01 - Aratuc, et al. vs. COMELEC (88 SCRA 251)

[GRN L-49705-09 February 8, 1979.*]TOMATIC ARATUC, SERGIO TOCAO, CISCOLARIO DIAZ, FRED TAMULA, MANGONTAWAR GURO and BONIFACIO LEGASPI, petitioners, vs. The COMMISSION ON ELECTIONS, REGIONAL BOARD OF CANVASSERS for Region XII (Central Mindanao),

ABDULLAH DIMAPORO, JESUS AMPARO, ANACLETO BADOY, et al., respondents

[GRN L-49717 February 8, 1979.*]LINANG MANDANGAN, petitioner, vs. THE COMMISSION ON

ELECTIONS, The REGIONAL BOARD OF CANVASSERS for Region XII, and ERNESTO ROLDAN, respondents

PETITIONS for certiorari with restraining order and preliminary injunctionThe facts are stated in the opinion of the Court,L-49705-09-Lino M. Patajo for petitioners.Estanislao A. Fernandez for private respondents.L-49717-21 -Estanislao A. Fernandez for petitioner.Lino M. Patajo for private respondent.Office of the Solicitor General, for public respondents.

BARREDO, J.:Petition in G.R. Nos. L-49705-09 for certiorari with

restraining Order and preliminary injunction filed by six (6) independent candidates for representatives to the Interim Batasang Pambansa who had joined together under the banner of the Kunsensiya ng Bayan which, however, was na registered as a Political Party or group under the 1976 Election Code, P.D. No. 1296. namely Tomatic Aratuc, Sergio Tocao, Ciscolario Diaz, Fred Tamula. Mangontawar Guro and Bonifacio Legaspi, hereinafter referred to as petitioners, to review the decision of the respondent Commission on Elections (Comelec) resolving their appeal from the rulings of the respondent Regional Board of Canvassers for Region XII regarding the canvass of the results of the election in said region for representatives to the I.B.P. held on April 7, 1978. Similar petition in G.R. Nos. L-49717-21, for certiorari with restraining order and preliminary injunction filed by Linang Mandangan, also a candidate for representative in the same election in that region, to review the decision of the Comelec declaring respondent Ernesto Bolden as entitled to be proclaimed as one of the eight winners in said election.

The instant proceedings are sequels of Our decision in G.R. No. L48097, wherein Tomatic Aratuc, et al. sought the suspension of the canvass then being undertaken by respondent Board in Cotabato, City and in which canvass, the returns in 1,966 out of a total of 4,107 voting centers in the whole region had already been canvassed showing partial results as follows:

"NAMES OF CANDIDATES NO. OF VOTES 1. Roldan Ernesto (KB) 225,6742. Valdez. Estanislao (KBL) 217,7893. Dimaporo, Abdullah (KBL) 199,2444. Tocao, Sergio (KB) 199,0625. Badoy, Anacleto (KBL) 198,9566. Amparo, Jesus (KBL) 184,7647. Pangandaman, Sambolayan (KBL) 183,6468. Sinsuat, Datu Blah (KBL) 182,4579. Baga, Tomas (KBL) 171,65610. Aratuc, Tomatic (KB) 165,79611. Mandangan, Linang (KB) 165,03212. Diaz, Ciscolario (KB) 159,97713. Tamula, Fred (KB) 153,73414. Legaspi, Bonifacio (KB) 148,20015. Guro, Mangontawar (KB) 139,386

16. Loma, Nemesio (KB) 107,45517. Macapeges, Malamama (Independent) 101,350(Votes of the independent candidates who actually were not in contention omitted.)" (Page 6, Record, L-49705-09.)

A supervening panel handed by Commissioner of Elections, Hon. Venancio, S. Duque, had conducted hearings of the complaints of the petitioners therein of alleged irregularities in the election records in an the voting centers in the whole province of Liman del Sur, the whole City of Marawi, eight (8) towns of Lanao del Norte, namely, Baloi, Karomatan, Matungao, Munai, Nunungan, Pantao Ragat, Tagoloan and Tangcal, seven (7) towns in Maguindanao, namely, Barrira, Datu Piang, Dinaig, Matanog, Parang, South Upi and Upi, ten (10) towns in North Cotabato, namely, Carmen, Kabacan, Kidapawan. Magpet, Matalam, Midsayap, Pigcawayan, Pikit, Pres. Roxas and Tulonan, and eleven (11) towns in Sultan Kudarat, namely, Bagumbayan, Columbio, Don Mariano Marcos, Esperanza, Isulan, Kalamansig, Lebak, Lutayan, Palimbang, President Quirino and Tacurong, by reason for which, petitioners had asked that the returns from said voting centers be excluded hum the canvass. Before the start of the hearings, the canvass was suspended, but after the supervisory panel presented its report, on May 15, 1978, the Comelec lifted its order of suspension and directed the resumption of the canvass to be done in Manila. This order was the one assailed in this Court. We issued a restraining order.

After hearing the parties, the Court allowed the resumption of the canvass but issued the following guidelines to be observed thereat:

"1. That the resumption of said canvass shall be hold in the Comelec main office in Manila starting na later than June 1, 1978;

"2. That in preparation therefor, respondent Commission an Elections shall am to it that all the material election paraphernalia corresponding to all the voting centers involved in Election Cases Nos. 78-8, 78-9, 78-10, 78-11 and 78-12 are taken to its main office In Manila, more particularly, the ballot boxes, with their contents, during the said elections, the books of voters or records of voting and the lists or records of registered voters, on or before May 31, 1978;

"3. That as soon as the corresponding records are available, petitioners and their counsel shall be allowed to examine the same under such security measures as the respondent Board may determine except the contents of the ballot boxes which shall be opened only upon orders of either the respondent Board or respondent Commission, after the need therefor has become evident, the purpose of such examination being to enable petitioners and their counsel to expeditiously determine which of them they would wish to be scrutinized and passed upon by the Board as supporting their charges of elec. tion frauds and anomalies, petitioners and their counsel being admonished. in this connection, that no dilatory tactics should be indulged in by them and that only such records as would support substantial objections should be offered by them for the scrutiny by the Board:

"4. That none of the election returns referred to in the petition herein shall be canvassed without first giving the herein petitioners ample opportunity to make their specific objections thereto, if they have any, and to show sufficient basis for the rejection of any of the returns, and, in this connection, the respondent Regional Board of Canvassers should give due consideration to the points raised in the memorandum filed by said petitioners with the Commission on Elections in the above cases dated April 26, 1978;

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"5. That should it appear to the Board upon summary scrutiny of the records to be offered by petitioners that there is sufficient indication that in the voting centers concerned, no election was actually held and/or that election returns were prepared either before the day of the election or at any other time, without counting the ballots or without regard thereto or that there has been massive substitution of voters, or that ballots and/or returns were prepared by the same groups of persons or individuals or outside of the voting centers, the Board should exclude the corresponding returns from the canvass;

"6. That appeals to the Commission on Elections from rulings of the Board may be made only after all the returns in question in all the above five cases shall have been passed upon by the Board and, accordingly, no Proclamation shall be made until after the Commission shall have finally resolved the appeal without prejudice to recourse to this Court, if warranted as provided by the Code and the Constitution, giving the parties reasonable time therefore;

"7. That the copies of the election returns found in the corresponding ballot boxes shall be the one used in the canvass;

"8. That the canvass shall be conducted with utmost dispatch, to the end that a proclamation, if feasible, may be made not later than June 10, 1978; thus, the canvass may be terminated as Soon as it is evident that the possible number of votes in the still uncanvassed returns will no longer affect the general results of the elections here in controversy;

"9. That respondent Commission shall promulgate such other directive not inconsistent with this resolution as it may deem necessary to expedite the proceedings herein contemplated and to accomplish the purposes herein intended." (Pp. 8-9. Record).

On June 1, 1978, upon proper motion, said guidelines were modified:

"x x x in the sense that the ballot boxes for the voting centers just referred to need not be taken to Manila, EXCEPT those of the particular voting centers as to which the petitioners have the right to demand that the corresponding ballot boxes be opened in order that the votes therein may be counted because said ballots unlike the election returns, have not been tampered with or substituted, in which instances the result of the counting shall be the basis of the canvass, provided that the voting centers concerned shall be specified and made known by petitioners to the Regional Board of Canvassers not later than June 3, 1978; it being understood, that for the purposes of the canvass, the petitioners shall not be allowed to invoke any objection not already alleged in or comprehend within the allegations in their complaint in the election cases abovementioned." (Page 8, Id.)

Thus, respondent Board proceeded with the canvass, with the herein petitioners presenting objections, most of them supported by the report of handwriting and finger-print experts who had examined the voting records and lists of voters in 878 voting centers, out of 2,700 which they specified in their complaints or Petitions in Election Cases 78-8, 78-9, 78-10, 78-11 and 78-12 in the Comelec. In regard to 501 voting centers, the records of which, consisting of the voters lists and voting records were not available and could not be brought to Manila, Petitioners asked that the results therein be completely exclud. ed from the canvass. On July 11, 1978, respondent Board terminated its canvass and declared the result of the voting to be as follows:

NAME OF CANDIDATE VOTES OBTAINED

"VALDEZ, Estanislao 436,069DIMAPORO, Abdullah 429,351PANGANDAMAN, Sambolayan 408,106SINSUAT, Blah 403,445AMPARO, Jesus 899,997MANDANGAN, Linang 387,025BAGA, Tomas 386,393BADOY, Anacleto 374,933ROLDAN, Ernesto 275,141TOCAO, Sergio 239,914ARATUC, Tomatic 205,829GURO, Mangontawar 190,489DIAZ, Ciscolario 190,077TAMULA, Fred 180,280LEGASPI, Bonifacio 174,396MACAPEGES, Malamana 160,271"(Pp. 11-12, Record)

Without loss of time, the petitioners brought the resolution of respondent Board to the Comelec. Hearing was hold on April 25,1978. after which hearing, the case was declared submitted for decision. However, on August 30, 1978, the Comelec issued a resolution stating inter alia that:

"In order to enable the Commission to decide the appeal properly

"a. It will have to go deeper into the examination of the voting records and registration records and in the case of voting centers whom voting and registration records which have not yet been sub. mitted for the Commission to decide to open the ballot boxes; and

"b. To interview and got statements under oath of impartial and disinterested persons from the area to determine whether actual voting took place on April 7, 1978, as well as those of the military authorities in the areas affected." (Page 12), Record, L-49705-09.)

On December 11, 1978, the Comelec required the parties "to file their respective written comments on the reports they shall periodically receive from the NBI-Comelec team of finger-print andsignature experts within the inextendible period of seven (7) days from their receipt thereof". According to counsel for Aratuc, et al., "petitioners submitted their various comments oil the reports the principal gist of which was that it would appear uniformly in all the reports submitted by the Comelec NBI experts that the registered voters were not the ones who voted as shown by the fact that the thumbprints appearing in Form 1 were different from the thumbprints of the voters in Form 5." But the Comelec denied a motion of petitioners asking that the ballot boxes corresponding to the voting centers the records of which are not available be opened and that a date be set when the statements of witnesses referred to in the August 30, 1978 resolution would be taken, on the ground that in its opinion, it was no longer necessary to proceed with such opening of ballot boxes and taking ofstatements.

For his part, Counsel for petitioner Mandangan in G.R. No. L-49717-21 filed with Comelec on December 19, 1978 a Preliminary Memorandum. To quote from the petition:

"On December 19, 1978, the KBL, through counsel, filed a 'Preliminary Memorandum for the Kilusang Bagong Lipunan (KBL) Candidates on the Comelec's Resolution of December 11, 1978,' a xerox copy of which is attached hareto and made a prut hereof as Annex 2. wherein they discussed the following topics: (1) Brief History of the President Cam

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(11) Summary of Our Position and Submission Before the Honorable Commission; and (III) KBL's Appeal Ad Cautelam. And the fourth topic, because of its relevance to the case now before this Honorable Court. we hereby quote for ready reference:

"IV "OUR POSITION WITH RESPECT TO THE RESOLUTION

OF THE HONORABLE COMMISSION OF DECEMBER 11, 1978"We respectfully submit that the Resolution of this

case by this Honorable Commission should be limited to the precints and municipalities involved in the KB's Petitions in Cases Nos. 78-8 to 78-12, 04 which evidence had been submitted by the parties and on which the KB submitted the reports of their handwriting/finger-print experts. Furthermore, it should be limited by the appeal of the KB. For under the Supreme Court Resolution of May 23, 1978, original jurisdiction was given to the Board with appeal to this Honorable Commission. Considerations of other matters beyond them would be, in Our humble opinion, without jurisdiction.

"For the present, we beg to inform this Honorable Commission that we stand by the reports and findings of the COMELEC/NBI exports as submitted by them to the Regional Board of Canvassers and as confirmed by the sold, Regional Board of Canvassers in its Resolution of July 11, 1978, giving the 8 KBL candidates the majorities we have already above mentioned. The Board did more than make a summary scrutiny of the records' required by the Supreme Court Resolution, Guideline No. 5, of May 23, 1978. Hence, if for lack of material time we cannot file any Memorandum within the nonextendible period of seven (7) days, we would just stand by said COMELEC/NBI experts' reports to the Regional Board, as confirmed by the Board (subject to our appeal ad cautelam)."

"The COMELEC sent to the parties copies of the reports of the NBICOMELEC experts. For lack of material time due to the voluminous reports and number of voting centers involved, the Christmas holidays, and our impression that the COMELEC will exercise only its appellate jurisdiction, specifically as per resolution of this Honorable Court of May 23, 1978 (in G.R. No. L-48097), we, the KBL, did not comment any more on said reports." (Pp. 5-6, Record, L-49717-21.)

On January 13, 1979, the Comelec rendered its resolution being assailed in these cases, declaring the final result of the canvass to be as follows:

"CANDIDATES VOTES VALDEZ, Estanislao 319,514DIMAPORO, Abdullah 289,751AMPARO, Jesus 286,180BADOY, Anacleto 285,985BAGA, Tomas 271,473PANGANDAMAN, Sambolayan 271,393SINSUAT, Blah 269,906ROLDAN, Ernesto 268,287MANDANGAN, Linang 251,226TOCAO, Sergio 229,124DIAZ, Ciscolario 187,986ARATUC, Tomatic 183,316LEGASPI, Bonifacio 178,564TAMULA, Fred 177,270GURO, Mangontawar 163,449LOMA, Nemesio 129,450"(Page 14, Record, L-49705-09.)

It is alleged in the Aratuc petition that:

"The Comelec committee grave abuse of discretion, amounting to lack of jurisdiction:

"1. In not pursuing further the examination of the registration records and voting records from the other voting centers questioned by petitioners after it found proof of massive substitute voting in all of the voting records and registration records examined by Comelec and NBI experts;

"2. In including in the canvass returns from the voting centers whose book of voters and voting records could not be recovered by the Commission in spite of its repeated efforts to retrieve said records;

"3. In not excluding from the canvass returns from voting centers showing a very high percentage of voting and in not considering that high percentage of voting, coupled with massive substitution of voters is proof of manufacturing of election returns;

"4. In denying petitioners' petition for the opening of the ballot boxes from voting centers whose records are not available for examination to determine whether or not there had been voting in said voting centers;

"5. In not identifying the ballot boxes that had no padlocks and especially those that were found to be empty while they were shipped to Manila pursuant to the directive of the Commission in compliance with the guidelines of this Honorable Court;

"6. In not excluding from the canvass returns where the results of examination of the voting records and registration records show that the thumbprints of the voters in CE Form 5 did not correspond to those of the registered voters as shown in CE Form 1;

"7. In giving more credence to the affidavits of chairmen and members of the voting centers, municipal treasurers and other election officials in the voting centers where irregularities had been committed and not giving credence to the affidavits of watchers of petitioners;

"8. In not including among those questioned before the Board by petitioners those included among the returns questioned by them in their Memorandum filed with the Commission on April 26, 1978, which Memorandum was attached as Annex 'I' to their petition filed with this Honorable Court G.R. No. L-48097 and which the Supreme Court said in its Guidelines should be considered by the Board in the course of the canvass (Guidelines No. 4)." (Pp. 15-16, Record, Id.)

On the other hand, the Mandangan petition submits that the Comelec committed the following errors:

"1. In erroneously applying the earlier cam of Diaz vs. Commission on Elections (November 29, 1971; 42 SCRA 428) and partially the highly restrictive criterion that when the votes obtained by the candidates with the highest number of votes exceed the total number of highest possible valid votes. the COMELEC ruled to exclude from the canvass the election returns reflecting such results, under which the COMELEC excluded 1,004 election returns, involving around 100,000 votes, 95% of which are for KBL candidates, particularly the

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petitioner Linang Mandangan, and which rule is so patently unfair, unjust and oppressive.

"2. In not holding that the real doctrine in the Diaz Case is not the total exclusion of election return simply because the total number of votes exceed the total number of highest possible valid votes, but 'even if all the votes cast by persons identified as registered voters were added to the votes cast by persons who can not be definitely ascertained as registered or not, and granting, ad arguendo, that all of them voted for respondent Daoas, 90 the resulting total is much below the number of votes credited to the latter in returns for Sagada, 'and that 'of the 4188 ballots cost in Sagada, nearly one-half (1,012) were cast by persons definitely identified as not registered therein, 'or still more than 40% of substitute voting which was the rule followed in the later case of Bashier/Basman (Diaz Case, November 19, 1971, 42 SCRA 426, 432).

"3. In not applying the rule and formula in the later case of Bashier and Basman vs. Commission on Elections (February 24, 1972, 43 SCRA 238) which was the one followed by the Regional Board of Canvassers, to wit:

'In Basman vs. Comelec (L-33728, Feb. 24, 1972) the Supreme Court upheld the ruling of the Comelec in setting the standard of 40% excess votes to justify the exclusion of election returns. In line with the above ruling the Board of Canvassers may likewise set aside election returns with 40% substitute votes. Likewise, where excess voting occurred and the excess was such as to destroy the presumption of innocent mistake, the returns was excluded. (COMELEC's Resolution, Annex 1 hereof, p. 22), which this Honorable Court must have meant when its Resolution of May 23, 1978 (G.R. No. L48097), it referred to "massive substitution of voters.'

"4. In examining through the NBI/COMBLEC experts, the records in more than 878 voting centers examined by the KB experts and passed upon by the Regional Board of Canvassers which was all that was within its appellate jurisdiction is examination of man election records to make a total of 1,085 voting centers (COMELEC's Resolution, Annex 1 hereof. p. 100). being beyond its jurisdiction and a denial of due process as far as the K84 particularly the petitioner Mandangan, were concerned because they were informed of it only in December, 1978, long after the come has bon submitted for decision in September, 1978, and the statement that the KBL acquiesced to the same is absolutely without foundation.

"5. In excluding election returns from aroma where the conditions of peace and order were allegedly unsettled or where there was a military operation going on immediately before and during elections and where the voter turn out was high 190% to 100%), and where the people had been asked to evacuate, as a ruling without jurisdiction and in violation of due process because no evidence was at all submitted by the parties before the Regional Board of Canvassers." (Pp. 23-25, Record, L-47917-21.)

Now before discussing the merits of the foregoing contentions, it is necessary to clarity first the nature and extent of the Supreme Court's power of review in the promises. The Aratuc petition is expressly predicated on the

ground that respondent Comelec "committed grave abuse of discretion, amounting to lack of jurisdiction" in eight specifications. On the other hand, the Mandangan petition raises pure questions of law and jurisdiction. In other words, both petitions invoked the Court's certiorari jurisdiction, not its appellate authority of review.

This is as it should be. While under the Constitution of 1935, "the decisions, orders and rulings of the Commission shall be Subject to review by the Supreme Court" (Sec. 2, first paragraph. Article X) and pursuant to the Rules of Court, the Petition for "certiorari or review" shall be on the ground that the Commission "has decided a question of substance not theretofore determined by the Supreme Court, or has decided it in a way not in accord with law or the applicable decisions of the Supreme Court" (Sec. 3, Rule 43), and such provisions refer not only to election contests but even to pre-proclamation proceedings, the 1973 Constitution provides somewhat differently thus: "Any decision, order or ruling of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from his receipt of a copy thereof" (Section 11, Article XII c), even as it ordains that the Commission shall "be the sole judge of all contests relating to the elections, returns and qualifications of all members of the National Assembly and elective provincial and city officials" (Section 2 (2).)

Correspondingly, the Election Code of 1978, which is the first legislative construction of the pertinent constitutional provisions, makes the Commission also the "sole judge of all pre-proclamation controversies" and further provides that "any of its decisions, orders or rulings (in such controversies) shall be final and executory", just as in election contests, "the decision of the Commission shall be final, and executory and inappealable." (Section 193)

It is at once evident from these constitutional and statutory modifications that there is a definite tendency to enhance and invigorate the role of the Commission on Elections as the in. dependent constitutional body charged with the safeguarding of free, peaceful and honest elections. The framers of the new Constitution must be presumed to have definite knowledge of what it means to make the decisions, orders and rulings of the Commission "subject to review by the Supreme Court". And since instead of maintaining that provision intact, it ordained that the Commission's actuations be instead "brought to the Supreme Court on certiorari", We cannot insist that there was no intent to change the nature of the remedy, considering that the limited scope of certiorari compared to a review, is well known in remedial law.

Withal, as already stated, the legislative construction of the modified pertinent constitutional provision is to the effect that the actuations of the Commission are final, executory and even inappealable. While such construction does not exclude the general certiorari jurisdiction of the Supreme Court which in. heres in it as the final guardian of the Constitution, particularly, of its imperious due process mandate, it correspondingly narrows down the scope and extent of the inquiry the court is supposed to undertake to what is strictly the office of certiorari as distinguished from review. We are of the considered opinion that the statutory modifications are consistent with the apparent new constitutional intent Indeed. it is obvious that to say that actuations of the Commission may be brought to the Supreme Court on certiorari technically connotes something less than saying that the same "shall be subject to review by the Supreme Court", when it comes to the measure of the Court's reviewing authority or prerogative in the promises.

A review includes digging into the merits and unearthing errors of judgment, while certiorari deals exclusively with grave abuse of discretion, which may not

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exist even when the decision is otherwise erroneous. Certiorari implies an indifferent disregard of the law, arbitrariness and caprice, an omission to weigh pertinent considerations, a decision arrived at without rational deliberation. While the effects of an error of judgment may not differ from that of an indiscretion, as a matter of policy, there are matters that by their nature ought to be left for final determination to the sound discretion of certain officers or entities, reserving it to the Supreme Court, to insure the faithful observance of due process only in cases of patent arbitrariness.

Such, to Our mind, is the constitutional scheme relative to the Commission on Elections. Conceived by the charter as the effective instrument to preserve the sanctity of popular suffrage, endowed with independence and all the needed concomittant powers, it is but proper that the Court should accord the greatest measure of presumption of regularity to its course of action and choice of means in performing its duties, to the end that it may achieve its designed place in the democratic fabric of our government. Ideally, its members should be free from all suspicions of partisan inclinations, but the fact that actually mane of them have had stints in the arena of politics should not, unless the contrary is shown, serve as basis for denying to its actuations the respect and consideration that the Constitution contemplates should be accorded to it, in the same manner that the Supreme Court itself which from time to time may have members drawn from the political ranks or even from the military is at all times deemed insulated from every degree or form of external pressure and influence as well as improper internal motivations that could arm from such background or orientation.

We hold, therefore, that under the existing constitutional and statutory provisions, the certiorari jurisdiction of the Court over orders, rulings and decisions of the Comelec is not as broad as it used to be and should be confined to instances of grave abuse of discretion amounting to patent and substantial denial of due process. Accordingly, it is in this light that We shall proceed to examine the opposing contentions of the parties in these cases.

THE MANDANGAN CASE

Being more simple in Our view, We shall deal with the potation in G.R. No. L-49717-21 first.

The errors assigned in this petition bad down to two main propositions, namely, (1) that it was an error of law on the part of respondent Comelec to have applied to the extant circumstances hereof the ruling of this Court in Diaz vs. Comelec, 42 SCRA 426 instead of that of Bashier vs. Comelec, 43 SCRA 238, and (2) that respondent Comelec exceeded its jurisdiction and denied due process to petitioner Mandangan in extending its inquiry beyond the election records of "the 878 voting centers examined by the KB experts and passed upon by the Regional Board of Canvassers" and in excluding from the canvass the returns, showing 90 to 100% voting, from voting centers where military operations were certified by the Army to be going on. to the extent that said voting centers had to be transferred to the poblaciones, the same being unsupported by evidence.

Anent the first proposition, it must be made clear that the Diaz and Bashier rulings are not mutually exclusive of each other, each being an outgrowth of the basic rationale of statistical improbability laid down in Lagumbay vs. Comelec and Climaco, 16 SCRA 175. Whether they should be applied together or separately or which of them should be applied depends on the situation on hand. In the factual milieu of the instant can as found by the Comelec, We see no cogent reason, and petitioner has not shown any, why returns in

voting centers showing that the votes of the candidate obtaining the highest number of votes exceeds the highest possible number of valid votes cast therein should not be deemed as spurious and manufactured just because the total number of excess votes in said voting centers was not more than 40%. Surely, this is not the occasion, considering the historical antecedents relative to the highly questionable manner in which elections have been held in the past in the provinces herein involved, of which the Court has judicial notice as attested by its numerous decisions in cases involving practically every such election, of the Court to move a whit back from the standards it has enunciated in those decisions.

