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Republic of the Philippines

SUPREME COURT Manila

EN BANC

G.R. No. 138298 August 24, 2001

RAOUL B. DEL MAR, petitioner,vs.

PHILIPPINE AMUSEMENT AND GAMING CORPORATION, BELLE JAI-ALAI CORPORATION,

FILIPINAS GAMING ENTERTAINMENT TOTALIZATOR CORPORATION, respondents.

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

G.R. No. 138982 August 24, 2001

FEDERICO S. SANDOVAL II and MICHAEL T. DEFENSOR, petitioners,

vs.

PHILIPPINE AMUSEMENT AND GAMING CORPORATION, respondent.JUAN MIGUEL ZUBIRI, intervenor.

R E S O L U T I O N

VITUG, J .:

In it's decision, dated 29 November 2000, the Court granted petitions filed by Raoul B. Del Mar, Federico S.

Sandoval 11 and Michael T. Defensor to enjoin the Philippine Amusement and Gaming Corporation(PAGCOR), Belle Jai-Alai Corporation (BELLE) and Filipinas Gaming Entertainment Totalizator Corporation

(FILGAME) from operating, maintaining or managing jai-alai games and from enforcing the 17th

June 1999

Agreement entered into among said respondents for that purpose.1

The ponencia penned by Justice Reynato S. Puno, concurred in by Chief Justice Hilario G. Davide, Jr., and

Justices Jose A.R. Melo, Artemio V. Panganiban, Bernardo P. Pardo, Arturo B. Buena, Minerva P. Gonzaga-Reyes and Consuelo Ynares-Santiago, enucleated that PAGCOR was bereft of any franchise to operate,

maintain or manage jai-alai games whether by itself alone or in conjunction with its co-respondents. Thedissenting opinion of Justice Sabino R. de Leon, Jr., subscribed to by Justices Josue N. Bellosillo, Santiago M.

Kapunan and Leonardo A. Quisumbing, stated that PAGCOR had a valid franchise to conduct jai-alai gamesand had likewise the authority under that franchise to maintain, operate or manage jai-alai games through and in

association with its co-respondents BELLE and FILGAME pursuant to their agreement. The separate opinion of Justice Jose c. Vitug, shared by Justice Vicente V. Mendoza, expressed the view that the franchise accorded

to PAGCOR was broad enough to authorize it to operate sports and gaming pools, inclusive of jai-alai, thatauthority, however, did not allow it to contract any part of that franchise to its co-respondents BELLE and

FILGAME.

The subsequent motion for reconsideration were resolved in the Court's resolution of 19 June 2001, in this wise;viz:

"Acting on the motions for reconsideration filed by public respondent Philippine Amusement andGaming Corporation (PAGCOR) and private respondents Belle Jai-Alai Corporation (BELLE), and

Filipinas Gaming Entertainment Totalizator Corporation (FILGAME), seeking to reverse the court'sDecision dated November 29, 2000, only seven (7) justices, namely, Josue Bellosillo, Jose Melo,

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Santiago Kapunan, Leonardo Quisumbing, Consuelo Y. Santiago, Sabino de Leon and AngelinaGutierrez voted to grant the motions. For lack of required number of votes, the said motions for

reconsideration are denied. The opinions of Justices Puno, Melo, Vitug and De Leon are herewith madepart of this resolution."

Respondents have sought from the Court a clarification of the foregoing resolution.

During the deliberations of the Court culminating in the promulgation of its 19th

June 2001 resolution, the

justices voted thusly: (a) Chief Justice Hilario G. Davide, Jr., and Justices Reynato S. Puno, Artemio V.Panganiban, Bernardo P. Pardo and Minerva P. Gonzaga-Reyes held that PAGCOR had no valid franchise and

that, therefore, it had no authority to operate, maintain or manage jai-alai games, either by itself or inassociation with any other entity; (b) Justices Josue N. Bellosillo, Jose A.R. Melo, Santiago M. Kapunan,

Leonardo A. Quisumbing, Consuelo Ynares-Santiago, Sabino R. de Leon, Jr., and Angelina Sandoval-Gutierrezconcluded that PAGCOR had a valid franchise to conduct jai-alai games and that it could operate, maintain or

manage such games by itself or in association with BELLE and FILGAME conformably with their agreement;while (c) Justices Jose C. Vitug, Vicente V. Mendoza and Arturo B. Buena maintained that PAGCOR alone

could operate, maintain or manage jai-alai games but that it could not contract, either directly or indirectly, anyof such activities to entities, including BELLE and FILGAME, which were not themselves holders of a valid

franchise.

In fine, the results of voting on the issues raised in the motions for reconsideration, can be summed up thusly:

On the issue of whether PAGCOR itself has a valid franchise to conduct jai-alai games, five members of the Court (Chief Justice Hilario G. Davide, Jr., and Justices Reynato S. Puno, Artemio V. Panganiban, Bernardo

P. Pardo, and Minerva P. Gonzaga-Reyes) have voted in the negative and ten members of the Court (JusticesJosue N. Bellosillo, Jose A. R. Melo, Jose C. Vitug, Vitug, Vicente V. Mendoza, Santiago M. Kapunan,

Leonardo A. Quisumbing, Arturo B. Buena, Consuelo Ynares-Santiago, Sabino R. De Leon, Jr. and AngelinaSandoval-Gutierrez) have voted in the affirmative; and on the issue of whether PAGCOR can operate,

maintain or manage jai-alai games in association with Belle and Filgame according to their assailedagreement, only seven members of the Court (Justices Josue N. Bellosillo, Jose A. R. Melo, Santiago M.

Kapunan, Leonardo A. Quisumbing, Consuelo Ynares-Santiago, Sabino R. De Leon, Jr., and Angelina

Sandoval-Gutierrez) have voted in the affirmative; while eight members of the Court have voted in the negative – five justices (Chief Justice Hilario G. Davide, Jr., and Justices Reynato S. Puno, Artemio V. Panganiban,Bernardo P. Pardo, and Minerva P. Gonzaga-Reyes) have voted in the negative on the thesis that PAGCOR has

no franchise to operate, maintain, or manage jai-alai, and three justices (Justices Jose C. Vitug, Vicente V.Mendoza, and Arturo B. Buena) have voted in the negative on the ground that only PAGCOR by itself , not with

any other person or entity, can operate, maintain, or manage jai-alai games.

WHEREFORE, acting on the instant motions for clarification filed by respondents and on the basis of theresults of the voting heretofore elucidated, the Court resolves (a) to partially GRANT the motions for

clarification insofar as it is prayed that Philippine Amusement and Gaming Corporation (PAGCOR) has a validfranchise to, but only by itself (i.e., not in association with any other person or entity), operate, maintain and/or

manage the game of jai-alai, and (b) to DENY the motions insofar as respondents would also seek areconsideration of the Court's decision of 29 November 2000 that has, since then, (i) enjoined the continued

operation, maintenance, and/or management of jai-alai games by PAGCOR in association with its co-respondents Belle Jai-Alai Corporation and/or Filipinas Gaming Entertainment Totalizator Corporation and (ii)

held to be without force and effect the agreement of 17 June 1999 among said respondents.

SO ORDERED.1âwphi1.nêt

Davide, Jr., C.J., Bellosillo, Melo, Puno, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo, Buena,

Gonzaga-Reyes, Ynares-Santiago, De Leon, Jr., and Sandoval-Gutierrez, JJ., concur.



Footnote:

1 The dispositive portion of the decision reads:

"WHEREFORE, the petitions are GRANTED. Respondents PAGCOR, Belle Jai alai

Corporation and Filipinas Gaming Entertainment Totalizator Corporation are ENJOINED from

managing, maintaining and operating jai-alai games, and from enforcing the agreement enteredinto by them for that purpose." (p. 42, Decision.)



FIRST DIVISION

G.R. No. 84811 August 29, 1989

SOLID HOMES, INC., petitioner,vs.TERESITA PAYAWAL and COURT OF APPEALS, respondents.

CRUZ, J.:

We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the Regional

Trial Court of Quezon City over a complaint filed by a buyer, the herein private respondent, againstthe petitioner, for delivery of title to a subdivision lot. The position of the petitioner, the defendant inthat action, is that the decision of the trial court is null and void ab initio because the case shouldhave been heard and decided by what is now called the Housing and Land Use Regulatory Board.

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. beforethe Regional Trial Court of Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged that the defendant contracted to sell to her a subdivision lot in Marikina on June 9, 1975, for the agreed price of P 28,080.00, and that by September 10, 1981, she had already paid thedefendant the total amount of P 38,949.87 in monthly installments and interests. Solid Homessubsequently executed a deed of sale over the land but failed to deliver the corresponding certificate

of title despite her repeated demands because, as it appeared later, the defendant had mortgagedthe property in bad faith to a financing company. The plaintiff asked for delivery of the title to the lotor, alternatively, the return of all the amounts paid by her plus interest. She also claimed moral andexemplary damages, attorney's fees and the costs of the suit.

Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, thisbeing vested in the National Housing Authority under PD No. 957. The motion was denied. Thedefendant repleaded the objection in its answer, citing Section 3 of the said decree providing that "theNational Housing Authority shall have exclusive jurisdiction to regulate the real estate trade andbusiness in accordance with the provisions of this Decree." After trial, judgment was rendered in favor






of the plaintiff and the defendant was ordered to deliver to her the title to the land or, failing this, torefund to her the sum of P 38,949.87 plus interest from 1975 and until the full amount was paid. Shewas also awarded P 5,000.00 moral damages, P 5,000.00 exemplary damages, P 10,000.00attorney's fees, and the costs of the suit. 1

Solid Homes appealed but the decision was affirmed by the respondent court, 2 which also berated

the appellant for its obvious efforts to evade a legitimate obligation, including its dilatory tactics duringthe trial. The petitioner was also reproved for its "gall" in collecting the further amount of P 1,238.47

from the plaintiff purportedly for realty taxes and registration expenses despite its inability to deliver the title to the land.

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

SEC. 41. Other remedies .-The rights and remedies provided in this Decree shall be in addition to any and

all other rights and remedies that may be available under existing laws.

and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that thecourt a quo was bereft of jurisdiction." The decision also dismissed the contrary opinion of the

Secretary of Justice as impinging on the authority of the courts of justice. While we are disturbed bythe findings of fact of the trial court and the respondent court on the dubious conduct of the petitioner,we nevertheless must sustain it on the jurisdictional issue.

The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the NationalHousing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under PresidentialDecree No. 957." Section 1 of the latter decree provides as follows:

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

A. Unsound real estate business practices ;

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

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

The language of this section, especially the italicized portions, leaves no room for doubt that"exclusive jurisdiction" over the case between the petitioner and the private respondent is vested notin the Regional Trial Court but in the National Housing Authority. 3

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

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

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

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over



which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit TrialCourts;

xxx xxx xxx

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

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

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

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

4

xxx xxx xxx

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

5

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

The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. 957,earlier quoted, is also unacceptable. We do not read that provision as vesting concurrent jurisdiction

on the Regional Trial Court and the Board over the complaint mentioned in PD No. 1344 if onlybecause grants of power are not to be lightly inferred or merely implied. The only purpose of thissection, as we see it, is to reserve. to the aggrieved party such other remedies as may be provided byexisting law, like a prosecution for the act complained of under the Revised Penal Code. 6

On the competence of the Board to award damages, we find that this is part of the exclusive power conferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other claims filed by subdivision lot or condominium unit buyers against the project owner, developer, dealer,broker or salesman." It was therefore erroneous for the respondent to brush aside the well-takenopinion of the Secretary of Justice that-

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

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



xxx xxx xxx

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

7

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

Statutes conferring powers on their administrative agencies must be liberally construed to enablethem to discharge their assigned duties in accordance with the legislative purpose. 8 Following thispolicy in Antipolo Realty Corporation v. National Housing Authority, 9 the Court sustained thecompetence of the respondent administrative body, in the exercise of the exclusive jurisdiction vested

in it by PD No. 957 and PD No. 1344, to determine the rights of the parties under a contract to sell asubdivision lot.

It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v.National Housing Authority 10 is not in point. We upheld in that case the constitutionality of theprocedure for appeal provided for in PD No. 1344, but we did not rule there that the National Housing

Authority and not the Regional Trial Court had exclusive jurisdiction over the cases enumerated inSection I of the said decree. That is what we are doing now.

It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down atany time, even on appeal before this Court. 11 The only exception is where the party raising the issue

is barred by estoppel,12

which does not appear in the case before us. On the contrary, the issue wasraised as early as in the motion to dismiss filed in the trial court by the petitioner, which continued toplead it in its answer and, later, on appeal to the respondent court. We have no choice, therefore,notwithstanding the delay this decision will entail, to nullify the proceedings in the trial court for lack of

jurisdiction.

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

SO ORDERED.



EN BANC

G.R. No. 159796 July 17, 2007

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST CONSUMERS

NETWORK, INC. (ECN), Petitioners,



vs.

DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC), NATIONAL

POWER CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT

GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES GROUP (SPUG), and PANAY

ELECTRIC COMPANY INC. (PECO), Respondents.

D E C I S I O N

NACHURA, J.:

Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers Network, Inc.

(ECN) (petitioners), come before this Court in this original action praying that Section 34 of Republic Act (RA)9136, otherwise known as the "Electric Power Industry Reform Act of 2001" (EPIRA), imposing the Universal

Charge,1 and Rule 18 of the Rules and Regulations (IRR)

2 which seeks to implement the said imposition, be

declared unconstitutional. Petitioners also pray that the Universal Charge imposed upon the consumers be

refunded and that a preliminary injunction and/or temporary restraining order (TRO) be issued directing therespondents to refrain from implementing, charging, and collecting the said charge.

3 The assailed provision of

law reads:

SECTION 34. Universal Charge. — Within one (1) year from the effectivity of this Act, a universal charge tobe determined, fixed and approved by the ERC, shall be imposed on all electricity end-users for the following

purposes:

(a) Payment for the stranded debts4 in excess of the amount assumed by the National Government and

stranded contract costs of NPC5 and as well as qualified stranded contract costs of distribution utilities

resulting from the restructuring of the industry;

(b) Missionary electrification;6

(c) The equalization of the taxes and royalties applied to indigenous or renewable sources of energy vis-

à-vis imported energy fuels;

(d) An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour (P0.0025/kWh),which shall accrue to an environmental fund to be used solely for watershed rehabilitation and

management. Said fund shall be managed by NPC under existing arrangements; and

(e) A charge to account for all forms of cross-subsidies for a period not exceeding three (3) years.

The universal charge shall be a non-bypassable charge which shall be passed on and collected from all end-

users on a monthly basis by the distribution utilities. Collections by the distribution utilities and the TRANSCOin any given month shall be remitted to the PSALM Corp. on or before the fifteenth (15th) of the succeeding

month, net of any amount due to the distribution utility. Any end-user or self-generating entity not connected toa distribution utility shall remit its corresponding universal charge directly to the TRANSCO. The PSALM

Corp., as administrator of the fund, shall create a Special Trust Fund which shall be disbursed only for thepurposes specified herein in an open and transparent manner. All amount collected for the universal charge shall

be distributed to the respective beneficiaries within a reasonable period to be provided by the ERC.

The Facts

Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect.7

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On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities Group8 (NPC-SPUG) filed

with respondent Energy Regulatory Commission (ERC) a petition for the availment from the Universal Charge

of its share for Missionary Electrification, docketed as ERC Case No. 2002-165.9

On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No. 2002-194, praying that theproposed share from the Universal Charge for the Environmental charge of P0.0025 per kilowatt-hour (/kWh),

or a total of P119,488,847.59, be approved for withdrawal from the Special Trust Fund (STF) managed byrespondent Power Sector Assets and

Liabilities Management Group (PSALM)10

for the rehabilitation and management of watershed areas.11

On December 20, 2002, the ERC issued an Order12

in ERC Case No. 2002-165 provisionally approving thecomputed amount of P0.0168/kWh as the share of the NPC-SPUG from the Universal Charge for Missionary

Electrification and authorizing the National Transmission Corporation (TRANSCO) and Distribution Utilities tocollect the same from its end-users on a monthly basis.

On June 26, 2003, the ERC rendered its Decision13

(for ERC Case No. 2002-165) modifying its Order of

December 20, 2002, thus:

WHEREFORE, the foregoing premises considered, the provisional authority granted to petitioner NationalPower Corporation-Strategic Power Utilities Group (NPC-SPUG) in the Order dated December 20, 2002 is

hereby modified to the effect that an additional amount of P0.0205 per kilowatt-hour should be added to theP0.0168 per kilowatt-hour provisionally authorized by the Commission in the said Order. Accordingly, a total

amount of P0.0373 per kilowatt-hour is hereby APPROVED for withdrawal from the Special Trust Fundmanaged by PSALM as its share from the Universal Charge for Missionary Electrification (UC-ME) effective

on the following billing cycles:

(a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and

(b) July 2003 for Distribution Utilities (Dus).

Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount of P0.0373 per kilowatt-

hour and remit the same to PSALM on or before the 15th day of the succeeding month.

In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a detailed report to include

Audited Financial Statements and physical status (percentage of completion) of the projects using the prescribedformat.1avvphi1

Let copies of this Order be furnished petitioner NPC-SPUG and all distribution utilities (Dus).

SO ORDERED.

On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC, among others,14

to setaside the above-mentioned Decision, which the ERC granted in its Order dated October 7, 2003, disposing:

WHEREFORE, the foregoing premises considered, the "Motion for Reconsideration" filed by petitioner

National Power Corporation-Small Power Utilities Group (NPC-SPUG) is hereby GRANTED. Accordingly, theDecision dated June 26, 2003 is hereby modified accordingly.

Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:




























1. Projects for CY 2002 undertaken;

2. Location

3. Actual amount utilized to complete the project;

4. Period of completion;

5. Start of Operation; and

6. Explanation of the reallocation of UC-ME funds, if any.

SO ORDERED.15

Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the NPC to draw up toP70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the availability of funds

for the Environmental Fund component of the Universal Charge.16

On the basis of the said ERC decisions, respondent Panay Electric Company, Inc. (PECO) charged petitioner

Romeo P. Gerochi and all other end-users with the Universal Charge as reflected in their respective electric billsstarting from the month of July 2003.

17

Hence, this original action.

Petitioners submit that the assailed provision of law and its IRR which sought to implement the same are

unconstitutional on the following grounds:

1) The universal charge provided for under Sec. 34 of the EPIRA and sought to be implemented underSec. 2, Rule 18 of the IRR of the said law is a tax which is to be collected from all electric end-users and

self-generating entities. The power to tax is strictly a legislative function and as such, the delegation of

said power to any executive or administrative agency like the ERC is unconstitutional, giving the sameunlimited authority. The assailed provision clearly provides that the Universal Charge is to bedetermined, fixed and approved by the ERC, hence leaving to the latter complete discretionary

legislative authority.

2) The ERC is also empowered to approve and determine where the funds collected should be used.

3) The imposition of the Universal Charge on all end-users is oppressive and confiscatory and amounts

to taxation without representation as the consumers were not given a chance to be heard andrepresented.

18

Petitioners contend that the Universal Charge has the characteristics of a tax and is collected to fund theoperations of the NPC. They argue that the cases

19 invoked by the respondents clearly show the regulatory

purpose of the charges imposed therein, which is not so in the case at bench. In said cases, the respective

funds20

were created in order to balance and stabilize the prices of oil and sugar, and to act as buffer tocounteract the changes and adjustments in prices, peso devaluation, and other variables which cannot be

adequately and timely monitored by the legislature. Thus, there was a need to delegate powers to administrativebodies.

