committee members along with the District Supervisor and the Academic Supervisor
of the place.

The corresponding complaint filed alleged, inter alia: that plaintiff-petitioner Teodoro C. Santiago, Jr.
is a sixth grader at the Sero Elementary School in Cotabato City scheduled to be graduated on May
21st, 1965 with the honor rank of third place, which is disputed; that the teachers of the school had
been made respondents as they compose the "Committee on the Rating of Student for Honor",
whose grave abuse of official discretion is the subject of suit, while the other defendants were
included as Principal, District Supervisor and Academic Supervisor of the school; that Teodoro
Santiago, Jr. had been a consistent honor pupil from Grade I to Grade V of the Sero Elementary
School, while Patricia Liñgat (second placer in the disputed ranking in Grade VI) had never been a
close rival of petitioner before, except in Grade V wherein she ranked third; that Santiago, Jr. had
been prejudiced, while his closest rival had been so much benefited, by the circumstance that the
latter, Socorro Medina, was coached and tutored during the summer vacation of 1964 by Mrs. Alpas
who became the teacher of both pupils in English in Grade VI, resulting in the far lead Medina
obtained over the other pupil; that the committee referred to in this case had been illegally
constituted as the same was composed of all the Grade VI teachers only, in violation of the Service
Manual for Teachers of the Bureau of Public Schools which provides that the committee to select the
honor students should be composed of all teachers in Grades V and VI; that there are direct and
circumstantial matters, which shall be proven during the trial, wherein respondents have exercised
grave abuse of discretion and irregularities, such as the changing of the final ratings on the grading
sheets of Socorro Medina and Patricia Liñgat from 80% to 85%, and some teachers giving petitioner a
starting grade of 75% in Grade VI, which proves that there has already an intention to pull him to a
much lower rank at the end of the school year; that several district examinations outside of teachers'
daily units and other than periodical tests were given, ratings in which were heavily considered in the
determination of periodical ratings, whereas according to the Academic Supervisor and Acting
Division Superintendent of schools of the place such district examinations were not advisable; that
there was a unanimous agreement and understanding among the respondent teachers to insult and
prejudice the second and third honors by rating Socorro Medina with a perfect score, which is very
unnatural; that the words "first place" in petitioner's certificate in Grade I was erased and replaced
with the words "second place", which is an instance of the unjust and discriminating abuses
committed by the respondent teachers in the disputed selection of honor pupils they made; that
petitioner personally appealed the matter to the School Principal, to the District Supervisor, and to
the Academic Supervisor, but said officials "passed the buck to each other" to delay his grievances,
and as to appeal to higher authorities will be too late, there is no other speedy and adequate remedy
under the circumstances; and, that petitioner and his parents suffered mental and moral damages in
the amount of P10,000.00. They prayed the court, among others, to set aside the final list of honor
students in Grade VI of the Sero Elementary School for that school year 1964-1965, and, during the
pendency of the suit, to enjoin the respondent teachers from officially and formally publishing and
proclaiming the said honor pupils in Grade VI in the graduation exercises the school was scheduled to
hold on the 21st of May of that year 1965. The injunction prayed for was denied by the lower court
in its order of May 20, 1965, the said court reasoning out that the graduation exercises were then
already set on the following day, May 21, 1965, and the restraining of the same would be shocking to
the school authorities, parents, and the community who had eagerly looked forward to the coming
of that yearly happy event. As scheduled, the graduation exercises of the Sero Elementary School for
the school year 1964-1965 was held on May 21, with the same protested list of honor students.

Having been required by the above-mentioned order to answer the petition within ten (10) days,
respondents moved for the dismissal of the case instead. Under date of May 24, 1965, they filed a
motion to dismiss, on the grounds (1) that the action for certiorari was improper, and (2) that even
assuming the propriety of the action, the question brought before the court had already become
academic. This was opposed by petitioner.

In an order dated June 4, 1965, the motion to dismiss of respondents was granted, the court
reasoning thus:

The respondents now move to dismiss the petition for being improper and for being
academic. In order to resolve the motion to dismiss, the Court has carefully
examined the petition to determine the sufficiency of the alleged cause of action
constituting the special civil action of certiorari.

The pertinent portions of the petition alleging 'grave abuse of discretion' are found
in paragraphs 3, 4, 5, 6, 7, 8, 9 and 10. These allegations may be substantially
summarized as follows: Paragraph 3 alleges that since grades one to six, the students
closely contending for class honors were Socorro Medina, Teodoro Santiago, Jr.,
Dolores Dalican and Patricia Liñgat.

Socorro Medina obtained first honor thrice (grades I, V and VI); once second honor
(grade IV), and twice third place (grades II and III).

Teodoro Santiago, Jr. obtained first place once (grade IV); four times second place
(grades I, II, III, and V) and once third place (grade VI).

Dolores Dalican obtained twice first place (grades II, III); once third place (grade I).

Patricia Liñgat once third place (grade V); and once second place (grade VI).
That as now ranked in the graduation Liñgat is given second place while Teodoro
Santiago, Jr., is given the third place only. This is the ranking now disputed by
petitioner, Teodoro Santiago, Jr.

Paragraph 4 alleges that Socorro Medina was tutored in the summer of 1964 by Mrs.
Rosalinda Alpas who became her English teacher in the sixth grade; that as such,
Mrs. Alpas unjustly favored Socorro against her rivals.

Paragraph 5 alleges that the teachers who composed the committee on honor
students are all grade six teachers while the Service Manual For Teachers provides
that the committee shall be composed of the teachers from the fifth and sixth

Paragraph 6 alleges that there are direct and circumstantial evidence showing the
change of ratings of Socorro Medina and Patricia Liñgat from 80% to 85% and the
intention to junk petitioner to a lower rank.

Paragraph 7 alleges that the giving of district examinations upon which ratings were
partly based were not advisable.

Paragraph 8 alleges that the teachers rated Socorro Medina a perfect pupil which is

Paragraph 9 alleges that on the first grade certificate of the petitioner the word "First
Place" was erased and changed to "Second Place".

Paragraph 10 alleges that petitioner personally appealed to the school authorities

but they only 'passed the buck to each other.'


Rule 65, Section 1 of the Rules of Court provides:

'Section 1. Petition for certiorari. — When any tribunal, board, or

officer exercising judicial functions, has acted without or in excess of
its or his jurisdiction, or with grave abuse of discretion and there is
no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court alleging the facts with certainty and
praying that judgment be rendered annulling or modifying the
proceedings, as the law requires, of such tribunal, board or officer.'

'The petition shall be accompanied by a certified true copy of the

judgment or order subject thereof, together with copies of all
pleadings and documents relevant and pertinent thereto.'

It is striking, indeed, that this petition has not been accompanied by a certified true
copy of the judgment or order complained of, together with all pleadings and
documents which are relevant thereto, as required by the second, paragraph of the
aforequoted rule. This violation renders the petition extremely indefinite and
uncertain. There is no written formal judgment or order of respondents that is
submitted for revision or correction of this Court. This violation is fatal to the


All that the petition alleges is that the petitioner personally appealed to the school
authorities who only 'passed the buck to each other.' This allegation does not show
that petitioner formally availed of and exhausted the administrative remedies of the
Department of Education. The petition implies that this is the first formal complaint
of petitioner against his teachers. The administrative agencies of the Department of
Education could have investigated the grievances of the petitioner with dispatch and
give effective remedies, but petitioner negligently abandoned them. Petitioner
cannot now claim that he lacked any plain, speedy and adequate remedy.


Allegations relating to the alleged 'grave abuse of discretion' on the part of teachers
refer to errors, mistakes, or irregularities rather than to real grave abuse of discretion
that would amount to lack of jurisdiction. Mere commission of errors in the exercise
of jurisdiction may not be corrected by means of certiorari.

In view of the foregoing, the Court is of the opinion, and so holds, that the petition
states no cause of action and should be, as it is hereby dismissed.

Upon receipt of a copy of the above-quoted order, the petitioner moved for the reconsideration
thereof, but the same proved to be futile, hence, this appeal.

Appellant here assails the holding of the lower court that his petition states no cause of action on the
grounds — discussed by the court a quo in the appealed order above-quoted — (1) that the petition
does not comply with the second paragraph of Sec. 1 of Rule 65 because it has not been
accompanied by a certified true copy of the judgment or order subject thereof, together with copies
of all pleadings and documents relevant and pertinent thereto; (2) that administrative remedies were
not first exhausted; and (3) that there was no grave abuse of discretion on the part of the teachers
who constituted the committee referred to. On the other hand, appellees maintain that the court
below did not err in dismissing the case on said grounds. Further, they argue in favor of the
questioned order of dismissal upon the additional ground that the "committee on the ratings of
students for honor" whose actions are here condemned by appellant is not the "tribunal, board or
officer exercising judicial functions" against which an action for certiorari may lie under Section 1 of
Rule 65.

The last point raised by appellees deserves first consideration, for if really the said committee of
teachers does not fall within the category of the tribunal, board, or officer exercising judicial
functions contemplated by Rule 65, further discussion of the issues raised by appellant may no
longer be necessary. To resolve this problem the following tests may be employed:
In this jurisdiction certiorari is a special civil action instituted against 'any tribunal,
board, or officer exercising judicial functions.' (Section 1, Rule 67.) A judicial function
is an act performed by virtue of judicial powers; the exercise of a judicial function is
the doing of something in the nature of the action of the court (34 C.J. 1182). In
order that a special civil action of certiorari may be invoked in this jurisdiction the
following circumstances must exist: (1) that there must be a specific controversy
involving rights of persons or property and said controversy is brought before a
tribunal, board or officer for hearing and determination of their respective rights and

'Judicial action is an adjudication upon the rights of parties who in

general appear or are brought before the tribunal by notice or
process, and upon whose claims some decision or judgment is
rendered. It implies impartiality, disinterestedness, a weighing of
adverse claims, and is inconsistent with discretion on the one hand
— for the tribunal must decide according to law and the rights of the
parties — or with dictation on the other; for in the first instance it
must exercise its own judgment under the law, and not act under a
mandate from another power. ... The character of its action in a
given case must decide whether that action is judicial, ministerial, or
legislative, or whether it be simply that of a public agent of the
country or State, as in its varied jurisdictions it may by turns be
each.' (In Re Saline County Subscription, 100 Am. Dec. 337, 338,
cited in Southeastern Greyhound Lines v. Georgia Public Service
Commission, 181 S. E. 836-837.)

'It may be said generally that the exercise of judicial function is to

determine what the law is, and what the legal rights of parties are,
with respect to a matter in controversy; and whenever an officer is
clothed with that authority, and undertakes to determine those
questions, he acts judicially.' (State ex rel. Board of Commissioners of
St. Louis County, et al. v. Dunn, 90 N. W. 772-773.)

(2) the tribunal, board or officer before whom the controversy is brought must have
the power and authority to pronounce judgment and render a decision on the
controversy construing and applying the laws to that end.

'The phrase "judicial power" is not capable of a precise definition

which would be applicable to all cases. The term has been variously
defined as the authority to determine the rights of persons or
property by arbitrating between adversaries in specific controversies
at the instance of a party thereto; the authority exercised by that
department of government which is charged with the declaration of
what the law is and its construction so far as it is written law; the
authority or power vested in the judges or in the courts; the
authority vested in some court, officer, or persons to hear and
determine when the rights of persons or property or the propriety of
doing an act is the subject matter of adjudication; the power
belonging to or emanating from a judge as such; the power
conferred upon a public officer, involving the exercise of judgment
and discretion in the determination of questions of right in specific
cases affecting the interest of persons or property, as distinguished
from ministerial power or authority to carry out the mandates of
judicial power or the law; the power exercised by courts in hearing
and determining cases before them, or some matter incidental
thereto, and of which they have jurisdiction; the power of a court to
decide and pronounce a judgment; the power which adjudicates
upon and protects the rights and interests of individual citizens, and
to that end construes and applies the law. "Judicial power" implies
the construction of laws and the adjudication of legal rights. It
includes the power to hear and determine but not everyone who
may hear and determine has judicial power. The term "judicial
power" does not necessarily include the power to hear and
determine a matter that is not in the nature of a suit or action
between the parties.' (34 C.J. 1183-1184.) .

(3) the tribunal, board or officer must pertain to that branch of the sovereign power
which belongs to the judiciary, or at least, which does not belong to the legislative or
executive department.

... the distinction between legislative or ministerial functions and

judicial functions is difficult to point out. What is a judicial function
does not depend solely upon the mental operation by which it is
performed or the importance of the act. In solving this question, due
regard must be had to the organic law of the state and the division
of power of government. In the discharge of executive and legislative
duties, the exercise of discretion and judgment of the highest order
is necessary, and matters of the greatest weight and importance are
dealt with. It is not enough to make a function judicial that it
requires discretion, deliberation, thought, and judgment. It must be
the exercise of discretion and judgment within that subdivision of
the sovereign power which belongs to the judiciary, or, at least,
which does not belong to the legislative or executive department. If
the matter, in respect to which it is exercised, belongs to either of
the two last-named departments of government, it is not judicial. As
to what is judicial and what is not seems to be better indicated by
the nature of a thing, than its definition.' (Whealing & Elm Grove
Railroad Co. Appt. v. Town of Triadelphia, et al., 4 L.R.A. (N. S.) pp.
321, 328-329.) [Emphasis supplied]1


impossible, precisely to define what are judicial or quasi judicial acts,
and there is considerable conflict in the decisions in regard thereto,
in connection with the law as to the right to the writ of certiorari. It
is clear, however, that it is the nature of the act to be performed,
rather than of the office, board, or body which performs it, that
determines whether or not it is the discharge of a judicial or quasi-
judicial function. It is not essential that the proceedings should be
strictly and technically judicial, in the sense in which that word is
used when applied to the courts of justice, but it is sufficient if they
are quasi judicial. It is enough if the officers act judicially in making
their decision, whatever may be their public character. ...' "In State
ex rel. Board of Commrs. vs. Dunn (86 Minn. 301, 304), the following
statements were made:

'The precise line of demarkation between what are judicial and what
are administrative or ministerial functions is often difficult to
determine. The exercise of judicial functions may involve the
performance of legislative or administrative duties, and the
performance of administrative or ministerial duties, may, in a
measure, involve the exercise of judicial functions. It may be said
generally that the exercise of judicial functions is to determine what
the law is, and what the legal rights of parties are, with respect to a
matter in controversy; and whenever an officer is clothed with that
authority, and undertakes to determine those questions, he acts

It is evident, upon the foregoing authorities, that the so called committee on the rating of students
for honor whose actions are questioned in this case exercised neither judicial nor quasi judicial
functions in the performance of its assigned task. From the above-quoted portions of the decision
cited, it will be gleaned that before tribunal board, or officer may exercise judicial or quasi judicial
acts, it is necessary that there be a law that give rise to some specific rights of persons or property
under which adverse claims to such rights are made, and the controversy ensuing therefrom is
brought, in turn, before the tribunal, board or officer clothed with power and authority to determine
what that law is and thereupon adjudicate the respective rights of the contending parties. As pointed
out by appellees,3 however, there is nothing on record about any rule of law that provides that when
teachers sit down to assess the individual merits of their pupils for purposes of rating them for
honors, such function involves the determination of what the law is and that they are therefore
automatically vested with judicial or quasi judicial functions. Worse still, this Court has not even been
appraised by appellant of the pertinent provisions of the Service Manual of Teachers for Public
Schools appellees allegedly violated in the composition of the committee they constituted
thereunder, and, in the performance of that committee's duties.

At any rate, the situation brought before Us in this case, the seemingly one of first impression, is not
without substantial parallel. In the case of Felipe vs. Leuterio, etc., et al.,4 the issue presented for
determination was whether or not the courts have the authority to reverse the award of the board of
judges of an oratorical contest, and this Court declared that the judiciary has no power to reverse the
award of the board of judges of that contest and, for that matter, it would not interfere in literary
contests, beauty contests and similar competitions. It was reasoned out thus:

For more than thirty years oratorical tilts have been held periodically by schools and
colleges in this islands. Inter-collegiate oratorical competitions are of more recent
origin. Members of this court have taken part in them either as contestants in their
school days (In the College of Law, U.P. annual oratorical contest, first prize was
awarded to Justice Montemayor in 1914 and to Justice Labrador in 1916), or as
members of the board of judges afterwards. They know some few verdicts did not
reflect the audience's preference and that errors have sometimes been ascribed to
the award of the judges. Yet no party ever presumed to invoke judicial intervention;
for it is unwritten law in such contests that the board's decision is final and

Like the ancient tournaments of the Sword, these tournaments of the Word apply
the highest tenets of sportsmanship: finality of referee's verdict. No alibis, no
murmurs of protest. The participants are supposed to join the competition to
contribute to its success by striving their utmost: the prizes are secondary.

No rights to the prizes may be asserted by the contestants, because theirs was
merely the privilege to compete for the prize, and that privilege did not ripen into a
demandable right unless and until they were proclaimed winners of the competition
by the appointed arbiters or referees or judges.

Incidentally, these school activities have been imported from the United States. We
found in American jurisprudence no litigation questioning the determination of the
board of judges.

Now, the fact that a particular action has had no precedent during a long period
affords some reason for doubting the existence of the right sought to be enforced,
especially where occasion for its assertion must have often arisen; and courts are
cautious before allowing it, being loath to establish a new legal principle not in
harmony with the generally accepted views thereon. (See C.J.S. Vol. 1, p. 1012.)

We observe that in assuming jurisdiction over the matter, the respondent judge
reasoned out that where there is a wrong there is a remedy and that courts of first
instance are courts of general jurisdiction.

The flaw in his reasoning lies in the assumption that Imperial suffered some wrong at
the hands of the board of judges. If at all, there was error on the part of one judge,
at most. Error and wrong do not mean the same thing. 'Wrong' as used in the
aforesaid principle is the deprivation or violation of a right. As stated before, a
contestant has no right to the prize unless and until he or she is declared winner by
the board of referees or judges.

Granting that Imperial suffered some loss or injury, yet in law there are instances
of 'damnum absque injuria'. This is one of them. If fraud or malice had been proven,
it would be a different proposition. But then her action should be directed against
the individual judge or judges who fraudulently or maliciously injured her. Not
against the other judges.

But even were We to assume for the moment, as the court below apparently did, that judicial
intervention might be sought in cases of this nature, still, We are inclined to sustain the order of
dismissal appealed from for failure on the part of appellant to comply with the requirements of
Section 1 of Rule 65. To be sure, the lower court's holding that appellant's failure to accompany his
petition with a copy of the judgment or order subject thereof together with copies of all pleadings
and documents relevant and pertinent thereto "is fatal to his cause" is supported not only by the
provision of that Rule but by precedents as well. In the case of Alajar, et al. vs. Court of Industrial
Relations,5where it was claimed by therein petitioners that the respondent court had acted with
grave abuse of discretion in estimating certain rice harvests involved in the case in terms of cavans
instead of cans, allegedly in complete disregard of the decision of the Court of First Instance of
Batangas in Expropriation Proceedings No. 84 and of this Court in G.R. No.
L-6191,6 and in ordering thereafter the division of the said rice harvests on the ratio of 70-30 in favor
of the tenants, this Court denied the petition for certiorari on the ground, among others, of failure on
the part of said petitioners to attach to their petition copies of the decisions allegedly violated.
Speaking thru Mr. Justice J.B.L. Reyes then, this Court held:

The petition is patently without merit. In the first place, it is not even sufficient in
form and substance to justify the issuance of the writ of certiorari prayed for. It
charges that the Court of Industrial Relations abused its discretion in disregarding
the decision of the Court of First Instance of Batangas in Expropriation Proceedings
No. 84 and of this Court in G.R. No. L-6191; yet it does not attach to the petition the
decisions allegedly violated by the Court below and point out which particular
portion or portions thereof have been disregarded by the respondent Court.

The same principle was applied in the more recent case of NAWASA vs. Municipality of Libmanan, et
al.,7 wherein this Court dismissed (by Resolution) the petition for certiorari and mandamus filed by
the National Waterworks and Sewerage Authority against the Court of First Instance of Camarines
Sur, and the municipality of Libmanan. In the following language, this Court emphasized the
importance of complying with the said requirement of Rule 65:

While paragraph 3 of the petition speaks of the complaint filed by the respondent
municipality with the respondent court for recovery of property with damages (Civil
Case No. L-161) no copy thereof is attached to the petition.

Similarly, paragraph 4 of the petition mentions the decision rendered by the

respondent court on December 10, 1965, but no copy thereof is attached to the

Again, paragraph 5 of the petition speaks of the order of default entered by the
respondent court and of the motion for reconsideration filed by petitioner in the
case above-mentioned, but no copy of the order of default is attached to its petition.
Bearing in mind that the petition under consideration was filed for the purpose of
enjoining the respondent court from executing the decision rendered in Civil Case
No. L-161, the importance of the missing pleadings is obvious.

Moreover, the petition is also for the purpose of securing an order commanding the
respondent court to approve either the original or the amended record on appeal
filed petition, but no copy of either is attached to its petition.

In view of the foregoing, the petition under consideration is dismissed.

It might be true, as pointed out by appellant, that he received a copy of the programme of the
graduation exercises held by the Sero Elementary School in the morning of the very day of that
graduation exercises, implying that he could not have attached then a copy thereof (to show the
decision of the committee of teachers in the ranking of students complained of) to his petition. The
stubborn fact remains, however, that appellant had known of such decision of the said committee of
teachers much earlier, as shown by the circumstance that according to him, even before the filing of
his petition with the lower court on the 19th of May, 1965, he had personally appealed the said
committee's decision with various higher authorities of the above-named school, who merely passed
the buck to each other. Moreover, appellant mentions in his petition various other documents or
papers — as the Service Manual for Teachers allegedly violated by appellees in the constitution of
their committee; altered grading sheets; and erasures in his Grade I certificate — which appellant
never bothered to attach to his petition. There could be no doubt then that he miserably failed to
comply with the requirement of Rule 65 above-mentioned. With this conclusion, it is no longer
necessary to pass upon the other two errors assigned by appellant.

FOR THE FOREGOING CONSIDERATIONS, the judgment appealed from is affirmed, with costs against

[January 9, 1989]

The administrative Decisions of the Office of the President of the Philippines, dated 13 May 1969 and
28 September 1971, respectively, set aside by respondent Court of Appeals in its judgment, dated 28
November 1986, constitute the nucleus of the present controversy.

The antecedent proceedings may be summarized thus:

1. On 15 April 1948, Jesus M. Larrabaster applied with the National Land Settlement Administration
(NLSA) for a home lot at the Marbel Settlement District, Cotabato.

2. On 10 July 1950 Larrabaster's application was granted. Home Lot No. 336 (later known as Lot No.
355) with an area of 1,500 square meters (hereafter, the Disputed Property) was allocated to him on
the basis of a report of the supervisor of the Settlement District that the subject lot was vacant and
free from any claim or conflict.

Meanwhile, "Larrabaster leased the lot to private respondent, Basilio MENDOZA, and tolerated Jorge
Geller to squat on the portion thereof" (2nd Indorsement, February 10, 1969, Office of the President,
p. 1, Annex "C", Petition).

3. On 25 November 1952 the Land Settlement and Development Corporation (LASEDECO) took over
the functions of the NLSA.

4. On 29 June 1956 Larrabaster and his wife assigned their rights and interests over the Disputed
Property to Jose B. PEÑA. "Notwithstanding the transfer, PEÑA allowed Mendoza and Geller to stay
on the lot." (id., p. 2).

5. On 8 September 1956 a Supplementary Deed of Sale was executed by the same parties defining
the boundaries of the Disputed Property, thus:

On the North by Bulok creek and a street; on the South by Bulok creek and the
National Highway; on the East by a street beside the public plaza; and on the West
by Bulok creek, which lot is designated as formerly lot No. 336 and now lot No. 355
on the new sketch plan of the Townsite of Marbel, South Cotabato. (2nd
Indorsement, Office of the President, February 10, 1969, p. 2, Annex "C", Petition).

6. On 18 June 1954 Republic Act No. 1160 transferred the custody and administration of the Marbel
Townsite to the National Resettlement and Rehabilitation Administration (NARRA).

7. On 20 August 1956 PEÑA requested NARRA to approve the above-mentioned transfer of rights but
the latter did not act thereon in view of Proclamation No. 336, series of 1956, returning to the
Bureau of Lands the disposition of the lots which remained unallocated by the LASEDECO at the time
of its abolition.