In regard to the jurisdictional mid due process points raised by herein petitioner, it is of decisive importance to bear in mind that under Section 168 of the Revised Election Code of 1978, "the Commission (on Elections) shall have direct control and supervision. over the board of canvassers" and that relatedly, Section 175 of the same Code provides that it "shall be the sole judge of all pre-proclamation controversies." While nominally, the procedure of bringing to the Commission objections to the actuations of boards of canvassers has been quite loosely referred to in certain quarters, even by the Commission and by this Court, such as in the guidelines of May 23, 1978 quoted earlier in this opinion, as an appeal, the fact of the matter is that the authority of the Commission in reviewing such actuations does not spring from any appellate jurisdiction conferred by any specific provision of law, for there is none such provision anywhere in the Election Code, but from the plenary prerogative of direct control and supervision endowed to it by the above-quoted provisions of Section 168. And in administrative law, it is a too well settled postulate to need any supporting citation hem that a superior body or office having supervision and control over another may do directly what the letter is supposed to do or ought to have done.

Consequently, anything said in Lucman vs. Dimaporo, 33 SCRA 387, cited by petitioner, to the contrary notwithstanding we cannot fault respondent Comelec for its having ex. tended its inquiry beyond that undertaken by the Board of Canvassers. On the contrary, it must be stated that Comelec correctly and commendably asserted its statutory authority born of its envisaged constitutional duties vis-a-vis the preservation of the purity of elections and electoral processes and procedures in doing what petitioner claims it should not have done. Incidentally, it cannot be said that Comelec went further then even what Aratuc, et al. have asked, dam said complainants had impugned from the outset not only the returns from the 878 voting centers examined by their experts but all those mentioned in their complaints in the election cases filed originally with the Comelec enumerated in the opening statements hereof, respondent Comelec: had that much fold to work on.

The same principle should apply in respect to the ruling of the Commission regarding the voting centers affected by military operations. It took cognizance of the fact, not considered by the board of canvassers, that said voting canton had ban transferred to the poblaciones. And, if only for purposes of pro-proclamation proceedings, We are persuaded it did not constitute a denial of due process for the Commission to have taken into account, without the need or presentation of evidence by the parties, a matter so publicly notorious as the unsettled situation of peace and order in some localities in the provinces harem involved that they may perhaps be taken judicial notice of, the same being capable of unquestionable demonstration. (See 1, Rule 129)

In this connection, We may as well, perhaps, say here as later that regrettably We cannot, however, go along with the view, expressed in the dissent; of our respected Chief Justice, that from the fact that some of the voting

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centers had been transferred to the poblaciones there is already sufficient basis for Us to rule that the Commission should have also subjected all the returns from the other voting centers of the same municipalities, if not provinces, to the same degree of scrutiny as in the former. The majority of the Court feels that had the Commission done so, it would have fallen into the error precisely alleged by petitioner Mandangan about denial of due procase, for it is relatively unsafe to draw adverse conclusions as to the exact conditions of peace and order in those other voting centers without at least some prima facie evidence to rely on considering that there is no allegation, much less any showing at all that the voting centers in question are so close to those excluded by the Commission as to warrant the inescapable conclusion that the relevant circumstances found by the Comelec as obtaining in the latter war identical to those in the former.

Promises considered, the petition in G.R. Nos. L-49717-21 is hereby dismissed for lack of merit.

THE ARATUC ET AL PETITION

Of the eight errors assigned by herein petitioners earlier adverted to, the seventh and the eight do not require any extended disquisition. As to the issue of whether the elections in the voting centers concerned were hold on April 7, 1978, the date designated by law, or ealier, to which the seventh alleged error is addressed, We note that apparently petitioners are not seriously pressing on it anymore, as evidenced by the complete absence of any reference thereto during the oral argument of their counsel and the practically cavalier discussion thereof in the petition. In any event, We are satisfied from a careful review of the analysis by the Comelec in its resolution now before Us that it took pains to consider as meticulously as the nature of the evidence presented by both parties would permit all the contentions of petitioners relative to the weight that should be given to such evidence. The detailed discussion of said evidence is contained in not less than nineteen pages (pp. 70-89) of the resolution. In then promises, We are not prepared to bold that Comelec acted wantonly and arbitrarily in drawing its conclusions adverse to petitioners' position. If errors there are in any of those conclusions, they are errors of Judgment which are not reviewable in certiorari, so long as they are founded on substantial evidence.

As to eighth assigned error. the thrust of respondents' comment is that the results in the voting centers mentioned in this assignment of error had already been canvassed at the regional canvassing center in Cotabato City. Again, We cannot say that in sustaining the board of canvassers in this regard, Comelec gravely abused its discretion, if only bemuse in the guidelines set by this Court, what appears to have been referred to is, rightly or wrongly, the resumption only of the canvass, which does not necessarily include the setting aside and repetition of the canvass already made in Cotabato City.

The second and fourth assignments of error concern the voting centers the corresponding voters's record (C.E. Form 1) and record of voting (C.E. Form 5) of which have never been brought to Manila because they war na available. The record is not clear as to how many an these voting centers. According to petitioners they are 501, but in the Comelec resolution in question, the number mentioned is only 408, and this number in directly challenged in the petition. Under the second assignment, it is contended that the Comelec gravely abused its discretion in including in the canvass the election returns from these voting centers and, somewhat alternatively, it is alleged as fourth assignment that petitioners' motion for the opening of the ballot boxes

pertaining to said voting centers was arbitrarily denied by respondent Comelec.

The resolution under scrutiny explains the situation that confronted the Commission in regard to the 408 voting centers referred to as follows:

"The Commission had the option of excluding from the canvass the election returns under this category. By deciding to exclude the Commission would be summarily disenfranchising the voters registered in the voting centers affected without any basis. The Commission could also order the inclusion in the canvass of these election returns under the injunction of the Supreme Court that extreme caution must be exercised in rejecting returns unless these are palpably irregular. The Commission chose to give prima facie validity to the election returns mentioned and uphold the votes cast by the voters in those areas. The Commission had the view that the failure of some election officials to comply with Commission orders (to submit the records) should not prejudice the right of suffrage of the citizens who were not parties to such official disobedience. In the case of Lino Luna vs. Rodriguez, 39 Phil. 208, the Supreme Court ruled that when voters have honestly cast their ballots, the same should not be nullified because the officers appointed under the law to direct the election and guard the purity of the ballot have na complied with their duty. (cited in Laurel on Elections, p. 24)" (pp. 139-140, Record.)

On page 14 of the comment of the Solicitor General, however, it is stated that:

"At all events. the returns corresponding to these voting centers were examined by the Comelec and 141 of such returns were excluded, as follows:

PROVINCE TOTAL EXCLUDED INCLUDED Lanao del Norte 30 - 30Lanao del Sur 342 137 205Maguindanao 21 1 20North Cotabato 7 1 6Sultan Kudarat 12 2 10TO ------- 412 141 271"(Page 301, Record.)

This assertion has not been denied by petitioners.Thus, it appears that precisely because of the

absence or unavailability of the CE Forms 1 and 5 corresponding to the more than 400 voting centers concerned in oar present discussion, the Comelec examined the returns from said voting centers to determine their trustworthiness by scrutinizing, the purported relevant data appearing on their faces, believing that such was the next best thing that could be done to avoid total disenfranchisement of the voters in all of them. On the other hand, petitioners' insist that the right thing to do was to ardor the opening of the ballot boxes involved.

In connection with such opposing contentions, Comelec's explanation in its resolution is:

"x x x The commission had it seen fit to so order, could have directed the opening of the ballot; boxes. But the Commission did not see the necessity of going to such length in a proceeding that was summary in nature and decided that there was sufficient basis for determine the resolution of the appeal. That the Commission has discretion to determine when be ballot boxes should be opened is implicit in the guidelines set by the Supreme Court which states that '... the ballot boxes [which] shall be opened only upon orders of either the respondent Board or respondent Commission.

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after the need therefor has become evident. . . .' (Guideline No. 3, italics supplied). Furthermore, the Court on June 1, 1978, mended the guidelines by providing that the "ballot boxes for the voting centers... need not be taken to Manila, EXCEPT those of the particular centers as to which the petitioners have the right to demand that the corresponding ballot boxes be opened .... provided that the voting centers concerned shall be specified and made known by petitioners to the Regional Board of Canvassers not later than June 3, 1978 .... (italics supplied). The KB, candidates did not take advantage of the option granted them under these guidelines.' (Pp. 106-107, Record.)

Considering that Comelec, if it had wished to do so, had the facilities to identify on its own the voting centers without CE Forms 1 and 5, thereby precluding the need for the petitioners having to specify them and under the circumstances the need for opening the ballot boxes in question should have appeared to it to be quite apparent, it may be contended that Comelec would have done greater service to the public interest had it proceeded to order such opening, as it had announced it had thoughts of doing in its resolution of August 30, 1978. On the other hand, We cannot really blame the Commission too much, since the exacting tenor of the guidelines issued by Us left it with very little elbow room, so to speak, to use its own discretion independently of what We had ordered. What could have saved matters altogether would have been a timely move on the part of petitioners on or before June 8, 1978, as contemplated in Our resolution. After all, come to think of it, that the possible outcome of the opening of the ballot boxes would favor the petitioners was not a certainty-the contents thereof could conceivably boomerang against them, such as, for example, if the ballots therein had been found to be regular and preponderantly for their opponents. Having in mind that significantly, petitioners filed their motion for opening only on January 9, 1979, practically on the eve of the promulgation of the resolution, We hold that by having adhered to Our guidelines of June 1, 1978, Comelec certainly cannot be hold to be guilty of having gravely abused its discretion whether in examining and passing on the returns from the voting centers refers to in the second and fourth assignments of am in the canvass or in denying petitioners, motion for the opening of the ballot boxes concerned.

The first, third and sixth assignment of more involve related matters and maybe discussed together. They all deal with the inclusion in or exclusion from the canvass of certain returns on the basis of the percentage of voting in specified voting centers and the corresponding findings of the Comelec on the extent of substitute voting therein as indicated by the result of either the technical examination by experts of the signatures and thumb-prints of the voters thereat.

To begin with, petitioners' complaint that the Comelec did not examine and study 1,694 of the records in all the 2,775 voting centers questioned by them is hardly accurate. To be more exact, the Commission excluded a total of 1,267 returns coming under four categories namely: 1,001 under the Diaz, supra, ruling 79 because of 90-100% turnout of voters despite military operations, 105 palpably manufactured ones and 82 return excluded by the board of canvassers on other grounds. Thus, 45.45% of the claims of the petitioners were sustained by the Comelec. In contrast, in the board of canvassers, only 453 returns were excluded. The board was reversed as to 6 of these, and 821 returns were excluded by Comelec over and above those excluded by the board. In other words, the Comelec almost doubled the exclusions by the board.

Petitioners would give the impression by their third assignment of error that Comelec refused to consider high

percentage of voting, coupled with mass substitute voting, as proof that the pertinent returns had been manufactured. That such was not the came is already shown in the above specifications. To add more, it can be gleaned hum the resolution that in respect to the 1,065 voting centers in Lanao del Sur and Marawi City where a high percentage of voting appeared, the returns from the 867 voting centers were excluded by the Comelec and only 198 were included a ratio of roughly 78% to 22%. The following tabulation drawn from the figures in the resolution shows how the Comelec went over those returns center by center and acted on them individually.

"90%-100% VOTING MARAWI CITY AND LANAO DEL SUR V/CNO. OF V/C MUNCIPALITIES THAT FUNCTIONED WITH 90% to 100% VOTING

No. of V/C Excluded Included Marawi City Bacolod Grande 28 28 27 1Balabagan 53 53 49 4Balindong 22 22 15 7Bayan 29 20 13 7Binidayan 37 33 29 4Buadiposo Buntong 41 10 10 0Bubong 24 23 21 2Bumbaran 21 (all excluded)Butig 35 38 32 1Calanogas 23 21 21 0Ditsaan-Ramain 42 39 38 1Ganassi 39 38 23 15Lumba Bayabao 64 63 47 16Lumbatanso 28 17 11Lumbayanague 37 33 28 5Madalum 14 13 6 7Madamba 20 20 6 15Maguing 25 75 55 3Malabang 59 47 54 2Marantao 79 63 41 22Marugong 37 35 32 3Masiu 27 26 24 2Pagayawan 15 13 9 4Piagapo 39 39 36 8Poona-Bayabao 44 44 42 2Pualas 23 20 20 0Saguiaran 36 32 21 11Sultan Gumander35 31 31 0Tamparan 24 21 15 6Taraka 31 31 31 0Tubaran 23 19 19 0TOTALS:Marawi &Lanao del Sur 1,218 1,065 867 198"

We are convinced, apart from presuming regularity in the performance of its duties, that there is enough showing in the record that it did examine and study the returns and pertinent records corresponding to all the 2775 voting centers subject of petitioners' complaints below. In one put of its resolution the Comelec states:

"The Commission as earlier stated examined an its own the Books of Voters (Comelec Form No. 11 and the Voters Records Comelec Form No. 5) to determine for itself which of these election forms needed further examination by the COMELEC-NBI experts. The Commission, aware of the summary nature of this pre-proclamation controversy, believes that it can decide, using common sense and

7

perception, whether the election forms in controversy needed further examination by the experts based on the presence or absence of patent signs of irregularity." (Pp. 137-138, Record.)

In the face of this categorical assertion of fact of the Commission, the bare charge of petitioners that the records pertaining to the 1,694 voting centers assailed by them should not a-eats any ripple of serious doubt. As We view this point under discussion, what is more factually accurate is that those records complained of were not examined with the aid of experts and that Comelec passed upon the returns concerned "using common sense and perception only." And there is nothing basically objectionable in this. The defunct Presidential, Senate and House Electoral Tribunals examined, passed upon and voided millions of votes in several national elections without the assistance of experts and "using" only "common sense and perception". No one ever raised any eyebrows about such procedure. Withal, what we discern from the resolution is that Comelec preliminary screened the records and whatever it could not properly pass upon by "using common sense and perception" it left to the experts to work on. We might disagree with the Comelec as to which voting center should be excluded or included, were We to go over the same records Ourselves, but still a case of grave abuse of discretion would not come out, considering that Comelec cannot be said to have acted whimsically or capriciously or without any rational basis, particularly if it is considered that in many respects and from the very nature of our respective functions, becoming candor would dictate to Us to concede that the Commission is in a better position to appreciate and same the vital circumstances closely and accurately. By and large, therefore, the first, third and sixth assignments of error of the petitioners are not well taken.

The fifth assignment of error is in our view moot and academic. The identification of the ballot boxes in defective condition, in some instances open and allegedly empty, is at best of secondary import because, as already discussed, the records related thereto were after all examined, studied and passed upon. if at all, deeper inquiry into this point would be of real value in an electoral protest.

Before closing, it may not be amiss to state here that the Court had initially agreed to dispose of the cases in a minute resolution, without prejudice to an extended or reasoned-out opinion later, so that the Court's decision may be known earlier. Considering, however, that no less than the Honorable Chief Justice has expressed misgivings as to the propriety of yielding to the conclusions of respondent Commission because in his view there are strong considerations warranting further meticulous inquiry of what he deems to be earmarks of seemingly traditional faults in the manner elections are held in the municipalities and provinces herein involved, and he is joined in this pose by two other distinguished colleagues of Ours, the majority opted to ask for more time to put down at least some of the important considerations that impelled Us to see the matters in dispute the other way, just as the minority bidded for the opportunity to record their points of view. In this manner, all concerned will perhaps have ample basis to place their respective reactions in proper perspective.

In this connection, the majority feels it is but moot to advert to the following portion of the ratiocination of respondent Board of Canvassers adopted by respondent Commission with approval in its resolution under question:

"First of all this Board was guided by the legal doctrine that canvassing boards must exercise "extreme caution" in rejecting returns and they may do so only when the returns are palpably irregular. A conclusion that an

election return is obviously manufactured or false and consequently should be disregarded in the canvass must be approached with extreme caution, and only upon the roost convincing proof Any plausible explanation, one which is acceptable to a reasonable man in the light of experience and of the probabilities of the situation, should suffice to avoid outright nullification, with the resulting disenfranchisement of those who exercised their right of suffrage. (Anni vs. Isquierdo et al., L-35918, June 28, 1974; Villalon v. Comelec, L-32008, August 31, 1970; Tagoranao v. Comelec. 22 SCRA 978). In the absence of strong evidence establishing the spuriousness of the return, the basis nila of their being accorded prima facie status as bona fide reports of the results of the count of the votes for can. vassing and proclamation purposes must be applied, without prejudice to the question being tried on the merits with the presentation of evidence, testimonial and real. in the corresponding electoral protest, (Bashier vs. Comelec, L-33692, 33699, 33728, 43 SCRA 238. February 24, 1972). The decisive factor is that where it has been duly determined after investigation and examination of the voting and registration records hat actual voting and election by the registered voters had taken place in the questioned voting centers, the election returns cannot be disregarded and excluded with the resulting disenfranchisement of the voters, but must boa accorded prima facie status as bona ride reports of the results of the voting for canvassing and proclamation purposes. Where the grievances relied upon is the coma mission of irregularities and violation of the Election Law the proper remedy is election protest. (Anni vs. Isquierdo et al., Supra)." (p. 59, Record, L-49705-09).

The writer of this opinion has taken care to personally on the citations to be doubly am they were not taken out of context, considering that most, if not all of them, arose from similar situations in the very venues of the actual milieu of the instant cases, and We are satisfied they do fit our chosen posture. More importantly, they actually came from the pow of different members of the Court, already retired or still with Us. distinguished by their perspicacity and their perceptive prowess. In the context of the constitutional and legislative intent expounded at the outset of this opinion and evident in the modifications of the duties and responsibilities of the Commission on Elections vis-a-vis the matters that have concerned Us herein. particularly the elevation of the Commission as the "sole judge of pre-proclamation controversies" as well as of all electoral contests, We find the afore-quoted doctrines compelling as they reveal through the clouds of existing jurisprudence the polestar by which the future should be guided in delineating and circumscribing separate spheres of action of the Commission as it functions in its equally important dual role just indicated bearing as they do on the purity and sanctity of elections in this country.

In conclusion, the Court finds insufficient merit in the petition to warrant its being given due course. Petition dismissed, without pronouncement as to costs. Justices Fernando, Antonio and Guerrero who are presently on official missions abroad voted for such dismissal.

Fernando, Antonio, Concepcion, Jr., Santos, Fernandez, and Guerrero, JJ., concur.Castro, C.J., files a dissenting opinion.Teehankee, J. did not take part.Makasiar and Herrera JJ., concurs in the dissenting opinion of the Chief Justice.Aquino, and Abad Santos, JJ., took no part.De Castro, J., concur in a separate opinion.Petition dismissed.

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02 – Maceda vs. ERB (192 SCRA 363)

[GRN 96266 July 18, 1991]ERNESTO M. MACEDA, petitioner, vs. ENERGY REGULATORY

BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION,

respondents

[GRN 96349 July 18, 1991]EUGENIO O. ORIGINAL, IRENEO N. AARON, JR., RENE

LEDESMA, ROLANDO VALLE, ORLANDO MONTANO, STEVE ABITANG, NERI JINON, WILFREDO DELEONIO, RENATO BORRO, RODRIGO DE VERA, ALVIN BAYUANG, JESUS

MELENDEZ, NUMERIANO CAJILIG, JR., RUFINO DE LA CRUZ AND JOVELINO G. TIPON, Petitioners, vs. ENERGY

REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON

CORPORATION, respondents

[GRN 96284 July 18, 1991]CEFERINO S. PAREDES, JR., petitioner, vs. ENERGY

REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL, INC. AND PETROPHIL CORPORATION, respondents

PETITIONS to review the orders of the Energy Regulatory Board.The facts are stated in the resolution

MEDIALDEA, J.:

In G.R. No. 96266, petitioner Maceda seeks nullification of the Energy Regulatory Board (ERB) Orders dated December 5 and 6, 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow him substantial cross-examination, in effect, allegedly, a denial of due process.

The facts of the case are as follows:Upon the outbreak of the Persian Gulf conflict on

August 2, 1990, private respondents oil companies filed with the ERB their respective applications on oil price increases (docketed as ERB Case Nos. 90-106, 90-382 and 90-384, respectively).

On September 21, 1990, the ERB issued an order granting a provisional increase of P1.42 per liter. Petitioner Maceda filed a petition for Prohibition on September 26, 1990 (E. Maceda v. ERB, et al., G.R. No. 95203), seeking to nullify the provisional increase. We dismissed the petition on December 18, 1990, reaffirming ERB's authority to grant provisional increase even without prior hearing, pursuant to Sec. 8 of E.O. No. 172, clarifying as follows:

'What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex-parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 3, paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex-parte and which are subject to the resolution of the main case.

"Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a

hearing, subject to the final outcome of the proceeding. The Board, of court is not prevented from conducting, hearing on the grant of provisional authority which is of course, the better procedure-however, it cannot be stigmatized later if it failed to conduct one. (pp. 129-130, Rollo) (Emphasis Ours)

In the same order of September 21, 1990, authorizing provisional increase, the ERB set the applications for hearing with due notice to all interested parties on October 16, 1990. Petitioner Maceda failed to appear at said hearing as well as on the second hearing an October 17, 1990.

To afford registered oppositors continuation of the hearing to October 24, 1990, this was postponed to November 5, 1990, on written notice of petitioner Maceda.

On November 5, 1990, the three oil companies filed their respective-motions for leave to file or admit amended/supplemental applications to further increase the prices of petroleum products.

The ERB admitted the respective supplemental/amended petitions on November 6, 1990 at the same time requiring applicants to publish the corresponding Notices of Public Hearing in two newspapers of general circulation (p. 4, Rollo and Annexes "F" and "G," pp. 60 and 62, Rollo).

Hearing for the presentation of the evidence-in-chief commenced on November 21, 1990 with ERB ruling that testimonies of witnesses were to be in the form of Affidavits (p. 6, Rollo). ERB subsequently outlined the procedure to be observed in the reception of evidence, as follows:

"CHAIRMAN FERNANDO:"Well, at the last hearing, appellant Caltex presented

its evidence-in-chief and there is an understanding or it is the Board's wish that for purposes of good order in the presentation of the evidence considering that these are being heard together, we will defer the cross-examination of applicant Caltex's witness and ask the other applicants to present their evidence-in-chief so that the oppositors will have a better idea of what all of these will lead to because as I mentioned earlier, it has been traditional and it is the intention of the Board to act on these applications on an industry-wide basis, whether to accept, reject, modify or whatever, the Board will do it on an industry wide basis, so, the best way to have (sic) the oppositors and the a the clear picture of what the applicants are asking for is to have all the evidence in chief to the replaced on first at the examination will come Liter, the cross-examination will come later. x x x (pp. or -6, TSN, November 23, 1990, ERB Cases Nos. 90-106, 90382 and 90-384)." (p. 162, Rollo)

Petitioner Maceda maintains that this order of proof deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to cross-examine each of the witnesses of Caltex and Shell. He points out that this relaxed procedure resulted in the denial of due process.

We disagree. The Solicitor General has pointed out:

"x x x The order of testimony both with respect to the examination of the particular witness and to the general course of the trial is within the discretion of the court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the rules is not improper (88 C.J.S. 206-207).

"Such a relaxed procedure is especially true in administrative bodies, such as the ERB, which in matters of rate or price fixing, is considered as exercising a quasi-legislative, not quasi-judicial, function. As such administrative agency, it is not bound by the strict or technical rules of evidence governing court proceedings (Sec. 29, Public Service

9

Act; Dickenson v. United States, 346, U.S. 389, 98 L. ed. 132, 74 S. St. 152). (Emphasis Ours)

"In fact, Section 2, Rule I of the Rules of Practice and Procedure Governing Hearings Before the ERB provides that

'These Rules shall govern pleadings, practice and procedure before the Energy Regulatory Board in all matters of inquiry, study, hearing, investigation and/or any other proceedings within the jurisdiction of the Board. However, in the broader interest of justice, the Board may, in any particular matter, except itself from these rules and apply such suitable procedure as shall promote the objectives of the Order."

(pp. 163-164, Rollo)

Petitioner Maceda also claims that there is no substantial evidence on record to support the provisional relief.

We have, in G.R. Nos. 95203-05, previously taken judicial notice of matters and events related to the oil industry, as follows:

"x x x '(1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to $1.00; (3) the counrty's balance of payment is expected to reach $1 Billion; (4) our trade deficit is at P2.855 Billion as of the first nine months of the year.' ,xxx xxx xxx" (P. 150, Rollo)

The Solicitor General likewise commented:

"Among the pieces of evidence considered by ERB in the grant of the contested provisional relief were: (1) certified copies of bins of lading issued by crude oil suppliers to the private respondents; (2) reports of the Bankers Association of the Philippines on the pesodollar exchange rate at the BAP oil pit; and (3) OPSF status reports of the Office of Energy Affairs. The ERB was likewise guided in the determination of international crude oil prices by traditional authoritative sources of information on crude oil and petroleum products, such as Platt's Oilgram and Petroleum Intelligence Weekly." (p. 158, Rollo)

Thus, We concede ERB's authority to grant the provisional increase in oil price, as We note that the Order of December 5, 1990 explicitly stated:

"in the light, therefore, of the rise in crude oil importation costs, which as earlier mentioned, reached an average of $30.3318 per barrel at $25.551/US $ in September-October 1990; the huge OPSF deficit which, as reported by the Office of Energy Affairs, has amounted to P5.7 Billion (based on filed claims only and net of the P5 Billion OPSF) as of September 30,1990, and is estimated to further increase to over P10 Billion by end-December 1990; the decision of the government to discontinue subsidizing oil prices in view of inflationary pressures; the apparent inadequacy of the proposed additional P5.1 Billion government appropriation for the OPSF; and the sharp drop in the value of the peso in relation to the US dollar to P28/US $, this Board is left with no other recourse but to grant applicants oil companies further relief by increasing the prices of petroleum products sold by them." (p. 161, Rollo)

Petitioner Maceda together with petitioner Original (G.R. No. 96349) also claim that the provisional increase involved amounts over and above that sought by the petitioning oil companies.