21 Petitioners posit that the Universal Charge is imposed not for a similar purpose.

On the other hand, respondent PSALM through the Office of the Government Corporate Counsel (OGCC)contends that unlike a tax which is imposed to provide income for public purposes, such as support of the






























government, administration of the law, or payment of public expenses, the assailed Universal Charge is leviedfor a specific regulatory purpose, which is to ensure the viability of the country's electric power industry. Thus,

it is exacted by the State in the exercise of its inherent police power. On this premise, PSALM submits thatthere is no undue delegation of legislative power to the ERC since the latter merely exercises a limited authority

or discretion as to the execution and implementation of the provisions of the EPIRA.22

Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor General (OSG),share the same view that the Universal Charge is not a tax because it is levied for a specific regulatory purpose,

which is to ensure the viability of the country's electric power industry, and is, therefore, an exaction in theexercise of the State's police power. Respondents further contend that said Universal Charge does not possess

the essential characteristics of a tax, that its imposition would redound to the benefit of the electric powerindustry and not to the public, and that its rate is uniformly levied on electricity end-users, unlike a tax which is

imposed based on the individual taxpayer's ability to pay. Moreover, respondents deny that there is unduedelegation of legislative power to the ERC since the EPIRA sets forth sufficient determinable standards which

would guide the ERC in the exercise of the powers granted to it. Lastly, respondents argue that the impositionof the Universal Charge is not oppressive and confiscatory since it is an exercise of the police power of the State

and it complies with the requirements of due process.23

On its part, respondent PECO argues that it is duty-bound to collect and remit the amount pertaining to the

Missionary Electrification and Environmental Fund components of the Universal Charge, pursuant to Sec. 34 ofthe EPIRA and the Decisions in ERC Case Nos. 2002-194 and 2002-165. Otherwise, PECO could be held liableunder Sec. 46

24 of the EPIRA, which imposes fines and penalties for any violation of its provisions or its IRR.

25

The Issues

The ultimate issues in the case at bar are:

1) Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax; and

2) Whether or not there is undue delegation of legislative power to tax on the part of the ERC.26

Before we discuss the issues, the Court shall first deal with an obvious procedural lapse.

Petitioners filed before us an original action particularly denominated as a Complaint assailing the

constitutionality of Sec. 34 of the EPIRA imposing the Universal Charge and Rule 18 of the EPIRA's IRR. Nodoubt, petitioners have locus standi. They impugn the constitutionality of Sec. 34 of the EPIRA because they

sustained a direct injury as a result of the imposition of the Universal Charge as reflected in their electric bills.

However, petitioners violated the doctrine of hierarchy of courts when they filed this "Complaint" directly with

us. Furthermore, the Complaint is bereft of any allegation of grave abuse of discretion on the part of the ERC orany of the public respondents, in order for the Court to consider it as a petition for certiorari or prohibition.

Article VIII, Section 5(1) and (2) of the 1987 Constitution27

categorically provides that:

SECTION 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls,and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may

provide, final judgments and orders of lower courts in:

























(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.

But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas

corpus, while concurrent with that of the regional trial courts and the Court of Appeals, does not give litigantsunrestrained freedom of choice of forum from which to seek such relief .

28 It has long been established that this

Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts,or where exceptional and compelling circumstances justify availment of a remedy within and call for the

exercise of our primary jurisdiction.29 This circumstance alone warrants the outright dismissal of the presentaction.

This procedural infirmity notwithstanding, we opt to resolve the constitutional issue raised herein. We are aware

that if the constitutionality of Sec. 34 of the EPIRA is not resolved now, the issue will certainly resurface in thenear future, resulting in a repeat of this litigation, and probably involving the same parties. In the public interest

and to avoid unnecessary delay, this Court renders its ruling now.

The instant complaint is bereft of merit.

The First Issue

To resolve the first issue, it is necessary to distinguish the State’s power of taxation from the police power.

The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very nature nolimits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes

the tax on the constituency that is to pay it .30

It is based on the principle that taxes are the lifeblood of thegovernment, and their prompt and certain availability is an imperious need.

31 Thus, the theory behind the

exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people.

32

On the other hand, police power is the power of the state to promote public welfare by restraining and

regulating the use of liberty and property.33 It is the most pervasive, the least limitable, and the most demandingof the three fundamental powers of the State. The justification is found in the Latin maxims salus populi est

suprema lex (the welfare of the people is the supreme law) and sic utere tuo ut alienum non laedas (so use yourproperty as not to injure the property of others). As an inherent attribute of sovereignty which virtually extends

to all public needs, police power grants a wide panoply of instruments through which the State, as parens

patriae, gives effect to a host of its regulatory powers.34

We have held that the power to "regulate" means the

power to protect, foster, promote, preserve, and control, with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons.

35

The conservative and pivotal distinction between these two powers rests in the purpose for which the charge is

made. If generation of revenue is the primary purpose and regulation is merely incidental, the imposition is a

tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does not make theimposition a tax.

36

In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police power, particularly

its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which enumerates the purposes forwhich the Universal Charge is imposed

37 and which can be amply discerned as regulatory in character. The

EPIRA resonates such regulatory purposes, thus:

SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;










































(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition andfull public accountability to achieve greater operational and economic efficiency and enhance the

competitiveness of Philippine products in the global market;

(d) To enhance the inflow of private capital and broaden the ownership base of the power generation,transmission and distribution sectors;

(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry;

(f) To protect the public interest as it is affected by the rates and services of electric utilities and other

providers of electric power;

(g) To assure socially and environmentally compatible energy sources and infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy resources in power

generation in order to reduce dependence on imported energy;

(i) To provide for an orderly and transparent privatization of the assets and liabilities of the NationalPower Corporation (NPC);

(j) To establish a strong and purely independent regulatory body and system to ensure consumer

protection and enhance the competitive operation of the electricity market; and

(k) To encourage the efficient use of energy and other modalities of demand side management.

From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is not a tax, but an

exaction in the exercise of the State's police power. Public welfare is surely promoted.

Moreover, it is a well-established doctrine that the taxing power may be used as an implement of policepower.

38 In Valmonte v. Energy Regulatory Board, et al.

39 and in Gaston v. Republic Planters Bank ,

40 this Court

held that the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization Fund (SSF) were exactions madein the exercise of the police power. The doctrine was reiterated in Osmeña v. Orbos

41 with respect to the OPSF.

Thus, we disagree with petitioners that the instant case is different from the aforementioned cases. With theUniversal Charge, a Special Trust Fund (STF) is also created under the administration of PSALM.

42 The STF

has some notable characteristics similar to the OPSF and the SSF, viz.:

1) In the implementation of stranded cost recovery, the ERC shall conduct a review to determine

whether there is under-recovery or over recovery and adjust (true-up) the level of the stranded cost

recovery charge. In case of an over-recovery, the ERC shall ensure that any excess amount shall beremitted to the STF. A separate account shall be created for these amounts which shall be held in trustfor any future claims of distribution utilities for stranded cost recovery. At the end of the stranded cost

recovery period, any remaining amount in this account shall be used to reduce the electricity rates to theend-users.

43

2) With respect to the assailed Universal Charge, if the total amount collected for the same is greater

than the actual availments against it, the PSALM shall retain the balance within the STF to pay forperiods where a shortfall occurs.

44































3) Upon expiration of the term of PSALM, the administration of the STF shall be transferred to the DOFor any of the DOF attached agencies as designated by the DOF Secretary.

45

The OSG is in point when it asseverates:

Evidently, the establishment and maintenance of the Special Trust Fund, under the last paragraph of Section 34,

R.A. No. 9136, is well within the pervasive and non-waivable power and responsibility of the government tosecure the physical and economic survival and well-being of the community, that comprehensive sovereign

authority we designate as the police power of the State.46

This feature of the Universal Charge further boosts the position that the same is an exaction imposed primarily

in pursuit of the State's police objectives. The STF reasonably serves and assures the attainment and perpetuityof the purposes for which the Universal Charge is imposed, i.e., to ensure the viability of the country's electric

power industry.

The Second Issue

The principle of separation of powers ordains that each of the three branches of government has exclusivecognizance of and is supreme in matters falling within its own constitutionally allocated sphere. A logical

corollary to the doctrine of separation of powers is the principle of non-delegation of powers, as expressed inthe Latin maxim potestas delegata non delegari potest (what has been delegated cannot be delegated). This is

based on the ethical principle that such delegated power constitutes not only a right but a duty to be performedby the delegate through the instrumentality of his own judgment and not through the intervening mind of

another. 47

In the face of the increasing complexity of modern life, delegation of legislative power to various specialized

administrative agencies is allowed as an exception to this principle.48

Given the volume and variety of interactions in today's society, it is doubtful if the legislature can promulgate laws that will deal adequately with

and respond promptly to the minutiae of everyday life. Hence, the need to delegate to administrative bodies -the principal agencies tasked to execute laws in their specialized fields - the authority to promulgate rules and

regulations to implement a given statute and effectuate its policies. All that is required for the valid exercise of this power of subordinate legislation is that the regulation be germane to the objects and purposes of the law and

that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law. Theserequirements are denominated as the completeness test and the sufficient standard test.

Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such

that when it reaches the delegate, the only thing he will have to do is to enforce it. The second test mandatesadequate guidelines or limitations in the law to determine the boundaries of the delegate's authority and prevent

the delegation from running riot.49

The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is complete in

all its essential terms and conditions, and that it contains sufficient standards.

Although Sec. 34 of the EPIRA merely provides that "within one (1) year from the effectivity thereof, aUniversal Charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-

users," and therefore, does not state the specific amount to be paid as Universal Charge, the amountnevertheless is made certain by the legislative parameters provided in the law itself. For one, Sec. 43(b)(ii) of

the EPIRA provides:

SECTION 43. Functions of the ERC. — The ERC shall promote competition, encourage market development,ensure customer choice and penalize abuse of market power in the restructured electricity industry. In























appropriate cases, the ERC is authorized to issue cease and desist order after due notice and hearing. Towardsthis end, it shall be responsible for the following key functions in the restructured industry:

x x x x

(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with law, a

National Grid Code and a Distribution Code which shall include, but not limited to the following:

x x x x

(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities and

suppliers: Provided, That in the formulation of the financial capability standards, the nature and function of theentity shall be considered: Provided, further, That such standards are set to ensure that the electric power

industry participants meet the minimum financial standards to protect the public interest. Determine, fix, andapprove, after due notice and public hearings the universal charge, to be imposed on all electricity end-users

pursuant to Section 34 hereof;

Moreover, contrary to the petitioners’ contention, the ERC does not enjoy a wide latitude of discretion in thedetermination of the Universal Charge. Sec. 51(d) and (e) of the EPIRA

50 clearly provides:

SECTION 51. Powers. — The PSALM Corp. shall, in the performance of its functions and for the attainment ofits objective, have the following powers:

x x x x

(d) To calculate the amount of the stranded debts and stranded contract costs of NPC which shall form

the basis for ERC in the determination of the universal charge;

(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales and other property

contributed to it, including the proceeds from the universal charge.

Thus, the law is complete and passes the first test for valid delegation of legislative power.

As to the second test, this Court had, in the past, accepted as sufficient standards the following: "interest of lawand order;"

51 "adequate and efficient instruction;"

52 "public interest;"

53 "justice and equity;"

54 "public

convenience and welfare;"55

"simplicity, economy and efficiency;"56

"standardization and regulation of medicaleducation;"

57 and "fair and equitable employment practices."

58 Provisions of the EPIRA such as, among others,

"to ensure the total electrification of the country and the quality, reliability, security and affordability of thesupply of electric power"

59 and "watershed rehabilitation and management"

60 meet the requirements for valid

delegation, as they provide the limitations on the ERC’s power to formulate the IRR. These are sufficientstandards.

It may be noted that this is not the first time that the ERC's conferred powers were challenged. In Freedom from

Debt Coalition v. Energy Regulatory Commission,61

the Court had occasion to say:

In determining the extent of powers possessed by the ERC, the provisions of the EPIRA must not be read in

separate parts. Rather, the law must be read in its entirety, because a statute is passed as a whole, and isanimated by one general purpose and intent. Its meaning cannot to be extracted from any single part thereof but

from a general consideration of the statute as a whole. Considering the intent of Congress in enacting theEPIRA and reading the statute in its entirety, it is plain to see that the law has expanded the jurisdiction of the

regulatory body, the ERC in this case, to enable the latter to implement the reforms sought to be accomplished












































by the EPIRA. When the legislators decided to broaden the jurisdiction of the ERC, they did not intend toabolish or reduce the powers already conferred upon ERC's predecessors. To sustain the view that the ERC

possesses only the powers and functions listed under Section 43 of the EPIRA is to frustrate the objectives of the law.

In his Concurring and Dissenting Opinion62

in the same case, then Associate Justice, now Chief Justice,

Reynato S. Puno described the immensity of police power in relation to the delegation of powers to the ERCand its regulatory functions over electric power as a vital public utility, to wit:

Over the years, however, the range of police power was no longer limited to the preservation of public health,

safety and morals, which used to be the primary social interests in earlier times. Police power now requires the

State to "assume an affirmative duty to eliminate the excesses and injustices that are the concomitants of an

unrestrained industrial economy." Police power is now exerted "to further the public welfare — a concept as

vast as the good of society itself." Hence, "police power is but another name for the governmental authority to

further the welfare of society that is the basic end of all government." When police power is delegated toadministrative bodies with regulatory functions, its exercise should be given a wide latitude. Police power takes

on an even broader dimension in developing countries such as ours, where the State must take a more activerole in balancing the many conflicting interests in society. The Questioned Order was issued by the ERC, acting

as an agent of the State in the exercise of police power. We should have exceptionally good grounds to curtail

its exercise. This approach is more compelling in the field of rate-regulation of electric power rates. Electric power generation and distribution is a traditional instrument of economic growth that affects not only a few but

the entire nation. It is an important factor in encouraging investment and promoting business. The engines of

progress may come to a screeching halt if the delivery of electric power is impaired. Billions of pesos would be

lost as a result of power outages or unreliable electric power services. The State thru the ERC should be able to

exercise its police power with great flexibility, when the need arises.

This was reiterated in National Association of Electricity Consumers for Reforms v. Energy Regulatory

Commission63

where the Court held that the ERC, as regulator, should have sufficient power to respond in realtime to changes wrought by multifarious factors affecting public utilities.

From the foregoing disquisitions, we therefore hold that there is no undue delegation of legislative power to theERC.

Petitioners failed to pursue in their Memorandum the contention in the Complaint that the imposition of theUniversal Charge on all end-users is oppressive and confiscatory, and amounts to taxation without

representation. Hence, such contention is deemed waived or abandoned per Resolution64

of August 3, 2004.65

Moreover, the determination of whether or not a tax is excessive, oppressive or confiscatory is an issue which

essentially involves questions of fact, and thus, this Court is precluded from reviewing the same .66

As a penultimate statement, it may be well to recall what this Court said of EPIRA:

One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established anew policy, legal structure and regulatory framework for the electric power industry. The new thrust is to tapprivate capital for the expansion and improvement of the industry as the large government debt and the highly

capital-intensive character of the industry itself have long been acknowledged as the critical constraints to theprogram. To attract private investment, largely foreign, the jaded structure of the industry had to be addressed.

While the generation and transmission sectors were centralized and monopolistic, the distribution side wasfragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low

utilization of existing generation capacity; extremely high and uncompetitive power rates; poor quality of service to consumers; dismal to forgettable performance of the government power sector; high system losses;

and an inability to develop a clear strategy for overcoming these shortcomings.




















Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of theassets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of

the roles of various government agencies and the private entities. The law ordains the division of the industryinto four (4) distinct sectors, namely: generation, transmission, distribution and supply.

Corollarily, the NPC generating plants have to privatized and its transmission business spun off and privatized

thereafter.67

Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there mustbe a clear and unequivocal breach of the Constitution and not one that is doubtful, speculative, or

argumentative.68

Indubitably, petitioners failed to overcome this presumption in favor of the EPIRA. We find noclear violation of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA and Rule

18 of its IRR are unconstitutional and void.

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

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

epublic of the Philippines


FIRST DIVISION

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR ANDEMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO, respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the Philippine OverseasEmployment Administration (POEA) for the death of her husband. The decision is challenged by thepetitioner on the principal ground that the POEA had no jurisdiction over the case as the husbandwas not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident inTokyo, Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and











Memorandum Circular No. 2 of the POEA. The petitioner, as owner of the vessel, argued that thecomplaint was cognizable not by the POEA but by the Social Security System and should have beenfiled against the State Insurance Fund. The POEA nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the complainant. The award consistedof P180,000.00 as death benefits and P12,000.00 for burial expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to move for dismissalon the ground of non-exhaustion of administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor RelationsCommission, on the theory inter alia that the agency should be given an opportunity to correct theerrors, if any, of its subordinates. This case comes under one of the exceptions, however, as thequestions the petitioner is raising are essentially questions of law. 1 Moreover, the private respondenthimself has not objected to the petitioner's direct resort to this Court, observing that the usualprocedure would delay the disposition of the case to her prejudice.

The Philippine Overseas Employment Administration was created under Executive Order No. 797,promulgated on May 1, 1982, to promote and monitor the overseas employment of Filipinos and toprotect their rights. It replaced the National Seamen Board created earlier under Article 20 of the

Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with "originaland exclusive jurisdiction over all cases, including money claims, involving employee-employer relations arising out of or by virtue of any law or contract involving Filipino contract workers, includingseamen." These cases, according to the 1985 Rules and Regulations on Overseas Employmentissued by the POEA, include "claims for death, disability and other benefits" arising out of suchemployment. 2

The petitioner does not contend that Saco was not its employee or that the claim of his widow is notcompensable. What it does urge is that he was not an overseas worker but a 'domestic employee andconsequently his widow's claim should have been filed with Social Security System, subject to appealto the Employees Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was an overseasemployee of the petitioner at the time he met with the fatal accident in Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas employment is definedas "employment of a worker outside the Philippines, including employment on board vessels plyinginternational waters, covered by a valid contract. 3 A contract worker is described as "any personworking or who has worked overseas under a valid employment contract and shall include seamen" 4 or "any person working overseas or who has been employed by another which may be a localemployer, foreign employer, principal or partner under a valid employment contract and shall includeseamen." 5 These definitions clearly apply to Vitaliano Saco for it is not disputed that he died while

under a contract of employment with the petitioner and alongside the petitioner's vessel, the M/VEastern Polaris, while berthed in a foreign country. 6

It is worth observing that the petitioner performed at least two acts which constitute implied or tacitrecognition of the nature of Saco's employment at the time of his death in 1985. The first is itssubmission of its shipping articles to the POEA for processing, formalization and approval in theexercise of its regulatory power over overseas employment under Executive Order NO. 797. 7

Thesecond is its payment 8 of the contributions mandated by law and regulations to the Welfare Fund for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing social andwelfare services to Filipino overseas workers."



Significantly, the office administering this fund, in the receipt it prepared for the private respondent'ssignature, described the subject of the burial benefits as "overseas contract worker Vitaliano Saco." 9

While this receipt is certainly not controlling, it does indicate, in the light of the petitioner's ownprevious acts, that the petitioner and the Fund to which it had made contributions considered Saco tobe an overseas employee.