8. The Bureau of Lands did not act on PEÑA's request either, prompting him to bring up the matter to
the Board of Liquidators (BOL), which was created to wind up the affairs of LASEDECO.

Although LASEDECO bad initially denied the request, it subsequently confirmed the sale to PEÑA in
its Resolution No. 139, series of 1964.

9. PEÑA must have realized that the Disputed Property contained an area bigger than 1,500 sq. ms.,
hence, his request to BOL that the area be adjusted from 1,500 to 3,616.93 sq. ms. to conform to its
actual area.

10. In its Resolution No. 139, series of 1964, the BOL denied the request.

PEÑA moved for reconsideration stressing that the award should be for 3,616.93 sq. ms., but the BOL
again denied the same under its Resolution No. 439, series of 1967.

11. Feeling aggrieved, PEÑA appealed to the Office of the President.

12. Requested by that Office to comment, the BOL conducted an investigation and reported (a) that
Lot No. 355, as awarded to Larrabaster, contained only 1,500 sq. ms. but due to accretion, since the
lot was almost surrounded by a creek, the area increased to 3,616.93 sq. ms.; and (b) since home lots
had an average area of 1,500 sq. ms. only, the Bureau of Lands subdivided the Disputed Property into
three [3] parts, namely: Lot No. 107 with an area of 1,455 sq. ms., was allocated to Basilio Mendoza;
Lot No. 108, with an area of 1,500 sq. ms., was allocated to PEÑA; and Lot No. 109, with an area of
661 sq. ms., was allocated to Arturo Roxas. The BOL then recommended that PEÑA be awarded Lot
No. 108 instead of the whole of former Lot No. 355.

13. Excepting to the above, PEÑA alleged that the lot transferred to him by Larrabaster contains
3,616.93 and not 1,500 sq. ms., this being the area embraced within the boundaries described in the
Supplementary Deed of Sale executed between him and Larrabaster on 8 September 1956.

14. On 10 February 1969 the Office of the President "ordered that the area of PEÑA's lot (Lot No.
108, formerly a part of Lot No. 355) be maintained at 1,500 sq. ms.. xxx' on the premise that
accretion belonged to the Government.

15. Upon PEÑA's motion for reconsideration, the same Office, on 13 May 1969, modified its Decision
of 10 February 1969 and held that "the award to PEÑA of the original Lot No. 355 is hereby
maintained" (p. 9, Annex "D", Petition). It reasoned out that the benefits of accretion, pursuant to
Article 457 of the Civil Code, accrue to the owner, PEÑA, and not to the Government. That Decision
of 13 May 1969 is the first judgment assailed in this Petition.

16. On 14 May 1969 the BOL approved Resolution No. 236, series of 1969, directing its LASEDECO
Unit to advise PEÑA accordingly. And on 3 September 1969 the BOL recommended to the Director of
Lands the issuance of a patent in PEÑA's favor.

17. On 1 August 1969 private respondent MENDOZA addressed a letter-protest to the BOL, to which
the latter in its Resolution No. 488, dated 6 August 1969, responded by advising MENDOZA to direct
its protest to the Office of the President.

18. MENDOZA did so and on 28 September 1971 said Office rendered its letter-decision (the second
one challenged herein) affirming its previous Decision of 13 May 1969, having found no cogent
reason to depart therefrom (Annex "E", Petition).

19. In the meantime, on 27 January 1970, and while his protest with the Office of the President was
still pending, MENDOZA resorted to Civil Case No. 98 for certiorari before the then Court of First
Instance of Cotabato against the petitioners-public officials and PEÑA.

On 23 June 1978, MENDOZA followed up with a Supplemental Petition to annul the administrative
Decision of 20 September 1971 denying his protest.

20. On 10 May 1985 the Trial Court 1 rendered its Decision in Civil Case No. 98 dismissing MENDOZA's
Petition for certiorari (Annex "B", Petition).

21. On appeal, respondent Court of Appeals reversed the Trial Court in its 28 November 1986
Decision, 2 with the following disposition:

WHEREFORE, finding the appeal of petitioner Basilio Mendoza to be meritorious, the

Decision of May 10, 1985 of the Regional Trial Court, Branch 24, of Koronadal, South
Cotabato, in Special Civil Case No. 98 is SET ASIDE. The Decisions of February 10,
1969, May 13, 1969 and September 28, 1971 of the Office of the President in the
administrative case are likewise SET ASIDE, without prejudice to the reopening of the
administrative case in said Office as to accord all parties concerned, including
petitioner, their constitutional rights to due process of law.

IT IS SO ORDERED. (pp. 23-31, Rollo)

Hence, this Petition for Review on certiorari by petitioners-public officials anchored on the following






Petition, p. 13, Rollo)

We uphold petitioners' submissions.

1. In ruling that the Decisions of the Office of the President were vitiated by failure to accord due
process of law to MENDOZA, respondent Appellate Court relied on its observations that MENDOZA
was: (1) not made a party to the administrative case; (2) not served with a copy of the 10 February
1969 Decision; and (3) not notified of proceedings before the 13 May 1969 Decision nor served a
copy thereof.

The foregoing observations do not justify the conclusion arrived at. After the Office of the President
had rendered its Decision dated 13 May 1969, MENDOZA filed a letter-protest on 1 August 1969 with
the BOL. The latter office directed him to file his protest with the Office of the President, which he
did. On 28 September 1971, MENDOZA's request for reconsideration was denied by said Office. So
that, even assuming that there was absence of notice and opportunity to be present in the
administrative proceedings prior to the rendition of the 10 February 1969 and 13 May 1969
Decisions by the Office of the President, such procedural defect was cured when MENDOZA elevated
his letter protest to the Office of the President, which subjected the controversy to appellate review
but eventually denied reconsideration. Having thus been given a chance to be heard with respect to
his protest there is sufficient compliance with the requirements of due process.

There is no merit likeness to the point raised by petitioners that they were not
informed by respondent Judge of the petition by private respondent to set aside the
writ of execution. The order granting such petition was the subject of a motion for
reconsideration. 'The motion for reconsideration was thereafter denied. Under the
circumstances, the failure to give notice to petitioners had been cured. That is a well-
settled doctrine. Their complaint was that they were not beard. They were given the
opportunity to file a motion for reconsideration. So they did. That was to free the
order from the alleged infirmity. Petitioners then cannot be heard to claim that they
were denied procedural due process.' (Dormitorio v. Fernandez, L-25897, August 21,
1976, 72 SCRA 388, 394-395; Montemayor vs. Araneta Univ. Foundation, L- 44251,
May 31, 1977, 77 SCRA 321 [1977]; also Sumpang v. Inciong, L-50992, June 19, 1985,
137 SCRA 56 [1985]).

It should also be recalled that MENDOZA filed his petition for certiorari before the then Court of First
Instance of Cotabato seeking to annul the 13 May 1969 Decision. At the time it was presented on 27
January 1970, MENDOZA's request for reconsideration with the Office of the President, involving the
same Decision, was still pending. In fact, it was only on 28 September 1971 that said Office denied
reconsideration. Evidently, MENDOZA had abandoned his pending administrative request for
reconsideration in favor of judicial proceedings. Again, therefore, MENDOZA cannot justifiably claim
that he was denied due process.

2. Substantial factual evidence support the questioned administrative rulings. The Office of the
President relied on the fact-finding report of the BOL made sometime in 1969 with respect to the
Disputed Property to the effect that although the area of Lot No. 355 awarded to Larrabaster was
1,500 sq. ms., it was found situated along a creek and that "it had increased in area to 3,616.93
square meters by accretion."

The question then which confronted the Office of the President was the ownership over the
increased area. In its Decision of 10 February 1969 it initially held, following the BOL
recommendation, that the accretion belonged to the government and that the excess of 2,116.93 sq.
ms. was an unallocated area which the Bureau of Lands had authority to dispose of so that said
Bureau was not remiss in subdividing the disputed Property into three (3 lots and allocating only Lot
No. 108, with an area of 1,500 sq. ms., to PEÑA, Lot No. 107 to MENDOZA, and Lot No. 109 to Arturo

Upon re-study, however, the Office of the President modified its conclusions in its Decision of 13 May
1969, and rightly so. It took into account Article 457 of the Civil Code, which provides:

To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.

and opined that "creeks are included within the meaning of this Civil Code provision" (Letter-
Decision, 13 May 1969, p. 7, Annex 'D', Petition).

And as far as the ownership of the accretion is concerned, the Office of the President likewise
correctly held that "while it may be conceded that Lot No. 355 technically belongs to the government
because it was bought from the latter under an installment plan, it cannot be rightfully concluded
that the benefits of accretion must still be retained by the said seller" (Letter-Decision, 13 May 1969,
p. 7, Annex "D", Petition). In so ruling, that Office acted on the authority of Director of Lands, et al.
vs. Ricardo Rizal, et al., 87 Phil. 806, at 810, 814 [1950]), reading in part:
... When the lot bordering on a public stream is sold on installment basis by the
government, said stream is made the boundary. ... The stream may advance or
recede but it will always constitute the boundary or boundaries of the lot, and the
purchaser has the right to insist that the original boundaries be preserved, and all
the area inside said boundaries be considered as included in the sale.

xxx xxx xxx

... In the sale of a friar land, lot or parcel ordering on rivers under Act. No. 1120
pending payment in full of the purchase price, although the government reserves
title thereto, merely for its protection, the beneficial and equitable title is in the
purchaser, and that any accretion by the lot even before payment of the last
installment belongs to the purchaser thereof.

Since the Disputed Property no longer belonged to the Government the subdivision thereof by the
Bureau of Lands into three lots, as well as the allocation of said lots to two other individuals, was
beyond the scope of its authority. Under Proclamation No. 336, series of 1956, the authority of the
Bureau of Lands to dispose of lots was limited to "unallocated areas." As the Letter-Decision of 28
September 1971 states: "however, it is equally true that the accretions took place after the land had
been allocated and assigned to Larrabaster. Clearly, therefore, when the accretion started.
Larrabaster had already acquired the beneficial and equitable title over the Lot No. 355, albeit the
Government still retained the naked title thereto. Consequently, to Larrabaster and now to his
assignee (Peña) belong the accretions to said lot which may no longer be allocated to others by the
Government." (Letter-Decision), 28 September 1971, Annex "E", Petition). Having been thus
allocated, the area within its original boundaries belong to the awardee whether the creek advances
or recedes. He is entitled to all the benefits which may accrue to the land as well as suffer the losses
that may befall it.

MENDOZA's filing of a Miscellaneous Sales Application over the Disputed Property with the Bureau
of Lands on 6 November 1962 must similarly be held to have been inappropriate and without any
legal force and effect since the same was no longer public land subject to disposition by the
Government. Contrary to the finding of respondent Appellate Court, no irregularity may be imputed
to the administrative decisions by reason of the fact that allegedly a copy of the investigation report
of the BOL was not among those elevated to the Trial Court or among those marked in evidence. It
can be safely assumed that the Office of the President could not have relied upon said report if the
same had not been before it when it rendered the questioned Decisions.

3. Finally, invariable is the rule that in reviewing administrative decisions of the Executive Branch of
the government, "the findings of fact made therein must be respected, as long as they are supported
by substantial evidence, even if not overwhelming or preponderant (Ang Tibay vs. Court of Industrial
Relations, 69 Phil. 635 [1940]); that it is not for the reviewing court to weigh the conflicting evidence,
determine the credibility of the witnesses, or otherwise substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence (Lao Tang Bun, et al. vs. Fabre, 81 Phil. 682
[1948]); that the administrative decision in matters within the executive jurisdiction can only be set
aside on proof of gross abuse of discretion, fraud, or error of law (Lovina vs. Moreno L-17821,
November 29, 1963, 9 SCRA 557; Timbancaya vs. Vicente, L-19100, December 27, 1963, 9 SCRA 852),
which we find absent herein.
To reopen the case as ordered by the Court of Appeals would open wide the doors to a protracted
litigation of a controversy that has been pending for approximately nineteen (19) years now. It is high
time that a finish to the case be written.

WHEREFORE, the Decision of 28 November 1986 of respondent Court of Appeals is hereby SET ASIDE
and the Decision of 10 May 1985 of the Regional Trial Court, Branch 24, Koronadal, South Cotabato,
in Civil Case No. 98, is hereby ordered REINSTATED.

[July 31, 2001]

The petition is one for review on certiorari 1 seeking to set aside (a) the decision of the Court of
Appeals2 nullifying the preventive suspension order issued by petitioner Ombudsman; and (b) the
resolution3 denying petitioner's motion for reconsideration.

The Ombudsman issued an order of preventive suspension 4 in connection with the administrative
charges for grave misconduct, dishonesty and conduct prejudicial to the best interest of the service
that Task Force Aduana filed with the Office of the Ombudsman against respondent Ronnie C.
Silvestre and Atty. Redempto Somera.

On February 14, 2000, respondent filed with the Ombudsman a motion for the lifting of the order of
preventive suspension. However, on April 03, 2000, the Ombudsman denied the motion.

On May 31, 2000, respondent filed with the Court of Appeals 5 a petition for certiorari and prohibition
with temporary restraining order and writ of preliminary injunction questioning the order of
preventive suspension issued by petitioner Ombudsman.

After due proceedings, on August 14, 2000, the Court of Appeals promulgated its decision 6 annulling
and setting aside the order of preventive suspension against respondent for having been issued by
the Ombudsman in grave abuse of discretion.

On October 06, 2000, the Court of Appeals denied a motion for reconsideration filed by the Solicitor

Hence, this petition.7

The Facts

On January 26, 2000, elements of Task Force "Aduana" headed by petitioner Doctor conducted an
entrapment operation in a case of bribery involving Atty. Redempto C. Somera, Hearing Officer, Law
Division, Bureau of Customs, Manila, and Indian nationals who had pending cases of seizure with the

After the pay-off materialized, petitioner Doctor announced the entrapment and then arrested Atty.
Somera and two (2) Indian nationals, namely, Murli Tejoomal Mohrani and Kumar Rupchand
Khiatani, for violation of Article 210 of the Revised Penal Code. As a consequence, the Task Force
filed with the Regional Trial Court, Manila, charges of bribery, violation of R. A. No. 3019, and
corruption of public officials against them.

Likewise, the Task Force filed with the Ombudsman administrative charges for grave misconduct,
dishonesty and conduct prejudicial to the best interest of the service against respondent Ronnie C.
Silvestre and Atty. Somera.

The Issue
The issue is whether the Ombudsman has authority to suspend from office respondent Ronnie C.
Silvestre indefinitely on the basis of the administrative complaint filed with his office showing that
evidence of guilt is strong.

The Court's Ruling

We need not resolve the issue presented. We dismiss the petition. It has become moot.

On February 14, 2001, the Ombudsman dismissed the administrative charges against respondent. In
dismissing the charges, the Ombudsman categorically ruled as follows:

"It is another story, however, as regards respondent SILVESTRE. In implicating respondent

SILVESTRE in the instant case, Atty. DOCTOR stated in his AFFIDAVIT OF ARREST AND
COMPLAINT, the following:

'6. That after the hearing of the case (S.I. No. 00-005) on January 20, 2000, ATTY.
SOMERA approached me and invited me to the room of ATTY. RONNIE SILVESTRE
(herein petitioner), Head of the Law Department of the Port of Manila wherein the
duo convinced me to cooperate with them in the withdrawal of the complaint and its
eventual dismissal;

'7. That I did not commit myself to their proposition to drop the case but I just
continued talking with them with the plan in mind to report the same to LT. GEN.
JOSE T. CALIMLIM, Task Force Commander of Presidential Anti-Smuggling Task Force

"Except this bare allegation of the complainant, however, practically no other evidence was
ever presented to substantiate the charge against respondent SILVESTRE. At this point, it may
be noted that well settled is the rule that within the field of administrative law, while strict
rules of evidence are not applicable to quasi-judicial proceedings, nevertheless, in adducing
evidence constitutive of substantial evidence, the basic rule that mere allegation is not
evidence cannot be disregarded.

"We are, therefore inclined to believe the defense of respondent SILVESTRE, that what was
discussed between him, respondent SOMERA and Atty. DOCTOR on January 20, 2000, was
the legal issue on the continued detention of some kitchen wares which were not covered by
the Warrant of Seizure and Detention (WSD). This, in light of subsequent Order of the District
Collector of the Port of Manila dated March 2, 2000, releasing the said kitchen wares which
were indeed, not covered by the Warrant of Seizure and Detention (WSD) x x x

"Worthy of note also is the DECISION of the Court of Appeals in CA-G. R. SP No. 58958 dated
(pages 253 to 254, Records) where in granting the petition for certiorari and prohibition
involving the preventive suspension order on respondent SILVESTRE, the said appellate court
stated, thus:

"xxx xxx xxx

"While the above DECISION may not necessarily be controlling in the resolution of the merits
of the instant case insofar as it pertains to respondent SILVESTRE, we cannot help but note
its relevancy inasmuch as practically no other evidence was presented by the complainant,
other than his AFFIDAVIT OF ARREST AND COMPLAINT to support the charge against
respondent SILVESTRE. Needless to state, this is also the very same and only evidence
presented before the Court of Appeals which rendered the aforequoted DECISION."

WHEREFORE, the Court hereby DISMISSED the petition for mootness.

No costs.1âwphi1.nêt



[July 5, 1994]

Private respondent Lucina C. Sendino entered into a reservation agreement with Realty Exchange
Venture, Inc. (REVI) for a 120-square meter lot in Raymondville Subdivision in Sucat, Paranaque for
P307,800.00 as its purchase price. 1 She paid P1,000.00 as partial reservation fee on January 15, 1989
and completed payment of this fee on January 20, 1989 by paying P4,000.00. 2

On July 18, 1989, private respondent paid REVI P16,600.00 as full downpayment on the purchase
price. 3 However, she was advised by REVI to change her co-maker, which she agreed, asking for an
extension of one month to do so.

For alleged non-compliance with the requirement of submission of the appropriate documents
under the terms of the original agreement, 4 REVI, through its Vice-President for Marketing, informed
respondent of the cancellation of the contract on the 31st of July 1989. 5
On April 20, 1990, private respondent filed a complaint for Specific Performance against REVI with
the office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory
Board (HLURB) asking that respondent be ordered:

1. To comply and continue with the sale of the house and lot, Block 4, Lot 17 at the
Raymondville Subdivision, Sucat Road, Paranaque, Metro Manila;

2. To pay complainant actual, nominal and moral damages, the amount of which will
be proved in the hearing;

3. To pay complainant attorney's fee in the sum of P10,000.00;

4. To pay complainant exemplary damages in the sum of P10,000.00 to set an

example and to avoid a repetition of such illegal and unsound business practices of
the respondent. 6

This petition was amended on August 17, 1990 by impleading petitioners Magdiwang Realty
Corporation (MRC) which appeared to be the registered owner of the subject lot as per TCT No.

On April 3, 1991 the HLURB, whose authority to hear and decide the complaint was challenged by
REVI in its answer, 7 rendered its judgment in favor of private respondent and ordered petitioners to
continue with the sale of the house and lot and to pay private respondent P5,000 as moral damages,
P5,000 as exemplary damages and P6,000 as attorney's fees and costs of the suit. 8 An appeal from
this decision was taken to the HLURB OAALA Arbiter, which affirmed the Board's decision. The
decision of the OAALA Arbiter was appealed to the Office of the President, herein public respondent.

On January 7, 1993, the public respondent rendered its decision dismissing the petitioners' appeal.
Motion for reconsideration of the decision was denied by the public respondent on January 26, 1993.
Consequently petitioners come before this Court, in this petition, which the Court resolves to treat as
a petition for certiorari, raising the following issues:








As the first and third issues raised by the petitioners strike at the core of the case at bench, this Court
deems it appropriate to initially dispose of the issue of private respondent's capacity to bring her
complaint before the HLURB-OAALA.

It is settled that rules of procedure are as a matter of course construed liberally in proceedings
before administrative bodies. 9 In the instant case, the original suit for specific performance and
damages was filed by the private respondent with the HLURB-OAALA, an administrative body not
hamstrung by the strict procedural technicalities of the Rules of Court. Under the circumstances, it
was certainly appropriate for the HLURB-OAALA to have acted on the substantive questions relating
to the validity of petitioners' unilateral rescission of the contract without unduly concerning itself
with a mere procedural slip, the non-joinder of private petitioner's husband in the original complaint
before the HLURB. Moreover, since petitioners participated in the administrative proceedings
without objecting to or raising the procedural infirmity, they were certainly estopped from raising it
on appeal before the Office of the President and before this Court.

Proceeding to the principal issues raised by the petitioner, while E.O. 85 dated 12 December 1986
abolished the Ministry of Human Settlements (MHS), it is patently clear from a reading of its
provisions that the said executive order did not abolish the Human Settlements Regulatory
Commission (HSRC) which continued to exercise its powers and functions even after the Ministry of
Human Settlements ceased to exist. In spite of the Aquino Government's stated intention of
eradicating what it considered the vestiges of the previous regime, it was not its intention to create a
vacuum by abolishing those juridical entities, agencies, corporations, etc., attached to or supervised
by the MHS, which performed vital administrative functions. Pertinently, Section 3 of E.O. 85
mandates that:

. . . The final disposition and final organizational alignment or attachment of the

juridical entities, agencies, corporations and councils attached to, or under the
administrative supervision of the MHS including their respective existing projects,
appropriations and other assets shall be subject to subsequent enactments by the

Pursuant to this provision therefore, the President subsequently issued Executive Order No. 90,
series of 1986, recognizing the Human Settlements Regulatory Commission (renamed the HLURB) as
one of the principal housing agencies of the government. Prior to this, Executive Order No. 648 in
1981 transferred all the functions of the National Housing Authority (pursuant to Presidential
Decrees Nos. 957, 1216 and 1344) to the Human Settlements Regulatory Commission (HSRC)
consolidating all regulatory functions relating to land use and housing development in a single
entity. 10 Being the sole regulatory body for housing and land development, the renamed body, the
HLURB, 11 would have been reduced to a functionally sterile entity if, as the petitioner contends, it
lacked the powers exercised by its predecessor which included the power to settle disputes
concerning land use and housing development and acquisition. Moreover, this Court has had the
occasion to definitively rule on the question as to whether or not the Housing and Land Use
Regulatory Board could exercise the same quantum of judicial or quasi-judicial powers possessed by
the HSRC under the Ministry of Human Settlements in the exercise of its regulatory functions when it
held, in United Housing Corporation vs. Hon. Dayrit 12 that:

As explicitly provided by law, jurisdiction over actions for specific performance of

contractual and statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner or developer, is vested exclusively in the HSRC,
Section 1 of PD 1344, in no uncertain terms, provides:

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

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision

lot or condominium unit buyer against the project owner, developer,
dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory

obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or salesman. (Emphasis

This is reinforced by section 8 of EO 648 (otherwise known as the Charter of the

Human Settlements Regulatory Commission) which took effect on February 7, 1981,

Sec. 8. Transfer of Functions. — The Regulatory functions of the National Housing

Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and other related
laws are hereby transferred to the Human Settlements Regulatory Commission. . . .
Among the regulatory functions are . . . (11) Hear and decide cases of unsound real
estate business practices, claims involving refund filed against project owners,
developers, dealers, brokers, or salesmen and cases of specific
performance (Emphasis Ours).

Private respondents reliance, therefore, on sections 1 and 8 of the Judiciary

Reorganization Act of 1980 is untenable. Thus, as correctly pointed out by petitioner,
section 19, paragraph 6 of said law is material to the issue of where jurisdiction lies,
and We quote:

Sec. 19. . . .

(6) In all other cases not within the exclusive jurisdiction of any
court, tribunal, persons or body exercising judicial or quasi-judicial
xxx xxx xxx

Neither can We accede to private respondents' claim that resort to

the courts is justified under section 41 of PD 957 specifically under
the phrase "legal remedies that may be available to aggrieved
subdivision lot buyers."