The Solicitor General has pointed out that aside from the increase in crude oil prices, all the applications of the respondent oil companies filed with the ERB, covered claims from the OPSF.

We shall thus respect the ERB's Order of December 5, 1990, granting a provisional price increase on petroleum products premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk for a subsidy on sale to NPC (p. 167, Rollo), since the oil companies are "entitled to as much relief as the fact alleged constituting the course of action may warrant," (Javellana v. D.C. Plaza Enterprises, Inc., G.R. No. L-28297, March 30, 1970, 32 SCRA 261 citing Rosales v. Reyes, 25 Phil. 495; Aguilar v. Rubiato, 40 Phil. 470) as follows: Crude Per Liter Wtd Ave Cost Petron Shell Caltex P 3.11 P3.6047 P2.9248 P3.1523Peso CostDiffn'l 2.1747 1.5203 1.5669 1.8123Forex Risk Fee-0.1089 -0.0719 -0.0790 -0.0896Subsidy onSales to NPC 0.1955 0.0685 0.0590 0.1203Total PriceIncreaseApplied for P5.3713 P5.1216 P4.4717 P4.9954Less: September 21 Price ReliefActual Price Increase P1.42Actual Tax Reduction:Ad Valorem Tax(per Sept. 1, 1990price build-up) P1.3333Specific Tax (perOct. 5, 1990 pricebuild-up) .6264 .7069 2.1269Net Price IncreaseApplied for 2.8685

Nonetheless, it is relevant to point out that on December 10, 1990, the ERB, in response to the President's appeal, brought back the increases in Premium and Regular gasoline to the levels mandated by the December 5, 1990 Order (P6.9600 and P6.3900, respectively), as follows:

"Product In Pesos Per LiterOPSF

Premium Gasoline 6.9600Regular Gasoline 6.3900Avturbo 4.9950Kerosene 1.4100Diesel Oil 1.4100Fuel Oil/Feedstock 0.2405LPG 1.2200Asphalt 2.5000Thinner 2.5000

In G.R. No. 96349, petitioner Original additionally claims that if the price increase will be used to augment the OPSF this will constitute illegal taxation. In the Maceda case,

10

(G.R. Nos. 95203-05, supra) this Court has already ruled that "the Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation but is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137.

The petitions of E.O. Original at a]. (G.R. No. 96349) and C.S. Povedas, Jr. (G.R. No. 96284), insofar as they question the ERB's authority under Sec. 8 of E.O. 172, have become moot and academic.

We lament Our helplessness over this second provisional increase in oil price. We have stated that this "is a question best judged by the political leadership" (G.R. Nos. 95203-05, G.R. Nos. 95119-21, supra). We wish to reiterate Our previous pronouncements therein that while the government is able to justify a provisional increase, these findings "are not final, and it is up to petitioners to demonstrate that the present economic picture does not warrant a permanent increase."

In this regard, We also note the Solicitor General's comments that "the ERB is not averse to the idea of a presidential review of its decision," except that there is no law at present authorizing the same. Perhaps, as pointed out by Justice Padilla, our law makers may see the wisdom of allowing presidential review of the decisions of the ERB, since, despite its being a quasi-judicial body, it is still "an administrative body under the Office of the President whose decisions should be appealed to the President under the established principle of exhaustion of administrative remedies," especially on a matter as transcendental as oil price increases which affect the lives of almost all Filipinos.

ACCORDINGLY, the petitions are hereby DISMISSED. SO ORDERED.

Narvasa, Melencio-Herrera, Feliciano, Gancayco, Bidin, Griño-Aquino and Regalado, JJ., concur.Fernan (C.J.), No part formerly counsel for one of the respondents.Gutierrez, Jr., J., I join J. Padilla's dissent.Cruz, J., I join Justices Pares and Padilla in their dissents. Paras, J., See separate DISSENT.Padilla, J., See dissenting opinion.Sarmiento, J., See separate opinion.Davide, J., in the result.

03 – Malaga vs. Penachos (213 SCRA 516)

[GRN 86695 September 3, 1992]MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN NAJARRO, doing business under

the name BEST BUILT CONSTRUCTION; JOSE N. OCCESA, doing business under the name THE FIRM OF JOSE N.

OCCESA; and the ILOILO BUILDERS CORPORATION, petitioners, vs. MANUEL R. PENACHOS, JR., ALFREDO

MATANGGA, ENRICO TICAR AND TERESITA VILLANUEVA, in their respective capacities as Chairman and Mernhers of the

Pre-qualification Bids and Awards Committee (PBAC)-BENIGNO PAN ISTANTE, in his capacity as President of Iloilo

State College of Fisheries, as well as in their respective personal capacities; and HON. LODRIGIO L. LEBAQUIN,

respondents

PETITION for review of the decision of the Regional Trial Court of Iloilo City, Br. 25.The facts are Stated In the opinion of the Court.Solos, Villareal & Velasco for petitioners.Virgilio A. Sindico for respondents.

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing injunctions in cases involving infrastructure projects of the government.

The facts are not disputed.The Iloilo State College of Fisheries (henceforth

ISCOF) through its Pre-qualification, Bids and Awards Committee (henceforth PBAC) caused the publication in the November 25, 26, 28, 1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF. The notice announced that the last day for the submission of pre-qualification requirements (PRE C-1)..was December 2, 1988, and that the bids would be received and opened on December 12, 1988, at 3 o'clock in the afternoon.1

Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of B. E. Construction and Best Built Construction, submitted their pre-qualification documents at two o'clock in the afternoon of December 2, 1988. Petitioner Jose Occena submitted his own PRE-Cl on December 5, 1988. All three of them were not allowed to participate in the bidding because their documents were considered late, having been submitted after the cutoff time of ten o'clock in the morning of December 2, 1988.

On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the chairman and members of PBAC in their official and personal capacities. The plaintiffs claimed that although they had submitted their PREC 1 on time, the PBAC refused without just cause to accept them. As a result, they were not included in the list of prequalified bidders, could not secure the needed plans and other documents, and were unable to participate in the scheduled bidding.

In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their PRE-Cl documents. They also asked that if the bidding had already been conducted, the defendants be directed not to award the project pending resolution of their complaint.

On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting the bidding and awarding the project.2

On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that; the Court was prohibited from issuing restraining orders, preliminary injunctions and preliminary mandatory injunctions by P.D. 1818.

The decree reads pertinently as follows:

Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility operated by the government, including among others public utilities for the transport of the goods or commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or government official from proceeding with, or continuing the execution or implementation of any such project, or the operation of such public utility, or pursuing any lawful activity necessary for such execution, implementation or operation.

The movants also contended that the question of the propriety of a preliminary injunction had become moot and academic because the restraining order was received late, at 2 o'clock in the afternoon of December 12, 1988, after

11

the bidding had been conducted and closed at eleven thirty in the morning of that date.

In their opposition to the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that while ISCOF was a state college, it had its own charter and separate existence and was not part of the national government or of any local political subdivision, Even if P.D. 1818 were applicable, the prohibition presumed a valid and legal government project, not one tainted with anomalies like the project at bar.

They also cited Filipinas Marble Corp. vs. IAC,3 where the Court allowed the issuance of a writ of preliminary injunction despite a similar prohibition found in P.D. 385 The Court therein stated that:

The government, however, is bound by basic principles of fairness and decency under the due process clause of the Bill of Rights. P.D. 385 was never meant to protect officials of government-lending institutions who take over the management of a borrower corporation, lead that corporation to bankruptcy through mismanagement or misappropriation of its funds, and who, after ruining it, use the mandatory provisions of the decree to avoid the consequences of their misdeeds (p. 188, italics supplied).

On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction. It declared that the building sought to be constructed at the ISCOF was an infrastructure project of the government falling within the coverage of P.D. 1818, Even if it were not, the petition for the issuance of' a writ of preliminary injunction would still fail because the sheriffs return showed that PBAC was served a copy of the restraining order after the bidding sought to be restrained had already been held. Furthermore, the members of the PBAC could not be restrained from awarding the project because the authority to do so was lodged in the President of the ISCOF, who was not a party to the case 4

In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its separate and distinct corporate personality. It is also stressed again that the prohibition under P.D. 1818 could rot apply to the present controversy because the project was vitiated with irregularities, to wit:

1. The invitation to bid as published fixed the deadline of submission of prequalification document on December 2, 1988 without indicating any time, yet after 10:00 o'clock of the given date, the PBAC already refused to accept petitioners' documents.

2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00 o'clock in the morning.

3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation to Bid" form, which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the project subject of bidding for the purposes of

(i) enabling bidders to make an intelligent and accurate bids;

(ii) for PBAC to have a uniform basis for evaluating the bids;

(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.

Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein were left blank.5 And although the project in question was a

"Construction," the private respondents used an Invitation to Bid form for "Materials."6

The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot and academic because even if the bids had been opened before the restraining order was issued, the project itself had not yet been awarded. The ISCOF president was not an indispensable party because the signing of the award was merely a ministerial function which he could perform only upon the recommendation of the Award Committee. At any rate, the complaint had already been duly amended to include him as a party defendant.

In their Comment, the private respondents maintain that since the members of the board of trustees of the ISCOF are all government officials under Section 7 of P.D. 1523 and since the operations and maintenance of the ISCOF are provided for in the General Appropriations Law, it should be considered a government institution whose infrastructure project is covered by P.D. 1818.

Regarding the schedule for pre-qualification, the. private respondents insist that PBAC posted on the ISCOF bulletin board an announcement that the deadline for the submission of prequalification documents was at 10 o'clock of December 2, 1986. and the opening of bids would be held at 1 o'clock in the afternoon of December 12,1988. As often o'clock in the morning of December 2, 1988, B.E. construction and Best Built construction had filed only their letters of intent. At two o'clock in the afternoon, B.E. and Best Built filed through their common representative, Nanette Garuello, their pre-qualification documents which were admitted but stamped "submitted late." The petitioners were informed of their disqualification on the same date, and the disqualification became final on December 6, 1988. Having failed to take immediate action to compel PBAC to pre-qualify them despite their notice of disqualification, they cannot now come to this Court to question the binding proper in which they had not participated.

In the petitioners' Reply, they raise as an additional irregularity the violation of the rule that where the estimated project cost is from P1M to P5M, the issuance of plans, specifications and proposal book forms should be made thirty days before the date of bidding.7 They point out that these forms were issued only on December 2, 1988, and not at the latest on November 12, 1988, the beginning of the 30-day period prior to the scheduled bidding.

In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received although filed late and were reviewed by the Award Committee, which discovered that the contractors had expired licenses. B.E.'s temporary certificate of Renewal of Contractor's License was valid only until September 30, 1988, while Best Built's license was valid only up to June 30, 1988.

The Court has considered the arguments of the parties in light of their testimonial and documentary evidence and the applicable laws and jurisprudence. It finds for the petitioners.

The 1987 Administrative Code defines a government instrumentality as follows:

Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by few, endowed with some if noc all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and government-owned or controlled corporations. (See. 2 (5) Introductory Provisions).

12

The same Code describes a Chartered institution thus:

Chartered institution refers to any agency organized or operating under a special charter, and vested by law with functions relating to specific constitutional policies or objectives. This term includes the state universities and colleges, and the monetary authority of the state. (See. 2 (12) Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.

There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in pursuance of the integrated fisheries development policy of the State, a priority program of the government to effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines shall also be the exofficio Treasurer of the state college with its accounts and expenses to be audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus, equipment, or supplies and even the services of such employees as can be spared without serious detriment to public service, Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National Treasury and it was also decreed in its charter that the funds and maintenance of the state college would henceforth be included in the General Appropriations Law.8Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.

In the case of Datiles and Co. vs. Sucaldito,9 this Court interpreted a similar prohibition contained in P.D. 605, the law after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the issuance of injunctions or restrain ing orders by courts against administrative acts in controversies involving facts or the exercise of discretion in technical cases. The Court observed that to allow the courts to judge these matters would disturb the smooth functioning of the administrative machinery. Justice Teodoro Padilla made it clear, however, that on issues definitely outside of this dimension and involving questions of law, courts could not be prevented by P.D. No. 605 from exercising: their power to restrain or prohibit administrative acts.

We see no reason why the above ruling should not apply to P.D. 1818.

There are at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the project.

First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these deadlines without prior notice to prospective participants.

Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts, PBAC shall provide prospective bidders with the Notice to Prequalification and other relevant information regarding the proposed work. Prospective contractors shall be required to file their ARC-Contractors Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-qualification Statement for the Project (prior to the amendment of the rules, this was referred to as PREC1) not later than the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be submitted and received. Invitations to Bid shall be advertised for at least three times within a reasonable period but in no case less than two weeks in at least two newspapers of general circulations.10

PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and announced that the opening of bids would be at 3 o'clock in the afternoon of December 12, 1988. This schedule was changed and a notice of such change was merely posted at the ISCOF bulletin board.

The notice advanced the cut-off time for the submission of prequalification documents to 10 o'clock in the morning of December 2, 1988, and the opening of bids to 1 o'clock in the afternoon of December 12, 1988.

The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the FBAC meeting hold on December 6, 1988. While it may be true that there were fourteen contractors who were pre-qualified despite the change in schedule, this fact did not cure the defect of the irregular notice. Notably, the petitioners were disqualified because they failed to meet the new deadline and not because of their expired licenses.

We have held that where the law requires a previous advertisement before government contracts Con he awarded, noncompliance with the requirement will, as a. general rule, render the same void and of no effect.11 The fact that an invitation for bids has been communicated to a number of possible bidders is not necessarily sufficient to establish compliance with the requirements of the law if it is shown that other possible bidders have not been similarly notified.12

Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book forms for the project to be bid thirty days before the date of bidding if the estimated project cost was between P1M and P5M. PBAC has not denied that these forms were issued only an December 2, 1988, or only ten days before the bidding scheduled for December 12, 1988. At the very latest, PBAC should have issued them on November 12, 1988, or 30 days before the scheduled bidding.

It is apparent that the present controversy did not arise from the discretionary acts of the administrative body nor does it involve merely technical matters. What is involved here is non-compliance with the procedural rules on bidding which required strict observance. The purpose of the rules implement ing P.D. 1594 is to secure competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the detriment of the public. This purpose was defeated by the irregularities committed by PBAC.

It has been held that the three principles in public bidding are the offer to the public, an opportunity fur competition and a basis for exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive character of the system and thwarts the purpose of its adoption.13

In the case at bar, it was the lack of proper notice regarding the prequalification requirement and the bidding that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as private respondents now claim. Moreover, the plans and specifications which are the contractors' guide to an intelligent bid, were not issued on time, thus defeating the guaranty that contractors be placed on equal footing when they submit their bids. The purpose of competitive bidding is negated if some contractors are informed ahead of their rivals of the plans and specifications that are to be the subject of their bids.

P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative agencies such as the anomalies above described, Hence, the challenged restraining order was not improperly issued by the respondent judge and the writ of preliminary injunction should not have been denied. We note from Annex Q of the

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private respondent's memorandum, however, that the subject project has already been "100% completed as to the Engineering Standard." This fait accompli has made the petition for a writ of preliminary injunction moot and academic.

We come now to the liabilities of the private respondents.

It has been held in a long line of cases that a contract granted without the competitive bidding required by law is void, and the party to whom it is awarded cannot benefit from it.14 It has not been shown that the irregularities committed by P13AC were induced by ci participated in by any of the contractors. Hence, liability shall attach only to the private respondents for the prejudice sustained by the petitioners as a result of the anomalies described above.

As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral damages do not appear to lie due either. Even so, the Court cannot close its eyes to the evident bad faith that characterized the conduct of the private respondents, including the irregularities in the announcement of the bidding and their efforts to persuade the ISCOF president to award the project after two days from receipt of the restraining order and before they moved to lift such order. For such questionable acts, they are liable in nominal damages at least in accordance with Article 2221 of the Civil Code, which states:

"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.

These damages are to be assessed against the private respondents in the amount of P10,000.00 each, to be paid separately for each of petitioners B.E. Construction and Best Built Construction. The other petitioner, Occena Builders, is not entitled to relief because it admittedly submitted its pre-qualification documents on December 5, 1988, or three days after the deadline.

WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988, as not covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC board of trustees, namely, Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and Teresita Villanueva, to each pay separately to petitioners Maria Elena Malaga and Josieleen Najarro nominal damages of Pl0,000.00 each; and c) removing the said chairman and members from the PBAC hoard of trustees, or whoever among them is still incumbent therein, for their malfeasance in office. Costs against PBAC.

Let a copy of this decision be sent to the Office of the Ombudsman.

SO ORDERED.Grifio-Aquino, Medialdea and Bellosillo, JJ., concur.

04 – The United Residents of Dominican Hills, Inc. vs. COSLAP (353 SCRA 782)

[G.R. No. 135945 March 7, 2001]THE UNITED RESIDENTS OF DOMINICAN HILL, INC.,

represented by its President RODRIGO S. MACARIO, SR., petitioner, vs. COMMISSION ON THE SETTLEMENT OF LAND

PROBLEMS, represented by its Commissioner, RUFINO V. MIJARES; MARIO PADILAN, PONCIANO BASILAN, HIPOLITO

ESLAVA, WILLIAM LUMPISA, PACITO MOISES, DIONISIO ANAS, NOLI DANGLA, NAPOLEON BALESTEROS, ELSIE MOISES, SEBIO LACWASAN, BEN FLORES, DOMINGO CANUTAB, MARCELINO

GABRIANO, TINA TARNATE, ANDREW ABRAZADO, DANNY LEDDA, FERNANDO DAYAO, JONATHAN DE LA PENA, JERRY

PASSION, PETER AGUINSOD, and LOLITA DURAN, respondents

DE LEON, JR., J.:Before us is a petition for prohibition and

declaratory relief seeking the annulment of a status quo order1 dated September 29, 1998 issued by the public respondent Commission on the Settlement of Land Problems (COSLAP, for brevity) in COSLAP Case No. 98-253.

The facts are:The property being fought over by the parties is a

10.36-hectare property in Baguio City called Dominican Hills, formerly registered in the name of Diplomat Hills, Inc. It appeared that the property was mortgaged to the United Coconut Planters Bank (UCPB) which eventually foreclosed the mortgage thereon and acquired the same as highest bidder. On April 11, 1983, it was donated to the Republic of the Philippines by UCPB through its President, Eduardo Cojuangco. The deed of donation stipulated that Dominican Hills would be utilized for the “priority programs, projects, activities in human settlements and economic development and governmental purposes” of the Ministry of Human Settlements.

On December 12, 1986, the then President Corazon C. Aquino issued Executive Order No. 85 abolishing the Office of Media Affairs and the Ministry of Human Settlements. All agencies under the latter’s supervision as well as all its assets, programs and projects, were transferred to the Presidential Management Staff (PMS).2

On October 18, 1988, the PMS received an application from petitioner UNITED RESIDENTS OF DOMINICAN HILL, INC. (UNITED, for brevity), a community housing association composed of non-real property owning residents of Baguio City, to acquire a portion of the Dominican Hills property. On February 2, 1990, PMS Secretary Elfren Cruz referred the application to the HOME INSURANCE GUARANTY CORPORATION (HIGC). HIGC consented to act as originator for UNITED.3 Accordingly, on May 9, 1990, a Memorandum of Agreement was signed by and among the PMS, the HIGC, and UNITED. The Memorandum of Agreement called for the PMS to sell the Dominican Hills property to HIGC which would, in turn, sell the same to UNITED. The parties agreed on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of conditional sale provided that ten (10) per cent of the purchase price would be paid upon signing, with the balance to be amortized within one year from its date of execution. After UNITED made its final payment on January 31, 1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property allocated to UNITED and constructed houses thereon. Petitioner was able to secure a demolition order from the city mayor.4

Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL BAGUIO RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action5 for injunction docketed as Civil Case No. 3316-R, in the Regional Trial Court of Baguio City, Branch 4. Private respondents were able to obtain a temporary restraining order but their prayer for a writ of preliminary injunction was later denied in an Order dated March 18, 1996.6

While Civil Case No. 3316-R was pending, the ASSOCIATION, this time represented by the Land Reform Beneficiaries Association, Inc. (BENEFICIARIES, for brevity), filed Civil Case No. 3382-R before Branch 61 of the same

14

court. The complaint7 prayed for damages, injunction and annulment of the said Memorandum of Agreement between UNITED and HIGC. Upon motion of UNITED, the trial court in an Order dated May 27, 1996 dismissed Civil Case No. 3382-R.8 The said Order of dismissal is currently on appeal with the Court of Appeals.9

Demolition Order No. 1-96 was subsequently implemented by the Office of the City Mayor and the City Engineer’s Office of Baguio City. However, petitioner avers that private respondents returned and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed on September 29, 1998 a petition10 for annulment of contracts with prayer for a temporary restraining order, docketed as COSLAP Case No. 98-253, in the Commission on the Settlement of Land Problems (COSLAP) against petitioner, HIGC, PMS, the City Engineer’s Office, the City Mayor, as well as the Register of Deeds of Baguio City. On the very same day, public respondent COSLAP issued the contested order requiring the parties to maintain the status quo.

Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the instant petition questioning the jurisdiction of the COSLAP.

The issues we are called upon to resolve are:

1IS THE COMMISSION ON THE SETTLEMENT OF LAND

PROBLEMS [COSLAP] CREATED UNDER EXECUTIVE ORDER NO. 561 BY THE OFFICE OF THE PHILIPPINES [sic] EMPOWERED TO HEAR AND TRY A PETITION FOR ANNULMENT OF CONTRACTS WITH PRAYER FOR A TEMPORARY RESTRAINING ORDER AND THUS, ARROGATE UNTO ITSELF THE POWER TO ISSUE STATUS

QUO ORDER AND CONDUCT A HEARING THEREOF [sic]?2

ASSUMING THAT THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP] HAS JURISDICTION ON THE

MATTER, IS IT EXEMPTED FROM OBSERVING A CLEAR CASE OF FORUM SHOPPING ON THE PART OF THE PRIVATE

RESPONDENTS?

To the extent that the instant case is denominated as one for declaratory relief, we initially clarify that we do not possess original jurisdiction to entertain such petitions.11 Such is vested in the Regional Trial Courts.12 Accordingly, we shall limit our review to ascertaining if the proceedings before public respondent COSLAP are without or in excess of its jurisdiction. In this wise, a recounting of the history of the COSLAP may provide useful insights into the extent of its powers and functions.

The COSLAP was created by virtue of Executive Order No. 561 dated September 21, 1979. Its forerunner was the Presidential Action Committee on Land Problems (PACLAP) founded on July 31, 1970 by virtue of Executive Order No. 251. As originally conceived, the committee was tasked “to expedite and coordinate the investigation and resolution of land disputes, streamline and shorten administrative procedures, adopt bold and decisive measures to solve land problems, and/or recommend other solutions.” It was given the power to issue subpoenas duces tecum and ad testificandum and to call upon any department, office, agency or instrumentality of the government, including government owned or controlled corporations and local government units, for assistance in the performance of its functions. At the time, the PACLAP did not exercise quasi-judicial functions.

On March 19, 1971, Executive Order No. 305 was issued reconstituting the PACLAP.13 The committee was given exclusive jurisdiction over all cases involving public

lands and other lands of the public domain and accordingly was tasked:

1. To investigate, coordinate, and resolve expeditiously land disputes, streamline administrative procedures, and in general, to adopt bold and decisive measures to solve problems involving public lands and lands of the public domain;

2. To coordinate and integrate the activities of all government agencies having to do with public lands or lands of the public domain;

3. To study and review present policies as embodied in land laws and administrative rules and regulations, in relation to the needs for land of the agro-industrial sector and small farmers, with the end in view to evolving and recommending new laws and policies and establishing priorities in the grant of public land, and the simplification of processing of land applications in order to relieve the small man from the complexities of existing laws, rules and regulations;

4. To evolve and implement a system for the speedy investigation and resolution of land disputes;

5. To receive all complaints of settlers and small farmers, involving public lands or other lands of the public domain;

6. To look into the conflicts between Christians and non-Christians, between corporations and small settlers and farmers; cause the speedy settlement of such conflicts in accordance with priorities or policies established by the Committee; and

7. To perform such other functions as may be assigned to it by the President.

Thereafter, the PACLAP was reorganized pursuant to Presidential Decree No. 832 dated November 27, 1975.14 Its jurisdiction was revised thus:

xxx xxx xxx2. Refer for immediate action any land

problem or dispute brought to the attention of the PACLAP, to any member agency having jurisdiction thereof: Provided, that when the Executive Committee decides to act on a case, its resolution, order or decision thereon, shall have the force and effect of a regular administrative resolution, order or decision, and shall be binding upon the parties therein involved and upon the member agency having jurisdiction thereof;

xxx xxx xxx

Notably, the said Presidential Decree No. 832 did not contain any provision for judicial review of the resolutions, orders or decisions of the PACLAP.

