MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y.

2017-2018

Table of Contents Case No. Case Title Page No. 1 Marcelo v. Bangubung G.R No. 175201, April 23, 2008 1 2
Marcoleta v. COMELEC G.R No. 181377, April 24, 2009 3 3 Merida Water District v. Bacarro G.R No.
165993,
September 30, 2008 5 4 Monetary Board V. Philippine Veterans Bank G.R No. 189571 7 5 Montoya v. Varilla G.R
No. 180149, December 18, 2008 9 6 Moran v. Office of the President, G.R No. 192957, September 29, 2014 11 7
Odchigue-Bondoc v Tan Tiong Bio, G.R No.186652, October 6, 2010 13 8 Office of the Ombudsman v Castro,
G.R. No. 172637, April 22, 2015 14 9 Office of the Ombudsman v. Delijero , G.R. No. 172635, October 20, 2010
16 10 Office of the Ombudsman v. Galicia, G.R. No. 167711, October 10, 2008 17 11 Office of the Ombudsman v.
Masing, G.R. No. 165416, January 22, 2008 18 12 Office of the Ombudsman v. Medrano, G.R. No. 177580,
October 17, 2008 20
13
Office of the Ombudsman v. Rodriguez, G.R. No. 172700, July 23, 2010, 625 SCRA 299
22
14 Ombudsman v. Jurado, G.R. No. 154155, August 6, 2008 24
15
Oporto v. Members of the Board of Inquiry and Discipline of the National Power Corporation , G.R. No. 147423,
October 15, 2008
27
16 Ortiz v. San Miguel Corporation, G.R. Nos, 151983-84, July 31, 2008 29 17 PAGCOR v. Aumendo, G.R. No.
173634, July 22, 2010 31 18 PAGCOR v. Fontana, G.R. No. 187972, June 29, 2010 33
19
PAGCOR 2009
COMPILED BY: BALTAZAR, DE LARNA, RICARDO, RIVERA, URNOS
v. Philippine E-Gaming Jurisdiction, Inc. (PEJI), G.R. No. 177333, April 24,
35
20 Patalinghug v. COMELEC, G.R. No. 178767, January 30, 2008 37
21
People’s Broadcasting (Bombo Radio) Philippines, Inc. v. Secretary of the Department of Labor and Employment,
G.R. No. 179652, May 8, 2009
38
22 Perez v. People, G.R. No. 164763, February 12, 2008 40
23
Pharmaceutical and Health Care Association of the Philippines v. Duque, G.R. No. 173034, October 9,
2007 41
24
Philippine Communications Satellite Corporation v. Sandiganbayan 5
th

Division, G.R. No. 203023, June 27,

2015
42
25
Philippine 2013
Overseas Telecommunication Corporation v. Africa, G.R. No. 184622, July 3,
44
26
Philippine Seafood (Philippines) Corporation v. Board of Investments, G.R. No. 175787, February 4, 2009
46
27
Pichay v Office of the Deputy Excutive secretary for Legal Affairs Investigative and Adjudication Division, G.R.
No. 196425, July 24, 2012
47
28
Pilipinas 8, 2015
Total Gas v.Commissioner of Internal Revenue G.R. No. 207112,
December 48
29 Rentokil (Initial) Philippines, Inc. v. Sanchez, G.R. No. 176219, December 23, 2008 49 30 Republic of the
Philippines v. Bajao, G.R. No. 160596, March 20, 2009 50 31 Republic of the Philippines v. City of Parañaque,
G.R. No. 191109, July 18, 2012 51
32
Pepublic of the Philippines v. Pilipinas Shell Petroleum Corporation, G.R. No. 173918, April 8, 2008
53
33 Republic v. Asiapro Cooperative, G.R. No. 172101, November 23, 2007 55
34
Review Center Association of the Philippines v. Executive Secretary, G.R. No. 180046. Apri 2, 2009
56
35 Ruivivar v. Ombudsman, G.R. No. 165012, September 16, 2008 57
36
Samahan 2009
ng mga Manggagawa sa Hyatt v. Bacungan, G.R. No. 149050, March 25,
58
37
Sangguniang 2008
Barangay of on Mariano Marcos v. Martinez, G.R. No. 170626, March 3,
59
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
38 Santos v. Rasalan, G.R. No. 155749, February 8, 2007, 515 SCRA 97 61
39
Securities and Exchange Commission v. GMA Network, Inc., G.R. No. 164026, December 23, 2008
62
40
Securities and Exchange Commission v. Interport Resources Corporation, G.R. No. 135808, October 6,
2008 63
41 University of the Philippines v. Dizon, G.R. No. 171182, August 2, 2012 65 42 Vargas v. Visitacion, G.R.
No.137869, June 12, 2008 67 43 Villacastin v. Pelaez, G.R. No. 170478, May 22, 2008 68 44 Villanueva v. Judicial
and Bar Council, G.R. No. 211833, April 7, 2015 69 45 The Manila Banking Corporation v. Sps. Ravina, G.R. No.
145941, December 16, 2008 70
46
Trade and Investment Development Corporation of the Philippine v. Manalang- Demigilio, G.R. No. 176343,
September 18, 2012
71
47 Unduran v.Aberasturi, G.R. No. 181284, Otober 20, 2015 72 48 Securities and Exchange Commission v. Laigo,
G.R.No. 188639, Setember 2, 2015 73
49
Securities and Exchange Commission v. PICOP Resources, Inc., G.R. No. 16433149, Setember 26, 2008
75
50
Securities and Exchange Commission v. Universal Rightfield Property Holding, Inc., G.R. No. 181381, July 20,
2015
77
51 Solid Homes, Inc. v. Laserna, G.R. No. 166051, April 8, 2008 79
52
Standard Chatered Bank v. Standard Chatered Bank Employees Union, G.R. No. 165550, October 8,
2008 80
53 Sy Tiong Shiou v. Sy Chim,G.R. No. 174768, March 30, 2009 83
COMPILED BY: BALTAZAR, DE LARNA, RICARDO, RIVERA, URNOS
HONORABLE OMBUDSMAN SIMEON V. MARCELO vs. LEOPOLDO F. BUNGUBUNG and CA
G.R. No. 175201; April 23, 2008
Topic: Substantial Evidence
Facts:
Bungubung is the Manager of the Port District Office (PDO) of Manila, Philippine Ports Authority (PPA),
South Harbor, Port Area, Manila. He is also the Chairman of the Ports District Security Bids and Awards Committee
(PDSBAC) of the PPA.
On September 2001, Roberto C. Doromal (Doromal), the President of Combat Security & Executive
Protection Agency (CSEPA), a security agency that participated in the bidding for security services for the PPA,
alleged that through her his wife, CSEPA entered into aSecurity Services contract with PPA for a period of 2 years.
That Bungubung asked for “balato” from his wife for winning the award. Bungubung and other PPA
official initially demanded amounts ranging from 10,000 to 2,000 pesos and these disbursements were recorded in
the records and book of accounts of CSEPA as “Representation Expense”. These amounts increased to 40,000 to 50,
000 pesos when the security force was increased to 184 security guards.
That on February 2001, Bungubung asked for a Mitsubinghi Pajero van, to be due on March 2001 while
there is no award of the winning bidder yet. Doromal failed to deliver the said van hence, PPA served a to Doromal
notice of award of the winning bidder which is STAR SPECIAL WATCHMAN AND DETECIVE AGENCY INC.,
an agency comparatively smaller than Doromal’s;
A criminal complaint was filed against Mr. Leopoldo F. Bungubung for violation of Section 3(b) of R.A.
3019; Section 7(d) of R.A. 6713 and Art. 211 of the RPC for demanding and receiving "balato" from COMBAT in
the total amount of P320,000 more or less and an administrative complaint be filed against Mr. Leopoldo F.
Bungubung for Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service arising from the above
criminal act.
On June 2006, the Court of Appeals issued a ruling in Bungubung's favor, and reversing and setting aside
the Orders of the Ombudsman. It further absolved Bungubung from liability for the charge of grave misconduct,
finding no substantial evidence that Bungubung committed the same.
Issue:
Whether or not the finding of administrative offense for grave misconduct against Bungubung is supported by
substantial evidence.
Held:
No.
In Montemayor v. Bundalian, this Court laid down the following guidelines for the judicial review of decisions
rendered
by administrative agencies in the exercise of their quasi-judicial power:
First, the burden is on the complainant to prove by substantial evidence the allegations in his complaint. Substantial
evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine
otherwise. Second, in reviewing administrative decisions of the executive branch of the government, the findings of
facts made therein are to be respected so long as they are supported by substantial evidence. Hence, it is not for the
reviewing court to weigh the conflicting evidence, determine the credibility of witnesses, or otherwise substitute its
judgment for that of the administrative agency with respect to the sufficiency of evidence. Third, administrative
decisions in matters within the executive jurisdiction can only be set aside on proof of gross abuse of discretion,
fraud, or error of law. These principles negate the power of the reviewing court to re-examine the sufficiency of the
evidence in an administrative case as if
DIGESTED BY: ANNANG
1
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
originally instituted therein, and do not authorize the court to receive additional evidence that was not submitted to
the administrative agency concerned.
As stated above, the fundamental rule in administrative proceedings is that the complainant has the burden of
proving, by substantial evidence, the allegations in his complaint.Section 27 of the Ombudsman Act is unequivocal:
Findings
of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive. Conversely,
therefore, when
the findings of fact by the Ombudsman are not adequately supported by substantial evidence, they shall not be
binding upon
the courts. Such is the case in the present Petition. This Court finds that the evidence on record in the present case
does not
constitute substantial evidence of Bungubungs administrative culpability for grave misconduct.
The Ombudsman chose to give more credence to Doromals allegations and evidence when it found that Bungubung
took advantage of his position as Chairman of the PSBAC and used it as leverage in soliciting cash and a Mitsubishi
Pajero
van from the bidders as a consideration for the award of the PPA security service contract. However, Doromals
evidence is
hardly substantive.
In this instance, Bungubungs denial of the allegations against him are supported by his own controverting
evidence. In contrast, Doromals Complaint-Affidavit and Cruzs Affidavit support only each other.
After evaluating the totality of evidence on record, this Court reaches the inescapable conclusion that complainant
Doromal failed to present substantial evidence that Bungubung is administratively liable for grave misconduct.
DIGESTED BY: ANNANG
2
RODANTE MARCOLETA, et al vs. COMMISSION ON ELECTIONS
G.R. No. 181377; April 24, 2009
Topic: Inherent power of COMELEC to amend and control its processes and orders
Facts:
When the party-list group Alagad first won a seat in the House of Representatives in 1998, Diogenes S.
Osabel (Osabel) sat as the party’s representative in Congress. In 2004, when the party again won one seat, Rodante
D. Marcoleta (Marcoleta) sat as Alagad’s representative. Due to infighting within Alagad’s ranks, however, Osabel
and Marcoleta parted ways, each one claiming to represent the party’s constituency. For the 2007 National and
Local Elections, the warring factions of Osabel and Marcoleta each filed a separate list of nominees for Alagad at
the Commission on Elections (Comelec).
With Alagad again winning a part-list seat in the House of Representatives, the Marcoleta and Osabel blocs
contested the right to represent the party in the 14th Congress. Osabel, purportedly the bona fide president of
Alagad, sought the cancellation of the certificates of nomination of the Marcoleta group.
By Omnibus Resolution of July 18, 2007, the Comelec’s First Division, then composed of Commissioners
Resurreccion Borra and Romeo Brawner, resolved the dispute in favor of Osabel. The First Division’s Omnibus
Resolution in favor of Osabel was eventually affirmed by the Comelec En Banc by Resolution of February 5, 2008.
On February 12, 2008, Marcoleta filed an ex parte motion to rectify the Comelec En Banc February 5, 2008
Resolution, contending that it inadvertently therein mentioned that there was a rehearing undertaken on November
20, 2007 when in fact there was none as the matter taken up on said date actually delved on the propriety of a
rehearing; and that no memorandum from either of the parties was submitted on December 3, 2007. By Order of
February 12, 2008, Commissioner Romeo Brawner, acting in his capacity as acting chairman of the Comelec,
suspended until further orders the implementation of the Comelec First Division February 5, 2008 Omnibus
Resolution. Subsequently, by Order of February 26, 2008, the Comelec En Banc acknowledged that no rehearing
had yet been undertaken and reiterated the earlier order of suspension of the February 5, 2009 First Division
Omnibus Resolution.
A rehearing of the controversy between the parties was thereupon calendared for March 4, 2008. From the
records, it appears that the scheduled rehearing did not push through in view of the filing in the interim of the
present petitions by the contending parties. Meanwhile, G.R. No. 181726 filed on March 4, 2008 by Alagad,
represented by Osabel, assails the suspension of the effects of the Comelec First Division February 5, 2008
Resolution as well as the February 26, 2008 Order that called for a rehearing.
Alagad asserts that the Comelec should not have suspended the effects of the February 5, 2008 Resolution
when, on its face, the ex parte motion to rectify filed by Marcoleta suffered from lack of proof of service on the
adverse party and the requisite notice of hearing; instead, an order to comment on the motion should have been the
proper recourse of the Comelec.
In further arguing against the rehearing order of the Comelec, petitioner Alagad invites the Court’s
attention to the earlier mentioned En Banc Resolution of November 6, 2007 (reinstating the certificates of
nomination of the Marcoleta group) where it appears that the Osabel group "secured a majority vote of the quorum:
three (3) against two (2) in a quorum of five commissioners, in spite the fact that Osabel is not the movant, and
hence, not the party required to secure a majority to reverse the First Division Omnibus Resolution."
Issue:
Whether the Comelec En Banc committed grave abuse of discretion in ordering a rehearing of the
controversy; and in suspending the implementation of the Order of February 5, 2008 for lack of rehearing.
Held:
G.R. No. 181377 was filed on February 7, 2008 by the Marcoleta group before it filed on February 12,
2008 before the Comelec the ex parte motion to rectify. In light of the filing of said motion as well as the positive
action of the Comelec in
DIGESTED BY: ANNANG
3
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
its Order of February 26, 2008 for a rehearing of the controversy, the petition had been rendered moot and academic.
More importantly, the extraordinary writ of certiorari, cannot be invoked when there is a plain, adequate and speedy
remedy in the ordinary course of law, as shown by petitioner’s recourse.
The petition in G.R. No. 181726 fails.
While at first impression, the November 6, 2007 Resolution of the Comelec En Banc seems to have
affirmed the First Division’s ruling, the said Resolution merely reflected the manner of voting of the Comelec
members.
The Court in Estrella v. Comelec pronounced that Section 5 (a) of Rule 3 of the Comelec Rules of
Procedure and Section 7 of Article IX-A
22

of the Constitution require that a majority vote of all the members of the Comelec, and
not only those who participated and took part in the deliberations, is necessary for the pronouncement of a decision,
resolution, order or ruling.
To reiterate, neither the assenters nor dissenters can claim a majority in the En Banc Resolution of
November 6, 2007. The Resolution served no more than a record of votes, lacking in legal effect despite its
pronouncement of reversal of the First Division Resolution. Accordingly, the Comelec did not commit any grave
abuse of discretion in ordering a rehearing. The propriety of a rehearing now resolved, the issue of whether the
Comelec committed grave abuse of discretion in suspending the effects of its En Banc Order of February 5, 2008 for
lack of a rehearing comes to the fore. From the records as well as the admission of inadvertence on the part of the
Comelec, there is likewise nothing gravely abusive of the Comelec’s assailed action.
For the most part, the Comelec was well within its authority to order a re-hearing, it having the inherent
power to amend or control its processes and orders before these become final and executory. It can even proceed to
issue an order motu proprio to reconsider, recall or set aside an earlier resolution which is still under its control. The
Comelec’s own Rules of Procedure authorize the body to "amend and control its processes and orders so as to make
them conformable to law and justice," and even to suspend said Rules or any portion thereof "in the interest of
justice and in order to obtain speedy disposition of all matters pending before the Commission."
Thus, the supposed lack of proof of service on the adverse party and lack of notice of hearing of
Marcoleta’s ex parte motion to rectify deserve little consideration in invalidating the Order of February 12, 2008.
Moreover, that Alagad even moved to execute the Comelec’s February 5, 2008 Order on the same day the ex parte
motion to rectify was filed (February 12, 2008) all the more justified the Comelec’s action. The Comelec,
confronted with a glaring procedural lapse, lost no time in rectifying its action by suspending the effects of an earlier
resolution and scheduling a mandatory rehearing. To be sure, this negates any indication of grave abuse of discretion
on its part in order to correct a lapse.
WHEREFORE, G.R. No. 181377 is DISMISSED for being moot. G.R. No. 181726 is likewise
DISMISSED for lack of merit. Let the case be REMANDED to the Comelec En Banc for it to proceed with utmost
dispatch with its intended rehearing and render the appropriate decision on the case at the earliest opportunity.
DIGESTED BY: ANNANG
4
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Merida Water District v. Bacarro