There is no question that a statute may vest exclusive original jurisdiction in an

administrative agency over certain disputes and controversies falling within the
agency's special expertise. The constitutionality of such grant of exclusive jurisdiction
to the National Housing Authority (now Housing and Land Use Regulatory Board)
over cases involving the sale of lots in commercial subdivisions was upheld
in Tropical Homes Inc. v. National Housing Authority (152 SCRA 540 [1987]) and again
sustained in a later decision in Antipolo Realty Corporation v. National Housing
Authority (153 SCRA 399 [1987]) where We restated that the National Housing
Authority (now HLURB) shall have exclusive jurisdiction to regulate the real estate
trade and business in accordance with the terms of PD No. 957 which defines the
quantum of judicial or quasi-judicial powers of said agency. 13

Clearly, therefore, the HLURB properly exercised its jurisdiction over the case filed by the petitioners
with its adjudicative body, the OAALA, in ordering petitioners to comply with their obligations arising
from the Reservation Agreement. In general, the quantum of judicial or quasi-judicial powers which
an administrative agency may exercise is defined in the agency's enabling act. In view of the Court's
pronouncement in United Housing Corporation vs. Hon. Dayrit, supra, recognizing the HLURB as the
successor agency of the HSRC's powers and functions, it therefore follows that the transfer of such
functions from the NHA to the HRSC effected by Section 8 of E.O. 648, series of 1981, thereby
resulted in the acquisition by the HLURB of adjudicatory powers which included the power to "(h)ear
and decide cases of unsound real estate business practices . . . and cases of specific
performance." 14 Obviously, in the exercise of its powers and functions, the HLURB must interpret
and apply contracts, determine the rights of the parties under these contracts, and award damages
whenever appropriate. 15We fail to see how the HSRC — which possessed jurisdiction over the
actions for specific performance for contractual and statutory obligations filed by buyers of
subdivision lots against developers — had suddenly lots its adjudicatory powers by the mere fiat of a
change in name through E.O. 90. One thrust of the multiplication of administrative agencies is that
the interpretation of such contracts and agreements and the determination of private rights under
these agreements is no longer a uniquely judicial function. 16 The absence of any provision, express
or implied, in E.O. 90, repealing those quasi-judicial powers inherited by the HSRC from the National
Housing Authority, furthermore militates against petitioners' position on the question.

Going to petitioners' contention that the decision of the OAALA should have been rendered by the
Board of Commissioners sitting en banc, we find ample authority — both in the statutes and in
jurisprudence-justifying the Board's act of dividing itself into divisions of three. Under Section 5 of
E.O. 648 which defines the powers and duties of the Commission, the Board is specifically mandated
to "(a)dopt rules of procedure for the conduct of its business" and perform such functions necessary
for the effective accomplishment of (its) above mentioned functions." Since nothing in the provisions
of either E.O. 90 or E.O. 648 denies or withholds the power or authority to delegate adjudicatory
functions to a division, we cannot see how the Board, for the purpose of effectively carrying out its
administrative responsibilities and quasi-judicial powers as a regulatory body should be denied the
power, as a matter of practical administrative procedure, to constitute its adjudicatory boards into
various divisions. After all, the power conferred upon an administrative agency to issue rules and
regulations necessary to carry out its functions has been held "to be an adequate source of authority
to delegate a particular function, unless by express provision of the Act or by implication it has been
withheld." 17 The practical necessity of establishing a procedure whereby cases are decided by three
(3) Commissioners furthermore assumes greater significance when one notes that the HLURB, as
constituted, only has four (4) full time commissioners and five (5) part time commissioners to deal
with all the functions, administrative, adjudicatory, or otherwise, entrusted to
it. 18 As the Office of the President noted in its February 26, 1993 Resolution denying petitioners'
Motion for Reconsideration, "it is impossible and very impractical to gather the four (4) full time and
five (5) part time commissioners (together) just to decide a case." Considering that its part time
commissioners act merely in an ex-officio capacity, requiring a majority of the Board to sit en banc on
each and every case brought before it would result in an administrative nightmare. 19

Finally, petitioners' assertion that RA 6552 is inapplicable in the instant case because the said law
does not apply to cases of reservation agreements finds no merit in the case at bench in view of
Section 24 of P.D. 957 which provides:

Sec. 24. Failure to Pay Installments — The rights of the buyer in the event of his
failure to pay the installments due for reasons other than the failure of the owner or
developer to develop the project shall be governed by Republic Act No. 6552.

As the Solicitor General correctly pointed out, RA 6552 makes no distinction between "option" and
"sale" 20 which, under P.D. 957 also includes "an exchange or attempt to sell, an option of sale or
purchase, a solicitation of a sale or an offer to sell directly." 21 This all-embracing definition virtually
includes all transactions concerning land and housing acquisition, including reservation agreements.
Since R.A. 6552 mandates cancellation by notarial
act — among other requirements — before any cancellation of a contract may be effected,
petitioners' precipitate cancellation of its contract with private respondent without observing the
conditions imposed by the said law was invalid and improper.

In fine, the HLURB-OAALA acted within the scope of its authority in ordering petitioners to comply
and continue with the sale of the house and lot subject of the contract between the original parties.
It cannot be gainsaid that the quasi-judicial functions exercised by the body are necessary incidents
to the proper exercise of its powers and functions under E.O. 90 and the laws enacted delineating
the scope of authority of its Board of Commissioners. Denying the body those functions so necessary
in carrying out its power to regulate housing and land use results in its effective emasculation as an
important regulatory body in an area vital to the national economy.

The acute housing shortage problem has prompted thousands of middle and lower class buyers of
houses and lots and condominium units to enter into all sorts of agreements with private housing
developers involving all manner of installment schemes under contracts drawn exclusively by these
developers. Many of these virtual contracts of adhesion entrap innocent buyers by requiring cash
deposits under reservation agreements which include, sometimes in the fine print, default clauses
guaranteeing huge monetary windfalls for the developers in the event that their buyers (oftentimes
for the flimsiest of reasons) default by failing to come up with certain requirements. While the Court
can take judicial notice of this pernicious practice, it can only hope that future legislation would
address the need to protect the innocent middle or lower class home purchaser. In the case of the
individual victim, this Court can only go to the extent of awarding such damages as may be proper
under the peculiar circumstances of the cases brought before it.

WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit. Costs against

[August 30, 1990]

This case puts in issue the authority of the Presidential Commission on Good Government (PCGG),
through the New Armed Forces of the Philippines Anti-Graft Board (hereinafter referred to as the
"Board"), to investigate and cause the prosecution of petitioner, a retired military officer, for violation
of Republic Acts Nos. 3019 and 1379.

Assailed by the Republic in this petition for certiorari, prohibition and/or mandamus with prayer for
the issuance of a writ of preliminary injunction and/or temporary restraining order are the orders of
respondent judge in Civil Case No. 57092 Branch 151 of the Regional Trial Court of Pasig, Metro
Manila: (1) dated June 23, 1989, denying petitioners’ Motion to Dismiss and Opposition, and (2)
dated June 26, 1989, granting private respondent’s application for the issuance of a writ of
preliminary injunction. Thus, the petition seeks the annulment of the two orders, the issuance of an
injunction to enjoin respondent judge from proceeding with Civil Case No. 57092 and, finally, the
dismissal of the case before the trial court.

The controversy traces its roots to the order of then PCGG Chairman Jovito R. Salonga, dated May 13,
1986, which created the New Armed Forces of the Philippines Anti-Graft Board. The Board was
created to "investigate the unexplained wealth and corrupt practices of AFP personnel, both retired
and in active service." The order further stated that" [t]he Board shall be primarily charged with the
task of investigating cases of alleged violations of the Anti-Graft and Corrupt Practices Act (Republic
Act No. 3019, as amended) and shall make the necessary recommendations to appropriate
government agencies and instrumentalities with respect to the action to be taken thereon based on
its findings."cralaw virtua1aw library

Acting on information received by the Board, which indicated the acquisition of wealth beyond his
lawful income, private respondent Lt. Col. Troadio Tecson (ret.) was required by the Board to submit
his explanation/comment together with his supporting evidence by October 31, 1987 [Annex "B",
Petition]. Private respondent requested, and was granted, several postponements, but was unable to
produce his supporting evidence because they were allegedly in the custody of his bookkeeper who
had gone abroad.

Just the same, the Board proceeded with its investigation and submitted its resolution, dated June
30, 1988, recommending that private respondent be prosecuted and tried for violation of Rep. Act
No. 3019, as amended, and Rep. Act No. 1379, as amended.chanrobles lawlibrary : rednad

The case was set for preliminary investigation by the PCGG. Private respondent moved to dismiss the
case on the following grounds: (1) that the PCGG has no jurisdiction over his person; (2) that the
action against him under Rep. Act No. 1379 has already prescribed; (3) that E.O. No. 14, insofar as it
suspended the provisions of Rep. Act No. 1379 on prescription of actions, was inapplicable to his
case; and (4) that having retired from the AFP on May 9, 1984, he was now beyond the reach of Rep.
Act No. 3019. The Board opposed the motion to dismiss.

In a resolution dated February 8, 1989, the PCGG denied the motion to dismiss for lack of merit.
Private respondent moved for reconsideration but this was denied by the PCGG in a resolution dated
March 8, 1989. Private respondent was directed to submit his counter-affidavit and other
controverting evidence on March 20, 1989 at 2:00 p.m.

On March 13, 1989, private respondent filed a petition for prohibition with preliminary injunction
with the Regional Trial Court in Pasig, Metro Manila. The case was docketed as Case No. 57092 and
raffled to Branch 151, respondent judge’s court. Petitioner filed a motion to dismiss and opposed the
application for the issuance of a writ of preliminary injunction on the principal ground that the
Regional Trial Court had no jurisdiction over the Board, citing the case of PCGG v. Peña, G.R. No.
77663, April 12, 1988, 159 SCRA 556. Private respondent opposed the motion to dismiss. Petitioner
replied to the opposition.

On June 23, 1989, respondent judge denied petitioner’s motion to dismiss. On June 26, 1989,
respondent judge granted the application for the issuance of a writ of preliminary injunction,
enjoining petitioners from investigating or prosecuting private respondent under Rep. Acts Nos. 3019
and 1379 upon the filing of a bond in the amount of Twenty Thousand Pesos (P20,000.00).

Hence, the instant petition.

On August 29, 1989, the Court issued a restraining order enjoining respondent judge from enforcing
his orders dated June 23, 1989 and June 26, 1989 and from proceeding with Civil Case No. 57092.

Private respondent filed his comment, to which petitioners filed a reply. A rejoinder to the reply was
filed by private Respondent. The Court gave due course to the petition and the parties filed their
memoranda. Thereafter, the case was deemed submitted.

The issues raised in the petition are as follows:chanrob1es virtual 1aw library




As to the first issue, petitioner contends that following the ruling of the Court in PCGG v. Peña the
Board, being a creation and/or extension of the PCGG, is beyond the jurisdiction of the Regional Trial
Court. On the second issue, petitioner strongly argues that the private respondent’s case falls within
the jurisdiction of the PCGG.

The pivotal issue is the second one. On this point, private respondent’s position is as
follows:chanrob1es virtual 1aw library

1. . . . he is not one of the subordinates contemplated in Executive Orders 1 , 2 , 14 and 14-A as the
alleged illegal acts being imputed to him, that of alleged amassing wealth beyond his legal means
while Finance Officer of the Philippine Constabulary, are acts of his own alone, not connected with
his being a crony, business associate, etc. or subordinate as the petition does not allege so. Hence
the PCGG has no jurisdiction to investigate him.

If indeed private respondent amassed wealth beyond his legal means, the procedure laid down by
Rep. Act 1379 as already pointed out before be applied. And since, he has been separated from the
government more than four years ago, the action against him under Republic Act 1379 has already

2. . . . no action can be filed anymore against him now under Republic Act 1379 for recovery of
unexplained wealth for the reason that he has retired more than four years ago.

3. . . . The order creating the AFP Anti-Graft Board (Annex "A", Petition) is null and void. Nowhere in
Executive Orders 1, 2, 14 and 14-A is there any authority given to the commission, its chairman and
members, to create Boards or bodies to be invested with powers similar to the powers invested with
the commission .. [Comment, pp. 6-7; Rollo, pp. 117-118].

1. The most important question to be resolved in this case is whether or not private respondent may
be investigated and caused to be prosecuted by the Board, an agency of the PCGG, for violation of
Rep. Acts Nos. 3019 and 1379. According to petitioners, the PCGG has the power to investigate and
cause the prosecution of private respondent because he is a "subordinate" of former President
Marcos. They cite the PCGG’s jurisdiction over —

(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the Philippines or
abroad, including the takeover or sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through nominees, by taking undue
advantage of their public office and/or using their powers, authority, influence, connections or
relationship. [E.O. No. 1, sec. 2.].

Undoubtedly, the alleged unlawful accumulation of wealth was done during the administration of
Pres. Marcos. However, what has to be inquired into is whether or not private respondent acted as a
"subordinate" of Pres. Marcos within the contemplation of E.O. No. 1, the law creating the PCGG,
when he allegedly unlawfully acquired the properties.

A close reading of E. O. No. 1 and related executive orders will readily show what is contemplated
within the term "subordinate."cralaw virtua1aw library

The Whereas Clauses of E. O. No. 1 express the urgent need to recover the ill-gotten wealth amassed
by former President Ferdinand E. Marcos, his immediate family, relatives, and close associates both
here and abroad.

E.O. No. 2 freezes "all assets and properties in the Philippines in which former President Marcos
and/or his wife, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents, or nominees have any interest or participation."cralaw virtua1aw

Applying the rule in statutory construction known as ejusdem generis, that is —

[W]here general words follow an enumeration of persons or things, by words of a particular and
specific meaning, such general words are not to be construed in their widest extent, but are to be
held as applying only to persons or things of the same kind or class as those specifically mentioned
[Smith, Bell & Co., Ltd. v. Register of Deeds of Davao, 96 Phil. 53, 58 (1954), citing Black on
Interpretation of Laws, 2nd Ed., 203].

the term "subordinate" as used in E.O. Nos. 1 and 2 would refer to one who enjoys a close
association or relation with former Pres. Marcos and/or his wife, similar to the immediate family
member, relative, and close associate in E.O. No. 1 and the close relative, business associate, dummy,
agent, or nominee in E.O. No. 2.

Thus, as stated by the Court in Bataan Shipyard & Engineering Co., Inc. v. PCGG, G.R. No. 75885, May
27, 1987, 150 SCRA 181, 205-206.

The situations envisaged and sought to be governed [by Proclamation No. 3 and E.O. Nos. 1, 2 and
14] are self-evident, these being:chanrob1es virtual 1aw library

1) that" (i)ll gotten properties (were) amassed by the leaders and supporters of the previous
regime" ;
a) more particularly, that" (i)ll-gotten wealth (was) accumulated by former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates, and close associates, . . . located in the
Philippines or abroad, xx (and) business enterprises and entities (came to be) owned or controlled by
them, during . . . (the Marcos) administration, directly or through nominees, by taking undue
advantage of their public office and/or using their powers, authority, influence, connections or

b) otherwise stated, that "there are assets and properties pertaining to former President Ferdinand
E. Marcos, and/or his wife Mrs. Imelda Romualdez Marcos, their close relatives, subordinates,
business associates, dummies, agents or nominees which had been or were acquired by them
directly or indirectly, through or as a result of the improper or illegal use of funds or properties
owned by the Government of the Philippines or any of its branches, instrumentalities, enterprises,
banks or financial institutions, or by taking undue advantage of their office, authority, influence,
connections or relationship, resulting in their unjust enrichment and causing grave damage and
prejudice to the Filipino people and the Republic of the Philippines" ;

c) that "said assets and properties are in the form of bank accounts, deposits, trust accounts, shares
of stocks, buildings, shopping centers, condominiums, mansions, residences, estates, and other kinds
of real and personal properties in the Philippines and in various countries of the world;" and.

2) that certain "business enterprises and properties (were) taken over by the government of the
Marcos Administration or by entities or persons close to former President Marcos." [Footnotes

It does not suffice, as in this case, that the respondent is or was a government official or employee
during the administration of former Pres. Marcos. There must be a prima facie showing that the
respondent unlawfully accumulated wealth by virtue of his close association or relation with former
Pres. Marcos and/or his wife. This is so because otherwise the respondent’s case will fall under
existing general laws and procedures on the matter. Rep. Act No. 3019, the Anti-Graft and Corrupt
Practices Act, penalizes the corrupt practices of any public officer. Under Rep. Act No. 1379 (An Act
Declaring Forfeited in Favor of the State Any Property Found to Have Been Unlawfully Acquired By
Any Public Officer or Employee and Providing for the Procedure Therefor), whenever any public
officer or employee has acquired during his incumbency an amount of property which is manifestly
out of proportion to his salary as such public officer or employee and to his other lawful income and
the income from legitimately acquired property, said property shall be presumed prima facie to have
been unlawfully acquired [Sec. 2]. The Solicitor General shall file the petition and prosecute the case
in behalf of the Republic, after preliminary investigation by the provincial or city prosecutor [Ibid].

Moreover, the record shows that private respondent was being investigated for unlawfully acquired
wealth under Rep. Acts Nos. 3019 and 1379, and not under E.O. Nos. 1, 2, 14 and 14-A.

Since private respondent was being investigated by the PCGG through the AFP Anti-Graft Board it
would have been presumed that this was under Rep. Acts Nos. 3019 and 1379 in relation to E.O. Nos.
1, 2, 14 and 14-A. But the record itself belies this presumption:chanrob1es virtual 1aw library
(a) The letter of the chairman of the AFP Anti-Graft Board to private respondent, dated October 16,
1987, states: "This letter is in connection with the alleged information received by the AFP Anti-Graft
Board indicating your acquisition of wealth beyond legal means of income in violation of Rep. Act No.
3019 known as the Anti-Graft and Corrupt Practices Act." [Rollo, p. 39].

(b) The Resolution dated June 30, 1988 of the Board categorically states:chanrob1es virtual 1aw

I. PRELIMINARY STATEMENT:chanrob1es virtual 1aw library

This refers to the case against Col Troadio B. Tecson PC (Ret) for alleged unexplained wealth pursuant
to R.A. 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices Act and R.A. 1379, as
amended, otherwise known as the "Act for Forfeiture of Unlawfully Acquired Property." [Rollo, p.

The resolution alleges that private respondent unlawfully accumulated wealth by taking advantage of
his office as Finance Officer of the Philippine Constabulary. No attempt is made in the Board’s
resolution to link him or his accumulation of wealth to former Pres. Marcos and/or his wife.

(c) The letter of the Board chairman to the chairman of the PCGG, dated July 28, 1988, is
clear:chanrob1es virtual 1aw library

Respectfully transmitted herewith for the prosecution before the Sandiganbayan is the case folder of
COLONEL TROADIO TECSON (Ret) who after preliminary investigation of the case by the Board, found
a prima facie evidence against subject officer for violating Section 8, R.A. 3019, as amended by BP
195, otherwise known as the Anti-Graft and Corrupt Practices Act and R.A. 1379, otherwise known as
an Act for the Forfeiture of Unlawfully Acquired Property." [Rollo, p. 46].

Moreover, from the allegations of petitioner in its memorandum, it would appear that private
respondent accumulated his wealth for his own account. Petitioner quoted the letter of Ignacio
Datahan, a retired PC sergeant, to General Fidel Ramos, the material portion of which
reads:chanrob1es virtual 1aw library

. . . After an official in the military unit received an Allotment Advice the same signed a cash advance
voucher, let us say in the amount of P5,000.00. Without much ado, outright, Col. Tecson paid the
amount. The official concerned was also made to sign the receipt portion on the voucher the amount
of which was left blank. Before the voucher is passed for routine processing by Mrs. Leonor Cagas,
clerk of Col. Tecson and its facilitator, the maneuver began. The amount on the face of the cash
advance voucher is altered or superimposed. The original amount of P5,000.00 was now made say,
P95,000.00. So it was actually the amount of P95,000.00 that appeared on the records. The
difference of P90,000.00 went to the syndicate.

. . . Boy Tanyag, bookkeeper in Col. Tecson’s office took care of the work.

. . . In the liquidation of the altered cash advance amount, names of persons found in the
Metropolitan Manila Telephone Directory with fictitious addresses appeared as recipients or payees.
Leonor and Boy got their shares on commission basis of the looted amount while the greater part
went to Col. Tecson. [Rollo, pp. 184-185.].

Clearly, this alleged unlawful accumulation of wealth is not that contemplated in E.O. Nos. 1, 2, 14
and 14-A.

2. It will not do to cite the order of the PCGG Chairman, dated May 13, 1986, creating the Board and
authorizing it to investigate the unexplained wealth and corrupt practices of AFP personnel, both
retired and in active service, to support the contention that PCGG has jurisdiction over the case of
private Respondent. The PCGG cannot do more than what it was empowered to do. Its powers are
limited. Its task is limited to the recovery of the ill-gotten wealth of the Marcoses, their relatives and
cronies. The PCGG cannot, through an order of its chairman, grant itself additional powers — powers
not contemplated in its enabling law.

3. Petitioner assails the trial court’s cognizance of the petition filed by private Respondent.
Particularly, petitioner argues that the trial court cannot acquire jurisdiction over the PCGG. This
matter has already been settled in Peña, supra, where the Court ruled that those who wish to
question or challenge the PCGG’s acts or orders must seek recourse in the Sandiganbayan, which is
vested with exclusive and original jurisdiction. The Sandiganbayan’s decisions and final orders are in
turn subject to review on certiorari exclusively by this Court. [Ibid, at pp. 564-565].

The ruling in Peña was applied in PCGG v. Aquino, G.R. No. 77816, June 30, 1988, 163 SCRA 363,
Soriano III v. Yuson, G.R. No. 74910 (and five other cases), August 10, 1988, 164 SCRA 226 and
Olaguer v. RTC, NCJR, Br. 48, G.R. No. 81385, February 21, 1989, 170 SCRA 478, among others, to
enjoin the regional trial courts from interfering with the actions of the PCGG.

Respondent judge clearly acted without or in excess of his jurisdiction when he took cognizance of
Civil Case No. 57092 and issued the writ of preliminary injunction against the PCGG.

4. Thus, we are confronted with a situation wherein the PCGG acted in excess of its jurisdiction and,
hence, may be enjoined from doing so, but the court that issued the injunction against the PCGG has
not been vested by law with jurisdiction over it and, thus, the injunction issued was null and void.

The nullification of the assailed order of respondent judge issuing the writ of preliminary injunction is
therefore in order. Likewise, respondent judge must be enjoined from proceeding with Civil Case No.

But in view of the patent lack of authority of the PCGG to investigate and cause the prosecution of
private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be enjoined
from proceeding with the case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of government be allowed to exercise
only the powers granted it.

5. The pronouncements made above should not be taken to mean that the PCGG’s creation of the
AFP Anti-Graft Board is a nullity and that the PCGG has no authority to investigate and cause the
prosecution of members and former members of the Armed Forces of the Philippines for violations
of Rep. Acts Nos. 3019 and 1379. The PCGG may investigate and cause the prosecution of active and
retired members of the AFP for violations of Rep. Acts Nos. 3019 and 1379 only in relation to E.O.
Nos. 1, 2, 14 and 14-A, i.e., insofar as they involve the recovery of the ill-gotten wealth of former
Pres. Marcos and his family and "cronies." But the PCGG would not have jurisdiction over an ordinary
case falling under Rep. Acts Nos. 3019 and 1379, as in the case at bar. E.O. Nos. 1, 2, 14 and 14-A did
not envision the PCGG as the investigator and prosecutor of all unlawful accumulations of wealth.
The PCGG was created for a specific and limited purpose, as we have explained earlier, and
necessarily its powers must be construed with this in mind.

6. n his pleadings, private respondent contends that he may no longer be prosecuted because of
prescription. He relies on section 2 of Rep. Act No. 1379 which provides that" [t]he right to file such
petition [for forfeiture of unlawfully acquired wealth] shall prescribe within four years from the date
of resignation, dismissal or separation or expiration of the term of the officer or employee
concerned." He retired on May 9, 1984, or more than six (6) years ago. However, it must be pointed
out that section 2 of Rep. Act No. 1379 should be deemed amended or repealed by Article XI, section
15 of the 1987 Constitution which provides that" [t]he right of the State to recover properties
unlawfully acquired by public officials or employees, from them or from their nominees or
transferees, shall not be barred by prescription, laches, or estoppel." Considering that sec. 2 of Rep.
Act No. 1379 was deemed amended or repealed before the prescriptive period provided therein had
lapsed insofar as private respondent is concerned, we cannot say that he had already acquired a
vested right that may not be prejudiced by a subsequent enactment.