The petitioner argues that the deceased employee should be likened to the employees of thePhilippine Air Lines who, although working abroad in its international flights, are not considered

overseas workers. If this be so, the petitioner should not have found it necessary to submit itsshipping articles to the POEA for processing, formalization and approval or to contribute to theWelfare Fund which is available only to overseas workers. Moreover, the analogy is hardlyappropriate as the employees of the PAL cannot under the definitions given be considered seamennor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made by thePOEA pursuant to its Memorandum Circular No. 2, which became effective on February 1, 1984. Thiscircular prescribed a standard contract to be adopted by both foreign and domestic shippingcompanies in the hiring of Filipino seamen for overseas employment. A similar contract had earlier been required by the National Seamen Board and had been sustained in a number of cases by this

Court. 10 The petitioner claims that it had never entered into such a contract with the deceased Saco,but that is hardly a serious argument. In the first place, it should have done so as required by thecircular, which specifically declared that "all parties to the employment of any Filipino seamen onboard any ocean-going vessel are advised to adopt and use this employment contract effective 01February 1984 and to desist from using any other format of employment contract effective that date."In the second place, even if it had not done so, the provisions of the said circular are neverthelessdeemed written into the contract with Saco as a postulate of the police power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of theprinciple of non-delegation of legislative power. It contends that no authority had been given thePOEA to promulgate the said regulation; and even with such authorization, the regulation represents

an exercise of legislative discretion which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of Executive Order No.797, reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall promulgate thenecessary rules and regulations to govern the exercise of the adjudicatory functions of the Administration(POEA).

Similar authorization had been granted the National Seamen Board, which, as earlier observed, haditself prescribed a standard shipping contract substantially the same as the format adopted by thePOEA.

The second challenge is more serious as it is true that legislative discretion as to the substantivecontents of the law cannot be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment of the latter subject is aprerogative of the legislature. This prerogative cannot be abdicated or surrendered by the legislatureto the delegate. Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No.626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the confiscated property asprescribed in the questioned executive order. It is there authorized that the seized property shall bedistributed to charitable institutions and other similar institutions as the Chairman of the National Meat



Inspection Commission may see fit , in the case of carabaos.' (Italics supplied.) The phrase "may see fit " isan extremely generous and dangerous condition, if condition it is. It is laden with perilous opportunities forpartiality and abuse, and even corruption. One searches in vain for the usual standard and thereasonable guidelines, or better still, the limitations that the officers must observe when they make their distribution. There is none. Their options are apparently boundless. Who shall be the fortunatebeneficiaries of their generosity and by what criteria shall they be chosen? Only the officers named cansupply the answer, they and they alone may choose the grantee as they see fit, and in their ownexclusive discretion. Definitely, there is here a 'roving commission a wide and sweeping authority that isnot canalized within banks that keep it from overflowing,' in short a clearly profligate and therefore invaliddelegation of legislative powers.

There are two accepted tests to determine whether or not there is a valid delegation of legislativepower, viz , the completeness test and the sufficient standard test. Under the first test, the law must becomplete in all its terms and conditions when it leaves the legislature such that when it reaches thedelegate the only thing he will have to do is enforce it. 13 Under the sufficient standard test, there mustbe adequate guidelines or stations in the law to map out the boundaries of the delegate's authorityand prevent the delegation from running riot. 14

Both tests are intended to prevent a total transference of legislative authority to the delegate, who isnot allowed to step into the shoes of the legislature and exercise a power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers of theGovernment but is especially important in the case of the legislative power because of the manyinstances when its delegation is permitted. The occasions are rare when executive or judicial powershave to be delegated by the authorities to which they legally certain. In the case of the legislativepower, however, such occasions have become more and more frequent, if not necessary. This hadled to the observation that the delegation of legislative power has become the rule and its non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing inability of thelegislature to cope directly with the myriad problems demanding its attention. The growth of societyhas ramified its activities and created peculiar and sophisticated problems that the legislature cannot

be expected reasonably to comprehend. Specialization even in legislation has become necessary. Tomany of the problems attendant upon present-day undertakings, the legislature may not have thecompetence to provide the required direct and efficacious, not to say, specific solutions. Thesesolutions may, however, be expected from its delegates, who are supposed to be experts in theparticular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are particularly applicableto administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the national legislature has found it more and more necessary to entrust to administrativeagencies the authority to issue rules to carry out the general provisions of the statute. This is calledthe "power of subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down in a statute by"filling in' the details which the Congress may not have the opportunity or competence to provide. Thisis effected by their promulgation of what are known as supplementary regulations, such as theimplementing rules issued by the Department of Labor on the new Labor Code. These regulationshave the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model contract prescribedthereby has been applied in a significant number of the cases without challenge by the employer. Thepower of the POEA (and before it the National Seamen Board) in requiring the model contract is not



unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority.That standard is discoverable in the executive order itself which, in creating the Philippine OverseasEmployment Administration, mandated it to protect the rights of overseas Filipino workers to "fair andequitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards "Public interest" inPeople v. Rosenthal 15

"justice and equity" in Antamok Gold Fields v. CIR 16 "public convenience andwelfare" in Calalang v. Williams 17 and "simplicity, economy and efficiency" in Cervantes v. Auditor

General , 18 to mention only a few cases. In the United States, the "sense and experience of men" wasaccepted in Mutual Film Corp. v. Industrial Commission , 19

and "national security" in Hirabayashi v.United States . 20

It is not denied that the private respondent has been receiving a monthly death benefit pension of P514.42 since March 1985 and that she was also paid a P1,000.00 funeral benefit by the SocialSecurity System. In addition, as already observed, she also received a P5,000.00 burial gratuity fromthe Welfare Fund for Overseas Workers. These payments will not preclude allowance of the privaterespondent's claim against the petitioner because it is specifically reserved in the standard contract of employment for Filipino seamen under Memorandum Circular No. 2, Series of 1984, that—

Section C. Compensation and Benefits .—

1. In case of death of the seamen during the term of his Contract, the employer shall pay his beneficiariesthe amount of:

a. P220,000.00 for master and chief engineers

b. P180,000.00 for other officers, including radio operators and master electrician

c. P 130,000.00 for ratings.

2. It is understood and agreed that the benefits mentioned above shall be separate and distinct from, and

will be in addition to whatever benefits which the seaman is entitled to under Philippine laws. ...

3. ...

c. If the remains of the seaman is buried in the Philippines, the owners shall pay thebeneficiaries of the seaman an amount not exceeding P18,000.00 for burial expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22, issued by theNational Seamen Board on July 12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.—

All compensation benefits under Title II, Book Four of the Labor Code of the Philippines (EmployeesCompensation and State Insurance Fund) shall be granted, in addition to whatever benefits, gratuities or allowances that the seaman or his beneficiaries may be entitled to under the employment contractapproved by the NSB. If applicable, all benefits under the Social Security Law and the PhilippineMedicare Law shall be enjoyed by the seaman or his beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working class,consistently with the social justice policy and the specific provisions in the Constitution for theprotection of the working class and the promotion of its interest.



One last challenge of the petitioner must be dealt with to close t case. Its argument that it has beendenied due process because the same POEA that issued Memorandum Circular No. 2 has alsosustained and applied it is an uninformed criticism of administrative law itself. Administrative agenciesare vested with two basic powers, the quasi-legislative and the quasi-judicial. The first enables themto promulgate implementing rules and regulations, and the second enables them to interpret andapply such regulations. Examples abound: the Bureau of Internal Revenue adjudicates on its ownrevenue regulations, the Central Bank on its own circulars, the Securities and Exchange Commissionon its own rules, as so too do the Philippine Patent Office and the Videogram Regulatory Board and

the Civil Aeronautics Administration and the Department of Natural Resources and so on ad infinitum on their respective administrative regulations. Such an arrangement has been accepted as a fact of life of modern governments and cannot be considered violative of due process as long as the cardinalrights laid down by Justice Laurel in the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are resolved in favor of the private respondent, in line with the express mandate of the Labor Code and the principle thatthose with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of social justice, the

heavier influence of the latter must be counter-balanced by the sympathy and compassion the lawmust accord the underprivileged worker. This is only fair if he is to be given the opportunity and theright to assert and defend his cause not as a subordinate but as a peer of management, with whichhe can negotiate on even plane. Labor is not a mere employee of capital but its active and equalpartner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The temporaryrestraining order dated December 10, 1986 is hereby LIFTED. It is so ordered.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 157043 February 2, 2007

REPUBLIC OF THE PHILIPPINES, Petitioner,vs.

TRINIDAD R.A. CAPOTE, Respondent.

D E C I S I O N

CORONA, J.:

This petition for review on certiorari1 seeks to set aside the Court of Appeals (CA) decision

2 dated January 13,

2003 in CA-G.R. CV No. 66128, which affirmed the decision of the Regional Trial Court (RTC), Branch 23 of

San Juan, Southern Leyte dated September 14, 1999 granting a petition for change of name.

http://www.lawphil.net/judjuris/juri2007/feb2007/gr_157043_2007.html#fnt1









Respondent Trinidad R. A. Capote filed a petition for change of name of her ward from Giovanni N. Gallamaso

to Giovanni Nadores on September 9, 1998. In Special Proceeding No. R-481,3 Capote as Giovanni’s guardian

ad litem averred:

xxx xxx xxx

1. [Respondent] is a Filipino citizen, of legal age, married, while minor GIOVANNI N. GALLAMASO,is also a Filipino citizen, sixteen (16) years old and both are residents of San Juan, Southern Leyte where

they can be served with summons and other court processes;

2. [Respondent] was appointed guardian [ad litem] of minor Giovanni N. Gallamaso by virtue of a court

order in Special [Proc.] No. R-459, dated [August 18, 1998] xxx xxx authorizing her to file in court apetition for change of name of said minor in accordance with the desire of his mother [who is residing

and working abroad];

3. Both [respondent] and minor have permanently resided in San Juan, Southern Leyte, Philippines formore than fifteen (15) years prior to the filing of this instant petition, the former since 1970 while the

latter since his birth [in 1982];

4. The minor was left under the care of [respondent] since he was yet nine (9) years old up to thepresent;

5. Minor GIOVANNI N. GALLAMASO is the illegitimate natural child of Corazon P. Nadores andDiosdado Gallamaso. [He] was born on July 9, 1982 [,] prior to the effectivity of the New Family Code

and as such, his mother used the surname of the natural father despite the absence of marriage betweenthem; and [Giovanni] has been known by that name since birth [as per his birth certificate registered at

the Local Civil Register of San Juan, Southern Leyte];

6. The father, Diosdado Gallamaso, from the time [Giovanni] was born and up to the present, failed totake up his responsibilities [to him] on matters of financial, physical, emotional and spiritual concerns.

[Giovanni’s pleas] for attention along that line [fell] on deaf ears xxx xxx xxx;

7. [Giovanni] is now fully aware of how he stands with his father and he desires to have his surnamechanged to that of his mother’s surname;

8. [Giovanni’s] mother might eventually petition [him] to join her in the United States and [his]continued use of the surname Gallamaso, the surname of his natural father, may complicate [his] status

as natural child; and

9. The change of name [from] GIOVANNI N. GALLAMASO to GIOVANNI NADORES will be forthe benefit of the minor.

xxx xxx xxx4

Respondent prayed for an order directing the local civil registrar to effect the change of name on Giovanni’s birth certificate. Having found respondent’s petition sufficient in form and substance, the trial court gave due

course to the petition.5 Publication of the petition in a newspaper of general circulation in the province of

Southern Leyte once a week for three consecutive weeks was likewise ordered.6 The trial court also directed

that the local civil registrar be notified and that the Office of the Solicitor General (OSG) be sent a copy of thepetition and order.

7























Since there was no opposition to the petition, respondent moved for leave of court to present her evidence ex

parte before a court-appointed commissioner. The OSG, acting through the Provincial Prosecutor, did not

object; hence, the lower court granted the motion.

After the reception of evidence, the trial court rendered a decision ordering the change of name from GiovanniN. Gallamaso to Giovanni Nadores.

8

From this decision, petitioner Republic of the Philippines, through the OSG, filed an appeal with a lone

assignment of error: the court a quo erred in granting the petition in a summary proceeding.

Ruling that the proceedings were sufficiently adversarial in nature as required, the CA affirmed the RTC

decision ordering the change of name.9

In this petition, the Republic contends that the CA erred in affirming the trial court’s decision which granted thepetition for change of name despite the non-joinder of indispensable parties.

10 Petitioner cites Republic of the

Philippines v. Labrador 11

and claims that the purported parents and all other persons who may be adverselyaffected by the child’s change of name should have been made respondents to make the proceeding

adversarial.12

We deny the petition.

"The subject of rights must have a fixed symbol for individualization which serves to distinguish him from all

others; this symbol is his name."13

Understandably, therefore, no person can change his name or surnamewithout judicial authority.

14 This is a reasonable requirement for those seeking such change because a person’s

name necessarily affects his identity, interests and interactions. The State must be involved in the process anddecision to change the name of any of its citizens.

The Rules of Court provides the requirements and procedure for change of name. Here, the appropriate remedy

is covered by Rule 103,15

a separate and distinct proceeding from Rule 108 on mere cancellation and correctionof entries in the civil registry (usually dealing only with innocuous or clerical errors thereon) .

16

The issue of non-joinder of alleged indispensable parties in the action before the court a quo is intertwined with

the nature of the proceedings there. The point is whether the proceedings were sufficiently adversarial.

Summary proceedings do not extensively address the issues of a case since the reason for their conduct is

expediency. This, according to petitioner, is not sufficient to deal with substantial or contentious issuesallegedly resulting from a change of name, meaning, legitimacy as well as successional rights.

17 Such issues are

ventilated only in adversarial proceedings wherein all interested parties are impleaded and due process isobserved.

18

When Giovanni was born in 1982 (prior to the enactment and effectivity of the Family Code of the

Philippines),19

the pertinent provision of the Civil Code then as regards his use of a surname, read:

Art. 366. A natural child acknowledged by both parents shall principally use the surname of the father. If recognized by only one of the parents, a natural child shall employ the surname of the recognizing parent.

(emphasis ours)

Based on this provision, Giovanni should have carried his mother’s surname from birth. The records do not

reveal any act or intention on the part of Giovanni’s putative father to actually recognize him. Meanwhile,according to the Family Code which repealed, among others, Article 366 of the Civil Code:



















































Art. 176. Illegitimate children shall use the surname and shall be under the parental authority of their

mother, and shall be entitled to support in conformity with this Code. xxx xxx xxx (emphasis ours)

Our ruling in the recent case of In Re: Petition for Change of Name and/or Correction/Cancellation of Entry in

Civil Registry of Julian Lin Carulasan Wang20

is enlightening:

Our laws on the use of surnames state that legitimate and legitimated children shall principally use the surnameof the father. The Family Code gives legitimate children the right to bear the surnames of the father and the

mother, while illegitimate children shall use the surname of their mother, unless their father recognizes theirfiliation, in which case they may bear the father’s surname.

Applying these laws, an illegitimate child whose filiation is not recognized by the father bears only a given

name and his mother’ surname, and does not have a middle name . The name of the unrecognized

illegitimate child therefore identifies him as such. It is only when the illegitimate child is legitimated by thesubsequent marriage of his parents or acknowledged by the father in a public document or private handwritten

instrument that he bears both his mother’s surname as his middle name and his father’s surname as his surname,reflecting his status as a legitimated child or an acknowledged child.1awphi1.net

21

The foregoing discussion establishes the significant connection of a person’s name to his identity, his status in

relation to his parents and his successional rights as a legitimate or illegitimate child. For sure, these mattersshould not be taken lightly as to deprive those who may, in any way, be affected by the right to present evidence

in favor of or against such change.

The law and facts obtaining here favor Giovanni’s petition. Giovanni availed of the proper remedy, a petitionfor change of name under Rule 103 of the Rules of Court, and complied with all the procedural requirements.

After hearing, the trial court found (and the appellate court affirmed) that the evidence presented during thehearing of Giovanni’s petition sufficiently established that, under Art. 176 of the Civil Code, Giovanni is

entitled to change his name as he was never recognized by his father while his mother has always recognizedhim as her child. A change of name will erase the impression that he was ever recognized by his father. It is also

to his best interest as it will facilitate his mother’s intended petition to have him join her in the United States.

This Court will not stand in the way of the reunification of mother and son.

Moreover, it is noteworthy that the cases cited by petitioner22

in support of its position deal with cancellation orcorrection of entries in the civil registry, a proceeding separate and distinct from the special proceedings for

change of name. Those cases deal with the application and interpretation of Rule 108 of the Rules of Courtwhile this case was correctly filed under Rule 103. Thus, the cases cited by petitioner are irrelevant and have no

bearing on respondent’s case. While the OSG is correct in its stance that the proceedings for change of nameshould be adversarial, the OSG cannot void the proceedings in the trial court on account of its own failure to

participate therein. As the CA correctly ruled:

The OSG is correct in stating that a petition for change of name must be heard in an adversarial proceeding.

Unlike petitions for the cancellation or correction of clerical errors in entries in the civil registry under Rule 108of the Rules of Court, a petition for change of name under Rule 103 cannot be decided through a summaryproceeding. There is no doubt that this petition does not fall under Rule 108 for it is not alleged that the entry in

the civil registry suffers from clerical or typographical errors. The relief sought clearly goes beyond correctingerroneous entries in the civil registry, although by granting the petition, the result is the same in that a

corresponding change in the entry is also required to reflect the change in name. In this regard, [appellee]

Capote complied with the requirement for an adversarial proceeding by posting in a newspaper of

general circulation notice of the filing of the petition. The lower court also furnished the OSG a copy

thereof. Despite the notice, no one came forward to oppose the petition including the OSG. The fact that

no one opposed the petition did not deprive the court of its jurisdiction to hear the same nor does it makethe proceeding less adversarial in nature. The lower court is still expected to exercise its judgment to














determine whether the petition is meritorious or not and not merely accept as true the arguments propounded.Considering that the OSG neither opposed the petition nor the motion to present its evidence ex parte when it

had the opportunity to do so, it cannot now complain that the proceedings in the lower court were notadversarial enough.

23 (emphasis supplied)

A proceeding is adversarial where the party seeking relief has given legal warning to the other party and

afforded the latter an opportunity to contest it .24

Respondent gave notice of the petition through publication asrequired by the rules.

25 With this, all interested parties were deemed notified and the whole world considered

bound by the judgment therein. In addition, the trial court gave due notice to the OSG by serving a copy of thepetition on it. Thus, all the requirements to make a proceeding adversarial were satisfied when all interested

parties, including petitioner as represented by the OSG, were afforded the opportunity to contest the petition.

WHEREFORE, the petition is hereby DENIED and the January 13, 2003 decision of the Court of Appeals inCA-G.R. CV No. 66128 AFFIRMED.

SO ORDERED.


SUPREME COURT

Manila

FIRST DIVISION


SUPREME COURT

SECOND DIVISION

G.R. No. 158244. August 9, 2005

ERNESTO PONCE AND MANUEL C. BALIGNASAY, Petitioners,vs.

NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), INNODATA PHILIPPINES

CORP., INNODATA PROCESSING CORP. (INNODATA CORPORATION) and TODD SOLOMON, Respondent.

D E C I S I O N

CHICO-NAZARIO, J .:

Petitioners impugn in the instant petition for review the Decision1 and the Resolution, dated 14 November 2002

and 12 May 2003, respectively, of the Court of Appeals in CA-G.R. SP No. 69811, affirming the judgment of the National Labor Relations Commission (NLRC) which reversed the Decision of the Labor Arbiter, and found

petitioners to have committed willful neglect of duties as a result of their absences, but awarded financialassistance to petitioners in the amount of one-half (1/2) month salary for every year of service.

The factual antecedents were synthesized by the Court of Appeals in its decision.