G.R. No. 165993; September 30, 2008
Topic: Doctrine of Exhaustion of Administrative Remedies
Facts:
Petitioners are Merida Water District, a government-owned and controlled corporation
4

that
operates the water utility services in the municipality of Merida, Leyte; its Chairman, Susano Torejas, Jr.; other
members of the Board of Directors, Lourdes Quinte, Romulo Pales, Carmelita De Los Angeles, and Villafranca
Rosal; and General Manager, Nilo C. Lucero. On October 10, 2001, Merida Water District conducted a public
hearing for the purpose of increasing the water rate.
On March 2002, Merida Water District received a letter from the Local Water Utilities Administration
(LWUA). The letter stated that on March 5, 2002, the LWUA Board of Trustees, per Board Resolution No. 63,
series of 2002, confirmed Merida Water District’s proposed water rates. Attached to the letter was the Rate Schedule
of Approved Water Rates containing a progressive increase of water rates over a certain period.
On September 2002, Merida Water District approved Resolution No. 006-02, implementing a water rate
increase of P90 for the first ten cubic meters of water consumption. Thereafter, petitioners issued notices of
disconnection to concessionaires who refused to pay the water rate increase and did not render service to those who
opted to pay the increased rate on installment basis.
On February 2003, respondents, consumers of Merida Water District, filed a Petition for Injunction, etc.
against petitioners before the RTC. Respondents sought to enjoin the petitioners from collecting payment of P90 for
the first ten cubic meters of water consumption. Respondents alleged that this imposed rate was contrary to the rate
increase agreed upon during the public hearing. Respondents claimed that petitioners violated Letter of Instructions
(LOI) No. 700 by: (1) implementing a water rate increase exceeding 60% of the current rate; and (2) failing to
conduct a public hearing for the imposed rate of P90.
On February 2003, petitioners filed a Motion to Dismiss, alleging that respondents’ petition lacked a cause
of action as they failed to exhaust administrative remedies under Presidential Decree (P.D.) No. 198, the Provincial
Water Utilities Act of 1973, as amended by P.D. Nos. 768 and 1479.
The RTC denied petitioners’ motion to dismiss. The RTC held that there was no need to exhaust
administrative remedies due to the following circumstances, that by imposing and collecting P90 for the first ten
cubic meters of water consumption from its concessionaires, petitioners: (1) failed to comply with the legal
requisites of hearing and notice; and (2) violated LOI No. 700 for prescribing a water rate increase of almost 100%
from the previous rate.
On April 2003, petitioners filed a Petition for Certiorari with the CA, assailing the RTC’s orders for lack of
jurisdiction. The CA affirmed the RTC’s orders, upholding its jurisdiction and the propriety of respondents’
recourse to the trial court notwithstanding the rule on the exhaustion of administrative remedies.
Issues:
1. Whether the RTC has jurisdiction over respondents’ petition; and
2. In the event of an affirmative answer of the first issue, whether respondents’ recourse to the trial court is
proper despite their failure to exhaust administrative remedies.
Held:
Neither P.D. No. 1067, as cited by petitioners, nor P.D. No. 1479, which governs the procedure for the
review of water rates, expressly states that the NWRB has original and exclusive jurisdiction over a dispute
concerning the increase of water rates. Moreover, petitioners failed to cite any law which impliedly grants the
NWRB original and exclusive jurisdiction to resolve a dispute regarding the increase of water rates. A grant of
exclusive jurisdiction cannot be implied from the language
DIGESTED BY: ANNANG
5
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
of a statute in the absence of a clear legislative intent to that effect. An administrative agency with quasi-judicial
power is a tribunal of limited jurisdiction, and "[i]ts jurisdiction should be interpreted in strictissimi juris."
Petitioners’ reliance on Abe-Abe v. Manta to support their allegation that the NWRB has original and
exclusive jurisdiction over a dispute concerning a local water district’s water rate increase is misplaced. First, the
abovementioned case involved a dispute over water rights for irrigation purposes, a dispute clearly governed by P.D.
No. 1067. The case at bar concerns a local water district’s increase of water rates, and P.D. No. 1479 provides for
the administrative procedure regarding a review of the said rates. Second, the Court discussed the NWRB’s
jurisdiction vis-à-vis the doctrine of the exhaustion of administrative remedies. The doctrine of exhaustion does not
apply when jurisdiction is exclusive. An administrative agency’s exclusive jurisdiction over a certain dispute renders
the courts without jurisdiction to adjudicate the same at that stage. The doctrine of exhaustion applies "where a
claim is cognizable in the first instance by an administrative agency alone; judicial intervention is withheld until the
administrative process has run its course."
Respondents failed to exhaust administrative remedies by stopping their pursuit of the administrative
process before the NWRB. Their failure to exhaust administrative remedies, however, does not affect the
jurisdiction of the RTC. Non- exhaustion of administrative remedies only renders the action premature, that the
"claimed cause of action is not ripe for judicial determination."
It is incumbent upon the party who has an administrative remedy to pursue the same to its
appropriate conclusion before seeking judicial intervention.
One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the
Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the
competence of the other departments. The theory is that the administrative authorities are in a better position to
resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution
may be rectified by their superiors if given a chance to do so... It may be added that strict enforcement of the rule
could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their
heavily loaded dockets.
Although the doctrine of exhaustion does not preclude in all cases a party from seeking judicial relief, cases
where its observance has been disregarded require a strong showing of the inadequacy of the prescribed procedure
and of impending harm.
Respondents justify their failure to observe the administrative process on the following exceptions to the
doctrine of exhaustion of administrative remedies: (1) patent illegality; and (2) a denial of due process. However,
respondents fail to show that the instant case merits the application of these exceptions.
The cases where this Court has upheld the non-observance of exhaustion of administrative remedies
because of patently illegal actions do not involve issues that require the consideration of the existence and relevancy
of specific surrounding circumstances and their relation to each other. In these cases, the question of patent illegality
arose from a set of undisputed facts. Here, certain facts need to be resolved first, in order to arrive at a conclusion of
patent illegality. The LWUA confirmed the Rate Schedule of Approved Water Rates for Merida Water District, a
schedule that outlines different rates due to the progressive increase of water rates. Thus, the determination of the
current rate from which to measure the allowable increase prescribed by LOI No. 700 is a factual matter best left to
the expertise of the NWRB.
Respondents claim that Merida Water District violated due process by failing to conduct a hearing for the
purpose of establishing a water rate increase. Section 11 of P.D. No. 1479 provides that hearing is a requirement in
establishing water rates.
Jurisprudence affirming the failure to observe the doctrine of exhaustion due to a denial of due process
involves instances when the party seeking outright judicial intervention was denied the opportunity to be heard.
Here, respondents admit that Merida Water District conducted a public hearing on October 10, 2001 regarding the
increase of water rates. The existence of a hearing for this purpose renders the allegation of a denial of due process
without merit.
The failure of the respondents to show that the instant case falls within the exceptions to the doctrine of
exhaustion necessitates in the due observance of exhausting the proper administrative remedies before seeking
judicial intervention.
Thus, the petition is GRANTED.
DIGESTED BY: ANNANG
6
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
MONETARY BOARD VS. PVB
G.R. No. 189571; January 21, 2015
Topic: Declaratory Relief
Facts:
Respondents established a pension loan product for bona fide veterans or their surviving spouses, as well as
salary loan product for teachers and low-salaried employees pursuant to its mandate under Republic Act (RA) Nos.
3518 and 7169 to provide financial assistance to veterans and teachers.
As its clientele usually do not have real estate or security to cover their pension or salary loan, other than
their continuing good health and/or employment, respondent devised a program by charging a premium in the form
of a higher fee known as Credit Redemption Fund (CRF) from said borrowers.
On April 2002, an examination was conducted by the Supervision and Examination Department (SED) II of
the Bangko Sentral ng Pilipinas (BSP). It found, among other things, that respondent’s collection of premiums from
the proceeds of various salary and pension loans of borrowers to guarantee payment of outstanding loans violated
Section 54 of RA No. 8791 which states that banks shall not directly engage in insurance business as insurer.
Subsequently, respondent wrote a letter to petitioners justifying the existence of the CRF. The BSP notified
respondent about the Insurance Commission’s opinion that the CRF is a form of insurance and requested to
discontinue the collection of said fees. On February 2004, respondent complied with the BSP’s directive and
discontinued the collection of fees for CRF. On September 2005, petitioners issued Monetary Board (MB)
Resolution No. 1139 directing respondent’s Trust and Investment Department to return to the borrowers all the
balances of the CRF in the amount of P144,713,224.54 as of August 31, 2004, and to preserve the records of
borrowers who were deducted CRFs from their loan proceeds pending resolution or ruling of the Office of the
General Counsel of the BSP. Thus, respondent requested reconsideration of said MB Resolution. However, the same
was denied.
Accordingly, respondent filed a Petition for Declaratory Relief with the RTC of Makati City. In response,
petitioners filed a Motion to Dismiss alleging that the petition for declaratory relief cannot prosper due to
respondent’s prior breach of Section 54 of RA No. 8791.
The RTC of Makati City granted respondent’s petition for declaratory relief.
Issue:
Whether or not the petition for declaratory relief is proper.
Held:
No.
Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written
instrument, executive order or resolution, to determine any question of construction or validity arising from the
instrument, executive order or regulation, or statute; and for a declaration of his rights and duties thereunder. The
only issue that may be raised in such a petition is the question of construction or validity of provisions in an
instrument or statute.
In the same manner that court decisions cannot be the proper subjects of a petition for declaratory relief,
decisions of quasi-judicial agencies cannot be subjects of a petition for declaratory relief for the simple reason that if
a party is not agreeable to a decision either on questions of law or of fact, it may avail of the various remedies
provided by the Rules of Court.
DIGESTED BY: ANNANG
7
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
In view of the foregoing, the decision of the BSP Monetary Board cannot be a proper subject matter for a petition
for declaratory relief since it was issued by the BSP Monetary Board in the exercise of its quasi-judicial powers or
functions.
The authority of the petitioners to issue the questioned MB Resolution emanated from its powers under
Section 37 of RA No. 7653 and Section 66 of RA No. 8791 to impose, at its discretion, administrative sanctions,
upon any bank for violation of any banking law.
Undoubtedly, the BSP Monetary Board is a quasi-judicial agency exercising quasi-judicial powers or
functions. As aptly observed by the Court of Appeals, the BSP Monetary Board is an independent central monetary
authority and a body corporate with fiscal and administrative autonomy, mandated to provide policy directions in the
areas of money, banking, and credit. It has the power to issue subpoena, to sue for contempt those refusing to obey
the subpoena without justifiable reason, to administer oaths and compel presentation of books, records and others,
needed in its examination, to impose fines and other sanctions and to issue cease and desist order. Section 37 of
Republic Act No. 7653, in particular, explicitly provides that the BSP Monetary Board shall exercise its discretion in
determining whether administrative sanctions should be imposed on banks and quasi-banks, which necessarily
implies that the BSP Monetary Board must conduct some form of investigation or hearing regarding the same.
A priori, having established that the BSP Monetary Board is indeed a quasi-judicial body exercising
quasi-judicial functions, then its decision in MB Resolution No. 1139 cannot be the proper subject of declaratory
relief.
DIGESTED BY: ANNANG
8
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

PO2 Ruel Montoya v. Police Director Varilla et. al

G.R No. 180146, December 18, 2008
Topic: Right to Due Process; Exhaustion of Administrative Remedies
Facts:
Montoya, a member of the Philippine National Police (PNP), was assigned to the Central Police District
(CPD) in Quezon City, when the National Police Commission (NAPOLCOM) issued Special Order No. 1044
dropping him from the rollsfor failure to attend the Law Enforcement and Enhancement Course (LEEC) at the
Special Training Unit, National Capital Region Police Office (NCRPO), Camp Bagong Diwa, Taguig City.
Montoya had been absent without official leave (AWOL) for a period of 67 days, from 23 January 1998
to 31 March 1998.
Four months after he was dropped from the rolls, Montoya filed a Motion for Reconsideration thereof
addressed to the PNP Regional Director for the National Capital Region (NCR), explaining that on 22 January 1998,
he went to the Baler Police Station/Police Station 2 to have his Sick Leave Form approved by the station
commander. Allegedly due to the fact that his name had already been forwarded to the NCRPO for the LEEC, his
Sick Leave Form was not approved. Montoya averred that his failure to attend the LEEC was beyond his control,
since he was suffering from arthritis with on and off symptoms of severe body pain. Montoya attached to his Motion
a certification simply dated 1998, issued by a certain Dr. Jesus G. de Guzman, and authenticated by Police Chief
Inspector (P/CINSP.) Ethel Y. Tesoro, Chief, Medical Service, CPD.
Upon the recommendation of the Chief of the NCRPO Legal Division, the NCR Regional Director issued
Special Order No. 990 canceling Special Order No. 1044. Montoya was also preventively suspended for 30 days,
from 8 June to 8 July 1999, pending Summary Proceedings of his administrative liability. The 67 days when
Montoya went on absence without leave (AWOL) were immediately deducted from his leave credits.
The Summary Dismissal Proceedings against Montoya were conducted by Hearing Officer
Police Superintendent (P/Supt.) Francisco Don Regional Director rendered C. a Montenegro Decision
4 on of 23 the June Central 2000 Police dismissing District Montoya Office (CPDO), from the DIGESTED BY:
BALTAZAR 9 and based on his findings, the NCR police service for Serious Neglect of Duty (due to AWOL),
effective immediately.
Montoya filed an appeal of the 23 June 2000 Decision of the NCR Regional Director before the RAB of the
National Capital Region (RAB-NCR), alleging lack of due process considering that he was not even notified of any
hearing by the Summary Hearing Officer and was thus deprived of the opportunity to present evidence in his
defense. The Summary Hearing Officer in the Summary Dismissal Proceedings against him recommended his
dismissal from police service based on his failure to report for the LEEC, without even looking into his side of the
controversy.
The RAB-NCR decreed re instate PO2 Ruel Catud Montoya. The NCR Regional Director authorized Police
Senior Superintendent (P/SSupt.) Rufino Jeffrey L. Manere (Manere) to appeal several RAB-NCR decisions
including Motoya’s case. DILG Secretary Jose D. Lina, Jr. issued an Order denied the appeal of the NCR Regional
Director. The CSC the Order of DILG Secretary Lina and affirmed the decisions of the NCR Regional Director
dismissing Montoya from police service.
Montoya argues that the NCR Regional Director failed to exhaust administrative remedies when he
appealed the 10 November 2003 Decision of DILG Secretary Lina directly to the CSC, without first filing an appeal
with the Office of the President.
 Under the doctrine of exhaustion of administrative remedies, before a party is allowed to seek the
intervention of the court, it is a pre-condition that he should have availed himself of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then
such remedy should be exhausted first before court’s judicial power can be sought.
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 Issue:

Whether or not the right to due process of petitioner was violated.