Moreover, to bar the Government from recovering ill-gotten wealth would result in the validation or
legitimization of the unlawful acquisition, a consequence at variance with the clear intent of Rep. Act
No. 1379, which provides:chanrobles virtual lawlibrary

SEC. 11. Laws on prescription. — The laws concerning acquisitive prescription and limitation of
actions cannot be invoked by, nor shall they benefit the respondent, in respect to any property
unlawfully acquired by him.

Thus, we hold that the appropriate prosecutory agencies, i.e., the city or provincial prosecutor and
the Solicitor General under sec. 2 of Rep. Act No. 1379, may still investigate the case and file the
petition for the forfeiture of unlawfully acquired wealth against private respondent, now a private
citizen. (On the other hand, as regards respondents for violations of Rep. Acts Nos. 3019 and 1379
who are still in the government service, the agency granted the power to investigate and prosecute
them is the Office of the Ombudsman [Rep. Act No. 6770]). Under Presidential Decree No. 1606, as
amended, and Batas Pambansa Blg. 195 violations of Rep. Acts Nos. 3019 and 1379 shall be tried by
the Sandiganbayan.

7. The Court hastens to add that this decision is without prejudice to the prosecution of private
respondent under the pertinent provisions of the Revised Penal Code and other related penal laws.

WHEREFORE, the order of respondent judge dated June 26, 1989 in Civil Case No. 57092 is NULLIFIED
and SET ASIDE. Respondent judge is ORDERED to dismiss Civil Case No. 57092. The temporary
restraining order issued by the Court on August 29, 1989 is MADE PERMANENT. The PCGG is
ENJOINED from proceeding with the investigation and prosecution of private respondent in I.S. No.
37, without prejudice to his investigation and prosecution by the appropriate prosecutory agency.



[March 21, 1975]

[Basically, Arrow Transportation challenged the PROVISIONAL PERMIT issued by the BoT based on
the absence of a HEARING, drawing from the PLDT v. Medina ruling.]

Arrow Transportation has a certificate of public convenience to operate a public utility bus air-
conditioned-auto-truck service from Cebu City to Mactan International Airport and vice-versa with
the use of 20 units. Sultan Rent-a-Car filed a petition with the Board of Transporation for the
issuance of a certificate of public convenience to operate a similar service on the same line. Eight
days later, without the required publication, the Board issued an order granting it provisional permit
to operate such auto-truck service on the line applied for. There was a motion for reconsideration
and for the cancellation of such provisional permit filed, but without awaiting final action thereon,
this present petition was filed. Arrow Transportation explained that it has not waited for the
resolution of his MR before going to this Court considering that the question involved herein is
purely a legal one, aside from the fact that the issuance of the Order without the Board having
acquired jurisdiction of the case yet, is patently illegal or was performed without jurisdiction.

BOARD OF TRANSPORTATION: denied the allegation that there must be a publication before a
provisional permit can be issued, reference being made to PD 101, which authorized Board of
Transportation to grant provisional permits when warranted by compelling circumstances and to
proceed promptly along the method of legislative inquiry.

ISSUE: W/N the petition to for the cancellation of the provisional permit issued by BoT without
publication may prosper?

HELD: NO, [sorry Arrow]. The claim for relief on the asserted constitutional deficiency based on
procedural due process, not from the standpoint of the absence of a hearing but from the lack of
jurisdiction without the required publication having been made, do not suffice to justify the grant
of certiorari1.

A barrier to Arrow Transportation’s pretension is the well-settled doctrine that for a provisional
permit, an ex parte hearing suffices. The decisive consideration is the existence of the public
need. That was shown in this case, the Board of Transportation, on the basis of demonstrable data,
being satisfied of the pressing necessity for the grant of the provisional permit sought. There is no
warrant for the nullification of what was ordered by it.

[PLDT v. Medina] In this case, Araneta University seeks reexamination of the rates approved by the
defunct Public Service Commission. These rate-fixing and allied cases terminated with the final
judgment of January 9, 1964. Not being a party, Araneta could not have moved to reconsider nor
appeal said decision. The Court held that the Public Service Commission may not reduce or increase
rates established in a judgment that has become final, without proper notice." Under the facts of
that case, the procedural due process infirmity amounting to lack of jurisdiction is quite apparent.
The aforesaid case finds no application to this controversy dealing with a provisional permit.

ISSUE: W/N the controversy is ripe for judicial determination

At the time the petition was filed, there was pending with the Board of Transportation a motion for
reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection grounded
on prematurity can be raised. Nonetheless, counsel for Arrow Transportation would stress that
certiorari lies as the failure to observe procedural due process ousted the Board of Transportation of
whatever jurisdiction it could have had in the premises. This Court was impelled to go into the merits
of the controversy at this stage, not only because of the importance of the issue raised but also
because of the strong public interest in having the matter settled.

PD 101 prescribes the procedure to be followed by the BoT. It states that it is the policy of the State,
as swiftly as possible, to improve the deplorable condition of vehicular traffic, obtain maximum
utilization of existing public motor vehicles and eradicate the harmful and unlawful trade of
clandestine operators, as well as update the standard of those carrying such business, making it
SECTION 1. Petition for Certiorari. – When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal,
nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such
tribunal, board or officer, and granting such incidental reliefs as law and justice may require.
"imperative to provide, among other urgently needed measures, more expeditious methods in
prescribing, redefining, or modifying the lines and mode of operation of public utility motor vehicles
that now or thereafter, may operate in this country.

It is essential then both from the standpoint of the firms engaged as well as of the riding public to
ascertain whether or not the procedure followed in this case and very likely in others of a similar
nature satisfies the procedural due process requirement. Thus, its ripeness for adjudication becomes

[Edu v. Ericta] Where the validity of a legislation was passed upon in a certiorari proceeding to annul
and set aside a writ of preliminary injunction, to so act would be to conserve both time and effort.
Those desiring to engage in public utility business as well as the public are both vitally concerned
with the final determination of the standards to be followed in the procedure that must be observed.
There is, to repeat, a great public interest in a definitive outcome of the crucial issue involved.

Professor Kenneth Culp Davis, discussing the RIPENESS CONCEPT, is of the view that the resolution
of what could be a debilitating uncertainty with the conceded ability of the judiciary to work out a
solution of the problem posed is a potent argument for minimizing the emphasis laid on its technical

WHEREFORE, the petition for certiorari is dismissed.

14, 1992]

Article XVI, Section 6: The State shall establish and maintain one police force, which stall be national
in scope and civilian in character, to be administered and controlled by a national police commission.
The authority of local executives over the police units in their jurisdiction shall be provided by law.

AND FOR OTHER PURPOSES". Following the said Act's approval by President Corazon Aquino, it was
published on December 17, 1990.

Three days after its publication, J. Antonio Carpio, as citizen, taxpayer and member of the
Philippine Bar, filed the petition seeking this Court's declaration of unconstitutionality of RA 6975
with prayer for TRO. The Court simply required the public respondents to file their comment. Hence,
the Act took effect.

In the past, the set-up whereby the Integrated National Police was placed under the command of the
military component, which is the Philippine Constabulary, severely eroded the INP's civilian
character and the multiplicity in the governance of the PC-INP resulted in inefficient police
service. Moreover, the integration of the national police forces with the PC also resulted in inequities
since the military component had superior benefits and privileges. The Constitutional Commission
of 1986 was fully aware of the structural errors that beset the system. Thus, a constitutional
postulate was made to the effect that the military cannot occupy any civil service position. Hence,
the "one police force, national in scope, and civilian in character" provision that is now Article XVI,
Section 6 of the 1987 Constitution.

J. CARPIO: advances the view that RA 6975 emasculated the National Police Commission by limiting
its power "to administrative control" over PNP, thus, "control" remained with the Department
Secretary under whom both the National Police Commission and the PNP were placed.

ISSUE: W/N RA 6975 is unconstitutional.

HELD: NO. The fundamentally accepted principle in Constitutional Law is that the President has
control of all executive departments, bureaus, and offices. This presidential power of control over the
executive branch of government extends over all executive officers from Cabinet Secretary to the
lowliest clerk. It has been held to mean the power to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to substitute the judgment of the
former with that of the latter.

Doctrine of Qualified Political Agency: As the President cannot be expected to exercise his control
powers all at the same time and in person, he will have to delegate some of them to his Cabinet
members. The multifarious executive and administrative functions of the Chief Executive are
performed by and through the executive departments, and the acts of the Secretaries of such
departments, performed and promulgated in the regular course of business, unless disapproved or
reprobated by the Chief Executive presumptively the acts of the Chief Executive ."

Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the reorganized
DILG is merely an administrative realignment that would bolster a system of coordination and
cooperation among the citizenry, local executives and the integrated law enforcement agencies and
public safety agencies created under the assailed Act, the funding of the PNP being in large part
subsidized by the national government. Such organizational set-up does not detract from the
mandate of the Constitution that the national police force shall be administered and controlled by
a national police commission as at any rate, and in fact, the Act in question adequately provides
for administration and control at the commission level.

Carpio further asserts that in manifest derogation of the power of control of the NAPOLCOM over
the PNP, RA 6975 vested the power to choose the PNP Provincial Director and the Chiefs of Police
in the Governors and Mayors, respectively; the power of "operational supervision and control"
over police units in city and municipal mayors; in the Civil Service Commission, participation in
appointments to the positions of Senior Superintendent to Deputy Director-General as well as the
administration of qualifying entrance examinations; disciplinary powers over PNP members in the
"People's Law Enforcement Boards" and in city and municipal mayors.

Every presumption should be indulged in favor of constitutionality and the court in considering the
validity of the statute in question should give it such reasonable construction as can be reached to
bring it within the fundamental law. Under the questioned provisions, full control remains with the
National Police Commission.

There is no usurpation of the power of control of the NAPOLCOM because under this very same
provision, it is clear that the local executives are only acting as representatives of the NAPOLCOM.
As such deputies, they are answerable to the NAPOLCOM for their actions in the exercise of their
functions under that section. It is significant to note that the local officials, as NAPOLCOM
representatives, will choose the officers concerned from a list of eligibles (those who meet the
general qualifications for appointment to the PNP) to be recommended by PNP officials. The same
holding is true with respect to the contention on the operational supervision and control exercised
by the local officials. Those officials would simply be acting as representatives of the Commission.
As regards the assertion involving the Civil Service Commission, the questioned provisions, precisely
underscore the civilian character of the national police force, and will undoubtedly professionalize
the same.

The grant of disciplinary powers over PNP members to the "People's Law Enforcement Boards" (or
the PLEB) and city and municipal mayors is also not in derogation of the commission's power of
control over the PNP. Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the
regional appellate boards, over decisions of both the PLEB and the said mayors. Furthermore, it is
the Commission which shall issue the implementing guidelines and procedures to be adopted by the
PLEB for in the conduct of its hearings, and it may assign NAPOLCOM hearing officers to act as legal
consultants of the PLEBs.

The national police force does not fall under the Commander-in-Chief powers of the President. This
is necessarily so since the police force, not being integrated with the military, is not a part of the
Armed Forces of the Philippines. As a civilian agency of the government, it properly comes within,
and is subject to, the exercise by the President of the power of executive control. The President, as
Commander-in-Chief, is not a member of the Armed Forces. He remains a civilian whose duties
under the Commander-in-Chief provision "represent only a part of the organic duties imposed
upon him. All his other functions are clearly civil in nature."

Finally, petitioner submits that the creation of a "Special Oversight Committee", especially the
inclusion therein of some legislators as members is an "unconstitutional encroachment upon and a
diminution of, the President's power of control over all executive departments, bureaus and
offices." HOWEVER, the Special Oversight Committee is simply an ad hoc or transitory body,
established and tasked solely with planning and overseeing the immediate "transfer, merger
and/or absorption" into the DILG of the "involved agencies." As an ad hoc body, its creation and the
functions it exercises, decidedly do not constitute an encroachment and in diminution of the power
of control which properly belongs to the President.

As a last word, under the Constitution, there are the so-called independent Constitutional
Commissions, namely: The Civil Service Commission, Commission on Audit, and the Commission on
Elections. (Article IX-A, Section 1) As these Commissions perform vital governmental functions, they
have to be protected from external influences and political pressures. Hence, they were made
constitutional bodies, independent of and not under any department of the government. Certainly,
they are not under the control of the President. The Constitution also created an independent office
called the "Commission on Human Rights." However, although it is independent like the latter
Commissions. It still had to be constituted thru Executive Order No. 163.

In contrast, Article XVI, Section 6 thereof, merely mandates the statutory creation of a national
police commission that will administer and control the national police force to be established
thereunder. This commission is not in the same category as the independent Constitutional
Commissions of Article IX and the other constitutionally created independent Office, namely, the
Commission on Human Rights.

By way of resume, the three Constitutional Commissions (Civil Service, Audit, Elections) and the
additional commission created by the Constitution (Human Rights) are all independent of the
Executive; but the National Police Commission is not. In fact, it was stressed during the CONCOM
deliberations that this commission would be under the President, and hence may be controlled by
the President, thru his or her alter ego, the Secretary of the Interior and Local Government.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit.


[April 18, 1990]
Industrial Enterprises Inc. was granted a coal operating contract by the Government through the
Bureau of Energy Development for the exploration of two coal blocks in Eastern Samar.
Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract
for the exploration of three additional coal blocks which, together with the original two blocks,
comprised the so-called "Giporlos Area."

IEI was later advised that with the objective of rationalizing the country's over-all coal supply-
demand balance, the logical coal operator in the area should be the Marinduque Mining and
Industrial Corporation, which was already developing the coal deposit in another area (Bagacay) and
that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC executed a
Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and
interests in the two coal blocks which are the subject of IEI's coal operating contract.

Subsequently, IEI filed an action for rescission of the Memorandum of Agreement with damages
against MMIC and the then Minister of Energy Geronimo Velasco before RTC-Makati, alleging that
MMIC took possession of the subject coal blocks even before the Memorandum of Agreement was
finalized and approved by the BED; that MMIC discontinued work thereon; that MMIC failed to apply
for a coal operating contract for the adjacent coal blocks; and that MMIC failed and refused to pay
the reimbursements agreed upon and to assume IEI's loan obligation as provided in the
Memorandum of Agreement. IEI also prayed that the Energy Minister be ordered to approve the
return of the coal operating contract from MMIC to IEI. Strangely enough, Jesus Cabarrus is the
President of both IEI and MMIC.

RTC: ordered the rescission of the Memorandum of Agreement, declared the continued efficacy of
the coal operating contract in favor of IEI. The RTC also ordered BED to give due course to IEI's
application for a coal operating contract and to IEI's application for three more coal blocks.

CA: reversed the RTC decision. The CA held that the rendition of the summary judgment was not
proper since there were genuine issues in controversy between the parties, and RTC had no
jurisdiction over the action considering that, under PD. 1206, it is the BED that has the power to
decide controversies relative to the exploration, exploitation and development of coal blocks.
[During the pendency of the appeal before the CA, the suit against the then Minister of Energy was
dismissed and that, in the meantime, IEI had applied with the BED for the development of certain
coal blocks.]

ISSUE: W/N the RTC had jurisdiction to hear and decide the suit for rescission of the Memorandum
of Agreement concerning a coal operating contract over coal blocks. A

HELD: NO. IEI's cause of action was not merely the rescission of a contract but the reversion or
return to it of the operation of the coal blocks, necessitating a determination of whether or not
such reversion would be in line with the integrated national program for coal-development and
with the objective of rationalizing the country's over-all coal-supply-demand balance. These are
matters properly falling within the domain of the BED.

For the BED, as the successor to the Energy Development Board(abolished by PD 1206), is tasked
with the function of establishing a comprehensive and integrated national program for the
exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal
resources; adopting a coal development program; regulating all activities relative thereto; and
undertaking by itself or through service contracts such exploitation and development, all in the
interest of an effective and coordinated development of extracted resources.

P.D. No. 1206 provides that the powers and functions of the defunct Energy Development Board
relative to the implementation of P.D. No. 972 on coal exploration and development have been
transferred to the BED, provided that coal operating contracts including the transfer or assignment
of interest in said contracts, shall require the approval of the Secretary (Minister) of Energy (Sec.
12, P.D. No. 1206). P.D. No. 972 also provides: Each coal operating contract herein authorized shall be
executed by the Energy Development Board.

Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, to
pass upon any question involving the Memorandum of Agreement between IEI and MMIC,
revolving as its does around a coal operating contract, should be sustained.

In recent years, it has been the jurisprudential trend to apply the DOCTRINE OF PRIMARY
JURISDICTION in many cases involving matters that demand the special competence of
administrative agencies.

It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that
the matter involved is also judicial in character. However, if the case is such that its determination
requires the expertise, specialized skills and knowledge of the proper administrative bodies
because technical matters or intricate questions of facts are involved, then relief must first be
obtained in an administrative proceeding before a remedy will be supplied by the courts even though
the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction.

It applies "where a claim is originally cognizable in the courts, and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have
been placed within the special competence of an administrative body, in such case the judicial
process is suspended pending referral of such issues to the administrative body for its view" (United
States v. Western Pacific Railroad Co).

Clearly, the DOCTRINE OF PRIMARY JURISDICTION finds application in this case since the question of
what coal areas should be exploited and developed and which entity should be granted coal
operating contracts over said areas involves a technical determination by the BED as the
administrative agency in possession of the specialized expertise to act on the matter.

RTC does not have the competence to decide matters concerning activities relative to the
exploration, exploitation, development and extraction of mineral resources like coal. These issues
preclude an initial judicial determination. It behooves the courts to stand aside even when
apparently they have statutory power to proceed, in recognition of the primary jurisdiction of an
administrative agency.

One thrust of the multiplication of administrative agencies is that the interpretation of contracts and
the determination of private rights thereunder is no longer a uniquely judicial function, exercisable
only by our regular courts (Antipolo Realty Corp. vs. National Housing Authority).
dismissal of the case below. It need only be SUSPENDED until after the matters within the
competence of the BED are threshed out and determined. Thereby, the principal purpose behind the
doctrine of primary jurisdiction is salutarily served.

Uniformity and consistency in the regulation of business entrusted to an administrative agency are
secured, and the limited function of review by the judiciary are more rationally exercised by
preliminary resort to agencies that are better equipped than courts by specialization, by insight
gained through experience, and by more flexible procedure (Far East Conference v. United States.

WHEREFORE, the Court Resolved to DENY the petition to review and reverse the APPELATE
COURT’S decision.


27, 1971]

Magno Manuel had been in continuous possession of the land in question since 1939. Being an
ignorant farmer, he did not file his Tree Farm application until June 1954. The Director of Forestry
rejected the same because a prior application had been filed by Mariano Villena in November
1955. Two motions for reconsideration of the rejection order were turned down. Manuel thereafter
appealed to the Secretary of Agriculture and Natural Resources, but the appeal was dismissed by
him. 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 before said investigation was terminated, the
Secretary rendered a decision dismissing the appeal. Thus, Manuel filed the complaint, averring
that the administrative decision which rejected his application for a tree farm permit over a 20-
hectare parcel of public land violated his right to due process.
CFI: found the defendants’ objection meritorious, and that the complaint averred no sufficient facts
to show the court’s jurisdiction. HOWEVER, it allowed Manuel to file an amended complaint.

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.

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. 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 Manuel 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

Manuel filed an amended complaint, alleging that from the very inception of this case in the Bureau
of Forestry up to the filing of his appeal in the DANR, he has not been assisted by counsel in any of
the proceedings therein. Further, in the investigation conducted by the District Forester, 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" Also, the Department 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.

Villena moved to dismiss the amended complaint on ground that it did not cure the defects of the
original one, and still contained insufficient allegations to make out a cause of action or to confer
jurisdiction upon the court to set aside the administrative decision complained of. CFI found the
motion meritorious and dismissed the complaint.
ISSUE: W/N the administrative decision complained of violated Manuel’s right to due process,
which in effect resulted to DANR acting with grave abuse of discretion and vesting jurisdiction
upon CFI.

HELD: NO. 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, this
function falls within the jurisdiction of the Director of Forestry with the approval of the Secretary of
Agriculture and Natural Resources.

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. 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" or that the decision is vitiated by fraud, imposition or

The complaint 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; 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. 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 heard, only 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. 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 confront each other and
their witnesses.

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 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 investigator’s Remarks and Comments."

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.



From September to October 1964 the President of the Philippines, purporting to act pursuant to
Section 68 of the Revised Administrative Code, issued EOs 93 to 121, 124 and 126 to 129, creating
33 municipalities. On November 1964, Emmanuel Pelaez, as Vice President of the Philippines and as
taxpayer, instituted the present special civil action, for a writ of prohibition with preliminary
injunction, against the Auditor General, to restrain him from passing in audit any expenditure of
public funds in implementation of said executive orders and/or any disbursement by said
municipalities. Pelaez alleges that said executive orders are null and void, upon the ground that
Section 68 has been impliedly repealed by RA 2370 and constitutes an undue delegation of
legislative power.

The Auditor General maintains the contrary view and avers that the present action is premature
and that not all proper parties (referring to the officials of the new political subdivisions in question)
have been impleaded. Subsequently, the mayors of several municipalities adversely affected by the
aforementioned executive orders — because the latter have taken away from the former the barrios
composing the new political subdivisions — intervened in the case.

Section 3 of Republic Act No. 2370, reads:

All barrios existing at the time of the passage of this Act shall come under the provisions hereof.

Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the
name of an existing one may be changed by the provincial board of the province, upon
recommendation of the council of the municipality or municipalities in which the proposed barrio is
stipulated. The recommendation of the municipal council shall be embodied in a resolution approved
by at least two-thirds of the entire membership of the said council: Provided, however, That no new
barrio may be created if its population is less than five hundred persons.

Barrios shall not be created or their boundaries altered nor their names changed except under the
provisions of this Act or by Act of Congress.

Hence, since January 1, 1960, when RA 2370 became effective, barrios may "not be created or their
boundaries altered nor their names changed" except by Act of Congress or of the corresponding
provincial board.

PELAEZ: "If the President, under this new law, cannot even create a barrio, can he create a
municipality which is composed of several barrios, since barrios are units of municipalities?"

AUDITOR: YES, upon the theory that a new municipality can be created without creating new barrios,
such as, by placing old barrios under the jurisdiction of the new municipality. Respondent alleges
that the power of the President to create municipalities under Sec. 68 of the RAC does not amount
to an undue delegation of legislative power. [This theory overlooks that the statutory denial of the
presidential authority to create a new barrio implies a negation of the bigger power to create
municipalities, each of which consists of several barrios. ]

[Municipality of Cardona vs. Municipality of Binañgonan] This case involved, not the creation of a
new municipality, but a mere transfer of territory — from an already existing municipality (Cardona)
to another municipality (Binañgonan), likewise, existing at the time of and prior to said transfer— in
consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of
two municipalities.

HOWEVER, whereas the power to fix such common boundary, in order to avoid or settle conflicts
of jurisdiction between adjoining municipalities, may partake of an administrative nature —
involving, as it does, the adoption of means and ways to carry into effect the law creating said
municipalities — the authority to create municipal corporations is essentially legislative in nature.
In the language of other courts, it is "strictly a legislative function" or "solely and exclusively the
exercise of legislative power". As the Supreme Court of Washington has put it, municipal
corporations are purely the creatures of statutes."

Although Congress may delegate to another branch of the Government the power to fill in the
details in the execution, enforcement or administration of a law, it is essential that said law: (a) be
complete in itself — it must set forth therein the policy to be executed, carried out or implemented
by the delegate — and (b) fix a standard — the limits of which are sufficiently determinate or
determinable — to which the delegate must conform in the performance of his functions. Indeed,
without a statutory declaration of policy, the delegate would in effect, make or formulate such policy,
which is the essence of every law; and, without the aforementioned standard, there would be no
means to determine, with reasonable certainty, whether the delegate has acted within or beyond
the scope of his authority.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for a
valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate
any policy to be carried out or implemented by the President. Neither does it give a standard
sufficiently precise to avoid the evil effects above referred to.

It is worth noting that Sec. 68 also provides that the President: “... may change the seat of the
government within any subdivision to such place therein as the public welfare may require.” It is true
that in Calalang vs. Williams, and Rosenthal this Court had upheld "public welfare" and "public
interest," respectively, as sufficient standards for a valid delegation of the authority to execute the
law. But, the doctrine laid down in these cases must be construed in relation to the specific facts and
issues involved therein. Both cases involved grants to administrative officers of powers related to the
exercise of their administrative functions, calling for the determination of questions of fact.