Innodata Philippines Corporation (Innodata) is a corporation engaged in the business of data processing whereinraw data supplied by its clients are fed into computers to process the same into data suitable for computer use,


















while Todd Solomon is its President. Innodata offered, among other services, encoding, typesetting, indexing,and abstracting data. Data encoding includes pre-encoding, encoding, editing, proofreading and scanning. All

job orders or projects of Innodata come from its foreign clientele. In order to assure continuous flow of joborders/projects, it is essential for the company to guarantee its clients that it could faithfully fulfill its

commitments within the agreed period and with attention to quality.2

All throughout its years of operations, Innodata has been continually beset with the perennial problem of incurring delays in accomplishing its data processing projects. To solve its quandary, Innodata engaged

additional manpower, in the process incurring additional cost in the form of overtime pay to ensure that the joborders and projects would be finished promptly. But the work backlog persisted prompting the company to

investigate and commission a study as to the cause of the crisis. The study revealed that the problem wasattributable to the habitual tardiness and absenteeism of its employees. As a result, Innodata revised its policy

on tardiness and absenteeism and came out with the Revised 1998 Absenteeism and Tardiness Policy (1998Revised Policy), which took effect on 01 January 1998.

3

The 1998 Revised Policy lessened the number of allowable absences and tardiness in a month and increased the

penalties imposed upon the employees for such. For that reason, the union and employees of Innodatachallenged the same through its Grievance Machinery under the National Conciliation and Mediation Board.

After exhausting the remedies available in the existing Grievance Machinery, the Innodata Employees

Association and respondent Innodata agreed on 18 May 1998, to submit the issue to voluntary arbitration asgleaned from the parties’ Submission Agreement.

4

Pending resolution by the Voluntary Arbitrator of the issue on the validity of the 1998 Revised Policy, Innodata

terminated the services of petitioner Ernesto Ponce on 03 August 1998.5

On 21 August 1998, the Voluntary Arbitrator declared the 1998 Revised Policy as null and void for lack of consultation with the employees prior to its adoption and for being diminutive of the vested rights of the

employees inasmuch as it reduced the number of unexcused absences in a month that an employee can avail of without sanction.

6 On this date, Manuel Balignasay’s services were also terminated for absenteeism, under the

1998 Revised Policy. The Court of Appeals, however, reversed the ruling of the Voluntary Arbitrator and

affirmed the validity of the 1998 Revised Policy on the ground that it was a valid exercise of management prerogative. On appeal, this Court affirmed with finality the Court of Appeals’ decision on 27 June 2001.

7

Both petitioners Ponce and Balignasay filed a complaint for illegal dismissal against Innodata protesting thatthey were dismissed by the latter sans just cause and in violation of their right to security of tenure.

8 According

to petitioners, their dismissal was illegal considering that the 1998 Revised Policy under which their dismissalfrom employment was based was, at that time, still subject of voluntary arbitration and which in fact was later

nullified by Voluntary Arbitrator Francisco Sobreviñas in his Decision dated 21 August 1998. Finally,petitioners bemoaned that the 1998 Revised Policy is unreasonable and that the penalty of dismissal is too harsh

a penalty, not commensurate to the supposed offense of a few days’ absences.9

In contrast, Innodata argued in its Reply that the 1998 Revised Policy on absenteeism was a valid exercise of management prerogative and necessary to its self- preservation. On petitioners’ dismissal, Innodata unfalteringlyasserted that petitioners were guilty of serious misconduct, willful disobedience to the lawful order of their

employer, violation of the rules and regulations of the company and gross neglect of duty. And pursuant toArticle 282 of the Labor Code,

10 as amended, the termination from employment of Ponce and Balignasay was

based on just causes.11

On 29 December 1999, Labor Arbiter Jovencio Mayor, Jr., rendered a decision favoring the petitioners. In thearbiter’s rationale, the dismissal of petitioners was illegal because the 1998 Revised Policy under which their

dismissal from employment was founded was, at that time, still subject of voluntary arbitration as agreed uponby the Innodata Employees Association and Innodata. This being the case, the Labor Arbiter was of the view











































that the implementation of said 1998 Revised Policy should have been suspended until the Voluntary Arbitratorshall have ruled on the validity thereof.

The Labor Arbiter thus ordered the reinstatement of petitioners with full back wages, the dispositive portion of

which reads as follows:

WHEREFORE, in view of all the foregoing, respondents are hereby ordered to reinstate complainants to theirformer positions without loss of seniority rights and other privileges and benefits with full back wages

computed from the time of their illegal dismissal up to their actual reinstatement which up to this promulgationalready amounted to, to wit:

ERNESTO PONCE Php. 122,184.44

MANUEL BALIGNASAY 112,060.00

----------------------

Php 234,244.48

plus attorney’s fees in the amount of TWENTY-THREE THOUSAND FOUR HUNDRED TWENTY-FOUR(Php23, 424.44) PESOS AND 44/100.

12

In a Decision13

dated 28 September 2001, the Second Division of the NLRC reversed the arbiter’s decision andheld that petitioners were validly terminated for having exceeded the maximum allowable absences as provided

in the 1998 Revised Policy, the legality of which was upheld by the Supreme Court. The NLRC found thatdespite being apprised of the implementation of the 1998 Revised Policy effective 01 January 1998, each of the

petitioners still incurred a total of 35 unexcused absences for the year 1998 prior to their removal in August of that year. Nonetheless, as an act of justice following case precedents, they were awarded financial assistance

equivalent to one-half (1/2) month’s salary for every year of service. The NLRC disposed as follows:

Wherefore, premises considered, the assailed Decision dated 29 December 1999, is hereby REVERSED andSET ASIDE and a new one entered DISMISSING the instant case for lack of merit. However, respondents arehereby ordered to pay complainants financial assistance in the amount of one-half month pay for every year of

service.14

Both parties moved to reconsider the NLRC Decision. It appears, however, that the NLRC had, for reasonsunknown, overlooked the motion for reconsideration

15 filed by petitioners and received by the NLRC on 17

October 2001 because, on 20 November 2001, the NLRC denied only the motion for reconsideration filed byInnodata, without any mention as to that of petitioners. The Resolution reads:

After due consideration of the Motion for Reconsideration filed by respondent on October 22, 2001, from the

Decision of September 28, 2001, the Commission (Second Division) resolved to deny the same for lack of merit. [Emphasis supplied.]

16

Within the reglementary period to file an appeal, Innodata proceeded to file a petition for certiorari with theCourt of Appeals. In their Comment to Innodata’s petition for certiorari before the Court of Appeals, however,

petitioners argued that the petition was prematurely filed as their motion for reconsideration was still pendingwith the NLRC. Petitioners reiterated that they were illegally dismissed and prayed for the dismissal of the

petition and for other equitable reliefs.17


























The Court of Appeals did not dwell on the prematurity issue and proceeded to rule on the merits of the petition.On 14 November 2002, the appellate court affirmed the decision of the NLRC, disposing as follows-

WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby DISMISSED for lack of

merit, and the decision of the NLRC dated September 28, 2001 is AFFIRMED.18

Petitioners moved for reconsideration but it was denied in the Resolution19

dated 12 May 2003. Hence, thisappeal via a petition for review where petitioners assign the following single error to the Court of Appeals, viz:

the honorable court of appeals erred in affirming the assailed decision of the nlrc while there is still a pendingmotion for reconsideration before the national labor relations commission. The decision of November 14, 2002

is null and void.20

The lone issue before the Court thus focuses on whether or not the Court of Appeals can take cognizance of thepetition for certiorari filed by Innodata assailing solely the portion of the NLRC’s Decision awarding financial

assistance to the petitioners while the latter’s motion for reconsideration of the NLRC Decision remainedunresolved by the said Commission.

Petitioners decry the Court of Appeals’ rendition of the Decision despite the fact that the NLRC had yet to rule

on their motion for reconsideration. For this reason, they bellyache that the Court of Appeals lacked the jurisdiction to review the NLRC Decision which had not yet attained finality, thus, the petition filed by Innodata

before the Court of Appeals was vulnerable to dismissal for being prematurely filed. Given the foregoingpremises, petitioners pray that this Court set aside the assailed Decision and Resolution of the Court of Appeals

and a new judgment be entered remanding the case to the NLRC and ordering the said Commission to resolve

the petitioners’ motion for reconsideration which petitioners say had been pending for almost two years at the

time of filing of this petition.21

A contrario, in its Comment, the Office of the Solicitor General (OSG), in behalf of Innodata, grouses that

petitioners have waived their motion for reconsideration with the NLRC when they actively participated in theproceedings before the Court of Appeals and when they raised the issue of the legality of the dismissal in the

same forum. The Court of Appeals, therefore, correctly assumed jurisdiction over the petition for certiorari filed by Innodata, says the OSG.

22

In its memorandum,23

Innodata is of the same mind as the OSG and entreats this Court to dismiss the present

petition for utter want of merit.

Much as we commiserate with the plight of the working class in general, the arguments raised by petitioners intheir six-page petition are, to our mind, simply vacuous and lacking in persuasive force.

Preliminarily, we take this occasion to strike a chord that in a petition for review on certiorari, our jurisdiction,as set forth in Rule 45, Section 1, of the 1997 Rules of Court, is limited to "questions of law which must be

distinctly set forth," to wit:

Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a judgment or final orderor resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever

authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition

shall raise only questions of law which must be distinctly set forth. [Italics supplied]

In the case at bar, petitioners having specifically raised a single procedural issue on the alleged prematurity of

the Court of Appeals’ Decision, we shall limit our discussion to this lone assignment of error.


























We agree in the stand of the OSG that the Court of Appeals correctly assumed jurisdiction over the petition forcertiorari filed by Innodata notwithstanding the pendency of the petitioners’ motion for reconsideration before

the NLRC. As intoned by the OSG, note that instead of moving for the dismissal of the petition filed byInnodata before the Court of Appeals in this case, petitioners, in their Comment to said petition, did not limit

their arguments to the alleged prematurity of said petition, but rather zealously argued the illegality of theirdismissal as well. Likewise, petitioners in their prayer to their Comment sought not only the dismissal of the

said petition but other reliefs too. Patently, petitioners had of their own accord submitted the entire case to the jurisdiction of the Court of Appeals, which jurisdiction they cannot now conveniently assail as estoppel had

already set in.24

As has been held in M. Ramirez Industries v. The Hon. Secretary of Labor and Employment :

[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after

obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.

. . . [I]t was further said that the question whether the court had jurisdiction either of the subject-matter of theaction or of the parties is barred from such conduct not because the judgment or order of the court is valid and

conclusive as an adjudication, but for the reason that such a practice can not be tolerated obviously for reasonsof public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse

decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. . . And inLittleton vs. Burges, 16 Wyo, 58, the Court said that it is not right for a party who has affirmed and invoked the

jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same

jurisdiction to escape a penalty.25

We hasten to add that at the time Innodata filed the petition for certiorari with the Court of Appeals, the NLRC

had already denied its motion for reconsideration. As such, it is reasonable for Innodata to believe that with thedenial of its motion for reconsideration by the NLRC, its business with said Commission is finished and the

next logical move is to appeal in due time the NLRC’s Decision to the Court of Appeals.

Then, too, implicit to the denial of Innodata’s motion for reconsideration is the obvious fact that the NLRC

preserved in toto its 28 September 2001 Decision which held petitioners to have been validly dismissed, butwith award of financial assistance to them. Indeed, the NLRC need not state the obvious that nothing, not even

petitioners’ motion for reconsideration, had changed the NLRC’s mind as to the course of its 28 September 2001 Decision.

In other words, although the 20 November 2001 Resolution of the NLRC tackled solely Innodata’s motion for

reconsideration questioning the award of financial assistance to petitioners, common sense and logic dictate thatsuch a denial carries the effect of denying petitioners’ motion for reconsideration as well for how can the

NLRC, on one hand, preserve in its 20 November 2001 resolution its ruling that petitioners were legally

dismissed (although awarded with financial assistance) and, on another hand, hold that they were not, if it grantspetitioners’ motion for reconsideration?

In fine, ours is not a perfect system of procedural rules as it does not encompass deviations such as the NLRC’s

oversight in the case at bar. But what is missing in the rules may be found in the general principles of logic, justice and equity.

26

As a postscript, the NLRC’s Second Division had resolved the pending motion for reconsideration of the

petitioners in its Resolution27

dated 12 August 2004 possibly after the NLRC was apprised of its oversight whenit was made a respondent in the case at bar. With this belated development, petit ioners’ prayer

28 for this Court






















to order the NLRC to resolve their pending motion for reconsideration has, in point of fact, become a vapidentreaty.

WHEREFORE, the present petition is hereby DENIED. Accordingly, the Decision and the Resolution, dated

14 November 2002 and 12 May 2003, respectively, of the Court of Appeals are hereby AFFIRMED. No costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 109113 January 25, 1995

CONCERNED OFFICIALS OF THE METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

(MWSS), petitioners,vs.HON. OMBUDSMAN CONRADO M. VASQUEZ AND MEMBERS OF THE PHILIPPINE LARGEDIAMETER PRESSURE PIPE MANUFACTURERS ASSOCIATION (PLDPPMA), respondents.

VITUG, J.:

The Ombudsman, in its 19th October 1992 Order, 1 directed the Board of Trustees of Metropolitan

Waterworks and Sewerage System ("MWSS") (a) to set aside the recommendation of its Pre-

qualification, Bids and Awards Committee for Construction Services and Technical Equipment("PBAC-CSTE") that Contract No. APM-01 be given to a contractor offering fiberglass pipes and (b) toinstead award the contract to a complying and responsive bidder pursuant to the provisions of Presidential Decree No. 1594. 2

The subsequent motion for reconsideration was denied by theOmbudsman in its Order 01 March 1993.

These two Orders are now sought to be annulled in this petition for certiorari , with prayer for preliminary injunction or a restraining order, lodged by the "Concerned Officials of the MetropolitanWaterworks and Sewerage System" 3

led by its former Administrator Teofilo I. Asuncion. Let us firsttouch on the factual backdrop.

In order to provide about 1.3 million liters of water daily to about 3.8 million people in the metropolitanarea, 4 MWSS launched the Angat Water Supply optimization ("AWSOP") consisting of several

phases. The entire project would be, in most part, financed by funds loaned by the OverseasEconomic Cooperation Fund ("OECF") of Japan to the national government and allocated to MWSSin the form of equity. 5

With the completion of the construction of the main aqueduct from Angat Damall the way down to La Mesa Dam in Novaliches, Quezon City, from where water mains for thedistribution system of the entire Metro Manila begin, MWSS focused its attention to the DistributionSystem Phase of the AWSOP. The projects were denominated Projects APM-01 and APM-02 whichconsist of the construction of the Distribution System Phase of the AWSOP, that would particularlycall for the supply of labor, materials and equipment, and of the installation of new watermains(43,305 linear meters for APM-01 and 31,491 linear meters for APM-02), 6

comprising of fittings,



valves and pipes of different sizes. 7 Under Clause IB-34 of the contract documents for APM-01 and

APM-02 the permitted alternative pipe materials for the projects were to include the following items:

(millimeters)

Asbestos cement Pipe (ACP) — 100 mm to 600 mm

Cast Iron Pipe (CIP) — 50 and larger

Polyethylene Pipe (PE) — 50 mm to 250 mm

Polyvinyl Chloride Pipe (DIP) — 50 mm and larger

Steel Pipe (SP) — 400 mm and larger

Fiberglass Pressure Pipe (FPP) — 300 mm and larger 8

On 30 August 1991, MWSS caused the publication in two (2) leading newspapers of an "Invitation for Pre-qualification and Bids" for Projects were opened for international competitive bidding, copies of the "Invitation for pre-qualification and Bids" were sent to the respective embassies and trademissions of member countries of the OECF. The advertisement and invitation to prospective biddersannounced that "(g)oods and services to be supplied under (the) contract must have their origin fromcountries defined in the Guidelines for Procurement of Goods under OECF loans" and that "(j)ointventures between foreign and domestic firms as encouraged." While there were twenty-five (25)

prospective applicants who secured pre-qualification documents, only fourteen (14) contractorssubmitted corresponding applications to the PBAC-CSTE.

On 20 November 1991, the PBAC-CSTE, after evaluating the applications for pre-qualification, issueda report 9

concluding that only eleven (11) 10 out of the fourteen (14) contractors were pre-qualified to

bid for the 31st March 1992 scheduled bidding covering both the APM-01 and APM-02 proposedcontracts. The major factors considered in the evaluation were the applicants' financial condition,technical qualifications and experience to undertake the project under bid.

Meanwhile, private respondent Philippine Large Diameter pressure Pipes Manufacturers' Association("PLDPPMA"), 11

sent seven (7) letters, between 13 January and 23 March 1992, to the MWSS

requesting clarification, as well as offering some suggestions, on the technical specifications for APM-01 and APM-02.

The first letter, dated 13 January 1992, 12 sought clarification on the design criteria of thickness used

for fiberglass and ductile iron pipes which varied from the standard thickness given by manufacturers.

The second letter, dated 29 January 1992, 13 suggested that all alternative pipes for Projects APM-01

and APM-02 should have the same design criteria on stiffness class, pressure class, rating, elevatedtemperature and wall thickness and should be manufactured in accordance with American water Works Association ("AWWA") standards.

PLDPPMA, in its third letter of 13 February 1992,

14

sought to be elaborated on the imposition of thetesting procedure of stiffness factor on steel pipes used in Fiberglass Reinforced Pipes ("FRP") andsuggested that the 5-year minimum experience by manufacturers be required for alternative pipes.

In its fourth letter, dated 25 February 1992, 15 PLDPPMA reiterated their request that the deflection

allowance of 3% under the AWWA standards on steel pipes be also applied to all alternative pipesand suggested that a comparative study should be undertaken by the MWSS on the feasibility of using filament wound fiberglass pipes ("FRP") and centrifugally cast fiberglass pipes ("GRP").



In their fifth letter, dated 05 March 1992, 16 PLDPPMA appealed to the MWSS to have steel pipes

placed in equal footing with other alternative pipes, specifically filament wound and centrifugally castfiberglass pipes, in order to avoid an unfair requirement on stiffness value.

In their penultimate letter of 16 March 1992, 17 PLDPPMA informed MWSS of their computation for

wall thickness and stiffness values for cement lined/cement coated and epoxy lined/coal tar enamelcoated steel pipes based on AWWA standards.

Finally, in their seventh letter of 23 march 1992, 18 PLDPPMA reiterated their request for correctingthe specifications for steel and fiberglass pipes, particularly on wall thickness and deflections,because of MWSS Addendum #5 where the wall thickness for steel pipes were noted to be more thanthe wall thickness computed in the previously agreed agenda.

Former Administrator Luis Sison issued, between 10 February and 24 March 1992, six (6) addenda tothe bidding documents that embodied the meritorious suggestions of PLDPPMA on various technicalspecifications. In his 24th March 1992 letter to the PLDPPMA, in response to the latter's 23rd march1992 (seventh) letter, Sison explained that the additional thickness for steel pipes was so required inorder to serve as a pipe corrosion allowance to counter imperfection in the preparation andapplication of lining and coating, the limit service life of epoxy resin lining and the corrosive element of

the local soil.