Whether or not respondent Regional Director failed to exhaust administrative remedies.
Held:
1. Though procedural rules in administrative proceedings are less stringent and often applied more liberally,
administrative proceedings are not exempt from basic and fundamental procedural principles, such as the right to
due process in investigations and hearings. The right to substantive and procedural due process is applicable to
administrative proceedings. Well-settled is the rule that the essence of due process is simply an opportunity to be
heard or, as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a
reconsideration of the action or ruling complained of.
Unarguably, this rule, as it is stated, strips down administrative due process to its most fundamental nature
and sufficiently justifies freeing administrative proceedings from the rigidity of procedural requirements. In
particular, however, due process in administrative proceedings has also been recognized to include the following: (1)
the right to actual or constructive notice of the institution of proceedings which may affect a respondent’s legal
rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and
evidence in one’s favor, and to defend one’s rights; (3) a tribunal vested with competent jurisdiction and so
constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality;
and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the
hearing or contained in the records or made known to the parties affected.
Even if administrative tribunals exercising quasi-judicial powers are not strictly bound by procedural
requirements, they are still bound by law and equity to observe the fundamental requirements of due process. Notice
to enable the other party to be heard and to present evidence is not a mere technicality or a trivial matter in any
administrative or judicial proceedings. In the application of the principle of due process, what is sought to be
safeguarded is not lack of previous notice but the denial of the opportunity to be heard.
In the instant case, the Summary Dismissal Proceedings against Montoya were flawed from the very
beginning when these were conducted without due notice to him. The NCR Regional Director, through Manere,
never contested the fact that the Hearing Officer proceeded with his investigation without giving notice to Montoya.
Without notice, Montoya was unable to attend the hearings, present written or oral arguments, and submit evidence
in his favor; he was completely deprived of the opportunity to be heard on the administrative charges against him
and was irrefragably denied due process.
2. Regarding the issue of failure of the Regional Director to exhaust administrative remedies, under the doctrine of
exhaustion of administrative remedies, before a party is allowed to seek the intervention of the court, it is a pre-
condition that he should have availed himself of all the means of administrative processes afforded him. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted
first before court’s judicial power can be sought. The administrative agency concerned is in the best position to
correct any previous error committed in its forum.
Montoya’s reliance on the doctrine of exhaustion of administrative remedies is misplaced, for said doctrine
does not find application in the instant case. The doctrine intends to preclude premature resort from a quasi-judicial
administrative body to the court. Such is not the situation in this case. Montoya is questioning the supposed
premature resort of the NCR Regional Director from the decision of the DILG Secretary to the CSC, instead of to
the Office of the President; obviously, he is challenging the resort from one administrative body to another. The
Court ruled that Montoya’s assertion that DILG Secretary Lina’s decision should have first been appealed to the
Office of the President before the CSC is baseless.
 PNP personnel fall under the administrative control and supervision of the DILG which, in turn, is under
the administrative control and supervision of the CSC.
DIGESTED BY: BALTAZAR 10
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Emmanuel Moran, JR v. Office of the President

G.R No. 192957, September29, 2014
Topic: Executive power of control over the acts of department secretaries
Facts:
On February 2004, the late Emmanuel B. Moran, Jr. filed a complaint with the Consumer Arbitration
Office (CAO) against PGA Cars, Inc. pursuant to the relevant provisions of Republic Act No. 7394 (RA 7394),
otherwise known as the Consumer Act of the Philippines alleging that PGA Cars should be held liable for the
product imperfections of a BMW car which it sold to Moran.
The CAO rendered a Decision
5

in favor of complainant and ordered the private respondent to refund the

purchase price of the BMW car in addition to the payment of costs of litigation and administrative fines.
The PGA Cars appealed to the Secretary of the Department of Trade and Industry (DTI), the quasi-judicial
agency designated by Article 165 of RA 7394 to entertain appeals from the adverse decisions and orders of the
CAO.
The DTI Secretary dismissed the appeal PGA Cars who then filed an appeal with the Office of the President.
OP reversed the decision of DTI. Moran, Jr. raised the issue of lack of jurisdiction of the OP, not being the
proper court referred to in Article 166 of R.A. 7394. The OP, however, denied his motion on the ground that the
President’s power of control over the executive department grants him the power to amend, modify, alter or repeal
decisions of the department secretaries. CA denied the petition for certiorari filed by Moran, Jr, holding that the
proper remedy from an adverse order or judgment of the OP is a petition for review under Rule 43 of the 1997 Rules
of Civil Procedure, as amended.
Issue:
Whether or not the CA correct in dismissing the petition for certiorari on the ground that petitioner resorted
to a wrong mode of appeal.
Held:
The Court Ruled in the negative.
Under the Consumer Act (RA 7394), the DTI has the authority and the mandate to act upon complaints
filed by consumers pursuant to the State policy of protecting the consumer against deceptive, unfair and
unconscionable sales, acts or practices. Said law provided for an arbitration procedure whereby consumer
complaints are heard and investigated by consumer arbitration officers whose decisions are appealable to the DTI
Secretary.
The executive power of control over the acts of department secretaries is laid down in Section 17, Article
VII of the 1987 Constitution. The power of control has been defined as the "power of an officer to alter or modify or
nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter."
Such "executive control" is not absolute. The definition of the structure of the executive branch of
government, and the corresponding degrees of administrative control and supervision is not the exclusive preserve
of the executive. It may be effectively limited by the Constitution, by law, or by judicial decisions. All the more in
the matter of appellate procedure as in the instant case. Appeals are remedial in nature; hence, constitutionally
subject to this Court’s rulemaking power. The Rules of Procedure was issued by the Court pursuant to Section 5,
Article VIII of the Constitution, which expressly empowers the Supreme Court to promulgate rules concerning the
procedure in all courts.
DIGESTED BY: BALTAZAR 11
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
In this case, a special law, RA 7394, likewise expressly provided for immediate judicial relief from
decisions of the DTI Secretary by filing a petition for certiorari with the "proper court." Hence, private respondent
should have elevated the case directly to the CA through a petition for certiorari.
In filing a petition for certiorari before the CA raising the issue of the OP’s lack of
jurisdiction, complainant Moran, Jr. thus availed of the proper remedy.
Certiorari is an extraordinary remedy available in extraordinary cases where a tribunal, board or officer,
among others, completely acted without jurisdiction. Ineluctably, a judgment rendered without jurisdiction over the
subject matter is void. While errors of judgment are correctible by appeal, errors of jurisdiction are reviewable by
certiorari. Considering that the OP had no jurisdiction to entertain private respondent’s appeal, certiorari lies to
correct such jurisdictional error. The CA thus erred in dismissing the petition for certiorari on the ground of being an
improper remedy.
DIGESTED BY: BALTAZAR 12
Atty. Alice Bondoc vs Tan Tiong Bio a.k.a. Henry Tan
G.R No. 186652, October 6,2010
Topic: DOJ is not a quasi judicial body
Facts:
Tan Tiong Bio had fully paid the installment payments of a 683-square-meter lot in the Manila Southwoods
Residential Estates, a project of Fil-Estate Golf & Development, Inc. (Fil-Estate) in Carmona, Cavite, but Fil-Estate
failed to deliver to him the title covering the lot, despite repeated demands. Fil-Estate also failed to heed the demand
for the refund of the purchase price. He later learned that the lot sold to him was inexistent.
He filed a complaint for Estafa against Fil-Estate officials including its Corporate Secretary Atty. Alice
Odchigue- Bondoc and other employees.
Respondent filed a counter affidavit before the Pasig City Prosecutors Office, which dismissed it by
Resolution for insufficiency of evidence and denied respondents Motion for Reconsideration. The respondents filed
a petition for review with the Department of Justice (DOJ). DOJ dismissed the petition on finding that there was no
showing of any reversible error, following Section 12(c) of Department Circular No. 70 dated July 3, 2000 (National
Prosecution Service [NPS] Rule on Appeal).
The respondents filed a petition for certiorari before the Court of Appeals which, set aside the DOJ
Secretary’s Resolution, holding that it committed grave abuse of discretion in issuing its Resolution dismissing
respondent’s petition for review without therein expressing clearly and distinctly the facts on which the dismissal
was based, in violation of Section 14, Article VIII of the Constitution.
Petitioner asserts that the requirement in Section 14, Article VIII of the Constitution applies only to
decisions of courts of justice and that the constitutional provision does not extend to decisions or rulings of
executive departments such as the DOJ.
Issue:
Whether or not Sec 14. Article VIII of the Constitution applies to the DOJ resolutions
Held:
A prosecutor does not exercise adjudication nor rule-making functions. Preliminary investigation is merely
inquisitorial, and is often the only means of discovering the persons who may be reasonably charged of a crime and
to enable the prosecutor to prepare his complaint or information. A preliminary investigation thus partakes of an
investigative or inquisitorial power for the sole purpose of obtaining information on what future action of a judicial
nature may be taken. While the prosecutor makes that determination, he cannot be said to be acting as a quasi-court,
for it is the courts, ultimately, that pass judgment on the accused, not the prosecutor.
Balangauan v. Court of Appeals in fact iterates that even the action of the Secretary of Justice in reviewing
a prosecutor’s order or resolution via appeal or petition for review cannot be considered a quasi-judicial proceeding
since the DOJ is not a quasi-judicial body. Section 14, Article VIII of the Constitution does not thus extend to
resolutions issued by the DOJ Secretary.
Whether the DOJ in Balangauan issued an extended resolution in resolving the therein respondents
motion for reconsideration is immaterial. The extended resolution did not detract from settling that the DOJ is not a
quasi-judicial body.
DIGESTED BY: BALTAZAR 13
Office of the Ombudsman v. Castro
G.R. No. 172637, April 22, 2015 Topic: Power of the Office of Ombudsman
Facts:
Mariven Castro, brother of respondent Mary Ann Castro (Assistant City Prosecutor) purchased on credit a
vehicle from KD Surplus and executed a promissory note for which he issued six (6) post-dated checks. The checks
were later dishonored. Mariven inquired from Emily, the owner-manager of KD Surplus, if it was still possible to
just return the vehicle in exchange for the issued checks.
Emily refused to accept the vehicle finding that it had a defective engine, as well as a rusty and dilapidated
body when it was returned by Rosephil, Mariven’s wife accompanied by respondent. In the same occasion,
respondent aboard a PNP-SWAT vehicle returned to the KD Surplus, made a photocopy of the security guard’s
logbook, where entry of the inspection and return was made and threatened Emily that she would file cases against
Emily if she does not return the bounced checks and Emily’s staff as well, with lawsuits if they will not testify in her
favor.
Emily filed an administrative complaint for violation of Republic Act No. 6713 (the Code of Conduct and
Ethical Standards for Public Officials and Employees) against the respondent before the Office of the Ombudsman.
The respondent essentially countered that the case Emily filed was a harassment suit. She further maintained that the
police arrived at the premises of KD Surplus ahead of her.
The Ombudsman found the respondent guilty of conduct prejudicial to the best interest of the service and
imposed on her the penalty of "three (3) months suspension from the service without pay. Respondent filed a
petition for review before the CA where they found the respondent liable for simple misconduct only.
The respondent and the Ombudsman filed their respective motions for reconsideration, which the CA denied.
Issue:
Whether the CA correctly found the respondent liable for simple misconduct.
Held:
The respondent’s acts of involving an elite police team like the SWAT in a matter purely personal to her
and riding on their vehicle in going to and from the premises of KD Surplus are uncalled for: these were a haughty
and an excessive display of the influence that she could wield, ultimately aimed at helping Mariven and Rosefil to
compel Emily to accept the "depreciated" vehicle, and to return the bum checks issued by Mariven. These send the
wrong impression that public officials could use and exploit the police force for their personal interests. While it
may be true that the respondent merely wanted to ensure the safety of the parties in the event that an untoward
incident may happen between Emily and
Rosefil, the calling of the SWAT was clearly an overkill; there was also no justification for her to ride in a
SWAT vehicle. By calling out the SWAT to the premises of KD Surplus and by riding on their vehicle, she clearly
wanted to project an image of power and influence meant to intimidate, bully, and/or browbeat Emily. How the
respondent managed to convince an elite police force like the SWAT to accompany her, and to allow her to use their
vehicle in a matter purely personal to her, does not favorably reflect on her as well as on the police. However, the
SC did not agree with the CA that the respondent is guilty of simple misconduct. Misconduct is "a transgression of
some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public
officer." In grave misconduct, as distinguished from simple misconduct, the elements of corruption, clear intent to
violate the law or flagrant disregard of established rules, must be manifest and established by substantial evidence.
We point out that to constitute an administrative offense, misconduct should relate to or be connected with
the performance of the official functions and duties of a public officer. The respondent in the present case
summoned the SWAT for a purely personal matter, i.e., to aid her brother and sister-in-law. There was no link
between the respondent’s acts and her official functions as a city prosecutor.
DIGESTED BY: CID 14
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
In Manuel v. Judge Calimag, Jr., the Court explained that:
Misconduct in office has been authoritatively defined by Justice Tuazon in Lacson v. Lopez in these words:
"Misconduct in office has a definite and well-understood legal meaning. By uniform legal definition, it is a
misconduct such as affects his performance of his duties as an officer and not such only as affects his character as a
private individual. x x x It is settled that misconduct, misfeasance, or malfeasance warranting removal from office of
an officer must have direct relation to and be connected with the performance of official duties amounting either to
maladministration or willful, intentional neglect and failure to discharge the duties of the office "
The respondent’s actions, to my mind, constitute conduct prejudicial to the best interest of the service, an
administrative offense which need not be related to the respondent’s official functions. In Pia v. Gervacio, we
explained that acts may constitute conduct prejudicial to the best interest of the service as long as they tarnish the
image and integrity of his/her public office. Additionally and contrary to the CA’s ruling, conduct grossly
prejudicial to the best interest of the service may or may not be characterized by corruption or a willful intent to
violate the law or to disregard established rules. "Prejudicial" means "detrimental or derogatory to a party; naturally,
probably or actually bringing about a wrong result." In these lights, the SC held that the Ombudsman correctly ruled
that the respondent’s acts of seeking the assistance of the SWAT and in riding on board a SWAT vehicle constitute
conduct prejudicial to the best interest of the service, and not misconduct, since there is no nexus between these acts
and her official functions. As long as the questioned conduct tarnishes the image and integrity of his/her public
office, the corresponding penalty may be meted on the erring public officer or employee.
Respondent was declared guilty of conduct prejudicial to the best interest of the service and is
suspended from service for six (6) months and one (1) day.
DIGESTED BY: CID 15
G.R. No. 172635 October 20, 2010
Facts:
Respondent Pedro Delijero, Jr., was a public school teacher at the Burauen Comprehensive National High
School, Burauen, Leyte and was administratively charged for Grave Misconduct for courting his student Myra Dela
Cruz who was 12 years old at that time.
The Office of the Ombudsman rendered decision finding respondent guilty of grave abuse of misconduct
and meted him the penalty of dismissal. Respondent appealed to the Court of Appeals which ruled in favor of him.
The CA ruled not by the issue raised by the respondent but the issue of jurisdiction motu propio, contending that the
Office of Ombudsman had no jurisdiction to investigate the complaint because it was RA 4670 known as Magna
Carta for Public School Teachers shall govern.
Issue:
Whether or not the Ombudsman has jurisdiction in the case.
Ruling:
In prevailing jurisprudence, the SC ruled that the administrative disciplinary authority of the Ombudsman
over a public school teacher is not an exclusive power but is concurrent with the proper committee of the DECS.
It is however settled that the power of the Ombudsman to determine and impose administrative liability is
not merely recommendatory but actually mandatory, to wit:
We reiterated this ruling in Office of the Ombudsman v. Laja, where we emphasized that the Ombudsmans
order to remove, suspend, demote, fine, censure, or prosecute an officer or employee is not merely advisory or
