THIRD DIVISION The evidence, testimonial and documentary, presented
during the trial show that on January 16, 1940, Cirilo
G.R. No. 95694 October 9, 1997
VICENTE VILLAFLOR, substituted by his heirs, petitioner,
vs.
COURT OF APPEALS and NASIPIT LUMBER CO.,
INC., respondents.
PANGANIBAN, J.:
In this rather factually complicated case, the Court reiterates the
binding force and effect of findings of specialized administrative
agencies as well as those of trial courts when affirmed by the
Court of Appeals; rejects petitioner's theory of simulation of
contracts; and passes upon the qualifications of private
respondent corporation to acquire disposable public agricultural
lands prior to the effectivity of the 1973 Constitution.
The Case
Before us is a petition for review on certiorari seeking the reversal
of the Decision1 of the Court of Appeals, dated September 27,
1990, in CA. G.R CV No. 09062, affirming the dismissal by the
trial court of Petitioner Vicente Villaflor's complaint against Private
Respondent Nasipit Lumber Co., Inc. The disposition of both the
trial and the appellate courts are quoted in the statement of facts
below.
The Facts
The facts of this case, as narrated in detail by Respondent Court
of Appeals, are as follows:2
Piencenaves, in a Deed of Absolute Sale (exh. A), sold to
[petitioner], a parcel of agricultural land containing an
area of 50 hectares,3 more or less, and particularly
described and bounded as follows:
A certain parcel of agricultural land
planted to abaca with visible concrete
monuments marking the boundaries and
bounded on the NORTH by Public Land
now Private Deeds on the East by Serafin
Villaflor, on the SOUTH by Public Land;
and on the West by land claimed by H.
Patete, containing an area of 60 hectares
more or less, now under Tax Dec. 29451
in the (sic) of said Vicente Villaflor, the
whole parcel of which this particular parcel
is only a part, is assessed at P22,550.00
under the above said Tax Dec. Number.
This deed states:
That the above described land was sold to
the said VICENTE VILLAFLOR, . . . on
June 22, 1937, but no formal document
was then executed, and since then until
the present time, the said Vicente Villaflor
has been in possession and occupation of
(the same); (and)
That the above described property was
before the sale, of my exclusive property
having inherited from my long dead
parents and my ownership to it and that of
my [sic] lasted for more than fifty (50)
years, possessing and occupying same
 peacefully, publicly and continuously
without interruption for that length of time.
Also on January 16, 1940, Claudio Otero, in a Deed of
Absolute Sale (exh. C) sold to Villaflor a parcel of
agricultural land, containing an area of 24 hectares, more
or less, and particularly described and bounded as
follows:
A certain land planted to corn with visible
concrete measurements marking the
boundaries and bounded on the North by
Public Land and Tungao Creek; on the
East by Agusan River; on the South by
Serafin Villaflor and Cirilo Piencenaves;
and on the West by land of Fermin
Bacobo containing an area of 24 hectares
more or less, under Tax Declaration No.
29451 in the name already of Vicente
Villaflor, the whole parcel of which this
particular land is only a part, is assessed
at P22,550.00 under the above said Tax
Declaration No. 29451.
This deed states:
That the above described land was sold to
the said VICENTE VILLAFLOR, . . . on
June 22, 1937, but no sound document
was then executed, however since then
and until the present time, the said
Vicente Villaflor has been in open and
continuous possession and occupation of
said land; (and)
That the above described land was before
the sale, my own exclusive property, being
inherited from my deceased parents, and
my ownership to it and that of my
predecessors lasted more than fifty (50)
years, possessing and occupying the
same, peacefully, openly and interruption
for that length of time.
Likewise on January 16, 1940, Hermogenes Patete, in a
Deed of Absolute Sale (exh. D), sold to Villaflor, a parcel
of agricultural land, containing an area of 20 hectares,
more or less, and particularly described and bounded as
follows:
A certain parcel of agricultural land
planted to abaca and corn with visible
concrete monuments marking the
boundaries and bounded on the North by
Public Land area-private Road; on the
East by land claimed by Cirilo
Piencenaves; on the South by Public Land
containing an area of 20 hectares more or
less, now under Tax Declaration No.
29451 in the name of Vicente Villaflor the
whole parcel of which this particular
parcel, is assessed at P22,550.00 for
purposes of taxation under the above said
Tax Declaration No. 29451.
This deed states:
. . . (O)n June 22, 1937 but the formal
document was then executed, and since
then until the present time, the said
VICENTE VILLAFLOR has been in
continuous and open possession and
occupation of the same; (and)
 That the above described property was
before the sale, my own and exclusive
property, being inherited from my
deceased parents and my ownership to it
and that of my predecessors lasted more
than fifty (50) years, possessing and
occupying same, peacefully, openly and
continuously without interruption for that
length of time.
On February 15, 1940, Fermin Bocobo, in a Deed of
Absolute Sale (exh. B), sold to Villaflor, a parcel of
agricultural land, containing an area of 18 hectares, more
or less, and particularly described and bounded as
follows:
A certain parcel of agricultural land
planted with abaca with visible part
marking the corners and bounded on the
North by the corners and bounded on the
North by Public Land; on the East by Cirilo
Piencenaves; on the South by
Hermogenes Patete and West by Public
Land, containing an area of 18 hectares
more or less now under Tax Declaration
No. 29451 in the name of Vicente Villaflor.
The whole parcel of which this particular
parcel is only a part is assessed as
P22,550.00 for purposes of taxation under
the above said Tax Declaration Number
(Deed of Absolute Sale executed by
Fermin Bocobo date Feb. 15, 1940). This
document was annotated in Registry of
Deeds on February 16, 1940).
This deed states:
That the above described property was
before the sale of my own exclusive
property, being inherited from my
deceased parents, and my ownership to it
and that of my predecessors lasted more
than fifty (50) years, possessing and
occupying the same peacefully, openly
and continuously without interruption for
that length of time.
On November 8, 1946, Villaflor, in a Lease Agreement
(exh. Q),4 leased to Nasipit Lumber Co., Inc. a parcel of
land, containing an area of two (2) hectares, together with
all the improvements existing thereon, for a period of five
(5) years from June 1, 1946 at a rental of P200.00 per
annum "to cover the annual rental of house and building
sites for thirty three (33) houses or buildings." This
agreement also provides:5
3. During the term of this lease, the
Lessee is authorized and empowered to
build and construct additional houses in
addition to the 33 houses or buildings
mentioned in the next preceding
paragraph, provided however, that for
every additional house or building
constructed the Lessee shall pay unto the
Lessor an amount of fifty centavos (¢50)
per month for every house or building. The
Lessee is empowered and authorized by
the Lessor to sublot (sic) the premises
hereby leased or assign the same or any
portion of the land hereby leased to any
person, firm and corporation; (and)
4. The Lessee is hereby authorized to
make any construction and/or
improvement on the premises hereby
 leased as he may deem necessary and
proper thereon, provided however, that
any and all such improvements shall
become the property of the Lessor upon
the termination of this lease without
obligation on the part of the latter to
reimburse the Lessee for expenses
incurred in the construction of the same.
Villaflor claimed having discovered that after the
execution of the lease agreement, that Nasipit Lumber "in
bad faith . . . surreptitiously grabbed and occupied a big
portion of plaintiff's property . . ."; that after a confrontation
with the corporate's (sic) field manager, the latter, in a
letter dated December 3, 1973 (exh. R),6 stated recalling
having "made some sort of agreement for the occupancy
(of the property at Acacia, San Mateo), but I no longer
recall the details and I had forgotten whether or not we
did occupy your land. But if, as you say, we did occupy it,
then (he is ) sure that the company is obligated to pay the
rental."
On July 7, 1948, in an "Agreement to Sell" (exh. 2),
Villaflor conveyed to Nasipit Lumber, two (2) parcels of
land . . . described as follows:7
PARCEL ONE
Bounded on the North by Public Land and Tungao
Creek; on the East by Agusan River and Serafin
Villaflor; on the South by Public Land, on the West
by Public Land. Improvements thereon consist of
abaca, fruit trees, coconuts and thirty houses of
mixed materials belonging to the Nasipit Lumber
Company. Divided into Lot Nos. 5412, 5413,
5488, 5490, 5491, 5492, 5850, 5849, 5860, 5855,
5851, 5854, 5855, 5859, 5858, 5857, 5853, and
5852. Boundaries of this parcel of land are
marked by concrete monuments of the Bureau of
Lands. Containing an area of 112,000 hectares.
Assessed at P17,160.00 according to Tax
Declaration No. V-315 dated April 14, 1946.
PARCEL TWO
Bounded on the North by Pagudasan Creek; on
the East by Agusan River; on the South by
Tungao Creek; on the West by Public Land.
Containing an area of 48,000 hectares more or
less. Divided into Lot Nos. 5411, 5410, 5409, and
5399. Improvements 100 coconut trees,
productive, and 300 cacao trees. Boundaries of
said land are marked by concrete monuments of
the Bureau pf (sic) Lands. Assessed value —
P6,290.00 according to Tax No. 317, April 14,
1946.
This Agreement to Sell provides:
3. That beginning today, the Party of the Second
Part shall continue to occupy the property not
anymore in concept of lessee but as prospective
owners, it being the sense of the parties hereto
that the Party of the Second Part shall not in any
manner be under any obligation to make any
compensation to the Party of the First Part, for the
use, and occupation of the property herein before
described in such concept of prospective owner,
and it likewise being the sense of the parties
hereto to terminate as they do hereby terminate,
effective on the date of this present instrument,
the Contract of Lease, otherwise known as Doc.
No. 420, Page No. 36, Book No. II, Series of 1946
of Notary Public Gabriel R. Banaag, of the
Province of Agusan.
4. That the Party of the Second Part has bound as
it does hereby bind itself, its executors and
administrators, to pay unto the party of the First
Part the sum of Five Thousand Pesos
(P5,000.00), Philippine Currency, upon
presentation by the latter to the former of
satisfactory evidence that:
(a) The Bureau of Lands will not
have any objection to the
obtainment by the Party of the
First Part of a Certificate of
Torrens Title in his favor, either
thru ordinary land registration
proceedings or thru administrative
means procedure.
(b) That there is no other private
claimant to the properties
hereinbefore described.
5. That the Party of the First Part has bound as he
does hereby bind to undertake immediately after
the execution of these presents to secure and
obtain, or cause to be secured and obtained, a
Certificate of Torrens Title in his favor over the
properties described on Page (One) hereof, and
after obtainment of such Certificate of Torrens
Title, the said Party of the First Part shall execute
a (D)eed of Absolute Sale unto and in favor of the
Party of the Second Part, its executors,
administrators and assigns, it being the sense of
the parties that the Party of the Second Part upon
delivery to it of such deed of absolute sale, shall
pay unto the Party of the First Part in cash, the
sum of Twelve Thousand (P12,000.00) Pesos in
Philippine Currency, provided, however, that the
Party of the First Part, shall be reimbursed by the
Party of the Second Part with one half of the
expenses incurred by the Party of the First Part
for survey and attorney's fees; and other
incidental expenses not exceeding P300.00.
On December 2, 1948, Villaflor filed Sales Application No.
V-8078 (exh. 1) with the Bureau of Lands, Manila, "to purchase
under the provisions of Chapter V, XI or IX of Commonwealth Act.
No. 141 (The Public Lands Act), as amended, the tract of public
lands . . . and described as follows: "North by Public Land; East
by Agusan River and Serafin Villaflor; South by Public Land and
West by public land (Lot Nos. 5379, 5489, 5412, 5490, 5491,
5492, 5849, 5850, 5851, 5413, 5488, 5489, 5852, 5853, 5854,
5855, 5856, 5857, 5858, 5859 and 5860 . . . containing an area of
140 hectares . . . ." Paragraph 6 of the Application, states: "I
understand that this application conveys no right to occupy the
land prior to its approval, and I recognized (sic) that the land
covered by the same is of public domain and any and all rights
may have with respect thereto by virtue of continuous occupation
and cultivation are hereby relinquished to the Government."9 (exh.
1-D)
On December 7, 1948, Villaflor and Nasipit Lumber executed an
"Agreement" (exh 3).10 This contract provides:
1. That the First Party is the possessor since 1930
of two (2) parcels of land situated in sitio Tungao,
Barrio of San Mateo, Municipality of Butuan,
Province of Agusan;
2. That the first parcel of land abovementioned
and described in Plan PLS-97 filed in the office of
the Bureau of Lands is made up of Lots Nos.
5412, 5413, 5488, 5490, 5491, 5492, 5849, 5850,
5851, 5852, 5853, 5854, 5855, 5856, 5857, 5858,
5859 and 5860 and the second parcel of land is
made of Lots Nos. 5399, 5409, 5410 and 5411;
3. That on July 7, 1948, a contract of Agreement
to Sell was executed between the contracting
parties herein, covering the said two parcels of
land, copy of said Agreement to Sell is hereto
attached marked as Annex "A" and made an
integral part of this document. The parties hereto
agree that the said Agreement to Sell be
maintained in full force and effect with all its terms
and conditions of this present agreement and in
no way be considered as modified.
4. That paragraph 4 of the Contract of Agreement
to Sell, marked as annex, "A" stipulates as
follows:
Par. 4. That the Party of the
Second Part has bound as it does
hereby bind itself, its executors
and administrators, to pay unto the
Party of the First Part of the sum
of FIVE THOUSAND PESOS
(P5,000.00) Philippine Currency,
upon presentation by the latter to
the former of satisfactory evidence
that:
a) The Bureau of Lands will have
any objection to the obtainment by
Party of the First Part of a favor,
either thru ordinary land
registration proceedings or thru
administrative means and
procedure.
b) That there is no other private
claimant to the properties
hereinabove described.
5. That the First Party has on December 2, 1948,
submitted to the Bureau of Lands, a Sales
Application for the twenty-two (22) lots comprising
the two abovementioned parcels of land, the said
Sales Application was registered in the said
Bureau under No. V-807;
6. That in reply to the request made by the First
Party to the Bureau of Lands, in connection with
the Sales Application No. V-807, the latter
informed the former that action on his request will
be expedited, as per letter of the Chief, Public
Land Division, dated December 2, 1948, copy of
which is hereto attached marked as annex "B"
and made an integral part of this agreement:
7. That for and in consideration of the premises
above stated and the amount of TWENTY FOUR
THOUSAND (P24,000.00) PESOS that the
Second Party shall pay to the First Party, by these
presents, the First Party hereby sells, transfers
and conveys unto the Second Party, its
successors and assigns, his right, interest and
participation under, an(d) by virtue of the Sales
Application No. V-807, which he has or may have
in the lots mentioned in said Sales Application No.
V-807;
8. That the amount of TWENTY FOUR
THOUSAND (P24,000.00) PESOS, shall be paid
by the Second Party to the First Party, as follows:
a) The amount of SEVEN
THOUSAND (P7,000.00) PESOS,
has already been paid by the
Second Party to the First Party
upon the execution of the
 Agreement to Sell, on July 7,
1948;
b) The amount of FIVE
THOUSAND (P5,000.00) PESOS
shall be paid upon the signing of
this present agreement; and
c) The balance of TWELVE
THOUSAND (P12,000.00) shall be
paid upon the execution by the
First Party of the Absolute Deed of
Sale of the two parcels of land in
question in favor of the Second
Party, and upon delivery to the
Second Party of the Certificate of
Ownership of the said two parcels
of land.
9. It is specially understood that the mortgage
constituted by the First Party in favor of the
Second Party, as stated in the said contract of
Agreement to Sell dated July 7, 1948, shall cover
not only the amount of SEVEN THOUSAND
(P7,000.00) PESOS as specified in said
document, but shall also cover the amount of
FIVE THOUSAND (P5,000.00) PESOS to be paid
as stipulated in paragraph 8, sub-paragraph (b) of
this present agreement, if the First Party should
fail to comply with the obligations as provided for
in paragraphs 2, 4, and 5 of the Agreement to
Sell;
10. It is further agreed that the First Party
obligates himself to sign, execute and deliver to
and in favor of the Second Party, its successors
and assigns, at anytime upon demand by the
Second Party such other instruments as may be
necessary in order to give full effect to this
present agreement;
In the Report dated December 31, 1949 by the public land
inspector, District Land Office, Bureau of Lands, in Butuan, the
report contains an Indorsement of the aforesaid District Land
Officer recommending rejection of the Sales Application of
Villaflor for having leased the property to another even before he
had acquired transmissible rights thereto.
In a letter of Villaflor dated January 23, 1950, addressed to the
Bureau of Lands, he informed the Bureau Director that he was
already occupying the property when the Bureau's Agusan River
Valley Subdivision Project was inaugurated, that the property was
formerly claimed as private properties (sic), and that therefore,
the property was segregated or excluded from disposition
because of the claim of private ownership. In a letter of Nasipit
Lumber dated February 22, 1950 (exh. X)11 addressed to the
Director of Lands, the corporation informed the Bureau that it
recognized Villaflor as the real owner, claimant and occupant of
the land; that since June 1946, Villaflor leased two (2) hectares
inside the land to the company; that it has no other interest on the
land; and that the Sales Application of Villaflor should be given
favorable consideration.
xxx xxx xxx
On July 24, 1950, the scheduled date of auction of the property
covered by the Sales Application, Nasipit Lumber offered the
highest bid of P41.00 per hectare, but since an applicant under
CA 141, is allowed to equal the bid of the highest bidder, Villaflor
tendered an equal bid; deposited the equivalent of 10% of the bid
price and then paid the assessment in full.
xxx xxx xxx
On August 16, 1950, Villaflor executed a document, denominated
as a "Deed of Relinquishment of Rights" (exh. N),12 pertinent
portion of which reads:
5. That in view of my present business in Manila,
and my change in residence from Butuan, Agusan
to the City of Manila, I cannot, therefore, develope
(sic) or cultivate the land applied for as projected
before;
6. That the Nasipit Lumber Company, Inc., a
corporation duly organized . . . is very much
interested in acquiring the land covered by the
aforecited application . . . ;
7. That I believe the said company is qualified to
acquire public land, and has the means to
develop (sic) the above-mentioned land;
xxx xxx xxx
WHEREFORE, and in consideration of the
amount of FIVE THOUSAND PESOS (P5,000.00)
to be reimbursed to me by the aforementioned
Nasipit Lumber Company, Inc., after its receipt of
the order of award, the said amount representing
part of the purchase price of the land aforesaid,
the value of the improvements I introduced
thereon, and the expenses incurred in the
publication of the Notice of Sale, I, the applicant,
Vicente J. Villaflor, hereby voluntarily renounce
and relinquish whatever rights to, and interests I
have in the land covered by my above-mentioned
application in favor of the Nasipit Lumber
Company, Inc.
Also on August 16, 1950, Nasipit Lumber filed a Sales Application
over the two (2) parcels of land, covering an area of 140
hectares, more or less. This application was also numbered V-
807 (exh. Y).
On August 17, 1950 the Director of Lands issued an "Order of
Award"13 in favor of Nasipit Lumber Company, Inc., pertinent
portion of which reads:
4. That at the auction sale of the land held on July
24, 1950 the highest bid received was that of
Nasipit Lumber Company, Inc. which offered
P41.00 per hectare or P5,740.00 for the whole
tract, which bid was equaled by applicant Vicente
J. Villaflor, who deposited the amount of P574.00
under Official Receipt No. B-1373826 dated July
24, 1950 which is equivalent to 10% of the bid.
Subsequently, the said . . . Villaflor paid the
amount of P5,160.00 in full payment of the
purchase price of the above-mentioned land and
for some reasons stated in an instrument of
relinquishment dated August 16, 1950, he
(Vicente J. Villaflor) relinquished his rights to and
interest in the said land in favor of the Nasipit
Lumber Company, Inc. who filed the
corresponding application therefore.
In view of the foregoing, and it appearing that the
proceedings had . . . were in accordance with law
and in [sic] existing regulations, the land covered
thereby is hereby awarded to Nasipit Lumber
Company, Inc. at P41.00 per hectare or
P5,740.00 for the whole tract.
This application should be entered in the record of
this Office as Sales Entry No. V-407.
It is Villaflor's claim that he only learned of the Order of Award on
January 16, 1974, or after his arrival to the Philippines, coming
from Indonesia, where he stayed for more than ten (10) years;
that he went to Butuan City in the latter part of 1973 upon the call
of his brother Serafin Villaflor, who was then sick and learned that
Nasipit Lumber (had) failed and refused to pay the agreed
rentals, although his brother was able to collect during the early
years; and that Serafin died three days after his (Vicente's)
arrival, and so no accounting of the rentals could be made; that
on November 27, 1973, Villaflor wrote a letter to Mr. G.E.C.
Mears of Nasipit Lumber, reminding him of their verbal agreement
in 1955 . . . that Mr. Mears in a Reply dated December 3, 1973,
appears to have referred the matter to Mr. Noriega, the corporate
general manager, but the new set of corporate officers refused to
recognize (Villaflor's) claim, for Mr. Florencio Tamesis, the
general manager of Nasipit Lumber, in a letter dated February 19,
1974, denied Villaflor's itemized claim dated January 5, 1974
(exh. V) to be without valid and legal basis. In the 5th January,
1974 letter, Villaflor claimed the total amount of P427,000.00 . . . .
In a formal protest dated January 31, 197414 which Villaflor filed
with the Bureau of Lands, he protested the Sales Application of
Nasipit Lumber, claiming that the company has not paid him
P5,000.00 as provided in the Deed of Relinquishment of Rights
dated August 16, 1950.
xxx xxx xxx
. . . (T)hat in a Decision dated August 8, 1977 (exh. 8), the
Director of Lands found that the payment of the amount of
P5,000.00 in the Deed . . . and the consideration in the
Agreement to Sell were duly proven, and ordered the dismissal of
Villaflor's protest and gave due course to the Sales Application of
Nasipit Lumber. Pertinent portion of the Decision penned by
Director of Lands, Ramon Casanova, in the Matter of SP No. V-
807 (C-V-407) . . . reads:
xxx xxx xxx
During the proceedings, Villaflor presented
another claim entirely different from his previous
claim — this time, for recovery of rentals in
arrears arising from a supposed contract of lease
by Villaflor as lessor in favor of Nasipit as lessee,
and indemnity for damages supposedly caused
improvements on his other property . . . in the
staggering amount of Seventeen Million
(P17,000,000.00) Pesos. Earlier, he had also
demanded from NASIPIT . . . (P427,000.00) . . .
also as indemnity for damages to improvements
supposedly caused by NASIPIT on his other real
property as well as for reimbursement of realty
taxes allegedly paid by him thereon.
xxx xxx xxx
It would seem that . . . Villaflor has sought to inject
so many collaterals, if not extraneous claims, into
this case. It is the considered opinion of this Office
that any claim not within the sphere or scope of its
adjudicatory authority as an administrative as well
as quasi-judicial body or any issue which seeks to
delve into the merits of incidents clearly outside of
the administrative competence of this Office to
decide may not be entertained.
There is no merit in the contention of Villaflor that
owing to Nasipit's failure to pay the amount of . . .
(P5,000.00) . . . (assuming that Nasipit had failed)
the deed of relinquishment became null and void
for lack of consideration. . . . .
xxx xxx xxx
. . . The records clearly show, however, that since
the execution of the deed of relinquishment . . .
Villaflor has always considered and recognized
NASIPIT as having the juridical personality to
acquire public lands for agricultural purposes. . . .
. been paid must perforce fail.
xxx xxx xxx
Even this Office had not failed to recognize the
juridical personality of NASIPIT to apply for the
purchase of public lands . . . when it awarded to it
the land so relinquished by Villaflor (Order of
Award dated August 17, 1950) and accepted its
application therefor. At any rate, the question
whether an applicant is qualified to apply for the
acquisition of public lands is a matter between the
applicant and this Office to decide and which a
third party like Villaflor has no personality to
question beyond merely calling the attention of
this Office thereto.
xxx xxx xxx
Villaflor offered no evidence to support his claim
of non-payment beyond his own self-serving
assertions and expressions that he had not been
paid said amount. As protestant in this case, he
has the affirmative of the issue. He is obliged to
prove his allegations, otherwise his action will fail.
For, it is a well settled principle (') that if plaintiff
upon whom rests the burden of proving his cause
of action fails to show in a satisfactory manner the
facts upon which he bases his claim, the
defendant is under no obligation to prove his
exceptions or special defenses (Belen vs. Belen,
13 Phil. 202; Mendoza vs. Fulgencio, 8 Phil. 243).
xxx xxx xxx
Consequently, Villaflor's claim that he had not
On the other hand, there are strong and
compelling reasons to presume that Villaflor
had already been paid the amount of Five
Thousand (P5,000.00) Pesos.
First, . . . What is surprising, however, is not
so much his claims consisting of gigantic
amounts as his having forgotten to adduce
evidence to prove his claim of non-payment
of the Five Thousand (P5,000.00) Pesos
during the investigation proceedings when he
had all the time and opportunity to do so. . . .
The fact that he did not adduce or even
attempt to adduce evidence in support thereof
shows either that he had no evidence to offer
. . . that NASIPIT had already paid him in fact.
What is worse is that Villaflor did not even
bother to command payment, orally or in
writing, of the Five Thousand (P5,000.00)
Pesos which was supposed to be due him
since August 17, 1950, the date when the
order of award was issued to Nasipit, and
when his cause of action to recover payment
had accrued. The fact that he only made a
command (sic) for payment on January 31,
1974, when he filed his protest or twenty-four
(24) years later is immediately nugatory of his
claim for non-payment.
But Villaflor maintains that he had no
knowledge or notice that the order of award
had already been issued to NASIPIT as he
had gone to Indonesia and he had been
absent from the Philippines during all those
twenty-four (24) years. This of course taxes
credulity. . . . .
Second, it should be understood that the
condition that NASIPIT should reimburse
Villaflor the amount of Five Thousand
(P5,000.00) Pesos upon its receipt of the
order of award was fulfilled as said award
was issued to NASIPIT on August 17, 1950.
The said deed of relinquishment was
prepared and notarized in Manila with Villaflor
and NASIPIT signing the instrument also in
Manila on August 16, 1950 (p. 77, (sic)). The
following day or barely a day after that, or on
August 17, 1950, the order of award was
issued by this Office to NASIPIT also in
Manila. Now, considering that Villaflor is
presumed to be more assiduous in following
up with the Bureau of Lands the expeditious
issuance of the order of award as the
payment of the Five Thousand (P5,000.00)
Pesos (consideration) would depend on the
issuance of said order to award NASIPIT,
would it not be reasonable to believe that
Villaflor was at hand when the award was
issued to NASIPIT an August 17, 1950, or
barely a day which (sic) he executed the deed
of relinquishment on August 16, 1950, in
Manila? . . . .
Third, on the other hand, NASIPIT has in his
possession a sort of "order" upon itself — (the
deed of relinquishment wherein he (sic)
obligated itself to reimburse or pay Villaflor
the . . . consideration of the relinquishment
upon its receipt of the order of award) for the
payment of the aforesaid amount the moment
the order of award is issued to it. It is
reasonable to presume that NASIPIT has
paid the Five Thousand (P5,000.00) Pesos to
Villaflor.
A person in possession of an
order on himself for the
payment of money, or the
delivery of anything, has paid
the money or delivered the
thing accordingly. (Section 5(k)
B-131 Revised Rules of Court.
It should be noted that NASIPIT did not
produce direct evidence as proof of its
payment of the Five Thousand (P5,000.00)
Pesos to Villaflor. Nasipit's explanation on
this point is found satisfactory.
. . . (I)t was virtually impossible
for NASIPIT, after the lapse of
the intervening 24 years, to be
able to cope up with all the
records necessary to show that
the consideration for the deed
of relinquishment had been
fully paid. To expect NASIPIT
to keep intact all records
 pertinent to the transaction for
the whole quarter of a century
would be to require what even
the law does not. Indeed, even
the applicable law itself (Sec.
337, National Internal Revenue
Code) requires that all records
of corporations be preserved
for only a maximum of five
years.
NASIPIT may well have added that at any
rate while "there are transactions where the
proper evidence is impossible or extremely
difficult to produce after the lapse of time . . .
the law creates presumptions of regularity in
favor of such transactions (20 Am. Jur. 232)
so that when the basic fact is established in
an action the existence of the presumed fact
must be assumed by force of law. (Rule 13,
Uniform Rules of Evidence; 9 Wigmore, Sec.
2491).
Anent Villaflor's claim that the 140-hectare
land relinquished and awarded to NASIPIT is
his private property, little (need) be said. . . . .
The tracks of land referred to therein are not
identical to the lands awarded to NASIPIT.
Even in the assumption that the lands
mentioned in the deeds of transfer are the
same as the 140-hectare area awarded to
NASIPIT, their purchase by Villaflor (or) the
latter's occupation of the same did not
change the character of the land from that of
public land to a private property. The
provision of the law is specific that public
lands can only be acquired in the manner
provided for therein and not otherwise (Sec.
11, C.A. No. 141, as amended). The records
show that Villaflor had applied for the
purchase of the lands in question with this
Office (Sales Application No. V-807) on
December 2, 1948. . . . . There is a condition
in the sales application signed by Villaflor to
the effect that he recognizes that the land
covered by the same is of public domain and
any and all rights he may have with respect
thereto by virtue of continuous occupation
and cultivation are relinquished to the
Government (paragraph 6, Sales Application
No. V-807 . . .) of which Villaflor is very much
aware. It also appears that Villaflor had paid
for the publication fees appurtenant to the
sale of the land. He participated in the public
auction where he was declared the
successful bidder. He had fully paid the
purchase prive (sic) thereof (sic). It would be
a (sic) height of absurdity for Villaflor to be
buying that which is owned by him if his claim
of private ownership thereof is to be believed.
The most that can be said is that his
possession was merely that of a sales
applicant to when it had not been awarded
because he relinquished his interest therein in
favor of NASIPIT who (sic) filed a sales
application therefor.
xxx xxx xxx
. . . During the investigation proceedings,
Villaflor presented as his Exhibit "(sic)" (which
NASIPIT adopted as its own exhibit and had it
marked in evidence as Exhibit "1") a duly
notarized "agreement to Sell" dated July 7,
1948, by virtue of which Villaflor undertook to
sell to Nasipit the tracts of land mentioned
therein, for a consideration of Twenty-Four
Thousand (P24,000.00) Pesos. Said tracts of
land have been verified to be identical to the
parcels of land formerly applied for by Villaflor
and which the latter had relinquished in favor
of NASIPIT under a deed of relinquishment
executed by him on August 16, 1950. In
another document executed on December 7,
1948 . . . Villaflor as "FIRST PARTY" and
NASIPIT as "SECOND PARTY" confirmed
the "Agreement to Sell" of July 7, 1948, which
was maintained "in full force and effect with
all its terms and conditions . . ." (Exh. "38-A");
and that "for and in consideration of . . .
TWENTY FOUR THOUSAND (P24,000.00)
PESOS that the Second Party shall pay to the
First Party . . . the First Party hereby sells,
transfers and conveys unto the Second Party
. . . his right interest and participation under
and by virtue of the Sales Application No. V-
807" and, in its paragraph 8, it made
stipulations as to when part of the said
consideration . . . was paid and when the
balance was to be paid, to wit:
a) the amount of SEVEN
THOUSAND . . . PESOS has
already been paid by the
Second Party to the First Party
upon the execution of the
Agreement to Sell, on July 17,
1948;
b) the amount of FIVE
THOUSAND . . . PESOS shall
be paid upon the signing of this
present agreement; and
c) the amount of TWELVE
THOUSAND . . . PESOS, shall
be paid upon the execution by
the First Party of the Absolute
Sale of the Two parcels of land
in question in favor of the
Second Party of the Certificate
of Ownership of the said two
parcels of land. (Exh. 38-B).
(Emphasis ours)
It is thus clear from this subsequent
document marked Exhibit "38 ANALCO"
that of the consideration of the
"Agreement to Sell" dated July 7, 1948,
involving the 140-hectare area
relinquished by Villaflor in favor of
NASIPIT, in the amount of Twenty-Four
Thousand (P24,000.00) Pesos:
(1) the amount of Seven Thousand
(P7,000.00) Pesos was already paid
upon the execution of the "Agreement to
Sell" on July 7, 1948, receipt of which
incidentally was admitted by Villaflor in
the document of December 7, 1948;
(2) the amount of Five Thousand
(P5,000.00) Pesos was paid when said
document was signed by Vicente J.
Villaflor as the First Party and Nasipit
thru its President, as the Second Party,
on December 7, 1948; and
(3) the balance of Twelve Thousand
(P12,000.00) Pesos to be paid upon the
execution by the First Party of the
Absolute Deed of Sale of the two
parcels of land in favor of the Second
Party, and upon delivery to the Second
Party of the Certificate of Ownership of
the said two parcels of land.
Villaflor contends that NASIPIT could
not have paid Villaflor the balance of
Twelve Thousand (P12,000.00) Pesos .
. . consideration in the Agreement to
Sell will only be paid to applicant-
assignor (referring to Villaflor) upon
obtaining a Torrens Title in his favor
over the 140-hectare of land applied for
and upon execution by him of a Deed of
Absolute Sale in favor of Nasipit Lumber
Company, Inc. . . . . Inasmuch as
applicant-assignor was not able to
obtain a Torrens Title over the land in
question he could not execute an
absolute Deed of (sic) Nasipit Lumber
Co., Inc. Hence, the Agreement to Sell
was not carried out and no Twelve
Thousand (P12,000.00) Pesos was
overpaid either to the applicant-
assignor, much less to Howard J. Nell
Company. (See MEMORANDUM FOR
THE APPLICANT-ASSIGNOR, dated
January 5, 1977). . . .
. . . Villaflor did not adduce evidence in
support of his claim that he had not
been paid the . . . (P12,000.00) . . .
consideration of the Agreement to Sell
dated July 7, 1948 (Exh. "38 NALCO")
beyond his mere uncorroborated
assertions. On the other hand, there is
strong evidence to show that said
Twelve Thousand (P12,000.00) Pesos
had been paid by (private respondent)
to Edward J. Nell Company by virtue of
the Deed of Assignment of Credit
executed by Villaflor (Exh. "41 NALCO")
for the credit of the latter.
Atty. Gabriel Banaag, resident counsel
of NASIPIT who is in a position to know
the facts, testified for NASIPIT. He
described that it was he who notarized
the "Agreement to Sell" (Exh. "F"); that
he knew about the execution of the
document of December 7, 1948 (Exh.
"38") confirming the said "Agreement to
Sell" having been previously consulted
thereon by Jose Fernandez, who signed
said document on behalf of NASIPIT . . .
that subsequently, in January 1949,
Villaflor executed a Deed of Assignment
of credit in favor of Edward J. Nell
Company (Exh. "41 NALCO") whereby
Villaflor ceded to the latter his receivable
for NASIPIT corresponding to the
remaining balance in the amount of
Twelve Thousand . . . Pesos of the total
consideration . . . stipulated in both the
"Agreement to Sell" (Exh. "F") and the
document dated December 7, 1948
(Exh. "39");
. . . . He further testified that the said
assignment of credit was communicated
to (private respondent) under cover
letter dated January 24, 1949 (Exh. "41-
A") and not long thereafter, by virtue of
the said assignment of credit, (private
respondent) paid the balance of Twelve
Thousand . . . due to Villaflor to Edward
J. Nell Company . . . . Atty. Banaag's
aforesaid testimony stand unrebutted;
hence, must be given full weight and
credit. . . . Villaflor and his counsel were
present when Atty. Banaag's foregoing
testimony was Villaflor did not demur,
nor did he rebut the same, despite
having been accorded full opportunity to
do so.
xxx xxx xxx
Having found that both the Five
Thousand . . . consideration of the deed
of Relinquishment . . . and that the
remaining balance of
. . . (P12,000.00) to complete the
Twenty-Four Thousand (P24,000.00)
Pesos consideration of both the
Agreement to Sell dated July 7, 1948,
and the document, dated December 7,
1948, executed by the former in favor of
the latter, have been paid Villaflor the
issue on prescription and laches
becomes academic and needs no
further discussion.
But more than all the questions thus far
raised and resolved is the question
whether a sales patent can be issued to
NASIPIT for the 140-hectare area
awarded to it in the light of Section 11,
Article XIV of the new Constitution which
provides in its pertinent portion to wit:
 . . . No private corporation
or association may hold
alienable land of the public
domain except by lease not
to exceed one thousand
hectares in area . . . .
The Secretary of Justice had previous
occasion to rule on this point in his
opinion No. 140, s. 1974. Said the
Honorable Justice Secretary:
On the second question,
(referring to the questions
when may a public land be
considered to have been
acquired by purchase
before the effectivity of the
new Constitution posed by
the Director of Lands in his
query on the effect on
pending applications for the
issuance of sales patent in
the light of Section 11, Art.
XIV of the New Constitution
aforecited), you refer to this
Office's Opinion No. 64
series of 1973 in which I
stated:
On the other hand, with
respect to sales
applications ready for
issuance of sales patent, it
is my opinion that where the
applicant had, before the
Constitution took effect,
fully complied with all this
obligations under the Public
Land Act in order to entitle
him to a Sales patent, there
would be no legal or
equitable justification for
refusing to issue or release
the sales patent.
With respect to the point as to when the
Sales applicant has complied with all the
terms and conditions which would entitle
him to a sales patent, the herein above
Secretary of Justice went on:
That as to when the
applicant has complied with
all the terms and conditions
which would entitle him to a
patent is a questioned (sic)
fact which your office would
be in the best position to
determine. However,
relating this to the
 procedure for the
processing of applications
mentioned above, I think
that as the applicant has
fulfilled the
construction/cultivation
requirements and has fully
paid the purchase price, he
should be deemed to have
acquired by purchase the
particular tract of land and
(sic) the area (sic) in the
provision in question of the
new constitution would not
apply.
From the decision of the Director of Lands, Villaflor
filed a Motion for Reconsideration which was
considered as an Appeal M.N.R. Case 4341, to the
Ministry of Natural Resources.
On June 6, 1979, the Minister of Natural Resources
rendered a Decision (exh. 9), 15 dismissing the appeal
and affirming the decision of the Director of Lands,
pertinent portions of which reads:
After a careful study of the records and
the arguments of the parties, we believe
that the appeal is not well taken.
Firstly, the area in dispute is not the private property of appellant.
The evidence adduced by appellant to establish his claim of ownership
over the subject area consists of deeds of absolute sale executed in his
favor on January 16, and February 15, 1940, by four (4) different
persons, namely, Cirilo Piencenaves, Fermin Balobo, Claudio Otero and
Hermogenes Patete.
However, an examination of the technical descriptions of the tracts of
land subject of the deeds of sale will disclose that said parcels are not
identical to, and do not tally with, the area in controversy.
It is a basic assumption of our policy that lands of
whatever classification belong to the state. Unless
alienated in accordance with law, it retains its rights
over the same as dominus, (Santiago vs. de los
Santos, L-20241, November 22, 1974, 61 SCRA 152).
For, it is well-settled that no public land can be acquired
by private persons without any grant, express or
implied from the government. It is indispensable then
that there be showing of title from the state or any other
mode of acquisition recognized by law. (Lee Hong Hok,
et al. vs. David, et al., L-30389, December 27, 1972, 48
SCRA 379.)
It is well-settled that all lands remain part of the public domain unless
severed therefrom by state grant or unless alienated in accordance with
law.
We, therefore, believe that the aforesaid deeds of sale do not constitute
clear and convincing evidence to establish that the contested area is of
private ownership. Hence, the property must be held to be public
domain.
"There being no evidence whatever that the property in
question was ever acquired by the applicants or their
ancestors either by composition title from the Spanish
Government or by possessory information title or by
any other means for the acquisition of public lands, the
 property must be held to be public domain." (Lee Hong
Hok, et al., vs. David , et al., L-30389 December 27,
Lastly, appellee has acquired a
1972, 48 SCRA 378-379 citing Heirs of Datu Pendatun vested right to the subject area
vs. Director of Lands; see also Director of Lands vs.
Reyes, L-27594, November 28, 1975, 68 SCRA 177). and, therefore, is deemed not
affected by the new constitutional
Be that as it may, appellant, by filing a sales application over the
controverted land, acknowledged unequivocably [sic] that the same is
provision that no private
not his private property. corporation may hold alienable
"As such sales applicant, appellant manifestly
land of the public domain except
acknowledged that he does not own the land and that by lease.
the same is a public land under the administration of
the Bureau of Lands, to which the application was
submitted, . . . All of its acts prior thereof, including its xxx xxx xxx
real estate tax declarations, characterized its
possessions of the land as that of a "sales applicant"
and consequently, as one who expects to buy it, but Implementing the aforesaid
has not as yet done so, and is not, therefore, its Opinion No. 64 of the Secretary of
owner." (Palawan Agricultural and Industrial Co., Inc.
vs. Director of Lands, L-25914, March 21, 1972, 44 Justice, the then Secretary of
SCRA 20, 21). Agriculture and Natural Resources
Secondly, appellant's alleged failure to pay the consideration stipulated issued a memorandum, dated
in the deed of relinquishment neither converts said deed into one without February 18, 1974, which
a cause or consideration nor ipso facto rescinds the same. Appellant,
though, has the right to demand payment with legal interest for the delay pertinently reads as follows:
or to demand rescission.