The bidding was conducted by PBAC on the previously scheduled date of 31 March 1992. Theprequalified bidders using steel and fiberglass pipes submitted their respective bid proposals. Theapproved agency cost estimate for Project APM-01 was Three Hundred Sixty Six Million Six HundredFifty Thousand Pesos (P366,650,000,00). 19

The Three (3) lowest bidders for the said project (APM-01) were the following:

BIDDER BID PRICE

1 DYWIDAG/TITAN/WILPER

PLDPPMA/GREEN JADE (Joint Venture) P267,345,574.00

2 F.F. CRUZ & CO., INC. P268,815,729.00 3 J.V. ANGELES CONST. CORP./JA

DEVT. CORP. P278,205,457.00 20

while the three lowest bidders for Project APM-02 included:

BIDDER BID PRICE

1 ENG'G. EQUIPMENT, INC. (EEI) P219,574,538.00

2 FF CRUZ & CO., INC. P233,533,537.00

3 J.V ANGELES CONST. CORP./JA

DEVT. CORP. P277,304,604.00 21

In APM-01, Joint Venture and F.F. Cruz and Co., Inc. proposed to use fiberglass pipes. In APM-02,Eng'g. Equipment Inc. and F.F. Cruz likewise preferred to use fiberglass pipes.

After the three lowest bidders for both projects were known, a meeting was held on 27 May 1992 bythe PBAC-CSTE, composed of MWSS Deputy Administrator for Engineering Eduardo M. del Fierro,as Acting Chairman, and deputy Administrator for Operations Ruben A. Hernandez, Acting Chief of Legal office Precioso E. Remolacio, and Project Manager Cesar S. Guevarra, as members, to decideon what should be done about Contract APM-01. Three of the members, namely, Hernandez,Guevarra and Asuncion, recommended for the contract on the following grounds:



a. Ambiguity of Addendum No. 6— The Addendum is subject to different interpretations because therewas no illustrations provided. Further, it could also be said that some contractors did not use the FRPbecause said Addendum was not clearly explained.

b. There was no provision for maintenance/repair materials for bidders who opted to use FRP which isrelatively new pipe to be used in the country. It was suggested that a 5% to 10% allowance be providedfor maintenance purposes.

c. Further review of pipe design should be made by the Consultant (NJS) in order to accommodate the

load to be carried in the Umiray-Angat Loop.22

Precioso E. Remolacio abstained; he felt that "technical evaluation (was) more essential in decidingthe issues in (the) Contract." For his part, Acting Chairman Eduardo M. del Fierro recommended thatno rebidding should be undertaken and that an award should be made to either the lowest or thesecond lowest bidder.

On 29 May 1992, PBAC-CSTE met again to discuss and evaluate the bids in APM-02. Here again,three members, namely, Guevarra, Hernandez and Asuncion, opined that a rebidding should beconducted, while Acting Chairman del Fierro and Remolacio believed that the contract should beawarded to the lowest bidder.

Finally, on 02 June 1992, the PBAC-CSTE formally submitted its report 23 on its bid evaluation on

APM-01. The PBAC-CSTE held that while Joint Venture's bid might have been the lowest it was,however, invalid due to its failure to acknowledge Addendum No. 6, a major consideration, that couldnot be waived. It accordingly recommended that the contract be instead awarded to the secondlowest but complying bidder, F.F. Cruz & Co., Inc., subject to the latter's manifestation that it wouldonly hire key personnel with experience in the installation of fiberglass pressure pipes (due to PBAC-CSTE's observation in the report that the company and its key personnel did not have previousexperience in the installation of fiberglass reinforced pipes). Acting Chairman del Fierro, together withmembers Guevarra and Asuncion, approved the PBAC-CSTE's findings and recommendation.Hernandez and Remolacio both disagreed with the findings of the PBAC-CSTE; the former opted for

a rebidding while the latter batted for awarding the contract to Joint Venture.

On the following day, or on 03 June 1992, the MWSS Board Committee on ConstructionManagement and the Board Committee on Engineering, acting jointly on the recommendation of

Administrator Sison, recommended that Contract No. APM-01 be awarded to F.F. Cruz & Co., Inc.,being the lowest complying bidder. 24

Prior thereto, or on 07 April 1992 (seven days after the submission of the bid proposals on 31 March1992), private respondent PLDPPMA, through its President Ramon Pastor, filed with the Office of theOmbudsman a letter-complaint 25

(docketed Case No. OMB-0-92-0750) protesting the public biddingconducted by the MWSS for Projects APM-01 and APM-02, detailing charges of an "apparent plan"

on the part of the MWSS to favor suppliers of fiberglass pipes, and urging the Ombudsman toconduct an investigation thereon and to hold in abeyance the award of the contracts. PLDPPMA'sletter-complaint, in part, read:

Even before the bidding had started, there appears to be an apparent plan on the part of the MWSS tofavor a particular supplier of pipes for the project considering the following events:

Firstly, the bid documents particularly the specifications for alternative pipes when first released inDecember 1991 whimsically and arbitrarily set such rigid standards for steel pipes so that MWSS had toissue six addenda to the bidding documents and had to postpone the bidding several times in a vainattempt to correct the apparent prejudice against the use of steel pipes for the APM 01 and 02 projects;



Secondly, despite our prior agreement with MWSS Engineering Department that the alternative pipes tobe used for the project should comply with internationally accepted AWWA specifications was writtenarbitrarily and in complete disregard of AWWA specifications increased by 1 mm. the thickness requiredfor steel pipes thereby effectively increasing the cost of steel pipes for the APM 01 project bid by aboutP30 Million, or more than twice the difference between the lowest bid and the bid that utilized steel pipes;

Thirdly, despite the fact that it was/is of common knowledge that FRP and GRP (Fiberglass) pipes havehad a long history of failures in the United States such that even MWSS Pre-qualification, Bidding and

Awards Committee resolved in a meeting held in March 1992 not to use FRP and GRP pipes for large

projects, bids utilizing such pipes were still accepted for the FRP and GRP pipes for large projects, bidsutilizing such pipes were still accepted for the APM 01 and 02 projects; and

Lastly, the undue preference for the use of GRP pipes became more apparent when the supposed lowestbidder for the APM 01 project (who did not participate in the bidding for APM 02 project), and thesupposed lowest bidder for the APM 02 project (who also did not participate in the bidding for APM 01project), both submitted bids utilizing GRP pipes.

On 10 June 1992, the Ombudsman referred PLDPPMA's 07th April 1992 letter-complaint to theMWSS Board of Trustees for comment along with a directive to it to hold in abeyance the awarding ofthe subject contract. 26

MWSS asked for an extension of time within which to submit its comment butcalled, at the same time, the attention of the Ombudsman to Presidential Decree No. 1818 27

prohibiting the issuance of restraining orders/injunctions in cases involving government infrastructureprojects.

After the submission by the parties of their respective pleadings, the case was referred to the Fact-Finding and Intelligence Bureau of the Office of the Ombudsman for Investigation and report 28

wassubmitted to, and approved by, the Ombudsman which became the basis for the issuance of the nowchallenged order, dated 19 October 1992, 29 reading as follows:

In view of the findings of this Office on the above-entitled case as contained in the Fact-Finding Report,dated September 14, 1992, of the Fact Finding Investigation Bureau (copy attached), and pursuant to thePowers, Functions and Duties of the Office of the Ombudsman as mandated under Section 15 of Republic Act 6770 (Ombudsman Act), the MWSS Board of Trustees in hereby directed to:

1) Set aside the recommendation of the MWSS Pre-qualification, Bids and AwardsCommittee for Construction Services and Technical Equipment (PBAC-CSTE) to awardContract APM-01 to a contractor offering fiberglass pipes;

2) Award the subject contract to a complying and responsive bidder pursuant to theprovisions of PD 1594, Prescribing Policies, Guidelines, Rules and Regulations for Government Infrastructure Contracts.

The Board of Trustees is further directed to inform this Office of the action taken thereon.

SO ORDERED.

A motion by herein petitioners for the reconsideration of the order was denied on 01 March 1993. 30

Petitioners cite to us the following reasons for its petition for certiorari .

I

RESPONDENT OMBUDSMAN ACTED BEYOND THE COMPETENCE OF HIS OFFICE WHEN HE ASSUMED JURISDICTION OVER THE COMPLAINT AT BAR NOTWITHSTANDING THAT THE SAMEIS CLEARLY AMONG THE CASES EXCEPTED BY SECTION 20 OF THE OMBUDSMAN ACT OF 1989(RA NO. 6770) WHICH ENUMERATED THE ADMINISTRATIVE ACT OR OMISSION THAT MAY NOTBE THE SUBJECT OF INVESTIGATION BY HIS OFFICE.



II

RESPONDENT OMBUDSMAN, AFTER HAVING TAKEN COGNIZANCE OF THE COMPLAINT, ARBITRARILY ISSUED A DIRECTIVE IN THE NATURE OF A RESTRAINING ORDER OR WRIT OFPRELIMINARY INJUNCTION TO PETITIONERS "TO HOLD IN ABEYANCE THE AWARDING OF THECONTRACT . . . UNTIL FURTHER ORDER FROM THIS OFFICE," A POWER OR AUTHORITY NOTVESTED IN HIS OFFICE.

III

RESPONDENT OMBUDSMAN ACTED WITHOUT JURISDICTION IN ISSUING THE ORDER OFOCTOBER 1993, CONSIDERING THAT UNDER THE LAW THE OMBUDSMAN'S JURISDICTIONCANNOT AND SHOULD NOT BE EXPANDED TO INCLUDE THE DECISION MAKING POWER OVER

A CIVIL ADJUDICATORY MATTER SUCH AS THE MWSS BIDDING PROCESS.

IV

RESPONDENT OMBUDSMAN COMMITTED A GRAVE ERROR OF LAW, AND ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, BY ARBITRARILY ANDCAPRICIOUSLY INTERPRETING WITH THE EXERCISE OF SOUND DISCRETION BY THE MWSSWHICH IS A SPECIALIZED AGENCY OF GOVERNMENT WITH WHICH EVEN COURTS OF JUSTICEGENERALLY DO NOT INTERFERE TO ISSUE THE ORDERS.

V

RESPONDENT OMBUDSMAN COMMITTED A GRAVE ERROR OF LAW, AND ACTED WITH GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OF JURISDICTION, IN ISSUING THE SUBJECTORDERS IN GROSS DISREGARD OF THE CARDINAL PRINCIPLES OF DUE PROCEEDINGS,

ASSUMING ARGUENDO THAT HE HAS JURISDICTION TO ISSUE SAID ORDERS.

VI

RESPONDENT OMBUDSMAN COMMITTED GRAVE ERROR OF LAW, AND ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, IN GROSSLY

MISAPPREHENDING THE RECORD BY FAILING TO TAKE INTO ACCOUNT THE FINDINGS OFEXPERTS THAT THE MWSS SPECIFICATIONS ARE FAIR, AND BY CONCLUDING BASELESSLYTHAT MWSS FORMULATED ITS SPECIFICATIONS TO FAVOR FIBERGLASS PIPES OVER STEELPIPES, ASSUMING ARGUENDO THAT HE HAS JURISDICTION TO ISSUE THE SUBJECT ORDERS.

VII

RESPONDENT OMBUDSMAN COMMITTED GRAVE ERROR OF LAW, AND ACTED ARBITRARILY AND CAPRICIOUSLY, IN IMPLYING BASELESSLY THAT MWSS ACTED UNFAIRLY, OPPRESSIVELY AND WITH GRAVE ABUSE OF DISCRETION, ASSUMING ARGUENDO THAT HE HAS JURISDICTIONTO ISSUE THE SUBJECT ORDERS.

VIII

IN CONSEQUENCE, THE ORDERS OF OCTOBER 19, 1992 AND MARCH 1, 1993 MUST BEREVERSED, ANNULLED AND SET ASIDE.

31

After the required pleadings were filed by the parties, this Court, in its resolution of 19 May 1994 gavedue course to the petition and required the parties to submit memoranda. In compliance therewith,the parties filed their respective memoranda, petitioners (MWSS) on 07 July 1994, the Solicitor-General on 28 June 1994, and PLDPPMA on 19 July 1994. Petitioners opposed Titan's intervention.This Court, ultimately, denied the motion for leave to intervene.



The various alleged errors raised by petitioners can be grouped into two basic issues, i.e., (a)whether or not the rudiments of due process have been properly observed in the issuance of theassailed 19th October 1992 and 01st march 1993 orders of the Ombudsman; and, more pivotal thatthe first, (b) whether or not the Ombudsman has jurisdiction to take cognizance of PLDPPMA'scomplaint and to correspondingly issue its challenged orders directing the Board of Trustees of theMWSS to set aside the recommendation of the PBAC-CSTE.

Relative to the first issue, we are more than convinced, after a scrutiny of the records of this case,

that petitioners have been amply accorded the opportunity to be heard.

Petitioners were asked to comment on the letter-complaint of PLDPPMA. On 25 June 1992,petitioners moved for an extension of time within which to comment. On July 16, 1992, petitionersfiled their letter-comment. Responding to the reply of PLDPPMA, petitioners later filed a rejoinder.When an adverse order was rendered against them, petitioners moved for its reconsideration, albeit to no avail.

The absence of due process is an opportunity to be heard. 32 One may be heard, not solely by verbal

presentation but also, and perhaps even many times more creditably and practicable than oralargument, through pleadings. 33

In administrative proceedings, moreover, technical rules of procedure

and evidence are not strictly applied; administrative due process cannot be fully equated to dueprocess in its strict judicial sense.

On the threshold matter that puts to issue the Ombudsman's directive to the Board of Trustees of MWSS to set aside the recommendation of the PBAC — CSTE to award Contract No. APM-01 to thelowest complying bid, we find, this time, the petition to be impressed with merit.

Petitioners maintain that while Republic Act ("R.A.") No. 6770, otherwise known as the Ombudsman Act of 1989, extends certain well-defined powers and authority to the Office of the Ombudsman to,among other functions, investigate and prosecute complaints filed therewith, the same law, however,expresses limits to the exercise of such jurisdictional power and authority. Section 20 of the Act is

cited; viz:

Sec. 20. Exceptions. — The Office of the Ombudsman may not conduct the necessary investigation of any administrative act or omission complained of if it believes that:

(1) The Complainant has an adequate remedy in another judicial or quasi-judicial body;

(2) The complaint pertains to a matter outside the jurisdiction of the Office of theOmbudsman;

(3) The complaint is trivial, frivolous interest in the subject matter of the grievance; or

(4) The complaint is trivial, frivolous, vexations or made in bad in bad faith;

(5) The complaint was filed after one year from the occurrence of the act or omissioncomplained of.

Petitioners contend that PLDPPMA's complaint falls under exceptions (1) to (4) of Sec. 20 of R.A. No.6770, and that, therefore, the Ombudsman should not have taken cognizance of the complaint.

Asserting, upon the other hand, that the Ombudsman has jurisdiction over PLDPPMA's complaint, theSolicitor-General enumerations various constitutional and statutory provisions; to wit:



(a) Section 13, Article XI of the 1987 Constitution providing thusly:

Sec. 13. The Office of the Ombudsman shall have the following powers, functions and duties:

(1) Investigate on its own, or on complaint by any person, any act or omission of anypublic official, employee, office or agency, when such act or omission appears to beillegal, unjust, improper, or inefficient.

(2) Direct, upon complaint or at its own instance, any public official or employee of the

Government, or any subdivision, agency or instrumentality thereof, as well as of anygovernment-owned or controlled corporation with original charter, to perform andexpedite any act or duty required by law, or to stop, prevent, and correct any abuse or impropriety in the performance of duties.

(3) Direct, the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith

(4) Direct the officer concerned, in any appropriate case, and subject to such limitationsas may be provided by law, to furnish it with copies of documents relating to contracts or transactions entered into by his office involving the disbursement or use of public funds orproperties, and report any irregularity to the Commission of Audit for appropriate action.

(5) Request any government agency for assistance and information necessary in thedischarge of its responsibilities, and to examine, if necessary, pertinent records anddocuments.

(6) Publicize matters covered by its investigation when circumstances so warrant andwith due prudence.

(7) determine the causes of inefficiency, red tape, mismanagement, fraud, and corruptionin the Government and make recommendations for their elimination and the observanceof high standards of ethics and efficiency.

(8) Promulgate its rule of procure and exercise such other powers or perform suchfunctions or duties as may be provided by law.

(b) Section 13 of republic Act No. 6770 which reads:

Sec. 13. Mandate.— The Ombudsman and his Deputies, as protectors of the people, shall act promptlyon complaints filed in any form or manner against officers or employees of the Government, or of anysubdivision, agency or instrumentality thereof, including government-owned or controlled corporations,enforce their administrative, civil and criminal liability in every case where the evidence warrants in order to promote efficient service by the Government to the to the people.

(c) Section 15, paragraphs (1) to (7), of republic Act No. 6770 which reproduced verbatim the

aforequoted provisions of Section 13 of the 1987 Constitution with some additional salient statutoryprovisions; hence:

Sec. 15. Powers, Functions and Duties. — The Office of the Ombudsman shall have the followingpowers, functions and duties:

xxx xxx xxx

(8) Administer oaths, issue subpoena and subpoena duces tecum , and take testimony in any

investigation or inquiry, including the power to examine and have access to bank accounts and records;



(9) Punish for contempt in accordance with the Rules of Court and under the same penalties providedtherein;

(10) delegate to the Deputies, or its investigators or representatives such authority or duty as shall ensurethe effective exercise or performance of the powers, functions and duties herein or hereinafter provided;

(11) Investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained wealthamassed after February 25, 1986 and the prosecution of the parties involved therein;

The Ombudsman shall give priority to complaints filed against high ranking government officials and/or those occupying supervisory positions, complaints involving grave offenses as well as complaintsinvolving large sums of money and/or properties.

(d) And, finally, Section 26 of the Ombudsman Act which expresses, as follows:

Sec. 26. Inquiries.— The Office of the Ombudsman shall inquire into acts or omissions of the publicofficer, employee, office or agency which, from the reports or complaints it has received the Ombudsmanor his Deputies consider to be:

(a) contrary to law or regulation;

(b) unreasonable, unfair, oppresive, irregular or inconsistent with the general course of the operations and functions of a public officer, employee, office or agency;

(c) an error in the application or interpretation of law, rules or regulations, or a gross or palpable error in the appreciation of facts;

(d) based on improper motives or corrupt considerations;

(e) unclear or inadequately explained when reasons should have been revealed; or

(f) inefficiently performed or otherwise objectionable.

2. The Office of the Ombudsman shall receive complaints from any source in whatever form concerningan official act or omission. It shall act on the complaint immediately and if it finds the same entirelybaseless, it shall dismiss the same and inform the complainant of such dismissal citing the reasonstherefor. If it finds a reasonable ground to investigate further, it shall first furnish the respondent publicofficer or employee with a summary of the complaint and require him to submit a written answer withinseventy-two hours from receipt thereof. If the answer is found satisfactory, it shall dismiss the case.

3. When the complaint consists in delay or refusal to perform a duty required by law, or when urgentaction is necessary to protect or preserve the rights of the Ombudsman shall take steps or measures andissue such orders directing the officer, employee, office or agency concerned to:

(a) expedite the performance of duty;

(b) cease or desist from the performance of a prejudicial act;

(c) correct the omission;

(d) explain fully the administrative act in question; or

(e) take any steps as may be necessary under the circumstances to protect and preservethe rights of the complainant.

4. Any delay or refusal to comply with the referral or directive of the Ombudsman or any of his Deputiesshall constitute a ground for administrative disciplinary action against the officer or employee to whom itwas rendered.