On September 21, 1979, the PACLAP was abolished and its functions transferred to the present Commission on the Settlement of Land Problems by virtue of Executive Order No. 561. This reorganization, effected in line with Presidential Decree No. 1416, brought the COSLAP directly under the Office of the President.15 It was only at this time that a provision for judicial review was made from resolutions, orders or decisions of the said agency, as embodied in section 3(2) thereof, to wit:

Powers and functions.—The Commission shall have the following powers and functions:

1. Coordinate the activities, particularly the investigation work, of the various government offices and agencies involved in the settlement of land problems or disputes, and streamline administrative procedures to relieve small settlers and landholders and members of cultural

15

minorities of the expense and time-consuming delay attendant to the solution of such problems or disputes;

2. Refer and follow-up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the Commission: Provided, that the Commission may, in the following cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the large number of the parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;

(b) Between occupants/squatters and government reservation grantees;

(c) Between occupants/squatters and public land claimants or applicants;

(d) Petitions for classification, release and/or subdivision of lands of the public domain; and

(e) Other similar land problems of grave urgency and magnitude.The Commission shall promulgate such rules of

procedure as will insure expeditious resolution and action on the above cases. The resolution, order or decision of the Commission on any of the foregoing cases shall have the force and effect of a regular administrative resolution, order or decision and shall be binding upon the parties therein and upon the agency having jurisdiction over the same. Said resolution, order or decision shall become final and executory within thirty (30) days from its promulgation and shall be appealable by certiorari only to the Supreme Court.

xxx xxx xxx

In the performance of its functions and discharge of its duties, the Commission is authorized, through the Commissioner, to issue subpoena and subpoena duces tecum for the appearance of witnesses and the production of records, books and documents before it. It may also call upon any ministry, office, agency or instrumentality of the National Government, including government-owned or controlled corporations, and local governments for assistance. This authority is likewise, conferred upon the provincial offices as may be established pursuant to Section 5 of this Executive Order.

In Bañaga v. Commission on the Settlement of Land Problems,16 we characterized the COSLAP’s jurisdiction as being general in nature, as follows:

Petitioners also contend in their petition that the COSLAP itself has no jurisdiction to resolve the protest and counter-protest of the parties because its power to resolve land problems is confined to those cases “which are critical and explosive in nature.”

This contention is devoid of merit. It is true that Executive Order No. 561 provides that the COSLAP may take cognizance of cases which are “critical and explosive in nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action.” However, the use of the word “may” does not mean that the COSLAP’s jurisdiction is merely confined to the above mentioned cases. The provisions of the said Executive Order are clear that the COSLAP was created as a means of providing a more effective mechanism for the expeditious settlement of land problems in general, which are frequently the source of conflicts among settlers, landowners and cultural minorities. Besides, the COSLAP merely took over

from the abolished PACLAP whose functions, including its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2, P.D. No. 832) were all assumed by it. The said Executive Order No. 561 containing said provision, being enacted only on September 21, 1979, cannot affect the exercise of jurisdiction of the PACLAP Provincial Committee of Koronadal on September 29, 1978. Neither can it affect the decision of the COSLAP which merely affirmed said exercise of jurisdiction.

Given the facts of the case, it is our view that the COSLAP is not justified in assuming jurisdiction over the controversy. As matters stand, it is not the judiciary’s place to question the wisdom behind a law;17 our task is to interpret the law. We feel compelled to observe, though, that by reason of the ambiguous terminology employed in Executive Order No. 561, the power to assume jurisdiction granted to the COSLAP provides an ideal breeding ground for forum shopping, as we shall explain subsequently. Suffice it to state at this stage that the COSLAP may not assume jurisdiction over cases which are already pending in the regular courts.

The reason is simple. Section 3(2) of Executive Order 561 speaks of any resolution, order or decision of the COSLAP as having the “force and effect of a regular administrative resolution, order or decision.” The qualification places an unmistakable emphasis on the administrative character of the COSLAP’s determinations, amplified by the statement that such resolutions, orders or decisions “shall be binding upon the parties therein and upon the agency having jurisdiction over the same.” An agency is defined by statute as “any of the various units of the Government, including a department, bureau, office, instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein.”18 A department, on the other hand, “refers to an executive department created by law.”19 Whereas, a bureau is understood to refer “to any principal subdivision of any department.”20 In turn, an office “refers, within the framework of governmental organization, to any major functional unit of a department or bureau including regional offices. It may also refer to any position held or occupied by individual persons, whose functions are defined by law or regulation.”21 An instrumentality is deemed to refer “to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned or controlled corporations.”22 Applying the principle in statutory construction of ejusdem generis, i.e., “where general words follow an enumeration or persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned,”23 section 3(2) of Executive Order 561 patently indicates that the COSLAP’s dispositions are binding on administrative or executive agencies. The history of the COSLAP itself bolsters this view. Prior enactments enumerated its member agencies among which it was to exercise a coordinating function.

The COSLAP discharges quasi-judicial functions:

“Quasi-judicial function” is a term which applies to the actions, discretion, etc. of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.”24

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However, it does not depart from its basic nature as an administrative agency, albeit one that exercises quasi-judicial functions. Still, administrative agencies are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals.25 The doctrine of separation of powers observed in our system of government reposes the three (3) great powers into its three (3) branches – the legislative, the executive, and the judiciary – each department being co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its own agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered “to determine whether or not there has been grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of any branch or instrumentality of the Government.”26

There is an equally persuasive reason to grant the petition. As an additional ground for the annulment of the assailed status quo order of COSLAP, UNITED accuses private respondents of engaging in forum shopping. Forum shopping exists when a party “repetitively avail[s] of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in, or already resolved adversely by some other court.”27 In this connection, Supreme Court Administrative Circular No. 04-94 dated February 8, 1994 provides:

Revised Circular No. 28-91, dated February 8, 1994, applies to and governs the filing of petitions in the Supreme Court and the Court of Appeals and is intended to prevent the multiple filing of petitions or complaints involving the same issues in other tribunals or agencies as a form of forum shopping.

Complementary thereto and for the same purpose, the following requirements, in addition to those in pertinent provisions of the Rules of Court and existing circulars, shall be strictly complied with in the filing of complaints, petitions, applications or other initiatory pleadings in all courts and agencies other than the Supreme Court and the Court of Appeals and shall be subject to the sanctions provided hereunder.

1. The plaintiff, petitioner, applicant or principal party seeking relief in the complaint, petition, application or other initiatory pleading shall certify under oath in such original pleading, or in a sworn certification annexed thereto and simultaneously filed therewith, to the truth of the following facts and undertakings: (a) he has not theretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action or proceedings is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding which is either pending or may have been terminated, he must state the status thereof; and (d) if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or any other tribunal or agency, he undertakes to report that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification contemplated herein have been filed.

The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or application wherein a party asserts his claim for relief.

2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or other initiatory pleading, upon motion and after hearing. However, any clearly willful and deliberate forum shopping by any other party and his counsel through the filing of multiple complaints or other initiatory pleadings to obtain favorable action shall be a ground for the summary dismissal thereof and shall constitute contempt of court. Furthermore, the submission of a false certification or non-compliance with the undertakings therein, as provided in Paragraph 1 hereof, shall constitute indirect contempt of court, without prejudice to disciplinary proceedings against the counsel and the filing of a criminal action against the party. [italics supplied]xxx xxx xxx

The said Administrative Circular’s use of the auxiliary verb “shall” imports “an imperative obligation xxx inconsistent with the idea of discretion.”28 Hence, compliance therewith is mandatory.29

It bears stressing that there is a material distinction between the requirement of submission of the certification against forum shopping from the undertakings stated therein. Accordingly,

xxx [f]ailure to comply with this requirement cannot be excused by the fact that plaintiff is not guilty of forum shopping. The Court of Appeals, therefore, erred in concluding that Administrative Circular No. 04-94 did not apply to private respondent’s case merely because her complaint was not based on petitioner’s cause of action. The Circular applies to any complaint, petition, application, or other initiatory pleading, regardless of whether the party filing it has actually committed forum shopping. Every party filing a complaint or any other initiatory pleading is required to swear under oath that he has not committed nor will he commit forum shopping. Otherwise, we would have an absurd situation where the parties themselves would be the judge of whether their actions constitute a violation of said Circular, and compliance therewith would depend on their belief that they might or might not have violated the requirement. Such interpretation of the requirement would defeat the very purpose of Circular 04-94.

Indeed, compliance with the certification against forum shopping is separate from, and independent of, the avoidance of forum shopping itself. Thus, there is a difference in the treatment—in terms of imposable sanctions—between failure to comply with the certification requirement and violation of the prohibition against forum shopping. The former is merely a cause for the dismissal, without prejudice, of the complaint or initiatory pleading, while the latter is a ground for summary dismissal thereof and constitutes direct contempt.30

A scrutiny of the pleadings filed before the trial courts and the COSLAP sufficiently establishes private respondents’ propensity for forum shopping. We lay the premise that the certification against forum shopping must be executed by the plaintiff or principal party, and not by his counsel.31 Hence, one can deduce that the certification is a peculiar personal representation on the part of the principal

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party, an assurance given to the court or other tribunal that there are no other pending cases involving basically the same parties, issues and causes of action. In the case at bar, private respondents’ litany of omissions range from failing to submit the required certification against forum shopping to filing a false certification, and then to forum shopping itself. First, the petition filed before the COSLAP conspicuously lacked a certification against forum shopping. Second, it does not appear from the record that the ASSOCIATION informed Branch 4 of the Regional Trial Court of Baguio City before which Civil Case No. 3316-R was pending, that another action, Civil Case No. 3382-R, was filed before Branch 61 of the same court. Another group of homeless residents of Dominican Hill, the LAND REFORM BENEFICIARIES ASSOCIATION, INC. initiated the latter case. The aforesaid plaintiff, however, does not hesitate to admit that it filed the second case in representation of private respondent, as one of its affiliates. In the same manner, the certification against forum shopping accompanying the complaint in Civil Case No. 3382-R does not mention the pendency of Civil Case No. 3316-R. In fact, the opposite assurance was given, that there was no action pending before any other tribunal. Another transgression is that both branches of the trial court do not appear to have been notified of the filing of the subject COSLAP Case No. 98-253.

It is evident from the foregoing facts that private respondents, in filing multiple petitions, have mocked our attempts to eradicate forum shopping and have thereby upset the orderly administration of justice. They sought recourse from three (3) different tribunals in order to obtain the writ of injunction they so desperately desired. “The willful attempt by private respondents to obtain a preliminary injunction in another court after it failed to acquire the same from the original court constitutes grave abuse of the judicial process.”32

In this connection, we expounded on forum shopping in Viva Productions, Inc. v. Court of Appeals33 that:

Private respondent’s intention to engage in forum shopping becomes manifest with undoubted clarity upon the following considerations. Notably, if not only to ensure the issuance of an injunctive relief, the significance of the action for damages before the Makati court would be nil. What damages against private respondent would there be to speak about if the Parañaque court already enjoins the performance of the very same act complained of in the Makati court? Evidently, the action for damages is premature if not for the preliminary injunctive relief sought. Thus, we find grave abuse of discretion on the part of the Makati court, being a mere co-equal of the Parañaque court, in not giving due deference to the latter before which the issue of the alleged violation of the sub-judice rule had already been raised and submitted. In such instance, the Makati court, if it was wary of dismissing the action outrightly under Administrative Circular No. 04-94, should have, at least, ordered the consolidation of its case with that of the Parañaque court, which had first acquired jurisdiction over the related case xxx, or it should have suspended the proceedings until the Parañaque court may have ruled on the issue xxx.

xxx xxx xxxThus, while we might admit that the causes of action

before the Makati court and the Parañaque court are distinct, and that private respondent cannot seek civil indemnity in the contempt proceedings, the same being in the nature of criminal contempt, we nonetheless cannot ignore private respondent’s intention of seeking exactly identical reliefs when it sought the preliminary relief of injunction in the Makati court. As earlier indicated, had private respondent

been completely in good faith, there would have been no hindrance in filing the action for damages with the regional trial court of Parañaque and having it consolidated with the contempt proceedings before Branch 274, so that the same issue on the alleged violation of the sub judice rule will not have to be passed upon twice, and there would be no possibility of having two courts of concurrent jurisdiction making two conflicting resolutions.

Yet from another angle, it may be said that when the Parañaque court acquired jurisdiction over the said issue, it excluded all other courts of concurrent jurisdiction from acquiring jurisdiction over the same. To hold otherwise would be to risk instances where courts of concurrent jurisdiction might have conflicting orders. This will create havoc and result in an extremely disordered administration of justice. Therefore, even on the assumption that the Makati court may acquire jurisdiction over the subject matter of the action for damages, without prejudice to the application of Administrative Circular No. 04-94, it cannot nonetheless acquire jurisdiction over the issue of whether or not petitioner has violated the sub judice rule. At best, the Makati court may hear the case only with respect to the alleged injury suffered by private respondent after the Parañaque court shall have ruled favorably on the said issue.

We also noted several indications of private respondents’ bad faith. The complaint filed in Civil Case No. 3316-R was prepared by the ASSOCIATION’s counsel, Atty. Conrado Villamor Catral, Jr. whereas the complaint filed in Civil Case No. 3382-R was signed by a different lawyer, Atty. Thomas S. Tayengco. With regard to the petition filed with the COSLAP, the same was signed by private respondents individually. As to the latter case, we noted that the petition itself could not have been prepared by ordinary laymen, inasmuch as it exhibits familiarity with statutory provisions and legal concepts, and is written in a lawyerly style.

In the same manner, the plaintiffs in the three (3) different cases were made to appear as dissimilar: in Civil Case No. 3316-R, the plaintiff was ASSOCIATION of which private respondent Mario Padilan was head, while the plaintiff in Civil Case No. 3382-R was the BENEFICIARIES. Before the COSLAP, private respondents themselves were the petitioners, led again by Padilan.34 Private respondents also attempted to vary their causes of action: in Civil Case No. 3382-R and COSLAP Case No. 98-253, they seek the annulment of the Memorandum of Agreement executed by and among UNITED, the PMS, and HIGC as well as the transfer certificates of title accordingly issued to petitioner. All three (3) cases sought to enjoin the demolition of private respondents’ houses.

It has been held that forum shopping is evident where the elements of litis pendentia or res judicata are present. Private respondents’ subterfuge comes to naught, for the effects of res judicata or litis pendentia may not be avoided by varying the designation of the parties or changing the form of the action or adopting a different mode of presenting one’s case.35

In view of the foregoing, all that remains to be done is the imposition of the proper penalty. A party’s willful and deliberate act of forum shopping is punishable by summary dismissal of the actions filed.36 The summary dismissal of both COSLAP Case No. 98-253 and Civil Case No. 3316-R is therefore warranted under the premises. We shall refrain from making any pronouncement on Civil Case No. 3382-R, the dismissal of which was elevated on appeal to the Court of Appeals where it is still pending.

WHEREFORE, the petition is hereby GRANTED. The status quo order dated September 29, 1998 issued in COSLAP Case No. 98-253 by respondent Commission On The

18

Settlement Of Land Problems (COSLAP) is hereby SET ASIDE; and the petition filed in COSLAP Case No. 98-253 and the complaint in Civil Case No. 3316-R are hereby DISMISSED for lack of jurisdiction and forum shopping. Costs against private respondents.

SO ORDERED.Bellosillo, (Chairman), Mendoza, Quisumbing, and

Buena, JJ., concur.

05 – Beja, Sr. vs. Court of Appeals (207 SCRA 689)

[GRN 97141 March 31, 1992]FIDENCIO Y. BEJA, SR., petitioner, vs. COURT OF APPEALS,

HONORABLE REINERIO O. REYES, in his capacity as Secretary of the Department of Transportation and Communications;

COMMODORE ROGELIO A. DAYAN, in his capacity as General Manager of the Philippine Ports Authority; DEPARTMENT OF

TRANSPORTATION AND COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; and JUSTICE ONTOFRE A. VILLALUZ, in his capacity as Chairman of the Administrative

Action Board, DOTC, respondents

PETITION for certiorari to review the decisions of the Court of Appeals. Aldecoa, Jr., J.The facts are stated in the opinion of the Court, Rogelio Zosa Bogabuyo for petitioner.

ROMERO, J.:

The instant petition for certiorari questions the jurisdiction of the Secretary of the Department Transportation and Communications (DOTC) and/or its Administrative Action Board (AAB) over administrative cases involving personnel below the rank of Assistant General Manager of the Philippine Ports Authority (PPA), an agency attached to the said Department.

Petitioner Fidencio Y. Beja, Sr.1 was first employed by the PPA as arrastre supervisor in l975. He became Assistant Port Operations Officer in 1976 and Port Operations Officer in 1977. In February 1988, as a result of the reorganization of the PPA, he was appointed Terminal Supervisor.

On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-88 against petitioner Beja and Hernando G. Villaluz For grave dishonesty, grave misconduct, willful violation of reasonable office rules and regulations and conduct prejudicial to the best interest of the service. Beja and Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA. Consequently, they were preventively suspended for the charges. After a preliminary investigation conducted by the district attorney for Region X, Administrative Cass No. 11-04-88 was "considered closed for lack of merit."

On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed against Beja by th PPA General manager also for dishonesty, grave misconduct, violation of reasonable office rules and regulations, conduct prejudicial to the best interest of the service and for being notoriously undesirable. The charge consisted of six (6)different specifications of administrative offenses including fraud against the PPA in the total amount of P2 18,000.00. Beja was also placed under preventive suspension pursuant to Sec. 41 of P.D. No. 807.

The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter, the PPA general manager indorsed it to the AAB for "appropiiate action." At the scheduled hearing, Beja asked for continuance on the ground that he needed time to study the charges against him, The

AAB proceeded to hear the case and gave Beja an opportunity to present evidence. However, on February 20, 1989, Beja filed a petition for certiorari with preliminary injunction before the Regional Trial Court of Misamis Oriental.2 Two days later, he filed with the AAB a manifestation and motion to suspend the hearing of Administrative Case No. PPA-AAB-1-049-89 on account of the pendency of the certiorari proceeding before the court. AAB denied the motion and continued with the hearing of the administrative case.

Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file before this Court a petition for certiorari with preliminary injunction and/or temporary restraining order. The case was docketed as G.R. No. 871352 captioned "Fidencio Y. Beja v. Hon. Reinerio O. Reyes, etc., et al.," In the en banc resolution of March 30, 1989, this Court referred the case to the Court of Appeals for "appropriate action."3 G.R. No. 87352 was docketed in the Court of Appeals as CA-G.R. SP No. 17270.

Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-049-89. Its dispositive portion reads:

"WHEREFORE, judgment is hereby rendered, adjudging the following, namely:

a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are exonerated from the charge against them;

b) That respondent Fidencio Y. Beja be dismissed from the service;

c) That his leave credits and retirement benefits are declared forfeited;

d) That he be disqualified from re-employment in the government service;

e) That his eligibility is recommended to be cancelled.

Pasig, Metro Manila, February 28, 1989."

On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered a decision4 in CA-G.R. SP No. 17270 dismissing the petition for certiorari for lack of merit. Hence, Beja elevated the case back to this Court through an appeal by certiorari with preliminary injunction and/or temporary restraining order.

We find the pleadings filed in this case to be sufficient bases for arriving at a decision and hence, the filing of memoranda has been dispensed with.

In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way probably not in accord with law or with the applicable decisions" of this Court.5 Specifically, Beja contends that the Court of Appeals failed to declare that: (a) he was denied due process; (b) the PPA general manager has no power to issue a preventive suspension order without the necessary approval of the PPA board of directors; (c) the PPA general manager has no power to refer the administrative case filed against him to the DOTC-AAB. and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB itself as an adjudicatory body, have no jurisdiction to try the administrative case against him. Simply put, Beja challenges the legality of the preventive suspension and the jurisdiction of the DOTC Secretary and/or the AAB to initiate and hear administrative cases against PPA personnel below the rank of Assistant General Manager.

Petitioner anchors his content ion that the PPA general manager cannot subject him to a preventive suspension on the following provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the PPA:

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"(d) The General Manager shall, subject to the approval of the Board, appoint and remove personnel below the rank of Assistant Genera) Manager." (Italics supplied.)

Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General Manager is the "proper disciplining authority."6

As correctly observed by the Solicitor General, the petitioner erroneously equates "preventive suspension" as a remedial measure with "suspension" as a penalty for administrative dereliction. The imposition of preventive suspension on a government employee charged with an administrative offense is subject to the following provision of the Civil Service Law, P.D. No. 807:

"Sec. 41. Preventive Suspension.- The proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of' duty, or if' there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service."

Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in itself. It is merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is being investigated.7 Thus preventive suspension is distinct from the administrative penalty of removal from office such as the. one mentioned in Sec. 8 (d) of P.D. No. 857. While the former may be imposed on a respondent during the investigation of the charges against him, the latter is the penalty which may only be meted upon him at the termination of the investigation or the final disposition of the case.

The PPA general manager is the disciplining authority who may, by himself and without the approval of the PPA Board of Directors, subject a respondent in an administrative case to preventive suspension. His disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies the "jurisdiction to investigate and decide matters involving disciplinary actions against officers and employees" in the PPA.

Parenthetically, the period of preventive suspension is limited. It may be lifted even if the disciplining authority has not finally decided the administrative case provided the ninety-day period from the effectivity of the preventive suspension has been exhausted. The employee concerned may then be reinstated.8 However, the said ninety-day period may be interrupted. Section 42 of P.D. No. 807 also mandates that any fault, negligence or petition of a suspended employee may not be considered in the computation of the said period. Thus, when a suspended employee obtains from a court of justice are straining order or a preliminary injunction inhibiting proceedings in an administrative case, the lifespan of such court order should be excluded in the reckoning of the permissible period of the preventive suspension.9

With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate and hear administrative cases against PPA Personnel below the rank of Assistant General Manager, the Court qualifiedly rules in favor of petitioner.

The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of the PPA were vested in a governing Board of Directors known as the Philippine Port Authority Council. Sec. 5(i) of the same decree

gave the Council the power "to appoint, discipline and remove, and determine the composition of the technical staff of the Authority and other personnel."

On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, Sec. Va) thereof created the Philippine Ports Authority which would be "attached" to the then Department of Public Works, Transportation and Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing the Ministry of Transportation and Communications was issued, the PPA retained its "attached" status.10 Even Executive Order No. 292 or the Administrative Code of 1987 classified the PPA as an agency "attached" to the, Department of Transportation and Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code."

Attachment of an agency to a Department is one of the three administrative relationships mentioned in Book IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and administrative supervision. "Attachment" is defined in Sec. 38 thereof as follows:

"(3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. The coordination shall be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system or periodic reporting which shall reflect the progress of program., and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency;

(b) Matters of day-to-day administration or all those pertaining to internal operations shall be left to the discretion or judgrnent of the executive officer of the agency or corporation. In the event that the Secretary and the head of the board or the attached agency or corporation strongly disagree on the interpretation and application of policies, and the Secretary is unable to resolve the disagreement, he shall bring the matter to the President for resolution and direction;

(c) Government-owned or controlled corporations attached to a department shall submit to the Secretary concerned their audited financial statements within sixty (60) days after the close of the fiscal year; and

(d) Pending submission of the required financial statements, the corporation shall continue to operate an the basis of the preceding year's budget until the financial statements shall have been submitted, Should any government-owned or controlled corporation incur an operation deficit at the close of its fiscal year, it shall be subject to administrative supervision of the department; and the corporation's operating and capital budget shall be subject to the department's examination, review, modification and approval." (Italics supplied.)

An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency. The attachment is merely for "policy and program coordination." With respect to administrative matters, the independence of an attached agency from

20

Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987.11 Moreover, the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a Department.12

Hence, the inescapable conclusion is that with respect to the management of personnel, an attached agency is, to a certain extent, free from Departmental interference and control. This is more explicitly shown by P.D. No. 857 which provides:

"SEC. 8. Management and Staff -a) The President shall, upon the recommendation of the Board, appoint the General Manager and the Assistant General Managers.

b) All other officials and employees of the Authority shall be selected and appointed on the basis of merit and fitness based on a comprehensive and progressive merit system to be established by the Authority immediately upon its organization and consistent with Civil Service rules and regulations. The recruitment, transfer, promotion, and dismissal of all personnel of the Authority, including temporary workers, shall be governed by such merit system.

c) The General Manager shall, subject to the approval of the Board, determine the staffing pattern and the number of personnel of the Authority, define their duties and responsibilities, and fix their salaries and emoluments. For professional and technical positions, the General Manager shall recommend salaries and emoluments that are comparable to those of similar positions in other government-owned corporations, the provisions of existing rules and regulations on wage and position classification notwithstanding.

d) The General Manager shall, subject to the approval by the Board, appoint and remove personnel below the rank of Assistant General Manager.

x x x x x x x x x" (Italics supplied.)

Although the foregoing section does not expressly provide for a mechanism for an administrative investigation of personnel, by vesting the power to remove erring employees on the General Manager, with the approval of the PPA Board of Directors, the law impliedly grants said officials the power to investigate its personnel below the rank of Assistant Manager who may be charged with an administrative offense. During such investigation, the PPA General Manager, as earlier stated, may subject the employee concerned to preventive suspension. The investigation should be conducted in accordance with the procedure set out in Sec. 38 of P.D. No. 807.13 Only after gathering sufficient facts may the PPA General Manager impose the proper penalty accordance with law. It is the latter action which requires the approval of the PPA Board of Directors.14

From an adverse decision of the PPA General Manager and the Board of Directors, the employee concerned may elevate the matter to the Depairtment Head or Secretary. Otherwise, he may appeal directly to the Civil Service Commission. The permissive recourse to the Department Secretary is sanctioned by the Civil Service Law (P.D. No. 807) under the following provisions:

"SEC. 37. Disciplinary Jurisdiction. -(a) The Commission shall decide upon appeal all administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty days, or fine in an amount

exceeding thirty days salary, demotion in rank or salary or transfer, removal or dismissal from office. A complaint maybe filed directly with the Commission by a private citizen against a government official or employee in which case it may hear and decide the case or it may deputize any department or agency or official or group of officials to conduct the investigation. The results of the investigation shall be submitted to the Commission with recommendation as to the penalty to be imposed or other action to be taken.