However, appellant's cause of
action, either for specific
performance or rescission of
contract, with damages, lies within
the jurisdiction of civil courts, not
with administrative bodies.
xxx xxx
In the implementation of
the foregoing opinion,
sales application of
private individuals
covering areas in
excess of 24 hectares
and those of
corporations,
xxx
 associations, or
partnership which fall
under any of the
following categories
shall be given due
course and issued
patents, to wit:
1. Sales application for fishponds and for agricultural
purposes (SFA, SA and IGPSA) wherein prior to
January 17, 1973;
a. the land covered thereby was
awarded;
b. cultivation requirements of law were
complied with as shown by investigation
reports submitted prior to January 17,
1973;
c. land was surveyed and survey returns
already submitted to the Director of
Lands for verification and approval; and
d. purchased price was fully paid.
From the records, it is evident that
the aforestated requisites have
been complied with by appellee
long before January 17, 1973, the
effectivity of the New Constitution.
To restate, the disputed area was
awarded to appellee on August
17, 1950, the purchase price was
fully paid on July 26, 1951, the
cultivation requirements were
complied with as per investigation
report dated December 31, 1949,
and the land was surveyed under
Pls-97.
On July 6, 1978, petitioner filed a complaint16 in the
trial court for "Declaration of Nullity of Contract (Deed
of Relinquishment of Rights), Recovery of
Possession (of two parcels of land subject of the
contract), and Damages" at about the same time that
he appealed the decision of the Minister of Natural
Resources to the Office of the President.
On January 28, 1983, petitioner died. The trial court
ordered his widow, Lourdes D. Villaflor, to be
substituted as petitioner. After trial in due course, the
then Court of First Instance of Agusan del Norte and
Butuan City, Branch III,17 dismissed the complaint on
the grounds that: (1) petitioner admitted the due
execution and genuineness of the contract and was
estopped from proving its nullity, (2) the verbal lease
agreements were unenforceable under Article 1403
(2) (e) of the Civil Code, and (3) his causes of action
were barred by extinctive prescription and/or laches.
It ruled that there was prescription and/or laches
because the alleged verbal lease ended in 1966, but
the action was filed only on January 6, 1978. The
six-year period within which to file an action on an
oral contract per Article 1145 (1) of the Civil Code
expired in 1972. The decretal portion18 of the trial
court's decision reads:
WHEREFORE, the foregoing premises duly
considered, judgment is hereby rendered in
favor of the defendant and against the plaintiff.
Consequently, this case is hereby ordered
DISMISSED. The defendant is hereby
declared the lawful actual physical possessor-
occupant and having a better right of
possession over the two (2) parcels of land in
litigation described in par. 1.2 of the complaint
as Parcel I and Parcel II, containing a total
area of One Hundred Sixty (160) hectares,
and was then the subject of the Sales
Application No. V-807 of the plaintiff (Exhibits
1, 1-A, 1-B, pp. 421 to 421-A, Record), and
now of the Sales Application No. 807, Entry
No. V-407 of the defendant Nasipit Lumber
Company (Exhibit Y, pp. 357-358, Record).
The Agreements to Sell Real Rights, Exhibits
2 to 2-C, 3 to 3-B, and the Deed of
Relinquishment of Rights, Exhibits N to N-1,
over the two parcels of land in litigation are
hereby declared binding between the plaintiff
and the defendant, their successors and
assigns.
Double the costs against the plaintiff.
The heirs of petitioner appealed to Respondent
Court of Appeals19 which, however, rendered
judgment against petitioner via the assailed Decision
dated September 27, 1990 finding petitioner's
prayers — (1) for the declaration of nullity of the
deed of relinquishment, (2) for the eviction of private
respondent from the property and (3) for the
declaration of petitioner's heirs as owners — to be
without basis. The decretal portion20 of the assailed
49-page, single-spaced Decision curtly reads:
WHEREFORE, the Decision appealed from, is
hereby AFFIRMED, with costs against plaintiff-
appellants.
Not satisfied, petitioner's heirs filed the instant 57-
page petition for review dated December 7, 1990. In
a Resolution dated June 23, 1991, the Court denied
this petition "for being late." On reconsideration —
upon plea of counsel that petitioners were "poor" and
that a full decision on the merits should be rendered
— the Court reinstated the petition and required
comment from private respondent. Eventually, the
petition was granted due course and the parties thus
filed their respective memoranda.
The Issues
Petitioner, through his heirs, attributes the following
errors to the Court of Appeals:
I. Are the findings of the Court of Appeals
conclusive and binding upon the Supreme
Court?
II. Are the findings of the Court of Appeals
fortified by the similar findings made by the
Director of Lands and the Minister of Natural
Resources (as well as by the Office of the
President)?
III. Was there "forum shopping?".
IV. Are the findings of facts of the Court of
Appeals and the trial court supported by the
evidence and the law?
V. Are the findings of the Court of Appeals
supported by the very terms of the contracts
which were under consideration by the said
court?
VI. Did the Court of Appeals, in construing the
subject contracts, consider the
contemporaneous and subsequent act of the
parties pursuant to article 1371 of the Civil
Code?
VII. Did the Court of Appeals consider the fact
and the unrefuted claim of Villaflor that he
never knew of the award in favor of Nasipit?
VIII. Did the Court of Appeals correctly apply
the rules on evidence in its findings that
Villaflor was paid the P5,000.00 consideration
because Villaflor did not adduce any proof that
he was not paid?
IX. Is the Court of Appeals' conclusion that the
contract is not simulated or fictitious simply
because it is genuine and duly executed by
the parties, supported by logic or the law?
X. May the prestations in a contract agreeing
to transfer certain rights constitute estoppel
when this very contract is the subject of an
action for annulment on the ground that it is
fictitious?
XI. Is the Court of Appeals' conclusion that the
lease agreement between Villaflor is verbal
and therefore, unenforceable supported by the
evidence and the law?
After a review of the various submissions of the
parties, particularly those of petitioner, this Court
believes and holds that the issues can be condensed
into three as follows:
 (1) Did the Court of Appeals err in adopting or
relying on the factual findings of the Bureau of
Lands, especially those affirmed by the
Minister (now Secretary) of Natural Resources
and the trial court?
(2) Did the Court of Appeals err in upholding
the validity of the contracts to sell and the
deed of relinquishment? Otherwise stated, did
the Court of Appeals err in finding the deed of
relinquishment of rights and the contracts to
sell valid, and not simulated or fictitious?
(3) Is the private respondent qualified to
acquire title over the disputed property?
The Court's Ruling
The petition is bereft of merit. It basically questions the sufficiency
of the evidence relied upon by the Court of Appeals, alleging that
public respondent's factual findings were based on speculations,
surmises and conjectures. Petitioner insists that a review of those
findings is in order because they were allegedly (1) rooted, not on
specific evidence, but on conclusions and inferences of the
Director of Lands which were, in turn, based on misapprehension
of the applicable law on simulated contracts; (2) arrived at
whimsically — totally ignoring the substantial and admitted fact
that petitioner was not notified of the award in favor of private
respondent; and (3) grounded on errors and misapprehensions,
particularly those relating to the identity of the disputed area.
First Issue: Primary Jurisdiction of the Director of Lands and
Finality of Factual Findings of the Court of Appeals
Underlying the rulings of the trial and appellate courts is the
doctrine of primary jurisdiction; i.e., courts cannot and will not
resolve a controversy involving a question which is within the
jurisdiction of an administrative tribunal, especially where the
question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the
administrative tribunal to determine technical and intricate matters
of fact.21
In recent years, it has been the jurisprudential trend to apply this
doctrine to cases involving matters that demand the special
competence of administrative agencies even if the question
involved is also judicial in character. It applies "where a claim is
originally cognizable in the courts, and comes into play whenever
enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, have been placed within the special
competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the
administrative body for its view."22
In cases where the doctrine of primary jurisdiction is clearly
applicable, the court cannot arrogate unto itself the authority to
resolve a controversy, the jurisdiction over which is initially lodged
with an administrative body of special competence.23 InMachete
vs. Court of Appeals, the Court upheld the primary jurisdiction of
the Department of Agrarian Reform Adjudicatory Board (DARAB)
in an agrarian dispute over the payment of back rentals under a
leasehold contract.24 In Concerned Officials of the Metropolitan
Waterworks and Sewerage System vs. Vasquez,25 the Court
recognized that the MWSS was in the best position to evaluate
and to decide which bid for a waterworks project was compatible
with its development plan.
The rationale underlying the doctrine of primary jurisdiction finds
application in this case, since the questions on the identity of the
land in dispute and the factual qualification of private respondent
as an awardee of a sales application require a technical
determination by the Bureau of Lands as the administrative
agency with the expertise to determine such matters. Because
these issues preclude prior judicial determination, it behooves the
courts to stand aside even when they apparently have statutory
power to proceed, in recognition of the primary jurisdiction of the
administrative agency.26
One thrust of the multiplication of administrative agencies
is that the interpretation of contracts and the
determination of private rights thereunder is no longer a
uniquely judicial function, exercisable only by our regular
courts.27
Petitioner initiated his action with a protest before the Bureau of
Lands and followed it through in the Ministry of Natural
Resources and thereafter in the Office of the President.
Consistent with the doctrine of primary jurisdiction, the trial and
the appellate courts had reason to rely on the findings of these
specialized administrative bodies.
The primary jurisdiction of the director of lands and the minister of
natural resources over the issues regarding the identity of the
disputed land and the qualification of an awardee of a sales
patent is established by Sections 3 and 4 of Commonwealth Act
No. 141, also known as the Public Land Act:
Sec. 3. The Secretary of Agriculture and Commerce (now
Secretary of Natural Resources) shall be the executive
officer charged with carrying out the provisions of this Act
through the Director of Lands, who shall act under his
immediate control.
Sec. 4. Subject to said control, the Director of Lands shall
have direct executive control of the survey, classification,
lease, sale or any other form of concession or disposition
and management of the lands of the public domain, and
his decision as to questions of fact shall be conclusive
when approved by the Secretary of Agriculture and
Commerce.
Thus, the Director of Lands, in his decision, said:28
. . . It is merely whether or not Villaflor has been paid the
Five Thousand (P5,000.00) Pesos stipulated
consideration of the deed of relinquishment made by him
without touching on the nature of the deed of
relinquishment. The administration and disposition of
public lands is primarily vested in the Director of Lands
and ultimately with the Secretary of Agriculture and
Natural Resources (now Secretary of Natural Resources),
and to this end —
Our Supreme Court has recognized that
the Director of Lands is a quasi-judicial
officer who passes on issues of mixed
facts and law (Ortua vs. Bingson
Encarnacion, 59 Phil 440). Sections 3 and
4 of the Public Land Law thus mean that
the Secretary of Agriculture and Natural
Resources shall be the final arbiter on
questions of fact in public land conflicts
(Heirs of Varela vs. Aquino, 71 Phil 69;
Julian vs. Apostol, 52 Phil 442).
The ruling of this Office in its order dated September 10,
1975, is worth reiterating, thus:
. . . it is our opinion that in the exercise of
his power of executive control,
administrative disposition and allegation of
public land, the Director of Lands should
entertain the protest of Villaflor and
conduct formal investigation . . . to
determine the following points: (a) whether
 or not the Nasipit Lumber Company, Inc.
paid or reimbursed to Villaflor the
consideration of the rights in the amount
of P5,000.00 and what evidence the
company has to prove payment, the
relinquishment of rights being part of the
administrative process in the disposition of
the land in question . . . .
. . . . Besides, the authority
of the Director of Lands to
pass upon and determine
questions considered
inherent in or essential to
the efficient exercise of his
powers like the incident at
issue, i.e. , whether
Villaflor had been paid or
not, is conceded bylaw.
Reliance by the trial and the appellate courts on the factual
findings of the Director of Lands and the Minister of Natural
Resources is not misplaced. By reason of the special knowledge
and expertise of said administrative agencies over matters falling
under their jurisdiction, they are in a better position to pass
judgment thereon; thus, their findings of fact in that regard are
generally accorded great respect, if not finality,29 by the
courts.30 The findings of fact of an administrative agency must be
respected as long as they are supported by substantial evidence,
even if such evidence might not be overwhelming or even
preponderant. It is not the task of an appellate court to weigh
once more the evidence submitted before the administrative body
and to substitute its own judgment for that of the administrative
agency in respect of sufficiency of evidence.31
However, the rule that factual findings of an administrative
agency are accorded respect and even finality by courts admits of
exceptions. This is true also in assessing factual findings of lower
courts.32 It is incumbent on the petitioner to show that the
resolution of the factual issues by the administrative agency
and/or by the trial court falls under any of the exceptions.
Otherwise, this Court will not disturb such findings.33
We mention and quote extensively from the rulings of the Bureau
of Lands and the Minister of Natural Resources because the
points, questions and issues raised by petitioner before the trial
court, the appellate court and now before this Court are basically
the same as those brought up before the aforesaid specialized
administrative agencies. As held by the Court of
Appeals:34
We find that the contentious points raised by appellant in
this action, are substantially the same matters he raised
in BL Claim No. 873 (N). In both actions, he claimed
private ownership over the land in question, assailed the
validity and effectiveness of the Deed of Relinquishment
of Rights he executed in August 16, 1950, that he had not
been paid the P5,000.00 consideration, the value of the
improvements he introduced on the land and other
expenses incurred by him.
In this instance, both the principle of primary jurisdiction of
administrative agencies and the doctrine of finality of factual
findings of the trial courts, particularly when affirmed by the Court
of Appeals as in this case, militate against petitioner's cause.
Indeed, petitioner has not given us sufficient reason to deviate
from them.
Land in Dispute Is Public Land
Petitioner argues that even if the technical description in the
deeds of sale and those in the sales application were not
identical, the area in dispute remains his private property. He
alleges that the deeds did not contain any technical description,
as they were executed prior to the survey conducted by the
Bureau of Lands; thus, the properties sold were merely described
by reference to natural boundaries. His private ownership thereof
was also allegedly attested to by private respondent's former field
manager in the latter's February 22, 1950 letter, which contained
an admission that the land leased by private respondent was
covered by the sales application.
This contention is specious. The lack of technical description did
not prove that the finding of the Director of Lands lacked
substantial evidence. Here, the issue is not so much whether the
subject land is identical with the property purchased by petitioner.
The issue, rather, is whether the land covered by the sales
application is private or public land. In his sales application,
petitioner expressly admitted that said property was public land.
This is formidable evidence as it amounts to an admission against
interest.
In the exercise of his primary jurisdiction over the issue, Director
of Lands Casanova ruled that the land was public:35
. . . Even (o)n the assumption that the lands mentioned in
the deeds of transfer are the same as the 140-hectare
area awarded to Nasipit, their purchase by Villaflor (or)
the latter's occupation of the same did not change the
character of the land from that of public land to a private
property. The provision of the law is specific that public
lands can only be acquired in the manner provided for
therein and not otherwise (Sec. 11, C.A. No. 141, as
amended). The records show that Villaflor had applied for
the purchase of lands in question with this Office (Sales
Application No. V-807) on December 2, 1948. . . . There
is a condition in the sales application . . . to the effect that
he recognizes that the land covered by the same is of
public domain and any and all rights he may have with
respect thereto by virtue of continuous occupation and
cultivation are relinquished to the Government (paragraph
6, Sales Application No. V-807 of Vicente J. Villaflor, p.
21, carpeta) of which Villaflor is very much aware. It also
appears that Villaflor had paid for the publication fees
appurtenant to the sale of the land. He participated in the
public auction where he was declared the successful
bidder. He had fully paid the purchase prive (sic) thereor
(sic). It would be a (sic) height of absurdity for Villaflor to
be buying that which is owned by him if his claim of
private ownership thereof is to be
believed. . . . .
This finding was affirmed by the Minister of Natural Resources:36
Firstly, the area in dispute is not the private property of
appellant (herein petitioner).
The evidence adduced by (petitioner) to establish his
claim of ownership over the subject area consists of
deeds of absolute sale executed in his favor . . . .
However, an examination of the technical descriptions of
the tracts of land subject of the deeds of sale will disclose
that said parcels are not identical to, and do not tally with,
the area in controversy.
It is a basic assumption of our policy that
lands of whatever classification belong to
the state. Unless alienated in accordance
with law, it retains its rights over the same
as dominus. (Santiago vs. de los Santos,
L-20241, November 22, 1974, 61 SCRA
152).
For it is well-settled that no public land can
be acquired by private persons without
any grant, express or implied from the
government. It is indispensable then that
there be showing of title from the state or
any other mode of acquisition recognized
 by law. (Lee Hong Hok, et al. vs. David, et
al., L-30389, December 27, 1972, 48
SCRA 379).
xxx xxx xxx
We, therefore, believe that the aforesaid deeds of sale do
not constitute clear and convincing evidence to establish
that the contested area is of private ownership. Hence,
the property must be held to be public domain.
There being no evidence whatever that
the property in question was ever acquired
by the applicants or their ancestors either
by composition title from the Spanish
Government or by possessory information
title or by any other means for the
acquisition of public lands, the property
must be held to be public domain.
Be that as it may, [petitioner], by filing a sales application
over the controverted land, acknowledged unequivocably
[sic] that the same is not his private property.
As such sales applicant manifestly
acknowledged that he does not own the
land and that the same is a public land
under the administration of the Bureau of
Lands, to which the application was
submitted, . . . All of its acts prior thereof,
including its real estate tax declarations,
characterized its possessions of the land
as that of a "sales applicant". And
consequently, as one who expects to buy
it, has not as yet done so, and is not,
therefore, its owner." (Palawan
Agricultural and Industrial Co., Inc. vs.
Director of Lands, L-25914, March 21,
1972, 44 SCRA 15).
Clearly, this issue falls under the primary jurisdiction of the
Director of Lands because its resolution requires "survey,
classification, . . . disposition and management of the lands of the
public domain." It follows that his rulings deserve great respect.
As petitioner failed to show that this factual finding of the Director
of Lands was unsupported by substantial evidence, it assumes
finality. Thus, both the trial and the appellate courts correctly
relied on such finding.37 We can do no less.
Second Issue: No Simulation of Contracts Proven
Petitioner insists that contrary to Article 137138 of the Civil Code,
Respondent Court erroneously ignored the contemporaneous and
subsequent acts of the parties; hence, it failed to ascertain their
true intentions. However, the rule on the interpretation of
contracts that was alluded to by petitioner is used in affirming, not
negating, their validity. Thus, Article 1373,39 which is a conjunct of
Article 1371, provides that, if the instrument is susceptible of two
or more interpretations, the interpretation which will make it valid
and effectual should be adopted. In this light, it is not difficult to
understand that the legal basis urged by petitioner does not
support his allegation that the contracts to sell and the deed of
relinquishment are simulated and fictitious. Properly understood,
such rules on interpretation even negate petitioner's thesis.
But let us indulge the petitioner awhile and determine whether the
cited contemporaneous and subsequent acts of the parties
support his allegation of simulation. Petitioner asserts that the
relinquishment of rights and the agreements to sell were
simulated because, first, the language and terms of said contracts
negated private respondent's acquisition of ownership of the land
in issue; and second, contemporaneous and subsequent
communications between him and private respondent allegedly
showed that the latter admitted that petitioner owned and
occupied the two parcels; i.e., that private respondent was not
applying for said parcels but was interested only in the two
hectares it had leased, and that private respondent supported
petitioner's application for a patent.
Petitioner explains that the Agreement to Sell dated December 7,
1948 did not and could not transfer ownership because
paragraph 8 (c) thereof stipulates that the "balance of twelve
thousand pesos (12,000.00) shall be paid upon the execution by
the First Party [petitioner] of the Absolute Deed of Sale of the two
parcels of land in question in favor of the Second Party, and upon
delivery to the Second Party [private respondent] of the
Certificate of Ownership of the said two parcels of land." The
mortgage provisions in paragraphs 6 and 7 of the agreement
state that the P7,000.00 and P5,000.00 were "earnest money or a
loan with antichresis by the free occupancy and use given to
Nasipit of the 140 hectares of land not anymore as a lessee." If
the agreement to sell transferred ownership to Nasipit, then why
was it necessary to require petitioner, in a second agreement, to
mortgage his property in the event of nonfulfillment of the
prestations in the first agreement?
True, the agreement to sell did not absolutely transfer ownership
of the land to private respondent. This fact, however, does not
show that the agreement was simulated. Petitioner's delivery of
the Certificate of Ownership and execution of the deed of
absolute sale were suspensive conditions, which gave rise to a
corresponding obligation on the part of the private
respondent, i.e., the payment of the last installment of the
consideration mentioned in the December 7, 1948 Agreement.
Such conditions did not affect the perfection of the contract or
prove simulation. Neither did the mortgage.
Simulation occurs when an apparent contract is a declaration of a
fictitious will, deliberately made by agreement of the parties, in
order to produce, for the purpose of deception, the appearance of
a juridical act which does not exist or is different from that which
was really executed.40 Such an intention is not apparent in the
agreements. The intent to sell, on the other hand, is as clear as
daylight.
Petitioner alleges further that the deed of relinquishment of right
did not give full effect to the two agreements to sell, because the
preliminary clauses of the deed allegedly served only to give
private respondent an interest in the property as a future owner
thereof and to enable respondent to follow up petitioner's sales
application.
We disagree. Such an intention is not indicated in the deed. On
the contrary, a real and factual sale is evident in paragraph 6
thereof, which states: "That the Nasipit Lumber Co., Inc., . . . is
very much interested in acquiring the land covered by the
aforecited application to be used for purposes of mechanized,
farming" and the penultimate paragraph stating: ". . . VICENTE J.
VILLAFLOR, hereby voluntarily renounce and relinquish whatever
rights to, and interests I have in the land covered by my above-
mentioned application in favor of the Nasipit Lumber Co., Inc."
We also hold that no simulation is shown either in the letter, dated
December 3, 1973, of the former field manager of private
respondent, George Mear. A pertinent portion of the letter reads:
(a)s regards your property at Acacia, San Mateo, I recall
that we made some sort of agreement for the occupancy,
but I no longer recall the details and I had forgotten
whether or not we actually did occupy your land. But if, as
you say, we did occupy it, then I am sure that the
Company is obligated to pay a rental.
The letter did not contain any express admission that private
respondent was still leasing the land from petitioner as of that
date. According to Mear, he could no longer recall the details of
his agreement with petitioner. This cannot be read as evidence of
the simulation of either the deed of relinquishment or the
agreements to sell. It is evidence merely of an honest lack of
recollection.
Petitioner also alleges that he continued to pay realty taxes on
the land even after the execution of said contracts. This is
immaterial because payment of realty taxes does not necessarily
prove ownership, much less simulation of said contracts.41
Nonpayment of the Consideration
Did Not Prove Simulation
Petitioner insists that nonpayment of the consideration in the contracts
proves their simulation. We disagree. Nonpayment, at most, gives him only
the right to sue for collection. Generally, in a contract of sale, payment of the
price is a resolutory condition and the remedy of the seller is to exact
fulfillment or, in case of a substantial breach, to rescind the contract under
Article 1191 of the Civil Code. However, failure to pay is not even a breach,
42
but merely an event which prevents the vendor's obligation to convey title
from acquiring binding force. 43
Petitioner also argues that Respondent Court violated evidentiary rules in
upholding the ruling of the Director of Lands that petitioner did not present
evidence to show private respondent's failure to pay him. We disagree. Prior
to the amendment of the rules on evidence on March 14, 1989, Section 1,
Rule 131, states that each party must prove his or her own affirmative
allegations. Thus, the burden of proof in any cause rested upon the party
44
who, as determined by the pleadings or the nature of the case, asserts the
affirmative of an issue and remains there until the termination of the
action. Although nonpayment is a negative fact which need not be proved,
45
the party seeking payment is still required to prove the existence of the debt
and the fact that it is already due. 46
Petitioner showed the existence of the obligation with the presentation of the
contracts, but did not present any evidence that he demanded payment from
private respondent. The demand letters dated January 2 and 5, 1974 (Exhs.
"J" and "U"), adduced in evidence by petitioner, were for the payment of
back rentals, damages to improvements and reimbursement of acquisition
costs and realty taxes, not payment arising from the contract to sell.
Thus, we cannot fault Respondent Court for adopting the finding of the
Director of Lands that petitioner "offered no evidence to support his claim of
nonpayment beyond his own self-serving assertions," as he did not even
demand "payment, orally or in writing, of the five thousand (P5,000.00)
pesos which was supposed to be due him since August 17, 1950, the date
when the order of award was issued to Nasipit, and when his cause of action
to recover payment had accrued." Nonpayment of the consideration in the
contracts to sell or the deed of relinquishment was raised for the first time in
the protest filed with the Bureau of Lands on January 31, 1974. But this
protest letter was not the demand letter required by law.
Petitioner alleges that the assignment of credit and the letter of the former
field manager of private respondent are contemporaneous and subsequent
acts revealing the nonpayment of the consideration. He maintains that the
P12,000.00 credit assigned pertains to the P5,000.00 and P7,000.00 initial
payments in the December 7, 1948 Agreement, because the balance of
P12,000.00 was not yet "due and accruing." This is consistent, he argues,
with the representation that private respondent was not interested in filing a
sales application over the land in issue and that Nasipit was instead
supporting petitioner's application thereto in Mear's letter to the Director of
Lands dated February 22, 1950 (Exh. "X") 47
This argument is too strained to be acceptable. The assignment of credit did
not establish the nondelivery of these initialpayments of the total
consideration. First, the assignment of credit happened on January 19,
1949, or a month after the signing of the December 7, 1948 Agreement and
almost six months after the July 7, 1948 Agreement to Sell. Second, it does
not overcome the recitation in the Agreement of December 7, 1948: ". . . a)
The amount of SEVEN THOUSAND (P7,000.00) PESOS has already been
paid by the Second Party to the First Party upon the execution of the
Agreement to Sell, on July 7, 1948; b) The amount of FIVE THOUSAND
(P5,000.00) PESOS shall be paid upon the signing of this present
agreement; . . . . "
Aside from these facts, the Director of Lands found evidence of greater
weight showing that payment was actually made: 48
. . . (T)here is strong evidence to show that said . . . (P12,000.00)
had been paid by NASIPIT to Edward J. Nell Company by virtue of
the Deed of Assignment of Credit executed by Villaflor (Exh. "41
NALCO") for the credit of the latter.
Atty. Gabriel Banaag, resident counsel of NASIPIT . . . declared
that it was he who notarized the "Agreement to Sell" (Exh. "F"); . . .
that subsequently, in January 1949, Villaflor executed a Deed of
Assignment of credit in favor of Edward J. Nell Company (Exh. "41
 NALCO") whereby Villaflor ceded to the latter his receivable for
NASIPIT corresponding to the remaining balance in the amount of .
. . (P12,000.00) . . . of the total consideration . . . . ; He further
testified that the said assignment . . . was communicated to
NASIPIT under cover letter dated January 24, 1949 (Exh. "41-A")
and not long thereafter, by virtue of the said assignment of credit,
NASIPIT paid the balance . . . to Edward J. Nell Company (p.
58, ibid). Atty. Banaag's aforesaid testimony stand unrebutted;
hence, must be given full weight and credit.
xxx xxx xxx
The Director of Lands also found that there had been payment of the
consideration in the relinquishment of rights:
49
On the other hand, there are strong and compelling reasons to
presume that Villaflor had already been paid the amount of Five
Thousand (P5,000.00) Pesos.
First, . . . What is surprising, however, is not so much his claims
consisting of gigantic amounts as his having forgotten to adduce
evidence to prove his claim of non-payment of the Five Thousand
(P5,000.00) Pesos during the investigation proceedings when he
had all the time and opportunity to do so. . . . . The fact that he did
not adduce or even attempt to adduce evidence in support thereof
shows either that he had no evidence to offer of that NASIPIT had
already paid him in fact. What is worse is that Villaflor did not even
bother to command payment, orally or in writing, of the Five
Thousand (P5,000.00) Pesos which was supposed to be due him
since August 17, 1950, the date when the order of award was
issued to Nasipit, and when his cause of action to recover payment
had accrued. The fact that he only made a command for payment
on January 31, 1974, when he filed his protest or twenty-four (24)
years later is immediately nugatory of his claim for non-payment.
But Villaflor maintains that he had no knowledge or notice that the
order of award had already been issued to NASIPIT as he had
gone to Indonesia and he had been absent from the Philippines
during all those twenty-four (24) years. This of course taxes
credulity. . . .
. . . It is more in keeping with the ordinary course
of things that he should have acquired
information as to what was transpiring in his
affairs in Manila . . . .
Second, it should be understood that the condition that NASIPIT
should reimburse Villaflor the amount of Five Thousand
(P5,000.00) Pesos upon its receipt of the order of award was
fulfilled as said award was issued to NASIPIT on August 17, 1950.
The said deed of relinquishment was prepared and notarized in
Manila with Villaflor and NASIPIT signing the instrument also in
Manila. Now, considering that Villaflor is presumed to be more
assiduous in following up with the Bureau of Lands the expeditious
issuance of the order of award as the (consideration) would depend
on the issuance of said order to award NASIPIT, would it not be
reasonable to believe that Villaflor was at hand when the award
was issued to NASIPIT on August 17, 1950, or barely a day which
he executed the deed of relinquishment on August 16, 1950, in
Manila? . . . .
Third, on the other hand, NASIPIT has in his possession a sort of
"order" upon itself — (the deed of relinquishment wherein he(sic)
obligated itself to reimburse or pay Villaflor the . . . consideration of
the relinquishment upon its receipt of the order of award) for the
payment of the aforesaid amount the moment the order of award is
issued to it. It is reasonable to presume that NASIPIT has paid the
(consideration) to Villaflor.
xxx xxx xxx
. . . (I)t was virtually impossible for NASIPIT, after the lapse of the
intervening 24 years, to be able to cope up with all the records
necessary to show that the consideration for the deed of
relinquishment had been fully paid. To expect NASIPIT to keep
intact all records pertinent to the transaction for the whole quarter of
a century would be to require what even the law does not. Indeed,
even the applicable law itself (Sec. 337, National Internal Revenue
Code) requires that all records of corporations be preserved for
only a maximum of five years.
NASIPIT may well have added that at any rate while there are
transactions where the proper evidence is impossible or extremely
difficult to produce after the lapse of time . . . the law creates
presumptions of regularity in favor of such transactions (20 Am. Jur.
232) so that when the basic fact is established in an action the
 existence of the presumed fact must be assumed by force of law.
(Rule 13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).
The Court also notes that Mear's letter of February 22, 1950 was sent six
months prior to the execution of the deed of relinquishment of right. At the
time of its writing, private respondent had not perfected its ownership of the
land to be able to qualify as a sales applicant. Besides, although he was a
party to the July 7, 1948 Agreement to Sell, Mear was not a signatory to the
Deed of Relinquishment or to the December 7, 1948 Agreement to Sell.
Thus, he cannot be expected to know the existence of and the amendments
to the later contracts. These circumstances explain the mistaken
representations, not misrepresentations, in said letter.
Lack of Notice of the Award
Petitioner insists that private respondent suppressed evidence, pointing to
his not having been notified of the Order of Award dated August 17,
1950. At the bottom of page 2 of the order, petitioner was not listed as one
50
of the parties who were to be furnished a copy by Director of Lands Jose P.
Dans. Petitioner also posits that Public Land Inspector Sulpicio A. Taeza
irregularly received the copies for both private respondent and the city
treasurer of Butuan City. The lack of notice for petitioner can be easily
explained. Plainly, petitioner was not entitled to said notice of award from the
Director of Lands, because by then, he had already relinquished his rights to
the disputed land in favor of private respondent. In the heading of the order,
he was referred to as sales applicant-assignor. In paragraph number 4, the
order stated that, on August 16, 1950, he relinquished his rights to the land
subject of the award to private respondent. From such date, the sales
application was considered to be a matter between the Bureau of Lands and
private respondent only. Considering these facts, the failure to give petitioner
a copy of the notice of the award cannot be considered as suppression of
evidence. Furthermore, this order was in fact available to petitioner and had
51
been referred to by him since January 31, 1974 when he filed his protest
with the Bureau of Lands. 52
Third Issue: Private Respondent Qualified
for an Award of Public Land
Petitioner asserts that private respondent was legally disqualified from
acquiring the parcels of land in question because it was not authorized by its
charter to acquire disposable public agricultural lands under Sections 121,
122 and 123 of the Public Land Act, prior to its amendment by P.D. No. 763.
We disagree. The requirements for a sales application under the Public Land
Act are: (1) the possession of the qualifications required by said Act (under
Section 29) and (2) the lack of the disqualifications mentioned therein (under
Sections 121, 122, and 123). However, the transfer of ownership via the two
agreements dated July 7 and December 7, 1948 and the relinquishment of
rights, being private contracts, were binding only between petitioner and
private respondent. The Public Land Act finds no relevance because the
disputed land was covered by said Act only after the issuance of the order of
award in favor of private respondent. Thus, the possession of any
disqualification by private respondent under said Act is immaterial to the
private contracts between the parties thereto. (We are not, however,
suggesting a departure from the rule that laws are deemed written in
contracts.) Consideration of said provisions of the Act will further show their
inapplicability to these contracts. Section 121 of the Act pertains to
acquisitions of public land by a corporation from a grantee, but petitioner
never became a grantee of the disputed land. On the other hand, private
respondent itself was the direct grantee. Sections 122 and 123 disqualify
corporations, which are not authorized by their charter, from acquiring public
land; the records do not show that private respondent was not so authorized
under its charter.
Also, the determination by the Director of Lands and the Minister of Natural
Resources of the qualification of private respondent to become an awardee
or grantee under the Act is persuasive on Respondent Court. In Espinosa
vs.Makalintal, the Court ruled that, by law, the powers of the Secretary of
53
Agriculture and Natural Resources regarding the disposition of public lands
— including the approval, rejection, and reinstatement of applications — are
of executive and administrative nature. (Such powers, however, do not
include the judicial power to decide controversies arising from
disagreements in civil or contractual relations between the litigants.)
Consequently, the determination of whether private respondent is qualified
to become an awardee of public land under C.A. 141 by sales application is
included therein.
All told, the only disqualification that can be imputed to private respondent is
the prohibition in the 1973 Constitution against the holding of alienable lands
of the public domain by corporations. However, this Court earlier settled the
54
matter, ruling that said constitutional prohibition had no retroactive effect and
could not prevail over a vested right to the land. In Ayog vs.Cusi, Jr., this
55
Court declared:
We hold that the said constitutional prohibition has no retroactive
application to the sales application of Biñan Development Co., Inc.
because it had already acquired a vested right to the land applied
for at the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by
the new Constitution. Section 2, Article XIII of the 1935 Constitution
allows private corporations to purchase public agricultural lands not
exceeding one thousand and twenty-four hectares. Petitioner's
prohibition action is barred by the doctrine of vested rights in
constitutional law.
"A right is vested when the right to enjoyment has become the
property of some particular person or persons as a present
interest." (16 C.J.S. 1173). It is "the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of property
conferred by existing law" (12 C.J. 955, Note 46, No. 6) or "some
right or interest in property which has become fixed and established
and is no longer open to doubt or controversy" (Downs vs. Blount,
170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights.
"A state may not impair vested rights by legislative enactment, by
the enactment or by the subsequent repeal of a municipal
ordinance, or by a change in the constitution of the State, except in
a legitimate exercise of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right"
expresses the concept of present fixed interest, which in right
reason and natural justice should be protected against arbitrary
State action, or an innately just an imperative right which an
enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5,
citing Pennsylvania Greyhound Lines, Inc. vs. Rosenthal, 192 Atl.
2nd 587).
Secretary of Justice Abad Santos in his 1973 opinion ruled that
where the applicant, before the Constitution took effect, had fully
complied with all his obligations under the Public Land Act in order
to entitle him to a sales patent, there would seem to be no legal or
equitable justification for refusing to issue or release the sales
patent (p. 254,Rollo).
In Opinion No. 140, series of 1974, he held that as soon as the
applicant had fulfilled the construction or cultivation requirements
and has fully paid the purchase price, he should be deemed to
have acquired by purchase the particular tract of land and to him
the area limitation in the new Constitution would not apply.
In Opinion No. 185, series of 1976, Secretary Abad Santos held
that where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was
completed after January 17, 1973, the applicant was, nevertheless,
entitled to a sales patent (p. 256, Rollo).
Such a contemporaneous construction of the constitutional
prohibition by a high executive official carries great weight and
should be accorded much respect. It is a correct interpretation of
section 11 of Article XIV.
In the instant case, it is incontestable that prior to the effectivity of
the 1973 Constitution the right of the corporation to purchase the
land in question had become fixed and established and was no
longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the
issuance of a patent had the effect of segregating the said land
from the public domain. The corporation's right to obtain a patent
for that land is protected by law. It cannot be deprived of that right
without due process (Director of Lands vs. CA, 123 Phil. 919).
The Minister of Natural Resources ruled, and we agree, that private
respondent was similarly qualified to become an awardee of the disputed
land because its rights to it vested prior to the effectivity of the 1973
Constitution:
56
Lastly, appellee has acquired a vested right to the subject area and,
therefore, is deemed not affected by the new constitutional
provision that no private corporation may hold alienable land of the
public domain except by lease.
It may be recalled that the Secretary of Justice in his Opinion No.
64, series of 1973, had declared, to wit:
On the other hand, with respect to sales
application ready for issuance of sales patent, it
is my opinion that where the applicant had,
before, the constitution took effect, fully complied
with all his obligations under the Public Land act
in order to entitle him to sales patent, there would
 seem to be not legal or equitable justification for the Director
refusing to issue or release the sales patent. of Lands for
verification
Implementing the aforesaid Opinion No. 64 . . . , the then Secretary and
of Agriculture and Natural Resources issued a memorandum, dated approval;
February 18, 1974, which pertinently reads as follows: and