recommendatory but is actually mandatory. Implementation of the order imposing the penalty is, however, to be
coursed through the proper officer. Recently, in Office of the Ombudsman v. Court of Appeals, we also held
While Section 15(3) of RA 6770 states that the Ombudsman has the power to recommend x x x removal,
suspension, demotion of government officials and employees, the same Section 15(3) also states that the
Ombudsman in the alternative may enforce its disciplinary authority as provided in Section 21 of RA 6770.
The Court however admonished that, while petitioner has concurrent administrative disciplinary authority
with the DECS over public school teachers, Section 23 of the Ombudsman Act of 1989 provides that the
Ombudsman may refer a complaint to the proper disciplinary authority. Under the circumstances, it would have
been more prudent for petitioner to have referred the complaint to the DECS given that it would have been in a
better position to serve the interest of justice considering the nature of the controversy. Respondent is a public
school teacher and is covered by RA 4670, therefore, the proceedings before the DECS would have been the more
appropriate venue to resolve the dispute.
The decision of the CA was reversed and set aside and was remanded for decision on the case on the merits.
DIGESTED BY: CID 16
Office of the Ombudsman v .Pedro Delijero,Jr.
G.R. No. 172637, April 22, 2015 Topic: Power of the Office of Ombudsman
Office of the Ombudsman v. Galicia
G.R. No. G.R. No. 167711 October 10, 2008 Topic: Jurisdiction of the Office of the Ombudsman
Facts:
Respondent Galicia was a former public school teacher. Based on the academic records which were part of
his 201 file, he graduated from FEU with a degree in civil engineering but failed to pass the board examinations and
has earned 18 units in education, evidenced by a copy of a Transcript of Records from the Caloocan City
Polytechnic College. Likewise, he passed the Teachers Professional Board Examination (TPBE) given on November
22, 1987.
On December 2001, Yamsuan, then Principal of the MBASHS, reviewed the 201 files of his teaching staff
and noticed that Galicia’s TOR was not an original copy and required Galicia and other teachers with similar
records, to secure authenticated copies of their TOR. All of the teachers complied except Galicia. Yamsuan verified
with the school the authenticity of Galicia’s TOR and was informed that the said school had no record of the said
TOR, and more importantly, that they had no records that Galicia took up 18 units of education in SY 1985-1986.
Acting on his findings, Yamsuan lodged an affidavit-complaint for falsification, dishonesty, and grave
misconduct against Galicia before the Ombudsman. The Ombudsman found Galicia guilty of Dishonesty for which
the penalty of Dismissal From the Service, Forfeiture of Leave Credits and Retirement Benefits and Temporary
Disqualification for Re-employment in the Government Service for a period of One (1) Year was imposed. Galicia
filed a motion for reconsideration and raised the issue of jurisdiction for the first time. He argued that it is not the
Ombudsman, but the Department of Education, through the School Superintendent, which has jurisdiction over
administrative cases against public school teachers, as mandated by RA 4670, (Magna Carta for Public School
Teachers). The Ombudsman denied Galicia’s motion for reconsideration. The CA reversed and set aside the decision
of the Ombudsman.
Issue:
WON the CA erred in nullifying the decision of the Office of the Ombudsman on alleged jurisdictional infirmity?
Held:
A review of the Ombudsman Act and the Magna Carta for Public School Teachers reveals an apparent
overlapping of jurisdiction over administrative cases against public school teachers. By virtue of the Magna Carta
for Public School Teachers, original jurisdiction belongs to the school superintendent. The intention of the law,
which is to impose a separate standard and procedural requirement for administrative cases involving public school
teachers, must be given consideration. Hence, the Ombudsman must yield to this committee of the Division School
Superintendent.
Even in the earlier case of Alcala v. Villar, the Court held that: Republic Act No. 6770, the Ombudsman
Act of 1989, provides that the Ombudsman shall have disciplinary authority over all elective and appointive officials
of the Government and its subdivisions, instrumentalities and agencies, including members of the Cabinet, local
government, government-owned or controlled corporations and their subsidiaries except over officials who may be
removed by impeachment or over Members of Congress, and the Judiciary. However, in Fabella v. Court of
Appeals, it was held that R.A. No. 4670, the Magna Carta for Public School Teachers, specifically covers and
governs administrative proceedings involving public school teachers. Be that as it may, SC held that the
Ombudsman’s exercise of jurisdiction was proper. The CA was in error in relying on Alcala, without taking into
consideration the cases full import. In Alcala, the Court, while recognizing the jurisdiction of the School
Superintendent, nonetheless upheld the decision of the Ombudsman on the rationale that the parties were afforded
their right to due process during the investigation proceedings.
 Respondent in the Alcala case was given sufficient opportunity to be heard and submit his defenses to the
charges made against him. Thus, he is estopped from questioning the jurisdiction of the Ombudsman after an
adverse decision was promulgated. In sum, it is the School Superintendent and not the Ombudsman that has
jurisdiction over administrative cases against public school teachers. Yet, Galicia is estopped from belatedly
assailing the jurisdiction of the Ombudsman. His right to due process was satisfied when he participated fully in the
investigation proceedings. He was able to present evidence and arguments in his defense. The investigation
conducted by the Ombudsman was therefore valid.
DIGESTED BY: CID 17
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Office of the Ombudsman v. Masing G.R. No. 165416 January 22, 2008 Topic: Authority of the Ombudsman
to act on complaints filed against public officers and employees
Facts:
Respondents Florita A. Masing, former Principal of the Davao City Integrated Special School, and Jocelyn
A. Tayactac, an office clerk in the same school, were administratively charged before the Office of the Ombudsman
for allegedly collecting unauthorized fees, failing to remit authorized fees, and to account for public funds.
Respondents filed a motion to dismiss on the ground that the Ombudsman has no jurisdiction over them.
Respondents alleged that the DECS has jurisdiction over them which shall exercise the same through a committee to
be constituted under Section 9 of Republic Act (R.A.) No. 4670, otherwise known as the “The Magna Carta for
Public School Teachers.”
The motion was denied. Ombudsman rendered a joint decision finding respondents Masing and
Tayactac guilty. Masing was dismissed from service while Tayactac was suspended for 6 months. On appeal, CA
reversed.
Meanwhile, Masing faced yet another administrative case before the Ombudsman for charges of
oppression, serious misconduct, discourtesy in the conduct of official duties, and physical or mental incapacity or
disability due to immoral or vicious habits.
Ombudsman found Masing guilty as charged and ordered her suspension for six (6) months without pay.
On appeal, CA also reversed. The Ombudsman, which was not impleaded as respondent in the cases, filed an
Omnibus Motion to Intervene and for Reconsideration. CA denied the on the grounds that (1) intervention is not
proper because it is sought by the quasi-judicial body whose judgment is on appeal, and (2) intervention, even if
permissible, is belated under Section 2, Rule 19 of the Rules of Court.
Hence, appeal before SC. The 2 cases were consolidated.
Issue:
WON Ombudsman may directly discipline public school teachers and employees?
Held:
Yes. The authority of the Ombudsman to act on complaints filed against public officers and employees is
explicit in Article XI, Section 12 of the 1987 Constitution. Article XI, Section 13 of the same Constitution delineates
the powers, functions and duties of the Ombudsman. The enumeration of these powers is non-exclusive.
Congress enacted R.A. No. 6770, otherwise known as The Ombudsman Act of 1989, giving the Office
such other powers that it may need to efficiently perform the task given by the Constitution. In fine, the manifest
intent of the lawmakers was to bestow on the Office of the Ombudsman full administrative disciplinary authority in
accord with the constitutional deliberations.
The Court emphasized that “the Ombudsman’s order to remove, suspend, demote, fine, censure, or
prosecute an officer or employee is not merely advisory or recommendatory but is actually mandatory.”
Implementation of the order imposing the penalty is, however, to be coursed through the proper officer.
DIGESTED BY: CID 18
 The authority of the Office of the Ombudsman to conduct administrative investigations is beyond cavil. As
the principal and primary complaints and action center against erring public officers and employees, it is mandated
by no less than Section 13(1), Article XI of the Constitution. In conjunction therewith, Section 19 of R.A. No. 6770
grants to the Ombudsman the authority to act on all administrative complaints.
It is erroneous, therefore, for respondents to contend that R.A. No. 4670 confers an exclusive disciplinary
authority on the DECS over public school teachers and prescribes an exclusive procedure in administrative
investigations involving them. R.A. No. 4670 was approved on June 18, 1966. On the other hand, the 1987
Constitution was ratified by the people in a plebiscite in 1987 while R.A. No. 6770 was enacted on November 17,
1989. It is basic that the 1987 Constitution should not be restricted in its meaning by a law of earlier enactment. The
1987 Constitution and R.A. No. 6770 were quite explicit in conferring authority on the Ombudsman to act on
complaints against all public officials and employees, with the exception of officials who may be removed only by
impeachment or over members of Congress and the Judiciary.
DIGESTED BY: CID 19
Office of the Ombudsman v. Victorio Medrano
G.R No. 177580, October 17, 2008
Topic: Jurisdiction of the Ombudsman over administrative complaint
FACTS:
Ma. Ruby A. Dumalaog, a teacher filed before the petitioner Office of the Ombudsman a sworn letter-
complaint against her superior herein-respondent Victorio N. Medrano for violation of Republic Act No. 7877
(Anti-Sexual Harassment Act of 1995) (criminal case), and grave misconduct (administrative case). While the
administrative case was pending investigation, Dumalaog filed an Urgent Ex-Parte Motion for Preventive
Suspension, and was granted by the Ombudsman ordering the preventive suspension of Medrano for six months
without pay. Medrano moved for lifting the suspension but was denied. When Medrano filed a Supplemental Motion
for Reconsideration, Ombudsman lifted the preventive suspension order.
The Ombudsman rendered its decision with the administrative case and found Medrano guilty of grave
misconduct. Medrano moved for reconsideration of the decision and assailed not only the factual findings and
conclusions of the Ombudsman, but for the first time, challenged its jurisdiction over the case. With regard to the
criminal case, Ombudsman found probable cause to indict Medrano and a criminal case was filed before the
Metropolitan Trial Court (MeTC) of Biñan, Laguna against him. By joint order, the Ombudsman affirmed its
Resolution in the criminal case but modified its decision in the administrative case.
Medrano filed a Petition for Review with the Court of Appeals (CA), assailing Ombudsman‘s jurisdiction
over the administrative case. The CA annulled Ombudsman‘s decision in the administrative case and dismissed the
complaint on the sole ground that Ombudsman has no jurisdiction over it. The Ombudsman filed a motion for
reconsideration of the CA‘s decision but was denied.
ISSUE:
Whether or not Office of the Ombudsman has jurisdiction over the administrative complaint against
Medrano even if an affidavit of desistance has already been filed by Dumalaog
HELD:
The flaw in Medrano‘s argument that the execution of Dumalaog‘s Affidavit of Desistance and the
dismissal of the criminal case must result in the dismissal of the administrative case is that it ignores the whale of a
difference between those two remedies. In Gerardo R. Villaseñor and Rodel A. Mesa v. Sandiganbayan and Louella
Mae Oco-Pesquerra (Office of the Special Prosecutor, Ombudsman), the Court stressed the distinct and independent
character of the remedies available to an offended party against any impropriety or wrongdoing committed by a
public officer. It provides the three remedies available: 1.) civil, 2.) criminal, and 3.) administrative. These remedies
may be invoked separately, alternately, simultaneously or successively. Sometimes, the same offense may be the
subject of all three kinds of remedies.
At any rate, an affidavit of desistance (or recantation) is, as a rule, viewed with suspicion and reservation
because it can easily be secured from a poor and ignorant witness, usually through intimidation or for monetary
consideration. And there is always the probability that it would later be repudiated, and criminal prosecution would
thus be interminable. Hence, such desistance, by itself, is not usually a ground for the dismissal of an action once it
has been instituted in court.
With regard to whether Ombudsman has jurisdiction over the administrative complaint, Section 5, Article XI of the
DIGESTED BY: DE LARNA 20
Constitution “created the independent Office of the Ombudsman.” Hailed as the “protectors of the people,” the
Ombudsman and his Deputies are bestowed with overreaching authority, powers, functions, and duties to act on
complaints against public officials and employees, as provided in Sections 12 and 13.
When an administrative charge is initiated against a public school teacher, however, Section 9 of the
Magna Carta for Public School Teachers specifically provides that the same shall be heard initially by an
investigating committee composed of the school superintendent of the division, as chairman, a representative of the
local or, in its absence, any existing provincial or national teachers‘organization, and a supervisor of the division.
Thus, Section 23 of The Ombudsman Act of 1989 directs that the petitioner “may refer certain complaints to the
proper disciplinary authority for the institution of appropriate administrative proceedings against erring public
officers or employees.”
In light of this, the Court holds that the administrative disciplinary authority of the Ombudsman over
a public school teacher is not an exclusive power but is concurrent with the proper committee of the DepEd.
While Ombudsman should have desisted from hearing the administrative complaint against Medrano and
referred it to the proper DepEd committee, given that it had already concluded the proceedings and had rendered a
decision thereon, Medrano is now barred from assailing Ombudsman‘s acts under the principle of estoppel. He had
actively participated in the administrative proceedings before the Ombudsman. In his Counter-Affidavit, he asked
Ombudsman for affirmative relief by seeking the dismissal of the administrative complaint allegedly for being
baseless. Verily, Medrano cannot be permitted to challenge Ombudsman‘s acts belatedly.
DIGESTED BY: DE LARNA 21
Office of the Ombudsman v. Rodriguez
G.R No. 1172700, July 23, 2010
Topic: Concurrent Jurisdiction of two or more disciplining authorities
FACTS:
On 26 August 2003, the Ombudsman in Visayas received a complaint for abuse of authority, dishonesty,
oppression, misconduct in office, and neglect of duty against Rolson Rodriguez, punong barangay in Brgy.
Sto.Rosario, Binalbagan, Negros Occidental. On 1 September 2003, the sangguniang bayan (SB) of Binalbagan,
Negros Occidental, through vice- mayor Jose G. Yulo, received a similar complaint against Rodriguez for abuse of
authority, dishonesty, oppression, misconduct in office, and neglect of duty. Rodriguez filed a motion to dismiss the
case filed in the SB on the ground that the allegations in the complaint were without factual basis and did not
constitute any violation of law. As regards the Ombudsman case, Rodriguez alleged complainants violated the rule
against forum shopping. He alleged that the SB had already acquired jurisdiction over his person as early as 8
September 2003.
When the SB case was called for hearing, complainants’ counsel manifested that complainants would like
to withdraw the administrative complaint filed in the SB on the ground that they wanted to prioritize the complaint
filed in the Ombudman. Rodriguez prayed for the dismissal of the case on the ground of forum shopping, not on the
ground complainants stated. In their opposition, complainants admitted they violated the rule against forum
shopping and claimed they filed the complaint in the SB without the assistance of counsel. In his 4 November 2003
Resolution, the municipal vice-mayor dismissed the case filed in the sangguniang bayan.
The Ombudsman directed both parties to file their respective verified osition papers. Rodriguez moved for
reconsideration of the order citing the pendency of his motion to dismiss. The Ombudsman stated that a motion to
dismiss was a prohibited pleading. In his position paper, Rodriguez insisted that the SB still continued to exercise
jurisdiction over the complaint filed against him. He claimed he had not received any resolution or decision
dismissing the complaint filed in the SB. In reply, complainants maintained there was no more complaint pending in
the SB since the latter had granted their motion to withdraw the complaint. In a rejoinder, Rodriguez averred that the
SB resolution dismissing the case filed against him was not valid because only the vice-mayor signed it.
OMBUDSMAN:
Rodriguez is guilty of dishonesty and oppression. It imposed the penalty of dismissal from the service with
forfeiture of all benefits, disqualification to hold public office, and forfeiture of civil service eligibilities. MR was
denied. Ombudsman directed the mayor of Binalbagan, Negros Occidental to implement the penalty of dismissal
against Rodriguez. Rodriguez filed in the Court of Appeals a petition for review with prayer for the issuance of a
temporary restraining order.
COURT OF APPEALS:
CA set aside the Decision of the Ombudsman for lack of jurisdiction and directed the SB to proceed with
the hearing on the administrative case. It reasoned that the sangguniang bayan had acquired primary jurisdiction
over the person of Rodriguez to the exclusion of the Ombudsman. When he was served notice on Sept 8, 2003.
Ombudsman did so just two days later.
ARGUMENT OF OMBUDSMAN:
Upon the filing of a complaint before a body vested with jurisdiction, that body has taken cognizance of the
complaint. It maintains that summons or notices do not operate to vest in the disciplining body jurisdiction over the
person of the respondent in an administrative case. It concludes that consistent with the rule on concurrent
jurisdiction, the Ombudsman’s exercise of jurisdiction should be to the exclusion of the sangguniang bayan.
ARGUMENT OF RODRIGUEZ:
DIGESTED BY: DE LARNA 22
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