On the basis of all the foregoing provisions of law, the Solicitor-General insists that the authority of the Ombudsman is sufficiently broad enough to cloth it with sufficient power to look into the allegedirregularities in the bidding conducted on 31 March 1992 leading to the recommendation made by thePBAC-CSTE on contract APM-01. He argues that even if no criminal act could be attributed to theformer MWSS Administrator and members of the PBAC-CSTE, the questioned report could still beembraced in the all-encompassing phrase "all kinds of malfeasance, misfeasance, and non-feasance," and falls within the scope of the constitutional provision calling for an investigation of "anyact or omission of any public official, employee, office or agency, when such act or omission appears

to be illegal, unjust, improper, or inefficient."

Indeed, in Deloso v. Domingo , 35 this Court had occasion to explain not only the rationale for the

creation of an office of the Ombudsman but also the grant to it of broad investigative authority, thus:

The reason for the creation of the Ombudsman in the 1987 Constitution and for the grant to it of broadinvestigative authority, is to insulate said office from the long tentacles of officialdom that are able topenetrate judges' and fiscals' offices, and others involved in the prosecution of erring public officials, andthrough the exertion of official pressure and influence, quash, delay, or dismiss investigations intomalfeasances and misfeasances committed by public officers. It was deemed necessary, therefore, tocreate a special office to investigate all criminal complaints against public officers regardless of whether or not the acts or omissions complained of are related to or arise from the performance of the duties of

their office. The Ombudsman Act makes perfectly clear that the jurisdiction of the Ombudsmanencompasses "all kinds of malfeasance, misfeasance, and non-feasance that have been committed byany officer or employee as mentioned in Section 13 hereof, during his tenure of office."

To begin with, the owners, functions and duties of the Ombudsman have generally been categorizedinto the following headings: Investigatory Power; Prosecutory Power; Public Assistance Functions;

Authority to Inquire and Obtain Information; and Function to Adopt, Institute and ImplementPreventive Measures.

Although the Solicitor-General has practically enumerated all the constitutional and statutoryprovisions describing the ample authority and responsibilities of the Ombudsman, the particular aspect of his functions that, however, really finds relevance to the present case relates to his

investigatory power and public assistance duties which can be found in the first and secondparagraphs, respectively, of Section 13, Article XI, of the Constitution, along with the correspondingprovisions of the Ombudsman Act. This much can be gleaned from the findings of the Office of theOmbudsman leading to its questioned orders. We quote:

a. There is an evident on the part of the MWSS under then Administrator Sison to favor suppliers of fiberglass when it prescribed rigid standards for steel pipes but set lenient requirements for pipes made offiberglass, for the following reasons:

1. MWSS management rely on the AWWA standards for fiberglass pipe but neglect thesame AWWA standards for steel pipes. The MWSS management under Administrator Sison disregarded the AWWA specifications by increasing 1mm thickness for steel pipes.

2. Complainant sent seven letters to the MWSS questioning and making suggestions of the rules of the bidding it set but only one was answered by Administrator Sison datedand received (by the complainant) after the bidding.

3. The MWSS' original specification for stiffness of fiberglass (36 psi) was [c]hanged to 54psi (pounds per square inch) in its Addendum No. 1 as a result of the complaints of thePLDPPMA members. But in its Addendum No. 4, the MWSS reverted to the originalstiffness class of 36 psi. In the letter-comment dated July 26, 1992 of the MWSS, thru

Acting Administrator Teofilo I. Asuncion, the MWSS tried to mislead this office by statingthat the stiffness class of fiberglass pipes was increased from 36 psi to 54 psi when intruth, as appearing in its Addendum No. 4, the MWSS reverted to the original stiffness



class of 36 psi. there is nothing in the subsequent Addenda (Nos. 5 and 6) that will showthat the MWSS finally settled for the stiffness class of 54 psi.

4. The MWSS failed to prescribe specific pipe laying procedure for fiberglass pipes.Contrary to the claim of the MWSS that pipes is not a complicated procedure as it issimilar with other types of pipes, the installation of fiberglass pipes seems to be a criticalfactor in the successful implementation of a project as shown in the findings of experts,attached by the MWSS in its motion, and quoted as follows: . . .

5. The MWSS failed to include in the Specifications a provision for themaintenance/repair materials for bidders who opted to use fiberglass pipes. Theimportance of a provision for repair of fiberglass pipes can be inferred in the findings of experts cited by the MWSS and quoted as follows: . . .

6. The MWSS tried to limit the acceptable joints for fiberglass pipes favorable to afiberglass manufacturer by issuing Addendum No. 6 which was undated. The provision of

Addendum No. 6 "The only acceptable joints are gasketted bell and Spigot andMechanical Type" appears to be vague and ambiguous as it cannot be determinedclearly whether the bidders will be using the Mechanical Type of Joint. As stated in theReport, the cost of the Bell and Spigot Joint is cheaper than the cost of mechanical TypeJoint. Moreover, it was only June 1, 1992 or two (2) months after the bidding that theMWSS issued clarification to the effect that fiberglass pipes bidders can use either the

Bell and Spigot type or Mechanical type.

7. In connection with Addendum No. 6, this office recently got hold of a copy of a letter dated January 31, 1992 (found on Folder I, records) of Joseph Albanese, GruppoSarplast, Milan, Italy (Manufacturer/Supplier of fiberglass pipes for F.F. Cruz & Co. Inc.),addressed to Felipe Cruz. The letter was officially stamped/received by the Office of theMWSS Administrator on February 12, 1992. It also has a veriño From: Mr. F.F. Cruz."The pertinent portion of the letter in the light of Addendum No. 6 is quoted as follows:

8. Conclusion "During the pre-bid meeting our friends should stay: our Spec TS-23 is ageneral one, but for this case only the pipes produced with discontinuing filament windingwill be accepted and only bell and spigot joint."

The existence of such a letter in such a situation can only mean that F.F. Cruz andSarplast, Italy had previous communications with the top officials of the MWSS evenbefore the opening of the bids on march 31, 1992. Clearly, the issuance of AddendumNo. 6 would only fit well for F.F. Cruz Co., Inc. and Sarplast who is proposing the use of discontinuous filament winding fiberglass pipe with bell and Spigot joint.

b. MWSS has no experience and sufficient knowledge on the use of fiberglass pipes.

c. The Contractors who proposed to use fiberglass pipes have no tract record or experience in theinstallation of the same. Thus, they are not qualified to undertake projects pursuant to the provisions of PD 1594 and under the guidelines of the Overseas Economic Cooperation Fund.

d. The would-be manufacturers of fiberglass pipes has no manufacturing plant at this stage and there isno guarantee whether such manufacturing plants will be operational.

e. There is no assurance that the manufacturers of fiberglass would be able to produce the kind of pipedesired.

36

In sum, the Office of the Ombudsman has considered three issues: (1) whether or not the technicalspecifications prescribed by the MWSS in projects APM 01 and 02 have been so designed as toreally favor Fiberglass Pipes-Contractors/Bidders; (2) whether or not the MWSS has the technicalknowledge and expertise with fiberglass pipes; and (3) whether or not the contractors and localmanufacturers of fiberglass pipes; and (3) whether or not the contractors and local manufacturers of



fiberglass pipes have the experience and qualification to undertake the APM-01 and APM-02projects.

While the broad authority of the Ombudsman to investigate any act or omission which ". . . appearsillegal, unjust, improper, or inefficient" may be yielded, it is difficult to equally concede, however, thatthe Constitution and the Ombudsman Act have intended to likewise confer upon it veto or revisorypower over an exercise of judgment or discretion by an agency or officer upon whom that judgment or discretion is lawfully vested. It would seem to us that the Office of the Ombudsman, in issuing the

challenged orders, has not only directly assumed jurisdiction over, but likewise pre-empted theexercise of discretion by, the Board of Trustees of MWSS. Indeed, the recommendation of the PBAC-CSTE to award Contract APM-01 appears to be yet pending consideration and action by the MWSSBoard of Trustees.

We can only view the assailed 19th October 1992 Order to be more of an undue interference in theadjudicative responsibility of the MWSS Board of Trustees rather than a mere directive requiring theproper observance of and compliance with law. The report submitted by the Fact-Finding andIntelligence Bureau of the Office of the Ombudsman reveals its predisposition against the use of fiberglass pipes, a technical, rather than a legal, matter. The fact-finding report has dealt with suchmatters as (1) the wall thickness of pipes; (2) the joints; (3) the pipe laying procedure; (4) the

technical expertise of the MWSS, on the one hand, and the fiberglass proponements, on the other;and (5) the supposed negative international feedback on the use of fiberglass pipes.

The question could be asked: Was the 31st March 1992 bidding really that faulty? During the bidding,the people present were the PBAC members, a COA representative, the bidders and the generalpublic. The eleven (11) prequalified contractors, according to the prequalification evaluation 37

of thePBAC, possessed the required experience, technical qualification and financial condition to undertakethe project. It should not be amiss to mention that the PBAC, under the implementing rules andregulations of P.D. No. 1594, 38

was tasked with the responsibility "for the conduct of prequalification,bidding, evaluation of bids and recommending award of contracts." In evaluating the bids, PBACstated in its report that it had examined the three lowest bids. Part of PBAC's review was to verify

whether the proposed pipe materials were in conformity with the permitted alternative materialsspecified in Clause IB-34 of the bid document. 39

In thereafter recommending that the award be madeto F.F. Cruz, Inc., instead of Joint venture, PBAC explained:

As presented above, evaluation of the bid results touches on a number of parameters to determinewhether the bids are "substantially responsive to the bidding documents and has offered the lowestevaluated bid, and that the bidder has the capacity and resources to effectively carry out the ContractWorks." The evaluation was conducted as fairly and accurately as possible to come up with arecommendation that satisfies the interest of the MWSS which in the final analysis, shall bear theconsequences if the contract is not fully performed. Conclusions of the important issues are hereunder presented.

A. Establishing the validity of the Bid of the Lowest Bidder

The deficiencies with respect to the bidding requirements enumerated in Section 4.2.1, page 4 werediscussed to wit:

a) Authority of the Signing Official

b) Acknowledgment of Addenda received

c) Currency Exchange Rate



After the discussion, the PBAC agreed that the deficiencies on the a) authority of the signing official andthe c) currency exchange rate may be waived as they do not affect the validity of the bid. PBAC believesthat the authority given to Fernando M. Sopot by the Consortium in the Joint Venture Agreementsubstantially complies with Clause IB-20-7 of the Contract Documents. On the currency exchange rate, inthe absence of BF-14, the MWSS may provide the exchange rate.

With regard to the acknowledgment of Addendum No. 6, which is a material provision of the documents, itis ascertained that the Joint Venture has not made allowance for the provision of said Addenda. The JointVenture indicated in the bid, as originally submitted, the acknowledgment of Addenda #1 to #5 only. The

alteration made during the bidding acknowledging Addendum #6 was done after the 12 noon deadline of submittal of bids and, hence, cannot be entertained. Moreover, the person who made the alteration isalso not authorized to make such alteration and affix his signature to the bid.

It is therefore, the position of the PBAC that the deficiency in the acknowledgment of Addendum No. 6 isa major defect and cannot be waived as it affects the validity of the bid of the Consortium. The bid has tobe rejected as non-complying.

The lowest complying becomes the bid submitted by the second lowest Bidder, F.F. CRUZ, & CO., INC.as discussed above.

40

PBAC was evidently guided by the rule that bids should be evaluated based on the requireddocuments submitted before, and not after, the opening of bids, 41

that should further dispel anyindiscriminate or whimsical exercise of discretion on its part.

The MWSS, a government-owned and controlled corporation created by law through R.A. No. 6234,42

is charged with the construction, maintenance and operation of waterwork system to insure anuninterrupted and adequate supply and distribution of potable water. 43

It is the agency that should bein the best position to evaluate the feasibility of the projections of the bidders and to decide which bidis compatible with its development plans. The exercise of this discretion is a policy decision thatnecessitates among other things, prior inquiry, investigation, comparison, evaluation, and deliberation— matters that can best be discharged by it. 44

MWSS has passed resolution No. 32-93 45 to likewise

show its approval of the technical specifications for fiberglass. All these should deserve weight.

In Razon Inc. v. PPA, 46 we have said that neither this Court nor Congress, and now perhaps theOmbudsman, could be expected to have the time and technical expertise to look into matters of thisnature. While we cannot go so far as to say that MWSS would have the monopoly of technical know-how in the waterworks system, by the very nature of its functions, however, it obviously must enjoy anadvantage over other agencies on the subject at hand. In Felipe Ysmael, Jr. & Co. Inc. vs. deputyExecutive Secretary, 47

citing numerouscases, 48

this Court has held:

Thus, while the administration grapples with the complex and multifarious problems caused by unbridledexploitation of these resources, the judiciary will stand clear. A long line of cases establish the basic rulethat the courts will not interfere in matters which are addressed to the sound discretion of government

agencies entrusted with the regulation of activities coming under the special technical knowledge andtraining of such agencies.

It stands to reason for, in Bureau Veritas v. Office of the President , 49 we have further observed:

The discretion to accept or reject a bid and award contracts is vested in the Government agenciesentrusted with that function. The discretion given to the authorities on this matter is of such wide latitudethat the Courts will not interfere therewith, unless it is apparent that it is used as a shield to a fraudulentaward.



All considered, it is our view that the issue here involved, dealing, such as they do, on basicallytechnical matters, dealing, such as they do, on basically technical matters, deserve to bedisentangled from undue interference from courts and so from the Ombudsman as well.

Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason,Puno, Kapunan and Mendoza, JJ., concur.

Francisco, J., took no part.



SECOND DIVISION

G.R. No. 146137 June 08, 2005

HAYDEE C. CASIMIRO, in her capacity as Municipal Assessor of San Jose, Romblon, Province of

Romblon, petitioner,

vs.FILIPINO T. TANDOG, in his capacity as the Municipal Mayor of San Jose, Romblon, respondent.

D E C I S I O N

CHICO-NAZARIO, J.:

This is a petition for review on certiorari of the Decision1 dated 31 May 2000 of the Court of Appeals and its

Resolution dated 21 November 2000 in CA-G.R. SP No. 46952, which affirmed in toto Civil ServiceCommission (CSC) Resolution No. 973602 dated 12 August 1997. The said CSC Resolution affirmed the

Decision of Municipal Mayor Filipino Tandog of San Jose, Romblon, finding petitioner Haydee Casimiro guilty

of dishonesty and ordering her dismissal 3from the service.

The relevant antecedents of the instant petition are as follows:

Petitioner Haydee Casimiro began her service in the government as assessment clerk in the Office of the

Treasurer of San Jose, Romblon. In August 1983, she was appointed Municipal Assessor.

On 04 September 1996, Administrative Officer II Nelson M. Andres, submitted a report2 based on an

investigation he conducted into alleged irregularities in the office of petitioner Casimero. The report spoke of ananomalous cancellation of Tax Declarations No. 0236 in the name of Teodulo Matillano and the issuance of a

new one in the name of petitioner’s brother Ulysses Cawaling and Tax Declarations No. 0380 and No. 0376 in

the name of Antipas San Sebastian and the issuance of new ones in favor of petitioner’s brother -in-law MarceloMolina.

Immediately thereafter, respondent Mayor Tandog issued Memorandum Order No. 133 dated 06 September

1996, placing the petitioner under preventive suspension for thirty (30) days. Three (3) days later, Mayor

Tandog issued Memorandum Order No. 15, directing petitioner to answer the charge of irregularities in heroffice. In her answer,

4 petitioner denied the alleged irregularities claiming, in essence, that the cancellation of

the tax declaration in favor of her brother Ulysses Cawaling was done prior to her assumption to office asmunicipal assessor, and that she issued new tax declarations in favor of her brother-in-law Marcelo Molina by

virtue of a deed of sale executed by Antipas San Sebastian in Molina’s favor.

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On 23 October 1996, thru Memorandum Order No. 17,5 respondent Mayor extended petitioner’s preventive

suspension for another thirty (30) days effective 24 October 1996 to give him more time to verify and collate

evidence relative to the alleged irregularities.

On 28 October 1996, Memorandum Order No. 186 was issued by respondent Mayor directing petitioner to

answer in writing the affidavit-complaint of Noraida San Sebastian Cesar and Teodulo Matillano. Noraida San

Sebastian Cesar7 alleged that Tax Declarations No. 0380 and No. 0376 covering parcels of land owned by her

parents were transferred in the name of a certain Marcelo Molina, petitioner’s brother -in-law, without the

necessary documents. Noraida Cesar further claimed that Marcelo Molina had not yet paid the full purchaseprice of the land covered by the said Tax Declarations. For his part, Teodulo Matillano claimed

8 that he never

executed a deed of absolute sale over the parcel of land covered by Tax Declaration No. 0236 in favor of Ulysses Cawaling, petitioner’s brother.

In response to Memorandum Order No. 18, petitioner submitted a letter9 dated 29 October 1996, stating that

with respect to the complaint of Noraida San Sebastian Cesar, she had already explained her side in the letterdated 26 September 1996. As to the complaint of Teodulo Matillano, she alleged that it was a certain Lilia

Barrientos who executed a deed of absolute sale over the parcel of land subject of the complaint in favor of herbrother, Ulysses Cawaling.

Not satisfied, respondent Mayor created a fact-finding committee to investigate the matter. After a series of hearings, the committee, on 22 November 1996, submitted its report

10 recommending petitioner’s separation

from service, the dispositive portion of which reads:

Evaluating the facts above portrayed, it is clearly shown that Municipal Assessor Haydee Casimero is guilty of malperformance of duty and gross dishonesty to the prejudice of the taxpayers of San Jose, Romblon who are

making possible the payments of her salary and other allowances. Consequently, we are unanimouslyrecommending her separation from service.

Based on the above recommendation, respondent Mayor issued Administrative Order No. 111

dated 25

November 1996 dismissing petitioner, thus:

Upon unanimous recommendations of the fact finding committee Chairmained (sic) by Municipal

Administrator Nelson M. Andres, finding you (Haydee C. Casimero) guilty of Dishonesty and Malperformanceof duty as Municipal Assessor of San Jose, Romblon, copy of which is hereto attached as Annex "A" and made

as integral part hereof, you are hereby ordered separated from service as Municipal Assessor of San Jose,Romblon, effective upon request hereof.

Undeterred by that setback, petitioner appealed to the CSC, which affirmed12

respondent Mayor’s order of

dismissal. A motion for reconsideration13

was filed, but the same was denied.14

Dissatisfied, petitioner elevated her case to the Court of Appeals, which subsequently affirmed the CSC

decision.15

Her motion for reconsideration was likewise denied.

Petitioner now comes to us raising the lone issue16

of whether or not petitioner was afforded procedural andsubstantive due process when she was terminated from her employment as Municipal Assessor of San Jose,

Romblon. An underpinning query is: Was petitioner afforded an impartial and fair treatment? She specificallypoints to bias and partiality on the members of the fact-finding committee. She avers that Lorna Tandog

Vilasenor, a member of the fact-finding committee, is the sister of respondent Mayor. She further alludes thatwhile the committee chairman, Nelson M. Andres, was appointed by the respondent Mayor to the position of

Administrative Officer II only on 01 August 1996, no sooner was he given the chairmanship of the Committee.Further the affiants-complainants were not presented for cross examination.












































We find the present petition bereft of merit.

The first clause of Section 1 of Article III of the Bill of Rights states that:

SECTION 1. No person shall be deprived of life, liberty, or property without due process of law, . . . .

In order to fall within the aegis of this provision, two conditions must concur, namely, that there is deprivation

of life, liberty and property and such deprivation is done without proper observance of due process. When one

speaks of due process, however, a distinction must be made between matters of procedure and matters of substance.