Such is not the nature of the powers dealt with in Section 68. The creation of municipalities is not
an administrative function, but one which is essentially and eminently legislative in character. The
question of whether or not "public interest" demands the exercise of such power is not one of fact. It
is "purely a legislative question" or a political question.

Section 10 (1) of Article VII of the Constitution states: “The President shall have control of all the
executive departments, bureaus, or offices, exercise general supervision over all local governments
as may be provided by law, and take care that the laws be faithfully executed.” The power of
control under this provision implies the right of the President to interfere in the exercise of such
discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of
the national government, as well as to act in lieu of such officers.

This power is denied by the Constitution to the Executive, insofar as local governments are
concerned. With respect to the latter, the fundamental law permits him to wield no more authority
than that of checking whether said local governments or the officers thereof perform their duties as
provided by statutory enactments. Hence, the President cannot interfere with local governments,
so long as the same or its officers act within the scope of their authority. He may not enact an
ordinance which the municipal council has failed or refused to pass, although he may see to it that
the corresponding provincial officials take appropriate disciplinary action therefor. Neither may he
vote, set aside or annul an ordinance passed by said council within the scope of its jurisdiction, no
matter how patently unwise it may be. He may not even suspend an elective official of a regular
municipality or take any disciplinary action against him, except on appeal from a decision of the
corresponding provincial board.

Upon the other hand if the President could create a municipality, he could, in effect, remove any of
its officials, by creating a new municipality and including therein the barrio in which the official
concerned resides, for his office would thereby become vacant. Thus, by merely brandishing the
power to create a new municipality , without actually creating it, he could compel local officials to
submit to his dictation, thereby, in effect, exercising over them the power of control denied to him
by the Constitution.

Then, also, the power of control of the President over executive departments, bureaus or offices
implies no more than the authority to assume directly the functions thereof or to interfere in the
exercise of discretion by its officials. Manifestly, such control does not include the authority either
to abolish an executive department or bureau, or to create a new one. As a consequence, the
alleged power of the President to create municipal corporations would necessarily connote the
exercise by him of an authority even greater than that of control which he has over the executive
departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code does
not merely fail to comply with the constitutional mandate above quoted. Instead of giving the
President less power over local governments than that vested in him over the executive
departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring
upon him more power over municipal corporations than that which he has over said executive
departments, bureaus or offices.

In short, even if it did not entail an undue delegation of legislative powers, as it certainly does, said
Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be
deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly
incompatible and inconsistent with said statutory enactment.

WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the
respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities above referred

PROVINCE OF BATANGAS vs. ALBERTO ROMULO (Chairman of Oversight Committee on Devolution)

[May 27, 2004]

On December 7, 1998, then President Joseph Estrada issued EO 48 entitled "ESTABLISHING A

"facilitate the process of enhancing the capacities of LGUs in the discharge of the functions and
services devolved to them by the National Government Agencies concerned pursuant to the Local
Government Code (RA 7160)."1 The Oversight Committee (referred to as the Devolution Committee
in EO 48) has been tasked to formulate and issue the appropriate rules and regulations necessary
for its effective implementation. Further, to address the funding shortfalls of functions and services
devolved to the LGUs and other funding requirements of the program, the "Devolution Adjustment
and Equalization Fund" was created. For 1998, the DBM was directed to set aside an amount to be
determined by the Oversight Committee based on the devolution status appraisal surveys
undertaken by the DILG. The initial fund was to be sourced from the available savings of the
national government for CY 1998. For 1999 and the succeeding years, the corresponding amount
required to sustain the program was to be incorporated in the annual GAA. The Oversight Committee
has been authorized to issue the implementing rules and regulations governing the equitable
allocation and distribution of said fund to the LGUs.

In line with such, in the GAA of 1999, 2000, and 2001, P5 billion is earmarked for the Local
Government Service Equalization Fund for the funding requirements of projects and activities of
LGUs pursuant to the LGC of 1991: PROVIDED, FURTHER, That such amount shall be released to the
LGUs subject to the IRRs, including such mechanisms and guidelines for the equitable allocations
and distribution of said fund among LGUs subject to the guidelines that may be prescribed by the
Oversight Committee on Devolution. Thus, OCD resolutions were also promulgated, providing for
the allocation schemes covering the P5 billion and the IRR therefor.

Thereafter, the Province of Batangas, represented by its Governor, Hermilando Mandanas, filed the
present petition to declare as unconstitutional and void provisos contained in the GAA of 1999, 2000
and 2001, insofar as they uniformly earmarked for each corresponding year P5 billion Internal
Revenue Allotment for the Local Government Service Equalization Fund and imposed conditions for
the release thereof. The PROVINCE OF BATANGAS submits that the assailed provisos in the GAAs and
the OCD resolutions violate the Constitution and the LGC of 1991.

ALBERTO ROMULO: advance the view that Section 6, Article X of the Constitution does not specify
that the "just share" of the LGUs shall be determined solely by the Local Government Code of 1991
and that there exists no limitation on the power of Congress to determine what is the "just share" of
the LGUs in the national taxes.

LGUs have no vested right in a permanent or fixed percentage as Congress may increase or
decrease the "just share" of the LGUs in accordance with what it believes is appropriate for their
operation. There is nothing in the Constitution which prohibits Congress from making such
determination through the appropriations laws. If the provisions of a particular statute, the GAA in
this case, are within the constitutional power of the legislature to enact, they should be sustained
whether the courts agree or not in the wisdom of their enactment.

ISSUE: W/N the provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF, and the OCD
resolutions infringe the Constitution and the Local Government Code of 1991.

Article X of the Constitution: “Sec. 6. Local government units shall have a just share, as determined
by law, in the national taxes which shall be automatically released to them.”

Local Government Code of 1991: “Sec. 18. Power to Generate and Apply Resources. Local
government units shall have the power and authority to establish an organization that shall be
responsible for the efficient and effective implementation of their development plans, program
objectives and priorities; to create their own sources of revenue and to levy taxes, fees, and charges
which shall accrue exclusively for their use and disposition and which shall be retained by them; to
have a just share in national taxes which shall be automatically and directly released to them without
need of further action;” . [Even the best intentions must be carried out within the parameters of the
Constitution and the law.]
“Sec. 286. Automatic Release of Shares. (a) The share of each local government unit SHALL be
released, without need of any further action, directly to the provincial, city, municipal or barangay
treasurer, as the case may be, on a quarterly basis within FIVE DAYS after the end of each
quarter, and which shall not be subject to any lien or holdback that may be imposed by the national
government for whatever purpose. (b) Nothing in this Chapter shall be understood to diminish the
share of local government units under existing laws.

Significantly, the LGSEF could not be released to the LGUs without the Oversight Committee's prior
approval. Further, with respect to the portion of the LGSEF allocated for various projects of the LGUs,
the Oversight Committee, through the assailed OCD resolutions, laid down guidelines and
mechanisms that the LGUs had to comply with before they could avail of funds from this portion of
the LGSEF.

The GUIDELINES required (a) the LGUs to identify the projects eligible for funding based on the
criteria laid down by the Oversight Committee; (b) the LGUs to submit their project proposals to the
DILG for appraisal; (c) the project proposals that passed the appraisal of the DILG to be submitted to
the Oversight Committee for review, evaluation and approval. It was only upon approval thereof
that the Oversight Committee would direct the DBM to release the funds for the projects.

SC: YES, the provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF, and the OCD
resolutions infringe the Constitution and the Local Government Code of 1991. To the Court's mind,
the entire process involving the distribution and release of the LGSEF is constitutionally
impermissible. The LGSEF is part of the IRA or "just share" of the LGUs in the national taxes. To
subject its distribution and release to the vagaries of the implementing rules and regulations,
including the guidelines and mechanisms unilaterally prescribed by the Oversight Committee from
time to time makes the release not automatic, a flagrant violation of the constitutional and statutory
mandate that the "just share" of the LGUs "shall be automatically released to them." The LGUs are,
thus, placed at the mercy of the Oversight Committee.

Indeed, the Oversight Committee exercising discretion, even control, over the distribution and
release of a portion of the IRA, the LGSEF, is an anathema to and subversive of the principle of local
autonomy as embodied in the Constitution. Moreover, it finds no statutory basis at all as the
Oversight Committee was created merely to formulate the rules and regulations for the efficient and
effective implementation of the Local Government Code of 1991 to ensure "compliance with the
principles of local autonomy as defined under the Constitution." In fact, its creation was placed
under the title of "Transitory Provisions," signifying its ad hoc character.

LOCAL AUTONOMY 'means a more responsive and accountable local government structure
instituted through a system of decentralization.' The Constitution does nothing more than to break
up the monopoly of the national government over the affairs of local governments and to "liberate
the local governments from the imperialism of Manila." Autonomy, however, is not meant to end the
relation of partnership and interdependence between the central administration and local
government units, or otherwise, to usher in a regime of federalism. The Charter has not taken such a
radical step. Local governments, under the Constitution, are subject to regulation, however limited,
and for no other purpose than precisely, albeit paradoxically, to enhance self-government.
Decentralization means devolution of national administration – but not power – to the local levels.
Now, autonomy is either decentralization of administration or decentralization of power. There is
decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power, at the same time, it relieves
the central government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises 'general supervision' over them, but only to 'ensure that
local affairs are administered according to law.'.

Decentralization of power, on the other hand, involves an abdication of political power in favor of
LGUs declared to be autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central authorities.

The assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions constitute a
"withholding" of a portion of the IRA. They put on hold the distribution and release of the five billion
pesos LGSEF and subject the same to the implementing rules and regulations, including the
guidelines and mechanisms prescribed by the Oversight Committee from time to time. They
effectively encroach on the fiscal autonomy enjoyed by the LGUs and must be struck down. They
cannot, therefore, be upheld. The assailed provisos in the GAAs of 1999, 2000 and 2001 and the
OCD resolutions cannot amend Section 285 of the Local Government Code of 1991.

The Local Government Code of 1991 is a substantive law. And while it is conceded that Congress may
amend any of the provisions therein, it may not do so through appropriations laws or GAAs. Any
amendment to the Local Government Code of 1991 should be done in a separate law, not in the
appropriations law, because Congress cannot include in a general appropriation bill matters that
should be more properly enacted in a separate legislation.

WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations Acts of
1999, 2000 and 2001, and the assailed OCD Resolutions, are declared UNCONSTITUTIONAL.


[January 31, 2001]

Joel Bito-Onon is the Barangay Chairman of Barangay Tacras, and is the Municipal Liga Chapter
President for the Municipality of Narra, Palawan. Elegio Quejano, Jr. is the Barangay Chairman of
Barangay Rizal, and is the Municipal Liga Chapter President for the Municipality of Magsaysay,
Palawan. Both Onon and Quejano were candidates for the position of Executive Vice-President in
the 1997 election for the Liga ng Barangay Provincial Chapter of the province of Palawan. Onon was
proclaimed the winning candidate in the said election prompting Quejano to file a post proclamation
protest with the Board of Election Supervisors , which was decided against him.

Quejano filed a Petition for Review of the decision of the BES with the RTC. Onon filed a motion to
dismiss, claiming that the RTC had no jurisdiction. Onon claimed the Supplemental Guidelines for
the 1997 Liga ng mga Barangay election issued by the DILG in its Memorandum Circular No. 97-193,
providing for review of decisions or resolutions of the BES by the regular courts of law is an ultra
vires act and is void for being issued without or in excess of jurisdiction, as its issuance is not a mere
act of supervision but rather an exercise of control over the Liga's internal organization.

RTC: ruled that it had jurisdiction over the petition for review filed by Quejada and denied Onon's
motion to dismiss. RTC held that the Secretary of DILG is vested with the power "to establish and
prescribe rules, regulations and other issuances and implementing laws on the general supervision
of LGUs and the promotion of local autonomy and monitor compliance thereof by said units. The RTC
added that DILG Circular No. 97-193 was issued by the DILG Secretary pursuant to his rule-making
power as provided for under the Administrative Code.

ONON: argues that the "Supplemental Guidelines for the 1997 Synchronized Election of the
Provincial and Metropolitan Chapters and for the Election of the National Chapter of the Liga ng
mga Barangay" contradicts the "Implementing Rules and Guidelines for the 1997 General Elections
of the Liga ng mga Barangay Officers and Directors" and is therefore invalid. Onon alleges that the
Liga ng mga Barangay (LIGA) is not an LGU considering that a local government unit must have its
own source of income, a certain number of population, and a specific land area in order to exist or be
created as such. Thus, the DILG only has a limited supervisory authority over the LIGA.

Moreover, Onon Argues that even if the DILG has supervisory authority over the LIGA, the act of
the DILG in issuing the supplemental rules and guidelines for the conduct of the 1997 LIGA
elections had the effect of modifying, altering and nullifying the rules prescribed by the National
Liga Board. Onon posits that the issuance of said guidelines allowing an appeal of the decision of the
BES to the regular courts rather than to the National Liga Board is no longer an exercise of
supervision but an exercise of control.

ISSUE: W/N in issuing the questioned Memorandum Circular, the Secretary of the DILG effectively
amended the rules and guidelines promulgated by National Liga Board.


Memorandum Circular No. 97-193: "Any post-proclamation protest must be filed with the BES within
twenty-four (24) hours from the closing of the election. The BES shall decide the same within forty-
eight (48) hours from receipt thereof. The decision of the BES shall be final and immediately
executory without prejudice to the filing of a Petition for Review with the regular courts of law."

Guidelines for the 1997 General Elections of the Liga ng mga Barangay Officers: "To resolve any
post-proclamation electoral protest which must be submitted in writing to this Board within 24-hours
from the close of election; provided said Board shall render its decision within 48-hours from receipt
hereof; and provided further that the decision must be submitted to the National Liga Headquarters
within 24-hours from the said decision. The decision of the Board of Election Supervisors in this
respect shall be subject to review by the National Liga Board the decision of which shall be final and

Memorandum Circular No. 97-193 was issued by the DILG Secretary pursuant to the power of
general supervision of the President over all local government units which was delegated to the
DILG Secretary by virtue of Administrative Order No. 267 dated February 18, 1992. The President's
power of general supervision over local government units is conferred upon him by the Constitution.

The power of supervision is defined as "the power of a superior officer to see to it that lower officers
perform their functions in accordance with law." This is distinguished from the power of control or
"the power of an officer to alter or modify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for the latter." Supervisory
power, when contrasted with control, is the power of mere oversight over an inferior body; it does
not include any restraining authority over such body.

Does the President's power of general supervision extend to the liga ng mga barangay, which is not
a local government unit? YES. Department of Justice ruled that the liga ng mga barangay is a
government organization, being an association, federation, league or union created by law or by
authority of law, whose members are either appointed or elected government officials. The ligas are
primarily governed by the provisions of the Local Government Code. However, their respective
constitution and by-laws shall govern all other matters affecting the internal organization of the liga
not otherwise provided for in the Local Government Code provided that the constitution and by-laws
shall be suppletory to the provisions of LGC.

HOWEVER, Memorandum Circular No. 97-193 of the DILG insofar as it authorizes the filing a
Petition for Review of the decision of the BES with the regular courts in a post proclamation
electoral protest is of doubtful constitutionality. In authorizing the filing of the petition for review
of the decision of the BES with the regular courts, the DILG Secretary in effect amended and
modified the GUIDELINES promulgated by the National Liga Board and adopted by the LIGA which
provides that the decision of the BES shall be subject to review by the National Liga Board. The
amendment of the GUIDELINES is more than an exercise of the power of supervision but is an
exercise of the power of control, which the President does not have over the LIGA.

Although the DILG is given the power to prescribe rules, regulations and other issuances, the
Administrative Code limits its authority to merely "monitoring compliance" by local government
units of such issuances. To monitor means "to watch, observe or check" and is compatible with the
power of supervision of the DILG Secretary over local governments, which is limited to checking
whether the local government unit concerned or the officers thereof perform their duties as per
statutory enactments. Besides, any doubt as to the power of the DILG Secretary to interfere with
local affairs should be resolved in favor of the greater autonomy of the local government.

[FERNANDEZ should have dismissed the petition ofQuejano.]

WHEREFORE, the instant petition is hereby GRANTED. The Order of the RTC is REVERSED and SET
17, 2004]

Francisco Rosales was elected mayor of Catarman, Northern Samar during the 1998 local elections.
After he assumed office, he summoned the department heads for a conference, among whom was
the municipal engineer, Miguel Mijares. During the meeting, Rosales told Mijares to resign under
pain of abolition of his position. Not wishing to antagonize the mayor, Mijares informed him that
he was "open" to the possibility of being transferred or detailed at the Provincial Engineering
Office. Then and there, Rosales instructed Mijares to prepare his papers.

Rosales then indorsed Mijares to the provincial governor of Northern Samar for consideration for the
position of Assistant Provincial Engineer. However, the provincial governor did not act on Rosales’

ROSALES’ FIRST LETTER: request to transfer to the Provincial Engineering Office is granted for a
period of 30 days from receipt hereof; SECOND LETTER: The 30-day period given to you to transfer
has now elapsed. In as much as you did not seek an extension of your permit to transfer, you are
considered resigned from this government unit.

Mijares requested Rosales to withdraw the separation letter.Rosales explained that Mijares was not
terminated and that his separation from the service was by operation of law, i.e., CSC Memorandum
Circular no. 38, S. 1993. In the same communication, Rosales offered to reinstate Mijares. MIJARES
filed a complaint for illegal termination against ROSALES before the CSC.

CSC: held in favor of MIJARES. The CSC held the respondent did not freely and voluntarily seek
permission to transfer to another office. Based on the record, the supposed transfer of the
respondent to the Office of the Provincial Engineer was a shrewd machination or clever ploy
resorted to by the petitioner to oust the respondent from his position as Municipal Engineer;
hence, such transfer was illegal.

The CSC also ruled that a request for transfer, under CSC Memorandum Circular No. 98-38, must be
in writing; and that even assuming that a verbal request for transfer may be made, Rosales failed to
adduce any proof that the respondent made such verbal request, as well as the date of the effectivity
of the transfer. The CSC cited its ruling in CSC Resolution No. 99-1616 dated July 20, 1999. The CSC
declared that the letter of the petitioner to the respondent dated August 12, 1998 was but a detail of
the respondent to the Office of the Provincial Engineer. After Rosales’ MR was denied by CSC, Rosales
filed a petition for review with the CA assailing the resolutions of the CSC.

CA: rendered a decision dismissing the petition and affirming the resolutions of the CSC. The CA held
that the ground relied upon to justify respondent's removal, i.e., expiration of his permit to transfer,
is purely technical and, therefore, too flimsy to override the constitutional mandate upholding an
employee's right to security of tenure (Art. IX-B, Sec. 2, par. 3, 1987 Constitution). The guarantee of
security of tenure is an important object of the civil service system because it affords a faithful
employee permanence of employment, at least for the period prescribed by law, and frees the
employee from the fear of political and personal prejudicial reprisal."

ISSUE: W/N Memorandum Circ. 93-98 of the CSC allows for a verbal request for an employee to
transfer to another office

CSC Memorandum Circular No. 93-38 reads:

Transfer – is a movement from one position without break in service involving the issuance of an

The transfer may be from one agency to another or from one organizational unit to another in the
same agency. An employee who seeks transfer to another office shall first secure permission from
the head of the department or agency where he is employed stating the effective date of the
transfer. If the request to transfer of an employee is not granted by the head of the agency where
he is employed, it shall be deemed approved after the lapse of 30 days from the date of notice to
the agency head. If, for whatever reason, the employee fails to transfer on the specified date, he
shall be considered resigned and his reemployment in his former office shall be at the discretion of his

The CSC interpreted its Memorandum as requiring a written and not merely a verbal request for an
employee to transfer to another office. Moreover, such request must be express and unequivocal,
and cannot be merely implied or ambiguous. The request by an employee to transfer to another
office must be such that he intended to surrender his permanent office. Also, a transfer connotes an
absolute relinquishment of an office in exchange for another office. Such request must be voluntary
on the part of the officer concerned and not vitiated by force, coercion, or intimidation or even

The Court also held that unconsented transfer is anathema to security of tenure. A transfer that
aims by indirect method to terminate services or to force resignation constitutes removal. An
employee cannot be transferred unless for causes provided for by law and after due process. The
right of employees to security of tenure should never be sacrificed merely at the whims and pleasure
of some unscrupulous and heartless politicians.

In this case, Rosales, who perceived that Mijares was a well-known supporter of the political party
opposed to his candidacy, coerced the respondent into resigning and even threatened to have his
position as Municipal Engineer abolished. In light of the demands and threats of the petitioner, the
respondent had only three options: to resign, to agree to transfer to another office, or to remain as
Municipal Engineer with the threat of the petitioner to have his position abolished hanging over his
head. Mijares opted to make himself available for appointment by the Provincial Governor as
Assistant Provincial Engineer. However, the Form 212 submitted by the respondent to the
Provincial Governor is not the written request envisaged in CSC Memorandum Circular No. 93-38
for the following reasons: (a) the respondent continued reporting and performing his duties as
Municipal Engineer of Catarman and receiving his salary as such; and (b) the respondent did not
send any written request to the petitioner for transfer to the Office of the Provincial Engineer.
Mijares did not want to risk unemployment by making a written request for transfer without first
being assured of his appointment by the Provincial Governor to the position of Assistant Provincial
Engineer; hence, he opted to wait for the Provincial Governor's approval for his appointment before
submitting a written request for transfer to the petitioner. As it were, the Governor failed to act on
the respondent's application.

By his September 24, 1998 letter to the respondent, the petitioner made it appear that he had
granted the respondent permission to transfer within thirty days, and that the respondent failed to
effect his transfer. This was done by the petitioner despite the absence of any letter from the
respondent requesting for such transfer. By his August 12, 1998 letter, the petitioner merely
detailed the respondent to the Office of the Provincial Engineer. It must be stressed that the only
legal effect of a detail of an employee, upon the lapse of the period of such detail, is for that
employee to return to his permanent station. Thus, the respondent retained his position as
Municipal Engineer despite his detail to the Office of the Provincial Engineer.

Well-settled is the rule that in reviewing administrative decisions, the findings of fact made therein
must be respected as long as they are supported by substantial evidence. We see no cogent reason
to depart from said principle.

It bears stressing that the case before the CSC involves the security of tenure of a public officer
sacrosanctly protected by the Constitution. Public interest requires a resolution of the merits of
the appeal instead of dismissing the same based on a strained and inordinate application of
Section 49(a) of the CSC Revised Rules of Procedure.

WHEREFORE, the petition is DENIED for lack of merit. The decision of the appellate court is


15, 1989]
Vivencio Sto. Domingo, Sr., deceased husband of Irene Sto. Domingo, died on June 4,1971 and buried
on June 6,1971 in Lot No. 159 of the North Cemetery. The lot was leased by the City of Manila to
Irene for the period from June 6, 1971 to June 6, 2021 per an Official Receipt for P50.

Believing in good faith that, in accordance with Administrative Order No. 5, Series of 1975, dated
March 6, 1975, of the City Mayor of Manila prescribing uniform procedure and guidelines in the
processing of documents pertaining to and for the use and disposition of burial lots and plots
within the North Cemetery, etc., the subject Lot was leased to the bereaved family for five years
only. Thus, subject lot was certified as ready for exhumation and the bones of Vivencio were placed
in a bag and kept the same in the depository of the cemetery.

Subsequently, the same lot in question was rented out to another lessee so that when Irene went to
said lot on All Souls Day, the resting place of their dear departed did not anymore bear the stone
marker which they lovingly placed on the tomb. Irene was offered another lot but was never
appeased. She was too aggrieved that she came to court for relief even before she could formally
present her claims and demands to the city government and to the other defendants named in the
present complaint.

RTC: rendered judgment ordering the City of Manila to give Irene, et al. the right to make use of
another single lot within the North Cemetery for a period of 43 years, 4 months and 11 days,
corresponding to the unexpired term of the fully paid lease sued upon; and to search for the
remains of the late Vivencio Sto. Domingo, Sr. and thereafter, to bury the same in the substitute lot
to be chosen by the plaintiffs pursuant to this decision.