In the implementation of the foregoing opinion, d. purchase

sales application of private individuals covering
areas in excess of 24 hectares and those of
corporations, associations, or partnership which
fall under any of the following categories shall be
given due course and issued patents, to wit:
Sales application for fishponds
and for agricultural purposes
(SFA, SA and IGPSA) wherein
prior to January 17, 1973,
price was
fully paid.
From the records, it is evident that the aforestated requisites have
been complied with by appellee long before January 17, 1973, the
effectivity of the New Constitution. To restate, the disputed area
was awarded to appellee on August 17, 1950, the purchase price
was fully paid on July 26, 1951, the cultivation requirements were
complied with as per investigation report dated December 31, 1949,
and the land was surveyed under Pls-97.

a. the land The same finding was earlier made by the Director of Lands: 57

covered
thereby was It is further contended by Villaflor that Nasipit has no juridical
awarded; personality to apply for the purchase of public lands for agricultural
purposes. The records clearly show, however, that since the
b. cultivation execution of the deed of relinquishment of August 16, 1950, in favor
requirements of Nasipit, Villaflor has always considered and recognized Nasipit
of law were as having the juridical personality to acquire public lands for
complied agricultural purposes. In the deed of relinquishment . . . , it is
with as stated:
shown by
investigation 6. That the Nasipit Lumber Co., Inc., a
reports corporation duly organized in accordance with
submitted the laws of the Philippines, . . . .
prior to
January 17, Even this Office had not failed to recognize the juridical personality
1973; of Nasipit to apply for the purchase of public lands . . . when it
awarded to it the land so relinquished by Villaflor (Order of Award
c. land was dated August 17, 1950) and accepted its application therefor. At
surveyed any rate, the question whether an applicant is qualified to apply for
and survey the acquisition of public lands is a matter between the applicant and
returns this Office to decide and which a third party like Villaflor has no
already personality to question beyond merely calling the attention of this
submitted to Office thereto.
Needless to say, we also agree that the November 8, 1946 Lease
Agreement between petitioner and private respondent had been terminated
by the agreements to sell and the relinquishment of rights. By the time the
verbal leases were allegedly made in 1951 and 1955, the disputed land had
58
already been acquired and awarded to private respondent. In any event,
petitioner's cause of action on these alleged lease agreements prescribed
long before he filed Civil Case No. 2072-III, as correctly found by the trial
and appellate courts. Thus, it is no longer important, in this case, to pass
59
upon the issue of whether or not amendments to a lease contract can be
proven by parol evidence. The same holds true as regards the issue of
forum-shopping.
All in all, petitioner has not provided us sufficient reason to disturb the
cogent findings of the Director of Lands, the Minister of Natural Resources,
the trial court and the Court of Appeals.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
VICENTE VILLAFLOR, substituted by his heirs,
petitioner,
vs.
COURT OF APPEALS and NASIPIT LUMBER CO.,
INC., respondents.
G.R. No. 95694 October 9, 1997
Facts:
The Petitioner bought a large tract of land containing
one hundred forty (140) hectares to four (4) different
owners in 1940. The land was part of the public
domain, but the petitioners predecessor in interest over
which he acquired the property, have been in open,
exclusive and notorious possession of the same for
sometime. After acquisition, petitioner asserts
exclusive rights thereof for more than fifty (50) years.
In 1946, petitioner entered into a lease agreement with
respondent Nasipit Lumber Co.Inc. However, an
“Agreement for the Relinquishment of Rights” was
entered into by both parties in 1950. The respondent
having complied all the requirements agreed upon,
assumed ownership and possession of the property
since then. Respondent corporation likewise filed a
sales application in 1950 over the property to bolster
his claim which the Bureau of Land otherwise granted
on the same year as proof of an “Order of Award”
issued.
In 1974 or twenty four (24) years had passed, when
petitioner, questioned and made several collateral and
extraneous claims against the respondent. However,
the Bureau of Lands dismissed the claim, arguing that
petitioner no longer has any substantial rights to
question the validity of acquisition of the respondent
and the subsequent issuance of free patent by the
Bureau of Lands. Unperturbed, petitioner filed a motion
for reconsideration at the Ministry of Natural Resources
which likewise dismissed the petition.
On July 6, 1978, petitioner filed a complaint in the trial
court for “Declaration of Nullity of Contract ( Deed of
Relinquishment of Rights), Recovery of Possession (of
two parcels of land subject of the contract), and
Damages” at about the same time that he appealed the
decision of the Minister of Natural Resources to the
Office of the President. On January 28, 1983, petitioner
died. Petitioner’s heir substituted in his behalf to
pursue the claim. The trial court in Butuan City who
initially take cognizance of the case ordered the case
dismissed, on the grounds that: (1) petitioner admitted
the due execution and genuineness of the contract and
was estopped from proving its nullity, (2) the verbal
lease agreements were unenforceable under Article
1403 (2) (e) of the Civil Code, and (3) his causes of
action were barred by extinctive prescription and/or
laches.
The heirs appealed to the CA which likewise rendered
judgment of dismissal by upholding the lower court’s
ruling.
ISSUE:
Whether or not the sale is valid.
HELD:
No. The provision of the law is specific that public
lands can only be acquired in the manner provided for
therein and not otherwise(Sec. 11, CA. No. 141, as
amended). In his sales application, petitioner expressly
admitted that said property was public land. This is
formidable evidence as it amounts to an admission
against interest. The records show that Villaflor had
applied for the purchase of lands in question with this
Office (Sales Application V-807) on 2 December 1948.
There is a condition in the sales application to the
effect that he recognizes that the land covered by the
same is of public domain and any and all rights he may
have with respect thereto by virtue of continuous
occupation and cultivation are relinquished to the
Government of which Villaflor is very much aware. It
also appears that Villaflor had paid for the publication
fees appurtenant to the sale of the land. He
participated in the public auction where he was
declared the successful bidder. He had fully paid the
purchase price thereof. It would be a height of
absurdity for Villaflor to be buying that which is owned
by him if his claim of private ownership thereof is to be
believed. The area in dispute is not the private property
of the petitioner.
It is a basic assumption of public policy that lands of
whatever classification belong to the state. Unless
alienated in accordance with law, it retains its rights
over the same as dominus. No public land can be
acquired by private persons without any grant, express
or implied from the government. It is indispensable
then that there be showing of title from the state or any
other mode of acquisition recognized by law. Such
sales applicant manifestly acknowledged that he does
not own the land and that the same is a public land
under the administration of the Bureau of Lands, to
which the application was submitted, all of its acts prior
thereof, including its real estate tax declarations,
characterized its possessions of the land as that of a
“sales applicant”. And consequently, as one who
expects to buy it, but has not as yet done so, and is
not, therefore, its owner.
The rule on the interpretation of contracts (Article
1371) is used in affirming, not negating, their validity.
Article 1373,which is a conjunct of Article 1371,
provides that, if the instrument is susceptible of two or
more interpretations, the interpretation which will make
it valid and effectual should be adopted. In this light, it
is not difficult to understand that the legal basis urged
by petitioner does not support his allegation that the
contracts to sell and the deed of relinquishment are
simulated and fictitious. Simulation occurs when an
apparent contract is a declaration of a fictitious will,
deliberately made by agreement of the parties, in order
to produce, for the purpose of deception, the
appearance of a juridical act which does not exist or is
different from that which was really executed. Such an
intention is not apparent in the agreements. The intent
to sell, on the other hand, is as clear as daylight. The
fact, that the agreement to sell (7 December 1948) did
not absolutely transfer ownership of the land to private
respondent, does not how that the agreement was
simulated. Petitioner‟s delivery of the Certificate of
Ownership and execution of the deed of absolute sale
were suspensive conditions, which gave rise to a
corresponding obligation on the part of the private
respondent, i.e., the payment of the last installment of
the consideration mentioned in the Agreement. Such
conditions did not affect the perfection of the contract
or prove simulation Nonpayment, at most, gives the
vendor only the right to sue for collection. Generally, in
a contract of sale, payment of the price is a resolutory
condition and the remedy of the seller is to exact
fulfillment or, in case of a substantial breach, to rescind
the contract under Article 1191 of the Civil Code.
However, failure to pay is not even a breach, but
merely an event which prevents the vendor‟s
obligation to convey title from acquiring binding force.
The requirements for a sales application under the
Public Land Act are: (1) the possession of the
qualifications required by said Act (under Section 29)
and (2) the lack of the disqualifications mentioned
therein (under Sections 121, 122,and 123). Section
121 of the Act pertains to acquisitions of public land by
a corporation from a grantee: The private respondent,
not the petitioner, was the direct grantee of the
disputed land. Sections 122 and 123 disqualify
corporations, which are not authorized by their charter,
from acquiring public land; the records do not show
that private respondent was not so authorized under its
charter.
SECOND DIVISION
G.R. No. L-33146 May 31, 1977
THE COMMISSIONER OF CUSTOMS, and THE
COLLECTOR OF CUSTOMS, petitioners,
vs.
HON. PEDRO C. NAVARRO, Judge of the Court
of First Instance of Rizal, Branch II (Pasig, Rizal),
and JUANITO S. FLORES, doing business under
the name and style of JS. F. ENTERPRISES and
ASIATIC INCORPORATED, represented by
EUGENIO VILLANUEVA, respondents.
Solicitor General Felix Q. Antonio, Assistant Solicitor
General Conrado T. Limcaoco, Solicitor Jaime M.
Lantin and Special Attorney Vicente M. Asuncion for
petitioner.
Ledesma, Saludo & Associates for private
respondent.
FERNANDO, J.:
The stress, and rightly so, by the Commissioner of
Customs and the Collector of Customs in their
exhaustive and scholarly petition for certiorari, filed
on February 11, 1971, was on the jurisdictional
issue. It sought to nullify and set aside order 1 of
respondent Judge Pedro C. Navarro 2 dated January 4, 1971,
issuing a writ of preliminary injunction as prayed for by private
respondents Juanito S. Flores and Asiatic Incorporated the importers
of 1,350 cartons of fresh fruits, restraining petitioners from
proceeding with the auction sale of such perishable goods. Classified
as non-essential consumer commodities, they were banned by
Central Bank Circulars Nos. 289, 294 and 295 as prohibited
importation or importation contrary to law and thus made subject to
forfeiture proceedings by petitioner Collector of Customs pursuant to
the relevant sections of the Tariff and Customs Code.3 In a detailed
and specific fashion, petitioners pointed out how violative was the
assumption of jurisdiction by respondent Judge over an incident of a
pending seizure and forfeiture proceeding which, as held in a
number of decisions, was a matter falling within the exclusive
competence of the customs authorities. The persuasive character of
the petition is thus evident, resulting in this Court issuing on February
15, 1971 a resolution requiring respondents to file an answer and at
the same time issuing a writ of preliminary injunction as prayed for by
petitioners to prevent the challenged order of respondent Judge from
being implemented. Instead of preparing an answer, they just
submitted a manifestation stating that "after an intensive and serious
study of the merit of the case, the respondents have decided to
abandon its interest in the case." 4 The rationale behind such a move
was ostensibly the desire to avoid additional expenses, in view of the
fact that "the shipments, being perishable, have already
deteriorated." 5 It is difficult to avoid the suspicion that the real
reason was that the points of law raised by petitioners could not be
refuted. Private respondents concluded with a statement of "their
intention of not filing an answer to the instant petition and respectfully
[submitting] the case on the basis of the pleadings made before the
lower court. " 6
It does not require too much of an effort then to
ascertain the applicable legal principles that should
govern. The inescapable conclusion is that the
petition possesses merit. certiorari lies.
1. The question of seizure and forfeiture is for the
administrative in the first instance and then the
Commissioner of Customs. This is a field where the
doctrine of primary jurisdiction controls. Thereafter
an appeal may be taken to the Court of Tax Appeals.
A court of first instance is thus devoid of competence
to act on the matter. There is further judicial review,
but only by this Court in the exercise of its certiorari
jurisdiction. More specifically, in Pascual v.
Commissioner of Customs,7 a 1959 decision, this Court
affirmed a judgment of the Court of Tax Appeals and categorically
announced that respondent Commissioner of Customs could "seize
[the importation of goods lacking the release certificates of the
Central Bank] and order their forfeiture under the [appropriate]
provisions of the Revised Administrative Code." 8 Such a doctrine
was reiterated in Commissioner of Customs v. Serree Investment
Company;9 Commissioner of Customs v. Eastern Sea Trading
Co.;10 Commissioner of Customs v. Santos;11 Commissioner of
Customs v. Nepomuceno;12 Pascual v. Commissioner of
Customs;13 Serree Investment Co. v. Commissioner of
Customs;14 Bombay Dept. Store v. Commissioner of
Customs;15Yupangco and Sons v. Collector of Customs;16 Chan
Kian v. Collector of Customs;17 Capulong v. Aseron;18 Lazaro v.
Commissioner of Customs;19 Capulong v. Acting Commissioner of
Customs;20 Gigare v. Commissioner of Customs.21
That such jurisdiction of the customs authorities is
exclusive was made clear in Pacis v. Averia,22 decided
in 1966. This Court, speaking through Justice J. P. Bengzon,
realistically observed: "This original jurisdiction of the Court of First
Instance, when exercised in an action for recovery of personal
property which is a subject of a forfeiture proceeding in the Bureau of
Customs, tends to encroach upon, and to render futile, the
jurisdiction of the Collector of Customs in seizure and forfeiture
proceedings."23 The court "should yield to the jurisdiction of the
Collector of Customs."24 Such a ruling, as pointed out by Justice
Zaldivar in Auyong Hian v. Court of Tax Appeals,25 promulgated less
than a year later, could be traced to Government v. Gale,26 a 1913
decision, where there was a recognition in the opinion of Justice
Carson that a Collector of Customs when sitting in forfeiture
proceedings constitutes a tribunal upon which the law expressly
confers jurisdiction to hear and determine all questions touching the
forfeiture and further disposition of the subject matter of such
proceedings.27
The controlling principle was set forth anew in Ponce
Enrile v. Vinuya,28 decided in 1971. Thus: "The prevailing
doctrine is that the exclusive jurisdiction in seizure and forfeiture
cases vested in the Collector of Customs precludes a court of first
instance from assuming cognizance over such a
matter."29 Reference was then made in the opinion to previous
cases.30Then it continued: "Papa v. Mago likewise deserves to be
cited. The opinion of Justice Zaldivar for the Court emphatically
asserted the doctrine anew in the following language: 'It is the settled
rule, therefore, that the Bureau of Customs acquires exclusive
jurisdiction over imported goods, for the purposes of enforcement of
the customs laws, from the moment the goods are actually in its
possession or control, even if no warrant of seizure or detention had
previously been issued by the Collector of Customs in connection
with seizure and forfeiture proceedings. In the present case, the
Bureau of Customs actually seized the goods in question on
November 4, 1966, and so from that date the Bureau of Customs
acquired jurisdiction over the goods for the purposes of the
enforcement of the tariff and customs laws, to the exclusion of the
regular courts. Much less then would the Court of First Instance of
Manila have jurisdiction over the goods in question after the Collector
of Customs had issued the warrant of seizure and detention on
January 12, 1967, And so, it cannot be said, as respondents
contend, that the issuance of said warrant was only an attempt to
divest the respondent Judge of jurisdiction over the subject matter of
the case. The court presided by respondent Judge did not acquire
jurisdiction over the goods in question when the petition for
mandamus was filed before it, and so there was no need of divesting
it of jurisdiction. Not having acquired jurisdiction over the goods, it
follows that the Court of First Instance of Manila had no jurisdiction to
issue the questioned order of March 7, 1967 releasing said
goods."31 Lopez v. Commissioner of Customs,32 as well as Luna v.
Pacis,33 both 1971 decisions, speak to the same effect. The latest
categorical declaration of such a rule appears in the opinion of
Justice Teehankee, speaking for the Court, in Seneres v. Frias 34 in
these words: "It is the settled law and jurisprudence in this
jurisdiction that the customs authorities acquire exclusive jurisdiction
over goods sought to be imported into the Philippines, for the
purpose of enforcement of Philippine customs laws, from the
moment the goods are actually under their possession and control,
even if no warrant for seizure or detention thereof has previously
been issued by the port collector of customs."35
2. The petition did not ignore the due process aspect
which appeared to have bothered respondent Judge.
It was pointed out that in ordering the sale at public
auction of the fruits in question, considering their
perishable character, petitioners acted in accordance
with section 2607 of the Tariff and Customs Code.
Insofar as pertinent, it reads: "When seizure shall be
made of property which, in the opinion of the
Collector, is liable to perish or be wasted or to
depreciate greatly in value by keeping, or which
cannot be kept without great disproportionate
expense, whether such property consists of live
animals or of any article, the appraiser shall be
certify in his appraisal, then the Collector may
proceed to advertise and sell the same of auction,
upon notice as he shall deem to be
reasonable." 36 There was a literal adherence to the procedure
above set forth. The proper advertisement to sell the perishable
goods of auction was made. That was the notice required by the
statute. Private respondents as the importers could not have been
unaware that such step was contemplated. The law expects them to
have that requisite degree of interest in what was happening. There
is nothing unreasonable in such an assumption. It would be futile to
assert therefore that there was a denial of due process unless the
above section is considered null precisely on that ground. No attempt
was made by private respondents to impugn its validity. Perhaps it is
because of the realization that it would be futile. There is nothing
arbitrary or unfair, the earmarks of a denial of due process, for the
Collector to order the sale at public auction upon notice as he shall
deem to be reasonable of a commodity in their nature perishable.
That is the only way to safeguard during the pendency of a seizure
and forfeiture proceeding the rights of both the government and even
the persons responsible for the importation. That way, if the illegality
of the importation is not shown and forfeiture is not ordered, the
proceeds could be turned over to the importer. If it were otherwise,
he would be deprived of property that is his, and that would be a
denial of due process. What negates any assertion of. such an
infringement of a constitutional right is the admitted and undeniable
fact that the :Importation in question is banned by the applicable
Central Bank circulars. Petitioners therefore had no choice except to
proceed in accordance with the mandatory provisions of the
Customs and Tariff Code.
3. The petition likewise took pains to point out that
the reliance by respondent Judge on Commissioner
of Customs v. Alikpala 37 was misplaced. In that 1970
decision, this Court, recognizing that the judiciary in the Philippines is
vested with both legal and equitable powers, did not deem it proper
to set aside an injunction issued by the lower court addressed to the
customs authorities to stop the sale at public auction of imported
fruits. There was thus a semblance of similarity. A closer
examination would reveal that the analogy is more apparent than
real. The case could be easily distinguished. All that is necessary is
to refer to the opinion of former Chief Justice Makalintal in the
Alikpala decision: "The warrants of seizure were issued in view of
Central Bank Circulars Nos. 294 and 295, promulgated on March 10
and 20, 1970, respectively, which provide that 'no- dollar imports not
covered by Circular No. 247 shall not be issued any release
certificates and shall be referred to the Central Bank for official
transmittal to the Bureau of Customs for appropriate seizure
proceedings. Evidently, in the opinion of the Collector of Customs
himself, even in the light of those circulars there exists no legal
impediment to the release of the subject importations under bond,
otherwise he would not have agreed thereto, although he changed
his requirement from surety bond to cash. In any case, as pointed
out by private respondents, the said importations had been ordered
before Central Bank Circulars 294 and 295 were promulgated, and
since, the orders were made in accordance with previous practice
there could be no bad faith or intent to violate those
circulars."38 Unfortunately, in this case respondent Judge missed
those significant distinctions. The importation in question was clearly
violative of the above Circulars Nos. 289, 294 and 295. Also
petitioner Collector of Customs in this case was, in accordance with
law, definitely opposed to the release of the importation in question.
He could not have authorized it without being held liable for violating
the Tariff and Customs Code and the applicable doctrines of this
Court previously cited. It may be said further on this point that the
Alikpala decision is the only one of its kind and has not since been
followed. As a matter of fact, the previously cited Seneres decision
did set aside a preliminary injunction issued by respondent Judge
and did chide in vigorous and vehement language the assumption of
jurisdiction by the lower court when respect for the controlling
doctrines ought to have cautioned him against the issuance of a
preliminary injunction. In the even later case of Pacis v.
Geronimo,39 a writ of preliminary injunction likewise issued by the
respondent Judge in a pending seizure and forfeiture proceeding
was annulled by this Court, again on the precise ground of manifest
lack of jurisdiction. The petition therefore did not exaggerate matters
when it emphasized that respondent Judge, in issuing the writ of
preliminary injunction sought to be nullified, acted in a manner
contrary to and in violation of the law, assuming jurisdiction over a
matter beyond his competence.
WHEREFORE, the writ of certiorari is granted and
the order of respondent Judge of January 4, 1971
nullified and set aside. The preliminary injunction
issued by this Court in its resolution of February 15,
1971 against the enforcement of the above order is
made permanent. Respondent Judge, or whoever is
acting in his place and in his stead, is ordered to
dismiss Civil Case No. 14178 of Branch II of the
Court of First Instance of Rizal, entitled Juanito S.
Flores, doing business under the name and style
of J.S.F. Enterprises and Asiatic Incorporated v. the
Commissioner of Customs and the Collector of
Customs. Costs against private respondents.
G.R. No. L-33146 May 31, 1977
THE COMMISSIONER OF CUSTOMS, and THE
COLLECTOR OF CUSTOMS, petitioners,
vs.
HON. PEDRO C. NAVARRO,
Facts:
 The Commissioner of Customs and the Collector of Customs in their
exhaustive and scholarly petition for certiorari, filed on February
11, 1971, was on the jurisdictional issue. It sought to nullify and set
aside order of respondent Judge Pedro C. Navarro dated January 4,
1971, issuing a writ of preliminary injunction as prayed for by
private respondents Juanito S. Flores and Asiatic Incorporated the
importers of 1,350 cartons of fresh fruits, restraining petitioners
from proceeding with the auction sale of such perishable goods.
Classified as non-essential consumer commodities, they were
banned by Central Bank Circulars Nos. 289, 294 and 295 as
prohibited importation or importation contrary to law and thus
made subject to forfeiture proceedings by petitioner Collector of
Customs pursuant to the relevant sections of the Tariff and
Customs Code.
 In a detailed and specific fashion, petitioners pointed out how
violative was the assumption of jurisdiction by respondent Judge
over an incident of a pending seizure and forfeiture proceeding
which, as held in a number of decisions, was a matter falling within
the exclusive competence of the customs authorities. The
persuasive character of the petition is thus evident, resulting in
this Court issuing on February 15, 1971 a resolution requiring
respondents to file an answer and at the same time issuing a writ
of preliminary injunction as prayed for by petitioners to prevent
the challenged order of respondent Judge from being implemented.
Instead of preparing an answer, they just submitted a SECOND DIVISION
manifestation stating that "after an intensive and serious study of
the merit of the case, the respondents have decided to abandon its G.R. No. 132048 March 6, 2002
interest in the case.
HON. ANTONIO M. NUESA in his capacity as the
Issue: W/ON Custom has Jurisdiction Regional Director of DAR Region III and
RESTITUTO RIVERA,petitioners,
Held: Yes. risdiction of the customs authorities is exclusive was
vs.
made clear in Pacis v. Averia, decided in 1966. This Court, speaking
through Justice J. P. Bengzon, realistically observed: "This original
HON. COURT OF APPEALS (14th Div.), HON.
jurisdiction of the Court of First Instance, when exercised in an DEPARTMENT OF AGRARIAN REFORM
action for recovery of personal property which is a subject of a ADJUDICATION BOARD (DARAB) and JOSE
forfeiture proceeding in the Bureau of Customs, tends to encroach VERDILLO, respondents.
upon, and to render futile, the jurisdiction of the Collector of
Customs in seizure and forfeiture proceedings." The court "should QUISUMBING, J.:
yield to the jurisdiction of the Collector of Customs."
The controlling principle was set forth anew in Ponce Enrile v. This petition for review seeks to reverse the
Vinuya, decided in 1971. Thus: "The prevailing doctrine is that the decision1 dated December 19, 1997, of the Court of
exclusive jurisdiction in seizure and forfeiture cases vested in the Appeals which upheld the ruling of the Department of
Collector of Customs precludes a court of first instance from Agrarian Reform Adjudication Board or DARAB in
assuming cognizance over such a matter. favor of private respondent Jose Verdillo.

The facts of this case, as borne by the records, are

as follows:

On May 25, 1972, then Secretary of Agrarian Reform

issued an "Order of Award" in favor of Jose Verdillo
over two (2) parcels of agricultural land, Lots 1932
and 1904 of the Buenavista Estate, San Ildefonso,
Bulacan, covering 14,496 and 19,808 square meters,
respectively, under the following conditions:
 That within a period of six (6) months from
receipt of a copy, the awardee(s) shall
personally cultivate xxx or otherwise develop
at least one-fourth of the area xxx or occupy
and construct his/her house in case of
residential lot and pay at least the first
installment xxx; failure on his/her part to
comply with this requirement shall be sufficient
cause for cancellation of this order and for
allocation xxx in favor of any qualified xxx
applicant; and that in no case shall an
agreement to sell or deed of sale, as the case
may be, issued in favor of the awardee(s)
covering the lots without a certification issued
by the Land Reform Project Team Leader of
Land Settlement Superintendent that the
awardee(s) has/have developed or devoted to
some productive enterprise at least one-half of
the area thereof, or constructed his/her/their
house therein in case of residential land.2
On August 26, 1993, or after twenty-one years,
private respondent filed an application with the
Regional Office of the Department of Agrarian
Reform for the purchase of said lots claiming that he
had complied with the conditions set forth in the
Order. Restituto Rivera, herein petitioner, filed a
letter of protest against private respondent claiming
that contrary to the manifestation of private
respondent, it is petitioner who had been in
possession of the land and had been cultivating the
same.3 Petitioner had filed his own application for
said parcels in opposition to that of private
respondent.
On December 27, 1993, a representative of the
Department of Agrarian Reform Regional Office
undertook an investigation to look into the conflicting
claims of the petitioner and the private respondent.
Based on said investigation, it was found that:
xxx the subject lots were previously tenanted
by other persons namely, Agapito Garcia and
Pablo Garcia for almost sixteen years prior to
the entry of Restituto Rivera in 1972 for Lot
1904 and in 1986 for Lot 1932 (pt.) Restituto
Rivera at the time of investigation is still in
possession/cultivation of the lots in question.
These facts have never been refuted by Jose
Verdillo who further testified that Restituto
Rivera used to pay annual rental of 25 cavans
for Lot 1932 (pt.) and 15 cavans of palay for
Lot 1904.
xxx
In the investigation...it was undoubtedly
established that Lots 1932 (pt.) and 1904,
Psd-52045, were in possession/cultivation of
tenants or other persons exclusive of Jose
Verdillo...It is crystal clear that Jose Verdillo
has culpably violated the terms and conditions
 of the Order of Award issued in his favor for
lots covered thereby.4
On January 24, 1994, petitioner, the Regional
Director of DAR, Antonio M. Nuesa, promulgated an
Order whose decretal portion reads:
WHEREFORE, premises considered, Order is
hereby issued cancelling Order of Award
dated May 25, 1972 issued in favor of Jose
Verdillo for Lot 1932 (pt.) and Lot 1904, Psd-
52045, Buenavista Estate, for violation of the
rules and regulations pertaining to the
disposition of lots in landed estates and
forfeiting whatever payments made by him on
account thereof in favor of the government.
Accordingly, the subject lots are hereby
declared vacant and open for disposition in
favor of qualified applicant.
Let the application of Restituto Rivera to
purchase these lots be processed in
accordance with existing rules and
regulations.5
Aggrieved by the cancellation of his award, private
respondent then filed on March 20, 1994, a Petition
with the Provincial Adjudication Board, Region III, for
Annulment of said Order. Instead of filing an Answer
to the Petition, herein petitioners (as respondents
below) filed a Motion to Dismiss the Petition on the
ground that the proper remedy was an appeal to the
Secretary of the Department of Agrarian Reform
from the Order of the Regional Director, under DAR
Memorandum Circular No. 5-87, and not by a
Petition with the DARAB Provincial Adjudicator,
hence, the aforesaid Order had become final and
executory. The petitioners manifested that they were
no longer submitting their position paper and were
opting to rely solely on their Motion to Dismiss.6
The DARAB Provincial Adjudicator, however, chose
to resolve the case on the merits and on October 14,
1994, promulgated a Decision denying the
petitioners’ Motion to Dismiss and reversing the
Order of the Regional Director, thus:
WHEREFORE, in view of the foregoing,
decision is hereby rendered as follows:
1. Declaring the Order dated January 24, 1994
issued by the then public respondent null and
void being contrary to public policy;
2. Directing the Landed Estate Division,
Department of Agrarian Reform, Regional
Office, San Fernando, Pampanga to
immediately execute the necessary deed of
conveyance and/or title of the subject
landholdings in favor of petitioner, JOSE
VERDILLO; and
 3. Declaring the subject landholdings fully paid
and all rights appurtenant thereto is vested to
the herein petitioner.7
Petitioner Rivera filed a Motion for Reconsideration
from said Decision, but it was denied by the DARAB
Provincial Adjudicator.8 He then interposed an
appeal before the DAR Appellate Adjudication Board
(DARAB), Diliman, Quezon City. On May 2, 1996,
the Board issued its decision affirming that of the
Provincial Adjudicator, thus:
WHEREFORE, in view of the foregoing, the
appeal is hereby DENIED by affirming the
decision, dated October 14, 1994 of the Hon.
Adjudicator for the Province of Bulacan.
Likewise, there being no cogent reason to
disturb the Order of February 22, 1995, the
same is hereby AFFIRMED.9
The Petition for Review filed by herein petitioners
with the Court of Appeals was denied due course
and ordered dismissed, with costs against petitioner
Rivera.10
Hence, this Petition for Review raising the following
errors:
I conflicting applications to purchase lots within the
THAT THE HONORABLE COURT OF
APPEALS ERRED IN DENYING AND
DISMISSING THE CLAIM OF THE
PETITIONERS THAT THE DECISION OF
THE BOARD (DARAB) WAS ISSUED IN
EXCESS OF JURISDICTION.
II
THAT THE HONORABLE COURT OF
APPEALS ERRED IN INTERPRETING THE
APPLICABLE AGRARIAN LAWS ON THE
MATTER.11
Briefly stated, the issue for resolution is whether or
not the Court of Appeals erred in denying petitioners’
claim that in this case, the Board (DARAB) acted in
grave abuse of discretion tantamount to lack or
excess of its jurisdiction.
According to petitioners, the Court of Appeals and
the DARAB in affirming the decision of the Provincial
Adjudicator of Bulacan committed grave abuse of
discretion, tantamount to or in excess or lack of
jurisdiction, because public respondents in their
questioned Orders/Decisions merely focused on the
procedural aspect, avoiding the substantial merits of
the case. Petitioners add that public respondents
brushed aside the fact that this case involves the
Buenavista Estate, San Ildefonso, Bulacan, which is
under the administration and disposition of the DAR
pursuant to the mandate of C.A. No. 539,12 as
amended by R.A. No. 1400.13 According to
petitioners, this case is not, strictly speaking, a
tenurial dispute there being no landlord and tenant
relationship, but involves the disposition of the lots
subject of the controversy between private petitioner
and private respondent. Hence, they contend that
this case involves the strict administrative
implementation and award of lots within the
Buenavista Estate. They conclude that this being the
case, the matter falls under the exclusive jurisdiction
and administrative competence of the DAR
(Regional Director and Department Secretary) and
not of the DARAB (including the Provincial
Adjudicator and the Provincial Adjudication Board
itself).
Moreover, petitioners argue, the Order of Director
Nuesa dated January 24, 1994, is in keeping with the
mandate of the governing agrarian reform law, i.e.,
C.A. No. 539, as amended by R.A. No. 1400, which
requires that lots within the Buenavista Estate shall
be strictly awarded and/or disposed of to qualified
tenant-beneficiaries.
They also assert that private petitioner Rivera is the
one in peaceful, adverse, open, continuous and
exclusive possession, occupation and cultivation of
said lots for the last twenty-one (21) years, while
private respondent Verdillo had culpably violated the
terms and conditions set forth in the Order of Award
in 1972. Citing jurisprudence,14 they claim private
respondent Verdillo should be barred by estoppel,
whereas petitioner Rivera should be deemed to have
acquired, by operation of law, a right to a
government grant without the necessity of a
certificate of title issued therein since the conditions
set by law have been complied with by him.15
Finally, petitioners submit that public respondents
grossly erred in affirming the decision of the
Provincial Adjudicator at Malolos, Bulacan, because
when private respondent filed his petition to the DAR
Provincial Adjudication Board on March 20, 1994,
against the DAR Regional Director of Region III and
private petitioner Restituto Rivera for the annulment
of Order, said Order dated January 24, 1994, of
public petitioner had already become final and
executory. According to petitioners, no Motion for
Reconsideration and/or appeal was interposed by
private respondent. Therefore, they conclude that the
decision of Director Nuesa had already acquired
finality.16
In turn, private respondent Jose Verdillo argues that
no grave abuse was committed by the provincial
adjudication officer and provincial board of
adjudicators when they decided the case on the
merits in resolving petitioners’ Motion to Dismiss,
and by the Central DARAB and the Court of Appeals
when they affirmed said decision. According to him,
the DARAB is not bound by the technical rules of
procedure as provided under Sec. 3 of the DARAB
Rules of Procedure,17 and Sec. 2 of Rule 1 of the
DARAB Rules.18 The Provincial Adjudication Board’s
action, according to private respondent, sought to
avoid unnecessary delays in the adjudication of
agrarian disputes.19 Moreover, he contends, there is
no basis for the allegation that the Court of Appeals
erred in appreciating applicable agrarian laws.20
In his Supplemental Memorandum, private
respondent further refuted the results of the DAR
investigation dated December 27, 1993, and the
subsequent Order of Director Nuesa which found
private respondent to have violated the terms of the
Order of Award in 1972. He claimed that he had
complied with said Order of Award and had paid in
full the purchase price of the subject lots as
evidenced by Official Receipt No. 1890249.21 Private
respondent also argued that the January 24, 1994
Order of Director Nuesa was irregular because he
had no authority to reverse, alter, modify or amend
the order of the Secretary of the Department of
Agrarian Reform.22
Finally, private respondent contends that the findings
of the tribunals a quo are based on substantial
evidence, citing the sworn statement of Herminia G.
Garcia, the wife of the deceased Agapito Garcia,
who declared that it was really private respondent
Verdillo whom she considers to be the owner of the
lots subject matter of the controversy, because it was
he who financed the cultivation and improvement of
the land. Private respondent also cites the joint
affidavit of Benedicta Villadarez and Normita
Valenzuela corroborating Mrs. Garcia’s affidavit.23
After carefully perusing the records of this case and
considering the contentions of the parties thereto, we
find the petition impressed with merit. We agree with
petitioners that respondent Court of Appeals erred in
holding that the DARAB and its officials have not
committed grave abuse of discretion tantamount to
excess or lack of jurisdiction in this case.
1âwphi 1.nêt
P.D. 94624 provides that matters involving the
administrative implementation of the transfer of the
land to the tenant-farmer under P.D. No. 2725 and
amendatory and related decrees, orders,
instructions, rules and regulations, shall be
exclusively cognizable by the Secretary of Agrarian
Reform, including: xxx (5) issuance, recall or
cancellation of certificates of land transfer in cases
outside the purview of P.D. No. 816.26
The revocation by the Regional Director of DAR of
the earlier Order of Award by the Secretary of
Agriculture falls under the administrative functions of
the DAR. The DARAB and its provincial adjudicator
or board of adjudicators acted erroneously and with
grave abuse of discretion in taking cognizance of the
case, then overturning the decision of the DAR
Regional Director and deciding the case on the
merits without affording the petitioner opportunity to
present his case.
As held by this Court in Centeno vs. Centeno,27 "the
DAR is vested with the primary jurisdiction to
determine and adjudicate agrarian reform matters
and shall have the exclusive jurisdiction over all
matters involving the implementation of the agrarian
reform program." The DARAB has primary, original
and appellate jurisdiction "to determine and
adjudicate allagrarian disputes, cases, controversies,
and matters or incidents involving the
implementation of the Comprehensive Agrarian
Reform Program under R.A. 6657, E.O. Nos. 229,
228 and 129-A, R.A. 3844 as amended by R.A.
6389, P.D. No. 27 and other agrarian laws and their
implementing rules and regulations."28
Under Section 3(d) of R.A. 6657 (CARP Law),
"agrarian dispute" is defined to include "(d) ...any
controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship or
otherwise over lands devoted to agriculture,
including disputes concerning farmworkers
associations or representation of persons in
negotiating, fixing, maintaining, changing or seeking
to arrange terms or conditions of such tenurial
arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and
other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants
stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and
lessee."
In the case at bar, petitioner and private respondent
had no tenurial, leasehold, or any agrarian relations
whatsoever that could have brought this controversy
between them within the ambit of the abovecited
provision. Consequently, the DARAB had no
jurisdiction over the controversy and should not have
taken cognizance of private respondent’s petition in
the first place.29
Note that Administrative Order No. 3, Series of 1990,
governs the distribution and titling of lots in landed
estates administered by the DAR. This Order
explicitly provides that "since land has a social
function, there is a concomitant social responsibility
in its ownership and should, therefore, be distributed
to the actual occupant/tillers" thereof. In the
investigation on December 27, 1993, conducted by
the Regional Officer of DAR, it was established that
the subject lots were in the possession and
cultivation of persons other than the awardee
Verdillo. Clearly, this constituted a violation of the
terms of the Order of Award issued in favor of private
respondent as an awardee, aside from contravening
the underlying principles of agrarian reform as a
social justice measure. Given these circumstances,
we find petitioner Restituto Rivera’s plea to overturn
the ruling of the Court of Appeals meritorious.
While it bears emphasizing that findings of
administrative agencies, which have acquired
expertise because their jurisdiction is confined to
specific matters are accorded not only respect but
even finality by the courts,30 care should be taken
that administrative actions are not done without due
regard to the jurisdictional boundaries set by the
enabling law for each agency. In this case,
respondent DARAB officials and boards, provincial
and central, had overstepped their legal boundaries
in taking cognizance of the controversy between
petitioner Rivera and private respondent Verdillo as
to who should be awarded Lots 1932 and 1904 of
the Buenavista Estate. Respondent appellate court
erred in sustaining DARAB’s unjustified action taken
with grave abuse of discretion resulting in lack or
excess of its jurisdiction.
WHEREFORE, the petition is GRANTED. The
decision of the Court of Appeals dated December 19,
1997, isREVERSED, and the order of DAR Appellate
Adjudication Board on May 2, 1996, and of the
DARAB Provincial Adjudication Officer and Board
dated October 14, 1994, and February 22, 1995, are
declared NULL and VOID and SET ASIDE. The
order of DAR Regional Director for Region III dated
January 24, 1994, in favor of petitioner Restituto
Rivera isREINSTATED.
No pronouncement as to costs.
SO ORDERED.
HON. ANTONIO M. NUESA vs. CA (DAVID) G.R.
No. 132048 March 6, 2002
FACTS: On May 25, 1972, then Secretary of
Agrarian Reform issued an “Order of Award” in
favor of Jose Verdillo over two (2) parcels of
agricultural land in Buenavista Estate, San
Ildefonso, Bulacan, covering 14,496 and 19,808
square meters, respectively, under the following
conditions: · Within 6 months, he shall personally
cultivate at least ¼ of the area; or · Occupy and
construct his/her house in case of residential lot
and pay at least the first installment In no case
shall an agreement to sell or deed of sale be issued
in favor of the covering the lots without a
certification issued by the Land Reform Project
Team Leader of Land Settlement Superintendent
that the awardee(s) has/have developed or devoted
to some productive enterprise at least one-half of
the area thereof, or constructed his/her/their
house therein in case of residential land. After
twenty-one years, private respondent filed an
application with the Regional Office of the
Department of Agrarian Reform for the purchase of
said lots claiming that he had complied with the
conditions set forth in the Order. Restituto Rivera,
herein petitioner, filed a letter of protest against
private respondent claiming that contrary to the
manifestation of private respondent, it is petitioner
who had been in possession of the land and had
been cultivating the same. Petitioner had filed his
own application for said parcels in opposition to
that of private respondent. On December 27, 1993,
a representative of the Department of Agrarian
Reform Regional Office undertook an investigation
and found that the subject lots were previously
tenanted by other persons and it is clear that Jose
Verdillo has culpably violated the terms and
conditions of the Order of Award issued in his
favor. On January 24, 1994, petitioner, the
Regional Director of DAR, Antonio M. Nuesa,
promulgated an Order, cancelling Order of Award
issued in favor of Jose Verdillo and giving Restituto
Rivera the opportunity to purchase said lots
ISSUE:
Whether or not the Court of Appeals erred in
denying petitioners’ claim that in this case, the
Board (DARAB) acted in grave abuse of discretion
tantamount to lack or excess of its jurisdiction
HELD:
Yes the Court of Appeals erred in holding that the
DARAB and its officials have not committed grave
abuse of discretion tantamount to excess or lack of
jurisdiction. The case involves the strict
administrative implementation and award of
lots. The matter falls under the exclusive
jurisdiction and administrative competence of the
DAR (Regional Director and Department Secretary)
and not of the DARAB (including the Provincial
Adjudicator and the Provincial Adjudication Board
itself). Centeno vs. Centeno, “the DAR is vested
with the primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have
the exclusive jurisdiction over all matters involving
the implementation of the agrarian reform
program.” The DARAB has primary, original and
appellate jurisdiction “to determine and adjudicate
all agrarian disputes, cases, controversies, and
matters or incidents involving the implementation
of the Comprehensive Agrarian Reform Program
under R.A. 6657, E.O. Nos. 229, 228 and 129-A,
R.A. 3844 as amended by R.A. 6389, P.D. No. 27
and other agrarian laws and their implementing
rules and regulations.” Under Section 3(d) of R.A.
6657 (CARP Law), “agrarian dispute” is defined to
include “(d) ...any controversy relating to tenurial
arrangements, whether leasehold, tenancy,
stewardship or otherwise over lands devoted to
agriculture, including disputes concerning
farmworkers associations or representation of
persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions
of such tenurial arrangements. It includes any
controversy relating to compensation of lands
acquired under this Act and other terms and
conditions of transfer of ownership from
landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the
disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or
lessor and lessee.”
 THIRD DIVISION
G.R. No. 110193 January 27, 1994
THE REGIONAL DIRECTOR, REGION VII OF THE
DEPARTMENT OF EDUCATION, CULTURE AND
SPORTS (DECS), MARCELO BALCASO, NUEVAS
MONTES AND GENEROSO
CAPUYAN, petitioners,
vs.
THE HON. COURT OF APPEALS, HON. JESUS L.
TABILON, in his capacity as Presiding Judge of
RTC Branch 42, Dumaguete City, and CONSEJO
CATACUTAN, ANECIA LABE, EVELYN
TAMPARONG, VIOLETA CELIS, ANAVILLA G.
TIZO, ANATOLIO DELVO, JESSICA DELVO,
EMILY ABERDE, AURELIO PARPAN,
LUTHGARDA ABLIR, BEMBO TANGERES, AIDA
CATAN, ISABELITA CALUNSAG, MARIPOSA
MENDOLA, JOSEPHINE BELLO, GEREMIA
UMBAC, ARCELA GORDONCILLO, NESTOR
GONZALES, GAUDIOSA MARTINEZ, ELEUTERIO
MERCADO, GENOVEVA CORNELIA, DALISAY B.
PINILI, BETSY FEROLINO, FRANCO
MANANQUIL, RUBEN A. OMANA, JAMES B.
CARAMPATANA, NENITA B. PALARPALAR,
ILUMINADO KABRISTANTE, ERLINDA MOLETA,
DINAH SARSAGA, PERLA HERNANDEZ,
ROWENA VAILOCES, GREGORIA CADALLO,
AGRIPINA LIBRADO, ZENAIDA TULABING, AND
ELVIRA LINGCONG, respondents.
The Solicitor General for petitioners.
Francisco D. Yap for private respondents.
RESOLUTION
VITUG, J.:
Ascribing grave abuse of discretion on the part of
respondent Court of Appeals, in its decision1 of 06
May 1993, the petitioners have come to this Court in
a petition for certiorari, prohibition and mandamus.
The appealed decision has turned down herein
petitioners' petition for certiorari assailing the
Order,2 dated 24 June 1991, of the court a quo that,
in turn, denied petitioners' motion to dismiss the
complaint in Civil Case No. 9884 of the Regional
Trial Court of Negros Oriental.
We state at the outset that this particular case is also
an offshoot of the same factual incidents that have
given rise to the consolidated cases of "Vidad, et al.
vs. RTC of Negros Oriental, et al.," etc., in G.R. Nos.
98084-98922 and 100300-03, already decided by
this Court on 18 October 1993.
The facts may be recalled, thus:
The private respondents, together with other Negros
Oriental public school teachers, held, starting 19
September 1990 and lasting until 21 September
1990, a mass action, or a strike from their school
classes, to demand the release of their salaries by
the Department of Budget.
A return-to-work order was promptly issued by one of
the petitioners, Regional Director Teofilo Gomez of
the Department of Education, Culture and Sports
("DECS"), with a warning that if the "striking" school
teachers were not to resume their classes within
twenty-four hours, administrative charges would be
filed. Since the order was not heeded, administrative
complaints against the teachers concerned were
thereupon filed. The teachers were each given five
days from receipt of said complaints within which to
submit their respective answers and supporting
documents. An investigation panel, composed of
three DECS lawyers (the other petitioners herein),
namely, Marcelo Baclaso, Nieva Montes and
Generoso Capuyan, was constituted to look into the
case.
Prior to the start of the hearings by the DECS
Investigating Team, the private respondents filed
with the Regional Trial Court of Negros Oriental,
Branch 42, Dumaguete City, a complaint for
injunction, prohibition and damages with prayer for
preliminary injunction. On 26 March 1991, the court a
quo issued the writ of preliminary injunction.
The petitioners filed their answer, later followed by a
motion to dismiss. On 24 June 1991, the trial court
denied the motion to dismiss and set the case for
pre-trial hearing, holding that the complaint stated a
cause of action and that the court had jurisdiction
thereover.3
The pre-trail, however, was pre-empted by the
petitioners when they filed with this Court a petition
for certiorari, prohibition and mandamus on 25 July
1991 and so docketed as G.R. No. 100781.4 In a
resolution, dated 5 August 1991, the Court referred
the petition to the Court of Appeals.
On 6 May 1993, the Court of Appeals promulgated
its assailed
decision,5 denying the petition.
In the instant appeal, the petitioners raise the same
issues that have heretofore been resolved by us in
the now decided case of "Vidad, et al. vs. RTC of
Negros Oriental, et al." and companion cases
aforementioned. There, we have ruled that it has
indeed been precipitate for the DECS officials to
seek the dismissal of the complaints filed in court by
the school teachers even as no restraining order
could lawfully issue against the continuation of the
administrative investigations. This Court has
rationalized, thus —
(1) There being no dispute that the root of the cases
filed before the court a quo deals on the performance
of official functions by the DECS officials, there
cannot be a full determination on whether the actions
taken by them have been proper or improper, or
whether they have acted in good faith or bad faith,
pending a full hearing that would give all the parties
a chance to ventilate their respective claims;
(2) Public officials are not necessarily immune from
damages in their personal capacities arising from
acts done in bad faith, for if malice is indeed
established, public officials can no longer be said to
have acted within the scope of official authority so as
to still find protection under the mantle of immunity
for official actions;
(3) The issuance, however, of the restraining orders
by the lower court against further proceedings of the
administrative complaints is inappropriate inasmuch
as the authority of the DECS Regional Director to
issue the return to work memorandum, to initiate the
administrative charges, as well as to constitute the
investigating panel, can hardly be disputed; and
Accordingly, we here reiterate that the court a
quo did not err in denying petitioners' motion to
dismiss the complaint in Civil Case No. 9884
although it did not commit error in issuing its
restraining further proceedings on the administrative
investigation being conducted by DECS.
WHEREFORE, the decision of 6 May 1993 of the
Court of Appeals is AFFIRMED insofar as it, in
effect, denied the dismissal of the complaint in Civil
Case No. 9884. The writ of preliminary injunction
issued by the Regional Trial Court of Negros
Oriental, Branch 42, however, is hereby ordered
DISSOLVED and its is DIRECTED to suspend
further hearings in said Civil Case No. 9884, until
after a final determination on the administrative
proceedings would have been made. No costs.
SO ORDERED.

(4) The court cases and the administrative matters

being closely interrelated, if not interlinked, it
behooves the court, in the interest of good order and
conformably with the doctrine of primary jurisdiction,
to suspend its action on the cases before it pending
the final outcome of the administrative charges.
 THIRD DIVISION
G.R. No. 139492 November 19, 2002
LAGUNA CATV NETWORK, INC., petitioner,
vs.
HON. ALEX E. MARAAN, Regional Director, Region IV,
Dept. of Labor and Employment (DOLE),
ENRICO SAGMIT, Acting Deputy Sheriff, DOLE Region
IV,
PEDRO IGNACIO, DIOMEDES CASTRO, FE
ESPERANZA CANDILLA, RUBEN LAMINA, JR.,
JOEL PERSIUNCULA, ALVINO PRUDENTE, JOEL
RAYMUNDO, REGIE ROCERO,
LINDA RODRIGUEZ, JOHN SELUDO, ALBERTO REYES,
and ANACLETA VALOIS, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
On March 3, 1998, private respondents Pedro Ignacio,
Diomedes Castro, Fe Esperanza Candilla, Ruben Lamina,
Jr., Joel Persiuncula, Alvino Prudente, Joel Raymundo,
Regie Rocero, Linda Rodriguez, John Seludo, Alberto
Reyes and Anacleta Valois filed with the Department of
Labor and Employment, Regional Office No. IV (DOLE
Region IV), separate complaints for underpayment of
wages and non-payment of other employee
benefits.1 Impleaded as respondent was their employer,
Laguna CATV Network, Inc. (Laguna CATV).
Private respondents filed their separate complaints
pursuant to Article 128 of the Labor Code, as amended by
Republic Act No. 7730,2 which provides:
"Article 128. Visitorial and enforcement powers. - (a) The
Secretary of Labor or his duly authorized representatives,
including labor regulation officers, shall have access to
employer’s records and premises at any time of the day or
night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order
or rules and regulations issued pursuant thereto.
"(b) x x x
"An order issued by the duly authorized representative of
the Secretary of Labor and Employment under this article
may beappealed to the latter. In case said order involves a
monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by
the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed
from. (emphasis added)
"x x x."
On April 1, 1998, DOLE Region IV conducted an inspection
within the premises of Laguna CATV and found that the
latter violated the laws on payment of wages and other
benefits. Thereupon, DOLE Region IV requested Laguna
CATV to correct its violations but the latter refused,
prompting Regional Director Alex E. Maraan to set the case
for summary investigation.3Thereafter, he issued an Order
dated August 19, 19984 directing Laguna CATV to pay the
concerned employees the sum of Two Hundred Sixty-One
Thousand, Nine and 19/100 (P261,009.19) Pesos
representing their unpaid claims, within 10 days from notice,
and to submit proof of payment within the same period.
Forthwith, Laguna CATV filed a motion for reconsideration.5
In view of Laguna CATV’s failure to comply with the Order
directing it to pay the unpaid claims of its employees, DOLE
Regional Director Maraan issued a writ of execution on
January 29, 19996 ordering Sheriff Enrico Sagmit to collect
in cash from Laguna CATV the amount specified in the writ
or, in lieu thereof, to attach its goods and chattels or those
of its owner, Dr. Bernardino Bailon. Sheriff Sagmit
subsequently levied on Dr. Bailon’s L300 van and garnished
his bank deposits.
On March 2, 1999, Laguna CATV and Dr. Bailon, in his
personal capacity, filed a motion to quash the writ of
execution, notice of levy and sale on execution and
garnishment of bank deposits,7 alleging that the writ was
premature because Laguna CATV’s motion for
reconsideration of the Order dated August 19, 1998 has not
yet been resolved by Regional Director Maraan. On April
21, 1999, he issued an Order8 denying the motion to quash
the writ of execution, stating inter alia, that Laguna CATV
failed to perfect its appeal of the August 19, 1998 Order
because it did not comply with the mandatory requirement
of posting a bond equivalent to the monetary award
of P261,009.19; and that the writ of execution dated
January 29, 1999 should be considered as an "overt denial"
of Laguna CATV’s motion for reconsideration.9
Instead of appealing to the Secretary of Labor, Laguna
CATV filed with the Court of Appeals a motion for extension
of time to file a petition for review.10 Laguna CATV was of
the view that an appeal to the Secretary of Labor "would be
an exercise in futility considering that the said appeal will be
filed with the Regional Office and it will surely be
disapproved."11
On May 13, 1999, the Court of Appeals issued a
Resolution12 denying Laguna CATV’s motion for extension
and dismissing the case. The Appellate Court found, among
others, that it failed to exhaust administrative remedies.
Laguna CATV filed a motion for reconsideration but was
denied by the Court of Appeals in its Resolution dated July
22, 1999.13 Hence, it filed the instant petition for review on
certiorari.14
Specifically, petitioner contends that the Court of Appeals
erred in denying its motion for extension and in dismissing
the case.
Private respondents, in their comment on the petition, claim
that the assailed Orders of DOLE Region IV have become
final and executory for petitioner’s failure to appeal to the
Secretary of Labor.
The petition lacks merit. The Court of Appeals was correct
in holding that petitioner failed to exhaust all administrative
remedies.
As provided under Article 128 of the Labor Code, as
amended, earlier quoted, an order issued by the duly
authorized representative of the Secretary of Labor may be
appealed to the latter. Thus, petitioner should have first
appealed to the Secretary of Labor instead of filing with the
Court of Appeals a motion for extension of time to file a
petition for review.
Courts, for reasons of law, comity and convenience, should completed the administrative process by appealing the
not entertain suits unless the available administrative questioned Orders to the Secretary of Labor.
remedies have first been resorted to and the proper
authorities have been given an appropriate opportunity to Although this Court has allowed certain exceptions to the
act and correct their alleged errors, if any, committed in the doctrine of exhaustion of administrative remedies, such as:
administrative forum.15 Observance of this doctrine is a
sound practice and policy. As succinctly explained by this 1) when there is a violation of due process;
Court in Carale vs. Abarintos:16
2) when the issue involved is a purely legal question;
"It (the doctrine of exhaustion of administrative remedies)
ensures an orderly procedure which favors a preliminary 3) when the administrative action is patently illegal
sifting process, particularly with respect to matters amounting to lack or excess of jurisdiction;
peculiarly within the competence of the administrative
agency, avoidance of interference with functions of the 4) when there is estoppel on the part of the
administrative agency by withholding judicial action until the administrative agency concerned;
administrative process had run its course, and prevention of
attempts to swamp the courts by a resort to them in the first 5) when there is irreparable injury;
instance."17
6) when the respondent is a Department Secretary
This Court, in a long line of cases, has consistently held that whose acts as an alter ego of the President bears
if a remedy within the administrative machinery can still be the implied and assumed approval of the latter;
resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within 7) when to require exhaustion of administrative
his jurisdiction, then such remedy should be exhausted first remedies would be unreasonable;
before the court’s judicial power can be sought. 18 The party
with an administrative remedy must not merely initiate the 8) when it would amount to a nullification of a claim;
prescribed administrative procedure to obtain relief but also
pursue it to its appropriate conclusion before seeking
9) when the subject matter is a private land in land
judicial intervention in order to give the administrative
case proceedings;
agency an opportunity to decide the matter itself correctly
and prevent unnecessary and premature resort to the
10) when the rule does not provide a plain, speedy,
court.19 The underlying principle of the rule rests on the
adequate remedy;
presumption that the administrative agency, if afforded a
complete chance to pass upon the matter will decide the
same correctly.20 Therefore, petitioner should have
 Laguna CATV
11) when there are circumstances indicating the
urgency of judicial intervention;

12) when no administrative review is provided by

law;
13) where the rule of qualified political agency
applies; and
14) when the issue of non-exhaustion of
administrative remedies has been rendered moot,21
petitioner fails to show that the instant case falls under any
of the exceptions. Its contention that an appeal to the
Secretary of Labor would be futile as "it will surely be
disapproved," is purely conjectural and definitely misplaced.
In the recent case of Republic of the Philippines vs. Express
Telecommunication Co.,22 this Court held that "the
premature invocation of the court’s intervention is fatal to
one’s cause of action." Accordingly, absent any finding of
waiver, estoppel, or any of the exceptions to the doctrine of
exhaustion of administrative remedies, the case is
susceptible of dismissal for lack of cause of action.23
vs. Maraan
LAGUNA CATV NETWORK, INC., petitioner,
vs.
HON. ALEX E. MARAAN, Regional Director, Region
IV, Dept. of Labor and Employment (DOLE),
ENRICO SAGMIT, Acting Deputy Sheriff, DOLE
Region IV, PEDRO IGNACIO, DIOMEDES CASTRO,
FE ESPERANZA CANDILLA, RUBEN LAMINA, JR.,
JOEL PERSIUNCULA, ALVINO PRUDENTE, JOEL
RAYMUNDO, REGIE ROCERO, LINDA
RODRIGUEZ, JOHN SELUDO, ALBERTO REYES,
and ANACLETA VALOIS, respondents.
G.R. No. 139492 November 19, 2002

WHEREFORE, the instant petition for review is DENIED.