When a competent body has acquired jurisdiction over a complaint and the person of the respondent, other
bodies are excluded from exercising jurisdiction over the same complaint. He cites Article 124 of the Implementing
Rules and Regulations of Republic Act No. 7160, which provides that an elective official may be removed from
office by order of the proper court or the disciplining authority whichever first acquires jurisdiction to the exclusion
of the other. He insists the SB first acquired jurisdiction over the complaint and his person. He argues jurisdiction
over the person of a respondent in an administrative complaint is acquired by the service of summons or other
compulsory processes. He stresses that complainants violated the rule against forum shopping when they filed
identical complaints in two disciplining authorities exercising concurrent jurisdiction.
ISSUES
1. Whether complainants violated the rule against forum shopping when they filed in the Ombudsman and
the sangguniang bayan identical complaints against Rodriguez? No.
2, Whether it was the sangguniang bayan or the Ombudsman that first acquired jurisdiction? The Ombudsman
RATIO:
1. The primary jurisdiction of the Ombudsman to investigate any act or omission of a public officer or
employee applies only in cases cognizable by the Sandiganbayan.
In cases cognizable by regular courts, the Ombudsman has concurrent jurisdiction with other
investigative agencies of government.
Republic Act No. 8249, otherwise known as An Act Further Defining the Jurisdiction of the
Sandiganbayan, limits the cases that are cognizable by the Sandiganbayan to public officials occupying positions
corresponding to salary grade 27 and higher. The Sandiganbayan has no jurisdiction over private respondent who, as
punong barangay, is occupying a position corresponding to salary grade 14.Under Section 61, Republic Act No.
7160, otherwise known as the Local Government Code, the sangguniang panlungsod or sangguniang bayan has
disciplinary authority over any elective barangay official and its decision is final and executory. Clearly, the
Ombudsman has concurrent jurisdiction with the sangguniang bayan over administrative cases against elective
barangay officials occupying positions below salary grade 27, such as private respondent in this case. In Laxina, Sr.
v. Ombudsman, the Court held that the rule against forum shopping applied only to judicial cases or proceedings,
not to administrative cases.
Thus, even if complainants filed in the Ombudsman and the sangguniang bayan identical complaints
against private respondent, they did not violate the rule against forum shopping because their complaint was in the
nature of an administrative case.
2. In administrative cases involving the concurrent jurisdiction of two or more disciplining authorities, the body in
which the complaint is filed first, and which opts to take cognizance of the case, acquires jurisdiction to the
exclusion of other tribunals exercising concurrent jurisdiction. In this case, since the complaint was filed first in the
Ombudsman, and the Ombudsman opted to assume jurisdiction over the complaint, the Ombudsman’s exercise of
jurisdiction is to the exclusion of the sangguniang bayan exercising concurrent jurisdiction.
It is a hornbook rule that jurisdiction is a matter of law. Jurisdiction, once acquired, is not lost upon the instance of
the parties but continues until the case is terminated. When herein complainants first filed the complaint in the
Ombudsman, jurisdiction was already vested on the latter. Jurisdiction could no longer be transferred to the
sangguniang bayan by virtue of a subsequent complaint filed by the same complainants. As a final note, under
Section 60 of the Local Government Code, the sangguniang bayan has no power to remove an elective barangay
official. Apart from the Ombudsman, only a proper court may do so. Unlike the sangguniang bayan, the powers of
the Ombudsman are not merely recommendatory. The Ombudsman is clothed with authority to directly remove an
erring public official other than members of Congress and the Judiciary who may be removed only by impeachment
CA decision is set aside. Ombudsman decision is affirmed.
DIGESTED BY: DE LARNA 23
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Office of the Ombudsman v. Ben Jurado
G.R No. 154155, August 6, 2008
Topic: Speedy Disposition of Cases
Facts:
Sometime in 1992, Maglei Enterprises Co., a partnership owned by Rose Cuyos and John Elvin C. Medina,
filed an application before the Bureau of Customs for the operation of a Customs Bonded Warehouse (CBW)-
Manufacturing Warehouse. As part of the evaluation of Maglei’s application, CBW Supervisor Juanito A. Baliwag
conducted an inspection of Maglei’s compliance with structural requirements. Baliwag submitted a report
recommending approval of the application.
On March 16, 1992, respondent Jurado, who was then the Chief of the Warehouse Inspection Division,
adopted the recommendation of Baliwag. Then he indorsed the papers of Maglei to the Chief of the Miscellaneous
Manufacturing Bonded Warehouse Division (MMBWD).
Maglei’s application was submitted to Rolando A. Mendoza, Chief of the MMBWD for his comment and
recommendation. In a Memorandum (for the District Collector of Customs) dated March 20, 1992, Mendoza
reported that Maglei has substantially complied with the physical and documentary requirements relative to their
application for the operation of a Customs Bonded Warehouse. Mendoza further recommended that Maglei’s
application be approved. Following the indorsements of the different divisions of the Bureau of Customs – Emma
M. Rosqueta (District Collector of Customs); Titus B. Villanueva (Deputy Commissioner for Assessment and
Operations); and Atty. Alex Gaticales (Executive Director of the Customs – SGS Import Valuation and
Classification Committee) – Maglei’s application was recommended for approval.
On June 25, 1992, Maglei was finally granted the authority to establish and operate CBW No. M-1467
located at 129 J. Bautista, Caloocan City. By virtue of such authority, Maglei imported various textile materials
which were then transferred to the said warehouse. The textiles were to be manufactured into car covers for
exportation.
Subsequently, on July 8 and 22, 1992, MMBWD Senior Storekeeper Account Officer George O. Dizon was
tasked by MMBWD Chief Mendoza to check and verify the status of Maglei’s CBW. Dizon reported that the subject
CBW was existing and operating. However, upon further verification by the Bureau of Customs, it was discovered
that the purported CBW of Maglei did not exist at the alleged site in Caloocan City. Rather, what was reported
located at the site was a School of the Divine Mercy. Only a small signboard bearing the name "Maglei Enterprises
Company" was posted inconspicuously in the corner of the lot. Further investigation revealed that Maglei’s
shipment of textile materials disappeared, without proof of the materials being exported or the corresponding taxes
being paid.
Ombudsman Disposition:
The Bureau of Customs initiated a complaint against George P. Dizon, Rose Cuyos and John Elvin C.
Medina for prosecution under the Tariff and Customs Code. After receiving a copy of the resolution, the
Ombudsman conducted the investigation on the complaint.
The Evaluation and Preliminary Investigation Bureau (EPIB) of the Office of the Ombudsman (OMB)
recommended that the Resolution of the Bureau of Customs be reversed. The EPIB further recommended that the
complaint against George P. Dizon be dismissed and another one be filed against Emma Rosqueta and Atty.
Rolando Mendoza, subject to further fact- finding investigation by the Fact Finding Bureau (FFB) of the OMB. With
regard to the case against Rose Cuyos and John Medina, the EPIB recommended that the charges be taken up
together with those of Rosqueta and Atty. Mendoza. The case
DIGESTED BY: DE LARNA 24
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
was then forwarded to the FFB.
The OMB dismissed the criminal complaint for falsification of public documents and violation of Section
3(e) of Republic Act (R.A.) No. 3019 and Section 3601 of the Tariff and Customs Code filed against respondent.
The complaint was dismissed on the ground of lack of prima facie evidence to charge respondent of the crime.
CA Disposition:
The CA reversed and set aside the questioned decision and resolution of the OMB. The dispositive part of
the CA decision runs in this wise: Foregoing premises considered, the Petition is given due course . Resultantly, the
challenged Decision/Resolution of the Ombudsman is hereby reversed and set aside. No costs.
ISSUES:
1. Whether or not respondent’s right to speedy trial was violated;
2. Whether or not respondent was negligent in the performance of his duty, as the chief of the warehousing
inspection division, despite the fact that he did not ensure that the supposed warehouse was not in
existence.
RULING:
1. No violation of respondent’s right to speedy disposition of cases.
Article III, Section 16 of the Constitution provides that, all persons shall have the right to a speedy
disposition of their cases before all judicial, quasi-judicial, or administrative bodies. The constitutional right to a
"speedy disposition of cases" is not limited to the accused in criminal proceedings but extends to all parties in all
cases, including civil and administrative cases, and in all proceedings, including judicial and quasi-judicial hearings.
Hence, under the Constitution, any party to a case may demand expeditious action from all officials who are tasked
with the administration of justice.
It bears stressing that although the Constitution guarantees the right to the speedy disposition of cases, it is
a flexible concept. Due regard must be given to the facts and circumstances surrounding each case. The right to a
speedy disposition of a case, like the right to speedy trial, is deemed violated only when the proceedings are attended
by vexatious, capricious, and oppressive delays, or when unjustified postponements of the trial are asked for and
secured, or when without cause or justifiable motive, a long period of time is allowed to elapse without the party
having his case tried.Just like the constitutional guarantee of "speedy trial," "speedy disposition of cases" is a
flexible concept. It is consistent with delays and depends upon the circumstances. What the Constitution prohibits
are unreasonable, arbitrary and oppressive delays which render rights nugatory.
In determining whether or not the right to the speedy disposition of cases has been violated, this Court has
laid down the following guidelines: (1) the length of the delay; (2) the reasons for such delay; (3) the assertion or
failure to assert such right by the accused; and (4) the prejudice caused by the delay.
2. Respondent administratively liable for neglect of duty.
It is elementary that the dismissal of criminal charges will not necessarily result in the dismissal of the
administrative complaint based on the same set of facts. The quantum of evidence in order to sustain a conviction
for a criminal case is different from the proof needed to find one administratively liable. Rule 133, Section 2 of the
Rules of Court provides that for criminal cases, conviction is warranted only when the guilt is proven beyond
reasonable doubt. Proof beyond reasonable doubt is defined as moral certainty, or that degree of proof which
produces conviction in an unprejudiced mind. On the other DIGESTED BY: DE LARNA 25
hand, the quantum of evidence necessary to find an individual administratively liable is substantial evidence. Rule
133, Section 5 of the Rules of Court states:
Sec. 5. Substantial evidence. – In cases filed before administrative or quasi-judicial bodies, a fact may be
deemed established if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion . (Underscoring supplied)
Substantial evidence does not necessarily mean preponderant proof as required in ordinary civil cases, but
such kind of relevant evidence as a reasonable mind might accept as adequate to support a conclusion or evidence
commonly accepted by reasonably prudent men in the conduct of their affairs.
Neglect of duty is the failure of an employee to give proper attention to a task expected of him, signifying
"disregard of a duty resulting from carelessness or indifference." By merely acquiescing to the report and
recommendation of his subordinate without verifying its accuracy, respondent was negligent in overseeing that the
duties and responsibilities of the WID were performed with utmost responsibility. Respondent was likewise
negligent when he failed, as supervisor, to initiate, institute, or recommend investigation and disciplinary
proceedings against his subordinate Baliwag after the anomaly was discovered. Clearly, respondent failed to
exercise the degree of care, skill, and diligence which the circumstances warrant.
DIGESTED BY: DE LARNA 26
OPORTO V. MEMBERS OF THE BOARD OF INQUIRY AND DISCIPLINE OF THE NATIONAL
POWER CORPORATION
G.R. NO. 147423, OCTOBER 15, 2008
Topic: Doctrine of Administrative Remedies: Due Process
FACTS:
Petitioner Tirso Z. Oporto, employed with the National Power Corporation (NPC) as Principal Engineer C,
Quality Assurance Inspector, together with his other co-employees, was administratively charged on October 30,
1996 for Dishonesty, Grave Misconduct and Gross Neglect of Duty.
Alleged therein that Tirso Z. Oporto, Principal Engineer C, Quality Assurance Inspector, Northern
Mindanao Area, Mindanao Regional Center, did on or about 10 November 1994, willfully and unlawfully sign NPC
Inspection and Receiving Report No. 002209, dated November 10, 1994, under the phrase Inspected and Accepted
By thereby making it appear that the woodpoles and crossarms specified therein were completely delivered to the
Aurora Sub-Area on 10 November 1994, which was not true, the truth being that no such woodpoles and crossarms
were delivered thereto on said date, an act of Dishonesty.
To this charge, petitioner filed an Answer dated December 13, 1996 with the NPC's Board of Inquiry and
Discipline (Board). Petitioner claimed that when the Inspection and Receiving Report (IRR) No. 002209 was
presented to him for his signature in order to support the supplier's claim for payment after February 15, 1995, he
immediately signed the same because all the items specified therein were completely delivered on November 26,
1994 and February 15, 1995. Petitioner averred that the error in the date of inspection appearing in the IRR, i.e.,
November 10, 1994, was simply an oversight on his part, with no malice or intent of being dishonest in the
discharge of his official functions. Petitioner also averred that he relied in good faith on the IRR which had been
prepared by the property/supply officer. Thus, he prayed that the said charge be dismissed.
A Pre-Hearing Conference was held. Thereafter, petitioner and his co-respondents submitted their
Joint Position Paper in support of their defenses, after which the case was submitted for resolution.
After the investigation/hearing, the Board found petitioner guilty of Dishonesty. NPC President in a letter-
decision, upon recommendation of the Board, meted on petitioner the penalty of suspension of one (1) year without
pay. The Board ratiocinated that while it is true that the items contained in the IRR were actually delivered and
accepted on November 26, 1994 and February 15, 1995, the fact remains that petitioner committed falsification
when he made it appear that he inspected and accepted the said items on November 10, 1994.
In a Memorandum/Appeal Brief dated May 20, 1998, addressed to Department of Energy (DOE) Secretary
and NPC Board Chairman Francisco L. Viray (Secretary Viray), petitioner prayed for the reversal of the decision of
the Board of Inquiry and the NPC President, and his exoneration from the charge of Dishonesty.
With his appeal to Secretary Viray still to be acted upon, petitioner, on May 28, 1998, filed with the RTC a
Petition for Prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with a prayer for the issuance of a
Temporary Restraining Order (TRO) against the respondents, praying, inter alia, that an order be issued
commanding the respondents to desist from enforcing any suspension order against petitioner. Summons were
served on the respondents. On June 3, 1998, the RTC issued a TRO against the respondents.
Instead of filing an answer, respondents, on July 14, 1998, filed a Motion to Dismiss alleging that petitioner
failed to exhaust administrative remedies, and that the RTC has no jurisdiction to issue the TRO/writ of prohibition
because RTCs can only enforce their writs within their respective territorial jurisdictions.
DIGESTED BY: FLOJO 27
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 RTC:
The motion to dismiss was denied.
The doctrine on exhaustion of administrative remedies does not preclude herein petitioner from seeking
judicial relief. This rule is not a hard and fast one but admits several exceptions. Some of these exceptions like when
the issue is pure legal question and when circumstances (sic) warrant urgency for judicial intervention. CA:
The CA ruled in favor of the respondents, declaring in the main that the RTC should have adhered to the
Doctrine of Exhaustion of Administrative remedies; that the petitioner was accorded due process by the Board,
considering that he was given a chance to file his Answer and Joint Position Paper; and that, for the writ of
prohibition to be issued, petitioner must clearly show that the Board acted without or in excess of its jurisdiction, or
with grave abuse of discretion.
SC:
The doctrine of exhaustion of administrative remedies mandates that whenever there is an available
administrative remedy provided by law, no judicial recourse can be made until all such remedies have been availed
of and exhausted. This rule is based on the practical principle that the administrative agency should be given a
chance to correct its error, and that relief first sought from a superior administrative agency could render court
action unnecessary.
In this case, petitioner appealed the decision of the NPC President to DOE Secretary and concurrently
Chairman of the NPC Board Viray. Obviously, petitioner was under the impression that Secretary Viray had
administrative appellate authority over the NPC President’s decision. But without waiting for the Secretary’s action,
petitioner filed with the RTC a petition for prohibition under Rule 65 of the Rules of Court. In so doing, petitioner
compounded an earlier error with yet another blunder, namely, forum shopping.
By going to court without awaiting the action of Secretary Viray whom he recognized as a superior
administrative authority petitioner violated the doctrine of exhaustion of administrative remedies. Evidently, even
the appeal to Secretary Viray was misplaced. As the DOE Secretary (Mario V. Tiaoqui, who replaced Secretary
Viray) eventually decided, petitioners appeal was without legal basis because the decision of the NPC President, on
recommendation of the NPC Board of Inquiry and Discipline, should have been bro ught on appeal to the CSC
While admittedly violation of due process is an exception to the doctrine of exhaustion of administrative
remedies, petitioner was not denied due process of law.
Due process is not a mantra, the mere invocation of which shall warrant a reversal of a decision. Well-
settled is the rule that the essence of due process is the opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side or seek a reconsideration of the action or ruling complained of.
Petitioner was not deprived of due process in this case as he had in fact filed his Answer and a Joint Position Paper
explaining to the Board the reasons for the discrepancy of the inspection and delivery date as contained in the IRR
and of the actual delivery dates. He was, likewise, able to file a Motion for Reconsideration of the NPC President's
decision. It bears stressing that petitioner, along with his other co-respondents, was given an opportunity during the
Pre-Conference Hearing to manifest whether he would like to avail the services of counsel but he opted to remain
quiet. It should also be emphasized that despite the opportunity to do so, petitioner did not present any new
substantial defense other than to say that the alleged typographical error on the date of IRR was not his own doing
and that his signing the IRR error and all was simply a case of oversight.
DIGESTED BY: FLOJO 28
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
JOSE MAX S. ORTIZ V. SAN MIGUEL CORPORATION
G.R. NOS. 15198 3-84 JULY 31, 2008
Topic: Two Commonly Accepted Concepts of Attorney's Fees: Ordinary And Extraordinary
FACTS:
Petitioner represented the complainants in 2 separate cases for illegal dismissal with backwages and
other benefits against respondent (1992 & 1993). In both cases, the LA rule in favor of petitioner’s clients.
SMC elevated the matter to the NLRC then to the Court of Appeals. NLRC rendered a decision modifying
the award to 10 % attorney's fees of the total monetary award or P198,296.95.
While the private respondent's Petitions for Certiorari were pending before the Court of Appeals, all but
one of the remaining complainants in both cases appeared on various dates before LA’s and in the presence of two
witnesses, signed separate Deeds of Release, Waiver and Quitclaim in favor of private respondent.
Complainants agreed to settle their claims against private respondent for amounts less than what the NLRC
actually awarded. Private respondent withheld 10% of the total amount agreed upon by the parties in the said Deeds
as attorney's fees and handed it over to petitioner.
CA rendered a Decision affirming the NLRC Decision only insofar as it concerned complainant Alfredo
Gadian, Jr. the only complainant who did not execute a Deed of Release, Waiver and Quitclaim. With respect to the
other complainants, their complaints were dismissed on account of their duly executed Deeds of Release, Waiver
and Quitclaim.
Herein petitioner, for their part, likewise moved for the partial reconsideration of the same Decision of the
appellate court praying that the award of attorney's fees of 10% should be based on the monetary awards adjudged
by the NLRC.
ISSUES:
1. What would be the basis of computation of the 10% Attorney’s fees; the decision of NLRC or 10% of
the amounts
actually paid to his clients, the complainants who signed the Deeds of Release, Waiver and Quitclaim.
2. Whether or not the quitclaim was valid.
HELD:
Article 111 of the Labor Code, as amended, specifically provides: (a) In cases of unlawful withholding of
wages the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of wages
recovered.
There are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In
its ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal
services the former has rendered to the latter. The basis of this compensation is the fact of the attorney's employment
by and his agreement with the client. In its extraordinary concept, attorney's fees are deemed indemnity for damages
ordered by the court to be paid by the losing party in a litigation. It is payable not to the lawyer but to the client,
unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.
Article 111 of the LC, as amended, contemplates the extraordinary concept of attorney's fees.
Based on the foregoing, the attorney's fees awarded by the NLRC pertain to the complainants, petitioner's
clients, as indemnity for damages; and not to petitioner as compensation for his legal services. Petitioner never
proved that the complainants willingly agreed that the award of attorney's fees would accrue to him as an additional
compensation or part thereof. The Deeds were executed between complainants and private respondent, the petitioner
was not even a party to the said documents; and (2) private complainants' request that private respondent withhold
10% attorney's fees to be payable to petitioner was in relation to the amount of gross settlement under the Deeds and
not to the amounts awarded by the NLRC.
DIGESTED BY: FLOJO 29
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
What the complainants explicitly agreed to in their individual Deeds of Release, Waiver, and Quitclaim
was that the 10% attorney's fees of the petitioner shall be deducted from the amount of the gross settlement.
Petitioner is not the real party in interest. To reiterate, the award of attorney's fees pertain to the prevailing
parties in the NLRC cases, namely, the complainants, all but one of whom no longer pursued their complaints
against private respondent after executing Deeds of Release, Waiver and Quitclaim.
On the second issue, the Deeds of Release, Waiver and Quitclaim individually executed by the
complainants is valid. The LC does not require the conformity of petitioner for its validity. The only requisites for
the validity of any Deed of Release, Waiver and Quitclaim are the following: (1) that there was no fraud or deceit on
the part of any of the parties; (2) that the consideration for the quitclaim is credible and reasonable; and (3) that the
contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person
with a right recognized by law.
DIGESTED BY: FLOJO 30
PAGCOR v Aumendo
G.R. NO. 173634
Topic: Jurisdiction of the Court of Appeals over petitions for review under rule 43 is not limited to
judgments and final orders of CSC.
FACTS:
Respondent Rufino G. Aumentado, Jr. was employed by PAGCOR as a table supervisor. Subsequently,
PAGCOR dismissed respondent from the service. Feeling aggrieved, respondent filed a complaint for illegal
dismissal.
In CSC Resolution No. 98-1996 dated 27 July 1998, the CSC ruled that respondent was illegally terminated
from the service and ordered respondents reinstatement and the payment of his back wages. PAGCOR filed a
motion for reconsideration. On 5 October 1998, the CSC denied PAGCORs motion.
PAGCOR appealed to the Court of Appeals. The Court of Appeals affirmed the CSCs decision.
PAGCOR appealed to this Court. In our 20 November 2000 Resolution in G.R. No. 144500, we denied
PAGCOR's appeal for failure to take the appeal within the reglementary period of 15 days. On 29 January 2001, our
20 November 2000 Resolution became final and executory. In his 15 March 2001 letter addressed to the CSC, the
Chairman and Chief Executive Officer and the Board of Directors of PAGCOR, respondent requested for his
immediate reinstatement and the payment of his backwages. Respondent also filed a motion for execution before the
CSC. In CSC Resolution No. 02-0773 dated 30 May 2002,
]