CA: MODIFIED the decision of the RTC. The City of Manila was ordered to look for the bones and skull
of the late Vivencio Sto. Domingo, Sr., and to bury the same in the substitute lot adjudged in favor of
Irene, et. al. Further, defendants are jointly and severally held liable to pay Irene: for breach of
contract, for moral damages, exemplary damages, attorney’s fees, on the legal rate of interest
computed from filing hereof until fully paid.

CITY OF MANILA: alleged that the North Cemetery is exclusively devoted for public use or purpose.
Since the City is a political subdivision in the performance of its governmental function, it is immune
from tort liability which may be caused by its public officers and subordinate employees. Further
Section 4, Article I of the Revised Charter of Manila exempts the city from liability for damages or
injuries to persons or property arising from the fault or negligence of its officials and employees.

STO. DOMINGOS: maintain that the City of Manila entered into a contract of lease which involve the
exercise of proprietary functions with Irene. The city and its officers therefore can be sued for any-
violation of the contract.

ISSUE: W/N the City of Manila can be held responsible for the alleged torts of its officials and
employees, despite its charter providing otherwise. (Whether the operations and functions of a
public cemetery are a governmental/proprietary?)

HELD: YES. Under Philippine laws, the City of Manila is a political body corporate and as such
endowed with the faculties of municipal corporations to be exercised by and through its city
government in conformity with law, and in its proper corporate name. It may sue and be sued, and
contract and be contracted with. Its powers are twofold in character—public, governmental or
political on the one hand, and corporate, private and proprietary on the other.

Governmental powers are those exercised in administering the powers of the state and promoting
the public welfare and they include the legislative, judicial, public and political. Municipal powers are
exercised for the special benefit and advantage of the community and include those which are
ministerial, private and corporate.

"A municipal corporation proper has a public character as regards the state at large insofar as it is its
agent in government, and private insofar as it is to promote local necessities and conveniences for its
own community. In connection with the powers of a municipal corporation, it may acquire property
in its public or governmental capacity, and private or proprietary capacity. The New Civil Code divides
such properties into property for public use and patrimonial properties (Article 423), and further
enumerates the properties for public use as provincial roads, city streets, municipal streets, the
squares, fountains, public waters, promenades, and public works for public service paid for by said
provisions, cities or municipalities, all other property is patrimonial without prejudice to the
provisions of special laws.

Municipal corporations are subject to be sued upon contracts and in tort. The rule of law is a general
one, that the superior or employer must answer civilly for the negligence or want of skill of its agent
or servant in the course or line of his employment, by which another who is free from contributory
fault, is injured. Municipal corporations under the conditions herein stated, fall within tile operation
of this rule of law, and are liable accordingly, to civil actions for damages when the requisite
elements of liability co-exist.

While the following are corporate or proprietary in character, viz: municipal waterworks, slaughter
houses, markets, stables, bathing establishments, wharves, ferries and fisheries. Maintenance of
parks, golf courses, cemeteries and airports among others, are also recognized as municipal or city
activities of a proprietary character.

Under the foregoing considerations and in the absence of a special law, the North Cemetery is a
patrimonial property of the City of Manila which was created by resolution of the Municipal Board.
The administration and government of the cemetery are under the City Health Officer, the order and
police of the cemetery , the opening of graves, niches, or tombs, the exhuming of remains, and the
purification of the same are under the charge and responsibility of the superintendent of the
cemetery. The City of Manila furthermore prescribes the procedure and guidelines for the use and
dispositions of burial lots and plots within the North Cemetery through Administrative Order No. 5, s.
1975. With the acts of dominion, there is, therefore no doubt that the North Cemetery is within
the class of property which the City of Manila owns in its proprietary or private character.
Furthermore, there is no dispute that the burial lot was leased in favor of the private respondents.
Hence, obligations arising from contracts have the force of law between the contracting parties. Thus
a lease contract executed by the lessor and lessee remains as the law between them. Therefore, a
breach of contractual provision entitles the other party to damages even if no penalty for such
breach is prescribed in the contract.

FURTHER, it would have been but fair and equitable if the Sto. Domingos were notified of the
intention of the city government to transfer the skeletal remains of the late Vivencio Sto. Domingo to
give them an opportunity to demand the faithful fulfillment of their contract, or at least to prepare
and make provisions for said transfer in order that they would not lose track of the remains of
their beloved, as what has actually happened on this case.

As regards the issue of the validity of the contract of lease of grave lot No. 159, Block No. 195 of the
North Cemetery for 50 years beginning from June 6, 1971 to June 6, 2021 as clearly stated in the
receipt duly signed by the deputy treasurer of the City of Manila and sealed by the city government,
there is nothing in the record that justifies the reversal of the conclusion of both the trial court and
the Intermediate Appellate Court to the effect that the receipt is in itself a contract of lease.

Under the doctrine of respondent superior, the City of Manila is liable for the tortious act committed
by its agents who failed to verify and check the duration of the contract of lease. The contention of
the city that the lease is covered by Administrative Order No. 5, series of 1975 dated March 6, 1975
of the City of Manila for 5 years only beginning from June 6, 1971 is not meritorious for the said
administrative order covers new leases. When subject lot was certified on January 25, 1978 as ready
for exhumation, the lease contract for 50 years was still in full force and effect.

PREMISES CONSIDERED, the Decision of the Intermediate Appellate Court is hereby AFFIRMED.


[March 27, 2000]

MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Bel-Air
Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are
homeowners in Bel-Air Village, a private subdivision in Makati City. BAVA is the registered owner of
Neptune Street, a road inside Bel-Air Village.

On December 30, 1995, BAVA received from MMDA, through its Chairman, a notice requesting BAVA
to open Neptune Street to public vehicular traffic starting January 2, 1996. BAVA was also apprised
that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be
demolished. Thus, BAVA instituted against MMDA before the RTC, praying for the issuance of a TRO
and preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition
of the perimeter wall. The RTC granted said TRO.

RTC: after due hearing, denied issuance of a preliminary injunction.

CA: issued a writ of preliminary injunction enjoining the implementation of the MMDA's proposed
action. Thereafter, the appellate court rendered a Decision, finding that the MMDA has no authority
to order the opening of Neptune Street, a private subdivision road, and cause the demolition of its
perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance.

MMDA: claims that it has the authority to open Neptune Street to public traffic because it is an agent
of the state endowed with police power in the delivery of basic services in Metro Manila. One of
these basic services is traffic management which involves the regulation of the use of thoroughfares
to insure the safety, convenience and welfare of the general public. It is now urged that there is no
need for the City of Makati to enact an ordinance opening Neptune street to the public.

ISSUE: W/N MMDA has the power to order the opening of subdivision roads to public traffic.

HELD: NO. Police power is an inherent attribute of sovereignty. It has been defined as the power
vested by the Constitution in the legislature to make, ordain, and establish all manner of wholesome
and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the
Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the
subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and
justifying measures for public health, public safety, public morals, and the general welfare. Police
power is lodged primarily in the National Legislature. The National Legislature, however, may
delegate this power to the President and administrative boards as well as the lawmaking bodies of
municipal corporations or local government units.

A local government is a "political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs." The Local Government Code of 1991 defines a local government
unit as a "body politic and corporate." — one endowed with powers as a political subdivision of the
National Government and as a corporate entity representing the inhabitants of its territory. Our
Congress delegated police power to the local government units in the Local Government Code of
1991 through Section 16 of the same Code, known as the general welfare clause. Local government
units exercise police power through their respective legislative bodies.

With the passage of RA 7924 in 1995, Metropolitan Manila was declared as a "special development
and administrative region" and the Administration of "metro-wide" basic services affecting the
region placed under "a development authority" referred to as the MMDA. "Metro-wide services" are
those "services which have metro-wide impact and transcend local political boundaries or entail
huge expenditures such that it would not be viable for said services to be provided by the individual
local government units comprising Metro Manila."

The implementation of the MMDA's plans, programs and projects is undertaken by the local
government units, national government agencies, accredited people's organizations, non-
governmental organizations, and the private sector as well as by the MMDA itself. For this purpose,
the MMDA has the power to enter into contracts, memoranda of agreement and other
arrangements with these bodies for the delivery of the required services Metro Manila.

It will be noted that the powers of the MMDA are limited to the following acts: formulation,
coordination, regulation, implementation, preparation, management, monitoring, setting of policies,
installation of a system and administration. There is no syllable in R.A. No. 7924 that grants the
MMDA police power, let alone legislative power. Even the Metro Manila Council has not been
delegated any legislative power. Unlike the legislative bodies of the local government units, there is
no provision in R.A. No. 7924 that empowers the MMDA or its Council to "enact ordinances, approve
resolutions appropriate funds for the general welfare" of the inhabitants of Metro Manila.

The MMDA is, as termed in the charter itself, "development authority." It is an agency created for
the purpose of laying down policies and coordinating with the various national government agencies,
people's organizations, non-governmental organizations and the private sector for the efficient and
expeditious delivery of basic services in the vast metropolitan area. All its functions are
administrative in nature.

[Sangalang v. Intermediate Appellate Court] The Court upheld a zoning ordinance issued by the
Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power. In
the second Sangalang/Yabut decision, the Court held that the opening of Jupiter Street was
warranted by the demands of the common good in terms of "traffic decongestion and public

The two Sangalang cases do not apply to the case at bar. Firstly, both involved zoning ordinances
passed by the municipal council of Makati and the MMC. In the instant case, the basis for the
proposed opening of Neptune Street is contained in the notice sent by MMDA to BAVA. The notice
does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City or by the
MMDA, as the legal basis for the proposed opening of Neptune Street. MMDA simply relied on its
authority under its charter ".

Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the
forerunner of the present MMDA, an examination of P. D. 824, the charter of the MMC, shows that
the latter possessed greater powers which were not bestowed on the present MMDA.

The MMC was the "central government" of Metro Manila for the purpose of establishing and
administering programs providing services common to the area. As a "central government" it had
the power to levy and collect taxes and special assessments, the power to charge and collect fees;
the power to appropriate money for its operation, and at the same time, review appropriations for
the city and municipal units within its jurisdiction. It was bestowed the power to enact or approve
ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had
the power to review, amend, revise or repeal all ordinances, resolutions and acts of any of the 4
cities and 13 municipalities comprising Metro Manila.

Clearly, the MMDA is not a political unit of government. The power delegated to the MMDA is that
given to the Metro Manila Council to promulgate administrative rules and regulations in the
implementation of the MMDA's functions. There is no grant of authority to enact ordinances and
regulations for the general welfare of the inhabitants of the metropolis. MMDA is a "development
authority" which is a "national agency, not a political government unit."

We stress that this decision does not make light of the MMDA's noble efforts to solve the chaotic
traffic condition in Metro Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis.
Even our once sprawling boulevards and avenues are now crammed with cars while city streets are
clogged with motorists and pedestrians. Traffic has become a social malaise affecting our people's
productivity and the efficient delivery of goods and services in the country. The MMDA was created
to put some order in the metropolitan transportation system but unfortunately the powers granted
by its charter are limited. Its good intentions cannot justify the opening for public use of a private
street in a private subdivision without any legal warrant. The promotion of the general welfare is not
antithetical to the preservation of the rule of law.

IN VIEW WHEREOF, the petition is denied. The Decision of the Court of Appeals is affirmed.


[May 8, 1992]

In 1974, National Power Corporation, through which the government undertakes the on-going
infrastructure and development projects throughout the country, filed two complaints for eminent
domain against private respondents with CFI-Lanao del Sur. The complaint which sought to
expropriate certain specified lots situated at Lanao del Sur was for the purpose of the development
of hydro-electric power and production of electricity as well as the erection of such subsidiary works
and constructions as may be necessarily connected therewith.

CFI: a decision was rendered, declaring that the lots described in the complaints have entirely been
lawfully condemned and expropriated by NAPOCOR, and ordering NAPOCOR to pay the private
respondents certain sums of money as just compensation for their lands expropriated "with legal
interest thereon until fully paid."

Upon finality of the decision, one of the private respondents (Sittie Sohra Batara) filed an ex-
parte motion for the execution of the decision, praying that NAPOCOR be directed to pay her the
unpaid balance of P14,300 for the lands expropriated from her, including legal interest which she
computed at 6% per annum. The said motion was granted by CFI and NAPOCOR was ordered to
deposit with its Clerk of Court the sums of money as adjudged, with interest computed at 6% per

In 1981, one of the private respondents (Pangonatan Cosna Tagol), filed with the trial court an ex-
parte motion, praying that the legal interest be computed at 12% per annum as allegedly "authorized
under and by virtue of Circular No. 416 of the Central Bank, issued pursuant to PD 116 and in a
decision of the SC that legal interest allowed in the judgment of the courts, in the absence of express
contract, shall be computed at 12% per annum." CFI granted the motion, allowing 12% interest per
annum, and the other private respondents filed motions also praying that the legal interest on the
just compensation awarded to them be computed at 12% per annum.

ISSUE: WHETHER in the computation of the legal rate of interest on just compensation for
expropriated lands, the law applicable is Article 2209 of the Civil Code which prescribes a 6% legal
interest rate or Central Bank Circular No. 416 which fixed the legal interest rate at 12% per annum.

CFI: denied NAPOCOR’s MR, stating that the rate of interest at the time of the promulgation of the
June 15, 1981 decision is that prescribed by Central Bank Circular No. 416 issued pursuant to PD No.
116, which is 12% per annum, and that it did not modify or change but merely amplified its order of
August 28, 1981 in the determination of the legal interest.

Central Bank Circular No. 416:

By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise
known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has
prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and
the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be
12% per annum.

The Central Bank circular applies only to loan or forbearance of money, goods or credits. Private
respondents, however, take exception to the inclusion of the term "judgments" in the said circular,
claiming that such term refers to any judgment directing the payment of legal interest, which term
includes the questioned judgment of the lower court in the case at bar. HOWEVER, the term
"judgments" should be interpreted to mean only judgments involving loan or forbearance of money,
goods or credits, following the principle of ejusdem generis. Under this doctrine, where general
terms follow the designation of particular things or classes of persons or subjects, the general term
will be construed to comprehend those things or persons of the same class or of the same nature as
those specifically enumerated. Applying the said rule on statutory construction to Central Bank
Circular No. 416, the general term "judgments" can refer only to judgments in cases involving loans
or forbearance of any money, goods or credits.

Therefore, Art. 2209 of the Civil Code, and not Central Bank Circular No. 416, is the law applicable to
the case at bar.

Art. 2209:

If the obligation consists in the payment of a sum of money, and the debtor incurs a delay, the
indemnity for damages, there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest, which is 6% per annum.

The Central Bank circular applies only to loan or forbearance of money, goods or credits and to
judgments involving such loan or forbearance of money, goods or credits. This is evident not only
from said circular but also from Presidential Decree No. 116, which amended Act No. 2655,
otherwise known as the Usury Law. On the other hand, Art. 2209 of the Civil Code applies to
transactions requiring the payment of indemnities as damages, in connection with any delay in the
performance of the obligation arising therefrom other than those covering loan or forbearance of
money, goods or credits.

In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or
credits but expropriation of certain parcels of land for a public purpose, the payment of which is
without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of
indemnity for damages. The legal interest required to be paid on the amount of just compensation
for the properties expropriated is manifestly in the form of indemnity for damages for the delay in
the payment thereof. Therefore, since the kind of interest involved in the joint judgment of the
lower court sought to be enforced in this case is interest by way of damages, and not by way of
earnings from loans, etc. Art. 2209 of the Civil Code shall apply.
As for private respondents' argument that Central Bank Circular No. 416 impliedly repealed or
modified Art. 2209 of the Civil Code, repeals or even amendments by implication are not favored if
two laws can be fairly reconciled. The Courts are slow to hold that one statute has repealed another
by implication, and they will not make such an adjudication if they can refrain from doing so, or if
they can arrive at another result by any construction which is just and reasonable.

Besides, the courts will not enlarge the meaning of one act in order to decide that it repeals another
by implication, nor will they adopt an interpretation leading to an adjudication of repeal by
implication unless it is inevitable and a clear and explicit reason therefor can be adduced. In this
case, Central Bank Circular No. 416 and Art. 2209 of the Civil Code contemplate different situations
and apply to different transactions.

In transactions involving loan or forbearance of money, goods or credits, as well as judgments

relating to such loan or forbearance of money, goods or credits, the Central Bank circular applies. On
the other hand, in cases requiring the payment of indemnities as damages, in connection with any
delay in the performance of an obligation other than those involving loan or forbearance of money,
goods or credits, Art. 2209 of the Civil Code applies. For the Court, this is the most fair, reasonable,
and logical interpretation of the two laws. We do not see any conflict between Central Bank Circular
No. 416 and Art. 2209 of the Civil Code or any reason to hold that the former has repealed the latter
by implication.

WHEREFORE, the petition is GRANTED. The Orders promulgated as to the recomputation of interest
at 12% per annum are ANNULLED and SET ASIDE. It is hereby declared that the computation of legal
interest at 6% per annum is the correct and valid legal interest allowed in payments of just
compensation for lands expropriated for public use to herein private respondents by the
Government through the National Power Corporation.


26, 1991]

J.B.L. Reyes, Edmundo and Milagros Reyes are owners of parcels of land in Tondo and Sta. Cruz
Districts, Manila, which are leased and entirely occupied as dwelling sites by tenants. Said tenants
were paying monthly rentals not exceeding P300. On July 14, 1971, the National Legislature enacted
RA 6359, prohibiting for one year from its effectivity, an increase in monthly rentals of dwelling
units or of lands on which another's dwelling is located, where such rentals do not exceed
P300/month, but allowing an increase in rent by not more than 10% thereafter. The said Act also
suspended Article 1673(1) of the Civil Code for two years from its effectivity thereby disallowing the
ejectment of lessees upon the expiration of the usual legal period of lease. Subsequently, PD No. 20
amended R.A. No. 6359 by making absolute the prohibition to increase monthly rentals below
P300.00 and by indefinitely suspending the aforementioned provision of the Civil Code, excepting
leases with a definite period. Consequently, the Reyeses were precluded from raising the rentals and
from ejecting the tenants.

In 1973, City Assessor of Manila re-classified and reassessed the value of the subject properties
based on the schedule of market values duly reviewed by the Secretary of Finance. The revision
entailed an increase in the corresponding tax rates prompting petitioners to file a Memorandum of
Disagreement with the Board of Tax Assessment Appeals. They averred that the reassessments
made were "excessive, unwarranted, inequitable, confiscatory and unconstitutional" considering
that the taxes imposed upon them greatly exceeded the annual income derived from their
properties. They argued that the INCOME APPROACH should have been used in determining the
land values instead of the COMPARABLE SALES APPROACH which the City Assessor adopted.

BOARD OF TAX ASSESSMENT APPEALS: considered the assessments valid. Since the appellants failed
to submit concrete evidence which could overcome the presumptive regularity of the classification
and assessments appear to be in accordance with the base schedule of market values and of the
base schedule of building unit values, as approved by the Secretary of Finance, the cases should be,
as they are hereby, upheld.

CENTRAL BOARD OF ASSESSMENT APPEALS: It was found that, during ocular inspection, certain
parcels of land were below street level and were affected by the tides. Thus, the Central Board of
Assessment Appeals rendered its decision and AFFIRMED the decision of the Board of Tax Appeals as
to some lots, and MODIFIED it by allowing a 20% reduction in their respective market values and
applying therein the assessment level of 30% to arrive at the corresponding assessed value for other

ISSUE: W/N the levels of the values assigned to the properties of the Reyeses were justifiable.

While Board of Tax Assessment Appeals admits in its decision that the income approach is used in
determining land values in some vicinities, it maintains that when income is affected by some sort of
price control, the same is rejected in the consideration and study of land values as in the case of
properties affected by the Rent Control Law for they do not project the true market value in the open
market. Thus, respondents opted instead for the "Comparable Sales Approach" on the ground that
the value estimate of the properties predicated upon prices paid in actual, market transactions
would be a uniform and a more credible standards to use especially in case of mass appraisal of

In any event, it is unquestionable that both the "Comparable Sales Approach" and the "Income
Approach" are generally acceptable methods of appraisal for taxation purposes. However, it is
conceded that the propriety of one as against the other would of course depend on several factors.
Hence, it has been stressed that the assessors, in finding the value of the property, have to consider
all the circumstances and elements of value and must exercise a prudent discretion in reaching

Under Art. VIII, Sec. 17 (1) of the 1973 Constitution, then enforced, the rule of taxation must not
only be uniform, but must also be equitable and progressive. UNIFORMITY has been defined as
that principle by which all taxable articles or kinds of property of the same class shall be taxed at the
same rate. Taxation is said to be EQUITABLE when its burden falls on those better able to pay.
Taxation is PROGRESSIVE when its rate goes up depending on the resources of the person affected.

The power to tax "is an attribute of sovereignty". In fact, it is the strongest of all the powers of
government. But for all its plenitude, the power to tax is not unconfined as there are restrictions.
Adversely effecting as it does property rights, both the due process and equal protection clauses of
the Constitution may properly be invoked to invalidate in appropriate cases a revenue measure. “If it
were otherwise, there would be truth to the 1903 dictum of Chief Justice Marshall that "the power
to tax involves the power to destroy." The web or unreality spun from Marshall's famous dictum was
brushed away by one stroke of Mr. Justice Holmes pen, thus: "The power to tax is not the power to
destroy while this Court sits. So it is in the Philippines ". In the same vein, the due process clause
may be invoked where a taxing statute is so arbitrary that it finds no support in the Constitution.
An obvious example is where it can be shown to amount to confiscation of property.

The taxing power has the authority to make a reasonable and natural classification for purposes of
taxation but the government's act must not be prompted by a spirit of hostility, or at the very least
discrimination that finds no support in reason. It suffices then that the laws operate equally and
uniformly on all persons under similar circumstances or that all persons must be treated in the same
manner, the conditions not being different both in the privileges conferred and the liabilities

Finally, under the Real Property Tax Code (P.D. 464 as amended), it is declared that the first
Fundamental Principle to guide the appraisal and assessment of real property for taxation purposes
is that the property must be "appraised at its current and fair market value."

By no strength of the imagination can the market value of properties covered by P.D. No. 20 be
equated with the market value of properties not so covered. The former has naturally a much lesser
market value in view of the rental restrictions.

Ironically, in the case at bar, not even the factors determinant of the assessed value of subject
properties under the "comparable sales approach" were presented by the public respondents,
namely: (1) that the sale must represent a bonafide arm's length transaction between a willing seller
and a willing buyer and (2) the property must be comparable property. Nothing can justify or support
their view as it is of judicial notice that for properties covered by P.D. 20 especially during the time in
question, there were hardly any willing buyers.

As a general rule, there were no takers so that there can be no reasonable basis for the conclusion
that these properties were comparable with other residential properties not burdened by P.D. 20.
Neither can the given circumstances be nonchalantly dismissed by public respondents as imposed
under distressed conditions clearly implying that the same were merely temporary in character. At
this point in time, the falsity of such premises cannot be more convincingly demonstrated by the fact
that the law has existed for around 20 years with no end to it in sight.

Taxes are the lifeblood of the government and so should be collected without unnecessary
hindrance. However, such collection should be made in accordance with law as any arbitrariness will
negate the very reason for government itself. It is therefore necessary to reconcile the apparently
conflicting interests of the authorities and the taxpayers so that the real purpose of taxations, which
is the promotion of the common good, may be achieved. Consequently, it stands to reason that
petitioners who are burdened by the government by its Rental Freezing Laws (then R.A. No. 6359
and P.D. 20) under the principle of social justice should not now be penalized by the same
government by the imposition of excessive taxes petitioners can ill afford and eventually result in the
forfeiture of their properties.

By the public respondents' own computation the assessment by income approach would amount to
only P10.00 per sq. meter at the time in question.

PREMISES CONSIDERED, (a) the petition is GRANTED; (b) the assailed decisions of public
respondents are REVERSED and SET ASIDE; and (e) the Board of Assessment Appeals of Manila and
the City Assessor of Manila are ordered to make a new assessment by the INCOME APPROACH
METHOD to guarantee a fairer and more realistic basis of computation.

17, 1976]

On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE
Mayor, Ramon Bagatsing, approved the ordinance.