FACTS:
SO ORDERED.
o Private respondents filed with the DOLE Region IV separate
complaints for underpayment of wages and non-payment of
other employee benefits against their employer, Laguna
CATV.
o Private respondents filed their separate complaints
pursuant to Article 128 of the Labor Code, as amended by
Republic Act No. 7730.
o DOLE Region IV conducted an inspection within the
premises of Laguna CATV and found that the latter violated
the laws on payment of wages and other benefits.
o Thereupon, DOLE Region IV requested Laguna CATV to
correct its violations but the latter refused, prompting the
Regional Director to set the case for summary investigation.
o Thereafter, he issued an Order directing Laguna CATV to
pay the concerned employees the sum of P261,009.19
representing their unpaid claims.
o Forthwith, Laguna CATV filed a motion for reconsideration.
o In view of Laguna CATV’s failure to comply with the Order
directing it to pay the unpaid claims of its employees, DOLE
Regional Director Maraan issued a writ of execution
ordering the Sheriff to collect in cash from Laguna CATV
the amount specified in the writ or, in lieu thereof, to attach
its goods and chattels or those of its owner, Dr. Bernardino
Bailon.
o Laguna CATV and Dr. Bailon filed a motion to quash the
writ of execution, notice of levy and sale on execution and
garnishment of bank deposits.
o Regional Director Maraan issued an Order denying the
motion to quash the writ of execution, stating that Laguna
CATV failed to perfect its appeal because it did not comply
with the mandatory requirement of posting a bond
equivalent to the monetary award of P261,009.19; and that
the writ of execution should be considered as an “overt
denial” of Laguna CATV’s motion for reconsideration.
o Instead of appealing to the Secretary of Labor, Laguna
CATV filed with the CA a motion for extension of time to file
a petition for review.
o Laguna CATV was of the view that an appeal to the
Secretary of Labor “would be an exercise in futility
considering that the said appeal will be filed with the
Regional Office and it will surely be disapproved.”
o The CA denied Laguna CATV’s motion for extension and
dismissing the case.
o The Appellate Court found, among others, that it failed to
exhaust administrative remedies.
o Laguna CATV filed a motion for reconsideration but was
denied by the Court of Appeals in its Resolution dated July
22, 1999.
o Hence, it filed a petition for review on certiorari to the SC.
ISSUE:
o Whether or not Laguna CATV failed to exhaust all
administrative remedies.
RULING:
o The SC ruled that Laguna CATV failed to exhaust all
administrative remedies.
o As provided under Article 128 of the Labor Code, as
amended, an order issued by the duly authorized
representative of the Secretary of Labor may be appealed to
the latter.
o Thus, petitioner should have first appealed to the Secretary
of Labor instead of filing with the Court of Appeals a motion
for extension of time to file a petition for review.
o Courts, for reasons of law, comity and convenience, should
not entertain suits unless the available administrative
remedies have first been resorted to and the proper
authorities have been given an appropriate opportunity to
act and correct their alleged errors, if any, committed in the
administrative forum.
o The SC, in a long line of cases, has consistently held that if a
remedy within the administrative machinery can still be
resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within
his jurisdiction, then such remedy should be exhausted first
before the court’s judicial power can be sought.
o The party with an administrative remedy must not merely
initiate the prescribed administrative procedure to obtain
relief but also pursue it to its appropriate conclusion before
seeking judicial intervention in order to give the
administrative agency an opportunity to decide the matter
itself correctly and prevent unnecessary and premature
resort to the court.
o The underlying principle of the rule rests on the
presumption that the administrative agency, if afforded a
complete chance to pass upon the matter will decide the
same correctly.
o Therefore, petitioner should have completed the
administrative process by appealing the questioned Orders
to the Secretary of Labor.
EN BANC
G.R. No. L-17860 March 30, 1962
R. MARINO CORPUS, petitioner-appellant,
vs.
MIGUEL CUADERNO, SR., THE CENTRAL BANK OF
THE PHILIPPINES AND
THE MONETARY BOARD AND MARIO
MARCOS, respondents-appellees;
FILEMON MENDOZA, intervenor-appellee.
Juan T. David and R. L. Alvarez for petitioner-appellant.
Nat M. Balboa for respondents-appellees.
Jose W. Diokno for intervenor-appellee.
DE LEON, J.:
While petitioner-appellant was holding the position of
Special Assistant to the Governor of the Central Bank of the
Philippines — a position declared by the President of the
Philippines as "highly technical in nature and placed in the
exempt class" (Appendix "D", Exhibit "VV"), he was, on or
about March 7, 1958, charged in an administrative case, for
alleged dishonesty, incompetence, neglect of duty and/or
abuse of authority, oppression, misconduct, etc. preferred
against him by employees of the Bank, resulting in his
suspension by the Monetary Board of the Bank and the
creation of a 3-man committee to investigate him. The
committee was composed of representatives of the Bank,
Bureau of Civil Service and the Office of the City Fiscal of
Manila. After receiving the answer of the respondent
therein, the committee heard the case, receiving
testimonies of witnesses on both sides. On May 5, 1959,
the committee submitted its Final Report, the pertinent
conclusion and recommendation therein reading as follows:
. the date of his suspension.
(1) In view of the foregoing, the Committee finds that
there is no basis upon which to recommend
disciplinary action against respondent, and therefore
respectfully recommends that he be immediately
reinstated.
Unable to agree with the committee report, the Monetary
Board adopted Resolution No. 957 on July 20, 1959 which
considered "the respondent, R. Marino Corpus, resigned as
of the date of his suspension." The pertinent portion of the
resolution reads thus: .
After an exhaustive and mature deliberation of the
report of the aforesaid fact finding committee, in
conjunction with the entire records of the case and
representations of both complainants and
respondent, through their respective counsel, and,
further, after a thorough review of the service record
of the respondent, particularly the various cases
presented against him, object of Monetary Board
Resolution No. 1527 dated August 30, 1955, which
all involve fitness, discipline, etc. of respondent; and
moreover, upon formal statement of the Governor
that he has lost confidence in the respondent as
Special Assistant to the Governor and In-Charge of
the Export Department (such position being primarily
confidential and highly technical in nature), the
Monetary Board finds that the continuance of the
respondent in the service of the Central Bank would
be prejudicial to the best interest of the Central Bank
and, therefore, in accordance with the provisions of
Section 14 of the Bank Charter, considers the
respondent, Mr. R. Marino Corpus, resigned as of
Three days after, the Monetary Board adopted Resolution
No. 995, dated July 23, 1959, approving the appointment of
herein respondent Mario Marcos to the position involved in
place of petitioner R. Marino Corpus.
On August 18, 1959, petitioner filed a petition for certiorari,
mandamus and quo warranto, with preliminary mandatory
injunction and damages, against the herein respondents.
The complaint, as amended, embodied four causes of
action, and the reliefs sought therein read as follows: .
1. Upon the FIRST CAUSE OF ACTION, to reinstate
petitioner immediately to the position of Special
Assistant in charge of the control of exports in
conformity with the Final Report of the Investigating
Committee of May 5, 1959 and to declare that the
action of the respondents per Monetary Resolution
No. 957 is null and void, respondents having acted in
connection with the same in excess of their
jurisdiction and with grave and gross abuse of
discretion and authority; and for the purposes thereof
to order respondent Miguel Cuaderno, Sr., as
Governor of the Central Bank, to prepare an agenda
including therein as part of the business to be taken
up by respondent Monetary Board petitioner's said
reinstatement;
2. Upon the SECOND CAUSE OF ACTION, to
remove respondent Mario Marcos from the Office of
Special Assistant in charge of the Export Department
of the Central Bank, the same office to which
petitioner in possession of the same and to declare
that the attempted appointment of the said
respondent Mario Marcos to the same is
unwarranted and illegal, there being no vacancy in
the same as it has at all times been legally and
physically filled by petitioner were it not for the
unlawful acts of respondents in ousting him
therefrom: .1äwphï1.ñët
3. Upon the THIRD CAUSE OF ACTION, to pay
petitioner the sums of P500,000.00 as moral
damages, P34,000.00 as salaries accrued and
uncollected since March 18, 1958, plus those that
may subsequently accrue, P20,000.00 as bonuses,
overtime pay, equity pay and other allowances,
which petitioner had failed to collect by reason of his
unwarranted and unjustified suspension by
respondents, P20,000.00 as attorney's fees plus the
costs of this suit;
4. Upon the FOURTH CAUSE OF ACTION, to
immediately reinstate petitioner to the position of
Special Assistant in charge of the control of exports
and not to remove or molest him therefrom pending
the determination of this case and, to this end, upon
petitioner's filing of a bond with sufficient sureties in
an amount to be fixed by this Honorable Court, to
issue a preliminary mandatory injunction
commanding respondents to do and/or refrain from
doing the acts hereinabove referred to.
Petitioner further prays for such other and further
relief as may be just and equitable in the premises.
The respondents filed their answer on September 4, 1959.
Filemon Mendoza, a Central Bank employee, filed a petition
for intervention. The respondents and the intervenor filed
separate motions to dismiss, against which an opposition
was filed by petitioner. On October 8, 1959, an order was
issued by the court below holding in abeyance the
resolution of the motions to dismiss until the trial, stating
that the grounds alleged therein do not appear to be
indubitable. Subsequently, petitioner manifested in open
court that he was abandoning his prayer for the issuance of
a preliminary mandatory injunction so that the case can be
speedily terminated. On June 8, 1960, upon representations
of the respondents and intervenor, an order was issued
vacating the order of October 8, 1959 and ordering that "the
Motions to Dismiss are deemed submitted anew for
resolution." On June 14, 1960, after several hearings,
another order was issued granting the motions to dismiss
the amended petition, on the ground that petitioner did not
exhaust all administrative remedies available to him in law.
Petitioner filed a motion for reconsideration, which was
denied in an order dated November 16, 1960. From said
order of June 14, 1960, dismissing the petition, and the
order of November 16, 1960, denying the motion for
reconsideration, petitioner has brought this appeal, claiming
that the lower court erred: .
1. In dismissing his petition for certiorari,
mandamus and quo warranto, with preliminary
mandatory injunction and damages;
2. In not finding that the Monetary Board removed
him for a cause not provided by law, therefore, in
violation of the Constitution; and .
3. In not finding that the appointment of Mario P.
Marcos, the officer appointed by the respondent
Monetary Board to the position to which he was
appointed, to have been made to a position that is
not yet vacant.
The lower court was of the opinion that petitioner-appellant
should have exhausted all administrative remedies
available to him, such as an appeal to the Commissioner of
Civil Service, under Republic Act No. 2260, or the President
of the Philippines who under the Constitution and the law is
the head of all the executive departments of the
government including its agencies and instrumentalities.
This is the main issue disputed in this appeal.
True, the appellant did not elevate his case for review either
by the President or the Civil Service Commission. However,
it is our opinion that a report to these administrative appeals
is voluntary or permissive, taking into account the facts
obtaining in this case.
(1) There is no law requiring an appeal to the President in a
case like the one at bar. The fact that the President had, in
two instances cited in the orders appealed from, acted on
appeals from decisions of the Monetary Board of the
Central Bank, should not be regarded as precedents, but at
most may be viewed as acts of condescension on the part
of the Chief Executive. (2) While there are provisions in the
Civil Service Law regarding appeals to the Commissioner of
Civil Service and the Civil Service Board of Appeals, We
believe the petitioner is not bound to observe them,
considering his status and the Charter of the Central Bank.
In Castillo vs. Bayona, et al., G.R. No. L-14375, January 13,
1960, We said that Section 14, Republic Act 265, creating
the Central Bank of the Philippines, particularly paragraph
(c) thereof, "is sufficiently broad to vest the Monetary Board
with the power of investigation and removal of its officials,
except the Governor thereof. In other words, the Civil
Service Law is the general legal provision for the
investigation, suspension or removal of civil service
employees, whereas Section 14 is a special provision of law
which must govern the investigation, suspension or removal
of employees of the Central Bank, though they may be
subject to the Civil Service Law and Regulations in other
respects." In this case, the respondent Monetary Board
considered petitioner resigned from the office to which he
has been legally appointed as of the date of his suspension,
after he has been duly indicted and tried before a
committee created by the Board for the purpose. An appeal
to the Civil Service Commission would thereby be an act of
supererogation, requiring the presentation of practically the
same witnesses and documents produced in the
investigation conducted at the instance of the Monetary
Board. Moreover, Section 16 (i) of the Civil Service Law
provides that "except as otherwise provided by law," the
Commissioner of Civil Service shall have "final authority to
pass upon the removal, separation and suspension of all
permanent officials and employees in the competitive
or classified service and upon all matters relating to the
conduct, discipline, and efficiency of such officials and
employees; ...." Considering again the fact that the Charter
of the Central Bank provides for its own power, through the
Monetary Board, relative to the investigation, suspension or
removal of its own employees except the Governor, coupled
with the fact that petitioner has admitted that he belongs to
the non-competitive or unclassified service, it is evident that
an appeal by petitioner to the Commissioner of Civil Service
is not required or at most is permissive and voluntary.
On the other hand, the doctrine does not apply
where, by the terms or implications of the statute
authorizing an administrative remedy, such remedy
is permissive only, warranting the conclusion that the
legislature intended to allow the judicial remedy even
though the administrative remedy has not been
exhausted (42 Am. Jur. 583).
There is another reason. It must be remembered that the
amended petition is for certiorari, mandamus and quo
warranto.The allegations of the second cause of action of
the amended petition as above quoted sufficiently comply
with Section 7, Rule 63 of the Rules of Court on quo
warranto proceedings, which requires that "When the action
is against a person for usurping an office or franchise, the
complaint shall set forth the name of the person who claims
to be entitled thereto. If any, with an averment of his right to
the same and that the defendant is unlawfully in possession
thereof." And the complaint was filed within the period of
one year from the date of separation, pursuant to Section
16 of the same Rule (Madrid vs. Auditor General, 58 Off.
Gaz., January, 1962, pp. 41, 42-43).
Section 9 of said Rule 68 provides that the time for
pleadings and proceedings may be shortened and the
action may be given precedence over any and other civil
business. Section 16 of the same Rule requires the filing of
the action against an officer for his ouster within one year
after the cause of such ouster. These judicial rules
underscore the need for speed in the determination of
controversies to public offices (Remata vs. Javier, 37 Phil.
699; Tumulak vs. Egay, 82 Phil. 828). As was stated
in Pinullar vs. President of the Senate, G.R. No. L-11667,
June 30, 1958, the rationale is that the Government must
be immediately informed or advised if any person claims to
be entitled to an office or position in the civil service as
against another actually holding it, so that the Government
may not be faced with the predicament of having to pay two
salaries, one, for the person actually holding the office,
although illegally, and another, for one not actually
rendering service although entitled to do so (see also
Madrid vs. Auditor General, supra).
Giving life and effect to these provisions, we have held
in Casin vs. Caluag, 45 Off. Gaz., Supp. No. 9, p. 379, that
a special civil action for quo warranto may be tried and
decided independently of a pending criminal case. In
another case (Abeto vs. Rodas, 46 Off. Gaz. 930), we
denied by resolution a supplemental motion for
reconsideration where the petitioner had contended that the
reglementary period of one year was suspended by the
order of the President exonerating him from certain
administrative charges because the petitioner "was justified
in waiting for the President of the Philippines to reappoint
him as the logical and legal consequence of his
exoneration," and "only after considerable delay, when his
hopes failed, did petitioner institute the present
proceedings." Finally, in Torres vs. Quintos, G.R. No. L-
3304, April 5, 1951, we recalled the Abeto case, supra, by
commenting therein that the denial of the motion for
reconsideration in that case had of course the effect of
rejecting the theory that the pendency of an administrative
remedy suspends the period within which a petition for quo
warranto should be filed, and we gave the reason thus:
The reason is obvious. While it may be desirable that
administrative remedies be first resorted to, no one
is compelled or bound to do so; and as said
remedies neither are prerequisite to nor bar the
institution of quo warrantoproceedings, it follows that
he who claims the right to hold a public office
allegedly usurped by another and who desires to
seek redress in the courts, should file the proper
judicial action within the reglementary period. As
emphasized in Bautista vs. Fajardo, 38 Phil. 624,
and Tumulak vs. Egay, 46 O.G. 3683, public interest
requires that the right to a public office should be
determined as speedily as practicable.
Upon the foregoing, we have to disagree with the legal
opinion of the trial judge and hold that the doctrine of
exhaustion of administrative remedies is inapplicable and
does not bar the present proceedings.
Considering the two views we have taken in the case, we
deem it unnecessary to pass upon the second and third
assignments of error which partially involve the evaluation
of facts. The court below has started to receive the
evidence, and it is better equipped and should be given the
chance to pass upon the credibility of the witnesses who
testified before it (Veraguth vs. Isabela Sugar Co., 57 Phil.
266).
WHEREFORE, the orders under considerations are hereby
set aside and the record of the case is hereby ordered
remanded to the trial court for further proceedings and
judgment on the merits. No pronouncement as to costs.
Corpus vs Cuaderna Admin Law Digest
Corpus vs Cuaderna, Sr.
GR No. L-17860, 30 March 1962
4 SCRA 749
FACTS
While petitioner-appellant R. Marino Corpus was a Special
Assistant to the Governor of the Central Bank, he was
administratively charged which resulted in his suspension by the
Monetary Board of the Bank and the creation of a committee to
investigate him. The committee found no basis on the complaint and
recommended Corpus’ reinstatement. But the Board adopted
Resolution No. 957 which considered Corpus resigned as of the date
of his suspension. Petitioner filed with the trial court a petition for
certiorari, mandamus and quo warranto, with preliminary injunction
and damages against respondents. The court a quo dismissed the
petition on the ground that petitioner did not exhaust all
administrative remedies available to him in law, such as an appeal to
the Commissioner of Civil Service, under RA 2260, or the President
of the Philippines who, under the Constitution and the law, is the
head of all executive departments of the government including its
agencies and instrumentalities.
ISSUE
Whether or not the doctrine of exhaustion of administrative
remedies is applicable in this case
HELD
The Court held in the negative. The doctrine does not apply
where, by the terms or implications of the statute authorizing an
administrative remedy, such remedy is permissive only, warranting
the conclusion that the legislature intended to allow the judicial
remedy even though the administrative remedy has not been
exhausted.
FIRST DIVISION
G.R. No. L-46218 October 23, 1990
JOVENTINO MADRIGAL, petitioner-appellant,
vs.
PROV. GOV. ARISTEO M. LECAROZ, VICE-GOVERNOR
CELSO ZOLETA, JR., PROVINCIAL BOARD MEMBERS
DOMINGO RIEGO AND MARCIAL PRINCIPE; PROV.
ENGR. ENRIQUE M. ISIDRO, ABRAHAM T. TADURAN
AND THE PROVINCE OF MARINDUQUE, respondents-
appellees.
F.S. Rivera Jr. for petitioner.
MEDIALDEA J.:
This case was certified to US by the Court of Appeals since it raises pure questions of law
(pp. 66-68, Rollo).
The issue raised in this case are certainly far from novel.
We shall, therefore, simply reiterate well established
jurisprudential rules on the prescriptive period within which
to file a petition for mandamus to compel reinstatement to a
government office and a claim for back salaries and
damages related thereto.
The antecedent facts are as follows:
On November 25, 1971, public respondents Governor
Aristeo M. Lecaroz, Vice-Governor Celso Zoleta, Jr.,
Provincial Board of Marinduque members Domingo Riego
and Marcial Principe abolished petitioner-appellat Joventino
Madrigal's possitionas a permanent construction capataz in
the office of the Provincial Engineer from the annual Roads
Bridges Fund Budget for fiscal year 1971-1972 (p.2,
Records) by virtue of Resolution No. 204. The abolition was
allegedly due to the poor financial condition of the province
and it appearing that his position was not essential (p. 6,
Records).
On April 22, 1972, Madrigal appealed to the Civil Service
Commission. On August 7, 1973, he transmitted a follow-up
letter to the Commission regarding his appela. On January
7, 1974, the Commission in its 1st Indorsement declared
the removal of Madrigal from the service illegal (pp. 7-8,
Records).
On April 26, 1974, public respondent Governor Aristeo M.
Lecaroz moved for a reconsideration of said resolution. On
February 10, 1975, the Commission denied the motion for
reconsideration (pp. 9-10, Records).
On August 4, 1975, Madrigal sent a letter to the Provincial
Board requesting implementation of the resolution of the
Commission and consequently, reinstatement to his former
posistion.
On August 18, 1975, the Provincial Board, through
Resolution No. 93, denied Madrigal's request for
reinstatement because his former posistion no longer
exists. In the same resolution, it ordered the appropriation
of the amount of P4,200.00 as his back salaries covering
the preiod December 1, 1971 up to June 30, 1973 (p. 47,
Records).
On December 15, 1975, Madrigal filed a petition before the
Court of First Instance (now Regional Trial Court) of
Marinduque against public respondents Governor Aristeo
M. Lecaroz, Vice-Governor Celso Zoleta, Jr., Provincial
Board Members Domingo Riego and Marcial Principe,
Provincial Engineer Enrique M. Isidro, Abraham I. Taduran
and the Province of Marinduque for mandamus and
damages seeking, inter alia, (1) restoration of his abolished
position in the Roads and Bridges Fund Budget of the
Province; (2) reinstatement to such position; and (3)
payment of his back salaries plus damages (pp. 1-5,
Records).
On March 16, 1976, the trial court issued an order
dismissing the petition on the ground that Madrigal's cause
of action was barred by laches. The trial court rationalized
its judgment as follows (pp. 31-33, Rollo):
It is beyond question that herein petitioner
was separated from the service on November
25, 1971, and it was only on December 15,
1975, or FOUR (4) YEARS and TWENTY
(20) DAYS after, that he filed this case for
"Mandamus and Damages" with the principal
aim of causing his reinstatement to the public
position from where his service was
terminated.
Much as the petitioner might have had a good
cause of action, it is unfortunate that (sic) the
same is now barred by laches.
A person claiming right to a
position in the civil service
should file his action for
 reinstatement within one year
from his illegal removal from
office, otherwise he is
considered as having
abandoned the same
(Gonzales vs. Rodriguez, L-
12976, March 24, 1961, 1
SCRA 755; Cebu Portland
Cement Co. vs. CIR, L-17897,
Aug. 31, 1962, 5 SCRA 1113;
Alipio vs. Rodriguez, L-17336,
Dec. 26, 1963, 9 SCRA 752).
The rationale for the aforecited doctrine on
time limitation of a cause of action in a judicial
tribunal by one seeking reinstatement in the
civil service is that the suitor thereby is guilty
of LACHES (National Shipyards and Steel
Corporation vs. CIR, L-21675, May 23, 1967,
20 SCRA 134).
The ruling is no doubt inspired by the
provision of Section 16, Rule 66 of the
Revised Rules of Court on "Quo Warranto",
pertinent portion of which reads:
Sec. 16. Limitations. — Nothing contained in
this rule shall be construed to authorize an
action ... against a public officer or employee
for his ouster from office unless the same be
commenced within one (1) year after the
cause of such ouster, or the right of the
plaintiff to hold such office or position, arose
....
and to the established jurisprudence
interpreting the aforequoted rule to the effect
that the period of one year fixed therein is a
condition precedent to the existence of the
cause of action for quo warranto (Bumanglag
vs Fernandez, L-11482, Nov. 29, 1960;
Tañada vs. Yulo, 61 Phil. 515; Ortiz Oiroso
vs. de Guzman, 49 Phil. 371; Tumulak vs.
Egay, 82 Phil. 828).
That the instant case is one for MANDAMUS,
and not QUO WARRANTO, is not of any
significance, for the same principle applies as
held in these cases:
An action for reinstatement, by
a public official, whether it be
quo warranto or mandamus,
should be filed in court within
one year from removal or
separation, otherwise the
action will be barred, (Morales,
Jr. vs. Patriarca, L-21280, April
30, 1965, 13 SCRA 766;
emphasis supplied).
..... We hold that as petitioner
was dismissed on June 16,
1953 and did not file his petition
for mandamus for his
reinstatement until July 1, 1954
or after a period of one year, he
is deemed to have abandoned
his right to his former position
and is not entitled to
 reinstatement therein
bymandamus (Unabia vs. City
Mayor, L-8759, May 25, 1956,
53 O.G. 132; emphasis
supplied).
On April 27, 1976, the motion for reconsideration
was denied (pp. 37-39, Rollo).
Madrigal assigns as errors the following:
1) the trial court erred in dismissing the petition
for mandamus and damages on the ground of laches; and
2) assuming arguendo that his claim for reinstatement was
not filed seasonably, the trial court erred in not proceeding
with the trial of the case on the merits to determine the
claim for back salaries and damages.
As regards the first assignment of error, Madrigal alleges
that the one (1) year period prescribed in an action for quo
warranto is not applicable in an action
for mandamus because Rule 65 of the Rules of Court does
not provide for such prescriptive period. The declaration by
the trial court that the pendency of administrative remedies
does not operate to suspend the period of one (1) year
within which to file the petition for mandamus, should be
confined to actions for quo warranto only. On the contrary,
he contends that exhaustion of administrative remedies is a
condition sine qua non before one can petition
for mandamus.
On the part of public respondents, they aver that it has
become an established part of our jurisprudence, being a
public policy repeatedly cited by the courts in myriad
of mandamus cases, that actions for reinstatement should
be brought within one year from the date of dismissal,
otherwise, they will be barred by laches. The pendency of
an administrative remedy before the Commission does not
stop the running of the one (1) year period within which
a mandamus case for reinstatement should be filed.
The unbending jurisprudence in this jurisdiction is to the
effect that a petition for quo
warranto and mandamus affecting titles to public office must
be filed within one (1) year from the date the petitioner is
ousted from his position (Galano, et al. v. Roxas, G.R. No.
L-31241, September 12, 1975, 67 SCRA 8; Cornejo v.
Secretary of Justice, G.R. No. L-32818, June 28, 1974, 57
SCRA 663; Sison v. Pangramuyen, etc., et al., G.R. No. L-
40295, July 31, 1978, 84 SCRA 364; Cui v. Cui, G.R. No. L-
18727, August 31, 1964, 11 SCRA 755; Villaluz v. Zaldivar,
G.R. No. L-22754, December 31, 1965,15 SCRA 710;
Villegas v. De la Cruz, G.R. No. L-23752, December 31,
1965,15 SCRA 720; De la Maza v. Ochave, G.R. No. L-
22336, May 23, 1967,20 SCRA 142; Alejo v. Marquez, G.R.
No. L-29053, February 27, 1971, 37 SCRA 762). The
reason behind this being was expounded in the case of
Unabia v. City Mayor, etc., 99 Phil. 253 where We said:
..... [W]e note that in actions of quo warranto involving right
to an office, the action must be instituted within the period of
one year. This has been the law in the island since 1901,
the period having been originally fixed in Section 216 of the
Code of Civil Procedure (Act No. 190). We find this
provision to be an expression of policy on the part of the
State that persons claiming a right to an office of which they
are illegally dispossessed should immediately take steps to
recover said office and that if they do not do so within a
period of one year, they shall be considered as having lost
their right thereto by abandonment. There are weighty
reasons of public policy and convenience that demand the
adoption of a similar period for persons claiming rights to
positions in the civil service. There must be stability in the
service so that public business may (sic) be unduly
retarded; delays in the statement of the right to positions in
the service must be discouraged. The following
considerations as to public officers, by Mr. Justice Bengzon,
may well be applicable to employees in the civil service:
Furthermore, constitutional rights may
certainly be waived, and the inaction of the
officer for one year could be validly
considered as waiver, i.e., a renunciation
which no principle of justice may prevent, he
being at liberty to resign his position anytime
he pleases.
And there is good justification for the
limitation period; it is not proper that the title
to public office should be subjected to
continued uncertainly (sic), and the peoples"
interest require that such right should be
determined as speedily as practicable
(Tumulak vs. Egay, 46 Off. Gaz., [8], 3693,
3695.)
Further, the Government must be
immediately informed or advised if any
person claims to be entitled to an office or a
position in the civil service as against another
actually holding it, so that the Government
may not be faced with the predicament of
having to pay the salaries, one, for the person
actually holding the office, although illegally,
and another, for one not actually rendering
service although entitled to do so. We hold
that in view of the policy of the State
contained in the law fixing the period of one
year within which action for quo warranto may
be instituted, any person claiming right to
position in the civil service should also be
required to file his petition for reinstatement
within the period of one year, otherwise he is
thereby considered as having abandoned his
office.
The fatal drawback of Madrigal's cause is that he
came to court out of time. As aforestated, it was only
after four (4) years and twenty (20) days from the
abolition of his position that he file the petition
for mandamus and damages. This single
circumstance has closed the door for any judicial
remedy in his favor.
And this one (1) year period is not interrupted by the
prosecution of any administrative remedy (Torres v.
Quintos, 88 Phil. 436). Actually, the recourse by Madrigal to
the Commission was unwarranted. It is fundamental that in
a case where pure questions of law are raised, the doctrine
of exhaustion of administrative remedies cannot apply
because issues of law cannot be resolved with finality by
the administrative officer. Appeal to the administrative
officer of orders involving questions of law would be an
exercise in futility since administrative officers cannot
decide such issues with finality (Cebu Oxygen and
Acetylene Co., Inc. v. Drilon, et al., G.R. No. 82849, August
2, 1989, citing Pascual v. Provincial Board of Nueva Ecija,
106 Phil. 466; Mondano v. Silvosa, 97 Phil. 143). In the
present case, only a legal question is to be resolved, that is,
whether or not the abolition of Madrigal's position was in
accordance with law.
With respect to the second assignment of error, Madrigal
asserts that despite (1) the ruling of the Commission
declaring his removal from office illegal; (2) Resolution No.
93 of the Provincial Board; and (3) Provincial Voucher No.
714 covering the appropriation for the sum of P3,667.29,
representing his back salaries for said period, the trial court
still refused to grant his money claim.
In answer thereto, public respondents contend that the
court cannot pass upon Madrigal's right to back salaries
without passing upon the validity of the abolition of his
position which is a matter that cannot now be a subject of
judicial inquiry. This is so because the question of back
salaries and damages is only incidental to the issues
involving the validity of said abolition and his request for
reinstatement.
Again, We uphold the view advanced by public
respondents. Madrigal loses sight of the fact that the claim
for back salaries and damages cannot stand by itself. The
principal action having failed, perforce, the incidental action
must likewise fail. Needless to state, the claim for back
salaries and damages is also subject to the prescriptive
period of one (1) year (see Gutierrez v. Bachrach Motor
Co., Inc., 105 Phil. 9).
ACCORDINGLY, the appeal is hereby DENIED. The orders
of the Court of First Instance of Marinduque dated March
16, 1976 and April 27, 1976 are AFFIRMED.
SO ORDERED.
THIRD DIVISION
G.R. No. 119645 August 22, 1996
SPO3 NOEL CABADA and SPO3 RODOLFO G. DE
GUZMAN, petitioners,
vs.
HON. RAFAEL M. ALUNAN III, Secretary of the
Department of Interior and Local Government &
Chairman, National Police Commission (NAPOLCOM);
HON. ALEXIS CANONIZADO, Commissioner,
NAPOLCOM, Manila; Chairman LEODEGARIO ALFARO,
Regional Appellate Board VIII; Regional Director
EDMUNDO LAVILLA LARROZA, Philippine National
Police (PNP) Regional Command VIII; and MARIO
VALDEZ, respondents.
DAVIDE, JR., J.:p
This is a special civil action for certiorari under Rule 65 of the Rules of Court 1 to set aside
the decision (in the form of a letter) of 24 March 1995 2 of public respondent National Police
Commission (NAPOLCOM), which denied due course for lack of jurisdiction the appeal and
the petition for review filed by petitioners SP03 Noel Cabada and SP03 Rodolfo G. de
Guzman, respectively. Challenged in the said appeal and petition for review were the
decision of 15 August 19943 and resolution of 25 October 1994 4 of the Regional Appellate
Board of the Eighth Regional Command (RAB 8), which affirmed their dismissal from the
service.
The pleadings and annexes filed by the parties disclose the
following factual and procedural backdrop of this case:
On 29 October 1993, a complaint against the petitioners for
Grave Misconduct, Arbitrary Detention, and Dishonesty was
filed with the Office of the Commission on Human Rights in
Tacloban City by private respondent Mario Valdez.5 The
complaint was referred to the Philippine National Police
Eighth Regional Command (PNP-RECOM 8) which, after
conducting its own investigation, filed an administrative
charge of Grave Misconduct against the petitioners and
instituted summary dismissal proceedings.
On 7 April 1994, the Regional Director of PNP-RECOM 8
handed down a decision 6 finding the petitioners guilty of
grave misconduct and ordering their dismissal from the
police service. Pursuant to this decision, Special Order No.
174, dated 23 April 1994, 7 was issued ordering, among
other things, the dismissal of the petitioners from the
service.
The petitioners claimed that they were not formally
furnished with a copy of the decision and that they were
able to secure a copy thereof "thru their own effort and
initiative" only on 13 June 1994. 8 However, they received a
copy of Special Order No. 174 on 26 April 1994.
Although they insist that the basis of the appeal before RAB
8 was Special Order No. 174, 9 petitioner Cabada stated
under oath in his
Appeal10 filed with the Department of Interior and Local
Government (DILG) that he in fact seasonably filed a
motion for reconsideration of the decision of the Regional
Director of PNP-RECOM 8, who, however, failed or refused
to act on the said motion, and that he asked that the said
motion be treated as an appeal to the RAB.
In its decision of 15 August 1994, 11 the RAB 8 affirmed the
decision of the Regional Director. In its resolution of 25
October 1994, 12 it denied the petitioners' motion for
reconsideration of its decision. The petitioners received a
copy of this resolution on 26 January 1995.
Petitioners Cabada and De Guzman then filed with the
Honorable Secretary of the DILG and Chairman of the
NAPOLCOM their "Appeal" 13 dated 5 February 1995 and
"Petition for Review" 14 dated 4 February 1995, respectively.
In its decision of 24 March 1995, the NAPOLCOM, through
Commissioner Alexis Canonizado, denied due course to the
petitioners' appeal and petition for review for lack of
jurisdiction "it appearing . . . that both the Decision and the
Resolution of the Regional Appellate Board had long
become final and executory and there being no showing
that the RAB failed to decide respondents' appeal within the
reglementary period of sixty (60) days." 15 In support thereof,
the NAPOLCOM cited Section 23, Rule IV of NAPOLCOM
Memorandum Circular No. 91-002 and Section 5, Rule III of
NAPOLCOM Memorandum Circular No. 91-006, which
provide as follows:
Sec. 23. Effect of Failure to Decide Appeal.
— Failure of the Regional Appellate Board to
decide the appeal within the reglementary
period shall render the decision final and
executory without prejudice, however, to the
filing of an appeal by either party with the
Secretary of the Department of the Interior
and Local Government.
xxx xxx xxx
Sec. 5. Finality of Decision/Resolution. — The
decision of the Regional Appellate Board on
an appealed case shall become final and
 executory after ten (10) days from receipt of a
copy thereof by the appellant, if no Motion for
Reconsideration is filed within said period.
A motion for Reconsideration may be filed by
either party from a Decision rendered by the
Regional Appellate Board on an appealed
case, provided that the same is filed within
ten (10) days from receipt of a copy of the
decision in question. However, only one (1)
Motion for Reconsideration may be allowed.
Hence, the instant petition.
The Office of the Solicitor General seeks to dismiss this
petition on the ground of prematurity because the
petitioners failed to exhaust administrative remedies; they
should have instead appealed to the Civil Service
Commission (CSC) pursuant to Section 47, Chapter 6,
Subtitle A, Title I, Book V of the Administrative Code of
1987 (E.O. No. 292), which vests upon the CSC appellate
jurisdiction over disciplinary cases of government personnel
where the penalty imposed is, inter alia, dismissal from
office. The said provision reads:
Sec. 47. Disciplinary Jurisdiction. — (1) The
Commission shall decide upon appeal all
administrative disciplinary cases involving the
imposition of a penalty of suspension for
more than thirty days, or fine in an amount
exceeding thirty days salary, demotion in rank
or salary or transfer, or removal or dismissal
from office. . . .
(2) The Secretaries . . . shall have jurisdiction
to investigate and decide matters involving
disciplinary action against officers and
employees under their jurisdiction. . . . In case
the decision rendered by a bureau or office
head is appealable to the Commission, the
same may be initially appealed to the
Department and finally to the Commission
and pending appeal, the same shall be
executory except when the penalty is
removal, in which case, the same shall be
executory only after confirmation by the
Secretary concerned.
The Office of the Solicitor General opines that this provision
covers PNP personnel, like the petitioners; consequently,
they should have appealed to the CSC. It also advances the
view that the instant petition should have been filed with the
proper forum, the Regional Trial Court.
The core issues that present themselves for our
determination are whether.
(1) the NAPOLCOM committed grave abuse
of discretion in denying due course, for lack of
jurisdiction, the petitioners' appeal from and
petition for review of the decision and
resolution of the RAB 8; and
(2) this special civil action was prematurely
filed for failure of the petitioners to exhaust
administrative remedies.
Section 45 of the DILG Act of 1990 16 provides for the finality
of disciplinary actions against members of the PNP as
follows:
Sec. 45. Finality of Disciplinary Action. — The
disciplinary action imposed upon a member of
the PNP shall be final and
executory: Provided, That a disciplinary
action imposed by the regional director or by
the PLEB involving demotion or dismissal
from the service may be appealed to the
regional appellate board within ten (10) days
from receipt of the copy of the notice of
decision: Provided, further, That the
disciplinary action imposed by the Chief of the
PNP involving demotion or dismissal may be
appealed to the National Appellate Board
within ten (10) days from receipt
thereof: Provided, furthermore, That, the
regional or National Appellate Board, as the
case may be, shall decide the appeal within
sixty (60) days from receipt of the notice of
appeal: Provided, finally, That failure of the
regional appellate board to act on the appeal
within said period shall render the decision
final and executory without prejudice,
however, to the filing of an appeal by either
party with the Secretary. (emphasis supplied)
The last proviso of this section is restated in Section 23,
Rule IV of NAPOLCOM Memorandum Circular No. 91-002.
And Section 3, Rule III of NAPOLCOM Memorandum
Circular No. 92-006 provides:
Sec. 3. Period Within Which to Decide
Appealed Cases; Finality of RAB/NAB
Decisions. — The NAPOLCOM appellate
board concerned shall decide the appealed
cases within sixty (60) days from receipt of
the entire records of the case from the PNP
summary dismissal authority. However,
failure of the NAPOLCOM Regional Appellate
Board (RAB) to act on the appeal within said
period renders the decision final and
executory without prejudice to the filing of an
appeal by the respondent-appellant with the
Secretary of the Department of the Interior
and Local Government. The decision
rendered by the NAPOLCOM National
Appellate Board (NAB) disposing an
appealed case shall be final and executory
unless a timely Motion for Reconsideration is
filed within ten (10) days from receipt thereof,
in which case, it shall become final and
executory upon receipt by the respondent-
appellant of the resolution of the aforesaid
board denying, modifying or affirming the
decision.
Section 45 of the DILG Act of 1990 specifically provides that
if a RAB fails to decide an appeal within the reglementary
period of sixty days, the appealed decision becomes final
and executory without, however, prejudice to the right of the
aggrieved party to appeal to the Secretary of the DILG. The
said provision is, however, silent as regards the availability
of an appeal from a decision rendered by a RAB within the
reglementary period.
This gap in Section 45 cannot be construed to prohibit
appeals from decisions of the RAB rendered within the
reglementary period, for while the epigraph of the section is
worded Finality of Disciplinary Action, there is nothing
therein that explicitly bars any further appeal.
Complementary laws on discipline of government officials
and employees must then be inquired into considering that
in conformity with the mandate of the Constitution that the
PNP must be national in scope and civilian in character, 17 it
is now a part, as a bureau, of the reorganized DILG. 18 As
such, it falls within the definition of the civil service in
Section 2 (1), Article IX-B of the Constitution. 19 For this
reason, Section 91 of the DILG Act of 1990 provides:
Sec. 91. Application of Civil Service Laws. —
The Civil Service Law and its implementing
rules and regulations shall apply to all
personnel of the Department.
The Civil Service Law referred to in Section 91 of the DILG
Act of 1990 is Subtitle A, Title I, Book V of the
Administrative Code of 1987 (E.O. No. 292). Section 47 of
Chapter 6 thereof provides, inter alia, that in cases where
the decision rendered by a bureau or office is appealable to
the Commission, the same may initially be appealed to the
department and finally to the Commission.
The rules and regulations implementing the Civil Service
Law referred to in Section 91 of the DILG Act of 1990 is the
Omnibus Rules Implementing Book V of Executive Order
No. 292 known as the Administrative Code of 1987
promulgated by the CSC. Sections 31 and 32, Rule XIV of
the said Rules provide as follows:
Sec. 31. Except as otherwise provided by the
Constitution or by law, the Commission shall
have the final authority to pass upon the
removal, separation and suspension of all
officers and employees in the civil service and
upon all matters relating to the conduct,
discipline and efficiency of such officers and
employees.
Sec. 32. The Secretaries and heads of
agencies and instrumentalities, provinces,
cities and municipalities shall have jurisdiction
to investigate and decide matters involving
disciplinary action against officers and
employees under their jurisdiction. Their
decisions shall be final in case the penalty
imposed is suspension for not more than
thirty (30) days or fine in an amount not
exceeding thirty (30) days' salary. In case the
decision rendered by a bureau or office head
is appealable to the Commission, the same
may be initially appealed to the department,
then to the Merit Systems Protection Board,
and finally to the Commission and pending
appeal, the same shall be executory except
when the penalty is removal, in which case
the same shall be executory only after
confirmation by the Secretary concerned.
Under Section 7 of E.O. No. 262, 20 the Secretary of the
DILG has the power of supervision and control of his
Department. His powers and functions thereunder are
recognized and affirmed in Section 10 of the DILG Act of
1990. 21
In view then of the aforementioned gap in Section 45 of the
DILG Act of 1990, the provisions of the Civil Service Law
and the rules and regulations implementing it must be taken
into account in light of the maxim interpretare concordare
legibus est optimus interpretandi or every statute must be
so construed and harmonized with other statutes as to form
a uniform system of jurisprudence. 22
As thus construed and harmonized, it follows that if a RAB
fails to decide an appealed case within sixty days from
receipt of the notice of appeal, the appealed decision is
deemed final and executory, and the aggrieved party may
forthwith appeal therefrom to the Secretary of the DILG.
Likewise, if the RAB has decided the appeal within the
sixty-day period, its decision may still be appealed to the
Secretary of the DILG.
In the instant case, Cabada's appeal was addressed to "the
Honorable Secretary of the Department of the Interior and
Local Government . . . as Chairman and Presiding Officer of
the National Police Commission," 23 while De Guzman's
petition for review was addressed to "the Honorable
Secretary, Department of the Interior and Local
Government and Chairman, National Police Commission,
Makati City, Metro Manila." 24
We consider the appeal and the petition for review as
appeals to the Secretary of the DILG under Section 45 of
the DILG Act of 1990.
Only the Secretary of the DILG can act thereon, one way or
the other. The NAPOLCOM did not have authority over the
appeal and the petition for review, and just because both
mentioned the Secretary of the DILG as Chairman or
Presiding Officer of the NAPOLCOM did not bring them
within the jurisdiction of the NAPOLCOM. The latter does
not have such jurisdiction because Section 14 of the DILG
Act of 1990 pertinently provides as follows:
Sec. 14. Powers and Functions of the
Commission. — . . .
xxx xxx xxx
(i) Affirm, reverse or modify, through the
National Appellate Board, personnel
disciplinary action involving demotion or
dismissal from the service imposed upon
members of the Philippine National Police by
the Chief of the Philippine National Police;
(k) Exercise appellate jurisdiction through the
regional appellate boards over administrative
cases against policemen and over decisions
on claims for police benefits. . . .
This section clearly shows that the NAPOLCOM
exercise appellate jurisdiction only on the following
cases and THROUGH (a) the NAB in personnel
disciplinary actions involving demotion or dismissal
from the service imposed by the Chief of the PNP,
and (b) the RAB in administrative cases against
policemen and over decisions on claims for police
benefits. It has no appellate jurisdiction over
decisions rendered by the NAB and the RAB.
Consequently, the NAPOLCOM did not have the power or
authority to issue, through Commissioner Alexis
Canonizado, the 24 March 1995 decision denying due
course to the appeal and petition for review filed by
petitioners Cabada and De Guzman, respectively, for lack
of jurisdiction because of Section 5, Rule III of NAPOLCOM
Memorandum Circular No. 91-006 and Section 23, Rule IV
of NAPOLCOM Memorandum Circular No. 91-002. The
reference to these rules suggest that the NAPOLCOM
believes it has jurisdiction over appeals from decisions of
the RAB if the latter has not decided the appeal within the
reglementary period of sixty days. Such a suggestion is
flawed because it would allow a ridiculous situation where
the NAPOLCOM vests upon itself an appellate jurisdiction
from a decision rendered by it in the exercise of its
appellate jurisdiction through the RAB, per Section 14(k) of
the DILG Act of 1990. Moreover, Commissioner
Canonizado cannot, singly, act for the NAPOLCOM
because it is a collegial body composed of a Chairman and
four Commissioners, pursuant to Section 13 of the DILG Act
of 1990.
In light of the foregoing, the petitioners could properly
invoke our original jurisdiction to issue the extraordinary writ
ofcertiorari under Rule 65 of the Rules of Court to annul and
set aside the NAPOLCOM's decision of 24 March 1995. It
being a patent nullity, the filing of a motion for its
reconsideration before the institution of this special civil
action may be dispensed with. 25
II
The plea of the Office of the Solicitor General that the
instant action is premature for non-exhaustion of
administrative remedies is thus untenable. We would have
sustained it if the Secretary of the DILG was the one who
denied due course to or dismissed the appeal of petitioner
Cabada and the petition for review of petitioner De
Guzman. By then, pursuant to Section 91 of the DILG Act of
1990; Section 47, Chapter 6, Subtitle A, Title I, Book V of
the Administrative Code of 1987; and Sections 31 and 32 of
the Omnibus Rules Implementing Book V of Executive
Order No. 292, the appeal would have to be filed with the
CSC. And futile would be the petitioners claim in their Reply
to the Comment of the OSG that their case falls within the
exceptions to the rule on exhaustion of administrative
remedies.
In view of all the foregoing, a discussion on the other issues
raised by the petitioners relating to the merits of the case
and on the issue of due process is unnecessary.
WHEREFORE, premises considered, the instant petition is
GRANTED. The decision (in the form of a fetter) of the
National Police Commission of 24 March 1995 is
ANNULLED and SET ASIDE. The Secretary of the
Department of Interior and Local Government is DIRECTED
to RESOLVE with reasonable dispatch the appeal and
petition for review of petitioners SP03 NOEL CABADA and
SP03 RODOLFO G. DE Guzman, respectively, from the
decision of 15 August 1994 and resolution of 25 October
1994 of the Regional Appellate Boar, Eight Regional
Command, if the same were filed on time.
No pronouncement as to costs.
SO ORDERED.
FACTS:
On 29 October 1993, a complaint against the petitioners
for Grave Misconduct, Arbitrary Detention, and
Dishonesty was filed with the Office of the Commission
on Human Rights in Tacloban City by private respondent
Mario Valdez. On 7 April 1994, the Regional Director of
PNP-RECOM 8 (Philippine National Police Eighth
Regional Command) handed down a decision finding the
petitioners guilty of grave misconduct and ordering their
dismissal from thepolice service. Pursuant to this
decision, Special Order No. 174, dated 23 April 1994,
was issued ordering,among other things, the dismissal of
the petitioners from the service.
The petitioners claimed that they were not formally
furnished with a copy of the decision and that they were
ableto secure a copy thereof thru their own effort and
initiative only on 13 June 1994. However, they received a
copyof Special Order No. 174 on 26 April 1994. Although
they insist that the basis of the appeal before RAB 8
(Regional Appellate Board of the Eighth
RegionalCommand) was Special Order No.
174,petitioner Cabada stated under oath in his Appeal
filed with the Department of Interior and Local
Government (DILG) that he in fact seasonably filed a
motion for reconsideration of the decision of the Regional
Director of PNP-RECOM 8, who, however, failed or
refused to act on the said motion, and that he asked that
the said motion be treated as an appeal to the RAB.
In its decision of 15 August 1994, the RAB 8 affirmed the
decision of the Regional Director. In its resolution of
25October 1994, it denied the petitioners motion for
reconsideration of its decision. The petitioners received a
copy of this resolution on 26 January 1995. Petitioners
Cabada and De Guzman then filed with the Honorable
Secretary of the DILG and Chairman of the NAPOLCOM
their Appeal dated 5 February 1995 and Petition for
Review dated 4 February 1995, respectively.
In its decision of 24 March 1995, the NAPOLCOM,
through Commissioner Alexis Canonizado, denied due
course to the petitioners appeal and petition for review for
lack of jurisdiction it appearing x x x that both the
Decision and the Resolution of the Regional Appellate
Board had long become final and executory and there
being no showing that the RAB failed to decide
respondents appeal within the reglementary period of
sixty (60)days. In support thereof, the NAPOLCOM cited
Section 23, Rule IV of NAPOLCOM Memorandum
Circular No.91-002 and Section 5, Rule III of
NAPOLCOM Memorandum Circular No. 91-006, which
provide as follows: Section 23. Effect of Failure to Decide
Appeal. Failure of the Regional Appellate Board to decide
the appeal within the reglementary period shall render
the decision final and executory without prejudice,
however, to the filing of an appeal by either party with the
Secretary of the Department of the Interior and Local
Government.
Section 5. Finality of Decision/Resolution. The decision of
the Regional Appellate Board on an appealed caseshall
become final and executory after ten (10) days from
receipt of a copy thereof by the appellant, if no Motionfor
Reconsideration is filed within said
period. A motion for Reconsideration may be filed by eith
er party from a Decision rendered by the Regional Appell
ateBoard on an appealed case, provided that the same is
filed within ten (10) days from receipt of a copy of the
decision in question. However, only one (1) Motion for
Reconsideration may be allowed. *The Office of the
Solicitor General seeks to dismiss this petition on the
ground of prematurity because the petitioners failed to
exhaust administrative remedies; they should have
instead appealed to the Civil Service Commission (CSC)
pursuant to Section 47, Chapter 6, Subtitle A, Title I,
Book V of the Administrative Code of1987 (E.O. No.
292), which vests upon the CSC appellate jurisdiction
over disciplinary cases of government personnel where
the penalty imposed is, inter alia, dismissal from office.
ISSUE/S:
(1) WON the NAPOLCOM committed grave abuse of
discretion in denying due course, for lack of jurisdiction,
thepetitioners appeal from and petition for review of the
decision and resolution of the RAB 8; and
(2) WON this special civil action was prematurely filed for
failure of the petitioners to exhaust administrative
remedies.
HELD:
1. In light of the foregoing, the petitioners could properly
invoke our original jurisdiction to issue the extraordinary
writ of certiorari under Rule 65 of the Rules of Court to
annual and set aside the NAPOLCOMs decision of
24March 1995. It being a patent nullity, the filing of a
motion for its reconsideration before the institution of
thisspecial civil action may be dispensed with. If a RAB
fails to decide an appealed case within sixty days from
receipt of the notice of appeal, the appealed decision is
deemed final and executory, and the aggrieved party
may forthwith appeal therefrom to the Secretaryof the
DILG. Likewise, if the RAB has decided the appeal within
the sixty-day period, its decision may still be appealed to
the Secretary of the DILG.In the instant case, Cabadas
appeal was addressed to the Honorable Secretary of the
Department of the Interior and Local Government x x x as
Chairman and Presiding Officer of the National Police
Commission, while DeGuzmans petition for review was
addressed to the Honorable Secretary, Department of the
Interior and Local Government and Chairman, National
Police Commission, Makati City, Metro Manila. We
consider the appeal and the petition for review as
appeals to the Secretary of the DILG under Section 45 of
the DILG Act of 1990.
Only the Secretary of the DILG can act thereon, one way
or the other. The NAPOLCOM did not have authorityover
the appeal and the petition for review, and just because
both mentioned the Secretary of the DILG asChairman or
Presiding Officer of the NAPOLCOM did not bring them
within the jurisdiction of the NAPOLCOM.The latter does
not have such jurisdiction because Section 14 of the
DILG Act of 1990 pertinently provides
asfollows:Functions of the Commission. x x x xxx xxx
xxx (j) Affirm, reverse or modify, through the National
Appellate Board, personnel disciplinary action
involvingdemotion or dismissal from the service imposed
upon members of the Philippine National Police by the
Chief ofthe Philippine National Police; (k) Exercise
appellate jurisdiction through the regional appellate
boards over administrative cases againstpolicemen and
over decisions on claims for police benefits. x x x This
section clearly shows that the NAPOLCOM exercises
appellate jurisdiction only on the following cases and
THROUGH (a) the NAB in personnel disciplinary actions
involving demotion or dismissal from the service imposed
by the Chief of the PNP, and (b) the RAB in
administrative cases against policemen and over
decisions on claims for police benefits. It has no
appellate jurisdiction over decisions rendered by the NAB
and the RAB.
2. The plea of the Office of the Solicitor General that the
instant action is premature for non-exhaustion of
administrative remedies is thus untenable. We would
have sustained it if the Secretary of the DILG was the
one who denied due course to or dismissed the appeal of
petitioner Cabada and the petition for review of petitioner
De Guzman. By then, pursuant to Section 91 of the DILG
Act of 1990; Section 47, Chapter 6, Subtitle A, Title
I,Book V of the Administrative Code of 1987; and