"(b) The heads of departments, agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. The decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days' salary. In cam the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the departrnent and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which cam the same shall be executory only after confirmation by the department head.

.x x x xxx x x x" (Italics supplied.)

It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was premature. The PPA General Manager should have first conducted an investigation, made the proper recommendation for the imposable penalty and sought its approval by the PPA Board of Directors. It was discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes. Only then could the AAB take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated July 1, 1988, was designed to act, decide and recommend to him "all cases of administrative malfeasance, irregularities, grafts and acts of corruption in the Department." Composed of a Chairman and two (2) members, the AAB came into being pursuant to Administrative Order No. 25 issued by the President on May 25, 1987.15 Its special nature as a quasi-judicial administrative body notwithstanding, the AAB is not exempt from the observance of due process in its proceedings.16 We are not satisfied that it did so in this case the respondents protestation that petitioner waived his right to be heard notwithstanding. It should be observed that petitioner was precisely questioning the AAB's jurisdiction when it sought judicial recourse.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the PPA General Manager to subject petitioner to preventive suspension and REVERSED insofar as it validates the jurisdiction of the DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1049-89 and rules 'hat due process has been accorded the petitioner.

The AAB decision in said case is hereby declared NULL and VOID and the case is REMANDED to the PPA whose General Manager shall conduct with dispatch its reinvestigation.

The preventive suspension of petitioner shall continue unless after a determination of its duration, it is found that he bad served the total of ninety (90) days in which case he shall be reinstated immediately.

SO ORDERED.Narvasa (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz,

Paras, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr. and Nocon, JJ., concur.

Feliciano, J., On leave.

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Padilla, J., No part; related to respondent Honorable Reinerio O. Reyes.

Bellosillo, J., No part.Power of PPA General Manager affirmed; jurisdiction

of DOTC reversed; AAB decision null and void.

06 – Luzon Dev’t Bank vs. Assoc. of Luzon Dev’t Bank Employees (249 SCRA 162)

[GRN 120319 October 6, 1995]LUZON DEVELOPMENT BANK, petitioner, vs. ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S.

GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents

APPEARANCES OF COUNSEL Eusebio P. Navarro, Jr. and Adolfo R. Fandialan for petitioner.Ester S. Garcia for respondent Voluntary Arbitrator,Napoleon Banzuela, Jr. for private respondent.

ROMERO, J.:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:

"Whether or not the company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion."

At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15; 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB.

On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

"WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining Agreement provision nor the Memorandum of Agreement on promotion."

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator and to prohibit her from enforcing the same.

In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination on the basis of evidence and arguments presented by such parties who have bound themselves to accept the decision of the arbitrator as final and binding.

Arbitration may be classified, on the basis of the obligation on which it is based, as either compulsory or voluntary.

Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party,1 The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the parties, but in compulsory arbitration, such a third party is normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding resolution.2 Ideally, arbitration awards are supposed to be complied with by both parties without delay, such that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide their case. Above all, they have mutually agreed to be bound by said arbitrator's decision.

In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include therein provisions for a machinery for the resolution of grievances arising from the interpretation or implementation of the CBA or company personnel policies.3 For this purpose, parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection, preferably from those accredited by the National Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the interpretation or implementation of the CBA and (2) the interpretation or enforcement of company personnel policies. Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other labor disputes.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following enumerated cases:

"x x x- (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases;2. Termination disputes;3. If accompanied with a claim for reinstatement,

those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts,

6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement,

x x x x x x x x x"

It will thus be noted that the Jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the National Labor Relations Commission (NLRC) for that matter.4 The state of our present law relating to voluntary arbitration provides that "(t)he award or decision of the Voluntary Arbitrator x x x shall be final and executory after ten (10) calendar days from receipt of the copy of the award or

22

decision by the parties,"5 while the "(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders."6 Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.

Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to the Supreme Court itself on a petition for certiorari,7 in effect equating the voluntary arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this is illogical and imposes an unnecessary burden upon it.

In Volkschel Labor Union, et al. v. NLRC et al.,8 on the settled premise that the judgments of courts and awards of quasijudicial agencies must become final at some definite time, this Court ruled that the awards of voluntary arbitrators determine the rights of parties; hence, their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al.,9 this Court ruled that "a voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity." Under these rulings, it follows that the voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but independent of, and apart from, the NLRC since his decisions are not appealable to the latter.10

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

x x x x x x x x x (B) Exclusive appellate jurisdiction over all final

judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

x x x x x x x x x"

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial agency, board or commission, still both he and the panel are comprehended within the concept of a "quasi-judicial instrumentality." It may even be stated that it was to meet the very situation presented by the quasi-judicial functions of the voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry Arbitration Commission,11 that the broader term "Instrumentalities" was purposely included in the above-quoted provision.

An "Instrumentality" is anything used as a means or agency.12 Thus, the terms governmental "agency" or instrumentality" are synonymous in the sense that either of them is a means by which a government acts, or by which a certain government act or function is performed.13 The word "Instrumentality," with respect to a state, contemplates an authority to which the state delegates governmental power for the performance of a state function.14 An individual person, like an administrator or executor, is a judicial instrumentality in the settling of an estate,15 in the same manner that a subagent appointed by a bankruptcy court is

an instrumentality of the court,16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term instrumentality" in the aforequoted Sec. 9 of B.P. 129.

The fact that his functions and powers are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It will be noted that, although the Employees Compensation Commission is also provided for in the Labor Code, Circular No. 1-9 1, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid down the procedure for the appealability of its decisions to the Court of Appeals under the foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. Nor will it run counter to the legislative intendment that decisions of the NLRC be reviewable directly by the Supreme Court since, precisely, the cases within the adjudicative competence of the voluntary arbitrator are excluded from the jurisdiction of the NLRC or the labor arbiter.

In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial Court for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction, A party to the controversy may, at any time within one (1) month after an award is made, apply to the court having jurisdiction for an order confirming the award and the court must grant such order unless the award is vacated, modified or corrected.19

In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition for certiorari from that award or decision, the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As a matter of policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition.

ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.

SO ORDERED.Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug,

Kapunan, Mendoza, Francisco, and Hermosisima, Jr., JJ., concur.

Feliciano, J., concurs in the result.Narvasa, C.J and Melo, J. are on leave.

07 – Iron and Steel Authority vs. CA (249 SCRA 538)

[GRN 102976 October 25, 1995]23

IRON AND STEEL AUTHORITY, petitioner, vs. THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION,

respondents

APPEARANCES OF COUNSEL The Solicitor General for petitioner.Angara, Abello, Concepcion, Regala & Cruz for private respondent,

FELICIANO, J.:

Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No, 272 dated 9 August 1973 in order, generally, to develop and promote the iron and steel industry in the Philippines. The objectives of the ISA are spelled out in the following terms:

"Sec, 2. Objectives. - "The Authority shall have the following objectives:

(a)to strengthen the iron and steel industry of the Philippines and to expand the domestic and export markets for the products of the industry;

(b) to promote the consolidation, integration and rationalization of the industry in order to increase industry capability and viability to service the domestic market and to compete in international markets;

(c) to rationalize the marketing and distribution of steel products in order to achieve a balance between demand and supply of iron and steel products for the country and to ensure that industry prices and profits are at levels that provide a fair balance between the interests of investors, consumers, suppliers, and the public at large;

(d) to promote full utilization of the existing capacity of the industry, to discourage investment in excess capacity, and in coordination with appropriate government agencies to encourage capital investment in priority areas of the industry;(e) to assist the industry in securing adequate and low-cost supplies of raw materials and to reduce the excessive dependence of the country on imports of iron and steel."

The list of powers and functions of the ISA included the following:

"Sec. 4. Powers and Functions, - The authority shall have the following powers and functions:

x x x x x x x x x to initiate expropriation of land required for basic

iron and steel facilities for subsequent resale and/or lease to the companies involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed for the attainment of the objectives of the Authority;

x x xx x xx x x (Italics supplied)

P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973.1 When ISA's original term expired on 10 October 1978, its term was extended for another ten (10) years by Executive Order No. 555 dated 31 August 1979.

The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development Corporation which is itself an entity wholly owned by the National Government, embarked on an expansion program embracing, among other things the construction of an integrated steel mill in Iligan City. The construction of such a steel mill was considered a priority and major industrial project of the Government. Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the President of the

Philippines on 16 November 1982 withdrawing from sale or settlement a large tract of public land (totaling about 30.25 hectares in area) located in Iligan City, and reserving that land for the use and immediate occupancy of NSC,

Since certain portions of the public land subject matter of Proclamation No. 2239 were occupied by a non-operational chemical fertilizer plant and related facilities owned by private respondent Mania Cristina Fertilizer Corporation ("MCFC"), Letter of Instruction (LOI) No. 1277, also dated 16 November 1982, was issued directing the NSC to "negotiate with the owners of MCFC, for and on behalf of the Government, for the compensation of MCFC's present occupancy rights on the subject land." LOI No. 1277 also directed that should NSC and private respondent MCFC fail to reach an agreement within a period of sixty (60) days from the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent domain under P.D. No. 272 and to initiate expropriation proceedings in respect of occupancy rights of private respondent MCFC relating to the subject public land as well as the plant itself and related facilities and to code the same to the NSC.2

Negotiations between NSC and private respondent MCFC did fall. Accordingly, on 18 August 1983, petitioner ISA commenced eminent domain proceedings against private respondent MCFC in the Regional Trial Court, Branch 1, of Iligan City, praying that it (ISA) be placed in possession of the property involved upon depositing in court the amount of P1,760,789,69 representing ten percent (10%) of the declared market values of that property. The Philippine National Bank, as mortgagee of the plant facilities and improvements involved in the expropriation proceedings, was also impleaded as party- defendant.

On 17 September 1983 a writ of possession was issued by the trial court in favor of ISA. ISA in turn placed NSC in possession and control of the land occupied by MCFC's fertilizer plant installation.

The case proceeded to trial. While the trial was on-going, however, the statutory existence of petitioner ISA expired on 11 August 1988. MCFC then filed a motion to dismiss, contending that no valid judgment could be rendered against ISA which had ceased to be a Juridical person. Petitioner ISA filed its opposition to this motion.

In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did dismiss the case. The dismissal was anchored on the provision of the Rules of Court stating that "only natural or juridical persons or entities authorized by law may be parties in a civil case."3 The trial court also referred to non-compliance by petitioner ISA with the requirements of Section 16, Rule 3 of the Rules of Court.4Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the expiration of its term, its juridical existence continued until the winding up of its affairs could be completed. In the alternative, petitioner ISA urged that the Republic of the Philippines, being the real partyin-interest, should be allowed to be substituted for petitioner ISA. In this connection, ISA referred to a letter from the Office of the President dated 28 September 1988 which especially directed the Solicitor General to continue the expropriation case.

The trial court denied the motion for reconsideration, stating, among other things that:

"The property to be expropriated is not for public use or benefit but for the use and benefit [__] of NSC, a government controlled private corporation engaged in private business and for profit, specially now that the government, according to newspaper reports, is offering for sale to the public its [shares of stock] in the National Steel Corporation in line with the pronounced policy of the present

24

administration to disengage the government from its private business ventures."5 (Brackets supplied)

Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of Appeals affirmed the order of dismissal of the trial court. The Court of Appeals held that petitioner ISA, "a government regulatory agency exercising sovereign functions," did not have the same rights as an ordinary corporation and that the ISA, unlike corporations organized under the Corporation Code, was not entitled to a period for winding up its affairs after expiration of its legally mandated term, with the result that upon expiration of its term on 11 August 1987, ISA was "abolished and [had] no more legal authority to perform governmental functions." The Court of Appeals went on to say that the action for expropriation could not prosper because the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate, had become ineffective as a result of the delegate's dissolution, and could not be continued in the name of Republic of the Philippines, represented by the Solicitor General:

"It is our considered opinion that under the law, the complaint cannot prosper, and therefore, has to be dismissed without prejudice to the refiling of a new complaint for expropriation if the Congress sees it fit." (Italics supplied)

At the same time, however, the Court of Appeals held that it was premature for the trial court to have ruled that the expropriation suit was not for a public purpose, considering that the parties had not yet rested their respective cases.

In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the action for expropriation in its capacity as agent of the Republic of the Philippines, the Republic, as principal of ISA, is entitled to be substituted and to be made a party-plaintiff after the agent ISA's term had expired.

Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law further extending the term of ISA after 11 August 1988 evinced a "clear legislative intent to terminate the juridical existence of ISA," and that the authorization issued by the Office of the President to the Solicitor General for continued prosecution of the expropriation suit could not prevail over such negative intent. It is also contended that the exercise of the eminent domain by ISA or the Republic is improper, since that power would be exercised "not on behalf of the National Government but for the benefit of NSC."

The principal issue which we must address in this case is whether or not the Republic of the Philippines is entitled to be substituted for ISA in view of the expiration of ISA's term. As will be made clear below, this is really the only issue which we must resolve at this time.

Rule 3, Section I of the Rules of Court, specifies who may be parties to a civil action:

"Section 1. Who May Be Parties. - Only natural or juridical persons or entities authorized by law may be parties in a civil action. "

Under the above quoted provision, it will be seen that those who can be parties to a civil action may be broadly categorized into two (2) groups:

(a) those who are recognized as persons under the law whether natural, i.e., biological persons, on the one hand, or juridical persons such as corporations, on the other hand; and

(b) entities authorized by law to institute actions.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No. 272, as already noted, contains express authorization to ISA to commence expropriation proceedings like those here involved:

"Section 4. Powers and Functions. - The Authority shall have the following powers and functions:

xxxxxx xxxto initiate expropriation of land required for basic

iron and steel facilities for subsequent resale and/or lease to the companies involved if it is shown that such use of the State's power is necessary to implement the construction of capacity which is needed for the attainment of the objectives of the Authority;

x x xx x x x x X"(Italics supplied)

It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain kinds of contracts "for and in behalf of the Government" in the following terms:

" x x xx x x x x x (i) to negotiate and when necessary, to enter into

contracts for and in behalf of the government, for the bulk purchase of materials, supplies or services for any sectors in the industry, and to maintain inventories of such materials in order to insure a continuous and adequate supply thereof and thereby reduce operating costs of such sector;

xxxxxx xxx"(Italics supplied)

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality. There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive juridical personality separate and distinct from that of the Government. The ISA in fact appears to the Court to be a non-incorporated agency or instrumentality of the Republic of the Philippines, or more precisely of the Government of the Republic of the Philippines, It is common knowledge that other agencies or instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes with and at other times without capital stock, and accordingly vested with a juridical personality distinct from the personality of the Republic. Among such incorporated agencies or instrumentalities are: National Power Corporation;6 Philippine Ports Authority;7 National Housing Authority;8 Philippine National Oil Company;9 Philippine National Railways;10 Public Estates Authority;11 Philippine Virginia Tobacco Administration; 12 and so forth. It is worth noting that the term "Authority" has been used to designate both incorporated and non-incorporated agencies or instrumentalities of the Government.

We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. The Republic itself is a body corporate and juridical person vested with the full panoply of powers and attributes which are compendiously described as "legal personality." The relevant definitions are found in the Administrative Code of 1987:

"Sec. 2. General Terms Defined - Unless the specific words of the text, or the context as a whole, or a particular statute, require a different meaning:

(1) Government of the Republic of the Philippines refers to the corporate governmental entity through which the functions of government are exercised throughout the

25

Philippines, including, save as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or barangay subdivisions or other forms of local government.

x x x x x x x x x (4) Agency of the Government refers to any of the

various units of the Government, including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein.

x x x x x x x x x (10) Instrumentality refers to any agency of the

National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned or controlled corporations.

x x x x x x x x x(Italics supplied)

When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the assets and liabilities of that agency revert back to, and are reassumed by, the Republic of the Philippines, in the absence of special provisions of law specifying some other disposition thereof such as, e.g., devolution or transmission of such powers, duties, functions, etc. to some other identified successor agency or instrumentality of the Republic of the Philippines. When the expiring agency is an incorporated one, the consequences of such expiry must be looked for, in the first instance, in the charter of that agency and, by way of supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets and liabilities are properly regarded as folded back into the Government of the Republic of the Philippines and hence assumed once again by the Republic, no special statutory provision having been shown to have mandated succession thereto by some other entity or agency of the Republic.

The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines and the Republic itself are, at least in part, spelled out in the Rules of Court. The general rule is, of course, that an action must be prosecuted and defended in the name of the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of the expropriation proceedings, a real party in interest, having been explicitly authorized by its enabling statute to institute expropriation proceedings. The Rules of Court at the same time expressly recognize the role of representative parties:

"Section 3. Representative Parties. - A trustee of an expressed trust a guardian, an executor or administrator, or a party authorized by statute may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may, at any stage of the proceedings, order such beneficiary to be made a party. x x x." (Italics supplied)

In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or delegate or representative of the Republic of the Philippines pursuant to its authority under P.D. No. 272. The present expropriation suit was brought on behalf of and for the benefit of the Republic as the principal of ISA. Paragraph 7 of the complaint stated:

"7 The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for the construction and installation of iron and steel manufacturing facilities that are indispensable to the integration of the iron and steel making industry which is vital to the promotion of public interest and welfare." (Italics supplied)

The principal or the real party in interest thus the Republic of the Philippines and not the National Steel Corporation, even though the latter may be an ultimate user of the properties involved should the condemnation suit be eventually successful.

From the foregoing premises, it follows that the Republic of the Philippines is entitled to be substituted in the expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the expiration of ISA's statutory term did not by itself require or justify the dismissal of the eminent domain proceedings.

It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's statutory term, was not a ground for dismissal of such proceedings since a party may be dropped or added by order of the court, on motion of any party or on the court's own initiative at any stage of the action and on such terms as are just.13 In the instant case, the Republic has precisely moved to take over the proceedings as party-plaintiff.

In E B. Marcha Transport Company. Inc. v. Intermediate Appellate Court,14 the Court recognized that the Republic may initiate or participate in actions involving its agents. There the Republic of the Philippines was held to be a proper party to sue for recovery of possession of property although the "real" or registered owner of the property was the Philippine Ports Authority, a government agency vested with a separate juridical personality. The Court said.

"It can be said that in suing for the recovery of the rentals, the Republic of the Philippines acted as principal of the Philippine Ports Authority, directly exercising the commission it had earlier conferred on latter as its agent. x x x "15(Italics supplied)

In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again another proceeding, as the trial court and Court of Appeals had required, was to generate unwarranted delay and create needless repetition of proceedings:

"More importantly, as we see it, dismissing the complaint on the ground that the Republic of the Philippines is not the proper party would result in needless delay in the settlement of this matter and also in derogation of the policy against multiplicity of suits. Such a decision would require the Philippine Ports Authority to refile the very same complaint already proved by the Republic of the Philippines and bring back as it were to square one."16 (Italics supplied)

As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the Philippines for the ISA upon the ground that the action for expropriation could not prosper because the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate, had become legally ineffective by reason of the expiration of the statutory term of the agent or delegated i.e., ISA. Since, as we have held above, the powers and functions of ISA have reverted to the Republic of the Philippines upon the termination of the statutory term of ISA, the question should be addressed whether fresh legislative authority is necessary before the Republic of the Philippines may continue the

26

expropriation proceedings initiated by its own delegate or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative department of the government, we believe and so hold that no new legislative act is necessary should the Republic decide, upon being substituted for ISA, in fact to continue to prosecute the expropriation proceedings. For the legislative authority, a long time ago, enacted a continuing or standing delegation of authority to the president of the Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of the Republic of the Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the commencement of the present expropriation proceedings before the Iligan Regional Trial Court, provided that:

"Section 64. Particular powers and duties of the President of the Philippines - in addition to his general supervisory authority, the President of the Philippines shall have such other specific powers and duties as are expressly conferred or imposed on him by law, and also, in particular, the powers and duties set forth in this Chapter.

Among such special powers and duties shall be:x x x x x x x x x (h) To determine when it is necessary or

advantageous to exercise the right of eminent domain in behalf of the Government of the Philippines; and to direct the Secretary of Justice, where such act is deemed advisable, to cause the condemnation proceedings to be begun in the court having proper jurisdiction,"

(Italics supplied)

The Revised Administrative Code of 1987 currently in force has substantially reproduced the foregoing provision in the following terms:

"Sec. 12. Power of eminent domain. - The President shall determine when it is necessary or advantageous to exercise the power of eminent domain in behalf of the National Government. and direct the Solicitor General, whenever he deems the action advisable, to institute expropriation proceedings in the proper court." (Italics supplied)

In the present case, the President, exercising the power duly delegated under both the 1917 and 1987 Revised Administrative Codes in effect made a determination that it was necessary and advantageous to exercise the power of eminent domain in behalf of the Government of the Republic and accordingly directed the Solicitor General to proceed with the suIt.17

It is argued by private respondent NICK that, because Congress after becoming once more the depository of primary legislative power, had not enacted a statute extending the term of ISA, such non-enactment must be deemed a manifestation of a legislative design to discontinue or abort the present expropriation suit. We find this argument much too speculative; it rests too much upon simple silence on the part of Congress and casually disregards the existence of Section 12 of the 1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of "public use" or "public purpose" is not present in the instant case, and that the indispensable element of Just compensation is also absent. We agree with the Court of Appeals in this connection that these contentions, which were adopted and set out by the Regional Trial Court in its order of dismissal,

are premature and are appropriately addressed in the proceedings before the trial court. Those proceedings have yet to produce a decision on the merits, since trial was still on going at the time the Regional Trial Court precipitously dismissed the expropriation proceedings. Moreover, as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an opportunity to determine whether or not, or to what extent, the proceedings should be continued in view of all the subsequent developments in the iron and steel sector of the country including, though not limited to, the partial privatization of the NSC.

WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent that it affirmed the trial court's order dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the court a quo which shall allow the substitution of the Republic of the Philippines for petitioner Iron and Steel Authority and for further proceedings consistent with this Decision. No pronouncement as to costs.

SO ORDERED.Romero, Melo, Vitug, and Panganiban, JJ., concur.

08 – Leyson, Jr. vs. Office of the Ombudsman (331 SCRA 227)

[G.R. No. 134990. April 27, 2000]MANUEL M. LEYSON JR., petitioner, vs. OFFICE OF THE

OMBUDSMAN, TIRSO ANTIPORDA, Chairman, UCPB and CIIF Oil Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills,

respondents

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport Corporation (ITTC), a domestic corporation engaged in the lighterage or shipping business, entered into a one (1)-year contract with Legaspi Oil Company, Inc. (LEGASPI OIL), Granexport Manufacturing Corporation (GRANEXPORT) and United Coconut Chemicals, Inc. (UNITED COCONUT), comprising the Coconut Industry Investment Fund (CIIF) companies, for the transport of coconut oil in bulk through MT Transasia. The majority shareholdings of these CIIF companies are owned by the United Coconut Planters Bank (UCPB) as administrator of the CIIF. Under the terms of the contract, either party could terminate the agreement provided a three (3)-month advance notice was given to the other party. However, in August 1996, or prior to the expiration of the contract, the CIIF companies with their new President, respondent Oscar A. Torralba, terminated the contract without the requisite advance notice. The CIIF companies engaged the services of another vessel, MT Marilag, operated by Southwest Maritime Corporation.

On 11 March 1997 petitioner Manuel M. Leyson Jr., Executive Vice President of ITTC, filed with public respondent Office of the Ombudsman a grievance case against respondent Oscar A. Torralba. The following is a summary of the irregularities and corrupt practices allegedly committed by respondent Torralba: (a) breach of contract - unilateral cancellation of valid and existing contract; (b) bad faith - falsification of documents and reports to stop the operation of MT Transasia; (c) manipulation - influenced their insurance to disqualify MT Transasia; (d) unreasonable denial of requirement imposed; (e) double standards and inconsistent in favor of MT Marilag; (f) engaged and entered into a contract with Southwest Maritime Corp. which is not the owner of MT Marilag, where liabilities were waived and whose paid-up capital is only P250,000.00; and, (g) overpricing in the freight rate causing losses of millions of pesos to Cocochem.1

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On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman of UCPB and CIIF Oil Mills, and respondent Oscar A. Torralba with violation of The Anti-Graft and Corrupt Practices Act also before the Ombudsman anchored on the aforementioned alleged irregularities and corrupt practices.