the CSC granted respondents motion.

However, on 4 April 2001, PAGCOR and respondent entered into an amicable settlement and, for
monetary consideration, respondent executed a quitclaim
On 1 July 2002, PAGCOR filed with the CSC a Manifestation of Quitclaim with Prayer to Declare
Complainant in Contempt. PAGCOR sought the reconsideration of CSC Resolution No. 02-0773 on the basis of the
quitclaim executed by respondent.
In CSC Resolution No. 03-0082 dated 20 January 2003, the CSC denied PAGCORs motion
PAGCOR filed a motion for reconsideration. In CSC Resolution No. 04-0395 dated 5 April 2004 Resolution,
]

t
he CSC denied PAGCORs motion.
THE RULING OF THE COURT OF APPEALS:
The Court of Appeals ruled that the appeal was not proper because Rule 43 of the Rules of Court (the
Rules) applies only to appeals from judgments or final orders of an administrative body. According to the Court of
Appeals, PAGCOR's appeal was not one from a judgment or final order of the CSC but was directed against a
resolution ordering respondents reinstatement in accordance with a decision which had already become final and
executory. The Court of Appeals added that an order of execution is not appealable.
ISSUES:
1. Whether or not the Court of Appeals erred in ruling that its jurisdiction under Rule 43 of the Rules of Court is
limited only to JUDGMENTS and FINAL ORDERS of the Civil Service Commission? 2. Whether or not the
Court
of Appeals erred in ruling that CSC Resolution No. 02-0773 dated May 30, 2002, CSC Resolution No. 03-0082
dated January 20, 2003, [and] CSC Resolution No. 04-0395 dated April 5, 2004, are merely orders for execution
thus not susceptible to appeal?
THE RULING OF THE SC
First, PAGCOR is correct that the jurisdiction of the Court of Appeals over petitions for review under Rule
43 is not limited to judgments and final orders of the CSC. Section 1, Rule 43 of the Rules provides:
SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax
DIGESTED BY: FLOJO 31
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission,
It is clear from the Rules that the Court of Appeals can entertain appeals from awards, judgments, final
orders or resolutions of the CSC.
Second, when the Court of Appeals declared that CSC Resolution Nos. 02-0773, 03-0082, and 04-0395
were not subject to appeal, the Court of Appeals applied Section 1, Rule 41 of the Rules which provides:
SECTION 1. Subject of Appeal. - An appeal may be taken from a judgment or final order that completely disposes
of the case, or of a particular matter therein when declared by these Rules to be appealable.
No appeal may be taken from:
f) An order of execution;
In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an
appropriate special civil action under Rule 65.
The general rule is that an order of execution is not appealable; otherwise, a case would never end. There
are, however, exceptions to this rule, namely:
2. There has been a change in the situation of the parties making execution inequitable or unjust;
PAGCOR argues that the quitclaim changed the situation of the parties making the execution of CSC
Resolution No. 98-1996 unjust. PAGCOR contends that it refused to reinstate respondent because he already
executed the quitclaim and waived his right to reinstatement.
PAGCOR and respondent executed the quitclaim after the entry of judgment. The execution of a quitclaim
after a decision has become final and executory is a supervening event which could affect the execution of the
decision. The quitclaim between PAGCOR and respondent brought about a change in their situation because the
validity of the quitclaim would determine whether respondent is entitled to reinstatement. The validity of the
quitclaim will also determine if the execution of CSC Resolution No. 98-1996 will be inequitable or unjust.
In this case, the CSC, without mentioning the quitclaim, issued CSC Resolution No. 02-0773 and ordered
respondents reinstatement. The CSC only took notice of the quitclaim in CSC Resolution No. 03-0082 and declared
it void. PAGCOR insists that the quitclaim is valid. The Court of Appeals subsequently denied PAGCORs appeal
without ruling on the validity of the quitclaim.
The issue on the validity of the quitclaim is a question of fact which should have been properly decided by
the Court of Appeals. As we are not a trier of facts, we remand the case to the Court of Appeals for a thorough
examination of the evidence and a judicious disposal of the case.
DIGESTED BY: FLOJO 32
PAGCOR VS. Fontana Development Corporation
G.R. No. 187972, June 29, 2010
Topic: Licensing power of PAGCOR
FACTS:
In this petition for review under Rule 45, the May 19, 2009 Decision of the Court of Appeals (CA) in CA-
G.R. SP No. 107247 is questioned for not nullifying the November 18, 2008 Order of the Regional Trial Court
(RTC) in Manila in Civil Case No. 08-120338 that issued a temporary restraining order (TRO) against petitioner
Philippine Amusement and Gaming Corporation (PAGCOR), barring PAGCOR from committing acts that allegedly
violate the rights of respondent Fontana Development Corporation (FDC) under a December 23, 1999 Memorandum
of Agreement (MOA).
PAGCOR granted private respondent Fontana Development Corporation (FDC) (formerly RN
Development Corporation) the authority to operate and maintain a casino inside the CSEZ under a Memorandum of
Agreement (MOA), stating inter alia: x x x 1. RNDC Improvements x x x 4. Non-exclusivity, PAGCOR and RNDC
agree that the license granted to RNDC to engage in gaming and amusement operations within CSEZ shall be non-
exclusive and co-terminus with the Charter of PAGCOR, or any extension thereof, and shall be for the period
hereinabove defined. x x x
The Coconut Oil Refiners Association challenged before the Supreme Court the constitutionality, among
others, of EO No. 80 on the ground that the incentives granted to SSEZ under RA No. 7227 was exclusive and
cannot be made applicable to CSEZ by a mere executive order. The case was decided in favor of Coconut Oil
Refiners Association and Section 5 aforequoted was declared of no legal force and effect. RA No. 9487 was enacted,
extending PAGCOR’s franchise up to July 10, 2033 renewable for another twenty-five (25) years,
PAGCOR informed FDC that it was extending the MOA on a month-to-month basis until the finalization of
the renewal of the contract. FDC protested, claiming that the extension of PAGCOR’s franchise had automatically
extended the MOA: that the SC decisions, including RA Nos. 9400 and 9399, had no effect on the authority of CDC
to allow the establishment of a casino inside the CSEZ; and that in Coconut Oil Refiners Association, Inc., the SC
did not declare void the entire EO No. 80 but only Section 5 thereof.
FDC filed before the RTC of Manila the instant complaint for Injunction against PAGCOR, contending that
it could not be covered by a month-to-month extension nor by the standard Authority to Operate since the MOA was
automatically renewed and extended up to 2033.
PAGCOR filed its Special Appearance (for Dismissal of the Petition and the Opposition to the Prayer for a
Temporary Restraining Order and/or Writ of Preliminary Injunction), praying that the complaint be dismissed for
lack of jurisdiction.
RTC issued the first assailed Order denying PAGCOR’s motion to dismiss and granting FDC’s application
for a TRO. The RTC held that the SC had no exclusive jurisdiction over cases involving PAGCOR; that the cases of
Del Mar vs. PAGCOR, Sandoval II vs. PAGCOR, Jaworski vs. PAGCOR were decided by the SC in the exercise of
its discretionary power to take cognizance of cases; that it had jurisdiction over the instant complaint under Section
21(1) of Batas Pambansa (BP) No. 129 in relation to Article VIII, Section 5(1) of the 1987 Constitution and the rule
on hierarchy of courts
ISSUE:
Whether or not the trial court erred in declaring that PAGCOR issued the license (MOA) to FDC under the
authority of PD 1869 and not under EO 80, Sec. 5.
DIGESTED BY: FLOJO 33
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 HELD:
NO. Sec. 13 of RA 7227 simply shows that SBMA has no power to license or operate casinos. Rather, said
casinos shall continue to be licensed by PAGCOR. Hence, the source of PAGCOR’s authority lies in its basic
charter, PD 1869, as amended, and neither in RA 7227 nor its extension, EO 80, for the latter merely recognizes
PAGCOR’s power to license casinos. Indeed, PD 1869 empowers PAGCOR to regulate and control all games of
chance within the Philippines, and clearly, RA 7227 or EO 80 cannot be the source of its powers, but its basic
charter, PD 1869.
The reliance of PAGCOR on Coconut Oil Refiners Association, Inc.15 to buttress its position that the
MOA with FDC can be validly supplanted with the 10-year SAO is clearly misplaced. That case cannot be a
precedent to the instant case, as it dealt solely with the void grant of tax and duty-free incentives inside CSEZ. The
Court ruled in Coconut Oil Refiners Association, Inc. that the tax incentives within the CSEZ were an invalid
exercise of quasi-legislative powers, thus:
In the present case, while Section 12 of Republic Act No. 7227 expressly provides for the grant of
incentives to the SSEZ, it fails to make any similar grant in favor of other economic zones, including the CSEZ. Tax
and duty-free incentives being in the nature of tax exemptions, the basis thereof should be categorically and
unmistakably expressed from the language of the statute. Consequently, in the absence of any express grant of tax
and duty-free privileges to the CSEZ in Republic Act No. 7227, there would be no legal basis to uphold the
questioned portions of two issuances: Section 5 of Executive Order No. 80 and Section 4 of BCDA Board
Resolution No. 93-05-034, which both pertain to the CSEZ.
DIGESTED BY: FLOJO 34
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), Petitioner, VS PHILIPPINE
GAMING JURISDICTION INCORPORATED (PEJI), ZAMBOANGA CITY SPECIAL ECONOMIC
ZONE AUTHORITY, et al.,Respondent.
G.R. No. 177333 2009-04-24 |
Topic: Doctrine of respect for administrative or practical construction
FACTS:
On 23 February 1995, R.A. No. 7903 was enacted into law, to which it conceived the Zamboanga City
Special Economic Zone (ZAMBOECOZONE) and the ZAMBOECOZONE Authority.
Among other things, the law gives the ZAMBOECOZONE Authority the following power under Sec. 7 (f)
To operate on its own, either directly or through a subsidiary entity or license to others, tourism-related activities,
including games amusements and recreational and sports facilities.
In the exercise of its power granted under the above provision, public respondent ZAMBOECOZONE
Authority approved the application of private respondent Philippine E-Gaming Jurisdiction, Inc. (PEJI) to be a
Master Licensor/Regulator of on-line/internet/electronic gaming/games of chance within the economic zone.
Philippine Amusement and Gaming Corporation (PAGCOR) filed the present petition for Prohibition
which assails the authority of the ZAMBOECOZONE Authority to operate, license, or regulate the operation of
games of chance in the ZAMBOECOZONE.
PAGCOR maintains that, compared with the above-quoted provisions of the ecozone-related statutes,
Section 7(f) of R.A. No. 7903 does not categorically empower the ZAMBOECOZONE Authority to operate,
license, or authorize entities to operate games of chance in the area, as the words "games" and "amusement"
employed therein do not include "games of chance." Hence, PAGCOR concludes, ZAMBOECOZONE Authority’s
grant of license to private respondent PEJI encroached on its (PAGCOR’s) authority under Presidential Decree No.
1869 vis-a-vis the above-stated special laws to centralize and regulate all games of chance.
ZAMBOECOZONE Authority, in its Comment, contends that PAGCOR has no personality to file the
present petition as it failed to cite a superior law which proves its claim of having been granted exclusive right and
authority to license and regulate all games of chance within the Philippines; and that, contrary to PAGCOR’s
assertion, the words "games" and "amusements" in Section 7(f) of R.A. No. 7903 include "games of chance" as was
the intention of the lawmakers when they enacted the law.
ISSUE:
Whether or not ZAMBOECOZONE Authority has the mandate of authorizing a private company, PEJI, to
be a Master Licensor/Regulator of online/internet/electronic gaming/games of chance within the economic zone.
HELD:
The Court finds that, indeed, R.A. No. 7903 does not authorize the ZAMBOECOZONE Authority
to operate and/or license games of chance/gambling.
Section 7(f) of R.A. No. 7903 authorizes the ZAMBOECOZONE Authority "to operate on its own, either
directly or through a subsidiary entity, or license to others, tourism-related activities, including games, amusements
and recreational and sports facilities."
It is a well-settled rule in statutory construction that where the words of a statute are clear, plain, and free
from ambiguity, it must be given its literal meaning and applied without attempted interpretation.
The plain meaning rule or verba legis, derived from the maxim index animi sermo est (speech is the index
of intention), rests on the valid presumption that the words employed by the legislature in a statute correctly express
its intention or will, and preclude the court from construing it differently. For the legislature is presumed to know
the meaning of the words, to have used them advisedly, and to have expressed the intent by use of such words as are
found in the statute. Verba legis non est recedendum. From the words of a statute there should be no departure.
DIGESTED BY: JACINTO 35
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
The words "game" and "amusement" have definite and unambiguous meanings in law which are clearly
different from "game of chance" or "gambling." In its ordinary sense, a "game" is a sport, pastime, or contest; while
an "amusement" is a pleasurable occupation of the senses, diversion, or enjoyment. On the other hand, a "game of
chance" is "a game in which chance rather than skill determines the outcome," while "gambling" is defined as
"making a bet" or "a play for value against an uncertain event in hope of gaining something of value."
The spirit and reason of the statute may be passed upon where a literal meaning would lead to absurdity,
contradiction, injustice, or defeat the clear purpose of the lawmakers.Not any of these instances is present in the case
at bar, however. Using the literal meanings of "games" and "amusement" to exclude "games of chance" and
"gambling" does not lead to absurdity, contradiction, or injustice. Neither does it defeat the intent of the legislators.
The ZAMBOECOZONE Charter simply allows the operation of tourism-related activities including games
and amusements without stating any form of gambling activity in its grant of authority to ZAMBOECOZONE.
PAGCOR being under the supervision of the Office of the President, the latter’s interpretation of R.A. No.
7903 is persuasive and deserves respect under the doctrine of respect for administrative or practical construction. In
applying said doctrine, courts often refer to several factors which may be regarded as bases thereof – factors leading
the courts to give the principle controlling weight in particular instances, or as independent rules in themselves.
These factors include the respect due the governmental agencies charged with administration, their competence,
expertness, experience, and informed judgment and the fact that they frequently are the drafters of the law they
interpret; that the agency is the one on which the legislature must rely to advise it as to the practical working out of
the statute, and practical application of the statute presents the agency with unique opportunity and experiences for
discovering deficiencies, inaccuracies, or improvements in the statute.
In fine, Section 7(f) did not grant to the ZAMBOECOZONE Authority the power to operate and/or
license games of chance/gambling.
DIGESTED BY: JACINTO 36
NORMA PATALINGHUG, et al vs.COMMISSION ON ELECTIONS, et al
G.R. No. 178767 January 30, 2008
Topic: Election Laws; Pre-Proclamation Controversies
FACTS:
In the May 14, 2007 national and local elections, petitioners ran for the local positions (mayor, vice-mayor
and councilor) in Lapu-Lapu City. At the start of and during the canvassing, petitioners questioned the composition
of the Board of Canvassers (BOC), and objected to the inclusion of several election returns (ERs). As the BOC ruled
against them, petitioners filed their notices of appeal,
4