Sections 31 and 32 of the Omnibus Rules Implementing
Book Vof Executive Order No. 292, the appeal would
have to be filed with the CSC. And futile would be the
petitionersclaim in their Reply to the Comment of the
OSG that their case falls within the exceptions to the rule
onexhaustion of administrative remedies.
SECOND DIVISION
G.R. No. L-42380 June 22, 1990
DATILES AND COMPANY, represented by LORETA DATILES
and LARRY DATILES, petitioner,
vs.
Honorable MELQUIADES S. SUCALDITO, Presiding Judge of
Branch I, Court of First Instance of Zamboanga del Sur,
Honorable MATIAS A. GUIEB, or his Successor-in-Office,
Regional Director, Region No. IX, Bureau of Fisheries and
Aquatic Resources and JESUS DEYPALUBOS and DANIEL
CABELIEZA, respondents.
Larry B. Datiles for petitioners.
Cerilles & Cerilles, Vera Cruz, Largo, Bautista Law Offices for
respondent J. Deypalubos.
PADILLA, J.:
The issue before the Court is whether or not an investigation of a formal protest over a lease
grant, by a Regional Director of the Bureau of Fisheries and Aquatic Resources may be the
subject of a petition for prohibition and/or injunction before the Regional Trial Court, in the
light of the following antecedent facts:
Petitioner Datiles and Company has in its favor a fishpond lease
agreement 1 whereby the Republic of the Philippines, thru the
Secretary of Agriculture and Natural Resources, agreed to lease
to the company one hundred seventy five hectares, ninety nine
ares and fifty-nine centares (175.9959 has.) of public land located
in Batu, Siay, Zamboanga del Sur, for fishpond purposes.
Fishpond Lease Agreement (FLA) No. 1902 was executed on 16
June 1971, with an original period of ten (10) years, later
extended to twenty five (25) years, or up to year 2002. 2
About the middle of 1973, petitioner-lessee filed a complaint for
"Injunction with Writ of Possession with Preliminary and
Prohibitory Injunction, with Damages" before the Court of First
Instance (now Regional Trial Court) of Zamboanga del Sur, and
docketed as Civil Case No. 1389, against herein private
respondents Jesus Deypalubos and Daniel Cabdieza. 3 Said court
action was alleged to have been resorted to after the vehement
refusal of the respondents to obey the orders of the then
Philippine Fisheries Commission and Bureau of Fisheries 4 (now
Bureau of Fisheries and Aquatic Resources) to vacate that
portion of the area covered by FLA No. 1902 which they (private
respondents) were occupying without a fishpond permit and the
knowledge and consent of petitioner.
To the accusation of their unlawful entry, private respondents set
up the defense of good faith at the time of their entry and
occupation of the land which they described as forested and
uncultivated. They added that prior to the filing of their own
respective fishpond lease applications over the disputed area
(i.e., Deypalubos on the southern portion of about forty-nine (49)
hectares and Cabelieza on the eastern part of about two (2)
hectares) on 3 January 1973, they were assured by an officer
from the Bureau that the areas were unoccupied and not subject
of any pending leasehold agreement or application.5
Meanwhile, respondent Deypalubos submitted to the Bureau of
Fisheries his formal protest against petitioner's existing fishpond
permit over the 49 hectares, subject on Civil Case 1389. 6
Later, or on 18 February 1974, the trial court, in Civil Case No.
1389 ordered the issuance of a writ of preliminary mandatory
injunction against both respondents 7 resulting in the restoration
of possession and occupancy of the disputed areas by the
petitioner on 28 May 1974. 8
Thereafter, or on 2 June 1974, the Barrio Council of Batu, Slay,
Zamboanga del Sur prepared and submitted to the Bureau of
Fisheries a resolution 9 which attests that the 49 hectare
controverted fishpond area was never occupied by the Datiles
family (herein petitioner company's predecessor) and that it was
Mr. Deypalubos (herein private co-respondent) who cleared the
same and constructed all the improvements therein. The
resolution further requests that the original grant of 175.9959
hectares to Datiles and Company (herein petitioner) be reduced
to fifty (50) hectares only in accordance with a certain presidential
decree limiting the cultivation of a fishpond to about fifty (50)
hectares, with the remaining area to be distributed to poor
families.
No investigation of both the above-mentioned barrio council
resolution and Deypalubos' formal protest over the forty-nine (49)
hectares was held in view of a 29 October 1974 order of the
Bureau Director to hold in abeyance any hearing on the matter
until such time that Civil Case No. 1389 shall have been finally
resolved. 10
On 3 January 1975, another memorandum was issued by the
Bureau Director addressed to herein public respondent Regional
Director Guieb, directing "an immediate formal investigation of
those issues involved in the foregoing resolution and the protest
of Mr. Jesus Deypalubos ...and not touched upon in Civil Case
No. 1389." 11
Accordingly, public respondent Guieb notified the parties of the
scheduled hearing of the said protest and resolution. 12
Praying to restrain the proposed investigation on the fishpond
conflict, petitioner filed its 10 February 1975 petition for
"Prohibition and/or Injunction with Preliminary Injunction" (Special
Civil Case No. 1426) before the CFI of Zamboanga del Sur
against public respondent Guieb and impleading pro
forma therein respondents Deypalubos and
Cabelieza. 13Following the limitation on the scope of issues to be
investigated as directed in the 3 January 1975 Memorandum of
the Bureau Director, petitioner alleged that Regional Director
Guieb has no longer any authority to conduct the investigation, as
the issues proposed to be investigated are the same issues
raised in the then pending Civil Case No. 1389.
The presiding judge of the court a quo, Hon. Melquiades S.
Sucaldito (now respondent), seeing that a possible irreparable
injury could be caused the petitioner if the investigation in
question were to proceed, issued the 31 March 1975 restraining
order. 14
During the trial of said Sp. Civil Case No. 1426, private
respondents moved to dismiss the case and to dissolve the
restraining order, 15 anchored on the grounds of (a) lack of the
court's jurisdiction to try the case for failure on the part of
petitioner to exhaust available administrative remedies, and (b)
violation of Section 1 of Pres. Decree No. 605 which provides, in
part, as follows:
SECTION 1. No court of the Philippines shall
have jurisdiction to issue any restraining order,
preliminary injunction or preliminary mandatory
injunction in any case involving or growing out of
the issuance, approval or disapproval, revocation
or suspension of, or any action whatsoever by the
proper administrative official or body on
concessions, licenses, permits, patents, or public
grants of connection with the disposition,
exploitation, utilization, exploration and/or
development of the natural resources of the
Philippines.
Upholding respondents' contentions, the respondent judge
dismissed Sp. Civil Case No. 1426 and lifted the 31 March 1975
restraining order on 4 August 1975. Pertinent portions of his
decision read as follows: 16
... the element of said section which read:
or any action whatsoever by the
proper administrative officials or
body on concessions, licenses,
permits, patents or public grants of
any kind.
is so embrasive as to include the projected
investigation sought to be prohibited. Clearly,
therefore, Section 1 of Presidential Decree No.
605, as cited above, is squarely applicable to the
restraining order sought to be dissolved. ...
... in that Civil Case No. 1389, in granting the said
Writ of Preliminary Mandatory and Prohibitory
Injunction, the Court acted solely to eject the
respondents Deypalubos and Cabelleza from, and
to prevent their return to the premises in question;
to prevent them in widening their possession ....
This Civil Case No. 1389 has not yet been tried
on the merit. On the other hand, the investigation
sought to be enjoined, and/or prohibited, involved
not only mere possession, but the right of the
parties to lease the premises in question, based
on law, rules and regulations issued by the
Bureau of Fisheries and Aquatic Resources. This
investigation, therefore, pertains to, and within the
exclusive jurisdiction of the Bureau of Fisheries. In
 this investigation of the protest, it might be shown
that while defendants may have no right in the
beginning, they might have acquired later on,
equitable right which may lead to the approval of
their fishpond applications on the land in question.
It may likewise show, upon the other hand, that
petitioner has not complied with the conditions of
its lease agreement;
xxx
Besides, the petitioner in this case has an
available, adequate and speedy remedy that is to
appeal this matter of investigation to the proper
superior official-which in this case is the Secretary
of agriculture and Natural Resources. The plaintiff
having failed to do this, the Court has no
jurisdiction to entertain the present petition for
prohibition. ...
Hence, this petition for review, which was previously denied for
lack of merit by this Court in a 28 May 1976
Resolution. 17Petitioner moved for the reconsideration of the said
order of denial 18 and on 22 April 1977, the Court decided to give
due course to the instant petition. 19
Petitioner's recourse to this Court is actually based on Section 2,
Rule 65 of the Rules of Court, seeking to prevent public
respondent Guieb from investigating the subject fishpond conflict,
on the ground that this threatened act constitutes excess in the
exercise of his jurisdiction. On the other hand, while respondents
do not contest that the nature of the contemplated action
(investigation) can be a proper subject of a petition for prohibition,
it is nonetheless submitted that there being no prior exhaustion of
administrative remedies on petitioner's part and in view of PD.
No. 606, the respondent court cannot Properly take jurisdiction of
the petition for prohibition.
We rule for the petitioner.
It is a well-settled rule that, for prohibition to lie against an
executive officer, the petitioner must first exhaust administrative
remedies. This doctrine rests upon the assumption that the
administrative body, board or officer, if given the chance to
correct its/his mistake or error, may amend its/his decision on a
given matter. 20 It follows therefore that there has to be some sort
of a decision, order or act, more or less final in character, that is
ripe for review and properly the subject of an appeal to a higher
administrative body or officer, for the principle of exhaustion of
administrative remedies to operate. In the present case, however,
there is no administrative order or act as above described, that
can be appealed from. The respondent Regional Director has not
rendered any decision, or made any final finding of any sort, and
is in fact just about to conduct an investigation which happens to
be the very act sought to be prevented. Consequently,
administrative remedies that must be exhausted, although
available, cannot be resorted to. There being urgency in stopping
public respondent Guieb's investigation but no plain, speedy and
adequate remedy in the ordinary course of law, petitioner's
recourse to the respondent court for relief by way of a petition for
prohibition was proper.
We now look into PD No. 605. Its evident purpose is to prevent
the substitution of judicial judgments for those of public
administrative officials in disputes involving the disposition or
utilization of natural resources of the country. The decree seeks
to leave to administrative agencies the authority to decide
controversies involving licenses, permits, patents or public grants
in connection with natural resources, obviously because of the
expertise of such administrative officials in dealing with such
problems.
The issuance of said decree (No. 605) does not, however, mean
that courts cannot exercise jurisdiction where questions of law are
involved, as in the case at bar. Here, what was assailed before
respondent judge is Regional Director Guieb's move to conduct
an investigation on Deypalubos' formal protest, the petitioner's
theory being that to investigate the matter is to go beyond what
the Director of the Bureau of Fisheries had authorized in his 3
January 1975 Memorandum, which is "to cause an immediate
formal investigation of those issues involved in the foregoing
resolution and the protest ... and not touched upon in Civil Case
No. 1389. 21 (Emphasis supplied)
The situation, therefore, called for a determination of whether or
not the proposed investigation was indeed an over-exercise of
authority by respondent Regional Director as claimed by the
petitioner; and if this was resolved in the negative, the
investigation would have been allowed to proceed. The
respondent court was called upon to look only into the propriety of
the investigation regardless of the fact that the investigation could
result in the issuance and/or revocation of fishpond lease permits
of the contending parties.
As to the prohibition dictated by PD No. 605, the same pertains to
the issuance by courts of injunctions or restraining orders against
administrative acts on controversies which involve facts or
exercise of discretion in technical cases, because to allow courts
to judge these matters could disturb the smooth functioning of the
administrative machinery. But on issues definitely outside of this
dimension and involving questions of law, courts are not
prevented by PD No. 605 from exercising their power to restrain
or prohibit administrative acts.
Instead of remanding this case to respondent court for further
proceedings, we win put a finish to it. At bottom line, the real legal
issue here is whether public respondent Guieb should desist from
investigating petitioner's fishpond lease No. 1902. It will be
recalled that when respondent Guieb issued the notice of hearing
of 24 February 1975 to the parties, the subjects of investigation,
as indicated therein, were the 18 September 1973 Protest against
FLA No. 1902 and the 2 June 1974 Barrio Council Resolution.
The said Protest consists of Deypalubos' assertions that prior to
his application for a fishpond permit for the area in question, he
was assured of the absence of any improvements in the area he
occupied, and that it was he who introduced all the substantial
improvements therein until petitioner company began harassing
him. These issues were however raised and, in fact, already
passed upon in the decision rendered in Civil Case No. 1389,
which became final and executory on 26 October
1980. 22 Elaborating on these points, the court in said Civil Case
No. 1389, in a 21-page decision, found the above allegations not
credible and ordered, among others, the forfeiture in favor of
petitioner of the improvements built and constructed by
Deypalubos in the controverted area covered by FLA No. 1902.
Said court findings are consistent with the results of the
inspection by the former Philippine Fisheries Commission and
Bureau of Fisheries conducted in 1973. 23
The insistence still of respondent Regional Director Guieb to
proceed with the investigation, knowing fully well that there
remain no other issues in Deypalubos' protest that were not
previously raised in Civil Case No. 1389 and before the same
Bureau, leads one to conclude that he is acting in excess of his
delegated authority to investigate. After these issues had been
tried and investigated, administratively and judicially, the same
issues can no longer be reopened by public respondent Guieb.
The Barrio Council Resolution intended to be included in the
investigation by public respondent Guieb likewise contains the
very same averments made in the protest, the only new matter
presented being that petitioner should have been awarded fifty
(50) hectares only in view of a presidential decree limiting
administrative grants of fishpond permits or leases to just this
much. The provisions of the invoked decree have not however
been set forth nor the decree number indicated. All that was said
is that there is an existing decree to that effect, and nothing more.
Such a broad statement does not justify a reinvestigation of this
fishpond conflict.
Justice and fairness dictate that long-resolved matters be finally
closed and laid to rest.
WHEREFORE, the 4 August 1975 decision in Sp. Civil Case No.
1426 is REVERSED and public respondent Guieb is hereby
ordered to REFRAIN and DESIST from investigating the
respondent Deypalubos' protest of 18 September 1973 and the
Barrio Council Resolution of 2 June 1974 of Batu-Siay,
Zamboanga del Sur questioning Fishpond Lease Agreement No.
1902 in favor of petitioner.
SO ORDERED.
SECOND DIVISION
G.R. Nos. 115121-25 February 9, 1996
NATIONAL FOOD AUTHORITY and ROMEO G.
DAVID, petitioners,
vs.
THE HON. COURT OF APPEALS, HON. BERNARDO P.
ABESAMIS, Presiding Judge, Regional Trial Court, Branch
85, Quezon City, HON. RODOLFO ORTIZ, Presiding Judge,
Regional trial Court, Branch 89, Quezon City, HON. TIRSO D.
C. VELASCO, Presiding Judge, Regional Trial Court, Branch
88, Quezon City, HON. BENEDICTO B. ULEP, Presiding
Judge, Branch 105, Quezon City, HON. JUSTO M. SULTAN,
Presiding Judge, Branch 98, Quezon City, COL. FELIX M.
MANUBAY, MASADA SECURITY AGENCY, CONTINENTAL
WATCHMAN AND SECURITY AGENCY, ALBERTO T.
LASALA, and NORMAN D. MAPAGAY, respondents.
DECISION
PUNO, J.:
The case at bar involves the legality of negotiated security
contracts awarded by the National Food Authority (NFA), a
government-owned and controlled corporation and its
Administrator, Romeo G. David, to several private security
agencies, in default of a public bidding. Petitioners NFA and
David seek a modification of the decision of the Court of Appeals
insofar as it nullifies and enjoins the implementation of the said
negotiated security contracts.
The facts are not disputed.
In 1990, the NFA, through then Administrator Pelayo J.
Gabaldon, conducted a public bidding to award security contracts
for the protection of its properties and facilities all over the country
. Twelve security agencies were awarded one-year contracts,
among whom were private respondents Col. Felix M. Manubay
(doing business under the name Greenview Investigation and
Security Agency), Continental Watchman and Security Agency,
Alberto T. Lasala (doing business under the name PSF
Watchman and Investigation Agency) and Norman D. Mapagay
(doing business under the name People's Protective and Security
Agency).
In August 1992, petitioner Romeo G. David became NFA
Administrator. He caused a review of all security service
contracts, procedures on the accreditation of private security
agencies and the bidding for security services. Pending this
review, Administrator David extended the services of private
respondents and the other incumbent security agencies on a
periodic basis.
The review was completed in March 1993 and new terms for
accreditation, bidding and hiring of security agencies were made.
The bidding areas were also reclassified and reduced from
fourteen NFA regions to only five NFA areas nationwide. A
special order was thereafter issued for the implementation of the
new rules and procedure.
On April 6, 1993, Special Order No. 04-07 was issued under
which Administrator David created a Prequalification, Bids and
Awards Committee (PBAC) to undertake the prequalification of
prospective bidders, conduct the bidding, evaluate the bids
tendered and recommend to the Administrator the bids accepted.
Notices for prequalification and bidding for security services were
published in a newspaper of national circulation. All incumbent
security contractors were required to prequalify and only those
prequalified were to be allowed to participate in the prebidding
and bidding scheduled on June 4 and 18, 1993, respectively.
The prebidding and bidding dates were later reset to June 18 and
30, 1993 to give more time for the participants to comply with
documentary requirements. Forty-one security agencies,
composed of the incumbents and new applicants, including
private respondent Masada Security Agency, submitted the
necessary documents for prequalification.
Upon a review of the documents submitted, the PBAC
disqualified respondent Mapagay for failure to submit proof of his
financial capability to support his bid. It also disqualified
respondent Lasala for alleged failure to meet the five-year service
requirement. Only respondents Manubay, Continental and
Masada participated in the prebidding and were declared on June
17, 1993 prequalified to bid.
Meanwhile, however, two of the applicants who failed to
prequalify, namely Lanting Security and Watchman Agency and
respondent Lasala, filed separate complaints with the Regional
Trial Court, Quezon City to restrain Administrator David and the
PBAC from proceeding with the public bidding. As prayed for,
restraining orders were issued by the two courts on June 29,
1993 which the NFA received on June 30, 1993, the day of the
scheduled bidding. No bidding thus took place on said date.
On respondent Lasala's application, the Regional Trial Court,
Branch 93, Quezon City issued on July 20, 1993 a preliminary
injunction ordering the PBAC to refrain from proceeding with the
bidding until the merits of the case shall have been heard and
resolved.
During the effectivity of the writ of preliminary injunction,
Administrator David sent to all incumbent security agencies,
including four of herein private respondents, notices of
termination dated July 30, 1993. Private respondents .were
informed that their services were to end on August 16, 1993
inasmuch as their respective contracts had expired and they no
longer enjoyed the trust and confidence of the NFA. They were
thus instructed to withdraw their security guards from all NFA
installations.
On August 4, 1993, Administrator David contracted the services
of seven new security agencies starting August 16, 1993 on a
month-to-month basis pending resolution of the injunction against
the bidding. Private respondents forthwith filed separate
complaints with the Regional Trial Court, Branches 85, 89, 88,
105 and 98, Quezon City for prohibition,mandamus and damages
with a prayer for the issuance of a preliminary injunction and
restraining order.1
The trial courts issued five separate restraining orders and
injunctions ordering the NFA to desist from terminating the
services of respondents, and from awarding and installing the
new security agencies replacing them.
These orders were challenged by NFA and David in separate
petitions before the Court of Appeals alleging grave abuse of
discretion by respondent judges. The Court of Appeals
consolidated the petitions and on March 11, 1994 rendered a
decision partially granting the same by annulling that part of the
orders restraining NFA from terminating the contracts with the
incumbent security agencies but affirming the orders insofar as
they enjoined NFA from awarding the contracts to the seven new
security agencies. The Court of Appeals ordered:
 WHEREFORE, premises considered, the petition is found
meritorious in part and partially given DUE COURSE .
The assailed orders and writs of preliminary injunction are
ANNULLED and SET ASIDE insofar as they order
petitioners to cease and desist from terminating or
implementing the termination of private respondents'
expired security contracts with NFA. The said assailed
orders and writs of preliminary injunction issued are,
however, declared LEGAL, VALID and NOT issued in
excess of jurisdiction or with grave abuse of discretion
insofar as they enjoin petitioners from awarding the
security service contracts to the seven (7) security
agencies named by petitioners and/or implementing said
awards. To this extent the petitions are DISMISSED for
lack of merit.2
Reconsideration was denied on April 15, 1994.
Petitioners now assail that part of the decision of the Court of
Appeals nullifying and enjoining the implementation of the
contracts with the new security agencies. They plead that we
restrain the lower courts from enforcing the injunction as against
the new security agencies. They argue that the new security
agencies were hired as an "emergency measure" after the
contracts with the incumbent security agencies expired. They
claim that without the new security agencies, the properties of the
NFA worth billions of pesos would be exposed to danger of loss
and dissipation.3
On May 18, 1994, we issued a temporary restraining order
enjoining respondents from enforcing the decision of the Court of
Appeals and the writs of preliminary injunction issued by the trial
courts "insofar as the same nullify or otherwise stop the
implementation of the subject interim negotiated NFA security
contracts." We however ordered petitioners to "proceed with the
public bidding of the security contracts without delay and submit
to us a report on the result of such bidding within 30 days from
the holding thereof.4
On July 21, 1994, petitioners submitted a report dated July 19,
1994 informing the Court that a public bidding was held on June
21, 1994 but no contract had been awarded because the PBAC
had to study and evaluate each and every bid proposal.5
A second report dated March 3, 1995 was filed by petitioners
informing us that deliberation on the bids was prolonged by the
necessity of passing upon the technical merits of each bid and by
the discovery of collusion between two bidders "which spawned
threats against the life of the members of the PBAC." The PBAC
decided to conduct a rebidding in Areas 1, 2 and 3 and apprise
the court of the results thereof.6
A third report dated July 13, 1995 was submitted where
petitioners manifested that still no contract had been awarded
because the minimum number of bidders per area was not met.
Two bidders7 for Areas 3, 4 and 5 submitted identical bids which
were held collusive by the PBAC per advice of the Office of the
Government Corporate Counsel. The rejection of the two
agencies reduced the number of bidders in each area below the
required minimum compelling the PBAC to recommend a failure
of bidding in all five NFA areas. Petitioners, however, could not
act on the PBAC's recommendation because a temporary
restraining order was issued on April 10, 1995 by the Regional
Trial Court, Branch 17, Davao. One of the bidders found in
collusion8 filed a complaint with the said Regional Trial Court
questioning the legality of the PBAC's rejection of its bids and
enjoining NFA and the PBAC from awarding security contracts to
any lowest or next lowest qualified bidder.9
We shall now resolve the contentions of petitioners that the Court
of Appeals gravely erred:
I
IN FAILING TO CONSIDER THAT PRIVATE
RESPONDENTS HAVE NO RIGHT AND CAUSE OF
ACTION AGAINST PETITIONERS, AND THEREFORE,
ARE NOT ENTITLED TO THE QUESTIONED RELIEF
GRANTED THEM BY RESPONDENTS RTC JUDGES
AND COURT OF APPEALS;
II
IN FAILING TO CONSIDER THAT PRIVATE
RESPONDENTS DID NOT AVAIL OF, MUCH LESS
EXHAUST, AVAILABLE ADMINISTRATIVE REMEDIES,
THEREBY RENDERING THEIR COMPLAINT
PREMATURE AND LEGALLY DEFICIENT TO MERIT
THE GRANT OF JUDICIAL RELIEF;
III
IN ITS FAILURE TO RECOGNIZE THAT THE
EXECUTION OF THE NEW INTERIM MONTHLY
NEGOTIATED SECURITY CONTRACTS OF NFA,
INTENDED TO PROVIDE NFA WITH AMPLE SECURITY
DURING THE TEMPORARY EMERGENCY PERIOD
THAT A PUBLIC BIDDING CANNOT BE CONDUCTED
BY REASON OF THE INJUNCTIVE ORDERS OF THE
COURTS A QUO, ARE SANCTIONED BY LAW, BEING
LEGITIMATE EXCEPTION TO THE GENERAL
REQUIREMENT OF A PUBLIC BIDDING;
IV
IN ITS GENERAL FAILURE TO RECOGNIZE THAT THE
EXECUTION OF THE INTERIM MONTHLY
NEGOTIATED NFA SECURITY CONTRACTS ARE A
VALID EXERCISE OF BUSINESS JUDGMENT WITHIN
THE PERIMETERS OF NFA MANAGEMENT'S AREA OF
COMPETENCE. THE CA, MOREOVER, SERIOUSLY
ERRED WHEN IT FAILED TO CONSIDER THAT THE
LAW AND THE SITUATIONAL FACTS OF THE CASE
SANCTION AND EVEN CALL FOR THE IMMEDIATE
IMPLEMENTATION OF SAID INTERIM CONTRACTS.10
We reject these contentions.
The principle of exhaustion of administrative remedies is not a
hard and fast rule. It is subject to some limitations and
exceptions. In this case, private respondents' contracts were
terminated in the midst of bidding preparations and their
replacements hired barely five days after their termination. In fact,
respondent Masada, a prequalified bidder, submitted all
requirements and was preparing for the public bidding only to find
out that contracts had already been awarded by negotiation.
Indeed, an appeal to the NFA Board or Council of Trustees and
the Secretary of Agriculture pursuant to the provisions of the
Administrative Code of 1987 11 was not a plain, speedy and
adequate remedy in the ordinary course of the law. 12 The urgency
of the situation compelled private respondents to go to court to
stop the implementation of these negotiated security contracts.
We are neither impressed by petitioners' claim that the subject
contracts were negotiated as a necessity to stave off a crisis that
gripped the NFA, i.e., the loss, destruction and dissipation of their
properties, warehouses, rice and corn stocks and facilities with an
estimated value of P19 billion. Petitioners allege they were merely
exercising their sound business judgment in an emergency
situation brought about by respondent security agencies
themselves who, in the first place, obtained the injunctions from
the Quezon City trial courts.
First of all, the restraining orders and writ of preliminary injunction
issued by the two Quezon City trial courts on complaint by
Lanting and respondent Lasala suspending the public bidding
scheduled on June 30, 1993 did not result in the emergency
situation petitioners alleged. The security vacuum was created
when petitioners terminated the services of the incumbent
security agencies after the issuance of the said orders
and before the injunctions issued by respondent trial courts on
application by private respondents.
When the bidding did not take place on June 30, 1993, the
incumbent security agencies continued rendering services to
petitioners, albeit on a temporary and provisional basis. However,
one month later, they were all terminated on grounds of expiration
of contract and loss of trust and confidence.
We agree with the Court of Appeals that it was well within the
power of petitioners to discontinue the services of the incumbent
security agencies. Their contracts with the NFA expired in 1992,
hence, their services were deemed terminated on said date. 13 The
fact that these agencies continued rendering services to NFA did
not amount to an implied. renewal of their respective contracts.
Respondents do not have any vested right to continue their
contracts with NFA. They remained and continued performing
their tasks at the tolerance of NFA who, by sending the notices of
termination, simply reminded them of the expiration of their
contracts. 14 These contracts can be renewed, revived or extended
only by mutual consent of the parties. No court can compel a
party to agree to a contract thru the instrumentality of a writ of
preliminary injunction.
Nevertheless, what causes eyebrows to arch is the act of
petitioners in discontinuing the incumbents' services.
Respondents Manubay and Lasala allege that their agencies had
been rendering security services to the NFA since 198515 and
1988, 16 respectively. Moreover, Manubay and Continental passed
the prequalification stage and were declared by the PBAC eligible
to join the public bidding. Scarcely a month later, however, their
services were terminated at the same time and for the same
reasons as the rest of the incumbent security agencies. It is
certainly strange why petitioners chose to do away with the
incumbents' services at a time when a "security void" would
directly and most necessarily result from their withdrawal. The
least petitioners could have done under the circumstances was to
maintain the status quo until the writ of preliminary injunction
obtained by respondent Lasala shall have been lifted.
Assuming arguendo that an emergency actually existed and the
negotiated contracts were justified, petitioners' continued failure
to conduct a public bidding and select the bidder within a
reasonable time casts doubts on the good faith behind the
negotiated contracts. This Court, on May 18, 1994, specifically
ordered petitioners to conduct a public bidding and report the
results within thirty days from holding thereof. In compliance, a
public bidding was conducted on June 21, 1994 but until now no
bidder has been chosen and no contract has been awarded.
Petitioners cited various reasons for the delay. They alleged that
the minimum number of bidders in three of the five areas had not
been met and that two bidders in the other two areas were in
collusion. This suspicion of collusion generated so much
controversy that the PBAC could not decide whether to include
the bids of the two agencies. Finally, the PBAC excluded them
and recommended that the Administrator declare a failure of
bidding in all five areas of responsibility.
The Administrator should have immediately acted upon the
PBAC's recommendation and accordingly scheduled another
public bidding but somehow petitioners chose to abide by a
restraining order of the Davao trial court. It must be noted that
what the Davao trial court issued was a temporary restraining
order enjoining petitioners from awarding the contracts to the
lowest or next lowest bidder at the June 21, 1994 public bidding.
It was not a writ of preliminary injunction nor was an order
restraining the holding of another bidding.
Petitioners and the PBAC are obviously taking their sweet time to
select and award security contracts to winning bidders. They took
one year evaluating and deliberating on thirteen bid proposals
only to declare a failure of bidding in all five areas of
responsibility. Then they relied on a restraining order of a trial
court after no less that this Highest Court specifically ordered
them to conduct and conclude a public bidding.
Litigants should be conscious of the position lower courts occupy
in the operation of the integrated judicial system of the
nation. 17 There is only one Supreme Court and all courts and
litigants should take their bearings from this Court. 18
Petitioners' manifest reluctance to hold a public bidding and
award a contract to the winning bidder smacks of favoritism and
partiality toward the security agencies to whom it awarded the
negotiated contracts and cannot be countenanced. A competitive
public bidding aims to protect the public interest by giving the
public the best possible advantages thru open competition. It is a
mechanism that enables the government agency to avoid or
preclude anomalies in the execution of public contracts. 19
The General Appropriations Act (GAA) of 1993 20 cannot be used
by petitioners to justify their actuations. An appropriations act is
primarily a special type of legislation whose content is limited to
specified sums of money dedicated to a specific purpose or a
separate fiscal unit. 21 Section 31 on the General Provisions of the
GAA of 1993 merely authorizes the heads of departments,
bureaus, offices or agencies of the national government to hire,
through public bidding or negotiated contracts, contractual
personnel to perform specific activities or services related or
incidental to their functions. This law specifically authorizes
expenditures for the hiring of these personnel. 22 It is not the
governing law on the award of service contracts by government
agencies nor does it do away with the general requirement of
public bidding. 23
IN VIEW WHEREOF, the petition is dismissed and the decision
dated March 11, 1994 and resolution dated April 15, 1994 of the
Court of Appeals in CA-G.R. SP Nos. 32213, 32230 and 32274-
76 are affirmed. The temporary restraining order issued by this
Court on May 18, 1994 is hereby lifted. Treble costs against
petitioners.
SO ORDERED.
National Food Authority vs. Court of Appeals G.R. Nos. 115121-
25. February 9, 1996. 253 SCRA 470 The case at bar involves
the legality of negotiated security contracts awarded by the
National Food Authority (NFA), a government-owned and
controlled corporation and its Administrator, Romeo G. David, to
several private security agencies, in default of a public bidding.
PETITIONERS: NATIONAL FOOD AUTHORITY ROMEO G.
DAVID PRIVATE RESPONDENTS: COL. FELIX M. MANUBAY,
MASADA SECURITY AGENCY CONTINENTAL WATCHMAN
AND SECURITY AGENCY, ALBERTO T. LASALA, NORMAN D.
MAPAGAY
FACTS:
In 1990, the NFA, through then Administrator
Pelayo J. Gabaldon, conducted a public bidding to
award security contracts. Twelve security agencies
were awarded one-year contracts, among whom
were private respondents Col. Felix M. Manubay,
Continental Watchman and Security Agency,
Alberto T. Lasala and and Norman D. Mapagay. In
August 1992, petitioner Romeo G. David became
NFA Administrator and caused a review of all
security service contracts, procedures on the
accreditation. Pending this review, Administrator
David extended the services of private respondents
and the other incumbent security agencies on a
periodic basis. The review was completed in March
1993 and new terms for accreditation, bidding and
hiring of security agencies were made. The bidding
areas were also reclassified and reduced from
fourteen NFA regions to only five NFA areas
nationwide. On April 6, 1993, Special Order No. 04-
07 was issued under which Administrator David
created a Prequalification, Bids and Awards
Committee (PBAC) to undertake the prequalification
of prospective bidders, conduct the bidding,
evaluate the bids tendered and recommend to the
Administrator the bids accepted. Notices for
prequalification and bidding for security services
were published. All incumbent security contractors
were required to pre-qualify and only those
prequalified were to be allowed to participate in the
prebidding and bidding scheduled on June 4 and
18, 1993. The prebidding and bidding dates were
later reset to give more time for the participants to
comply with documentary requirements. Forty-one
security agencies submitted the necessary
documents for prequalification. Upon a review, the
PBAC disqualified respondent Mapagay and Lasala.
Only respondents Manubay, Continental and
Masada participated in the prebidding were
declared prequalified to bid. Lanting Security and
Watchman Agency and respondent Lasala, filed
separate complaints with the RTC Quezon City to
restrain Administrator David and the PBAC from
proceeding with the public bidding. Thus,
restraining orders were issued. During the
effectivity of the writ of preliminary injunction,
Administrator David sent to all incumbent security
agencies, including four of herein private
respondents, notices of termination. Private
respondents were informed that their services were
to end inasmuch as their respective contracts had
expired and they no longer enjoyed the trust and
confidence of the NFA and instructed to withdraw
their security guards from all NFA installations. On
August 4, 1993, Administrator David contracted the
services of seven new security agencies on a month-
to-month basis pending resolution of the injunction
against the bidding.Private respondents forthwith
filed separate complaints with the Regional Trial
Court for prohibition, mandamus and damages
with a prayer for the issuance of a preliminary
injunction and restraining order. The trial courts
issued five separate restraining orders and
injunctions ordering the NFA to desist from
terminating the services of respondents. Petitioners
now assail that part of the decision of the Court of
Appeals nullifying and enjoining the
implementation of the contracts with the new
security agencies. They argue that the new security
agencies were hired as an âemergency measureâ
after the contracts with the incumbent security
agencies expired. On May 18, 1994, SC issued a
temporary restraining order enjoining respondents
from enforcing the decision of the Court of Appeals
and the writs of preliminary injunction issued by
the trial courts âinsofar as the same nullify or
otherwise stop the implementation of the subject
interim negotiated NFA security contracts.â On
July 21, 1994, petitioners submitted a report dated
July 19, 1994 informing the Court that a public
bidding was held on June 21, 1994 but no contract
had been awarded because the PBAC had to study
and evaluate each and every bid proposal. A second
report dated March 3, 1995 was filed by petitioners
informing us that deliberation on the bids was
prolonged by the necessity of passing upon the
technical merits of each bid and by the discovery of
collusion between two bidders. The PBAC decided
to conduct a rebidding in Areas 1, 2, and 3. A third
report dated July 13, 1995 was submitted where
petitioners manifested that still no contract had
been awarded because the minimum number of
bidders per area was not met. The rejection of the
two agencies reduced the number of bidders in
each area below the required minimum compelling
the PBAC to recommend a failure of bidding in all
five NFA areas. However, petitioners could not act
on the PBACâs recommendation because of a
temporary restraining order. One of the bidders
found in collusion filed a complaint with the said
Regional Trial Court questioning the legality of the
PBACâs rejection of its bids and enjoining NFA and
the PBAC from awarding security contracts to any
lowest or next lowest qualified bidder.
ISSUE: WON private respondents did not avail of,
much less exhaust, available administrative
remedies, which rendered their complaint
premature and legally deficient to merit the grant of
judicial relief?
HELD: NO. The principle of exhaustion of
administrative remedies is not a hard and fast rule.
It is subject to some limitations and exceptions. In
this case, private respondentsâ contracts were
terminated in the midst of bidding preparations and
their replacements hired barely five days after their
termination. In fact, respondent Masada, a
prequalified bidder, submitted all requirements and
was preparing for the public bidding only to find
out that contracts had already been awarded by
negotiation. Indeed, an appeal to the NFA Board or
Council of Trustees and the Secretary of Agriculture
pursuant to the provisions of the Administrative
Code of 1987was not a plain, speedy and adequate
remedy in the ordinary course of the law. The
urgency of the situation compelled private
respondents to go to court to stop the
implementation of these negotiated security
contracts. RULING ON THE BIDDING: In case
asked The Court was neither impressed by
petitioners claim that the subject contracts were
negotiated as a necessity to stave off a crisis that
gripped the NFA, i.e., the loss, destruction and
dissipation of their properties. First of all, the
restraining orders and writ of preliminary
injunction issued by the two Quezon City trial
courts on complaint by Lanting and respondent
Lasala suspending the public bidding scheduled did
not result in the emergency situation petitioners
alleged. The security vacuum was created when
petitioners terminated the services of the
incumbent security agencies after the issuance of
the said orders and before the injunctions issued by
respondent trial courts on application by private
respondents. Assuming arguendo that an
emergency actually existed and the negotiated
contracts were justified, petitionersâ continued
failure to conduct a public bidding and select the
bidder within a reasonable time casts doubts on the
good faith behind the negotiated contracts. The
Administrator should have immediately acted upon
the PBACâs recommendation and accordingly
scheduled another public bidding but somehow
petitioners chose to abide by a restraining order of
the Davao trial court. It must be noted that what
the Davao trial court issued was a temporary
restraining order enjoining petitioners from
awarding the contracts to the lowest or next lowest
bidder at the June 21, 1994 public bidding. It was
not a writ of preliminary injunction nor was it an
order restraining the holding of another bidding.
Petitioners manifest reluctance to hold a public
bidding and award a contract to the winning bidder
smacks of favoritism and partiality toward the
security agencies to whom it awarded the
negotiated contracts and cannot be countenanced.
EN BANC
G.R. No. L-24989 July 21, 1967
PEDRO GRAVADOR, petitioner-appellee,
vs.
EUTIQUIO MAMIGO, THE DISTRICT SUPERVISOR OF
BAYAWAN-STA. CATALINA SCHOOL DISTRICT,
THE DIVISION SUPERINTENDENT OF SCHOOLS OF
NEGROS ORIENTAL, THE DIRECTOR OF PUBLIC SCHOOLS
and THE SECRETARY OF EDUCATION, (all sued in their
official and personal capacities),respondents-appellants.
Office of the Solicitor Genero Arturo A. Alafriz, Assistant Solicitor
General I. C. Borromeo and Solicitor F. J. Bautista for
respondents-appellants.
Newton E. Serion for petitioner-appellee.
CASTRO, J.:
The petitioner Pedro Gravador was the principal of the Sta.
Catalina Elementary School in Sta. Catalina, Negros Oriental on
August 15, 1964 when he was advised by the then,
Superintendent of Schools Angel Salazar, Jr., through the
respondent Supervisor Teodulfo E. Dayao, of his separation from
the service on the ground that he had reached the compulsory
retirement age of 65. The advice reads:
According to your pre-war records as a teacher in the
public schools, including your Employee's Record Card,
which has just been found in connection with the
verification of the services of all school officials including
elementary school principals in this division, you were
born on November 26, 1897. As of this date, therefore,
you are now 66 years, 8 months, and 22 days old.
In view of the above, you are hereby advised of your
separation from the service effective immediately unless
you can show valid proof in the form of a baptismal or
birth certificate that you are below sixty-five years of age
today.
A few days later the respondent Eutiquio Mamigo was designated
teacher-in-charge of the said elementary school.
On August 31, 1964 the petitioner wrote the Director of Public
Schools, protesting his forced retirement on the ground that the
date of his birth is not November 26, 1897 but December 11,
1901. Attached to his letter was the affidavit, executed on July 26,
1962, of Lazaro Bandoquillo and Pedro A. Sienes both of Amlan
Negros Oriental, in which these two affiants declared that they
knew that the petitioner "was born on December 11, 1901, in the
Municipality of Amlan formerly known as New Ayuquitan Province
of Negros Oriental, Philippines" because, "we were the neighbors
of the late spouses, NEPOMUCENO GRAVADOR and AGUEDA
REGOROSA [petitioner's parents], and we were present when
said PEDRO GRAVADOR was born; furthermore,we were also
invited during the baptismal party a few weeks after the birth of
said PEDRO GRAVADOR."
On October 19, 1964 the petitioner wrote to the Division
Superintendents of Schools, reiterating his claim that he had not
reached the age of 65 and enclosing some papers in support
thereof.
On April 13, 1965 he filed this suit for quo
warranto, mandamus and damages in the Court of First Instance
of Negros Oriental. He asked the court to adjudge him entitled to
the office of principal of the Sta. Catalina Elementary School and
to order payment to him of not only his back salaries but also
damages in the total amount of P52,400. Named as respondents
were Eutiquio Mamigo, the District Supervisor, the
Superintendent of Schools, the Director of Public Schools and the
Secretary of Education.
The respondents filed their answer, entered into a stipulation of
facts with the petitioner, and thereafter the case was submitted
for decision. The trial court concluded that the petitioner was born
on December 11, 1901 accordingly granted his petition.
Immediate execution was ordered, as a result of which the
petitioner was reinstated.
The respondents appealed directly to this Court.
On July 6, 1967 the petitioner asked for the dismissal of the
appeal on the ground that the issues posed thereby had become
moot with his retirement from the service on December 11, 1966
and the payment to him of the corresponding retirement benefits.
We deem it necessary, however, to review the trial court's
decision on the merits, considering that the computation of
retirement annuities is based among other things, on the number
of years of service of a retiree,1 and that payment of benefits
already made to the petitioner on the basis of December 11, 1901
as the date of his birth would not exempt him from the obligation
to make a refund should this Court ultimately rule that he was
actually born November 26, 1897, as the respondents claim.
The controversy on the petitioner's date of birth arose as a result
of the conflicting records of the Division of Schools of Negros
Oriental. On the one hand the pre-war records show his date of
birth to be November 26, 1897. These records consist of two
Insular Teachers Cards2 and one Employee's Record Card.3 It is
on the basis of these records that the Superintendent of Schools
determined the petitioner's age to be 66 years, 8 months and 22
days on August 15, 1964.
On the other hand, the post-war records, consisting of an
Elementary Teacher's Report Card,4 an Employee's Record
Card,5 and an Employee's Record of Qualifications,6 state that the
petitioner was born on Dec. 11, 1901. These are the records on
which the petitioner bases his claim.
The problem is aggravated by two uncontroverted facts, namely,
that the records of the church where the petitioner was baptized
were destroyed by fire, and that the municipal civil register
contains no record. of the petitioner's birth.
According to the trial court, the post-war records were intended to
replace the pre-war records and therefore the correct date of birth
of the petitioner is December 11, 1901. The court also took into
account the verified answer in a cadastral proceeding in the Court
of First Instance of Negros Oriental, dated March 15, 1924, filed
by the petitioner's brother, Romulo Gravador, now deceased. It is
therein stated that the petitioner, said to be one of the co-owners
of a piece of land, was at the time 23 years old.
The respondents now contend that the trial court erred in placing
full reliance on the post-war records to establish the date of birth
(December 11, 1901) of the petitioner. They argue that these
records were made only because it was thought that the pre-war
records had been lost or destroyed, but as some pre-war records
had since been located, the date contained in the pre-war records
should be regarded as controlling and that the finding of the
Superintendent of Schools that the petitioner was born on
November 26, 1897 is an administrative finding that should not be
disturbed by the court.
That the findings of fact of administrative officials are binding on
the courts if supported by substantial evidence, is a settled rule of
administrative law, But whether there is substantial evidence
supporting the finding of the Superintendent of Schools is
precisely the issue in this case. The school official based his
determination of the petitioner's age on the pre-war records in the
preparation of which the petitioner does not appear to have taken
a part.7 On the other hand, the petitioner post-war records which
he personally accomplished to prove the date of his birth.8
It is our considered view that the lower court correctly relied upon
the post-war records, for three cogent reasons.
In the first place, as Moran states, although a person can have no
personal knowledge of the date of his birth, he may testify as to
his age as he had learned it from his parents and relatives and
his testimony in such case is an assertion of a family
tradition.9 Indeed, even in is application for back pay which he
filed with the Department of Finance, through the Office of the
Superintendent of Schools, on October 7, 1948, the petitioner
stated that the date of his birth is December 11, 1901. He
repeated the same assertion in 1956 and again in 1960 when he
asked the Government Service Insurance System and the Civil
Service Commission to correct the date of his birth to December
11, 1901.
In the second place, the import of the declaration of the
petitioner's brother, contained in a verified pleading in a cadastral
case way back in 1924, to the effect that the petitioner was then
23 years old, can not be ignored. Made ante litem motamby a
deceased relative, this statement is at once a declaration
regarding pedigree within the intendment and meaning of section
33 of Rule 130 of the Rules of Court.
Thus, December 11, 1901 is established as the date of birth of
the petitioner not only by evidence of family tradition but also by
the declaration ante litem motam of a deceased relative. 1äwphï1.ñët
Finally, the patties are agreed that the petitioner has a brother,
Constantino, who was born on June 10, 1898 and who retired on
June 10, 1963 with full retirement pay. The petitioner then could
not have been born earlier than Constantino, say in 1897 as pre-
war records indicate, because Constantino is admittedly older
than he.10
Still it is argued that the petitioner's action was prematurely
brought because he had not availed of all administrative
remedies. This argument is without merit. Suit for quo warranto to
recover a public office must be brought within one year.11 Before
filing this case the petitioner waited for eight months for the
school officials to act on his protest. To require him to tarry a little
more would obviously be unfair to him since on April 13, 1965,
when this case was filed, he had only four months left within
which to bring the case to court. There was neither manner nor
form of assurance that the decision of the Director of Public
Schools would be forthcoming. The rule on exhaustion of
administrative remedies does not apply where insistence on its
observance would result in the nullification of the claim being
asserted.12
Accordingly, the judgment a quo is affirmed. No pronouncement
as to costs.
 FIRST DIVISION
G.R. No. 80719 September 26, 1989
HILDA RALLA ALMINE, petitioner,
vs.
HONORABLE COURT OF APPEALS, MINISTRY OF
AGRARIAN REFORM (MAR) AND SULPICIO
BOMBALESrespondents.
GANCAYCO, J.:
This case involves the issue of the power of review of the Court of
Appeals over the administrative decision on the transfer of the
land to the tenant-farmer under Presidential Decree No. 27 and
the amendatory and related decrees.
The facts are few and simple. On December 25, 1975, petitioner
filed a sworn application for retention of her riceland or for
exemption thereof from the Operation Land Transfer Program
with the then Ministry of Agrarian Reform (MAR), Regional Office
in Tabaco, Albay. After due hearing, Atty. Cidarminda Arresgado
of the said office filed an investigation report dated June 26, 1980
for the cancellation of the Certificate of Land Transfer (CLT) of
private respondent who appears to be petitioner's tenant over her
riceland. Upon failure of the Ministry to take the necessary action,
petitioner reiterated her application sometime in 1979-1985
alleging that her tenant deliberately failed and refused to deliver
her landowner's share from 1975 up to the time of the filing of the
said application and that the latter had distributed his landholding
to his children. A reinvestigation was conducted this time by Atty.
Seth Evasco who on October 31, 1985 filed his report
recommending the cancellation of private respondent's CLT Said
report was elevated to the MAR. In an endorsement dated
November 25, 1985, Regional Director Salvador Pejo manifested
his concurrence with the report of Atty. Evasco holding that the
properties of the petitioner consist of 4.3589 hectares as
evidenced by Transfer Certificates of Title Nos. 27167, 27168 and
27344 and hence not covered by the Operation Land Transfer
Program. Juanito L. Lorena, the Officer-in-Charge of MAR
likewise concurred therewith. However, in the order dated
February 13, 1986, then Minister Conrado Estrella denied
petitioner's application for retention.
On April 17, 1986, petitioner appealed to the then Intermediate
Appellate Court (IAC) The case was entitled Hilda Ralla Almine
vs. MAR and docketed as AC-G.R. SP No. 08550. Private
respondent filed a motion to dismiss the appeal. However, it was
denied in an order dated May 28, 1986. A motion for
reconsideration thereof was likewise denied. After the parties filed
their respective pleadings, the Court of Appeals rendered a
decision dated June 29, 1987 1 dismissing the appeal on the
ground of lack of jurisdiction holding that questions as to whether
a landowner should or should not be allowed to retain his land-
holdings, if administratively administratively by the Minister of
Agrarian Reform, are appealable and could be reviewed only by
the Court of Agrarian Relations and now by the Regional Trial
Courts pursuant to Batas Pambansa Blg. 129, otherwise known
as the Judiciary Reorganization Act of 1980. 2 Petitioner filed a
motion for reconsideration but the same was denied in a
resolution dated October 22, 1987. 3
Hence, the present petition.
Petitioner's posture is that it is an error for the respondent
appellate court to dismiss the appeal on the ground of lack of
jurisdiction since under Section 9 of Batas Pambansa Blg. 129,
said appellate court is vested with the exclusive appellate
jurisdiction over all decisions, resolutions, or orders of quasi-
judicial agencies except those falling within the appellate
jurisdiction of the Supreme Court. Petitioner argues that since the
appeal involves both calibration of the evidence and the
determination of the laws applicable thereto, then an appeal to
the Court of Appeals is the appropriate remedy and hence her
appeal should not have been dismissed. Petitioner argues further
that on the assumption that the Court of Appeals has no
jurisdiction on the matter, still the appeal should not have been
dismissed but should have been certified to the proper court citing
Section 3 of Rule 50 of the Revised Rules of Court.
The Court of Agrarian Relations has original and exclusive
jurisdiction as follows:
Jurisdiction over Subject matter. — The Courts of
Agrarian Relations shall have original and
exclusive jurisdiction over:
a) Cases involving the rights and obligations of
persons in the cultivation and use of agricultural
land except those cognizable by the National
Labor Relations Commission; Provided, That no
case involving the determination of rentals over
any kind of tenanted agricultural land shall be
taken cognizance of by the Courts of Agrarian
Relations unless there has been a prior fixing of
provisional rental by the Department of Agrarian
Reform, except that the tenant-farmer may
directly bring the case for immediate
determination by the Courts of Agrarian Relations;
b) Questions involving rights granted and
obligations imposed by laws, Presidential
Decrees, Orders, Instructions, Rules and
Regulations issued and promulgated in relation to
the agrarian reform program; Provided, however,
That matters involving the administrative
implementation of the transfer of the land to the
tenant-farmer under Presidential Decree No. 27
and amendatory and related decrees, orders,
instructions, rules and regulations, shall be
exclusively cognizable by the Secretary of
Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) identification of tenant-farmers and
landowners, and determination of their tenancy
relationship;
(3) parcellary mapping;
(4) determination of the total production and value
of the land to be transferred to the tenant-farmer;
(5) issuance, recall or cancellation of certificates
of land transfer in cases outside the purview of
Presidential Decree No. 816;
(6) right of retention of the landowner;
xxx xxx xxx
Provided, further, That the decision of the Secretary of Agrarian
Reform may be appealed to the President of the Philippines. 4
A perusal of the provision above cited reveals that questions as to
whether a landowner should or should not be allowed to retain his
landholdings are exclusively cognizable by the Minister (now
Secretary) of Agrarian Reform whose decision may be appealed
to the Office of the President and not to the Court of Agrarian
Relations. These cases are thus excluded from those cognizable
by the then CAR, now the Regional Trial Courts. There is no
appeal from a decision of the President. However, the said
decision may be reviewed by the courts through a special civil
action for certiorari, prohibition or mandamus, as the case may be
under Rule 65 of the Rules of Court.
Thus, the respondent appellate court erred in holding that it has FIRST DIVISION
no jurisdiction over the petition for review by way
ofcertiorari brought before it of a decision of the Minister of G.R. No. 151908 August 12, 2003
Agrarian Reform allegedly made in grave abuse of his discretion
and in holding that this is a matter within the competence of the SMART COMMUNICATIONS, INC. (SMART) and PILIPINO
Court of Agrarian Reform. The Court of Appeals has concurrent TELEPHONE CORPORATION (PILTEL), petitioners,
jurisdiction with this Court and the Regional Trial Court over vs.
petitions seeking the extraordinary remedy NATIONAL TELECOMMUNICATIONS COMMISSION
ofcertiorari, prohibition or mandamus. 5 (NTC), respondent.