On 30 January 1998 public respondent dismissed the complaint based on its finding that –

The case is a simple case of breach of contract with damages which should have been filed in the regular court. This Office has no jurisdiction to determine the legality or validity of the termination of the contract entered into by CIIF and ITTC. Besides the entities involved are private corporations (over) which this Office has no jurisdiction.2

On 4 June 1998 reconsideration of the dismissal of the complaint was denied. The Ombudsman was unswayed in his finding that the present controversy involved breach of contract as he also took into account the circumstance that petitioner had already filed a collection case before the Regional Trial Court of Manila-Br. 15, docketed as Civil Case No. 97-83354. Moreover, the Ombudsman found that the filing of the motion for reconsideration on 31 March 1998 was beyond the inextendible period of five (5) days from notice of the assailed resolution on 19 March 1998.3

Petitioner now imputes grave abuse of discretion on public respondent in dismissing his complaint. He submits that inasmuch as Philippine Coconut Producers Federation, Inc. (COCOFED) v. PCGG4 and Republic v. Sandiganbayan5 have declared that the coconut levy funds are public funds then, conformably with Quimpo v. Tanodbayan,6 corporations formed and organized from those funds or whose controlling stocks are from those funds should be regarded as government owned and/or controlled corporations. As in the present case, since the funding or controlling interest of the companies being headed by private respondents was given or owned by the CIIF as shown in the certification of their Corporate Secretary,7 it follows that they are government owned and/or controlled corporations. Corollarily, petitioner asserts that respondents Antiporda and Torralba are public officers subject to the jurisdiction of the Ombudsman.

Petitioner alleges next that public respondent's conclusion that his complaint refers to a breach of contract is whimsical, capricious and irresponsible amounting to a total disregard of its main point, i. e., whether private respondents violated The Anti-Graft and Corrupt Practices Act when they entered into a contract with Southwest Maritime Corporation which was grossly disadvantageous to the government in general and to the CIIF in particular. Petitioner admits that his motion for reconsideration was filed out of time. Nonetheless, he advances that public respondent should have relaxed its rules in the paramount interest of justice; after all, the delay was just a matter of days and he, a layman not aware of technicalities, personally filed the complaint.

Private respondents counter that the CIIF companies were duly organized and are existing by virtue of the Corporation Code. Their stockholders are private individuals and entities. In addition, private respondents contend that they are not public officers as defined under The Anti-Graft and Corrupt Practices Act but are private executives appointed by the Boards of Directors of the CIIF companies. They asseverate that petitioner's motion for reconsideration was filed through the expert assistance of a learned counsel. They then charge petitioner with forum shopping since he had similarly filed a case for collection of a sum of money plus damages before the trial court.

The Office of the Solicitor General maintains that the Ombudsman approved the recommendation of the investigating officer to dismiss the complaint because he sincerely believed there was no sufficient basis for the criminal indictment of private respondents.

We find no grave abuse of discretion committed by the Ombudsman. COCOFED v. PCGG referred to in Republic v. Sandiganbayan reviewed the history of the coconut levy funds. I These funds actually have four (4) general classes: (a) the Coconut Investment Fund created under R. A. No. 6260;8 (b) the Coconut Consumers Stabilization Fund created under P. D. No. 276;9 (c) the Coconut Industry Development Fund created under P. D. No. 582;10 and, (d) the Coconut Industry Stabilization Fund created under P. D. No. 1841.11

The various laws relating to the coconut industry were codified in 1976. On 21 October of that year, P. D. No. 96112 was promulgated. On 11 June 1978 it was amended by P. D. No. 146813 by inserting a new provision authorizing the use of the balance of the Coconut Industry Development Fund for the acquisition of "shares of stocks in corporations organized for the purpose of engaging in the establishment and operation of industries x x x commercial activities and other allied business undertakings relating to coconut and other palm oil indust(ries)."14 From this fund thus created, or the CIIF, shares of stock in what have come to be known as the "CIIF companies" were purchased.

We then stated in COCOFED that the coconut levy funds were raised by the State's police and taxing powers such that the utilization and proper management thereof were certainly the concern of the Government. These funds have a public character and are clearly affected with public interest.

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a government owned or controlled corporation the employees of which fell within the jurisdictional purview of the Tanodbayan for purposes of The Anti-Graft and Corrupt Practices Act. We upheld the jurisdiction of the Tanodbayan on the ratiocination that -

While it may be that PETROPHIL was not originally "created" as a government-owned or controlled corporation, after it was acquired by PNOC, which is a government-owned or controlled corporation, PETROPHIL became a subsidiary of PNOC and thus shed-off its private status. It is now funded and owned by the government as, in fact, it was acquired to perform functions related to government programs and policies on oil, a vital commodity in the economic life of the nation. It was acquired not temporarily but as a permanent adjunct to perform essential government or government-related functions, as the marketing arm of the PNOC to assist the latter in selling and distributing oil and petroleum products to assure and maintain an adequate and stable domestic supply.

But these jurisprudential rules invoked by petitioner in support of his claim that the CIIF companies are government owned and/or controlled corporations are incomplete without resorting to the definition of "government owned or controlled corporation" contained in par. (13), Sec. 2, Introductory Provisions of the Administrative Code of 1987, i. e., any agency organized as a stock or non-stock corporation vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock. The definition mentions three (3) requisites, namely, first, any agency organized as a stock or non-stock corporation; second, vested with functions

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relating to public needs whether governmental or proprietary in nature; and, third, owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock.

In the present case, all three (3) corporations comprising the CIIF companies were organized as stock corporations. The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.15 Obviously, the below 51% shares of stock in LEGASPI OIL removes this firm from the definition of a government owned or controlled corporation. Our concern has thus been limited to GRANEXPORT and UNITED COCONUT as we go back to the second requisite. Unfortunately, it is in this regard that petitioner failed to substantiate his contentions. There is no showing that GRANEXPORT and/ or UNITED COCONUT was vested with functions relating to public needs whether governmental or proprietary in nature unlike PETROPHIL in Quimpo. The Court thus concludes that the CIIF companies are, as found by public respondent, private corporations not within the scope of its jurisdiction.

With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by petitioner.

A brief note on private respondents' charge of forum shopping. Executive Secretary v. Gordon16 is instructive that forum shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. It is readily apparent that the present charge will not prosper because the cause of action herein, i. e., violation of The Anti-Graft and Corrupt Practices Act, is different from the cause of action in the case pending before the trial court which is collection of a sum of money plus damages.

WHEREFORE, the petition is DISMISSED. The Resolution of public respondent Office of the Ombudsman of 30 January 1998 which dismissed the complaint of petitioner Manuel M. Leyson Jr., as well as its Order of 4 June 1998 denying his motion for reconsideration, is AFFIRMED. Costs against petitioner.

SO ORDERED.Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ.,

concur.

09 – Bagaoisan vs. National Tobacco Adm. (408 SCRA 337)

[G.R. No. 152845. August 5, 2003]DRIANITA BAGAOISAN, FELY MADRIAGA, SHIRLY TAGABAN, RICARDO SARANDI, SUSAN IMPERIAL, BENJAMIN DEMDEM, RODOLFO DAGA, EDGARDO BACLIG, GREGORIO LABAYAN,

HILARIO JEREZ, and MARIA CORAZON CUANANG, petitioners, vs. NATIONAL TOBACCO ADMINISTRATION, represented by ANTONIO DE GUZMAN and PERLITA BAULA, respondents

VITUG, J.:

President Joseph Estrada issued on 30 September 1998 Executive Order No. 29, entitled “Mandating the Streamlining of the National Tobacco Administration (NTA),” a government agency under the Department of Agriculture. The order was followed by another issuance, on 27 October 1998, by President Estrada of Executive Order No. 36, amending Executive Order No. 29, insofar as the new staffing pattern was concerned, by increasing from four hundred (400) to not exceeding seven hundred fifty (750) the positions affected thereby. In compliance therewith, the NTA prepared and adopted a new Organization Structure and Staffing

Pattern (OSSP) which, on 29 October 1998, was submitted to the Office of the President.

On 11 November 1998, the rank and file employees of NTA Batac, among whom included herein petitioners, filed a letter-appeal with the Civil Service Commission and sought its assistance in recalling the OSSP. On 04 December 1998, the OSSP was approved by the Department of Budget and Management (DBM) subject to certain revisions. On even date, the NTA created a placement committee to assist the appointing authority in the selection and placement of permanent personnel in the revised OSSP. The results of the evaluation by the committee on the individual qualifications of applicants to the positions in the new OSSP were then disseminated and posted at the central and provincial offices of the NTA.

On 10 June 1996, petitioners, all occupying different positions at the NTA office in Batac, Ilocos Norte, received individual notices of termination of their employment with the NTA effective thirty (30) days from receipt thereof. Finding themselves without any immediate relief from their dismissal from the service, petitioners filed a petition for certiorari, prohibition and mandamus, with prayer for preliminary mandatory injunction and/or temporary restraining order, with the Regional Trial Court (RTC) of Batac, Ilocos Norte, and prayed -

“1) that a restraining order be immediately issued enjoining the respondents from enforcing the notice of termination addressed individually to the petitioners and/or from committing further acts of dispossession and/or ousting the petitioners from their respective offices;

“2) that a writ of preliminary injunction be issued against the respondents, commanding them to maintain the status quo to protect the rights of the petitioners pending the determination of the validity of the implementation of their dismissal from the service; and

“3) that, after trial on the merits, judgment be rendered declaring the notice of termination of the petitioners illegal and the reorganization null and void and ordering their reinstatement with backwages, if applicable, commanding the respondents to desist from further terminating their services, and making the injunction permanent.”1

The RTC, on 09 September 2000, ordered the NTA to appoint petitioners in the new OSSP to positions similar or comparable to their respective former assignments. A motion for reconsideration filed by the NTA was denied by the trial court in its order of 28 February 2001. Thereupon, the NTA filed an appeal with the Court of Appeals, raising the following issues:

“I. Whether or not respondents submitted evidence as proof that petitioners, individually, were not the ‘best qualified and most deserving’ among the incumbent applicant-employees.

“II. Whether or not incumbent permanent employees, including herein petitioners, automatically enjoy a preferential right and the right of first refusal to appointments/reappointments in the new Organization Structure And Staffing Pattern (OSSP) of respondent NTA.

“III. Whether or not respondent NTA in implementing the mandated reorganization pursuant to E.O. No. 29, as amended by E.O. No. 36, strictly adhere to the implementing rules on reorganization, particularly RA 6656 and of the Civil Service Commission – Rules on Government Reorganization.

“IV. Whether or not the validity of E.O. Nos. 29 and 36 can be put in issue in the instant case/appeal.”2

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On 20 February 2002, the appellate court rendered a decision reversing and setting aside the assailed orders of the trial court.

Petitioners went to this Court to assail the decision of the Court of Appeals, contending that -

“I. The Court of Appeals erred in making a finding that went beyond the issues of the case and which are contrary to those of the trial court and that it overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion;

“II. The Court of Appeals erred in upholding Executive Order Nos. 29 and 36 of the Office of the President which are mere administrative issuances which do not have the force and effect of a law to warrant abolition of positions and/or effecting total reorganization;

“III. The Court of Appeals erred in holding that petitioners’ removal from the service is in accordance with law;

“IV. The Court of Appeals erred in holding that respondent NTA was not guilty of bad faith in the termination of the services of petitioners; (and)

“V. The Court of Appeals erred in ignoring case law/jurisprudence in the abolition of an office.”3

In its resolution of 10 July 2002, the Court required the NTA to file its comment on the petition. On 18 November 2002, after the NTA had filed its comment of 23 September 2002, the Court issued its resolution denying the petition for failure of petitioners to sufficiently show any reversible error on the part of the appellate court in its challenged decision so as to warrant the exercise by this Court of its discretionary appellate jurisdiction. A motion for reconsideration filed by petitioners was denied in the Court’s resolution of 20 January 2002.

On 21 February 2003, petitioners submitted a “Motion to Admit Petition For En Banc Resolution” of the case allegedly to address a basic question, i.e., “the legal and constitutional issue on whether the NTA may be reorganized by an executive fiat, not by legislative action.”4 In their “Petition for an En Banc Resolution” petitioners would have it that -

“1. The Court of Appeals’ decision upholding the reorganization of the National Tobacco Administration sets a dangerous precedent in that:

“’a) A mere Executive Order issued by the Office of the President and procured by a government functionary would have the effect of a blanket authority to reorganize a bureau, office or agency attached to the various executive departments;

‘b) The President of the Philippines would have the plenary power to reorganize the entire government Bureaucracy through the issuance of an Executive Order, an administrative issuance without the benefit of due deliberation, debate and discussion of members of both chambers of the Congress of the Philippines;

c) The right to security of tenure to a career position created by law or statute would be defeated by the mere adoption of an Organizational Structure and Staffing Pattern issued pursuant to an Executive Order which is not a law and could thus not abolish an office created by law;“2. The case law on abolition of an office would

be disregarded, ignored and abandoned if the Court of Appeals decision subject matter of this Petition would remain

undisturbed and untouched. In other words, previous doctrines and precedents of this Highest Court would in effect be reversed and/or modified with the Court of Appeals judgment, should it remain unchallenged.

“3. Section 4 of Executive Order No. 245 dated July 24, 1987 (Annex ‘D,’ Petition), issued by the Revolutionary government of former President Corazon Aquino, and the law creating NTA, which provides that the governing body of NTA is the Board of Directors, would be rendered meaningless, ineffective and a dead letter law because the challenged NTA reorganization which was erroneously upheld by the Court of Appeals was adopted and implemented by then NTA Administrator Antonio de Guzman without the corresponding authority from the Board of Directors as mandated therein. In brief, the reorganization is an ultra vires act of the NTA Administrator.

“4. The challenged Executive Order No. 29 issued by former President Joseph Estrada but unsigned by then Executive Secretary Ronaldo Zamora would in effect be erroneously upheld and given legal effect as to supersede, amend and/or modify Executive Order No. 245, a law issued during the Freedom Constitution of President Corazon Aquino. In brief, a mere executive order would amend, supersede and/or render ineffective a law or statute.”5

In order to allow the parties a full opportunity to ventilate their views on the matter, the Court ultimately resolved to hear the parties in oral argument. Essentially, the core question raised by them is whether or not the President, through the issuance of an executive order, can validly carry out the reorganization of the NTA.

Notwithstanding the apparent procedural lapse on the part of petitioner to implead the Office of the President as party respondent pursuant to Section 7, Rule 3, of the 1997 Revised Rules of Civil Procedure, 6 this Court resolved to rule on the merits of the petition.

Buklod ng Kawaning EIIB vs. Zamora7 ruled that the President, based on existing laws, had the authority to carry out a reorganization in any branch or agency of the executive department. In said case, Buklod ng Kawaning EIIB challenged the issuance, and sought the nullification, of Executive Order No. 191 (Deactivation of the Economic Intelligence and Investigation Bureau) and Executive Order No. 223 (Supplementary Executive Order No. 191 on the Deactivation of the Economic Intelligence and Investigation Bureau and for Other Matters) on the ground that they were issued by the President with grave abuse of discretion and in violation of their constitutional right to security of tenure. The Court explained:

“The general rule has always been that the power to abolish a public office is lodged with the legislature. This proceeds from the legal precept that the power to create includes the power to destroy. A public office is either created by the Constitution, by statute, or by authority of law. Thus, except where the office was created by the Constitution itself, it may be abolished by the same legislature that brought it into existence.

“The exception, however, is that as far as bureaus, agencies or offices in the executive department are concerned, the President’s power of control may justify him to inactivate the functions of a particular office, or certain laws may grant him the broad authority to carry out reorganization measures. The case in point is Larin v. Executive Secretary [280 SCRA 713]. In this case, it was argued that there is no law which empowers the President to reorganize the BIR. In decreeing otherwise, this Court sustained the following legal basis, thus:

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“`Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.

`We do not agree.`x x x x x x`Section 48 of R.A. 7645 provides that:

``Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive Branch. – The heads of departments, bureaus and offices and agencies are hereby directed to identify their respective activities which are no longer essential in the delivery of public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations. x x x. Actual scaling down, phasing out or abolition of the activities shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President.’

`Said provision clearly mentions the acts of `scaling down, phasing out and abolition’ of offices only and does not cover the creation of offices or transfer of functions. Nevertheless, the act of creating and decentralizing is included in the subsequent provision of Section 62 which provides that:

``Sec. 62. Unauthorized organizational changes. – Unless otherwise created by law or directed by the President of the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be funded from appropriations by this Act.’

`The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned.

`x x x x x x

`Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:

``Sec. 20. Residual Powers. – Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not specifically enumerated above or which are not delegated by the President in accordance with law.’

`This provision speaks of such other powers vested in the President under the law. What law then gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity of these two decrees are unquestionable. The 1987 Constitution clearly provides that `all laws, decrees, executive orders, proclamations, letter of instructions and other

executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked. So far, there is yet no law amending or repealing said decrees.’

“Now, let us take a look at the assailed executive order.

“In the whereas clause of E.O. No. 191, former President Estrada anchored his authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted in Larin, thus:

“`Sec. 77. Organized Changes. – Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and funded from appropriations provided by this Act.’

“We adhere to the x x x ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of this respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. The law has spoken clearly. We are left only with the duty to sustain.

“But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power – that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), ‘the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President.’ For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado vs. Aguirre [323 SCRA 312], we ruled that reorganization ‘involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.’ It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the President’s continuing authority to reorganize.

“It having been duly established that the President has the authority to carry out reorganization in any branch or agency of the executive department, what is then left for us to resolve is whether or not the reorganization is valid. In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good faith. Reorganization is

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carried out in `good faith’ if it is for the purpose of economy or to make bureaucracy more efficient. Pertinently, Republic Act No. 6656 provides for the circumstances which may be considered as evidence of bad faith in the removal of civil service employees made as a result of reorganization, to wit: (a) where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; (b) where an office is abolished and another performing substantially the same functions is created; (c) where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; (d) where there is a classification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices, and (e) where the removal violates the order of separation.”8

The Court of Appeals, in its now assailed decision, has found no evidence of bad faith on the part of the NTA; thus -

“In the case at bar, we find no evidence that the respondents committed bad faith in issuing the notices of non-appointment to the petitioners.

“Firstly, the number of positions in the new staffing pattern did not increase. Rather, it decreased from 1,125 positions to 750. It is thus natural that one’s position may be lost through the removal or abolition of an office.

“Secondly, the petitioners failed to specifically show which offices were abolished and the new ones that were created performing substantially the same functions.

“Thirdly, the petitioners likewise failed to prove that less qualified employees were appointed to the positions to which they applied.

“x x x x x x x x x.“Fourthly, the preference stated in Section 4 of R.A.

6656, only means that old employees should be considered first, but it does not necessarily follow that they should then automatically be appointed. This is because the law does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service, provided that the acts of the appointing power are bonafide for the best interest of the public service and the person chosen has the needed qualifications.”9

These findings of the appellate court are basically factual which this Court must respect and be held bound.

It is important to emphasize that the questioned Executive Orders No. 29 and No. 36 have not abolished the National Tobacco Administration but merely mandated its reorganization through the streamlining or reduction of its personnel. Article VII, Section 17,10 of the Constitution, expressly grants the President control of all executive departments, bureaus, agencies and offices which may justify an executive action to inactivate the functions of a particular office or to carry out reorganization measures under a broad authority of law.11 Section 78 of the General Provisions of Republic Act No. 8522 (General Appropriations Act of FY 1998) has decreed that the President may direct changes in the organization and key positions in any department, bureau or agency pursuant to Article VI, Section 25,12 of the Constitution, which grants to the Executive Department the authority to recommend the budget necessary for its operation. Evidently, this grant of power includes the authority to evaluate each and every government agency, including the determination of the most economical and efficient staffing pattern, under the Executive Department.

In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D. Zamora, in his capacity as the Executive

Secretary, et al.,13 this Court has had occasion to also delve on the President’s power to reorganize the Office of the President under Section 31(2) and (3) of Executive Order No. 292 and the power to reorganize the Office of the President Proper. The Court has there observed:

“x x x. Under Section 31(1) of EO 292, the President can reorganize the Office of the President Proper by abolishing, consolidating or merging units, or by transferring functions from one unit to another. In contrast, under Section 31(2) and (3) of EO 292, the President’s power to reorganize offices outside the Office of the President Proper but still within the Office of the President is limited to merely transferring functions or agencies from the Office of the President to Departments or Agencies, and vice versa.”

The provisions of Section 31, Book III, Chapter 10, of Executive Order No. 292 (Administrative Code of 1987), above-referred to, reads thusly:

“SEC. 31. Continuing Authority of the President to Reorganize his Office. – The President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may take any of the following actions:

“(1) Restructure the internal organization of the Office of the President Proper, including the immediate Offices, the Presidential Special Assistants/Advisers System and the Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring functions from one unit to another;

“(2) Transfer any function under the Office of the President to any other Department or Agency as well as transfer functions to the Office of the President from other Departments and Agencies; and

“(3) Transfer any agency under the Office of the President to any other department or agency as well as transfer agencies to the Office of the President from other departments and agencies.”

The first sentence of the law is an express grant to the President of a continuing authority to reorganize the administrative structure of the Office of the President. The succeeding numbered paragraphs are not in the nature of provisos that unduly limit the aim and scope of the grant to the President of the power to reorganize but are to be viewed in consonance therewith. Section 31(1) of Executive Order No. 292 specifically refers to the President’s power to restructure the internal organization of the Office of the President Proper, by abolishing, consolidating or merging units hereof or transferring functions from one unit to another, while Section 31(2) and (3) concern executive offices outside the Office of the President Proper allowing the President to transfer any function under the Office of the President to any other Department or Agency and vice-versa, and the transfer of any agency under the Office of the President to any other department or agency and vice-versa.14

In the present instance, involving neither an abolition nor transfer of offices, the assailed action is a mere reorganization under the general provisions of the law consisting mainly of streamlining the NTA in the interest of simplicity, economy and efficiency. It is an act well within the

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authority of President motivated and carried out, according to the findings of the appellate court, in good faith, a factual assessment that this Court could only but accept.15

In passing, relative to petitioners’ “Motion for an En Banc Resolution of the Case,” it may be well to remind counsel, that the Court En Banc is not an appellate tribunal to which appeals from a Division of the Court may be taken. A Division of the Court is the Supreme Court as fully and veritably as the Court En Banc itself and a decision of its Division is as authoritative and final as a decision of the Court En Banc. Referrals of cases from a Division to the Court En Banc do not take place as just a matter of routine but only on such specified grounds as the Court in its discretion may allow.16

WHEREFORE, the Motion to Admit Petition for En Banc resolution and the Petition for an En Banc Resolution are DENIED for lack of merit. Let entry of judgment be made in due course. No costs.

SO ORDERED.Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio,

and Azcuna, JJ., concur.

10 – Araneta vs. Gatmaitan (101 Phil 328)

[GRN L-8895 April 30, 1957]SALVADOR ARANETA, ETC., ET AL., petitioners, vs. THE HON.

IMAGNO S. GATMAITAN, ETC., ET AL., respondents. EXEQUIEL SORIANO, ET AL., petitioners and appellees, vs. SALVADOR

ARANETA, ETC., ET AL., respondents and appellants

1. PLEADING AND PRACTICE; ACTIONS; DECLARATORY RELIEF; CONSTITUTIONALITY OF EXECUTIVE ORDER PROPER SUBJECT OF ACTION.-The constitutionality of an executive order can be ventilated in a declaratory relief proceeding. (Hilado vs. De la Costa, 83 Phil., 471).2. ID.; APPEALS; EFFECT ON EXECUTION OR JUDGMENT; EXCEPTION.-It is an elementary rule of procedure that an appeal stays the execution of a judgment. However in injunction, receivership and patent accounting cases, a judgment shall not be stayed after its rendition and before an appeal is taken or during the pendency of an appeal unless otherwise ordered by the court. (See. 4, Rule 39, Rules of Court).3. ID.; ID.; ID.; INJUNCTION; ISSUANCE RESTS IN SOUND DISCRETION OF COURT; CASE AT BAR.-The State's counsel contends that while judgment could be stayed in injunction, receivership and patent accounting cases, the present complaint, although styled "Injunction and/or Declaratory Relief with Preliminary Injunction," is one for declaratory relief, there being no allegation sufficient to convince the Court that the plaintiffs intended it to be one for injunction. But aside from the title of the complaint, plaintiffs pray for the declaration of the nullity of Executive Orders Nos. 22, 66 and 80; the issuance of a writ of preliminary injunction, and for such other relief as may be deemed just and equitable. This Court has already held that there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right sought to be protected, and that the acts against which the Administrative Code). Hence, Executive Orders Nos. 22, 66 and 80, series of 1954, restricting and banning of trawl fishing from San Miguel Bay (Camarines) are valid and issued by authority of law.6. ID.; ID.; ID.; ID.; EXERCISE OF AUTHORITY BY THE PRESIDENT DOES NOT CONSTITUTE UNDUE DELEGATION OF LEGISLATIVE POWERS.-For the protection of fry or fish eggs and small and immature fishes, Congress intended wit the promulgation of Act No. 4003, to prohibit the Use of any fish net or fishing device like trawl nets that could endanger and deplete the supply of sea food, an to that end authorized the

Secretary of Agriculture and Natural. Resources to provide by regulations such restrictions as he deemed necessary in order to preserve the aquatic resources of the land. In so far as the protection of fish fry or fish eggs is concerned the Fisheries Act is complete in itself leaving only to the Secretary of Agriculture & Natural Resources the promulgation of rules and regulations to carry into effect the legislative intent. Consequently, when the President, in response to the clamor of the people and authorities of Camarines Sur issued Executive Order No. 80 absolutely prohibiting fishing by means of trawls in all waters comprised within the San Miguel Bay, he did nothing but show an anxious regard for the welfare of the inhabitants of said coastal province and dispose of issues of general concern (Section 63, Revised Administrative Code) which were in consonance and strict conformity with the law. The exercise of such authority did not, therefore, constitute an undue delegation of the powers of. Congress.