and consequently, initiated with the COMELEC a Pre-Proclamation

Petition docketed as SPC No. 07-011, seeking the declaration of the composition and the proceedings of the BOC as
illegal.
Petitioners also filed an Appeal with the COMELEC, praying for the non-inclusion in the canvass of 182
election returns. COMELEC First Division issued in the Order directing the BOC to proclaim the winning
candidates in the official canvass and the BOC proclaimed private respondents as the duly elected officials of Lapu-
Lapu City. Dissatisfied, petitioners moved for the recall and/or nullification of the said proclamation on May 29,
2007.
On June 4, 2007, the COMELEC First Division rendered the Resolution dismissing the said case.
Consequently, the COMELEC en banc issued the third assailed Resolution or the Omnibus Resolution on Pending
Cases.
Discontented with the said COMELEC issuances, petitioners, on July 26, 2007, instituted the instant petition for
certiorari under Rule 65.
Respondents in their Comment countered, among others, that COMELEC Resolution could not be
questioned via a petition for certiorari because it was not issued in the COMELEC’s exercise of quasi-judicial
functions. It was rather issued in the exercise of its power to enforce and administer all laws relative to the conduct
of elections as enunciated in Section 52 of the OEC. Furthermore, the petition was filed beyond the 30-day
reglementary period for questioning via certiorari final orders and resolutions of the COMELEC.
ISSUE:
Is a petition for certiorari under Rule 65 proper in challenging tha COMELEC Resolution? Was there grave
abuse of discretion?
HELD:
Dismissed for failure to prove grave abuse of discretion, but SC discussed a few important points in this case.
The petitioners correctly filed the instant certiorari petition to question the COMELEC Resolution but
failed to sufficiently show grave abuse of discretion on the part of the COMELEC in its issuance of the said
Resolution.
We clarify, at this point, that COMELEC Resolution in an issuance in the exercise of the COMELEC’s
adjudicatory or quasi-judicial function. The same was issued pursuant to the second paragraph of Section 16 of RA
No. 7166, which states that “all pre-proclamation cases pending before the Commission shall be deemed terminated
at the beginning of the term of the office involved and the rulings of the boards of canvassers concerned shall be
deemed affirmed, without prejudice to the filing of a regular election protest by the aggrieved party. However,
proceedings may continue when on the basis of the evidence thus far presented, the Commission determines that the
petition appears meritorious and accordingly issues an order for the proceeding to continue or when an
appropriate order has been issued by the Supreme Court in a petition for certiorari.”
The determination by the COMELEC of the merits of a pre-proclamation case definitely involves the
exercise of adjudicatory powers. The COMELEC examines and weighs the parties’ pieces of evidence vis-à-vis their
respective arguments, and considers whether, on the basis of the evidence thus far presented, the case appears to
have merit. Where a power rests in judgment or discretion, so that it is of judicial nature or character, but does not
involve the exercise of functions of a judge, or is conferred upon an officer other than a judicial officer, it is deemed
quasi-judicial.
Second, if a pre-proclamation case is dismissed by a COMELEC division and, on the same date of
dismissal or within the period to file a motion for reconsideration, the COMELEC en banc excluded the said case
from the list annexed to the Omnibus Resolution, the remedy of the aggrieved party is also to timely file a certiorari
petition assailing the Omnibus Resolution before the Court under Rules 64 and 65. The aggrieved party need no
longer file a motion for reconsideration of the division ruling.
DIGESTED BY: JACINTO 37
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

PEOPLE’S BROADCASTING (BOMBO RADYO PHILS., INC.) vs.THE SECRETARY OF THE

DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII,
and JANDELEON JUEZAN
G.R. No. 179652, May 8, 2009
Topic: Employer-Employee Relationship
FACTS:
The instant petition for certiorari under Rule 65 assails the decision and the resolution of the Court of Appeals.
The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent) against People’s
Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service
incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth (non-diminution of benefits in the amount
allegedly 6K) before the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City.
On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September 2003. Labor
Inspector wrote under the heading “Findings/Recommendations” “non-diminution of benefits” and “Note:
Respondent deny employer- employee relationship with the complainant- see Notice of Inspection results.”
PETITIONER’S POSITION:
Management representative informed that complainant is a drama talent hired on a per drama ”
participation basis” hence no employer-employeeship [sic] existed between them. As proof of this, management
presented photocopies of cash vouchers, billing statement, employments of specific undertaking (a contract between
the talent director & the complainant), summary of billing of drama production etc. They (mgt.) has [sic] not control
of the talent if he ventures into another contract w/ other broadcasting industries.
RULING OF DOLE REGIONAL DIRECTOR:
Respondent is an employee of petitioner, and that the former is entitled to his money claims amounting
toP203,726.30. MR denied; Appeal with the DOLE Secretary, dismissed the appeal on the ground that petitioner did
not post a cash or surety bond and instead submitted a Deed of Assignment of Bank Deposit.
APPEAL WITH THE CA:
Claiming that it was denied due process when the DOLE Secretary disregarded the evidence it presented
and failed to give it the opportunity to refute the claims of respondent. Petitioner maintained that there is no
employer-employee relationship had ever existed between it and respondent because it was the drama directors and
producers who paid, supervised and disciplined respondent. It also added that the case was beyond the jurisdiction
of the DOLE and should have been considered by the labor arbiter because respondent’s claim exceeded P5,000.00.
CA denied.
WITH THE SC:
Petitioner argues that the National Labor Relations Commission (NLRC), and not the DOLE Secretary, has
jurisdiction over respondent’s claim, in view of Articles 217 and 128 of the Labor Code. RESPONDENT’S
POSITION: respondent posits that the Court of Appeals did not abuse its discretion. He invokes Republic Act No.
7730, which “removes the jurisdiction of the Secretary of Labor and Employment or his duly authorized
representatives, from the effects of the restrictive provisions of Article 129 and 217 of the Labor Code, regarding the
confinement of jurisdiction based on the amount of claims.”; and wrong mode of appeal.
ISSUE:
 Whether or not the Secretary of Labor have the power to determine the existence of an employer-employee
relationship.
HELD:
No. To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement power of
the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act 7730. It reads:
DIGESTED BY: JACINTO 38
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in
cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance orders to give effect to the labor standards
provisions of this Code and other labor legislation based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of inspection
The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into play only
“in cases when the relationship of employer-employee still exists.” Of course, a person’s entitlement to labor
standard benefits under the labor laws presupposes the existence of employer-employee relationship in the first
place. The clause signifies that the employer-employee relationship must have existed even before the emergence of
the controversy. Necessarily, the DOLE’s power does not apply in two instances, namely: (a) where the employer-
employee relationship has ceased; and (b) where no such relationship has ever existed.
The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the Disposition of Labor
Standards Cases 15 issued by the DOLE Secretary. It reads:
Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION
Sec. 3. Complaints where no employer-employee relationship actually exists. Where employer-employee
relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of the
complaint, it can be ascertained that employer-employee relationship no longer exists, the case, whether
accompanied by an allegation of illegal dismissal, shall immediately be endorsed by the Regional Director to the
appropriate branch of the National Labor Relations Commission (NLRC).
Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee
relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the second situation
especially, the existence of an employer-employee relationship is a matter which is not easily determinable from an
ordinary inspection, necessarily so, because the elements of such a relationship are not verifiable from a mere ocular
examination. The determination of which should be comprehensive and intensive and therefore best left to the
specialized quasi-judicial body that is the NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to
make a determination of the existence of an employer-employee relationship. Such prerogative determination,
however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such determination is
merely preliminary, incidental and collateral to the DOLE’s primary function of enforcing labor standards
provisions. The determination of the existence of employer-employee relationship is still primarily lodged with the
NLRC.
Thus, before the DOLE may exercise its powers under Article 128, two important questions must be
resolved: (1) Does the employer-employee relationship still exist, or alternatively, was there ever an employer-
employee relationship to speak of; and (2) Are there violations of the Labor Code or of any labor law?
A mere assertion of absence of employer-employee relationship does not deprive the DOLE of jurisdiction
over the claim under Article 128 of the Labor Code. At least a prima facie showing of such absence of relationship,
as in this case, is needed to preclude the DOLE from the exercise of its power. Without a doubt, petitioner, since the
inception of this case had been consistent in maintaining that respondent is not its employee. Certainly, a
preliminary determination, based on the evidence offered, and noted by the Labor Inspector during the inspection as
well as submitted during the proceedings before the Regional Director puts in genuine doubt the existence of
employer-employee relationship. From that point on, the prudent recourse on the part of the DOLE should have
been to refer respondent to the NLRC for the proper dispensation of his claims. Furthermore, as discussed earlier,
even
the evidence relied on by the Regional Director in his order are mere self-serving declarations of respondent, and
hence cannot be relied upon as proof of employer-employee relationship.
DIGESTED BY: JACINTO 39
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

ZENON R. PEREZ VS PEOPLE OF THE PHILIPPINES

G.R. No. 164763, February 12, 2008
Topic: Malversation of Public Funds
FACTS:
An audit team conducted a cash examination on the account of petitioner, who was then the acting
municipal treasurer of Tubigon, Bohol. In the course of the audit, the amount of P21,331.79 was found in the safe of
petitioner. The audit team embodied their findings in the Report of Cash Examination, which also contained an
inventory of cash items. Based on the said audit, petitioner was supposed to have on hand the total amount of
P94,116.36, instead of the P21,331.79, incurring a shortage of P72,784.57. When asked by the auditing team as to
the location of the missing funds, petitioner verbally explained that part of the money was used to pay for the loan of
his late brother, another portion was spent for the food of his family, and the rest for his medicine.
As a result of the audit, Arlene R. Mandin prepared a memorandum dated January 13, 1989 addressed to
the Provincial Auditor of Bohol recommending the filing of the appropriate criminal case against petitioner.
Petitioner was charged before the Sandiganbayan with malversation of public funds, defined and penalized
by Article 217 of the Revised Penal Code
ISSUE:
Whether or not petitioner is guilty of malversation?
HELD:
YES. Malversation is defined and penalized under Article 217 of the Revised Penal Code. The acts
punished as malversation are: (1) appropriating public funds or property, (2) taking or misappropriating the same,
(3) consenting, or throughabandonment or negligence, permitting any other person to take such public funds or
property, and (4) being otherwise guilty of the misappropriation or malversation of such funds or property.
There are four elements that must concur in order that one may be found guilty of the crime. They are: (a)
That the offender be a public officer; (b) That he had the custody or control of funds or property by reason of the
duties of his office;(c) That those funds or property involved were public funds or property for which he is
accountable; and (d) That he has appropriated, took or misappropriated or consented or, through abandonment or
negligence, permitted another person to take them.
Evidently, the first three elements are present in the case at bar. At the time of the commission of the crime
charged, petitioner was a public officer, being then the acting municipal treasurer of Tubigon, Bohol. By reason of
his public office, he was accountable for the public funds under his custody or control. In malversation, all that is
necessary to prove is that the defendant received in his possession public funds; that he could not account for them
and did not have them in his possession; and that he could not give a reasonable excuse for its disappearance. An
accountable public officer may be convicted of malversation even if there is no direct evidence of misappropriation
and the only evidence is shortage in his accounts which he has not been able to explain satisfactorily.
Verily, an accountable public officer may be found guilty of malversation even if there is no direct
evidence of malversation because the law establishes a presumption that mere failure of an accountable officer to
produce public funds which have come into his hands on demand by an officer duly authorized to examine his
accounts is prima facie case of conversion. Because of the prima facie presumption in Article 217, the burden of
evidence is shifted to the accused to adequately explain the location of the funds or property under his custody or
control in order to rebut the presumption that he has appropriated or misappropriated for himself the missing funds.
Failing to do so, the accused may be convicted under the said provision.
 However, the presumption is merely prima facie and a rebuttable one. The accountable officer may
overcome the presumption by proof to the contrary. If he adduces evidence showing that, in fact, he has not put said
funds or property to personal use, then that presumption is at end and the prima facie case is destroyed. In the case at
bar, petitioner was not able to present any credible evidence to rebut the presumption that he malversed the missing
funds in his custody or control.
DIGESTED BY: JACINTO 40
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES vs. HEALTH

SECRETARY FRANCISCO T. DUQUE III
G.R. No. 173034, October 9, 2007
Topic: Doctrine of Transformation
FACTS:
On October 28, 1986, Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino by
virtue of the legislative powers granted to the president under the Freedom Constitution. The Milk Code states that
the law seeks to give effect to Article 112 of the International Code of Marketing of Breastmilk Substitutes
(ICMBS), a code adopted by the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted
several Resolutions to the effect that breastfeeding should be supported, promoted and protected, hence, it should be
ensured that nutrition and health claims are not permitted for breastmilk substitutes. the Philippines ratified the
International Convention on the Rights of the Child. Article 24 of said instrument provides that State Parties should
take appropriate measures to diminish infant and child mortality, and ensure that all segments of society, specially
parents and children, are informed of the advantages of breastfeeding. the DOH issued RIRR which was to take
effect on July 7, 2006. a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify Revised
Implementing Rules and Regulations of The “Milk Code,” assailing that the RIRR was going beyond the provisions
of the Milk Code, thereby amending and expanding the coverage of said law.
ISSUE:
Whether or not respondents officers of the DOH acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and in violation of the provisions of the Constitution
in promulgating the RIRR
HELD:
The Supreme Court PARTIALLY GRANTED the petition. Sections 4(f), 11 and 46 of Administrative
Order No. 2006- 0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department of
Health and respondents are PROHIBITED from implementing said provisions. The international instruments
pointed out by the respondents, UNRC, ICESR, CEDAW, are deemed part of the law of the land and therefore the
DOH may implement them through the RIRR. Customary international law is deemed incorporated into our
domestic system. Custom or customary international law means “a general and consistent practice of states followed
by them from a sense of legal obligation (opinio juris). Under the 1987 Constitution, international law can become
part of the sphere of domestic law either by transformation or incorporation. The transformation method requires
that an international law be transformed into a domestic law through a constitutional mechanism such as local
legislation. “Generally accepted principles of international law” refers to norms of general or customary
international law which are binding on all states.
The Milk Code is a verbatim reproduction of the (ICMBS), but it did not prohibit advertising or other forms
of promotion to the general public of products. Instead, the Milk Code expressly provides that advertising,
promotion, or other marketing materials may be allowed if such materials are duly authorized and approved by the
Inter-Agency Committee (IAC). In this regard, the WHA Resolutions adopting the ICMBS are merely
recommendatory and legally non-binding. This may constitute “soft law” or non-binding norms, principles and
practices that influence state behavior. Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by at least a majority
of the member states and obligatory in nature. The provisions of the WHA Resolutions cannot be considered as part
of the law of the land that can be implemented by executive agencies without the need of a law enacted by the
legislature. On the other hand, the petitioners also failed to explain and prove by competent evidence just exactly
how such protective regulation would result in the restraint of trade. Since all the regulatory provisions under the
Milk Code apply equally to both manufacturers and distributors, the Court sees no harm in the RIRR. Except
Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the objective, purpose and
intent of the Milk Code.
DIGESTED BY: LLAGUNO 41
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Philippine Communications Satellite Corporation v. Sandiganbayan 5