Federation of Manila Market Vendors, Inc. commenced a Civil Case before CFI-Manila, seeking the
declaration of nullity of Ordinance No. 7522 for the reason that (a) the PUBLICATION REQUIREMENT
under the Revised Charter of the City of Manila has not been complied with; (b) the MARKET
COMMITTEE WAS NOT GIVEN ANY PARTICIPATION in the enactment of the ordinance, as envisioned
by RA 6039; (c) Section 3(e) of the Anti-Graft and Corrupt Practices Act has been violated; and (d)
the ordinance would violate PD No. 7, prescribing the collection of fees and charges on livestock and
animal products. [accompanied by a prayer for ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION]

CFI: issued an order denying the plea for PRELIMINARY INJUNCTION, for failure of the Federation of
Manila Market Vendors, Inc. to exhaust the administrative remedies outlined in the Local Tax Code.
Upon trial on the merits, JUDGE RAMIREZ rendered its decision, declaring the nullity of Ordinance
No. 7522 of the City of Manila on the primary ground of non-compliance with the requirement of
publication2 under the Revised City Charter.

BAGATSING: moved for reconsideration, stressing that (a) only post-publication is required by the
Local Tax Code; and (b) the Federation failed to exhaust all administrative remedies before
instituting an action in court. [Denied]

ISSUE: What law shall govern the publication of a tax ordinance enacted by the Municipal Board of
Manila, the Sec. 17 of the Revised City Charter 3 (RA 409), which requires publication before its
enactment and after its approval, or the Local Tax Code4 (PD 231), which only demands publication
after approval.

HELD: The LOCAL TAX CODE, PD 231 governs. The Revised Charter of the City of Manila is a special
act since it relates only to the City of Manila, whereas the Local Tax Code is a general law because it
applies universally to all local governments. The fact that one is special and the other general creates
a presumption that the special is to be considered as remaining an exception of the general, one as a
general law of the land, the other as the law of a particular case. However, the rule yields to a
situation where the special statute refers to a subject in general, which the general statute treats
in particular. The exactly is the circumstance obtaining in the case at bar.

Section 17 of the Revised Charter of the City of Manila speaks of "ordinance" in general, whereas,
Section 43 of the Local Tax Code relates to "ordinances levying or imposing taxes, fees or other
charges" in particular. In regard, therefore, to ordinances in general, the Revised Charter of the City
of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches
the realm of "ordinances levying or imposing taxes, fees or other charges" in particular. There, the
Local Tax Code controls. Here, as always, a general provision must give way to a particular
provision. Special provision governs. This is especially true where the law containing the particular
provision was enacted later than the one containing the general provision. The City Charter of Manila
was promulgated on June 18, 1949 as against the Local Tax Code which was decreed on June 1, 1973.

There is no rule which prohibits the repeal even by implication of a special or specific act by a
general or broad one. A charter provision may be impliedly modified or superseded by a later
statute, and where a statute is controlling, it must be read into the charter notwithstanding any
particular charter provision.

The ordinance in question was not published at all in two daily newspapers of general circulation in the City of Manila before its
enactment. Neither was it published in the same manner after approval, although it was posted in the legislative hall and in all city public
markets and city public libraries. There being no compliance with the mandatory requirement of publication before and after approval, the
ordinance in question is invalid and, therefore, null and void.

Section 17 - Each proposed ordinance shall be published in two daily newspapers of general circulation in the city, and shall not be
discussed or enacted by the Board until after the 3rd day following such publication. * * * Each approved ordinance shall be published in
two daily newspapers of general circulation in the city, within 10 days after its approval; and shall take effect after the 20th day following
its publication, if no date is fixed in the ordinance.

Section 43 - Within 10 days after their approval, certified true copies of all provincial, city, municipal and barrio ordinances levying or
imposing taxes, fees or other charges shall be published for three consecutive days in a newspaper or publication widely circulated
within the jurisdiction of the local government, OR posted in the local legislative hall or premises and in two other conspicuous places
within the territorial jurisdiction of the local government. In either case, copies of all provincial, city, municipal and barrio ordinances shall
be furnished the treasurers of the respective component and mother units of a local government for dissemination.
A subsequent general law similarly applicable to all cities prevails over any conflicting charter
provision, for the reason that a charter must not be inconsistent with the general laws and public
policy of the state. A chartered city is not an independent sovereignty. The state remains supreme in
all matters not purely local. Otherwise stated, a charter must yield to the constitution and general
laws of the state, it is to have read into it that general law which governs the municipal corporation
and which the corporation cannot set aside but to which it must yield. When a city adopts a charter,
it in effect adopts as part of its charter general law of such character.

that any question or issue raised against the legality of any tax ordinance, or portion thereof, shall be
referred for opinion to the city fiscal in the case of tax ordinance of a city. The opinion of the city
fiscal is appealable to the Secretary of Justice, whose decision shall be final and executory unless
contested before a competent court within 30 days.

HOWEVER, the controversy between the parties is deeply rooted in a pure question of law: whether
it is the Revised Charter of the City of Manila or the Local Tax Code that should govern the
publication of the tax ordinance. In other words, the dispute is sharply focused on the applicability of
the Revised City Charter or the Local Tax Code on the point at issue, and not on the legality of the
imposition of the tax. Exhaustion of administrative remedies before resort to judicial bodies is not an
absolute rule. It admits of exceptions. Where the question litigated upon is purely a legal one, the
rule does not apply. The principle may also be disregarded when it does not provide a plain, speedy
and adequate remedy. It may and should be relaxed when its application may cause great and
irreparable damage.

Ordinance is not a "tax ordinance," because the imposition of rentals, permit fees, tolls and other
fees is not strictly a taxing power but a revenue-raising function, so that the procedure for
publication under the Local Tax Code finds no application.

Constitution, "Each local government unit shall have the power to create its own sources of revenue
and to levy taxes, subject to such provisions as may be provided by law." One of those sources of
revenue is what the Local Tax Code points to in particular: "Local governments may collect fees or
rentals for the occupancy or use of public markets and premises. They can provide for and regulate
market stands, stalls and privileges, and, also, the sale, lease or occupancy thereof. They can license,
or permit the use of, lease, sell or otherwise dispose of stands, stalls or marketing privileges.

NON-PARTICIPATION OF THE MARKET COMMITTEE: RA 6039, an amendment to the City Charter of

Manila, provides that "the market committee shall formulate, recommend and adopt, subject to the
ratification of the municipal board, and approval of the mayor, policies and rules or regulation
repealing or maneding existing provisions of the market code" does not infect the ordinance with any
germ of invalidity.

The function of the committee is purely recommendatory. Its recommendation is without binding
effect on the Municipal Board and the City Mayor. Its prior acquiescence of an intended or proposed
city ordinance is not a condition sine qua non before the Municipal Board could enact such
ordinance. The native power of the Municipal Board to legislate remains undisturbed even in the
slightest degree. It can move in its own initiative and the Market Committee cannot demur. At
most, the Market Committee may serve as a LEGISLATIVE AIDE of the Municipal Board in the
enactment of city ordinances affecting the city markets or, in plain words, in the gathering of the
necessary data, studies and the collection of consensus for the proposal of ordinances regarding city

Much less could it be said that RA 6039 intended to delegate to the Market Committee the adoption
of regulatory measures for the operation and administration of the city markets. Potestas delegata
non delegare potest.

Market stall fees imposed are diverted to the exclusive private use of the Asiatic Integrated
Corporation since the collection of said fees had been let by the City of Manila to the said
corporation in a "Management and Operating Contract." The fees collected do not go direct to the
private coffers of the corporation. Ordinance No. 7522 was not made for the corporation but for the
purpose of raising revenues for the city. The entrusting of the collection of the fees does not
destroy the public purpose of the ordinance. So long as the purpose is public, it does not matter
whether the agency through which the money is dispensed is public or private. The right to tax
depends upon the ultimate use, purpose and object for which the fund is raised. It is not dependent
on the nature or character of the person or corporation whose intermediate agency is to be used in
applying it. The people may be taxed for a public purpose, although it be under the direction of an
individual or private corporation.

Nor can the ordinance be stricken down as violative of Sec. 3(e) of the Anti-Graft and Corrupt
Practices Act because the increased rates of market stall fees as levied by the ordinance will
necessarily inure to the unwarranted benefit and advantage of the corporation. We are concerned
only with the issue whether the ordinance in question is INTRA VIRES5. Once determined in the
affirmative, the measure may not be invalidated because of consequences that may arise from its

ACCORDINGLY, the decision of CFI is reversed and set aside. Ordinance No. 7522 of the City of
Manila, dated June 15, 1975, is hereby held to have been VALIDLY ENACTED.


[June 30, 1988]

In 1969, Municipal Board of the City of Butuan enacted Ordinance no. 649 which penalize any
person, group of persons, entity, or corporation engaged in the business of selling admission tickets
to any movie or other public exhibitions, games, contests, or other performances to require children
between 7-12 years old to pay full payment for admission tickets intended for adults. [Children
should pay only one-half of the value of the said tickets; PENALTY: Fine of P200-P600 or
imprisonment of 2-6 months or BOTH.]

Carlos Balacuit, Lamberto Tan, and Sergio Carcel are managers of the Maya and Dalisay Theaters, the
Crown Theater, and the Diamond Theater, respectively. Aggrieved by the effect of Ordinance No.
INTRA VIRES – within the powers.
640, they filed a complaint before the CFI, praying that the subject ordinance be declared
unconstitutional and, therefore, void and unenforceable.

CFI: held in favor of the City of Butuan and declared Ordinance no. 640 constitutional and valid,
PROVIDED that the fine shall not exceed P200. Considering that, apart from size, children between
the ages of 7-12 cannot fully grasp the nuance of movies or other public exhibitions, games, contests
or other performances, the admission prices with respect to them ought to be reduced.

BALACUIT: contends that Ordinance No. 640 is not within the power of' the Municipal Board to enact
as provided for in Sec. 15(n) of Republic Act No. 523, the Charter of the City of Butuan, which states
under the “General powers and duties of the Board, the Municipal Board only has the legislative
power “(n) To regulate6 and fix the amount of the license fees for: theaters, theatrical performances,
cinematographs, public exhibitions and all other performances and places of amusements”.

CITY OF BUTUAN: attempts to justify the enactment of the ordinance by invoking the general welfare
clause embodied in Sec. 15 (nn) of the cited law, which provides:

(nn) To enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity, and the promotion of the morality, peace, good order,
comfort, convenience, and general welfare of the city and its inhabitants, and such others as
may be necessary to carry into effect and discharge the powers and duties conferred by this
Act, and to fix the penalties for the violation of the ordinances, which shall not exceed a P200-
fine or six months imprisonment, or both, for a single offense.

ISSUE: W/N Ordinance No. 640 is a valid exercise of police power.

NO, Ordinance no. 640 is NOT a valid exercise of POLICE POWER. [1. Lawful Subject, 2. Lawful
Means] While it is true that a business may be regulated, such regulation must be within the bounds
of reason. The regulatory ordinance must be reasonable, and its provisions cannot be oppressive
amounting to an arbitrary interference with the business or calling subject of regulation.

In this jurisdiction, it is already settled that the operation of theaters, cinematographs and other
places of public exhibition are subject to regulation by the municipal council in the exercise of
delegated police power by the local government. The City of Butuan, apparently realizing that it has
no authority to enact the ordinance in question under its POWER TO REGULATE EMBODIED IN SEC.
15(N), now invokes the police power as delegated to it under the GENERAL WELFARE CLAUSE to
justify the enactment of said ordinance.

To invoke the exercise of police power, not only must it appear that the interest of the public
generally requires an interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. The
legislature may not, under the guise of protecting the public interest, arbitrarily interfere with private
business, or impose unusual and unnecessary restrictions upon lawful occupations.

[Homeowners' Association of the Philippines, Inc. v. Municipal Board of the City of Manila] : The
authority of municipal corporations to regulate is essentially police power. Inasmuch as the same
generally entails a curtailment of the liberty, the rights and/or the property of persons, which are
[Kwong Sing v. City of Manila]The word "REGULATE" was interpreted to include the power to control, to govern and to restrain
protected and even guaranteed by the Constitution, the exercise of police power is necessarily
subject to a qualification, limitation or restriction demanded by the regard, the respect and the
obedience due to the prescriptions of the fundamental law, particularly those forming part of the
Constitution of Liberty, otherwise known as the Bill of Rights.

[Minutes of the Municipal Board]: A certain Councilor Calo, the proponent of the measure, had taken
into account the complaints of parents that for them to pay the full price of admission for their
children is too financially burdensome.

There must be PUBLIC NECESSITY which demands the adoption of proper measures to secure the
ends sought to be attained by the enactment of the ordinance, and the large discretion is necessarily
vested in the legislative authority to determine not only what the interests of the public require, but
what measures are necessary for the protection of such interests. The methods or means used to
protect the public health, morals, safety or welfare, must have some relation to the end in view,
for under the guise of the police power, personal rights and those pertaining to private property will
not be permitted to be arbitralily invaded by the legislative department.

Ordinance no. 640 is not justified by any necessity for the public interest. The police power
legislation must be firmly grounded on public interest and welfare, and a reasonable relation must
exist between purposes and means. The evident purpose of the ordinance is to help ease the burden
of cost on the part of parents who have to shell out the same amount of money for the admission of
their children, as they would for themselves. A reduction in the price of admission would mean
corresponding savings for the parents; however, the petitioners are the ones made to bear the cost
of these savings. The ordinance does not only make the petitioners suffer the loss of earnings but it
likewise penalizes them for failure to comply with it. Furthermore, there will be difficulty in its
implementation because children over 12 years of age tried to pass off their age as below 12 years in
order to avail of the benefit of the ordinance. The ordinance does not provide a safeguard against
this undesirable practice and as such, the City of Butuan now suggests that birth certificates be
exhibited by movie house patrons to prove the age of children. We can see that the ordinance is
clearly unreasonable if not unduly oppressive upon the business of petitioners. Moreover, there is no
discernible relation between the ordinance and the promotion of public health, safety, morals and
the general welfare.

There is nothing pernicious in demanding equal price for both children and adults. The petitioners
are merely conducting their legitimate businesses. The object of every business entrepreneur is to
make a profit out of his venture. There is nothing immoral or injurious in charging the same price
for both children and adults. In fact, no person is under compulsion to purchase a ticket. It is a
totally voluntary act on the part of the purchaser if he buys a ticket to such performances.

City of Butuan claims that Ordinance No. 640 is reasonable and necessary to lessen the economic
burden of parents whose minor children are lured by the attractive nuisance being maintained by
the petitioners. How can the municipal authorities consider the movies an attractive nuisance and
yet encourage parents and children to patronize them by lowering the price of admission for
children? (LOL!)

Moreover, as a logical consequence of the ordinance, movie house and theater operators will be
discouraged from exhibiting wholesome movies for general patronage, much less children's pictures
if only to avoid compliance with the ordinance and still earn profits for themselves. For after all,
these movie house and theater operators cannot be compelled to exhibit any particular kind of film
except those films which may be dictated by public demand and those which are restricted by
censorship laws.

In this jurisdiction, legislation had been passed controlling the prices of goods commodities and
drugs during periods of emergency, as a matter of national policy in the interest of public health
and safety, economic security and the general welfare of the people. However, the same could not
be said of theaters, cinematographs and other exhibitions. In no sense could these businesses be
considered public utilities. The State has not found it appropriate as a national policy to interfere
with the admission prices to these performances. This does not mean however, that theaters and
exhibitions are not affected with public interest even to a certain degree. The government has seen it
fit to enact censorship laws to regulate the movie industry. Even police measures regulating the
operation of these businesses have been upheld in order to safeguard public health and safety.

A police measure for the regulation of the conduct, control and operation of a business should not
encroach upon the legitimate and lawful exercise by the citizens of their property rights. Ordinance
No. 640 clearly invades the personal and property rights of petitioners for even if We could assume
that, on its face, the interference was reasonable, from the foregoing considerations, it has been
fully shown that it is an unwarranted and unlawful curtailment of the property and personal rights
of citizens. For being unreasonable and an undue restraint of trade, it cannot, under the guise of
exercising police power, be upheld as valid.

WHEREFORE, the decision of the trial court is hereby REVERSED and SET ASIDE and a new judgment
is hereby rendered declaring Ordinance No. 640 UNCONSTITUTIONAL and, therefore, NULL and

[August 30, 2001]

In 1995, Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office to install
a Terminal for the operation of lotto. Calvento asked Mayor Calixto Cataquiz, Mayor of San Pedro,
Laguna, for a mayor's permit to open the lotto outlet. This was denied by Mayor Cataquiz, on the
ground that Kapasiyahan Blg. 508, T. 1995 was passed by the Sangguniang Panlalawigan of
Laguna, which prohibits ALL FORMS OF GAMBLING, INCLUDING LOTTO, in the province of Laguna.

Thus, Calvento filed a complaint for declaratory relief with prayer for preliminary injunction with
RTC-San Pedro. He prays, inter alia: (1) that the defendants refrain from implementing Kapasiyahan
Blg. 508, (2) for an order requiring Cataquiz to issue a business permit for the operation of a lotto
outlet; and (3) an order declaring as invalid Kapasiyahan Blg. 508.

RTC: promulgated his decision enjoining the petitioners from implementing or enforcing resolution
or Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan ng Laguna, prohibiting the
operation of the lotto in the province of Laguna.

SANGGUNIANG PANLALAWIGAN: contend that the assailed resolution is a valid policy declaration of
the Provincial Government of Laguna of its vehement objection to the operation of lotto and all
forms of gambling. It is likewise a valid exercise of the provincial government's police power under
the General Welfare Clause of Republic Act 7160. They also maintain that respondent's lotto
operation is illegal because no prior consultations and approval by the local government were sought
before it was implemented contrary to the express provisions of R.A. 7160.

CALVENTO: argues that the questioned resolution is a curtailment of the power of the state since
the national legislature itself had already declared lotto as legal and permitted its operations around
the country. Calvento also contends that prior consultations and approval of the sangguniang
panlalawigan of Laguna is not mandatory since such a requirement is merely stated as a
declaration of policy and not a self-executing provision of the Local Government Code of 1991. He
also states that his operation of the lotto system is legal because of the authority given to him by the
PCSO, which in turn had been granted a franchise to operate the lotto by Congress.

OSG: contends that the Provincial Government of Laguna has no power to prohibit a form of
gambling which has been authorized by the national government. This is based on the principle
that ordinances should not contravene statutes as municipal governments are merely agents of the
national government. The local councils exercise only delegated legislative powers which have been
conferred on them by Congress. This being the case, these councils, as delegates, cannot be superior
to the principal or exercise powers higher than those of the latter. Since Congress has allowed the
PCSO to operate lotteries which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of
authority, the province's Sangguniang Panlalawigan cannot nullify the exercise of said authority by
preventing something already allowed by Congress.

ISSUE: W/N Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the
denial of a mayor's permit based thereon are valid;

HELD: NO, a denial of a MAYOR’S PERMIT based thereon is not valid. The ordinance merely states
the "objection" of the council to the said game. It is but a mere policy statement on the part of the
local council, which is not self-executing. Nor could it serve as a valid ground to prohibit the
operation of the lotto system in the province of Laguna.

As a policy statement expressing the local government's objection to the lotto, such resolution is
valid. This is part of the local government's autonomy to air its views which may be contrary to that
of the national government's. However, this freedom to exercise contrary views does not mean that
local governments may actually enact ordinances that go against laws duly enacted by Congress.
Given this premise, the assailed resolution in this case could not and should not be interpreted as a
measure or ordinance prohibiting the operation of lotto.

The game of lotto is a game of chance duly authorized by the national government through an Act of
Congress. RA 1169, as amended by BP 42, is the law which grants a franchise to the PCSO and allows
it to operate the lotteries. This statute remains valid today.

While lotto is clearly a game of chance, the national government deems it wise and proper to
permit it. Hence, the Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue a
resolution or an ordinance that would seek to prohibit permits. Stated otherwise, what the national
legislature expressly allows by law, such as lotto, a provincial board may not disallow by ordinance or
In our system of government, the power of local government units to legislate and enact ordinances
and resolutions is merely a delegated power coming from Congress. Ordinances should not
contravene an existing statute enacted by Congress.

Municipal governments are only agents of the national government. Local councils exercise only
delegated legislative powers conferred upon them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they
have derived their power in the first place, and negate by mere ordinance the mandate of the

Nothing in the present constitutional provision enhancing local autonomy dictates a different
conclusion. The basic relationship between the national legislature and the local government units
has not been enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Congress retains control of the local government units although in significantly reduced
degree now than under our previous Constitutions. The power to create still includes the power to
destroy. The power to grant still includes the power to withhold or recall. True, there are certain
notable innovations in the Constitution, like the direct conferment on the LGUs of the power to tax
(Art. X, Sec. 5, Constitution), which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units, which cannot
defy its will or modify or violate it.

Ours is still a UNITARY FORM OF GOVERNMENT, not a federal state. Being so, any form of autonomy
granted to local governments will necessarily be limited and confined within the extent allowed by
the central authority. Besides, the principle of local autonomy under the 1987 Constitution simply
means "decentralization". It does not make local governments sovereign within the state or an
"imperium in imperio".

The Mayor of San Pedro, cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board
of Laguna as justification to prohibit lotto in his municipality. For said resolution is nothing but an
expression of the local legislative unit concerned. The Board's enactment could not rise above its
source of power, the national legislature.

PERIODIC CONSULTATIONS: “It is the policy of the State to require all national agencies and offices to
conduct periodic consultations with appropriate local government units, non-governmental and
people's organizations, and other concerned sectors of the community before any project or
program is implemented in their respective jurisdictions.” xxx “No project or program shall be
implemented by government authorities unless the consultations mentioned are complied with,
and prior approval of the sanggunian concerned is obtained…”

These apply only to national programs and/or projects which are to be implemented in a particular
local community. Lotto is neither a program nor a project of the national government, but of a
charitable institution, the PCSO. Further, the projects and programs mentioned in Section 27 should
be interpreted to mean projects and programs whose effects are among those enumerated in
Section 26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic change;
(3) may cause the depletion of non-renewable resources; (4) may result in loss of crop land, range-
land, or forest cover; (5) may eradicate certain animal or plant species from the face of the planet;
and (6) other projects or programs that may call for the eviction of a particular group of people
residing in the locality where these will be implemented. Obviously, none of these effects will be
produced by the introduction of lotto in the province of Laguna.

There is NO ERROR in the RTC decision enjoining Mayor Cataquiz from enforcing Kapasiyahan Blg.
508, T. 1995, of the Sangguniang Panlalawigan of Laguna. That resolution expresses merely a policy
statement of the Laguna provincial board. It possesses no binding legal force nor requires any act
of implementation. It provides no sufficient legal basis for the mayor's refusal to issue the permit
sought by Calvento in connection with a legitimate business activity authorized by a law passed by

WHEREFORE, the petition is DENIED. The Order of the RTC of San Pedro, Laguna enjoining the
petitioners from implementing or enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the
Provincial Board of Laguna is hereby AFFIRMED.


[April 12, 2005]

Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of

operating hotels, motels, hostels and lodging houses. It built and opened Victoria Court in Malate.
In 1993, the City Council of Manila enacted Ordinance 7783, which prohibited the
“establishment/operation of businesses providing certain forms of amusement, entertainments,
services and facilities in the Ermita-Malate area.” Consequently, MTDC filed a Petition with RTC-
Manila against City of Manila, Alfredo Lim, Joselito Atienza, and the members of the City Council of
Manila, praying that Ordinance 77837, insofar as it includes motels and inns as among its prohibited
establishments, be declared invalid and unconstitutional.

MTDC: argued that the Ordinance erroneously and improperly included in its enumeration of
prohibited establishments, motels and inns such as MTDC's Victoria Court considering that these
were not establishments for "amusement" or "entertainment" and they were not "services or
facilities for entertainment," nor did they use women as "tools for entertainment," and neither did
they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral
welfare of the community."

MTDC maintains that the Ordinance is ultra vires and void for being repugnant to the general law.
The Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory
and amounts to an arbitrary interference with its lawful business; that it is violative of the equal
protection clause; and that it confers on City Mayor unregulated discretion in the execution of
the Ordinance absent rules to guide and control his actions.