In essence, procedural due process "refers to the method or manner by which the law is enforced."17

The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity tobe heard.

18 In administrative proceedings, such as in the case at bar, procedural due process simply means the

opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complainedof .

19 "To be heard" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where

opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of proceduraldue process.

20

In administrative proceedings, procedural due process has been recognized to include the following: (1) theright to actual or constructive notice of the institution of proceedings which may affect a respondent’s legal

rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and

evidence in one’s favor, and to defend one’s rights; (3) a tribunal vested with competent jurisdiction and so

constituted as to afford a person charged administratively a reasonable guarantee of honesty as well asimpartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for

consideration during the hearing or contained in the records or made known to the parties affected.21

In the case at bar, what appears in the record is that a hearing was conducted on 01 October 1996, whichpetitioner attended and where she answered questions propounded by the members of the fact-finding

committee. Records further show that the petitioner was accorded every opportunity to present her side. Shefiled her answer to the formal charge against her. After a careful evaluation of evidence adduced, the committee

rendered a decision, which was affirmed by the CSC and the Court of Appeals, upon a move to review the sameby the petitioner. Indeed, she has even brought the matter to this Court for final adjudication.

Kinship alone does not establish bias and partiality.22

Bias and partiality cannot be presumed. In administrative

proceedings, no less than substantial proof is required.23

Mere allegation is not equivalent to proof .24

Meresuspicion of partiality is not enough. There should be hard evidence to prove it, as well as manifest showing of

bias and partiality stemming from an extrajudicial source or some other basis.25

Thus, in the case at bar, theremust be convincing proof to show that the members of the fact-finding committee unjustifiably leaned in favor

of one party over the other. In addition to palpable error that may be inferred from the decision itself, extrinsic

evidence is required to establish bias.26

The petitioner miserably failed to substantiate her allegations. In effect,the presumption of regularity in the performance of duty prevails.

27

Neither are we persuaded by petitioner’s argument that the affidavit is hearsay because the complainants were

never presented for cross examination. In administrative proceedings, technical rules of procedure and evidenceare not strictly applied; administrative due process cannot be fully equated to due process in its strict judicial

sense.28

Nothing on record shows that she asked for cross examination. In our view, petitioner cannot argue that she hasbeen deprived of due process merely because no cross examination took place. Again, it is well to note that due

process is satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the



















































controversy or given opportunity to move for a reconsideration of the action or ruling complained of. In thepresent case, the record clearly shows that petitioner not only filed her letter-answer, she also filed a motion for

reconsideration of the recommendation of the committee dated 22 November 1996. The essence of due processin the administrative proceedings is an opportunity to explain one side or an opportunity to seek reconsideration

of the action or ruling complained of .29

The Court finds far little basis to petitioner’s protestations that she was depr ived of due process of law and thatthe investigation conducted was far from impartial and fair.

As to the substantive due process, it is obvious to us that what petitioner means is that the assailed decision was

not supported by competent and credible evidence.30

The law requires that the quantum of proof necessary for a finding of guilt in administrative cases is substantial

evidence or such relevant evidence as a reasonable mind may accept as adequate to support a conclusion.31

Well-entrenched is the rule that substantial proof, and not clear and convincing evidence or proof beyondreasonable doubt, is sufficient basis for the imposition of any disciplinary action upon an employee. The

standard of substantial evidence is satisfied where the employer has reasonable ground to believe that theemployee is responsible for the misconduct and his participation therein renders him unworthy of trust and

confidence demanded by his position.32

In the case at bar, there is substantial evidence to prove petitioner’s dismissal.

Two alleged irregularities provided the dismissal from service of herein petitioner:

1. The cancellation of complainant Teodulo Matillano’s tax declaration and the issuance of a new one in

favor of petitioner’s brother Ulysses Cawaling; and

2. The cancellation of the tax declaration in the name of complainant Noraida San Sebastian Cesar’s parent in favor of petitioner’s brother -in-law, Marcelo Molina.

On these points, we quote, with approval, the findings of the Court of Appeals for being supported by evidenceon record.

Going first to the alleged irregularity accompanying the issuance of tax declarations in favor of petitioner’s

brother Ulysses Cawaling, the former’s asseverations that she had nothing to do with the processing of thesubject tax declarations is simply unacceptable. As municipal assessor, one of petitioner’s duties was to keep a

correct record of all transfers, leases and mortgages of real property (par. [4] f, Sec. 159, Article VI, Chapter 3,Title II, Book II of the Local Government Code) within her jurisdiction. Thus, even if petitioner had no hand in

the processing of her brother’s tax declaration, she should have seen to it that the records pertaining thereto arein order. Furthermore, the annotation on her brother’s tax declaration that the same property is also declared in

the name of another person and that all of them are paying the realty taxes thereon should have cautionedpetitioner to take the necessary steps to set records right. Under par. [4] h, ( ibid.) the municipal assessors, in

such a situation, are suppose to cancel assessments, in case several assessments have been made for the sameproperty, except the one properly made, but if any assessee or his representative shall object to the cancellation

of the assessment made in his name, such assessment shall not be cancelled but the fact shall be noted on the taxdeclaration and assessment rolls and other property books of records. Preference, however, shall be given to the

assessment of the person who has the best title to the property, or in default thereof, of the person who haspossession of the property (id.). On this score alone, petitioner is already liable for gross neglect of duty, which

is also penalized by dismissal at the first offense (Sec. 22 [b], Rule XIV of the Omnibus Rule [supra]).



















Secondly, petitioner’s vacillation on whether it was Teodulo Matillano or Leticia Barrientos Berbano whoexecuted a deed of absolute sale in favor of her brother Ulysses Cawaling further weakens her defense.

Petitioner, in her written answer, claimed that both Teodulo Matillano and Ulysses Cawaling have deeds of absolute sale over the same parcel of land (vide par. [4], Annex "G," supra). In the course of investigation,

however, petitioner claimed before the investigating body that Teodulo Matillano executed a deed of absolutesale in favor of her brother (vide, p. 8, Annex "N," supra). Thereafter petitioner claimed that it was a certain

Leticia Barrientos Berbano who executed the deed of absolute sale in favor of her brother ( vide, Annex "J,"supra). . . .

With respect to the irregularity involving the tax declarations of petitioner’s brother -in-law, Marcelo Molina, no

better evidence can be presented to support petitioner’s dismissal for dishonesty than the questioned taxdeclarations themselves (vide, pp. 87 & 88, ibid.). Both tax declarations indicated that the declarations therein

where subscribed to under oath by the declarant before herein petitioner on August 15, 1996, in effect cancelingAnti paz San Sebastian’s tax declaration on even date. However, the same tax declarations indicate that the taxes

due thereon (i.e., land tax, transfer tax & capital gain tax) were paid only in October of the same year or twomonths after the tax declarations have already been issued in favor of petitioner’s brother -in-law. Under Article

224 [b] of the Rules and Regulations Implementing the Local Government Code, no tax declaration shall becancelled and a new one issued in lieu thereof unless the transfer tax has first been paid.

The issuance of new tax declarations in favor of petitioner’s brother and brother -in-law effectively cancels thetax declarations of the complainants. Article 299[c] of the Rules of Regulations Implementing the LocalGovernment Code, provides that:

"In addition to the notice of transfer, the previous property owner shall likewise surrendered to the provincial,city, or municipal assessor concerned, the tax declaration covering the subject property in order that the same

maybe cancelled from the assessment records of the LGU. x x x."

Thus, the tax declaration of complainants Noraida San Sebastian and Teodulo Matillano must first besurrendered before herein petitioner could effectively cancel their respective tax declarations and issue new

ones in favor of her brother and brother-in-law. Unfortunately, herein petitioner failed to present the

complainants’ cancelled tax declarations. She did not even allege that the same had been surrendered to her for cancellation.

33

In addition, petitioner admitted using the deed of sale allegedly executed by Lilia Barrientos in favor of Cawaling in transferring the Tax Declaration in the name of her brother Ulysses Cawaling. However, glaring in

the record is the admission by the petitioner in her petition34

and memorandum35

that the property was stillunder litigation, as both Matillano and Barrientos continue to take their claims over it. Clearly, therefore, she

had no right, or reason, to pre-empt judgment on who is the lot’s rightful owner who can legally dispose thesame. Prudence dictates that, under the situation, she should have refrained from taking any course of action

pending the court’s final determination of this matter.

In Philippine Amusement and Gaming Corporation v. Rilloza,36

dishonesty was understood to imply a"disposition to lie, cheat, deceive, or defraud; unworthiness; lack of integrity." Dishonesty is considered as agrave offense punishable by dismissal for the first offense under Section 23, Rule XIV of the Omnibus Rules

Implementing Book V of Executive Order No. 292 and Other Pertinent Civil Service Laws. It is beyond cavil

that petitioner’s acts displayed want of honesty.

IN ALL, we affirm the finding of the Court of Appeals that petitioner is guilty of acts of dishonesty. Her acts of

cancelling the tax declarations of Antipas San Sebastian and Teodulo Matillano in favor of her close relativeswithout complying with the requirements set under the law constitute grave acts of dishonesty.








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WHEREFORE, the instant petition is hereby DENIED. The Court of Appeals Decision dated 31 May 2000and its subsequent Resolution dated 21 November 2000, dismissing petitioner from service, are hereby

AFFIRMED. With costs.

SO ORDERED.

Austria-Martinez, (Acting Chairman), Callejo, Sr., and Tinga, JJ., concur.Puno, (Chairman), on official leave.



EN BANC

G.R. No. L-46496 February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners,

vs.THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations.

Antonio D. Paguia for National Labor Unon.

Claro M. Recto for petitioner "Ang Tibay".

Jose M. Casal for National Workers' Brotherhood.

LAUREL, J.:

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case has

filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider thefollowing legal conclusions of the majority opinion of this Court:

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no seapara una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que ilega el

plazo fijado para el pago de los salarios segun costumbre en la localidad o cunado se termine la obra;

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente,con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por haberse declarando paro

forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma;

3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sintiempo fijo de duracion y sin ser para una obra determiminada y que se niega a readmitir a dichosobreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica injusta in incurre

en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a readmitirse deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han

dejado deser empleados suyos por terminacion del contrato en virtud del paro.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement renderedby the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial,

and avers:



1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANGTIBAY making it necessary for him to temporarily lay off the members of the National Labor Union

Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather.

2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to

systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with thePhilippine Army.

3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of

leather soles from the States) was but a scheme to systematically prevent the forfeiture of this bonddespite the breach of his CONTRACT with the Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominatedby Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548, petitioner's printed

memorandum, p. 25.)

5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and electiverepresentation are highly essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)

6. That the century provisions of the Civil Code which had been (the) principal source of dissensions

and continuous civil war in Spain cannot and should not be made applicable in interpreting and applyingthe salutary provisions of a modern labor legislation of American origin where the industrial peace has

always been the rule.

7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the

National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood.

8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of

Industrial Relations.

9. That the attached documents and exhibits are of such far-reaching importance and effect that theiradmission would necessarily mean the modification and reversal of the judgment rendered herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondentNational Labor Union, Inc.

In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial

of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon themotion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for new trial of

the respondent labor union. Before doing this, however, we deem it necessary, in the interest of orderlyprocedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make several

observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certainguiding principles which should be observed in the trial of cases brought before it. We have re-examined the

entire record of the proceedings had before the Court of Industrial Relations in this case, and we have found nosubstantial evidence that the exclusion of the 89 laborers here was due to their union affiliation or activity. The

whole transcript taken contains what transpired during the hearing and is more of a record of contradictory andconflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident

that these statements and expressions of views of counsel have no evidentiary value.



The Court of Industrial Relations is a special court whose functions are specifically stated in the law of itscreation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial system

of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice whichis essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to

it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of itsorganic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in

the determination of disputes between employers and employees but its functions in the determination of disputes between employers and employees but its functions are far more comprehensive and expensive. It has

jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, mattercontroversy or dispute arising between, and/or affecting employers and employees or laborers, and regulate the

relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103(section 1). It shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any

industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from differences asregards wages, shares or compensation, hours of labor or conditions of tenancy or employment, between

landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the

Secretary of Labor or by any or both of the parties to the controversy and certified by the Secretary of labor asexisting and proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the

sake of public interest. (Section 4, ibid .) It shall, before hearing the dispute and in the course of such hearing,

endeavor to reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2,section 4, ibid .) When directed by the President of the Philippines, it shall investigate and study all industriesestablished in a designated locality, with a view to determinating the necessity and fairness of fixing and

adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon"or rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid .) In fine, it may appeal

to voluntary arbitration in the settlement of industrial disputes; may employ mediation or conciliation for thatpurpose, or recur to the more effective system of official investigation and compulsory arbitration in order to

determine specific controversies between labor and capital industry and in agriculture. There is in reality here amingling of executive and judicial functions, which is a departure from the rigid doctrine of the separation of

governmental powers.

In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939we had occasion to joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated

September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not narrowlyconstrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and

substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by anytechnicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its

mind in such manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall notbe restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural

dispute, but may include in the award, order or decision any matter or determination which may be deemednecessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural

disputes. (section 13, ibid .) And in the light of this legislative policy, appeals to this Court have been especially

regulated by the rules recently promulgated by the rules recently promulgated by this Court to carry into theeffect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be said tobe free from the rigidity of certain procedural requirements does not mean that it can, in justifiable cases before

it, entirely ignore or disregard the fundamental and essential requirements of due process in trials andinvestigations of an administrative character. There are primary rights which must be respected even in

proceedings of this character:

(1) The first of these rights is the right to a hearing, which includes the right of the party interested or

affected to present his own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S ., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property

of the citizen shall be protected by the rudimentary requirements of fair play.



(2) Not only must the party be given an opportunity to present his case and to adduce evidence tendingto establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief

Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of thiscourt in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding

duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person orpersons to whom the evidence is presented can thrust it aside without notice or consideration."

(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity

which cannot be disregarded, namely, that of having something to support it is a nullity, a place whendirectly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental is

contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs.Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must

be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor Relations Board, 301U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a reasonable

mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National LaborRelations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6

Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F.

2d 758, 760.) . . . The statute provides that "the rules of evidence prevailing in courts of law and equityshall not be controlling.' The obvious purpose of this and similar provisions is to free administrativeboards from the compulsion of technical rules so that the mere admission of matter which would be

deemed incompetent inn judicial proceedings would not invalidate the administrative order. (InterstateCommerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate

Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law.ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this

assurance of a desirable flexibility in administrative procedure does not go far as to justify orderswithout a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does

not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S.Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in therecord and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227

U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the evidencedisclosed to the parties, can the latter be protected in their right to know and meet the case against them.

It should not, however, detract from their duty actively to see that the law is enforced, and for thatpurpose, to use the authorized legal methods of securing evidence and informing itself of facts material

and relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating anddetermining the facts in any given case, but their report and decision are only advisory. (Section 9,

Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agriculturaldispute or any matter under its consideration or advisement to a local board of inquiry, a provincial

fiscal. a justice of the peace or any public official in any part of the Philippines for investigation, reportand recommendation, and may delegate to such board or public official such powers and functions as the

said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exerciseof the Court itself of any of its powers. (Section 10, ibid .)

(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own

independent consideration of the law and facts of the controversy, and not simply accept the views of asubordinate in arriving at a decision. It may be that the volume of work is such that it is literally

Relations personally to decide all controversies coming before them. In the United States the difficulty issolved with the enactment of statutory authority authorizing examiners or other subordinates to render



final decision, with the right to appeal to board or commission, but in our case there is no such statutoryauthority.

(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a

manner that the parties to the proceeding can know the various issues involved, and the reasons for thedecision rendered. The performance of this duty is inseparable from the authority conferred upon it.

In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged

agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A), the record is barrenand does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a conclusion of law.

This result, however, does not now preclude the concession of a new trial prayed for the by respondent NationalLabor Union, Inc., it is alleged that "the supposed lack of material claimed by Toribio Teodoro was but a

scheme adopted to systematically discharged all the members of the National Labor Union Inc., from work" andthis avernment is desired to be proved by the petitioner with the "records of the Bureau of Customs and the

Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang Tibay isa company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal."

Petitioner further alleges under oath that the exhibits attached to the petition to prove his substantialavernments" are so inaccessible to the respondents that even within the exercise of due diligence they could not

be expected to have obtained them and offered as evidence in the Court of Industrial Relations", and that thedocuments attached to the petition "are of such far reaching importance and effect that their admission would

necessarily mean the modification and reversal of the judgment rendered herein." We have considered the replyof Ang Tibay and its arguments against the petition. By and large, after considerable discussions, we have come

to the conclusion that the interest of justice would be better served if the movant is given opportunity to presentat the hearing the documents referred to in his motion and such other evidence as may be relevant to the main

issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new.The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected

by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entirerecord of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the

case, receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements

set forth hereinabove. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.


SUPREME COURT

SECOND DIVISION

G.R. Nos. 164684-85 November 11, 2005

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., Petitioner,vs.ANTONIO Q. TIAMSON, Respondent.

D E C I S I O N

CALLEJO, SR ., J.:

Being questioned in this petition for review on certiorari is the Decision1 of the Court of Appeals (CA) dated

April 16, 2004 in CA-G.R. SP Nos. 51855 and 52247, and the Resolution dated July 27, 2004 denying themotion for reconsideration thereof.

http://www.lawphil.net/judjuris/juri2005/nov2005/gr_164684-85_2005.html#fnt1





On April 16, 1986, the Philippine Long Distance Telephone Company, Inc. (PLDT) employed Antonio Q.Tiamson as a Radio Technician II (JG4). He was assigned at the company’s North Luzon Toll Network

Division, Clark Transmission Maintenance Center (Clark-TMC) in Pampanga. After the expiration of theprobationary period, he was extended regular appointment for the same position.

In a Letter2 dated July 29, 1994, Anthony Dy Dee, the President of the Angeles City Telephone System and

Datelcom Corporation, informed PLDT of his complaint against its employees assigned in Clark-TMC, statingtherein that he suspected them to be in cohorts with the local subscribers in effecting illegal overseas calls.

Acting on the letter-complaint, PLDT immediately dispatched a team of inspectors and investigators from itsQuality Control and Inspection Department (QCID) and Security Division to conduct surveillance operations in

the area. On August 2, 1994, Vidal Busa, a radio technician, was caught in flagrante delicto while monitoringan illegally connected overseas call using the radio facilities of the company’s Clark -TMC Radio Room.

3

The QCID, likewise, requested the Switching Network Division at PLDT’s Sampaloc National Toll Center to

print the CAMA4 tape recording of all long distance calls originating from the PLDT Clark Exchange Traffic

for the period of July 29 to August 2, 1994. The printout revealed that a total of 469 fraudulent overseas and

local calls were connected and completed at the PLDT Clark-TMC Radio Room for the said period. Threeoverseas calls to Saudi Arabia made on August 1, 1994 were imputed to Tiamson who appeared to be on duty

from 10:00 p.m. to 6:00 a.m.5

The QCID conducted its initial investigation on August 2, 1994, where Busa readily admitted his involvement

in the illegal connection of overseas calls. In his sworn statement, he specifically named Arnel Cayanan, hisShift Supervisor, Antonio Tiamson and Paul Cruzada, both radio technicians, as the other employees actively

engaged in the illegal practice. He stated that he knew about this because whenever he would relieve them fromtheir tour of duty, he would see that the circuit was engaged.