ORIGINAL ACTION in the Supreme Court. Prohibition and certiorari with preliminary injunction.The facts are stated in the opinion of the Court.Solicitor General Ambrosio Padilla,: Assistant Solicitor General Jose G. Bautista and Solicitor Troadio T. Quiazon for petitioners.San Juan, Africa & Benedicto for respondents.

FÉLIX, J.:

San Miguel Bay, located between the provinces of Camarines Norte and Camarines Sur, a part of the National waters of the Philippines with an -extension of about 250 square miles and an average depth of approximately 6 fathoms (Otter trawl explorations in Philippine waters. 21, Exh. B), is considered as the most important fishing area in the Pacific side of the Bicol region. Sometime in 1950, trawl' operators from Malabon, Navotas and other places migrated to this region most of them settling at Sabang, Calabanga, Camarines Sur, for the purpose of using this particular method of fishing in said bay. On account of the belief of sustenance fishermen that the operation of this kind of gear caused the depletion of the marine resources of that area, there arose a general clamor among the majority of the inhabitants of coastal towns to prohibit the operation of trawls in San Miguel Bay. This move wag manifested in the resolution of December 18, 1953 (Exh. F), passed by the Municipal Mayors' League condemning the operation of trawls as the cause of the wanton destruction of the shrimp specie and resolving to petition the President of the Philippines to regulate fishing in San Miguel Bay by declaring it closed for trawl fishing at a certain period of the year. In another resolution dated March 27, 1954, the same League of Municipal Mayors prayed the President to protect them and the fish resources of San Miguel Bay by banning the operation of trawls therein (Exh. 4). The Provincial Governor also made proper representations to this effect and petitions in behalf of the non-trawl fishermen were likewise presented to the President by social and civic organizations as the NAMFREL (National Movement for Free Elections) and the COMPADRE (Committee for Philippine Action in Development, Reconstruction and Education), recommending the cancellation of the licenses of trawl operators after investigation, if such inquiry would substantiate the charges that the operation of said fishing method was detrimental to the welfare of the majority of the inhabitants (Exh. 2).

In response to these pleas, the President issued on April 5, 1954, Executive Order No. 22 (50 Off. Gaz., 1421) prohibiting the use of trawls in San Miguel Bay, but said Fisheries were not the real parties in interest; that said

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executive orders do not constitute a deprivation of property without due process of law, and therefore prayed that the complaint be dismissed (Exh. B, petition, L-8895).

During the trial of the case, the Governor of Camarines Sur appearing for the municipalities of Siruma, Tinambac, Calabanga, Cabusao and Sipocot, in, said province, called the attention of the Court that the Solicitor General bad not been notified of the proceeding. To this manifestation, the Court ruled that in view of the circumstances of the case, and as the Solicitor General would only be interested in maintaining the legality of the executive orders sought to be impugned, section 4 of Rule 66 could be interpreted to mean that the trial could go on and the Solicitor General could be notified before judgment is entered.

After the evidence for both parties was submitted and the Solicitor General was allowed to file his memorandum, the Court rendered decision on February 2, 1955, the last part of which reads as follows:

"The power to close any definite area of the Philippine waters, from the fact that Congress has seen fit to define under what conditions it may. be done by the enactment of the sections cited, in the mind of Congress must be of transcendental significance. It is primarily within the fields of legislation not of execution; for it goes far and says who can and who can not fish in definite territorial waters. The court can not accept that Congress had intended to abdicate its inherent right to legislate on this matter of national importance. To accept respondents' view would be to sanction the exercise of legislative power by executive decrees. If it is San Miguel Bay now, it may he Davao Gulf tomorrow, and so on. That may be done only by Congress. This being the conclusion, there is hardly need to go any further. Until the trawler is outlawed by legislative enactment, it cannot be. banned from San Miguel Bay by executive proclamation. The remedy for respondents and population of the coastal towns of Camarines Sur is to go to the Legislature. The result will be to issue the writ prayed for, even though this be to strike at public clamor and to annul the orders of the President issued in response therefor. This is a task unwelcome and unpleasant; unfortunately, courts of justice use only one measure for both the rich and poor, and are not bound by the more popular cause when they give judgments.

"IN VIEW WHEREOF, granted; Executive Order Nos. 22, 66 and 80 are declared invalid; the injunction prayed for is ordered to issue; no pronouncement as to costs".

Petitioners immediately filed an ex-parte motion for the issuance of a writ of injunction which was opposed by the Solicitor General and after the parties had filed their respective memoranda, the Court issued an order dated February 19, 1955, denying respondents' motion to set aside judgment and ordering them to file a bond in the sum of P30,000 on or before March 1, 1955, as a condition for the non-issuance of the injunction prayed for by petitioners pending appeal. The Solicitor General filed a motion for reconsideration which was denied for lack of merit, and the Court, acting upon the motion for new trial filed by respondents, issued another order on March 3, 1955, denying said motion and granting the injunction prayed for by petitioners upon the latter's filing a bond for P30,000 unless respondents could secure a writ of preliminary injunction from the Supreme Court on or before March 15, 1955. Respondents, therefore, brought the matter to this Court in a petition for prohibition and certiorari with preliminary injunction, docketed as G. R. No. L-8895, and on the same day filed a notice to appeal from the order of the lower court

dated February 2, 1955, which appeal was docketed in this Court as G. R. No. L-9191.

In the petition for prohibition and certiorari, petitioners (respondents therein) contended among other things, that the order of the respondent Judge requiring petitioners Secretary of Agriculture and Natural Resources and the Director of Fisheries to post a bond in the sum of P30,000 on or before March 1, 19,65, had been issued without jurisdiction or in excess thereof, or at the very least with grave abuse of discretion, because by requiring the bond, the Republic of the Philippines was in effect made a party as Our decision in the prohibition' and certiorari case (G. R. No. L-8895) would depend, in the last analysis on Our ruling in the appeal of the respondents in case G. R. No. L-9191, We shall first proceed to dispose of the latter case.

It is indisputable that the President issued Executive Orders Nos. 22, 66 and 80 in response to the clamor of the inhabitants of the municipalities along the coastline of San Miguel Bay. They read as follows:

"EXECUTIVE ORDER No. 22"PROHIBITING THE USE OF TRAWLS INSAN MIGUEL

BAY""In order to effectively protect the municipal

fisheries of San Miguel Bay, Camarines Norte and Camarines Sur, and to conserve fish and other aquatic resources of the! area, I, RAMON MAGSAYSAY, President of the Philippines, by virtue of the powers vested in me by law, do hereby order that:

"1. Fishing by means of trawls (utase, Otter and/or perenzella) of any kind, in the waters comprised within San Miguel Bay, is hereby prohibited.

"2. Trawl shall mean, for the, purpose of this Order, a fishing net made in the form of a bag with the mouth kept open by a device, the whole affair being towed,. dragged, trailed or trawled on the bottom of the sea to capture demersal, ground or bottom species.

"3. Violation of the provisions of this Order shall subject the offender to the penalty provided under Section 83 of Act 4993, or a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the Court.

"Done in the City of Manila, this 5th day of April, nineteen hundred and fifty-four and of the Independnce of the Philippines, the eighth." (50 Off. Gaz. 1421)

"EXECUTIVE ORDER No. 66"AMENDING EXECUTIVE ORDER NO.'22, DATED

APRIL 5, 1954, ENTITLED 'PROHIBITING THE : USE OF TRAWLS IN SAN MIGUEL BAY'

"By virtue of the powers vested in me by law, I, RAMON MAGSAYSAY, President of the Philippines, do hereby amend Executive Order No. 22, dated April 5, 1954, so as to allow fishing by means of trawls, as defined in -said Executive Order, within that portion of San Miguel Bay north of a. straight line drawn from Tacubtacuban Hill in the Municipality of Tinambac, Province of Camarines Sur. Fishing by means of trawls south of said line shall still be absolutely prohibited.

"Done in the City of Manila, this 23rd day of September, in the year of our Lord, nineteen hundred and fifty-four, and of the Independence of the Philippines, the ninth.." (50 Or. Gaz. 4637)

"EXECUTIVE ORDER NO. 80

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"FURTHER AMENDING EXECUTIVE ORDER NO. 22, DATED APRIL 5, 1954, AS AMENDED BY EXECUTIVE ORDER NO. 66, DATED SEPTEMBER 23, 1954.

"By virtue of the powers vested in me by, law, I, RAMON MAGSAYSAY, President of the Philippines,: do hereby! amend Executive Order No. 66, dated September 23, 1954, so as to! allow fishing by means of trawls, as defined in Executive Order No. 22, dated April 5, 1954,within that portion of San Miguel Bay north of a straight line drawn from Tacubtacuban Hill in'; the Municipality of Mercedes, Province of Camarines Norte to Balocbaloc Point in the Municipality of Tinambac, Province of Camarines Sur, until December 31, 1954,only.

Thereafter, the provisions of said Executive Order No. 22 absolutely prohibiting fishing by means of trawls, in all the waters comprised within the San Miguel Bay shall be revived and given full force and effect as originally provided therein.

"Done in the City of Manila, this 2nd day of November, in the year of Our Lord, nineteen hundred and fifty-four and of the Independence of the Philippines, the, ninth." (50 Off. Gaz. 5198)

It is likewise admitted that petitioners assailed the validity of said executive orders in their petition for a writ of injunction and/or declaratory relief filed with the Court of First Instance of Manila, and that the lower court, upon declaring Executive Orders Nos. 22, 66 and 80 invalid, issued an order requiring the Secretary of Agriculture and Natural Resources and the Director of Fisheries to post a bond for P30,000 if the writ of injunction restraining them From enforcing the executive orders in question must be stayed.

The Solicitor General' avers that the constitutionality of an executive order cannot be ventilated in a declaratory is taken or during the pendency of an appeal. The trial court, however, in its discretion, when an appeal is taken from a judgment granting, dissolving or denying an injunction, may make an order suspending, modifying, restoring, or granting such injunction during the pendency of an appeal, upon such terms as to bond or otherwise as it may consider proper for the security: of the rights of the adverse party.

This provision was the basis of the order of the lower court dated February 19, 1956, requiring the filing by the respondents of a bond for P30,000 as a condition for the non-issuance of the injunction prayed for by plaintiffs therein, and which, the Solicitor General charged to have been issued in excess of jurisdiction. The State's counsel, however, alleges that while judgment could be stayed in injunction, receivership and patent accounting cases and although the complaint was styled "Injunction and/ or Declaratory Relief with Preliminary Injunction", the case is necessarily one for declaratory relief, there being no allegation sufficient to convince the Court that the plaintiffs intended it to be one 1 for injunction. But aside from the title of the complaint, We find that plaintiffs pray for the declaration of the nullity of Executive Order Nos. 22, 66 and 80; the issuance of a writ of preliminary injunction, and for such other relief as may be deemed just and equitable. This Court has already held that there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right sought to be protected, and that the acts against which the injunction is to be directed are violative of said right (North Negros Sugar Co., Inc. vs. Serafin Hidalgo, 63 Phil., 664). There is no question that at least 11 of the complaining trawl operators were licensed to operate in any of the national waters of the Philippines, and it is undeniable that the executive, enactments sought to be annulled are detrimental to their interests. And considering further that the 'granting or refusal of an injunction, whether temporary or permanent, rests in

the sound discretion of the Court, taking into account the the lower court, allegedly due to difficulties encountered with the Auditor General's Office (giving the impression that they were willing to put up said bond but failed to do so for reasons beyond their control), and that the orders subjects of the prohibition and certiorari proceedings in G. R. No. L-8895, Were enforced, if at all, I in accordance with section 4 of Rule 39, which We hold to be applicable to the case at bar, the issue as to the regularity or adequacy: of requiring herein petitioners to post a bond, becomes moot and academic.

II. Passing upon the question involved in the second proposition, the trial judge extending the controversy to the determination of which between the Legislative and Executive Departments of the Government had "the power to close any definite area, of, the Philippine waters" instead of limiting the same to the real issue raised by the enactment of Executive Orders Nos. 22, 66 and 80, specially the first and the last: "absolutely prohibiting fishing by means of trawls in all -the waters comprised within the San Miguel Bay", ruled in favor of Congress, and as the closing of any definite area of the Philippine waters is, according to His Honor, primarily within the fields of legislation and Congress had not intended to abdicate its power to legislate on the matter, he maintained, As stated before, that "until the trawler is outlawed by legislative enactment, it cannot be banned from San Miguel Bay by executive proclamation", and that "the remedy for respondents and population of the coastal towns of Camarines Sur is to go to the Legislature," and thus declared said Executive Orders Nos. 22, 66 and 80 invalid".

The Solicitor General, on, the contrary, asserts that the President is empowered by law to issue the executive enactments in question.

Whether said orders were enforced is not clear from the record, for it does not appear certain therefrom that plaintiffs furnished the bond required from them, and that the writ of injunction was actually issued by the Court.

Act No. 4003 further provides, as follows:

"SEC. 83. OTHER VIOLATIONS.--Any other violation of the provisions of this Act or any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the Court."

As may be seen from the; just quoted provisions, the law declares unlawful and fixes the penalty for the taking (except for scientific or educational purposes or for propagation), destroying or killing of any fish fry or fish eggs, and the Secretary of Agriculture and Commerce (now the Secretary of Agriculture and Natural Resources) is authorized to promulgate regulations restricting the use of any fish net or fishing device (which includes the net used by trawl fishermen) for the protection of fry or fish eggs, as well as to set aside and establish fishery reservations or fish refuges and sanctuaries to be administered in the manner prescribed by him, from which no person could lawfully take, destroy or kill, in any of the places aforementioned, or in any manner disturb or drive away or take therefrom any small or immature fish, fry or fish eggs. It is true that said section 75 mentions certain streams, ponds and waters within the game refuges, * * * communal forests, etc., which the law itself declares fish refuges and sanctuaries, but this enumeration of places does not curtail the general" and unlimited power of the Secretary of Agriculture and Natural Resources in the first part of section 75, to Set aside and establish fishery reservations or fish refuges and sanctuaries, which naturally include seas or bays, like the San Miguel Bay in Camarines.

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From the resolution passed at the Conference of Municipal Mayors held at Tinambac, Camarines Sur, on December 18, 1953 (Exh. F), the following manifestation is made:

"WHEREAS, the continuous operation of said trawls even during the close season as specified in said Executive Order No. 20 caused the wanton destruction of the mother shrimps laying their eggs and the millions of eggs laid and the inevitable extermination of the shrimps specie; in order to the shrimps specie from eventual extermination and in order to conserve the shrimps specie for posterity;".

In the brief submitted by the NAMFREL and addressed to the President of the Philippines, (Exh. 2), in support of the petition of San Miguel Bay fishermen (allegedly 6,175 in number), praying that trawler& be banned from operating in San Miguel Bay, it is also stated that:

"The trawls ram and destroy-the fish corrals. The heavy trawl nets dig-deep into the ocean bed. They destroy the fish food which lies below the ocean floor. Their daytime catches net millions of shrimps scooped up from the mud. In their nets they bring up the life of the sea: algea, shell fish and star fish * * *

"The absence of some species or the apparent decline in the catch of some fishermen operating in the bay may be due to several factors, namely: the indiscriminate catching. of fry and immature sizes of fishes, the wide-spread use of -explosives, inside as well as at the mouth and approaches of the bay, and the extensive operation of the trawls." (p. 9, Report of Santos B, Rasal an, Exh. A).

Extensive Operation of Trawls: The strenuous effect of the operations of the 17 TRAWLS of the demersal fisheries of San Miguel Bay is better appreciated when we consider the fact that out of its about 850 square kilometers area, only about 350 square kilometers of 5 fathoms up could be trawled. With their continuous operation, coupled with those of the numerous fishing methods, the fisheries is greatly strained. This is shown by the fact that in view of the non-observance of the close season from May to October, each year, majority of their catch are immature. If their operation would continue unrestricted, the supply 'would be greatly depleted." (p. 11, Report of Santos B. Rasalan Exh- A).

San Miguel Bay-can sustain; 3 to 4 small trawlers (Otter Trawl Explorations in Philippine: Waters, Research Report 25 of the Fish and Wildlife Service, United States Department of the Interior, p. 9, Exhibit B).

According to Annex A of the complaint filed in the lower court in Civil Case No. 24867,-G. A. No. L-9191 (Exh. D, P. 53 of the folder of Exhibits), the 18 plaintiffs-appellees operate 29 trawling boats, and their operation must be in a big scale considering the investments plaintiffs have made therefor, amounting to, P387,000 (Record on Appeal, P. 16-17).

In virtue of the aforementioned provisions of law and the manifestations just copied, We are of the opinion that with or without said Executive Orders, the restriction and banning of trawl fishing from all Philippine waters come, under the law, within the powers of the Secretary of Agriculture and Natural Resources, who in compliance with his duties may even cause the criminal. prosecution of those who in violation of his instructions, regulations or orders are caught fishing with trawls in Philippine waters.

Now, if under the law the Secretary of Agriculture and Natural Resources has authority to regulate or ban the

fishing by trawl which, it is claimed, is obnoxious for it carries away fish eggs and frys which should be preserved, can the President of the Philippines exercise that same power and authority? Section 10 ( l ), Article VII of the Constitution of the Philippines prescribes:

"SEC. 10 (l) - The President shall have control of all the executive departments, bureaus or offices, exercises general supervision over all! local governments as may be provided by law, and take care that the laws be faithfully executed."

Section 63 of the Revised Administrative Code reads as follows:

SEC. 63 - EXECUTIVE ORDERS AND EXECUTIVE PROCLAMATION-' Administrative acts and commands of the President of the Philippines touching the organization or mode of operation of the Government or rearranging or readjusting any of the districts, divisions, parts or ports of the Philippines, and all acts and, commands governing the general performance of duties 4 public employees or disposing of issues of general concern shall be made in executive orders."

Regarding department organization Section 74 of the Revised Administrative Code also provides that:

"All executive functions of the Government of the Republic of the Philippines shall be directly under the Executive Department subject to the supervision and control of the President of the Philippines in matters of general policy. , The Departments are established for the proper distribution of the work of the Executive, for the performance of the -functions expressly assigned to them by law, and in order that each branch of the administration may have a chief responsible for its direction and policy. Each Department Secretary shall assume the burden of, and responsibility for, all activities of the Government under his control and supervision of rules and regulations to carry into effect the legislative intent. It also appears from the exhibits on record in these cases that fishing with trawls causes "a wanton destruction of the mother shrimps laying their eggs and the millions of eggs laid and the inevitable extermination of the shrimps specie" (Exh. F), and that "the trawls ram and destroy the fish corrals. The heavy trawl nets dig deep into the ocean bed. They destroy the fish food which lies below the ocean floor. Their daytime catches net millions of shrimps scooped up from the mud. In their nets they, bring up the life of the sea" (Exh. 2).

In the light of these facts it, is clear to Our mind that for the protection of fry or fish eggs and small and immature fishes, Congress intended 'with the promulgation of Act No. 4003, to prohibit the use of any fish net or fishing device like trawl nets that could endanger and deplete our supply of sea food, and to that end authorized the Secretary of Agriculture And, Natural Resources to provide by regulations such restrictions as he deemed necessary in order to preserve the aquatic resources of the land. Consequently, when the President, in response to the clamor of the people and authorities of Camarines Sur issued Executive Order No.80 Absolutely prohibiting fishing by means: of trawls in 411 waters comprised within the San Miguel Bay, he did nothing but show an anxious regard for the welfare of the inhabitants of said coastal province and dispose of issues of general concern (See. 63, R.A.C.) which were in consonance and strict conformity with the law.

Wherefore, and on the strength of the foregoing considerations We render judgment, as follows:

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(a) Declaring that the issues involved in case G. R. No. L-8895 have become moot, as no writ of preliminary injunction has been issued by this Court enjoining the respondent Judge of the Court of First Instance of Manila, Branch XIV, from enforcing his order of March 3, 1955; and (b) Reversing the decision appealed, from in case G. R. No. L-9191; dissolving the writ of injunction prayed for in the lower court by plaintiffs, if any has been actually issued by the court a quo; and declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid for having been issued by authority of the Constitution, the Revised Administrative Code and the Fisheries Act.

Without pronouncement as to costs. It is so ordered.Bengzon, Padilla, Montemayor, Bautista Angelo,

Labrador, Concepción, Reyes, J. B. L.,: and Endencia, JJ., concur.

Issues in case No. L-8895 declared moot.Judgment in case No. L-9191 reversed.Executive Orders Nos., 22, 66 and 80, series 1954

declared valid.

11 – Lacson-Magallanes Co., Inc. vs. Paño (21 SCRA 895)

[GRN L-27811 November 17, 1967]LACSON-MAGALLANES CO., INC., plaintiff and appellant, vs. JOSE PAÑO, HON. JUAN PAJO, in his capacity as Executive Secretary, HON. JUAN DE G. RODRIGUEZ, in his capacity as Secretary of Agriculture and Natural Resources, defendants

and appellees

1. CONSTITUTIONAL LAW; PRESIDENTIAL POWERS.- Appellant's claim that decisions of the Director of Lands under See. 4 of Commonwealth Act 141 as to questions of fact shall be conclusive when approved by the Secretary of Agriculture and Natural Resources and therefore controlling not only upon the courts but also upon the President, is incorrect. The President's duty to execute the law is of constitutional origin. So, too, is his control of all executive departments. Thus it is that department heads are men of his confidence. His is the power to appoint them, his, too, is the privilege to dismiss them at pleasure. Naturally, he controls and directs their acts. Implicit, then, is his authority to go over, confirm, modify or reverse the action taken by his department secretaries. In this context, it may not be said that the President cannot rule on the correctness of a decision of a department secretary.2. ID.; ID.; DELEGATION OF POWERS; ACTS OF EXECUTIVE SECRETARY ACTING BY AUTHORITY OF THE PRESIDENT ARE THOSE OF PRESIDENT HIMSELF.- It is correct to say that constitutional powers there are which the President must exercise in person. Not as correct, however, is it to say that the Chief Executive may not delegate to his Executive Secretary acts which the Constitution does not command that he perform in person, for the President is not expected to perform in person all the multifarious executive and administrative functious. The Office of the Executive Secretary is an auxiliary unit which assists the President. The rule which has thus gained recognition is that under our constitutional set-up the Executive Secretary who acts for and in behalf and by authority of the President has an undisputed jurisdiction to affirm, modify, or even reverse any order that the Secretary of Agriculture and Natural Resources, including the Director of Lands, may issue. Where the Executive Secretary acts "by authority of the President," his decision is that of the President's. Such decision is to be given full faith and credit by our courts. The assumed authority of the Executive Secretary is to be accepted. For, only the President

may rightfully say that the Executive Secretary is not authorized to do so. Therefore, unless the action taken is "disapproved or reprobated by the Chief Executive," that remains the act of the Chief Executive, and cannot be successfully assailed.

FERNANDO, J., concurring:1. CONSTITUTIONAL LAW; EXECUTIVE DEPARTMENT; PRESIDENT'S POWER OF CONTROL AND DIRECTION OVER THE EXECUTIVE DEPARTMENTS; ACTS OF DEPARTMENT SECRETARIES PRESUMPTIVELY THE ACTS OF THE PRESIDENT.- In the leading case of Villena v. Secretary of Interior, 67 Phil. (1939), the Supreme Court held: "After serious reflection, we have decided to sustain the contention of the government in this case on the broad proposition, albeit not suggested, that under the presidential type of government which we have adopted and considering the departmental organization established and continued in force by paragraph 1, section 12, Article VII, of our Constitution, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and except in cases where the Chief Executive is required by the Constitution or the law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive.2. ID.; ID.; HEADS OF THE VARIOUS EXECUTIVE DEPARTMENTS ARE THE PRESIDENT'S ALTER EGO.- The first section of Article VII of the Constitution, dealing with the Executive Department, begins with the enunciation of the principle that "the executive power shall be vested in a President of the Philippines." This means that the President of the Philippines is the Executive of the Government of the Philippines and no other. The heads of the executive departments occupy political positions and hold office in an advisory capacity, and, in the language of Tomas Jefferson, 'should be of the President's bosom confidence' (7 Writings Ford ed., 498), and, in the language of Attorney-General Cushing (7 Op., Attorney-General, 453), 'are subject to the direction of the President.' Without minimizing the importance of the heads of the various departments, their personality is in reality but the projection of that of the Chief Executive.

APPEAL from a judgment of the Court of First Instance of Davao. Abbas, J.The facts are stated in the opinion of the Court.Leopoldo M. Abellera for appellant.Solicitor General A. A. Alafriz, Assistant Solicitor General P. P. de Castro and Solicitor L Montano-de los Angeles for appellee Secretary of Agriculture and Natural Resources.Victorio Advincula for appellee Paño.

SANCHEZ, J.:

The question - May the Executive Secretary, acting by authority of the President, reverse a decision of the Director of Lands that had been affirmed by the Secretary of Agriculture and Natural Resources - yielded an affirmative answer from the lower court.1

Hence, this appeal certified to this Court by the Court of Appeals upon the provisions of Sections 17 and 31 of the Judiciary Act of 1948, as amended.

The undisputed controlling facts are:

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In 1932, Jose Magallanes was a permittee and actual occupant of a 1,103hectare pasture land situated in Tamlangon, Municipality of Bansalan, Province of Davao.On January 9, 1953, Magallanes ceded his rights and interests to a portion (392.7569 hectares) of the above public land to plaintiff.

On April 13, 1954, the portion Magallanes ceded to plaintiff was officially released from the forest zone as pasture land and declared agricultural land.