CITY OF MANILA: maintained that the City Council had the power to "prohibit certain forms of
entertainment in order to protect the social and moral welfare of the community" as provided for in
Section 458 (a) 4 (vii) of the Local Government Code. Petitioners likewise asserted that
the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of

SECTION 1. xxx no person, partnership, corporation or entity shall, in the Ermita-Malate area…be allowed or authorized to contract
and engage in, any .business providing certain forms of amusement, entertainment, services and facilities where women are used as
tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral
welfare of the community
the community in conjunction with its police power as found in the Revised Charter of the City of

RTC: rendered a decision enjoining the petitioners from implementing the Ordinance.

ISSUE: W/N the subject ordinance is VALID and CONSTITUTIONAL.

HELD: NO. The Court held that the Ordinance is ultra vires and therefore null and void. The
prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the
Constitution. The Court is called upon to shelter these rights from attempts at rendering them

TEST OF A VALID ORDINANCE: for an ordinance to be valid, it must not only be within the corporate
powers of the local government unit to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following substantive requirements: (1) must not
contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be
partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and
consistent with public policy; and (6) must not be unreasonable.

The Ordinance was passed by the City Council in the exercise of its police power, an enactment of
the City Council acting as agent of Congress. Local government units, as agencies of the State, are
endowed with police power in order to effectively accomplish and carry out the declared objects of
their creation. This delegated police power is found in Section 16 of the Code, known as the general
welfare clause.

Local government units exercise police power through their respective legislative bodies; in this case,
the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to "enact
ordinances, approve resolutions and appropriate funds for the general welfare of the
province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper
exercise of the corporate powers of the province/city/ municipality provided under the Code. The
inquiry in this Petition is concerned with the validity of the exercise of such delegated power.

Procedural due process, refers to the procedures that the government must follow before it deprives
a person of life, liberty, or property. Classic procedural due pocess issues are concerned with what
kind of notice and what form of hearing the government must provide when it takes a particular

Substantive due process, asks whether the government has an adequate reason for taking away a
person's life, liberty, or property. In other words, substantive due process looks to whether there is a
sufficient justification for the government's action.

To successfully invoke the exercise of police power as the rationale for the enactment of
the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear
that the interests of the public generally, as distinguished from those of a particular class, require an
interference with private rights, but the means adopted must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals. It must be evident that
no other alternative for the accomplishment of the purpose less intrusive of private rights can
work. Lacking a concurrence of these two requisites, the police measure shall be struck down as an
arbitrary intrusion into private rightsa violation of the due process clause.

The Ordinance was enacted to address and arrest the social ills purportedly spawned by the
establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer
of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges,
hotels and motels. The object of the Ordinance was, accordingly, the promotion and protection of
the social and moral values of the community.

Granting for the sake of argument that the objectives of the Ordinance are within the scope of the
City Council's police powers, the means employed for the accomplishment thereof were
unreasonable and unduly oppressive. The worthy aim of fostering public morals and the eradication
of the community's social ills can be achieved through means less restrictive of private rights; it can
be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and
transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no
reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the
enumerated establishments will not per se protect and promote the social and moral welfare of the
community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication
nor will it arrest the spread of sexual disease in Manila.

Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and
establishments of the like which the City Council may lawfully prohibit, it is baseless and
insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night
clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not
warranted under the accepted definitions of these terms. The enumerated establishments are
lawful pursuits which are not per se offensive to the moral welfare of the community.

Immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council
instead should regulate human conduct that occurs inside the establishments, but not to the
detriment of liberty and privacy which are covenants, premiums and blessings of democracy.

In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent
of the beneficial use of its property. There are two different types of taking that can be identified. A
"possessory" taking occurs when the government confiscates or physically occupies property. A
"regulatory" taking occurs when the government's regulation leaves no reasonable economically
viable use of the property. While property may be regulated to a certain extent, if regulation goes
too far it will be recognized as a taking. A regulation which denies all economically beneficial or
productive use of land will require compensation under the takings clause.

All considered, the Ordinance invades fundamental personal and property rights and impairs
personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is
discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that
abuses may attend the enforcement of its sanctions. And the City Council under the Code had no
power to enact the Ordinance and is therefore ultra vires, null and void.

Concededly, the Ordinance was enacted with the best of motives and shares the concern of the
public for the cleansing of the Ermita-Malate area of its social sins. Police power legislation of such
character deserves the full endorsement of the judiciar, BUT inspite of its virtuous aims, the
enactment of the Ordinance has no statutory or constitutional authority to stand on. Local legislative
bodies cannot prohibit the operation of the enumerated establishments under Section 1 or order
their transfer or conversion without infringing the constitutional guarantees of due process and
equal protection of laws not even under the guise of police power.


[January 29, 1987]

On March 30, 1981, the Assistant Provincial Fiscal Vivencio Estrada of Bukidnon, at the instance of
Nelia Arandel (Clerk-typist) and Susan Palamine (Clerical Aide) both of the Office of the Mayor of the
Municipality of Don Carlos, Bukidnon, filed THREE CRIMINAL CASES against Teodulo Palma, Sr., the
duly elected and qualified Mayor of said Municipality with CFI-Bukidnon. By virtue of the aforesaid
cases, Arandel and Palamine requested the Provincial Governor for an immediate administrative
investigation for the purpose of suspending Mayor Palma from office pending final determination
of these cases.

Thus, the Governor formally informed the Mayor of the administrative charge against him for
Misconduct in Office. The record of the administrative case against the Mayor was forwarded to the
Sangguniang Panlalawigan of the province of Bukidnon and the case was set for hearing. After the
hearing, Arandel and Palamine petitioned for the preventive suspension of the Mayor, which was
granted by Sangguniang Panlalawigan in its Resolution. The Mayor accepted his preventive
suspension from office. Nonetheless, he filed this petition.

ISSUE: W/N the filing and pendency of the aforesaid THREE SEPARATE INFORMATION for “Acts of
Lasciviousness” against an elective local official would constitute “Misconduct in Office” within the
meaning of Sec. 5 of RA 5185, which may warrant the filing of an administrative complaint against
him and/or his suspension from office.

MAYOR: contends that "Acts of Lasciviousness" do not fall within the category of "malfeasance and
misfeasance" or "conduct in the office" contemplated in Section 5 of R.A. No. 5185, and therefore
cannot be the basis of the filing of a separate administrative case against an elective official and the
preventive suspension of the latter.

ARANDEL and PALAMINE: maintain that the lascivious acts of the Mayor constitute misconduct
under Article XIII, Section 1 of the 1973 Constitution, re: "Accountability of Public Officers."

However, on September 1, 1983, Mayor Palma filed a Manifestation and Prayer informing this Court
that the three criminal cases filed against him were all dismissed by RTC-Bukidnon. Thus, on the
premise that the administrative case in question as well as the resulting preventive suspension is
now bereft of any legal basis, Mayor Palma now prays that judgment be rendered in accordance
with his prayer in the petition. [Before the petition could be decided, the Provisional Constitution
was promulgated in Proclamation No. 3, dated March 25, 1986, by President Corazon Aquino.]

Article III, Section 2: All elective and appointive officials and employees under the 1973 Constitution
shall continue in office until otherwise provided by proclamation or executive order or upon the
designation or appointment and qualification of their successors, if such is made within a period of
one year from February 25, 1986. Thus, an incumbent Mayor, elected under the 1973 Constitution
may be replaced by an "Officer-in-Charge, a specie of successor considered as within the ambit of the
provision." Coming back to the case at bar, it appears from the records of the Ministry of Local
Government that Mayor Palma who was obviously elected under the 1973 Constitution has been
replaced by OIC Fabian Gardones as Mayor of Don Carlos, Cagayan.

As a GENERAL RULE, dismissal of an administrative case does not necessarily follow the dismissal
of a criminal case, the former requiring as it does, only preponderance of evidence while the latter
requires proof beyond reasonable doubt.

However, in administrative actions against municipal officers, the Supreme Court classified the
grounds for suspension under two categories, namely: (1) those related to the discharge of the
functions of the officer concerned (neglect of duty, oppression, corruption or other forms of
maladministration of office) and (2) those not so connected with said functions. Under the second
category, when the crime involving moral turpitude 8 is not linked with the performance of official
duties, conviction by final judgment is required as a condition precedent to administrative action.

The ground for filing of the administrative action in the case at bar and the suspension of Mayor
Palma is misconduct allegedly committed in the form of lascivious acts of the latter. Misconduct has
been defined as "such as affects his performance of his duties as an officer and not only as affects his
character as a private individual.” In such cases, it has been said at all times, it is necessary to
separate the character of the man from the character of the officer. "

ISSUE: W/N the misconduct of Mayor Palma affects his performance of his duties as an officer and
not only his character as a private individual

HELD: NO. While "it is true that the charges of rape and concubinage may involve moral turpitude of
which a municipal official may be proceeded against, but before the provincial governor and board
may act and proceed against the municipal official, a conviction by final judgment must precede the
filing by the provincial governor of the charges and trial by the provincial board."

The same ruling applies to acts of lasciviousness which falls under the same classification as crimes
against chastity. In the instant case, not only is a final judgment lacking, but the criminal cases filed
against the petitioner were all dismissed by the trial court, for insufficiency of evidence, on the basis
of its findings that the attendant circumstances logically point to the existence of consent on the part
of the offended parties.

Under the circumstances, there being no showing that the acts of Mayor Palma are linked with the
performance of official duties such as "neglect of duty, oppression, corruption, or other form of
maladministration of office", the pending administrative case against him should be dismissed for
lack of basis and the restraining order issued by the court should be made permanent.

Nonetheless, the replacement of Mayor Palma by the Officer-in-Charge Fabian Gardones has
rendered the issues of removal and suspension from office, moot and academic.
MORAL TURPITUDE - Act of baseness, vileness, or the depravity in private and social duties which man owes to his fellow man, or to
society in general, contrary to the accepted and customary rule of right and duty between man and man. xxx Act or behavior that gravely
violates moral sentiment or accepted moral standards of community and is a morally culpable quality held to be present in some criminal
offenses as distinguished from others.
PREMISES CONSIDERED, judgment is hereby rendered DISMISSING: (a) the administrative case filed
against the petitioner for lack of basis and (b) subject petition for having become moot and


17, 2004]

ISSUE: W/N a public official charged with violation of Section 3(h) of RA No. 3019 for unlawful
intervention, in his official capacity, in the issuance of a license in favor of a business enterprise in
which he has a pecuniary interest, may be convicted, together with his spouse, of violation of that
same provision premised on his mere possession of such interest.

In 2002, the Sandiganbayan in a Criminal Case convicted Edgar Teves, former Mayor of Valencia,
Negros Oriental, and his wife Teresita Teves, of violation of Section 3(h) of the Anti-Graft Law for
possessing direct pecuniary interest in the Valencia Cockpit and Recreation Center in Valencia.

The conviction was anchored on the finding that the petitioners possessed pecuniary interest in the
said business enterprise on the grounds that (a) nothing on record appears that Mayor Teves
divested himself of his pecuniary interest in said cockpit; (b) as of April 1992, Teresita Teves was of
record the "owner/licensee" of the cockpit; and (c) since Mayor Teves and Teresita remained married
to each other from 1983 until 1992, their property relations as husband and wife, in the absence of
evidence to the contrary, was that of the conjugal partnership of gains. Hence, the cockpit is a
conjugal property over which the petitioners have pecuniary interest. This pecuniary interest is
prohibited under Section 89(2) of R.A. No. 7160, otherwise known as the Local Government
Code (LGC) of 1991, and thus falls under the prohibited acts penalized in Section 3(h) of the Anti-
Graft Law. The Sandiganbayan, however, absolved the petitioners of the charge of causing the
issuance of a business permit or license to operate the Valencia Cockpit and Recreation Center for
not being well-founded. Petitioners thereafter filed the instant petition for review on certiorari,
seeking to annul and set aside the 2002 Decision of the Sandiganbayan.

TEVES: assert that the Sandiganbayan committed serious and palpable errors in convicting them. In
the first place, the charge was for alleged unlawful intervention of Mayor Teves in his official capacity
in the issuance of a cockpit license in violation of Section 3(h) of the Anti-Graft Law. But they were
convicted of having a direct financial or pecuniary interest in the Valencia Cockpit and Recreation
Center prohibited under Section 89(2) of the LGC of 1991, which is essentially different from the
offense with which they were charged. Thus, the petitioners insist that their constitutional right to
be informed of the nature and cause of the accusation against them was transgressed because
they were never apprised at any stage of the proceedings in the Sandiganbayan that they were
being charged with, and arraigned and tried for, violation of the LGC of 1991.

Second, according to the petitioners, their alleged prohibited pecuniary interest in the Valencia
Cockpit in 1992 was not proved. The Sandiganbayan presumed that since Mayor Teves was the
cockpit operator and licensee in 1989, said interest continued to exist until 1992. It also presumed
that the cockpit was the conjugal property of Mayor Teves and his wife, and that their pecuniary
interest thereof was direct. But under the regime of conjugal partnership of gains, any interest
thereon is at most inchoate and indirect. Also assigned as glaring error is the conviction of Teresita
Teves, who is not a public officer.

The essential elements of the crime of violation of Section 3(h) of the Anti-Graft Law are as

1. The accused is a public officer;

2. He has a direct or indirect financial or pecuniary interest in any business, contract, or


3. He either:

a. intervenes or takes part in his official capacity in connection with such interest; or

b. is prohibited from having such interest by the Constitution or by any law.

There are, therefore, two modes by which a public officer who has a direct or indirect financial or
pecuniary interest in any business, contract, or transaction may violate Section 3(h) of the Anti-Graft
Law. The first mode is if in connection with his pecuniary interest in any business, contract or
transaction, the public officer intervenes or takes part in his official capacity. The second mode is
when he is prohibited from having such interest by the Constitution or any law.
The charge against Mayor Teves for causing the issuance of the business permit or license to operate
the Valencia Cockpit and Recreation Center is "not well-founded." Only the Sangguniang Bayan
could have issued a permit to operate the Valencia Cockpit in the year 1992. Under Section 447(3) of
the LGC of 1991, which took effect on January 1, 1992, it is the Sangguniang Bayan that has the
authority to issue a license for the establishment, operation, and maintenance of cockpits. Unlike in
the old LGC, Batas Pambansa Blg. 337, wherein the municipal mayor was the presiding officer of the
Sangguniang Bayan,16 under the LGC of 1991, the mayor is not so anymore and is not even a member
of the Sangguniang Bayan. Hence, Mayor Teves could not have intervened or taken part in his
official capacity in the issuance of a cockpit license during the material time, as alleged in the
information, because he was not a member of the Sangguniang Bayan.17

However, evidence overwhelmingly evinces that Mayor Teves had a pecuniary interest in the
Valencia Cockpit, which is prohibited under Section 89(2) of the LGC of 1991.

The evidence for the prosecution has established that Edgar Teves, then mayor of Valencia, Negros
Oriental, owned the cockpit in question. In his sworn application for registration of cockpit filed in
198319 with the Philippine Gamefowl Commission, as well as in his renewal application in 1989, he
stated that he is the owner and manager of the said cockpit. Absent any evidence that he divested
himself of his ownership over the cockpit, his ownership thereof is rightly to be presumed because
a thing once proved to exist continues as long as is usual with things of that nature. His affidavit is
NOT sufficient proof that he divested himself of ownership.

Even if the ownership of Edgar Teves over the cockpit were transferred to his wife, still he would have
a direct interest thereon because they remained married to each other from 1983 up to 1992, and as
such their property relation can be presumed to be that of conjugal partnership of gains in the
absence of evidence to the contrary. Article 160 of the Civil Code provides that all property of the
marriage is presumed to belong to the conjugal partnership unless it be proved that it pertains
exclusively to the husband or to the wife. Section 143 of the Civil Code declares all the property of
the conjugal partnership of gains to be owned in common by the husband and wife. Hence, his
interest in the Valencia Cockpit is direct and is, therefore, prohibited under Section 89(2) of the LGC
of 1991

Section 89. Prohibited Business and Pecuniary Interest. – (a) It shall be unlawful for any local
government official or employee, directly or indirectly, to: (2) Hold such interests in any cockpit or
other games licensed by a local government unit….

VARIANCE DOCTRINE: When there is a variance between the offense charged in the complaint or
information and that proved, and the offense as charged is included in or necessarily includes the
offense proved, the accused shall be convicted of the offense proved which is included in the offense
charged, or of the offense charged which is included in the offense proved. [UNLAWFUL

It is clear that the essential ingredients of the offense proved constitute or form part of those
constituting the offense charged. Put differently, the first and second elements of the offense
charged, as alleged in the information, constitute the offense proved. Hence, the offense proved is
necessarily included in the offense charged, or the offense charged necessarily includes the offense
proved. The variance doctrine thus finds application to this case, thereby warranting the conviction
of Edgar Teves for the offense proved.

It must be observed that Section 3(h) of the Anti-Graft Law is a general provision, it being applicable
to all prohibited interests; while Section 89(2) of the LGC of 1991 is a special provision, as it
specifically treats of interest in a cockpit. It is a rule of statutory construction that where one statute
deals with a subject in general terms, and another deals with a part of the same subject in a more
detailed way, the two should be harmonized if possible; but if there is any conflict, the latter shall
prevail regardless of whether it was passed prior to the general statute.

Conformably with these rules, the LGC of 1991, which specifically prohibits local officials from
possessing pecuniary interest in a cockpit licensed by the local government unit and which, in itself,
prescribes the punishment for violation thereof, is paramount to the Anti-Graft Law, which penalizes
possession of prohibited interest in a general manner. Moreover, the latter took effect on 17 August
1960, while the former became effective on 1 January 1991. Being the earlier statute, the Anti-Graft
Law has to yield to the LGC of 1991, which is the later expression of legislative will.

NONETHELESS, we take judicial notice of the fact that under the old LGC, mere possession of
pecuniary interest in a cockpit was not among the prohibitions enumerated in Section 41thereof.
Such possession became unlawful or prohibited only upon the advent of the LGC of 1991, which took
effect on January 1, 1992.


[August 5, 1991]

Mayor Rodolfo Ganzon was charged with 10 administrative complaints, filed against him by various
city officials sometime in 1988, on various charges, among them, abuse of authority, oppression,
grave misconduct, disgraceful and immoral conduct, intimidation, culpable violation of the
Constitution, and arbitrary detention.

Finding probable grounds, Luis Santos, Secretary of DILG, issued a preventive suspension order on
August 11, 1988 for a period of 60 days. Thereafter, when prima facie evidence was found to exist in
the arbitrary detention case against Mayor Ganzon, Santos ordered Mayor Ganzon’s second
preventive suspension dated October 11, 1988 for another 60 days. Mayor Ganzon was able to
obtain a restraining order and a writ of preliminary injunction in the RTC so the second preventive
suspension was not enforced. Amidst the two successive suspensions, Mayor Ganzon instituted an
action for prohibition against the Secretary of DILG in the RTC, where he succeeded in obtaining a
writ of preliminary injunction.

Meanwhile, on May 3, 1990, the Secretary issued another order, preventively suspending Mayor
Ganzon for another 60 days, the third time in 20 months, and designating meantime Vice-Mayor
Mansueto Malabor as acting mayor. Thus, Mayor Ganzon commenced a petition for prohibition in
the Court of Appeals.

CA: rendered judgment, dismissing the two case; SC issued a TRO barring the Secretary from
implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two
ISSUE: W/N the Secretary of Local Government, as the President's alter ego, can suspend and/or
remove local officials.

MAYOR GANZON: argues that the 1987 Constitution no longer allows the President, as the 1935 and
1973 Constitutions did, to exercise the power of suspension and/or removal over local officials. The
Constitution is meant, first, to strengthen self-rule by local government units and second, by deleting
the phrase “as may be provided by law” to strip the President of the power of control over local
governments. The petitioners submit that the deletion (of "as may be provided by law") is
significant, as their argument goes, since: (1) the power of the President is "provided by law" and
(2) hence, no law may provide for it any longer.

ISSUE: W/N the 1987 Constitution, in deleting the phrase "as may be provided by law" intend to
divest the President of the power to investigate, suspend, discipline, and/or remove local officials.

HELD: NO. Notwithstanding the change in the constitutional language, the charter did not intend to
divest the legislature of its right or the President of her prerogative as conferred by existing
legislation to provide administrative sanctions against local officials. The omission (of "as may be
provided by law") signifies nothing more than to underscore local governments' autonomy from
congress and to break Congress' "control" over local government affairs. The Constitution did not,
however, intend, for the sake of local autonomy, to deprive the legislature of all authority over
municipal corporations, in particular, concerning discipline.

Autonomy does not contemplate making mini-states out of local government units, as in the federal
governments of the United States of America. Autonomy, in the constitutional sense, is subject to the
guiding star, though not control, of the legislature, albeit the legislative responsibility under the
Constitution and as the "supervision clause" itself suggest-is to wean local government units from
over-dependence on the central government.

CONTROL: has been defined as "the power of an officer to alter or modify or nullify or set aside what
a subordinate officer had done in the performance of his duties and to substitute the judgment of
the former for test of the latter.

SUPERVISION: means "overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. However, "investigating" is not inconsistent with "overseeing", although
it is a lesser power than "altering". The President enjoyed no control powers but only supervision "as
may be provided by law".

ISSUE: W/N the successive 60-day period imposed on Mayor Ganzon is valid.

HELD: NO. The Mayor is facing 10 administrative charges. Thus, the Mayor is facing the possibility of
600 days of suspension, in the event that all 10 cases yield prima facie findings, which would in
effect suspend him out of office.

It is a basic assumption of the electoral process implicit in the right of suffrage that the people are
entitled to the services of elective officials of their choice. For misfeasance or malfeasance, any of
them could be proceeded against administratively or criminally. In either case, the culpability must
be established. Moreover, if there be a criminal action, he is entitled to the constitutional
presumption of innocence. A preventive suspension may be justified. Its continuance, however, for
an unreasonable length of time raises a due process question.

The sole objective of a suspension is simply "to prevent the accused from hampering the normal
cause of the investigation with his influence and authority over possible witnesses" or to keep him
off "the records and other evidence. It is a means, and no more, to assist prosecutors in firming up a
case, if any, against an erring local official. Suspension is temporary and as the Local Government
Code provides, it may be imposed for no more than 60 days.

What is intriguing is that the respondent Secretary has been cracking down, so to speak, on the
Mayor piecemeal apparently, to pin him down ten times the pain, when he, the respondent
Secretary, could have pursued a consolidated effort. We are not precluding the President, through
the Secretary of Interior from exercising a legal power, yet we are of the opinion that the Secretary
of Interior is exercising that power oppressively, and needless to say, with a grave abuse of

Thus, Mayor Rodolfo Ganzon is alllowed to suffer the duration of his third suspension and lifting, for
the purpose, the TRO earlier issued. Insofar as the seven remaining charges are concerned, we are
urging the Department of Local Government, upon the finality of this Decision, to undertake steps to
expedite the same, subject to Mayor Ganzon's usual remedies of appeal, judicial or administrative, or
certiorari, if warranted, and meanwhile, we are precluding the Secretary from meting out further
suspensions based on those remaining complaints, notwithstanding findings of prima facie evidence.

In resume the Court is laying down the following rules:

1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not
of power, in which local officials remain accountable to the central government in the manner the
law may provide;

2. The new Constitution does not prescribe federalism;

3. The change in constitutional language (with respect to the supervision clause) was meant but to
deny legislative control over local governments; it did not exempt the latter from legislative
regulations provided regulation is consistent with the fundamental premise of autonomy;

4. Since local governments remain accountable to the national authority, the latter may, by law, and
in the manner set forth therein, impose disciplinary action against local officials;

5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify
"control" (which the President does not have);

6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no
longer be suspended for the offenses he was charged originally; provided:

a) that delays in the investigation of those charges "due to his fault, neglect or request, (the
time of the delay) shall not be counted in computing the time of suspension. [Supra, sec.
b) that if during, or after the expiration of, his preventive suspension, the petitioner commits
another or other crimes and abuses for which proper charges are filed against him by the
aggrieved party or parties, his previous suspension shall not be a bar to his being
preventively suspended again, if warranted under subpar. (2), Section 63 of the Local
Government Code.

WHEREFORE, the petitions are DISMISSED. The TRO issued is LIFTED. The suspensions of the
petitioners are AFFIRMED, provided that Mayor Rodolfo Ganzon may not be made to serve future
suspensions on account of any of the remaining administrative charges pending against him for
acts committed prior to August 11, 1988.