6

On August 3, 1994, during a confrontation between Busa and Tiamson, the former reiterated his earlier

statement that the latter was involved in the illegal act of connecting overseas calls.7 For his part, Tiamson

admitted that he knew how to mak e an overseas call using the company’s radio equipment and that he learned

how to do so through hands-on experimentation and intensive reading of operating manuals. He, however,

denied having actually made an illegal connection of overseas calls. He declared that he knew of thewrongdoings of Busa and even disconnected the latter’s overseas telephone calls whenever he (Tiamson) wason duty. Tiamson claimed that he failed to report the actuations of Busa because the latter was his supervisor

and was afraid to antagonize him.8

On August 5, 1994, there was another confrontation proceeding between Busa, Tiamson, Cruzada and Cayanan.In their sworn statements, Busa and Cruzada testified that, sometimes when they relieve Cayanan from his duty,

they would discover an illegal connection and an on-going conversation in the line.9 Tiamson maintained that

he disconnected the illegal calls of Busa, while Cayanan implicated his subordinates.

The QCID recommended that administrative action for serious misconduct be instituted against the said

employees. Consequently, the company issued to Tiamson an Inter-Office Memorandum dated August 12,1994, charging him with violation of the company’s disciplinary rules and regulations. He was, likewise,required to explain within 72 hours why he should not be dismissed, thus:

Investigation of the complaint indicated hereunder disclosed that:

1. Complainant – Mr. Anthony Dy, President DATELCOM Corp.

2. The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent overseas callscam was complained and notified by Mr. A. Dy to Mrs. B. G. Gendrano – Clark Exchange Division Head on

July 26, 1994.


































3. The complainant requested assistance to NBI and PLDT QCI to apprehend the personnel responsible for theillegal connection.

4. A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC through

taped and equipment monitoring.

5. In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa asinvolved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate a

call but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as oneof your supervisors was involved in the fraudulent case.

The acts described above are in violation of the Company’s rules and regulations and is punishable withdismissal from the service.

In view of the above, please explain in writing within 72 hours from receipt hereof why you should not be

dismissed from the service for the acts described above. You may elect to be heard if you so desire. …10

Meanwhile, Tiamson was placed under preventive suspension on August 16, 1994.11

On August 18, 1994, Tiamson submitted his written explanation denying any participation in the illegalactivities at PLDT’s Clark -TMC. He averred that Busa’s statement against him was malicious and untrue andthat he was the one relieving Busa from his tour of duty and not the other way around. He insisted that on

August 1, 1994, his tour of duty was from 6:00 a.m. to 10:00 p.m.12

PLDT found his explanation unsatisfactory and inadequate in substance. Thus, it issued an Inter-Office Memo13

dated October 5, 1994, terminating Tiamson’s employment effective October 7, 1994 on the ground of serious

misconduct and/or fraud.

Tiamson filed a complaint against PLDT for illegal suspension, illegal dismissal, damages and other monetaryclaims, docketed as NLRC Case No. RAB-III-07-6414-95.

The Labor Arbiter resolved the case in favor of Tiamson:

WHEREFORE, premises considered, judgment is hereby rendered declaring respondent PLDT guilty of illegaldismissal and it is hereby ordered to reinstate complainant to his former position without loss of seniority rights

and with full backwages reckoned from the date of his dismissal up to his actual or payroll reinstatement at theoption of the respondent, which as of this date is in the amount of Three Hundred Seventy-Two Thousand Eight

Hundred Twenty-Five and 32/100 (P372,825.32) Pesos.

Further, respondent is ordered to pay complainant attorney’s fee in the amount of Thirty-Seven Thousand TwoHundred Eighty-Two and 53/100 (P37,282.53) Pesos.

The claims for moral and exemplary damages are dismissed for lack of evidence.

SO ORDERED.14

The Labor Arbiter declared that the complainant could not have made any illegal connection on August 1, 1994from 10:00 p.m. to 6:00 a.m. because he was off-duty.

PLDT elevated the case to the National Labor Relations Commission (NLRC). On August 31, 1998, the NLRC

ruled that while there was just cause for Tiamson’s dismissal, the penalty of dismissal was too harsh. Hence, the





















NLRC ordered that Tiamson be reinstated to his former position without loss of seniority rights, but withoutbackwages.

15

Both parties moved to reconsider the decision, but the NLRC denied the motions for lack of merit.16

PLDT filed a petition for certiorari before the CA, assailing the NLRC’s order of reinstatement despite a

categorical finding that Tiamson was guilty of illegal connection of overseas calls. The petition was docketed asCA-G.R. SP No. 51855. Tiamson filed a similar petition, assailing the deletion of the award of backwages and

attorney’s fees. This was docketed as CA-G.R. SP No. 52247. The CA, thereafter, ordered the consolidation of the two petitions.

On April 16, 2004, the CA reinstated the decision of the Labor Arbiter, thus:

WHEREFORE, the petition by the PLDT under CA-G.R. SP No. 51855 is DENIED DUE COURSE and

DISMISSED while the petition by Antonio Tiamson under CA-G.R. SP No. 52247 is GIVEN DUE COURSE

and GRANTED, and the Decision dated October 15, 1997 of the Labor Arbiter which was set aside by theNLRC, is hereby REINSTATED in its fullness and without modifications.

SO ORDERED.17

The CA held that Busa’s sworn statement was not worthy of credence, a mere afterthought, the contents of which were seriously flawed. The appellate court found it difficult to believe Busa’s assertion that, on several

occasions when he came to relieve the respondent, a circuit was in use which the latter would turn off beforeleaving. In this regard, the appellate court noted that Busa’s work shift preceded that of the respondent, such

that it would be impossible for him to see the respondent make an illegal connection.18

The CA likewise opined that the respondent was denied due process when he was not apprised of nor given theopportunity to confute the charge that during his duty on August 1, 1994, three overseas calls to Saudi Arabia

were recorded in the CAMA tape.19

The petitioner timely filed a motion for reconsideration, which the CA denied in its Resolution 20 dated July 27,2004.

The petitioner now comes before this Court, alleging that:

… THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN REINSTATING THE DECISION OFTHE ARBITER A QUO AS SAID DECISION WAS NOT IN ACCORD WITH LAW AND CONTRARY TO

THE EVIDENCE ON RECORD.21

The petitioner submits that it has presented more than substantial evidence to prove that the respondent wasinvolved in the illegal connection of overseas calls. The petitioner avers that the CA erred in holding that Busa’s

sworn statement was not credible. According to the CA, it would have been impossible for Busa to see therespondent making an illegal connection since his tour of duty preceded that of the respondent. The petitioner,

however, asserts that there was a rotation of the employees’ tour of duty such that, at times, it was Busa whowould take over from the respondent; hence, Busa had the occasion to personally see the respondent connecting

illegal calls. In support of this, the petitioner proffers the copy of logbook entries from July 13 to August 3,1994, which was attached to its Memorandum of Appeal filed with the NLRC. The logbook shows that onseveral occasions, it was Busa who took over from the respondent.

22

The petitioner further asserts that the respondent failed to show that Busa was actuated and impelled by

improper motive and bad faith in executing his sworn statement.23

The records show that Busa, from the verystart, had categorically and unequivocally named the respondent as one of those engaged in the illegal






































connection of overseas calls.24

Moreover, Busa’s sworn statement had been corroborated by the printout of theCAMA tapes (which disclosed that during the respondent’s August 1, 1994 duty, three fraudulent calls to Saudi

Arabia were illegally made),25

as well as Cayanan’s sworn statement implicating the respondent.26

The petitioner submits that the respondent’s offense was serious in character and merits the penalty of dismissalfrom employment. It contends that the respondent was accorded the full measure of due process before he was

dismissed: he was given a notice which apprised him of the charge against him and required him to explain whyhe should not be dismissed, and later, a notice of termination. The petitioner claims that the Labor Code simply

requires that the employee be given a written notice containing a statement of the causes of termination. Itinsists that the printout of the recording of the CAMA tapes showing that three illegal connections were made

on August 1, 1994 is a mere evidentiary matter that need not be mentioned in the notice.27

For his part, the respondent avers that Busa’s statement was uncorroborated and hearsay for lack of cross-examination. He insists that Busa could not have seen him make illegal connections since the latter’s shift came

before his.28

The petitioner replies that an affidavit may be admissible even if the witness is not presented during trial

because technical rules are not strictly followed in proceedings before the Labor Arbiter and the NLRC.29

The petition has no merit.

It is a settled rule that factual findings of labor officials, who are deemed to have acquired expertise in matterswithin their respective jurisdictions, are generally accorded not only respect but even finality.

30 Moreover, in a

petition for review on certiorari under Rule 45, the Supreme Court reviews only errors of law and not errors of facts.

31 However, where there is divergence in the findings and conclusions of the NLRC, on the one hand, from

those of the Labor Arbiter and the Court of Appeals, on the other, the Court is constrained to examine theevidence.

32

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and validcause; failure to do so would necessarily mean that the dismissal was illegal.

33 The employer’s case succeeds or

fails on the strength of its evidence and not on the weakness of the employee’s defense. If doubt exists betweenthe evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the

latter.34

Moreover, the quantum of proof required in determining the legality of an employee’s dismissal is onlysubstantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a

reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable,might conceivably opine otherwise.

35

In this case, the appellate court ruled for respondent Tiamson, ratiocinating as follows:

The issues posed by both parties involve the evaluation of the findings of facts by the agencies a quo. While the

general rule is that factual issues could not be properly raised and considered in a petition for certiorari, it

however admits of this exception that a disharmony between the factual findings of the Labor Arbiter and thoseof the NLRC opens the door to review thereof by the Supreme Court (Asuncion vs. National Labor RelationsCommission, 362 SCRA 56), including, of course, the Court of Appeals.

The crux of both petitions is whether the NLRC with its findings quoted below, was correct in setting aside thedisposition of the Labor Arbiter:

We disagree that respondent failed to present evidence linking complainant to the illegal connection scam. As

pointed out by the respondent, co-employee Busa and Cayanan in the course of their investigation implicatedcomplainant’s participation in illegal overseas connection. Complainant also failed to refute respondent’s



















































evidence that on August 1, 1994, while he was on duty, three (3) overseas calls to Saudi Arabia were recordedin cama tape (Annex 4, p. 30, records).

However, we consider the penalty of dismissal too harsh considering that respondent imposed a sixty (60)-day

suspension on Paul Cruzada, a co-employee of complainant who submitted (sic) culpability. For where a lesserpunitive penalty would suffice, the supreme penalty of dismissal should be visited (Almira vs. B.F. Goodrich,

58 SCRA 120). Under the circumstances, reinstatement but without backwages is appropriate (pp. 39-40, Rollo)

Our review of the records reveals that among the three employees who issued sworn statements, namely, Busa,Cayanan and Cruzada, it was only Busa who directly implicated Tiamson and it was done inexplicably only in

his second sworn statement. It does not inspire credence as it comes as an afterthought and the contents areseriously flawed on material points. Looming large is the claim of Busa that on several occasions when he came

to relieve Tiamson, he observed that his circuit was logged on and in use, and Tiamson would then put it off before leaving. This is a canard because the shift of Busa was from 1:00 p.m. to 6:00 a.m. and of course ahead

of the 6:00 a.m. to 2:00 p.m. shift of Tiamson who came in as his reliever. Their tours of duty was in theconverse order of what Busa claimed, and so he spoke with a forked tongue when he stated that Tiamson at the

preceding shift had his circuit logged on and switched this off when he left.

A no less important point is the undisputed fact that Tiamson was not given the opportunity to confute the

charge that on August 1, 1994 while he was on duty, three (3) overseas calls to Saudi Arabia were recorded inthe cama tape. This was not indicated in the memorandum sent to him on August 12, 1994, the full text of

which reads:

August 12, 1994

TO : MR. ANTONIO Q. TIAMSON – Radio Tech II Clark TMC

FROM : Division Head, North Luzon Toll Network

SUBJECT: ADMINISTRATIVE CASE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Investigation of the complaint indicated hereunder disclosed that:

1. Complainant Mr. Anthony Dy, President DATELCOM Corp.

2. The decrease of toll revenue for DATELCOM Angeles/Mabalacat Exchange due to fraudulent overseas callscam was complained and notified by Mr. A. Dy to Mrs. H. G. Gendrano – Clark Exchange Division Head on

July 26, 1994.

3. The complainant requested assistance to NBI and PLDT QCI to apprehend the personnel responsible for theillegal connection.

4. A clue was provided by Mr. Anthony Dy that the illegal overseas call was coming from Clark-TMC throughtaped and equipment monitoring.

5. In the QCI investigation, you were implicated by your fellow Radio Technician Mr. Vidal C. Busa as

involved in the case. You admitted you know how to operate the Lenkurt 26600 Signalling Test Set to initiate acall but denied doing it for personal gain or interest but you failed to report the anomaly to your superior as oneof your supervisors was involved in the fraudulent case.



The acts described above are in violation of the Company’s rules and regulations and is punishable withdismissal from the service.

In view of the above, please explain in writing within 72 hours from receipt hereof why you should not be

dismissed from the service for the acts described above. You may elect to be heard if you so desire.

Please be informed also that you will be placed under preventive suspension which will take effect on August16, 1994 pending resolution of the case.

If no written explanation is received from you within the said period of 72 hours, this case will be decided onthe basis of the evidence on hand. (p. 227, Rollo)

(SGD.)

ARMANDO A. ABESAMIS

Procedural due process requires that an employee be apprised of the charge against him, given reasonable time

to answer the same, allowed ample opportunity to be heard and defend himself, and assisted by a representative

if the employee so desires (Concorde Hotel vs. Court of Appeals, 362 SCRA 583; underlining supplied).

Procedural due process requires that the employer serve the employees to be dismissed two (2) written noticesbefore the termination of their employment is effected: (a) the first, to apprise them of the particular acts or

omission for which their dismissal is sought; and (b) second, to inform them of the decision of the employer that

they are being dismissed (Perpetual Help Credit Cooperative, Inc. vs. Faburada, 366 SCRA 693; underliningsupplied). The Labor Arbiter, therefore, was correct in ruling that Tiamson was indeed illegally dismissed from

his employment.36

The petitioner maintains that contrary to the findings and conclusions of the appellate court, it has establishedthrough substantial evidence that there was just cause for the respondent’s dismissal. To bolster such

contention, the petitioner adduces the following documentary evidences: (1) the sworn statements of Vidal Busaspecifically implicating the respondent;

(2) the sworn statement of Arnel Cayanan; and (3) the printout of the CAMA tape, recording the unauthorizedoverseas calls originating from Clark-TMC during the respondent’s tour of duty.

The respondent disputes the admissibility of Busa’s sworn statements for being hearsay since the latter was not

presented for cross-examination. This argument, however, is not persuasive because the rules of evidence arenot strictly observed in proceedings before administrative bodies like the NLRC where decisions may be

reached on the basis of position papers only.37

The Court agrees with the contentions of the respondent and the findings and rulings of the CA.

The petitioner indeed failed to adduce substantial evidence to prove that the dismissal of the respondent was for

a just cause. In his first sworn statement, Busa implicated the respondent in the illegal connections of overseascalls in this manner:

T 25 - Bukod sa iyo, sinu-sino pa sa mga kasamahan mo ang tinuruan ni Mr. Cayanan ng sistemang ito?

S - Sina Antonio Tiamson at Paul Cruzada na pawang mga Radio Technicians din.

T 26 - Ang ibig mo sabihin, ginagawa din nina Mr. Tiamson at Cruzada

ang magpa-patch ng mga tawag sa abroad o overseas?











S - Opo.

T 27 - Paano mo naman nasisiguro ito?

S - Nakikita ko po.

T 28 - Paano mo naman nakita samantalang magka-iba ang tour of duty

ninyo?

S - Pag nag-relyebo kami ay naaabutan kong naka-engage ang circuit at pag tinanong ko ay sinasabi nga nilang

may tawag sila at kasalukuyang nag-uusap ang magkabilang parties.38

During the confrontation between Busa and the respondent, the former likewise made the following statements:

T 3 - Ayon sa iyo, ginagawa rin ni Mr. Tiamson ang magku-kunekta ng mga illegal na tawag overseas sa

pamamagitan ng pag-gamit ng inyong Radio Equipment. Tama ba ito?

S - Tama po, Sir.

T 4 - Paano mo nalaman na ginagawa rin ni Mr. Tiamson ito?

S - Dahil nakikita ko siyang nagkukunekta at ilang beses ko ring nadatnan kapag nag-relyebo kami na

gumagana ang circuit na ang ibig sabihin ay may nag-uusap. At bago siya aalis ay inilalagay niya sa normalposition ang linyang ginamit niya.

T 5 - Kailan pa ito gingawa ni Mr. Tiamson kung natatandaan mo pa?

S - Sa natatandaan ko ginagawa niya ito magmula noong 1992 pa.

T 6 - Ayon pa rin sa iyo, alam din ni Mr. Tiamson na ginagawa rin ni Mr. Cayanan itong mga illegal activitiesna ito. Paano mo nasabi na alam ni Mr. Tiamson itong ginagawa ni Mr. Cayanan

S - Kasi magkakasama kami at kaming apat lang nina Mr. Cayanan, Mr.Tiamson, Mr. Cruzada at ako ang

nakaka-alam niyang operation na iyan.39

On the other hand, during the confrontation among all four employees implicated in the matter, Cayanan

testified that he was aware that his "subordinates" were engaged in illegal activities. However, he failed tospecifically mention who these subordinates were.

40

Although admissible in evidence, affidavits being self-serving must be received with caution. This is because

the adverse party is not afforded any opportunity to test their veracity.41 By themselves, generalized and proforma affidavits cannot constitute relevant evidence which a reasonable mind may accept as adequate.

42 There

must be some other relevant evidence to corroborate such affidavits.

On this point, the petitioner submits that the printout of the CAMA tapes corroborated Busa’s sworn statement.A perusal of the printout, however, shows that it is not authenticated by the proper officer of the company.

Moreover, the name of the respondent and the other annotations in the said printout are handwritten andunsigned.























The ruling in Asuncion v. National Labor Relations Commission43

is instructive on how such document shouldbe treated. In that case, the employer submitted a handwritten listing and computer printouts to establish the

charges against the employee. The handwritten listing was not signed, and while there was a computer-generated listing, the entries of time and other annotations therein were also handwritten and unsigned. The

Court ruled that the handwritten listing and unsigned computer printouts were unauthenticated, hence,unreliable. Mere self-serving evidence (of which the listing and printouts are of that nature) should be rejected

as evidence without any rational probative value even in administrative proceedings.44

Thus, in Uichico v. National Labor Relations Commission,45 the Court elucidated the extent of the liberality of procedure in administrative actions:

… It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of

procedure in the adjudication of cases. However, this procedural rule should not be construed as a license todisregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or

equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a

modicum of admissibility for it to be given some probative value. …46

The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrativeagencies, have nonetheless consistently required some proof of authenticity or reliability as a condition for the

admission of documents.47 Absent any such proof of authenticity, the printout of the CAMA tape should beconsidered inadmissible, hence, without any probative weight.

To conclude, the petitioner has not established by substantial evidence that there was just cause for the

respondent’s termination from his employment. The sworn statements of Busa and Cayanan alone are notsufficient to establish that the respondent was guilty of serious misconduct. In light of such finding, there is no

need to delve into whether or not the respondent was afforded due process when he was dismissed by thepetitioner.

WHEREFORE, premises considered, the petition is DENIED DUE COURSE. The Decision of the Court of

Appeals dated April 16, 2004, and its Resolution dated July 27, 2004 in CA-G.R. SP Nos. 51855 and 52247 are

AFFIRMED.

SO ORDERED.

