On January 26, 1955, Jose Paño and nineteen other claimants2 applied for the purchase of ninety hectares of the released area.

On March 29, 1955, plaintiff corporation in turn filed its own sales application covering the entire released area. This was protested by Jose Paño and his nineteen companions upon the averment that they are actual occupants of the part thereof covered by their own sales application.

The Director of Lands, following an investigation of the conflict, rendered a decision on July 31, 1956, giving due course to the application of plaintiff corporation, and dismissing the claim of Jose Palm and his companions. A move to reconsider failed.

On July 5, 1957, the Secretary of Agriculture and Natural Resources - on appeal by Jose Paño for himself and his companions - held that the appeal was without merit and dismissed the same.

The case was elevated to the President of the Philippines.

On June 25, 1958, Executive Secretary Juan Paño, "[b] y authority of the President," decided the controversy, modified the decision of the Director of Lands as affirmed by the Secretary of Agriculture and Natural Resources, and (1) declared that "it would be for the public interest that appellants, who are mostly landless farmers who depend on the land for their very existence, be allocated that portion on which they have made improvements"; and (2) directed that the controverted land (northern portion of Block 1, LC Map 1749, Project No. 27, of Bansalan, Davao, with Latian River as the dividing fine) "should be subdivided into lots of convenient sizes and allocated to actual occupants, without prejudice to the corporation's right to reimbursement for the cost of surveying this portion." It may be well to state, at this point, that the decision just mentioned, signed by the Executive Secretary, was planted upon the facts as found in said decision.

Plaintiff corporation took the foregoing decision to the Court of First Instance praying that judgment be rendered declaring: (1) that the decision of the Secretary of Agriculture and Natural Resources has full force and effect; and (2) that the decision of the Executive Secretary is contrary to law and of no legal force and effect.

And now subject of this appeal is the judgment of the court a quo dismissing plaintiffs case.

1. Plaintiff's mainstay is Section 4 of Commonwealth Act 141. The precept there is that decisions of the Director of Lands "as to questions of fact shall be conclusive when approved" by the Secretary of Agriculture and Natural Resources. Plaintiff's trenchant claim is that this statute is controlling not only upon courts but also upon the President.

Plaintiff's position is incorrect. The President's duty to execute the law is of constitutional origin.3 So, too, is his control of all executive departments. Thus it is, that department heads are men of his confidence. His is the power to appoint them; his, too, is the privilege to dismiss them at pleasure. Naturally, he controls and directs their acts. Implicit then is his authority to go over, confirm, modify or reverse the action taken by his department secretaries. In this

context, it may not be said that the President cannot rule on the correctness of a decision of a department secretary.

Particularly in reference to the decisions of the Director of Lands, as affirmed by the Secretary of Agriculture and Natural Resources, the standard practice is to allow appeals from such decisions to the Office of the President.5 This Court has recognized this practice in several cases. In one, the decision of the Lands Director as approved by the Secretary was considered superseded by that of the President's on appeal.6 In other cases, failure to pursue or resort to this last remedy of appeal was considered a fatal defect, warranting dismissal of the case, for non-exhaustion of all administrative remedies.7

Parenthetically, it may be stated that the right to appeal to the President reposes upon the President's power of control over the executive departments.8 And control simply means "the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter."9

This unquestionably negates the assertion that the President cannot undo an act of his department secretary.

2. Plaintiff next submits that the decision of the Executive Secretary herein is an undue delegation of power. The Constitution, petitioner asserts, does not contain any provision whereby the presidential power of control may be delegated to the Executive Secretary. It is argued that it is the constitutional duty of the President to act personally upon the matter.

It is correct to say that constitutional powers there are which the President must exercise in person.10 Not as correct, however, is it to say that the Chief Executive may not delegate to his Executive Secretary acts which the Constitution does not command that he perform in person. 11 Reason is not wanting for this view. The President is not expected to perform in person all the multifarious executive and administrative functions. The Office of the Executive Secretary is an auxiliary unit which assists the President. The rule which has thus gained recognition is that "under our constitutional setup the Executive Secretary who acts for and in behalf and by authority of the President has all undisputed jurisdiction to affirm, modify, or even reverse any order" that the Secretary of Agriculture and Natural Resources, including the Director of Lands, may issue. 12

3. But plaintiff underscores the fact that the Executive Secretary is equal in rank to the other department heads, no higher than anyone of them. From this, plaintiff carves the argument that one department head, on the pretext that he is an alter ego of the President, cannot intrude into the zone of action allocated to another department secretary. This argument betrays lack of appreciation of the fact that where, as in this case, the Executive Secretary acts "[b] y authority of the President," his decision is that of the President's. Such decision is to be given full faith and credit by our courts. The assumed authority of the Executive Secretary is to be accepted. For, only the President may rightfully say that the Executive Secretary is not authorized to do so. Therefore, unless the action taken is "disapproved or reprobated by the Chief Executive," 13 that remains the act of the Chief Executive, and cannot be successfully assailed. 14 No such disapproval or reprobation is even intimated in the record of this case.

For the reasons given, the judgment under review is hereby affirmed. Costs against plaintiff. So ordered.

Concepcion, Q., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Ruiz Castro and Angeles, JJ., concur.

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Fernando, J., concurs and submits a separate concurring opinion.

Judgment affirmed.

12 – Montes vs. Civil Service Board of Appeals (101 Phil 490)MISSING

13 – Lianga Bay Logging Co., Inc. vs. Enage (152 SCRA 280)

[GRN L-30637 July 16, 1987]LIANGA BAY LOGGING, CO., INC., petitioner, vs. HON.

MANUEL LOPEZ ENAGE, in his capacity as Presiding Judge of Branch II of the Court of First Instance of Agusan, and AGO

TIMBER CORPORATION, respondents

PETITION for certiorari and prohibition to review the order of the Court of First Instance of Agusan, Br. II. Lopez Enage, J.The facts are stated in the opinion of the Court.

TEEHANKEE, C.J.:

The Court grants the petition for certiorari and prohibition and holds that respondent judge, absent any showing of grave abuse of discretion, has no competence nor authority to review anew the decision in administrative proceedings of respondents public officials (director of forestry, secretary of agriculture and natural resources and assistant executive secretaries of the Office of the President) in determining the correct boundary line of the licensed timber areas of the contending parties. The Court reaffirms the established principle that findings of fact by an administrative board or agency or official, following a hearing, are binding upon the courts and will not he disturbed except where the board, agency and/or officials have gone beyond their statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to their duty or with grave abuse or discretion.

The parties herein are both forest concessionaries whose licensed areas are adjacent to each other. The concession of petitioner Lianga Bay Logging Corporation Co., Inc. (hereinafter referred to as petitioner Lianga) as described in its Timber License Agreement No. 49, is located in the municipalities of Tago, Cagwait, Marihatag and Lianga, all in the Province of Surigao, consisting of 110,406 hectares, more or less, while that of respondent Ago Timber Corporation (hereinafter referred to as respondent Ago) granted under Ordinary Timber License No. 1323-60 [New] is located at Los Arcos and San Salvador, Province of Agusan, with an approximate area of 4,000 hectares. It was a part of a forest area of 9,000 hectares originally licensed to one Narciso Lansang under Ordinary Timber License No. 584-'52.

Since the concessions of petitioner and respondent are adjacent to each other, they have a common boundary-the Agusan-Surigao Provincial boundary-whereby the eastern boundary of respondent Ago's concession is petitioner Lianga's western boundary. The western boundary of petitioner Lianga is described as "x x x Corner 5, a point in the intersection of the Agusan-Surigao Provincial boundary and Los Arcos-Lianga Road; thence following Agusan-Surigao Provincial boundary in a general northerly and northwesterly and northerly directions about 39,500 meters to Corner 6, a point at the intersection of the Agusan-Surigao Provincial boundary and Nalagdao Creek x x x." The eastern boundary of respondent Ago's concession is described as "x x x point 4, along the Agusan-Surigao boundary; thence following Agusan Surigao boundary in a general southeasterly and southerly directions about 12,000 meters to point 5, a point along Los Arcos-Lianga Road; x x x."1

Because of reports of encroachment by both parties on each other's concession areas, the Director of Forestry ordered a survey to establish on the ground the common boundary of their respective concession areas. Forester Cipriano Melchor undertook the survey and fixed the common boundary as "Corner 5 of Lianga Bay Logging Company at Km. 10.2 in stead of Km 9.7 on the Lianga-Arcos Road and lines N90ºE, 21,000 meters, N12ºW, 21,150 meters; N40ºW, 3,000 meters; N31ºW, 2,800 meters; N50ºW, 1,700 meters" which respondent Ago protested claiming that "its eastern boundary should be the provincial boundary line of Agusan-Surigao as described in Section 1 of Art. 1693 of the Philippine Commission as indicated in the green pencil in the attached sketch" of the areas as prepared by the Bureau of Forestry.2 The Director of Forestry, after considering the evidence, found:

"That the claim of the Ago Timber Corporation portrays a line (green line) far different in alignment with the line (red) as indicated in the original License Control Map of this Office;

"That the claim of the Ago Timber Corporation (green line) does not conform to the distance of 6,800 meters from point 3 to point 4 of the original description of the arm of Narciso Lansang but would project said line to a distance of approximately 13,800 meters;

"That to follow the claim of the Ago Timber Corporation would increase the area of Narciso Lansang from 9,000 to 12,360 hectares;

"That to follow the claim of the Ago Timber Corporation would reduce the area of the Lianga Bay Logging, Co., Inc. to 107,046 hectares instead of the area granted which is 110,406 hectares."

and ruled that "the claim of the Ago Timber Corporation runs counter to the intentions of this Office is granting the license of Mr. Narciso Lansang; and further, that it also runs counter to the intentions of this Office in granting the Timber License Agreement to the Lianga Bay Logging Co., Inc. The intentions of this Office in granting the two licenses (Lansang and Lianga Bay Logging Co., Inc.) are patently manifest in that distances and bearings are the controlling factors. If mention was ever made of the Agusan-Surigao boundary, as the common boundary line of both licensees, this Office could not have meant the Agusan-Surigao boundary as described under Section 1 of Act 1693 of the Philippine Commission for were it so it could have been so easy for this Office to mention the distance from point 3 to point 4 of Narciso Lansang as approximately 13,800 meters. This cannot be considered a mistake considering that the percentage of error which is more or less 103% is too high an error to be committed by an Office manned by competent technical men. The Agusan-Surigao boundary as mentioned in the technical descriptions of both licensees, is, therefore, patently an imaginary line based on B.F. License Control Map. Such being the case, it is reiterated that distance and bearings control the description where an imaginary line exists.3 The decision fixed the common boundary of the licensed areas of the Ago Timber Corporation and Lianga Bay Logging Co., Inc. as that indicated in red pencil of the sketch attached to the decision.

In an appeal interposed by respondent Ago, docketed in the Department of Agriculture and Natural Resources as DANR Case No. 2268, the then Acting Secretary of Agriculture and Natural Resources Jose Y. Feliciano, in a decision dated August 9, 1965 set aside the appealed decision of the Director of Forestry and ruled that "(T)he common boundary line of the licensed areas of the Ago Timber Corporation and the Lianga Bay Logging Co., Inc., should be

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that indicated by the green line on the same sketch which had been made an integral part of the appealed decision."4

Petitioner elevated the case to the Office of the President, where in a decision dated June 16, 1966, signed by then Assistant Executive Secretary Jose J. Leido, Jr., the ruling of the then Secretary of Agriculture and Natural Resources was affirmed.5 On motion for reconsideration, the Office of the President issued another decision dated August 9, 1968 signed by then Assistant Executive Secretary Gilberto Duavit reversing and overturning the decision of the then Acting Secretary of Agriculture and Natural Resources and affirming in toto and reinstating the decision, dated March 20, 1961, of the Director of Forestry.6

Respondent Ago filed a motion for reconsideration of the decision dated August 9, 1968 of the Office of the President but after written opposition of petitioner Lianga, the as me was denied in an order dated October 2,1968, signed by then Assistant Executive Secretary Jose J. Leido, Jr.7On October 21, 1968, a new action was commenced by Ago Timber Corporation, as plaintiff, in the Court of First Instance of Agusan, Branch II, docketed thereat as Civil Case No. 1253, against Lianga Bay Logging Co., Inc., Assistant Executive Secretaries Jose J. Leido, Jr. and Gilberto M. Duavit and Director of Forestry, as defendants, for "Determination of Correct Boundary Line of License Timber Areas and Damages with Preliminary Injunction" reiterating once more the same question raised and passed upon in DANR Case No. 2268 and insisting that "a judicial review of such divergent administrative decisions is necessary in order to determine the correct boundary line of the licensed areas in question."8As prayed for, respondent judge issued a temporary restraining order on October 28, 1968, on a bond of P20,000, enjoining the defendants from carrying out the decision of the Office of the President. The corresponding writ was issued the next day, or on October 29, 1968.9

On November 10, 1968, defendant Lianga (herein petitioner) moved for dismissal of the complaint and for dissolution of the temporary restraining order on grounds that the complaint states no cause of action and that the court has no jurisdiction over the person of respondent public officials and respondent corporation. It also submitted its opposition to plaintiff's (herein respondent prayer for the issuance of a writ of preliminary injunction.10 A supplemental motion was filed on December 6, 1968.11

On December 19, 1968, the lower court issued an order denying petitioner Lianga's motion to dismiss and granting the writ of preliminary injunction prayed for by respondent Ago.12 Lianga's Motion for Reconsideration of the Order was denied on May 9, 1969.13 Hence, this petition praying of the Court (a) to declare that the Director of Forestry has the exclusive jurisdiction to determine the common boundary of the licensed areas of petitioners and respondents and that the decision of the Office of the President dated August 9, 1968 is final and executory; (b) to order the dismissal of Civil Case No. 1253 in the Court of First Instance of Agusan; (e) to declare that respondent Judge acted without jurisdiction or in excess of jurisdiction and with grave abuse of discretion, amounting to lack of jurisdiction, in issuing the temporary restraining order dated October 28, 1968 and granting the preliminary injunction per its Order dated December 19, 1968; and (d) to annul the aforementioned orders.

After respondent's comments on the petition and petitioner's reply thereto, this Court on June 30, 1969 issued a restraining order enjoining in turn the enforcement of the preliminary injunction and related orders issued by the respondent court in Civil Case No. 1253.14

The Court finds merit in the petition.

Respondent Judge erred in taking cognizance of the complaint filed by respondent Ago, asking for the determination anew of the correct boundary line of its licensed timber area, for the same issue had already been determined by the Director of Forestry, the Secretary of Agriculture and Natural Resources and the Office of the President, administrative officials under whose jurisdictions the matter properly belongs. Section 1816 of the Revised Administrative Code vests in the Bureau of Forestry, the jurisdiction and authority over the demarcation, protection, management, reproduction, reforestation, occupancy, and use of all public forests and forest reserves and over the granting of licenses for game and fish, and for the taking of forest products, including stone and earth therefrom. The Secretary of Agriculture and Natural Resources, as department head, may repeal or modify the decision of the Director of Forestry when advisable in the public interests,15 whose decision is in turn appealable to the Office of the President.16

In giving due course to the complaint below, the respondent court would necessarily have to assess and evaluate anew all the evidence presented in the administrative proceedings,17 which is beyond its competence and jurisdiction. For the respondent court to consider and weigh again the evidence already presented and passed upon by said officials would be to allow it to substitute its judgment for that of said officials who are in a better position to consider and weigh the same in the light of the authority specifically vested in them by law. Such a posture cannot be entertained, for it is a well-settled doctrine that the courts of justice will generally not interfere with purely administrative matters which are addressed to the sound discretion of government agencies and their expertise unless there is a clear showing that the latter acted arbitrarily or with grave abuse of discretion or when they have acted in a capricious and whimsical manner such that their action may amount to an excess or lack of jurisdiction.18

A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions or matters, upon the facts to be presented, the jurisdiction of such office shall prevail over the courts.19

The general rule, under the principles of administrative law in force in this jurisdiction, is that decisions of administrative officers shall not be disturbed by the courts, except when the former have acted without or in excess of their jurisdiction, or with grave abuse of discretion. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality of such findings are supported by substantial evidence.20 As recently stressed by the Court, "in this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has become well nigh indispensable."21

The facts and circumstances in the instant case are similar to the earlier case of Pajo, et al. v. Ago, et al.22 (where therein respondent Pastor Ago is the president of herein respondent Ago Timber Corporation). In the said case, therein respondent Pastor Ago, after an adverse decision of the Director of Forestry, Secretary of Agriculture and Natural Resources and Executive Secretary in connection with his application for renewal of his expired timber licenses, filed with the Court of First instance of Agusan a petition for certiorari, prohibition and damages with preliminary injunction alleging that the rejection of his application for

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renewal by the Director of Forestry and Secretary of Agriculture and Natural Resources and its affirmance by the Executive Secretary constituted an abuse of discretion and was therefore illegal. The Court held that "there can be no question that petitioner Director of Forestry has jurisdiction over the grant or renewal of respondent Ago's timber license (Sec. 1816, Rev. Adm. Code); that petitioner Secretary of Agriculture and Natural Resources as department head, is empowered by law to affirm, modify or reject said grant or renewal of respondent Ago's timber license by petitioner Director of Forestry (Sec. 79[c], Rev. Adm. Code); and that petitioner Executive Secretary, acting for and in behalf and by authority of the President has, likewise, jurisdiction to affirm, modify or reverse the orders regarding the grant or renewal of said timber license by the two aforementioned officials." The Court went on to say that, "(I)n the case of Espinosa, et al, v. Makalintal, et al. (79 Phil. 134; 45 Off. Gaz. 712), we held that the powers granted to the Secretary of Agriculture and Commerce (Natural Resources) by law regarding the disposition of public lands such as granting of licenses. permits, leases, and contracts or approving, rejecting, reinstating, or cancelling applications or deciding conflicting applications, are all executive and administrative in nature. It is a well-recognized principle that purely administrative and discretionary functions may not be interfered with by the courts. In general, courts have no supervising power over the proceedings and actions of the administrative departments of the government. This is generally true with respect to acts involving the exercise of judgment or discretion, and findings of act. Findings of fact by an administrative board, agency or official, following a hearing, are binding upon the courts and will not be disturbed except where the board, agency or official has gone beyond his statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion. And we have repeatedly held that there is grave abuse of discretion justifying the issuance of the writ of certiorari only when there is capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. (Abad Santos v. Province of Tarlac, 67 Phil. 480; Tan vs. People, 88 Phil, 609)"

Respondent Ago contends that the motion filed by petitioner Lianga for reconsideration of the decision of the Office of the President was denied in an alleged "decision" dated August 15, 1966, allegedly signed by then Assistant Executive Secretary Jose J. Leido, Jr. that, "however, for some mysterious, unknown if not anomalous reasons and/or Illegal considerations, the 'decision' allegedly dated August 15, 1966 (Annex "D") was never released" and instead a decision was released on August 9, 1968, signed by then Assistant Executive Secretary Gilberto M. Duavit, which reversed the findings and conclusions of the Office of the President in its first decision dated June 16, 1966 and signed by then Assist-ant Executive Secretary Leido.

It is elementary that a draft of a decision does not operate as judgment on a case until the same is duly signed and delivered to the clerk for filing and promulgation. A decision cannot be considered as binding on the parties until its promulgation.23 Respondent should be aware of this rule. In still another case of Ago v. Court of Appeals,24 (where herein respondent Ago was the petitioner) the Court held that, "While it is to be presumed that the judgment that was dictated in open court will be the judgment of the court, the court may still modify said order as the same is being put into writing. And even if the order or judgment has already been put into writing and signed, while it has not yet been delivered to the clerk for filing, it is still subject to amendment or change by the judge. It is only when the judgment signed by the judge is actually filed with the clerk of court that it becomes a valid and binding judgment. Prior

thereto, it could still be subject to amendment and change and may not, therefore, constitute the real judgment of the court."

Respondent alleges "that in view of the hopelessly conflicting decisions of the administrative bodies and/or offices of the Philippine government, and the important questions of law and fact involved therein, as well as the well-grounded fear and suspicion that some anomalous, illicit and unlawful considerations had intervened in the concealment of the decision of August 15, 1966 (Annex "D") of Assistant Executive Secretary Gilberto M. Duavit, a judicial review of such divergent administrative decisions is necessary in order to determine the correct boundary Line of the licensed areas in question and restore the faith and confidence of the people in the actuations of our public officials and in our system of administration of justice."

The mere suspicion of respondent that there were anomalies in the nonrelease of the Leido "decision" allegedly denying petitioner's motion for reconsideration and the substitution thereof by the Duavit decision granting reconsideration does not justify judicial review. Beliefs, suspicions and conjectures cannot overcome the presumption of regularity and legality of official actions.25 It is presumed that an official of a department performs his official duties regularly.26 It should be noted, furthermore, that as hereinabove stated with regard to the case history in the Office of the President, Ago's motion for reconsideration of the Duavit decision dated August 9, 1968 was denied in the Order dated October 2, 1968 and signed by Assistant Executive Secretary Leido himself (who thereby joined in the reversal of his own first decision dated June 16, 1966 and signed by himself).

The Ordinary Timber License No. 1323-'60[New] which approved the transfer to respondent Ago of the 4,000 hectares from the forest area originally licensed to Narciso Lansang, stipulates certain conditions, terms and limitations, among which were: that the decision of the Director of Forestry as to the exact location of its licensed areas is final; that the license is subject to whatever decision that may be rendered on the boundary conflict between the Lianga Bay Logging Co. and the Ago Timber Corporation, that the terms and conditions of the license are subject to change at the discretion of the Director of Forestry and the license may be made to expire at an earlier date. Under Section 1834 of the Revised Administrative Code, the Director of Forestry, upon granting any license, may prescribe and insert therein such terms, conditions, and limitations, not inconsistent with law, as may be deemed by him to be in the public interest. The license operates as a contract between the government and respondent. Respondent, therefore, is estopped from questioning the terms and stipulation thereof.

Clearly, the injunctive writ should not have been issued, The provisions of law explicitly provide that Courts of First Instance shall have the power to issue writ of injunction, mandamus, certiorari, prohibition, quo warranto and habeas corpus in their respective places,27 if the petition filed relates to the acts or omissions of an inferior court, or of a corporation, board, officer or person, within their jurisdiction.28

The jurisdiction or authority of the Court of First Instance to control or restrain acts by means of the writ of injunction is limited only to acts which are being committed within the territorial boundaries of their respective provinces or districts29 except where the sole issue is the legality of the decision of the administrative officials.30

In the leading case of Palanan Lumber Plywood Co., Inc. v. Arranz,31 which involved a petition for certriorari and prohibition filed in the Court of First Instance of Isabela against the same respondent public officials as here and

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where the administrative proceedings taken were similar to the case at bar, the Court laid down the rule that: "We agree with the petitioner that the respondent Court acted without jurisdiction in issuing a preliminary injunction against the petitioners Executive Secretary, Secretary of Agriculture and Natural Resources and the Director of Forestry, who have their official residences in Manila and Quezon City, outside of the territorial jurisdiction of the respondent Court of First Instance of Isabela. Both the statutory provisions and the settled jurisdiction of this Court unanimously affirm that the extraordinary writs issued by the Court of First Instance are limited to and operative only within their respective provinces and districts."

A different rule applies only when the point in controversy relates solely to a determination of a question of law whether the decision of the respondent administrative officials was legally correct or not.32 We thus declared in Director of Forestry v. Ruiz:33 "In Palanan Lumber & Plywood Co., Inc., supra, we reaffirmed the rule of non-jurisdiction of courts of first instance to issue injunctive writs in order to control acts outside of their premises or districts. We went further and said that when the petition filed with the courts of first instance not only questions the legal correctness of the decision of administrative officials but also seeks to enjoin the enforcement of the said decision, the court could not validly issue the writ of injunction when the officials sought to be restrained from enforcing the decision are not stationed within its territory.

"To recapitulate, insofar as injunctive or prohibitory writs are concerned, the rule still stands that courts of first instance have the power to issue writs limited to and operative only within their respective provinces or districts."

The writ of preliminary injunction issued by respondent court is furthermore void, since it appears that the forest area described in the injunctive writ includes areas not licensed to respondent Ago. The forest area referred to and described therein comprises the whole area originally licensed to Narciso Lansang under the earlier Ordinary Timber License No. 584-52. Only a portion of this area was in fact transferred to respondent Ago as described in its Ordinary Timber License No. 1323-'60[New].

It is abundantly clear that respondent court has no jurisdiction over the subject matter of Civil Case No. 1253 of the Court of First Instance of Agusan nor has it jurisdiction to decide on the common boundary of the licensed areas of petitioner Lianga and respondent Ago, as determined by respondents public officials against whom no case of grave abuse of discretion has been made. Absent a cause of action and jurisdiction, respondent Judge acted with grave abuse of discretion and excess, if not lack, of jurisdiction in refusing to dismiss the case under review and in issuing the writ of preliminary injunction enjoining the enforcement of the final decision dated August 9, 1968 and the order affirming the same dated October 2, 1968 of the Office of the President.

ACCORDINGLY, the petition for certiorari and prohibition is granted. The restraining order heretofore issued by the Court against enforcement of the preliminary injunction and related orders issued by respondent judge is the case below is made permanent and the respondent judge or whoever has taken his place is hereby ordered to dismiss Civil Case No. 1253.

SO ORDERED.Narvasa, Cruz, Paras and Gancayco, JJ., concur.Petition granted

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