The failure to appeal to the Office of the President from the x---------------------------------------------------------x
decision of the Minister of Agrarian Reform in this case is not a
violation of the rule on exhaustion of administrative remedies as
G.R. No. 152063 August 12, 2003
the latter is the alter ego of the President . 6
GLOBE TELECOM, INC. (GLOBE) and ISLA
WHEREFORE, the petition is GRANTED. The decision of the
COMMUNICATIONS CO., INC. (ISLACOM), petitioners,
Court of Appeals dated June 29, 1987 and its resolution dated
vs.
October 22, 1987, in CA-G.R. SP No. 08550 are set aside and
COURT OF APPEALS (The Former 6th Division) and the
the records of the case are remanded to said appellate court for
NATIONAL TELECOMMUNICATIONS
further proceedings. No costs.
COMMISSION,respondents.
SO ORDERED.
YNARES-SANTIAGO, J.:

Pursuant to its rule-making and regulatory powers, the National

Telecommunications Commission (NTC) issued on June 16, 2000
Memorandum Circular No. 13-6-2000, promulgating rules and
regulations on the billing of telecommunications services. Among
its pertinent provisions are the following:

(1) The billing statements shall be received by the

subscriber of the telephone service not later than 30 days
from the end of each billing cycle. In case the statement is
received beyond this period, the subscriber shall have a
specified grace period within which to pay the bill and the
public telecommunications entity (PTEs) shall not be
allowed to disconnect the service within the grace period.
 (2) There shall be no charge for calls that are diverted to
a voice mailbox, voice prompt, recorded message or
similar facility excluding the customer's own equipment.
(3) PTEs shall verify the identification and address of
each purchaser of prepaid SIM cards. Prepaid call cards
and SIM cards shall be valid for at least 2 years from the
date of first use. Holders of prepaid SIM cards shall be
given 45 days from the date the prepaid SIM card is fully
consumed but not beyond 2 years and 45 days from date
of first use to replenish the SIM card, otherwise the SIM
card shall be rendered invalid. The validity of an invalid
SIM card, however, shall be installed upon request of the
customer at no additional charge except the presentation
of a valid prepaid call card.
(4) Subscribers shall be updated of the remaining value of
their cards before the start of every call using the cards.
(5) The unit of billing for the cellular mobile telephone
service whether postpaid or prepaid shall be reduced
from 1 minute per pulse to 6 seconds per pulse. The
authorized rates per minute shall thus be divided by 10.1
The Memorandum Circular provided that it shall take effect 15
days after its publication in a newspaper of general circulation
and three certified true copies thereof furnished the UP Law
Center. It was published in the newspaper, The Philippine Star,
on June 22, 2000.2 Meanwhile, the provisions of the
Memorandum Circular pertaining to the sale and use of prepaid
cards and the unit of billing for cellular mobile telephone service
took effect 90 days from the effectivity of the Memorandum
Circular.
On August 30, 2000, the NTC issued a Memorandum to all
cellular mobile telephone service (CMTS) operators which
contained measures to minimize if not totally eliminate the
incidence of stealing of cellular phone units. The Memorandum
directed CMTS operators to:
a. strictly comply with Section B(1) of MC 13-6-2000
requiring the presentation and verification of the identity
and addresses of prepaid SIM card customers;
b. require all your respective prepaid SIM cards dealers to
comply with Section B(1) of MC 13-6-2000;
c. deny acceptance to your respective networks prepaid
and/or postpaid customers using stolen cellphone units or
cellphone units registered to somebody other than the
applicant when properly informed of all information
relative to the stolen cellphone units;
d. share all necessary information of stolen cellphone
units to all other CMTS operators in order to prevent the
use of stolen cellphone units; and
e. require all your existing prepaid SIM card customers to
register and present valid identification cards.3
This was followed by another Memorandum dated October 6,
2000 addressed to all public telecommunications entities, which
reads:
This is to remind you that the validity of all prepaid cards
sold on 07 October 2000 and beyond shall be valid for at
least two (2) years from date of first use pursuant to MC
13-6-2000.
In addition, all CMTS operators are reminded that all SIM
packs used by subscribers of prepaid cards sold on 07
October 2000 and beyond shall be valid for at least two
(2) years from date of first use. Also, the billing unit shall
be on a six (6) seconds pulse effective 07 October 2000.
 For strict compliance.4
On October 20, 2000, petitioners Isla Communications Co., Inc.
and Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A.
Santiago, Deputy Commissioner Aurelio M. Umali and Deputy
Commissioner Nestor C. Dacanay, an action for declaration of
nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing
Circular) and the NTC Memorandum dated October 6, 2000, with
prayer for the issuance of a writ of preliminary injunction and
temporary restraining order. The complaint was docketed as Civil
Case No. Q-00-42221 at the Regional Trial Court of Quezon City,
Branch 77.5
Petitioners Islacom and Piltel alleged, inter alia, that the NTC has
no jurisdiction to regulate the sale of consumer goods such as the
prepaid call cards since such jurisdiction belongs to the
Department of Trade and Industry under the Consumer Act of the
Philippines; that the Billing Circular is oppressive, confiscatory
and violative of the constitutional prohibition against deprivation of
property without due process of law; that the Circular will result in
the impairment of the viability of the prepaid cellular service by
unduly prolonging the validity and expiration of the prepaid SIM
and call cards; and that the requirements of identification of
prepaid card buyers and call balance announcement are
unreasonable. Hence, they prayed that the Billing Circular be
declared null and void ab initio.
Soon thereafter, petitioners Globe Telecom, Inc and Smart
Communications, Inc. filed a joint Motion for Leave to Intervene
and to Admit Complaint-in-Intervention.6 This was granted by the
trial court.
On October 27, 2000, the trial court issued a temporary
restraining order enjoining the NTC from implementing
Memorandum Circular No. 13-6-2000 and the Memorandum
dated October 6, 2000.7
In the meantime, respondent NTC and its co-defendants filed a
motion to dismiss the case on the ground of petitioners' failure to
exhaust administrative remedies.
Subsequently, after hearing petitioners' application for preliminary
injunction as well as respondent's motion to dismiss, the trial
court issued on November 20, 2000 an Order, the dispositive
portion of which reads:
WHEREFORE, premises considered, the defendants'
motion to dismiss is hereby denied for lack of merit. The
plaintiffs' application for the issuance of a writ of
preliminary injunction is hereby granted. Accordingly, the
defendants are hereby enjoined from implementing NTC
Memorandum Circular 13-6-2000 and the NTC
Memorandum, dated October 6, 2000, pending the
issuance and finality of the decision in this case. The
plaintiffs and intervenors are, however, required to file a
bond in the sum of FIVE HUNDRED THOUSAND PESOS
(P500,000.00), Philippine currency.
SO ORDERED.8
Defendants filed a motion for reconsideration, which was denied
in an Order dated February 1, 2001.9
Respondent NTC thus filed a special civil action for certiorari and
prohibition with the Court of Appeals, which was docketed as CA-
G.R. SP. No. 64274. On October 9, 2001, a decision was
rendered, the decretal portion of which reads:
WHEREFORE, premises considered, the instant petition
for certiorari and prohibition is GRANTED, in that, the
order of the court a quo denying the petitioner's motion to
dismiss as well as the order of the court a quo granting
the private respondents' prayer for a writ of preliminary
injunction, and the writ of preliminary injunction issued
 thereby, are hereby ANNULLED and SET ASIDE. The
private respondents' complaint and complaint-in-
intervention below are hereby DISMISSED, without
prejudice to the referral of the private respondents'
grievances and disputes on the assailed issuances of the
NTC with the said agency.
SO ORDERED.10
Petitioners' motions for reconsideration were denied in a
Resolution dated January 10, 2002 for lack of merit.11
Hence, the instant petition for review filed by Smart and Piltel,
which was docketed as G.R. No. 151908, anchored on the
following grounds:
A.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT THE NATIONAL
TELECOMMUNICATIONS COMMISSION (NTC) AND
NOT THE REGULAR COURTS HAS JURISDICTION
OVER THE CASE.
B.
THE HONORABLE COURT OF APPEALS ALSO
GRAVELY ERRED IN HOLDING THAT THE PRIVATE
RESPONDENTS FAILED TO EXHAUST AN AVAILABLE
ADMINISTRATIVE REMEDY.
C.
THE HONORABLE COURT OF APPEALS ERRED IN
NOT HOLDING THAT THE BILLING CIRCULAR ISSUED
BY THE RESPONDENT NTC IS UNCONSTITUTIONAL
AND CONTRARY TO LAW AND PUBLIC POLICY.
D.
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT THE PRIVATE RESPONDENTS
FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO
WARRANT THE ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION.12
Likewise, Globe and Islacom filed a petition for review, docketed
as G.R. No. 152063, assigning the following errors:
1. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED BECAUSE THE DOCTRINES OF
PRIMARY JURISDICTION AND EXHAUSTION OF
ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE
THE INSTANT CASE IS FOR LEGAL NULLIFICATION
(BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS
OF LAW) OF A PURELY ADMINISTRATIVE
REGULATION PROMULGATED BY AN AGENCY IN
THE EXERCISE OF ITS RULE MAKING POWERS AND
INVOLVES ONLY QUESTIONS OF LAW.
2. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED BECAUSE THE DOCTRINE ON
EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES
NOT APPLY WHEN THE QUESTIONS RAISED ARE
PURELY LEGAL QUESTIONS.
3. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED BECAUSE THE DOCTRINE OF
EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES
NOT APPLY WHERE THE ADMINISTRATIVE ACTION
IS COMPLETE AND EFFECTIVE, WHEN THERE IS NO
OTHER REMEDY, AND THE PETITIONER STANDS TO
SUFFER GRAVE AND IRREPARABLE INJURY.
 4. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED BECAUSE PETITIONERS IN FACT
EXHAUSTED ALL ADMINISTRATIVE REMEDIES
AVAILABLE TO THEM.
5. THE HONORABLE COURT OF APPEALS SO
GRAVELY ERRED IN ISSUING ITS QUESTIONED
RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA
HAVE A CLEAR RIGHT TO AN INJUNCTION.13
The two petitions were consolidated in a Resolution dated
February 17, 2003.14
On March 24, 2003, the petitions were given due course and the
parties were required to submit their respective memoranda.15
We find merit in the petitions.
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.16
The rules and regulations that administrative agencies
promulgate, which are the product of a delegated legislative
power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority
granted by the legislature to the administrative agency. It is
required that the regulation be germane to the objects and
purposes of the law, and be not in contradiction to, but in
conformity with, the standards prescribed by law.17 They must
conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid.
Constitutional and statutory provisions control with respect to
what rules and regulations may be promulgated by an
administrative body, as well as with respect to what fields are
subject to regulation by it. It may not make rules and regulations
which are inconsistent with the provisions of the Constitution or a
statute, particularly the statute it is administering or which created
it, or which are in derogation of, or defeat, the purpose of a
statute. In case of conflict between a statute and an
administrative order, the former must prevail.18
Not to be confused with the quasi-legislative or rule-making
power of an administrative agency is its quasi-judicial or
administrative adjudicatory power. This is the power to hear and
determine questions of fact to which the legislative policy is to
apply and to decide in accordance with the standards laid down
by the law itself in enforcing and administering the same law. The
administrative body exercises its quasi-judicial power when it
performs in a judicial manner an act which is essentially of an
executive or administrative nature, where the power to act in such
manner is incidental to or reasonably necessary for the
performance of the executive or administrative duty entrusted to
it. In carrying out their quasi-judicial functions, the administrative
officers or bodies are required to investigate facts or ascertain the
existence of facts, hold hearings, weigh evidence, and draw
conclusions from them as basis for their official action and
exercise of discretion in a judicial nature.19
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 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. In Association of Philippine Coconut
Dessicators v. Philippine Coconut Authority,20it was held:
The rule of requiring exhaustion of administrative remedies before
a party may seek judicial review, so strenuously urged by the
Solicitor General on behalf of respondent, has obviously no
application here. The resolution in question was issued by the
PCA in the exercise of its rule- making or legislative power.
However, only judicial review of decisions of administrative
agencies made in the exercise of their quasi-judicial function is
subject to the exhaustion doctrine.
Even assuming arguendo that the principle of exhaustion of
administrative remedies apply in this case, the records reveal that
petitioners sufficiently complied with this requirement. Even
during the drafting and deliberation stages leading to the
issuance of Memorandum Circular No. 13-6-2000, petitioners
were able to register their protests to the proposed billing
guidelines. They submitted their respective position papers
setting forth their objections and submitting proposed schemes
for the billing circular.21 After the same was issued, petitioners
wrote successive letters dated July 3, 200022 and July 5,
2000,23 asking for the suspension and reconsideration of the so-
called Billing Circular. These letters were not acted upon until
October 6, 2000, when respondent NTC issued the second
assailed Memorandum implementing certain provisions of the
Billing Circular. This was taken by petitioners as a clear denial of
the requests contained in their previous letters, thus prompting
them to seek judicial relief.
In like manner, the doctrine of primary jurisdiction applies only
where the administrative agency exercises its quasi-judicial or
adjudicatory function. Thus, in cases involving specialized
disputes, the practice has been to refer the same to an
administrative agency of special competence pursuant to the
doctrine of primary jurisdiction. The courts will not determine a
controversy involving a question which is within the jurisdiction of
the administrative tribunal prior to the resolution of that question
by the administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal
to determine technical and intricate matters of fact, and a
uniformity of ruling is essential to comply with the premises of the
regulatory statute administered. The objective of the doctrine of
primary jurisdiction is to guide a court in determining whether it
should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some
aspect of some question arising in the proceeding before the
court. It applies where the claim is originally cognizable in the
courts and comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory
scheme, has been placed within the special competence of an
administrative body; in such case, the judicial process is
suspended pending referral of such issues to the administrative
body for its view.24
However, 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. The determination of
whether a specific rule or set of rules issued by an administrative
agency contravenes the law or the constitution is within the
jurisdiction of the regular courts. Indeed, the Constitution vests
the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts, including the
regional trial courts.25 This is within the scope of judicial power,
which includes the authority of the courts to determine in an
appropriate action the validity of the acts of the political
departments.26 Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or
instrumentality of the Government.27
In the case at bar, the issuance by the NTC of Memorandum
Circular No. 13-6-2000 and its Memorandum dated October 6,
2000 was pursuant to its quasi-legislative or rule-making power.
As such, petitioners were justified in invoking the judicial power of
the Regional Trial Court to assail the constitutionality and validity
of the said issuances. In Drilon v. Lim,28 it was held:
 We stress at the outset that the lower court had WHEREFORE, in view of the foregoing, the consolidated
jurisdiction to consider the constitutionality of Section 187, petitions are GRANTED. The decision of the Court of Appeals in
this authority being embraced in the general definition of CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution
the judicial power to determine what are the valid and dated January 10, 2002 are REVERSED and SET ASIDE. The
binding laws by the criterion of their conformity to the Order dated November 20, 2000 of the Regional Trial Court of
fundamental law. Specifically, B.P. 129 vests in the Quezon City, Branch 77, in Civil Case No. Q-00-42221 is
regional trial courts jurisdiction over all civil cases in which REINSTATED. This case is REMANDED to the court a quo for
the subject of the litigation is incapable of pecuniary continuation of the proceedings.
estimation, even as the accused in a criminal action has
the right to question in his defense the constitutionality of SO ORDERED.
a law he is charged with violating and of the proceedings
taken against him, particularly as they contravene the Bill
Smart Communications, Inc. & PILTEl v. NTC
of Rights. Moreover, Article X, Section 5(2), of the
Constitution vests in the Supreme Court appellate
jurisdiction over final judgments and orders of lower Chester Cabalza recommends his visitors to please
courts in all cases in which the constitutionality or validity read the original & full text of the case cited. Xie
of any treaty, international or executive agreement, law, xie!
presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.29
G.R. No. 151908 August 12, 2003
In their complaint before the Regional Trial Court, petitioners
averred that the Circular contravened Civil Code provisions on
SMART COMMUNICATIONS, INC. (SMART) and
sales and violated the constitutional prohibition against the
deprivation of property without due process of law. These are PILIPINO TELEPHONE CORPORATION (PILTEL),
within the competence of the trial judge. Contrary to the finding of petitioners,
the Court of Appeals, the issues raised in the complaint do not
entail highly technical matters. Rather, what is required of the
vs.
judge who will resolve this issue is a basic familiarity with the NATIONAL TELECOMMUNICATIONS COMMISSION
workings of the cellular telephone service, including prepaid SIM (NTC), respondent.
and call cards – and this is judicially known to be within the
knowledge of a good percentage of our population – and
expertise in fundamental principles of civil law and the x---------------------------------------------------------x
Constitution.
G.R. No. 152063 August 12, 2003
Hence, the Regional Trial Court has jurisdiction to hear and
decide Civil Case No. Q-00-42221. The Court of Appeals erred in
setting aside the orders of the trial court and in dismissing the GLOBE TELECOM, INC. (GLOBE) and ISLA
case.
COMMUNICATIONS CO., INC. (ISLACOM),
petitioners,
vs.
COURT OF APPEALS (The Former 6th Division) and
the NATIONAL TELECOMMUNICATIONS
COMMISSION, respondents.
Facts:
The National Telecommunications Commission
(NTC) issued on June 16, 2000 Memorandum
Circular No. 13-6-2000, promulgating rules and
regulations on the billing of telecommunications
services.
The Memorandum Circular provided that it shall
take effect 15 days after its publication in a
newspaper of general circulation and three certified
true copies thereof furnished the UP Law Center. It
was published in the newspaper, The Philippine
Star, on June 22, 2000. Meanwhile, the provisions
of the Memorandum Circular pertaining to the sale
and use of prepaid cards and the unit of billing for
cellular mobile telephone service took effect 90 days
from the effectivity of the Memorandum Circular.
On August 30, 2000, the NTC issued a
Memorandum to all cellular mobile telephone
service (CMTS) operators which contained
measures to minimize if not totally eliminate the
incidence of stealing of cellular phone units. This
was followed by another Memorandum dated
October 6, 2000 addressed to all public
telecommunications entities.
Isla Communications Co., Inc. and Pilipino
Telephone Corporation filed against the National
Telecommunications Commission, Commissioner
Joseph A. Santiago, Deputy Commissioner Aurelio
M. Umali and Deputy Commissioner Nestor C.
Dacanay, an action for declaration of nullity of NTC
Memorandum Circular No. 13-6-2000 (the Billing
Circular) and the NTC Memorandum dated October
6, 2000, with prayer for the issuance of a writ of
preliminary injunction and temporary restraining
order.
Petitioners alleged that NTC has no jurisdiction to
regulate the sale of consumer goods such as the
prepaid call cards since such jurisdiction belongs to
the Department of Trade and Industry under the
Consumer Act of the Philippines; that the Billing
Circular is oppressive, confiscatory and violative of
the constitutional prohibition against deprivation of
property without due process of law; that the
Circular will result in the impairment of the
viability of the prepaid cellular service by unduly
prolonging the validity and expiration of the prepaid
SIM and call cards; and that the requirements of
identification of prepaid card buyers and call
balance announcement are unreasonable. Hence,
they prayed that the Billing Circular be declared
null and void ab initio.
Globe Telecom, Inc and Smart Communications,
Inc. filed a joint Motion for Leave to Intervene and
to Admit Complaint-in-Intervention and this was
granted by the trial court.
Respondent NTC and its co-defendants filed a
motion to dismiss the case on the ground of
petitioners' failure to exhaust administrative
remedies. Likewise, Globe and Islacom filed a
petition for review, docketed as G.R. No. 152063,
assigning the following errors. Thus, two petitions
were consolidated in a Resolution dated February
17, 2003.
Issues:
1. Whether NTC has a jurisdiction and not the
regular courts over the case; and
2. Whether Billing Circular issued by NTC is
unconstitutional and contrary to law and public
policy.
Held:
Jurisdiction: NTC vs. RTC
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.
The doctrine of primary jurisdiction applies only
where the administrative agency exercises its quasi-
judicial or adjudicatory function. Thus, in cases
involving specialized disputes, the practice has
been to refer the same to an administrative agency
of special competence pursuant to the doctrine of
primary jurisdiction. The courts will not determine
a controversy involving a question which is within
the jurisdiction of the administrative tribunal prior
to the resolution of that question by the
administrative tribunal, where the question
demands the exercise of sound administrative
discretion requiring the special knowledge,
experience and services of the administrative
tribunal to determine technical and intricate
matters of fact, and a uniformity of ruling is
essential to comply with the premises of the
regulatory statute administered.
Hence, the Regional Trial Court has jurisdiction to
hear and decide Civil Case No. Q-00-42221. The
Court of Appeals erred in setting aside the orders of
the trial court and in dismissing the case.
Constitutionality of the Circular
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
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.
However, 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. The
determination of whether a specific rule or set of
rules issued by an administrative agency
contravenes the law or the constitution is within
the jurisdiction of the regular courts.
In the case at bar, the issuance by the NTC of
Memorandum Circular No. 13-6-2000 and its
Memorandum dated October 6, 2000 was pursuant
to its quasi-legislative or rule-making power.
Ruling:
Contrary to the finding of the Court of Appeals, the
issues raised in the complaint do not entail highly
technical matters. Rather, what is required of the
judge who will resolve this issue is a basic
familiarity with the workings of the cellular
telephone service, including prepaid SIM and call
cards – and this is judicially known to be within the
knowledge of a good percentage of our population –
and expertise in fundamental principles of civil law
and the Constitution.
Hence, the consolidated petitions are granted but
the decision of the Court of Appeals on the civil
cases are reversed and set aside. Thus, it is
remanded to the court a quo for continuation of the
proceedings.
 EN BANC
G.R. No. 91551 August 16, 1991
U.P. BOARD OF REGENTS, DR. JOSE V. ABUEVA, in his
capacity as U.P. President, DR. ERNESTO O. DOMINGO, in
his capacity as Chancellor of U.P. Manila, and the
Nomination Committee for the Director of the U.P.-P.G.H.
Medical Center, petitioners,
vs.
HON. JAINAL D. RASUL, in his capacity as Presiding Judge,
Branch 69 of the Regional Trial Court, Pasig, Metro Manila,
and DR. FELIPE A. ESTRELLA, JR., respondents.
Ledesma, Saludo & Associates for private respondent.
GANCAYCO, J.:
The principal issue in this case is whether or not respondent Dr.
Felipe A. Estrella who holds the position of Director of the
Philippine General Hospital (PGH) can invoke security of tenure
during his term of office notwithstanding the abolition of the said
position by the University of the Philippines Board of Regents.
Petitioners seek to annul and set aside the decision dated August
28, 1989 and the order dated October 23, 1989 issued and
rendered by respondent Judge, Honorable Jainal D. Rasul of the
Regional Trial Court, Branch 69, Pasig, Metro Manila. The
dispositive portion of the decision in question reads as follows:
WHEREFORE, in view of the foregoing and by virtue of
preponderance of evidence, this Court hereby renders
judgment in favor of the plaintiff and against the
defendants.
1. Permanently enjoining the Defendants Dr. Jose V.
Abueva, in his capacity as UP President; Dr. Ernesto
Domingo, in his capacity as Chancellor of UP-Manila; the
Nomination Committee for the Director of the UP-PGH
Medical Center and the UP Board of Regents, from
proceeding with the nomination of a Medical Director, until
the expiration of the term of office of the plaintiff, Dr.
Felipe A. Estrella, Jr., in his capacity as Director of the
PGH or unless sooner removed, for cause provided by
law;
2. Permanently enjoining the UP Board of Regents from
implementing the so-called Reorganization Plan of UP-
PGH, unless there is a prior legislative enactment of
enabling law authorizing it and finally,
3. Ordering the defendants to pay attorney's fees and
litigation expenses for P50,000.00 and the costs of this
suit.
SO ORDERED.1
In an order dated October 23, 1989, the respondent Judge denied
petitioners' motion for reconsideration of the decision above-
mentioned.
Assailing the above-mentioned rulings, petitioners allege as
errors the following:
REASONS FOR THE ALLOWANCE OF THE WRIT
I
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT RESPONDENT ESTRELLA IS ENTITLED TO
THE PROTECTIVE MANTLE OF THE CONSTITUTIONAL
GUARANTEE OF SECURITY OF TENURE
II
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT THE REORGANIZATION OF U.P. MANILA
INCLUDING THE PGH, WAS DONE IN BAD FAITH
III
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT RESPONDENT ESTRELLA NEED NOT
EXHAUST ADMINISTRATIVE REMEDIES BEFORE HE CAN
BRING SUIT AGAINST THE U.P. BOARD OF REGENTS, ET AL.
IV
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT THE REORGANIZATION PLAN FOR THE U.P.
PGH MEDICAL CENTER CANNOT YET BE IMPLEMENTED
V of its service operations (Exh. "A"); that the duties and
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT THE U.P. BOARD OF REGENTS HAS NO
AUTHORITY TO REORGANIZE
VI
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT HE CAN SUBSTITUTE HIS OWN JUDGMENT
FOR THAT OF THE U.P. BOARD REGENTS.
VII
RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT NON-IMPLEMENTATION OF THE
REORGANIZATION PLAN WILL NOT CAUSE CONSIDERABLE
DAMAGE TO U.P. IN GENERAL AND TO PGH IN
PARTICULAR.2
The petition is devoid of merit.
The facts and background of the case as narrated by the trial
court are as follows—
That on June 26, 1986, plaintiff Dr. Felipe A. Estrella, Jr.,
was appointed by the defendant Board of Regents BOR
as Director of the Philippine General Hospital, to take
effect "1 September 1986 until 30 April 1992"(Exh. "A-
14");that the defendant U.P. Board of Regents speaking
thru its then University Secretary Professor Martin
Gregorio intended to have the plaintiff serve his full term,
as Director, since any other arrangement would impede
the hospital's development, not to mention the continuity
responsibilities, under Chapter 29, of the Revised
Administrative Code, as PGH Director, inter alia, to direct
and manage various activities within the hospital;
formulate and implement regulations; develop institutional
plans and policies; approve/recommend budget proposals
of the hospital; execute contracts; represent the hospital
in proper functions; approve and sign warrants, checks,
vouchers and recommend or endorse appointments of
personnel to higher authorities (Exh. "M").
On September 16, 1987, barely two (2) weeks after
assuming the presidency of the University of the
Philippines defendant Jose V. Abueva submitted a
memorandum to the Board of Regents to reorganize the
U.P. Manila including the Philippine General Hospital with
a draft resolution for approval of the Board of Regents,
recommending that certain key positions of UP Manila
including that of plaintiff be declared vacant (Exhs. "C" to
"C-3"): that on March 20, 1988, the defendant Board of
Regent upon recommendation of defendants Abueva and
Domingo approved the so-called reorganization plan for
the Philippine General Hospital.
On April 29, 1988, defendant Dr. Ernesto Domingo acting
on instruction of defendant Dr. Jose v. Abueva, U.P.
President, issued a memorandum creating the
Nomination Committee for the UP-PGH Medical Center
Director; that on May 10, 1988, defendant-members of
the Nomination Committee thus created, are scheduled to
nominate plaintiff s replacement as Director; that
consequently on May 2, 1988, plaintiff filed with this
Court, his complaint for Injunction with Preliminary
Injunction of temporary restraining Order, seeking to
enjoin defendants Abueva, Domingo, the Nomination
Committee and the ITP Board of Regents from
proceeding with the nomination of UP-PGH medical
Center Director, in order to forestall the consequent
removal/dismissal of the plaintiff Dr. Felipe A. Estrella, Jr.,
incumbent PGH Director, even before the expiration of his
term of office on April 30, 1992 without any cause
provided by law.
On May 2, this Court issued the Restraining Order and on
May 30, After due hearing this Court, thru its then
Presiding Judge Hon. Julio Logarta issued the Writ of
Preliminary Injunction, enjoining defendants from
implementing the reorganization plan for the UP-PGH
medical Center (Exh. "A" Affidavit of plaintiff Dr. Felipe A.
Estrella, Jr.; Exh. "10" Affidavit of defendant Dr. Ernesto
O. Domingo; TSN pp. 1-23, June 1, 1989, TSN pp. 1-106,
June 1, 1989; TSN pp.1-52, June 1, 1989).3
Respondent Judge, based on the evidence presented, concluded
that the reorganization of PGH was done in bad faith.
Accordingly, the lower court ruled that respondent Dr. Estrella
cannot be removed from office as a result of such defective
abolition of the position to which he was appointed. Significant in
this regard is the following pronouncement of the lower court:
Going over the organizational structure of present set-up
of the PGH and proposed reorganizational structure, it
appears that there are other minor differences aside from
changes of designations and enlargement of functions
and powers, namely: (1) The positions of Assistant
Director for Administration and Assistant Director for
Fiscal matters in the present set-up are combined into
only one position of Assistant Director for Administrative
and Fiscal Matters in the reorganization plan; (2) The
position of Assistant Director for Health Operation in the
present set-up was changed to position of Director of
Health Services, directly under the UP-PGH Medical
Center Director with one Assistant Director for Allied
Medical Services, under it, in the reorganization plan and
(3) The five (5) Departments of Oncology, Out-Patient
Department, Emergency Room, Charity Ward and Pay
Ward under the present set-up were converted into
Institute of Oncology, Out-Patient Hospital, Emergency
Hospital, Charity Hospital and Non-Charity Hospital under
the reorganization plan.
In other words, these five (5) units were merely enlarged,
expanded and called hospitals headed each by a
Director. The Director of the PGH under the present set-
 up became Director of UP-PGH Medical Center. Aside
from the three changes above and change of
designations and transfers of duties, the structure
remains substantially the same. The leadership element
which the defendant Abueva wants to impress upon this
Court, encourages reorganization and justifies abolition of
positions. But the whole reorganization set-up under our
law cannot or should not have the effect of abolishing the
position of the plaintiff unless legal requirements are
complied with.(Brallo vs. Enage, 94 Phil. 732) If the
reorganization plan results in abolishing the position of
the plaintiff and in putting in his place another one, with
substantially the same duties, not to say qualifications, in
the name of leadership, it will surely be considered a
device to unseat the incumbent and to circumvent the
constitutional and statutory prohibition of removal from
office of a civil service officer even without cause provided
by law. Plaintiffs position should not therefore be deemed
abolished by mere implication. (Cuneta vs. CA, 1 SCRA
663, 111 Phil. 249) If the abolition of office is made to
circumvent the constitutional security of tenure of civil
service employees, our Supreme Court, has ruled that
such abolition is null and void. (Gutierrez vs. CA, 1-
25972, 2 /26 / 68, 26 SCRA 32)4
Respondent Dr. Estrella was appointed Director of PGH on June
26, 1986 by the LTP Board of Regents. His appointment was to
1âwphi 1
be effective September 1, 1986 until April 30, 1992 or unless
sooner terminated. Appointees of the LTP Board of Regents
enjoy security of tenure during their term of office. In Tapales v.
President of the University of the Philippines,5 We held that
Director Tapales who was appointed by the UP Board of Regents
as Director of the Conservatory of Music for a term of five (5)
years is entitled to security of tenure during his term of office.
Likewise, in Sta. Maria v. President Salvador P. Lopez, et.
al.,6 We rejected the removal of Professor Sta. Maria as dean of
the College of Education. In that case, Professor Sta. Maria was
appointed by the UP Board of Regents as dean of the College of
Education effective May 16,1967 until May 17,1972 or unless
sooner terminated. Before the expiration of his term of office,
President Salvador P. Lopez removed him as dean of the College
of Education and tranferred him to the office of the UP President.
Upholding the right of Professor Sta. Maria to security of tenure,
We explained out that "... a college dean holding an appointment
with a fixed term ... cannot, without his consent, be terminated
before the end of his term. He cannot be asked to give up his
post. Nor may he be appointed as dean of another college. Much
less can he be transferred to another position even if it be
dignified with a dean's rank."
Petitioners argue, however, that the abolition of the position of
respondent Dr. Estrella Jr. negates his claim to security of tenure.
The argument is devoid of merit.
It is clear from the record that the PGH itself was not abolished in
the reorganization plan approved by the UP Board of Regents.
The PGH was merely renamed "UP-PGH Medical Center" and
some of it functions and objectives were expanded or
consolidated. There is no substantial distinction, in terms of
functions, between PGH and the proposed UP-PGH Medical
Center.
While PGH itself was not abolished, the position of PGH Director
was abolished and in its place, the position of UP-PGH Medical
Center Director was created. After abolishing said position, it was
proposed to be reclassified as Director, Charity hospital, one of
the five (5) hospital director positions proposed to be created in
the reorganized PGH.
The UP Board of Regents acted within the scope and limitations
of its charter, Act No. 1870, as amended when it approved the
reorganization plan renaming the PGH and expanding and
consolidating some of its functions and objectives. The UP Board
of Regents did not and could not have abolished PGH. And rightly
so. The PGH and one of its component units, the Cancer
Institute, are creations of special laws, the old Administrative,
Code (Chapter 29, Secs. 706-707) and Commonwealth Act No.
398, respectively. The authority of the UP under Act No. 1870 as
amended, to combine two or more colleges in the interest of
economy and efficiency does not empower UP to abolish offices
created by special laws. Section 6(b) of Act No. 1870, al
amended, reads as follows:
(b) To provide for the establishment of one or more
Colleges of Liberal Arts; a College of Law; a College of
Social and Political Science; a College of Medicine and
Surgery; a College of Pharmacy; a College of Dentistry; a
College of Veterinary Science; a College of Engineering;
a College of Mines; a College of Agriculture; a College of
Education; a School of Fine Arts; a School of Forestry; a
Conservatory of Music, and such other colleges and
schools as the Board of Regents may deem
necessary: Provided, That the Board of Regents may
establish these colleges, or any of them, in Manila or in
any other place in the Archipelago, as soon as in its
judgment conditions shall favor their opening and finds
shall be available for their maintenance: And provided
further, That the Board of Regents shall have the power
to combine two or more of the colleges authorized by this
Act, in the interests of economy and efficiency And
provided finally, That the Philippine Medical School as
established by Act Numbered Fourteen Hundred and
Fifteen as amended, shall become the College of
Medicine and Surgery of the Philippine University as soon
as two or more colleges of the University of the
Philippines shall have been established and in actual
operation.
It is therefore clear that the authority of the UP is limited to what is
expressly provided in Act No. 1870 as amended, that is, to
combine or merge colleges. that is all the law speaks of in such
instance.
On the other hand, the power to create and abolish offices carries
with it the power to fix the number of positions, salaries,
emoluments, and to provide funds for the operation of the office
created.7 This power is inherently legislative in character. The UP
Board of Regents does not have such power. Hence, the abolition
of the position of respondent Dr. Estrella is not valid.
It is true that a valid and bona fide abolition of an office denies to
the incumbent the right to security of tenure.8 However, in this
case, the renaming and restructuring of the PGH and its
component units cannot give rise to a valid and bona fide
abolition of the position of PGH Director. This is because where
the abolished office and the offices created in its place have
similar functions, the abolition lacks good faith.9 We hereby apply
the principle enunciated in Cesar Z. Dalio vs. Hon.Salvador M.
Mison10 that abolition which merely changes the nomenclature of
positions is invalid and does not result in the removal of the
incumbent.
The above notwithstanding, and assuming that the abolition of the
position of the PGH Director and the creation of a UP-PGH
Medical Center Director are valid the removal of the incumbent is
still not justified for the reason that the duties and functions of the
two positions are basically the same. The UP-PGH Medical
Center is essentially the same PGH hence, the Medical Center
Director will be performing duties very similar to the present PGH
Director. It cannot be invoked to sustain the argument that
respondent is not entitled to security of tenure. In Palma-
Fernandez v. de la Paz,11 the abolition of the position of "Chief of
Clinic" and the creation of the position of "Assistant Director,
Professional Services" were set aside for the reason that the two
positions are basically one and the same except for the change of
nomenclature.
The proposal to establish five hospitals within the UP-PGH
Medical Center, and with it, the proposal to create five hospital
director positions militate against the propriety of giving due
course to this petition. As presently organized, there is only one
hospital director position in the plantilla of positions of the PGH, WHEREFORE, the petition is DENIED for lack of merit. The
the PGH Director. In the proposed reorganization, such number Decision dated August 28, 1989 and Order dated October 23,
will be increased to six, one UP-PGH Medical Center Director and 1989 of the respondent Judge are hereby AFFIRMED in toto. No
five directors for each of the five hospitals proposed to be costs.
established namely, the Out-Patient Hospital, Emergency
Hospital, Charity Hospital, Non-Charity Hospital and Institute of SO ORDERED.
Oncology. In Guerrero vs. Arizabal,12 We held that the creation of
additional management positions in a proposed reorganization is
evidence of bad faith and is in violation of Republic Act No. 6656.
We hold that the same applies to the PGH reorganization.
UP BOARD OF REGENTS v RASUL
Finally, the admission by petitioner Dr. Jose V. Abueva that the
staffing pattern for the reorganized PGH has not been prepared is
fatal to petitioners' cause. In Dario v. Mison,13 We made the FACTS:
observation that no reorganization of the Bureau of Customs
actually took place since a staffing pattern which could have been The UP Board of Regents appointed Dr. Felipe Estrella as
the basis for hiring and g was lacking. In this case, petitioners
were poised to nominate and appoint a UP-PGH Medical Center the Director of PhilippineGeneral Hospital or PGH
Director inspite of the absence of a staffing pattern. The absence from September 1986 till April 1992. Barely 2 weeks
of such an important element in the reorganization plan
contradicts the petitioners' claim of good faith and only proves afterappointment, Dr. Abuava, as the President of the UP
that petitioners were unreasonably in a hurry to remove sent a memorandum to the Board of Regents to
respondent Estrella from his office.
Reorganize PGH. Upon this recommendation, the Board
Anent the issue regarding respondent Estrella's failure to exhaust of Regents approved the re-organization plan and
all administrative remedies, We hold that this case has special
circumstances that made it fall under the jurisprudentially
Nomination Committee was formed.
accepted exceptions to the rule. As the facts show, respondent This committee ought to choose a replacement for
Dr. Estrella was about to be replaced by the Nomination
Dr. Estrella as to fill up the alleged vacant UP-PGH
Committee. He must have believed that airing his protest with the
Board of Regents would only be fruitless and that unless he goes Director. Dr. Estrella filed an injunction case against the
to the courts, irreparable damage or injury on his part will be
NominationCommittee and the Board of Regents to
caused by the implementation of the proposed reorganization.
forestall the removal or dismissal of DrEstrella
Respondent Judge did not commit any reversible error much less
grave abuse of discretion. The facts as supported by evidence
1âwphi1

ISSUE:
established may no longer be disturbed.

Whether Dr Estrella can be rightfully removed because of
PGH’s reorganization
HELD:
NO. As held in numerous cases, appointees of the UP
Board of Regents enjoy security of tenure during their
term of office. Moreover, it is clear from the record that
PGH itself was not abolished in the reorganization plan
approved by the UP Board of Regents. The PGH was
merely renamed “UP-PGH Medical Center and some of
its functions and objects were expanded or consolidated.
The UP-PGH Medical Center is essentially the same as
PGH hence, the Medical Center Director will
be performing duties very similar to the present PGH
director. It cannot be invoked to sustain the argument
that respondent is not entitled to security of tenure. It is
true that a valid and bona fide abolition of an
office denies to the incumbent the right to security of
tenure. However in
this case, the renaming and restructuring of the PGH and
its component units cannot give rise to a valid and bona
fide abolition of the position of the PGH Director. This is
because where the abolished office and the offices created
in its place have similar functions, the abolition lacks
good faith.
SECOND DIVISION
G.R. No. L-39655 March 21, 1975
ARROW TRANSPORTATION CORPORATION, petitioner,
vs.
BOARD OF TRANSPORTATION and SULTAN RENT-A-CAR,
INC., respondents.
Manuel Imbong for petitioner.
Office of the Solicitor General Estelito P. Mendoza and Assistant
Solicitor General Reynato S. Puno for respondent Board.
Pastor C. Bacani and Ernesto Ganiban for private respondent.
FERNANDO, J.: ñé+ .£ª wph!1
It must have been the realization that a challenge to a provisional
permit issued by respondent Board of Transportation1based on
the absence of a hearing is not likely to be attended with success
that prompted petitioner to rely on another aspect of procedural
due process, the infirmity alleged being traceable to what it
considered lack of jurisdiction.2 There is the invocation
of Philippine Long Distance Telephone Company v. Medina3 with
its mention of both competitors and the public being notified. It
does not suffice. Something more, which more, is necessary. The
reliance is misplaced. Its applicability is by no means obvious. As
was pointed out in the answer of respondent Board of
Transportation, such a claim is hardly persuasive with the
procedure set forth in Presidential Decree No. 101 being followed
and the provisional authority to operate being based on an urgent
public need. Such a contention merits the approval of the Court.
The petition cannot prosper.
Both petitioner and private respondent Sultan Rent-a-Car are
domestic corporations.4 The former has in his favor a certificate of
public convenience to operate a public utility bus air-conditioned-
auto-truck service from Cebu City to Mactan International Airport
and vice-versa with the use of twenty (20) units.5 Private
respondent on September 12, 1974 filed a petition with the
respondent Board for the issuance of a certificate of public
convenience to operate a similar service on the same line.6 Eight
days later, without the required publication, the Board issued an
order granting it provisional permit to operate such auto-truck
service on the line applied for.7 There was a motion for
reconsideration and for the cancellation of such provisional permit
filed on October 21, 1974,8 but without awaiting final action
thereon, this petition was filed. 9 This is the explanation: "That petitioner has not
waited for the resolution of his Motion for Reconsideration before going to this Court
considering that the question involved herein is purely a legal one, aside from the fact that
the issuance of the Order without the Board having acquired jurisdiction of the case yet, is
patently illegal or was performed without jurisdiction." 10
So it was set forth in the petition filed on November 16, 1974. As
a preliminary injunction was likewise sought, a hearing was
scheduled for November 29, 1974. It was cancelled, this Court
issuing a resolution instead, requiring respondents to file an
answer not later than December 6, 1974 and setting the hearing
on the merits of the case on Wednesday, December 11, 1974. In
the answer submitted the facts alleged were substantially
admitted. 11 It denied the allegation that there must be a
publication before a provisional permit can be issued, reference
being made, as noted, to Presidential Decree No. 101, which
authorized respondent Board to grant provisional permits when
warranted by compelling circumstances and to proceed promptly
along the method of legislative inquiry. 12 The case was then
argued on December 11, 1974, Attorney Manuel Imbong
appearing for petitioner and Assistant Solicitor General Reynato
S. Puno appearing for respondent Board of
Transportation. 13 Thereafter, the parties were given twenty days
to file their respective memoranda and an additional ten-day
period to submit replies thereto if so minded. In time all the
pleadings were submitted, and the case was ready for decision.
The petition, to repeat, cannot prosper.
1. It is to be, admitted that the claim for relief on the asserted
constitutional deficiency based on procedural due process, not
from the standpoint of the absence of a hearing but from the lack
of jurisdiction without the required publication having been made,
was argued vigorously and developed exhaustively in the
memoranda of petitioner. The arguments set forth, while
impressed with plausibility, do not suffice to justify the grant
of certiorari. Moreover, the doctrine announced in the Philippine
Long Distance Telephone Company decision, heavily leaned on
by petitioner is, at the most, a frail and insubstantial support and
gives way to decisions of this Court that have an even more
specific bearing on this litigation.
2. A barrier to petitioner's pretension, not only formidable but also
insurmountable, is the well-settled doctrine that for a provisional
permit, an ex parte hearing suffices. 14 The decisive consideration
is the existence of the public need. 15 That was shown in this
case, respondent Board, on the basis of demonstrable data,
being satisfied of the pressing necessity for the grant of the
provisional permit sought. There is no warrant for the nullification
of what was ordered by it. It must have been, as already noted,
this state of the law that did lead petitioner to harp on its
interpretation of what for it is the teaching of the Philippine Long
Distance Telephone Company decision. 16 There was therein
stated that one of the compelling reasons that led this Court to
hold that the defunct Public Service Commission did not acquire
jurisdiction was that no provision was made for bringing in as
parties thereto the competitors of the Philippine Long Distance
Telephone Company.17 That is the basis for the objection on
procedural due process ground. While no doubt such a holding
was necessary for the decision of that case which dealt with a
petition for the reexamination of a decision that was held to be
final and executory, it finds no application to this controversy
dealing with a provisional permit. This is made clear by this
portion of the opinion of Justice Sanchez: "Araneta seeks
reexamination of the rates approved by the Commission. Araneta
avers that PLDT can carry out its improvement and expansion
program at less onerous terms to the subscribers. But Araneta
[University] was not a party to the rate-fixing case or to any of the
other proceedings below. These rate-fixing and allied cases
terminated with the final judgment of January 9, 1964. Not being
a party, it could not have moved to reconsider said decision. Nor
could it have appealed from that decision — it had no standing in
that case. Even if we treat Araneta's reexamination petition as
one for reconsideration, the time therefor has long passed. 18 It
was then stated: The reexamination herein sought by Araneta,
perforce seeks the fixing of new and different rates. 19 Further:
Araneta in effect, institutes a fresh
petition — for new rates different from those already established.
Such petition is a proceeding separate and distinct from those
concluded by the final judgment of PSC of January 9, 1964. 20 The
conclusion, therefore, necessarily follows:" We hold that the
Public Service Commission may not reduce or increase rates
established in a judgment that has become final, without proper
notice; and that a Commission order reducing or increasing said
rates without such notice is void." 21Under the facts of that case,
the procedural due process infirmity amounting to lack of
jurisdiction is quite apparent. The opposite is true with this
present petition which deals with a grant of provisional permit. It
would be to lift out of context the reference made in the aforesaid
opinion with reference to notification to the competitors to give a
color of applicability to the situation before us. Clearly then, the
allegation of a failure to follow the command of the due process
guarantee is bereft of any legal foundation.
3. The question of whether the controversy is ripe for judicial
determination was likewise argued by the parties. For it is
undeniable that at the time the petition was filed. there was
pending with the respondent Board a motion for reconsideration.
Ordinarily, its resolution should be awaited. Prior thereto, an
objection grounded on prematurity can be raised. Nonetheless,
counsel for petitioner would stress that certiorari lies as the failure
to observe procedural due process ousted respondent Board of
whatever jurisdiction it could have had in the premises. This Court
was impelled to go into the merits of the controversy at this stage,
not only because of the importance of the issue raised but also
because of the strong public interest in having the matter settled.
As was set forth in Executive Order No. 101 which prescribes the
procedure to be followed by respondent Board, it is the policy of
the State, as swiftly as possible, to improve the deplorable
condition of vehicular traffic, obtain maximum utilization of
existing public motor vehicles and eradicate the harmful and
unlawful trade of clandestine operators, as well as update the
standard of those carrying such business, making it "imperative to
provide, among other urgently needed measures, more
expeditious methods in prescribing, redefining, or modifying the
lines and mode of operation of public utility motor vehicles that
now or thereafter, may operate in this country.22 It is essential
then both from the standpoint of the firms engaged as well as of
the riding public to ascertain whether or not the procedure
followed in this case and very likely in others of a similar nature
satisfies the procedural due process requirement. Thus its
ripeness for adjudication becomes apparent.
To paraphrase what was said in Edu v. Ericta 23 where the validity
of a legislation was passed upon in a certiorari proceeding to
annul and set aside a writ of preliminary injunction, to so act
would be to conserve both time and effort. Those desiring to
engage in public utility business as well as the public are both
vitally concerned with the final determination of the standards to
be followed in the procedure that must be observed. There is, to
repeat, a great public interest in a definitive outcome of the crucial
issue involved. One of the most noted authorities on
Administrative Law, professor Kenneth Culp Davis, discussing the
ripeness concept, is of the view that the resolution of what could
be a debilitating uncertainty with the conceded ability of the
judiciary to work out a solution of the problem posed is a potent
argument for minimizing the emphasis laid on its technical
aspect. 24
WHEREFORE, the petition for certiorari is dismissed. No costs.
Arrow Transportation Corp. vs. Board of Transportation GR No.
L-39655, March 21, 1975 Fernando, J.
1. FACTS: Both petitioner and private respondent Sultan
Rent-a-Car are domestic corporations. The former has in
his favor a certificate of public convenience to operate a
public utility auto-truck service from Cebu city to
2. 25. Mactan Interantional Airport and vice versa. Private
respondent filed a petition with the respondent Board for
the issuance of a certificate of private respondent filed a
petition with the respondent Board for the issuance of a
certificate of public convenience to operate a similar
service on the same line. Without the required publication,
the Board issued on order granting it provisional permit to
operte on the line applied for. A motion for
reconsideration was filed and for the cancellation of such
provisional permit but without awaiting final action, this
petition was filed on the ground that the issuance of
provisional permit was patently illegal or was performed
without jurisdiction.
ISSUE: Whether or not the controversy is ripe for judicial
determination
HELD: YES. It is undeniable that at the time the petition was
filed, there was pending with respondent Board a motion for
reconsideration. Ordinarily, its resolution should be awaited. The
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
EN BANC
G.R. No. L-12944 March 30, 1959
MARIA NATIVIDAD VDA. DE TAN, petitioner-appellee,
vs.
VETERANS BACKPAY COMMISSION, respondent-appellant.
Atilano R. Cinco and Aguilan and Rosero Law Offices for
appellee.
Acting Solicitor General Guillermo E. Torres and Solicitor Camilo
D. Quiason for appellant.
REYES, J.B.L., J.:
On March 5, 1957, petitioner-appellee, Maria Natividad vda. de
Tan filed with the Court of First Instance of Manila a verified
petition for mandamus seeking an order to compel the
respondent-appellant Veterans Back Pay Commission: (1) to
declare deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a
Chinese national, entitled to backpay rights, privileges, and
prerogatives under Republic Act No. 304, as amended by
Republic Act No. 897; and (2) to give due course to the claim of
petitioner, as the widow of the said veterans, by issuing to her the
corresponding backpay certificate of indebtedness.
Respondent Commission filed its answer in due time asserting
certain special and affirmative defenses, on the basis of which,
the Commission unsuccessfully moved to dismiss the petition.
The parties then submitted a stipulation of facts hereinbelow
reproduced:
Come now the petitioner and respondent in the above-
entitled case through their respective counsel, and to this
Honorable Court respectfully agree and stipulate that the
following facts are true:
1. That the petitioner is of legal age, widow, and a
resident of •400 Lallana, Tondo, Manila; that the
respondent is a government instrumentality or agency,
with offices in the City of Manila, Philippines, duly vested
with authority to implement the provisions of the Backpay
Law, otherwise known as Republic Act No. 879, further
amending Republic Act No. 304;
2. That the petitioner is the widow of the late Lt. Tan Chiat
Bee alias Tan Lian Lay, a Chinese national, and a bona
fide member of the 1st Regiment, United States-Chinese
Volunteers in the Philippines;
3. That the United States-Chinese Volunteers in the
Philippines is a guerrilla organization duly recognized by
the Army of the United States and forming part and parcel
of the Philippine Army;
4. That Tan Chiat Bee alias Tan Lian Lay died in the
service on April 4, 1945 in the battle at Ipo Dam, Rizal
Province, Philippines; he was duly recognized as a
guerrilla veteran and certified to by the Armed Forces of
the Philippines as having rendered meritorious military
services during the Japanese occupation;
5. That petitioner as the widow of the said recognized
deceased veteran, filed an application for back pay under
the provisions of Republic Act No. 897, the resolution of
the Veterans Back Pay Commissions dated November
19, 1953 and the letter of the Veterans Back Pay
Commission dated December 9, 1953;
6. That on June 18, 1955, the Secretary and the Chief of
Office Staff of Veterans Back Pay Commission sent a
letter to General Vicente Lopez of the United States-
Chinese Volunteers in the Philippines apprising the latter
that the Commission has reaffirmed its resolution granting
the back pay to alien members;
7. That the Adjutant, Armed Forces of the Philippines, has
verified and certified that deceased veteran has rendered
service as a recognized guerrilla for the period indicated
in his •(Adjutant's) indorsement to the Chief, Finance
Service Armed Forces of the Philippines;
8. That, likewise, the Chief of Finance Service, Camp
Murphy, has computed the backpay due the petitioner
and the same was passed in audit by representatives of
the Auditor General;
9. That after due liberation respondent revoked its
previous stands and ruled that aliens are not entitled to
back pay;
10. That on February 13, 1957, the respondent Veterans
Back Pay Commission, through its Secretary & Chief of
Office Staff, made a formal reply to the aforesaid claim of
the herein petitioner denying her request on the ground
that aliens are not entitled to back pay;
11. That upon refusal of the Veterans Back Pay
Commission the petitioner brought the case direct to this
Honorable Court by way of mandamus;
12. That petitioner and respondent admit the existence
and authenticity of the following documents;
Annex A—Resolution of the Veterans Back Pay dated
November 19, 1953.
Annex B—Letter dated December 9, 1953.
Annex C—Letter dated June 18, 1955.
Annex D—Executive Order No. 21 dated October 28,
1944.
Annex E—Executive Order No. 68 dated September 26,
1945.
Annex F—Minutes of the Resolution of the Back Pay
Commission regarding the opinion of the Secretary of
Justice dated February 8, 1956.
Annex G—Letter of Back Pay Commission dated
February 26, 1954 to Secretary of Justice.
Annex H—Opinion No. 213 series of 1956 of the
Secretary of Justice.
Annex I—Reply of Veterans Backpay Commission.
Annex J—Explanatory Note to House Bill No. 1953.
Annex K—Explanatory note to Senate Bill No. 10.
Annex L—Explanatory note to House Bill No. 1228, now
Republic Act No. 897.
Annex M—Joint Resolution No. 5 of the First Congress of
the Philippines.
13. That the parties waive the presentation of further
evidence;
14. That the respondents will file its memorandum within
ten (10) days from August 1, 1957 and the petitioner may
file her memorandum within ten (10) days from receipt of
respondent's memorandum, after which the case is
deemed submitted for decision.
Manila, July 31, 1957.
Based on the foregoing, the lower court rendered judgment the
dispositive portion of which, reads:
Wherefore, the petition is granted, ordering respondent
Commission to give due course to the claim of herein
petitioner to the backpay to which her deceased husband
was entitled as member of a duly recognized guerrilla
organization.
Against the decision, the respondent instituted this appeal
averring once more, in its assignment of errors, the special and
affirmative defenses that the petitioner failed to exhaust available
administrative remedies; that the suit is, in effect, an action to
enforce a money claim against the government without its
consent; that mandamus will not lie to compel the exercise of •a
discretionary function; and that the Republic Act Nos. 304 and
•897 already referred to were never intended to benefit aliens.
We find no merit in the appeal. As to the claim that mandamus is
not the proper remedy to correct the exercise of discretion of the
Commission, it may well be remembered that its discretion is
limited to the facts of the case, i.e., in merely evaluating the
evidence whether or not the claimant is a member of a guerrilla
force duly recognized by the United States Army. Nowhere in the
law is the respondent Commission given the power to adjudicate
or determine rights after such facts are established. Having been
satisfied that deceased Tan Chiat Bee was an officer of a duly
recognized guerrilla outfit, certified to by the Armed Forces of the
Philippines, having served under the United States-Chinese
Volunteers in the Philippines, a guerrilla unit recognized by the
United States army and forming part of the Philippine Army, it
becomes the ministerial duty of the respondent to give due
course to his widow's application. (See sections 1 and 6,
Republic Act •897). Note that the Chief of the Finance Service,
Camp Murphy, has accepted the backpay due the petitioner's
husband and the same was passed in audit by the
representatives of the Auditor General.
It is insisted by the respondent Commission that aliens are not
included within the purview of the law. We disagree. The law is
contained in Republic Act Nos. 304 and 897 is explicit enough,
and it extends its benefits to members of "guerrilla forces duly
recognized by the Army of the United States." From the plain and
clear language thereof, we fail to see any indication that its
operation should be limited to citizens of the Philippines only, for
all that is required is that the guerrilla unit be duly recognized by
the Army of the United States. We are in full accord with Opinion
No. 213, series of 1956, of the Secretary of Justice, which reads:
Section 1 of the cited Act (Republic act No. 304, as
amended by Republic Act No. 897), otherwise known as
the Back Pay Law, recognizes the rights to the backpay of
members of "guerrilla forces duly recognized by the Army
of the United States, among others. A perusal of its
provisions reveals nothing which may be construed to
mean that only Filipino citizens are entitled to back pay
thereunder. On the contrary, the statute expressly
includes within its coverage "persons under contract with
the Government of the Commonwealth", which clause
was construed by this office to refer to service" by the
government (Opinion No. •137, s. 1953), a majority of
whom were non-citizens. Thus, the Opinion No. 30, s.
1949, this office ruled that a civil service employee of the
U.S. Coast and Geodetic Survey rendering the service to
the Philippine Government when war broke out on
December 8, 1941, was entitled to back pay.
As regards guerrillas, it seems clear that all the law
requires is that they be "duly recognized by the Army of
the United States." Section 1 of the Back Pay Law, it is
also noted, enumerates those who are not entitled to its
benefits; recognized guerrillas who were not Filipino
citizens are not among those expressly mentioned. The
maximexpressio unius est exclusio alterius, I think, finds
application here.
Moreover, Executive Order No. 21, dated October 28,
1944, expressly declared that, Sections 22 (a) and 27 of
Commonwealth Act No. 1 to the contrary notwithstanding,
"all persons of any nationality or citizenship, who are
actively serving in recognized military forces in the
Philippines, are thereby considered to be on active
service in the Philippine Army."
It is the respondent's main argument that it could not have been
the intention of Congress to extend its benefit to aliens, as the
purpose of the law was "precisely to help rehabilitate members of
the Armed Forces of the Philippines and recognized guerrillas by
giving them the right to acquire public lands and public property
by using the back pay certificate", and "it is fundamental under
the Constitution that aliens except American citizens cannot
acquire public lands or exploit our natural resources".
Respondent Commission fails to realize that this is just one of the
various uses of the certificate; and that it may also be utilized for
the payment of obligations to the Government or to any of its
branches or instrumentalities, i.e., taxes, government hospital
bills, etc. (See Sec. 2, Rep. act No. 897).
As further observed by the lower court:
It is one thing to be entitled to backpay and to receive
acknowledgment therefor, and another thing to receive
backpay certificates in accordance with the resolutions of
the Commission and to make use of the same.
It was, therefore, unreasonable if not arbitrary on the part of
respondent Commission to deny petitioner's claim on the basis.
It is further contended by the Commission that the petitioner
should have first exhausted her administrative remedies by
appealing to the President of the Philippines, and that her failure
to do so is a bar to her action in court (Montes vs. The Civil
Service Board of Appeals, 101 Phil., 490; 54 Off. Gaz. [7] 2174.
The respondent Commission is in estoppel to invoke this rule,
considering that in its resolution (Annex F of the Stipulation of
Facts) reiterating its obstinate refusal to abide by the opinion of
the Secretary of Justice, who is the legal adviser of the Executive
Department, the Commission declared that —
The opinions promulgated by the Secretary of Justice are
advisory in nature, which may either be accepted or
ignored by the office seeking the opinion, and any
aggrieved party has the court for recourse, (Annex F)
thereby leading the petitioner to conclude that only a final judicial
ruling in her favor would be accepted by the Commission.
Neither is there substance in the contention that the petition is, in
effect, a suit against the government without its consent. the relief
prayed for is simply "the recognition of the petitioner-appellee"
under the provisions of sections 1 and 2 of Republic Act No. 897,
and consists in "directing an agency of the government to perform
an act . . . it is bound to perform." Republic Act Nos. 304 and 897
necessarily embody state consent to an action against the
officers entrusted with the implementation of said Acts in case of
unjustified refusal to recognize the rights of proper applicants.
The decision appealed from should be, and hereby is, affirmed.
No costs. So ordered.
[G.R. No. L-12944. March 30, 1959.]
FACTS:
1. That the petitioner is of legal age, a widow and a resident of the
Philippines and that the respondent is a government instrumentality or
agency, duly vested with authority to implement the provisions of Backpay
Law, otherwise known as Republic Act No. 897, further amending Republic
Act No. 304;
2. That the petitioner is the widow of the late Lt. Tan Chiat Bee alias Tan
Lian Lay, a Chinese national, and bonafide member the 1st Regiment,
United State-Chinese Volunteers in the Philippines; died in a battle at Rizal
Province; and certified by the Armed Forces of the Philippines as having
rendered aritorious military services during the Japanese occupation;
3. That petitioner as widow of the said recognized deceased veteran, filed an
application for back pay
4. The Secretary and Chief of Office Staff the Veterans Back Pay
Commission sent a letter to General Vicente Lopez of the United States-
Chinese Volunteers in the Philippines apprising the latter that the
Commission has reaffirmed its solution granting the back pay to alien
members; the AFP certified certified that deceased veteran has rendered
service as a recognized guerrilla
5. That after due deliberation respondent revoked its previous stands and
ruled that aliens are not entitled to back pay;
6. That on February 13, 1957, the respondent Veterans Back Pay
Commission, through its Secretary & Chief of Office Staff, made a formal
reply to the aforesaid claim of the herein petitioner denying her request on
the ground that aliens are not entitled to backpay;
7. That upon refusal of the Veterans Back Pay Commission the petitioner
brought the case direct to this Honorable Court by way of mandamus;
The trial court ordered respondent Commission to give due course to the
claim of herein petitioner. Against the decision, the respondent instituted this
appeal and it further contended by the Commission that the petitioner should
have first exhausted her administrative remedies by appealing to the
President of the Philippines, and that her failure to do so is a bar to her
action in court.

ISSUE: WON petitioner’s failure to exhaust her administrative remedies bars

subsequent action in courts

HELD: ADMINISTRATIVE REMEDIES; RULE OF EXHAUSTION NOT TO

BE INVOKED IF PARTY IS IN ESTOPPEL. — The respondent Commission
is in estoppel to invoke the rule on the exhaustion of administrative
remedies, considering that in its resolution, it declared that the opinions of
the Secretary of Justice were “advisory in nature, which may either be
accepted or ignored by the office seeking the opinion, and any aggrieved
party has the court for recourse”, thereby leading the petitioner to conclude
that only a final judicial ruling in her favor would be accepted by the
Commission.