th

Division
G.R. No. 203023, June 27, 2015
Topic: Functions of the PCGG
FACTS:
On 13 September 1995, Oliverio G.Laperal then Chairman of the Board and President of LMI, and Honorio
Poblador III, then President of PHILCOMSAT, signed a Memorandum of Agreement for the latter to gain
controlling interest in LMI through an increase in its authorized capital stock.
On 24 June 1996, Laperal and PHILCOMSAT executed a Supplemental Memorandum of Agreement
reiterating the increase in capital stock of LMI from six billion shares to100 billion shares with par value of P0.01
per share equivalent to ₱1 billion. As part of its implementation of the Supplemental MOA, PHILCOMSAT
subscribed to ₱79,050,000,000 shares of LMI. Sometime in 1997, LMI changed its name to PHC. It declassified its
shares and amended its primary purpose to become a holding company. PHC then filed its application with the PSE
for listing the shares representing the increase in its capital stock. Included in this application were the PHC shares
owned by PHILCOMSAT.
Pending the PSE’s final approval of PHC’s application for listing of the shares, the PCGG on 1 March
2005, through its then Chairman Camilo L. Sabio (Chairman Sabio), made a written request to suspend the listing of
the increase in PHC’s capital stock citing as reason the need to settle the conflicting claims of the two sets of board
of directors of the Philippine Overseas Telecommunication Corporation (POTC) and PHILCOMSAT.
PSE informed the PCGG that the PSE Listing Committee deferred action on the company’s listing
application and instead referred the matter to the PSE General Counsel to ascertain the applicability of the
provisions on disqualifications for listing as provided under the PSE Revised Listing Rules.
In November 2007, then President Gloria Macapagal-Arroyo appointed new government nominees to the
POTC and PHILCOMSAT boards to replace Enrique Locsin, Manuel Andal, Julio Jalandoni and Guy de Leon.
POTC owns 100% of PHILCOMSAT.
On 19 November 2007, in a special stockholders’ meeting attended by POTC’s private stockholders and
Presidential Management Staff Undersecretary Enrique D. Perez, as representative and proxy of the Republic of the
Philippines, and observed by Securities and Exchange Commission (SEC) representatives. On the same day,
PHILCOMSAT held a special stockholders’ meeting attended by Erlinda I. Bildner as proxy for POTC. At the
request of the Republic of the Philippines, the three government representatives were nominated to the
PHILCOMSAT Board of Directors.
On 7 May 2008, the PCGG issued En Banc Resolution No. 2008-009 recognizing the validity of
the POTC’s and PHILCOMSAT’s respective stockholders’ meetings and elections.
Katrina C. Ponce-Enrile (Ponce-Enrile), then President of POTC, wrote to then PCGG Chairman Andres D.
Bautista (Chairman Bautista) demanding that the PCGG rescind its objection to the listing of the increase in PHC’s
capital stock. When PCGG failed to reply, PHILCOMSAT sent a final demand Letter reiterating its demand for
PCGG to withdraw its objection to the listing of the increase in PHC’s capital stock. Ponce-Enrile received a letter
from Chairman Bautista, informing her that, among others, the agency was discussing the matter with the
Department of Finance and that the two would give a joint recommendation thereafter. However, the PCGG never
communicated said recommendation to PHILCOMSAT.
 On 1 February 2012, PHILCOMSAT filed a complaint before the Sandiganbayan against PCGG to compel
the latter to withdraw its opposition to the listing of the increase in PHC’s capital stock. PHILCOMSAT argued that
PCGG had already recognized the validity of the stockholders’ meetings in the two corporations, which "practically
erased" the alleged conflict between the two sets of directors.
The PCGG filed a motion to dismiss the complaint, which PHILCOMSAT subsequently opposed.
The Sandiganbayan held that, based on the allegations in the complaint, the action was one for specific
performance since it sought to have PCGG withdraw its objection to the listing of the increase in PHC’s capital
stock at the PSE. Following Section 19 of Batas Pambansa Blg.129 (B.P. 129), as amended by Republic Act No.
7691 (R.A. 7691), the Regional Trial
DIGESTED BY: LLAGUNO 42
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Court (RTC) has exclusive jurisdiction over the case. The Sandiganbayan also ruled that the case was a "dispute
among its directors," and thus, was an intra-corporate dispute.
ISSUE:
Whether or not the case must be decided by the Sandiganbayan because the RTC is co-equal to the PCGG
and therefore would have no authority to issue an order to the latter
HELD:
In the exercise of its functions, the PCGG is a co-equal body with the regional trial courts and co-equal
bodies have no power to control the other. The regional trial courts and the Court of Appeals have no jurisdiction
over the PCGG in the exercise of its powers under the applicable Executive Orders and Section 26, Article XVIII of
the 1987 Constitution and, therefore, may not interfere with and restrain or set aside the orders and actions of the
PCGG.
As the Court has already conclusively ruled, the RTC is co-equal to the PCGG only in relation to cases
falling under the latter’s function under the applicable Executive Orders, specifically Section 2 of E.O. 14, and
Section 26, Article XVIII of the 1987 Constitution.
Note that in this case, the acts complained of do not pertain to the PCGG’s function under the
aforementioned provisions of law and the Constitution, i.e., it is not a case involving "the Funds, Moneys, Assets
and Properties Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda
Romualdez Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents or Nominees,
whether civil or criminal, x x x" nor can it be considered an "incident arising from, incidental to, or related to" such
cases.
Rather, the PCGG, acting as representative of the Republic, was exercising a duty of a stockholder to
ensure the proper and lawful exercise of corporate acts.
Based on the foregoing, the Sandiganbayan correctly dismissed the complaint for lack of jurisdiction.
DIGESTED BY: LLAGUNO 43
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Philippine Overseas Telecommunication Corporation v. Africa

G.R. No. 184622
Topic: Jurisdiction of RTC over intra-corporate controversy
FACTS:
After the EDSA Revolution, Philippine Communication Satellite Corporation (PHILCOMSAT) and
Philippine Overseas Telecommunications Corporation (POTC) were among those sequestered by the Philippine
Commission on Good Government. PHILCOMSAT, whose majority shareholders are the same families who control
and own POTC (Ilusorio, Nieto, Poblador, Africa, Benedicto, Ponce Enrile and Elizalde), own 81% of the
outstanding capital stock of Phicomsat Holdings Corporation (PHC). During the Arroyo administration, respondents
Locsin, Andal and Jalandoni were appointed nominee directors representing the Republic of the Philippines through
the PCGG in the board of directors of PHILCOMSAT. They sided with the Nieto Group.
In the July 28, 2004 meeting of the POTC and PHICOMSAT, Victor Africa was elected as one of the
directors in the Africa-Bildner Group; he was designated as the POTC proxy to the PHILCOMSAT stockholders
meeting. While Andal and Nieto were elected Directors to both POTC and PHICOMSAT, they did not accept their
nominations. Instead, the Nieto- PCGG group on the other hand, held their own election for the PHILCOMSAT on
August 9, 2004, where Manuel Nieto Jr. And Enrique Locsin were elected as Chairman and President of
PHILCOMSAT. They also issued a proxy in favour of Nieto Jr/Locsin authorising them to represent
PHILCOMSAT and vote the PHILCOMSAT shares in the PHC stockholders meeting on August 28, 2004.
During the August 31, 2004 annual stockholders meeting of the PHC conducted by the PCGG-Nieto group,
the following were elected: Locsin (Director and Acting Chairman); Oliverio Laperal (Director and Vice-
Chairman); Manuel H. Nieto, Jr. (Director, President and Chief Executive Officer); Philip G. Brodett (Director and
Vice-President); Andal (Director, Treasurer and Chief Financial Officer); Roberto V. San Jose (Director and
Corporate Secretary); Jalandoni, Lokin, Jr., Prudencio Somera, Roberto Abad and Benito Araneta as Directors.
Thereafter, various suits were filed against each other by the two factions to gain legitimacy of their
election as respective officers of POTC and PHILCOMSAT. The Africa group sought the invalidation of the proxy
issued in favor of Nieto, Jr. and/or Locsin and consequent nullification of the elections held during the annual
stockholders’ meeting of PHC on August 31, 2004. Prior to this, there was the pending case involving the
compromise agreement dated June 28, 1996 entered into by Atty. Potenciano Ilusorio with the Republic of the
Philippines and the PCGG relative to the Ilusorio family’s shareholdings in POTC, including those shares forcibly
taken from him by former President Ferdinand Marcos which were placed in the name of Independent Realty
Corporation (IRC) and Mid-Pasig Land Development (Mid-Pasig). By Decision dated June 15, 2005, the Court
affirmed the validity of the said compromise agreement in G.R. Nos. 141796 and 141804. As a result of the
compromise agreement, the Ilusorio, Africa, Poblador, Benedicto and Ponce Enrile families gained majority control
(51.37%) and the Nieto family and PCGG became the minority.
Victor Africa, the president and CEO of the PHILCOMSAT, then wrote a letter to the PHC Board,
informing it that PHILCOMSAT will exercise its right of inspection over the books, records, papers, etc. pertinent to
the business transactions of PHC for the 3rd quarter of 2005, specifically the company’s financial documents. In
reply, Nieto Jr. averred that he will refer the matter to the Executive Committee or PHC Board in view of the several
pending cases involving the two factions; Africa wrote back, asserting that the PHICOMSAT Board was elected on
September 22, 2005, in accordance with the final decision of the Supreme Court in G.R. Nos. G.R. Nos. 141796 and
141804, thus there is question anymore on its legitimacy. On the day of the scheduled inspection, Africa’s group
was disallowed by Philip Brodett Jr., which prompted PHILCOMSAT to inquire if the conduct of Brodett was with
the knowledge and authority of the PHC Board of Directors. No reply to this query was received, hence Victor
Africa, in his capacity as president/CEO of PHILCOMSAT and as a stockholder, filed with the RTC a Complaint
for Inspection of Books against the incumbent PHC Board to enforce its rights under Sections 74 and 75 of the
Corporation Code of the Philippines. By order dated June 21, 2007, the RTC dismissed the case for lack of
jurisdiction. The RTC held that it is the Sandiganbayan, not the RTC, which has jurisdiction since plaintiff is a
sequestered corporation of the Republic through the PCGG alleging a right of inspection over PHC but which right
or authority was being raised as a defense by the defendants.
PHILCOMSAT appealed the ruling. Respondents argued that it is the RTC which has jurisdiction over the
inspection of corporate books by a stockholder. The petitioners in this case argue otherwise. They maintain that the
main issue is who are the rightful representatives of PHILCOMSAT, whose right of inspection hinges on the
ongoing power struggle within the
DIGESTED BY: LLAGUNO 44
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
PHILCOMSAT, especially on who between the Africa-Bildner and the PCGG-Nieto group is the legitimate board
of directors. Since both POTC and PHICOMSAT were both under sequestration by the PCGG, all issues and
controversies arising therefrom or related or incidental thereof fall under the exclusive and original jurisdiction of
the Sandiganbayan.
ISSUE:
Whether it is the Sandiganbayan or RTC which has jurisdiction over a stockholders’ suit to enforce its right
of inspection under Section 74 of the Corporation Code.
HELD:
The petition has no merit.
On the first issue, we ruled that it is the RTC and not the Sandiganbayan which has jurisdiction over cases
which do not involve a sequestration-related incident but an intra-corporate controversy. The RTC, not the
Sandiganbayan, that has jurisdiction, when a controversy is intra-corporate in nature, as they arose out of intra-
corporate relations between and among stockholders, and between stockholders and the corporation, even though it
is a sequestered corporation.
Originally, Section 5 of Presidential Decree (P.D.) No. 902-A vested the original and exclusive jurisdiction
in the SEC over intra-corporate controversies and the other cases enumerated in Section 5 of P.D. No. 902-A. Upon
the enactment of Republic Act No. 8799 (The Securities Regulation Code), effective on August 8, 2000, the
jurisdiction of the SEC over intra- corporate controversies and the other cases enumerated in Section 5 of P.D. No.
902-A was transferred to the Regional Trial Court pursuant to Section 5.2 of the law. To implement Republic Act
No. 8799, the Court promulgated its resolution of November 21, 2000 in A.M. No. 00-11-03-SC designating certain
branches of the RTC to try and decide the cases enumerated in Section 5 of P.D. No. 902-A. Among the RTCs
designated as special commercial courts was the RTC (Branch 138) in Makati City.
On March 13, 2001, the Court adopted and approved the Interim Rules of Procedure for Intra-Corporate
Controversies under Republic Act No. 8799 in A.M. No. 01-2-04-SC, effective on April 1, 2001, whose Section 1
and Section 2, Rule 6 state:
Section 2. Definition. – An election contest refers to any controversy or dispute involving title or claim to
any elective office in a stock or non-stock corporation, the validation of proxies, the manner and validity of
elections, and the qualifications of candidates, including the proclamation of winners, to the office of director,
trustee or other officer directly elected by the stockholders in a close corporation or by members of a non-stock
corporation where the articles of incorporation or by-laws so provide.
Conformably with Republic Act No. 8799, and with the ensuing resolutions of the Court on the
implementation of the transfer of jurisdiction to the Regional Trial Court, the RTC (Branch 138) in Makati had the
authority to hear and decide the election contest between the parties herein. There should be no disagreement that
jurisdiction over the subject matter of an action, being conferred by law, could neither be altered nor conveniently
set aside by the courts and the parties.
To buttress its position, however, the Nieto-Locsin Group relied on Section 2 of Executive Order No. 14,
which expressly mandated that the PCGG “shall file all such cases, whether civil or criminal, with the
Sandiganbayan, which shall have exclusive and original jurisdiction thereof.” The reliance was unwarranted.
Section
2 of Executive Order No. 14 had no application herein simply because the subject matter involved was an intra-
corporate controversy, not any incidents arising from, incidental to, or related to any case involving assets whose
nature as ill-gotten wealth was yet to be determined. Moreover, the jurisdiction of the Sandiganbayan has been held
not to extend even to a case involving a sequestered company notwithstanding that the majority of the
members of the board of directors were PCGG nominees.
In the cases now before the Court, what are sought to be determined are the propriety of the election of a
party as a Director, and his authority to act in that capacity. Such issues should be exclusively determined only by
the RTC pursuant to the pertinent law on jurisdiction because they did not concern the recovery of ill-gotten wealth.
In the case at bar, the complaint concerns PHILCOMSAT’s demand to exercise its right of inspection as stockholder
of PHC but which petitioners refused on the ground of the ongoing power struggle within POTC and
PHILCOMSAT that supposedly prevents PHC from recognizing PHILCOMSAT’s representative (Africa) as
possessing such right or authority from the legitimate directors and officers. Clearly, the controversy is intra-
corporate in nature as they arose out of intra-corporate relations between and among stockholders, and between
stockholders and the corporation.
DIGESTED BY: LLAGUNO 45
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

PHILLIPPINE SEAFOOD (PHILIPPINES) CORPORATION vs. THE BOARD OF INVESTMENTS

G.R. No. 175787, February 4, 2009
Topic: Doctrine of Finality of Judgment
FACTS:
Phillips Seafood is a domestic corporation engaged in the export of processed crabmeat and seafood
products. Respondent BOI informed petitioner that the ITH previously granted would be applicable only to the
period from 13 August 1999 to 21 October 1999 or before petitioner’s transfer to a “not less-developed area.”
Petitioner wrote respondent BOI requesting for a reconsideration of its decision but was denied.petitioner filed a
petition for review before the Court of Appeals, questioning the dismissal of its appeal before the Office of the
President. The appellate court dismissed the petition for review for having been filed out of time as petitioner opted
to appeal to the Office of the President instead of filing a Rule 43 petition to the Court of Appeals within the
reglementary period.
ISSUE:
Is the decision of the BOI denying the ITH appealable to the Office of the President or to the Court of Appeals?
HELD:
Indeed, under E.O. 226, when the action or decision pertains to either of these two instances: first, in the
decisions of the BOI over controversies concerning the implementation of the relevant provisions of E.O No. 226
that may arise between registered enterprises or investors and government agencies under Article 7; and second, in
an action of the BOI over applications for the Office of the President is available. E.O. No. 226 contains no
provision specifically governing the remedy of a party whose application for an ITH has been denied by the BOI in
the same manner that Articles 7 and 36 thereof allow recourse to the Office of the President in certain instances.
Nevertheless, Article 82 of E.O. No. 22 is the catch-all provision allowing the appeal to the courts from all other
decisions of respondent BOI involving the other provisions of E.O. No. 226. The intendment of the law is
undoubtedly to afford immediate judicial relief from the decision of respondent BOI, save in cases mentioned under
Articles 7 and 36.
In relation to Article 82, E.O. No. 226, Section 1 of Rule 43 of the 1997 Rules of Civil Procedure expressly
includes respondent BOI as one of the quasi-judicial agencies whose judgments or final orders are appealable to the
Court of Appeals via a verified petition for review. Appeals from judgments and final orders of quasi-judicial
agencies are now required to be brought to the Court of Appeals on a verified petition for review, under the
requirements and conditions in Rule 43 which was precisely formulated and adopted to provide for a uniform rule of
appellate procedure for quasi-judicial agencies.
Thus, petitioner should have immediately elevated to the Court of Appeals the denial by respondent BOI of
its application for an ITH. From the letter dated 09 October 2003 of respondent BOI, which informed petitioner that
its ITH would be extended only from 13 August 1999 to 21 October 1999, petitioner appealed to the Office of the
President, a recourse that is not sanctioned by either the Rules of Civil Procedure or by the Omnibus Investments
Code of 1987.
Petitioner cannot invoke Article 36 of E.O. No. 226 to justify its appeal to the Office of the President.
Article 36, along with Article 7, which allows recourse to the Office of the President, applies to specific instances,
namely, controversies between a registered enterprise and a government agency and decisions concerning the
registration of an enterprise, respectively. Expresio unius est exclusio alterius. This enumeration is exclusive so that
other controversies outside of its purview, including petitioner’s entitlement to an ITH, can invoke only the appellate
judicial relief provided under Article 82. In the instant case, the denial of petitioner’s application for an ITH is not
within the cases where the law expressly provides for appellate recourse to the Office of the President. That being
the case, petitioner should have elevated its appeal to the Court of Appeals under Rule 43.
DIGESTED BY: LLAGUNO 46
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Pichay vs Office of the Deputy Exec Sec for Legal Affairs Investigative and Adjudication Div. GR. No.
196425, July 24, 2012 Topic: Delegated Legislative Power
Facts:
On April 16, 2001, then President Gloria Macapagal-Arroyo issued Executive Order No. 12 (E.O. 12)
creating the Presidential Anti-Graft Commission (PAGC) and vesting it with the power to investigate or hear
administrative cases or complaints for possible graft and corruption, among others, against presidential appointees
and to submit its report and recommendations to the President.
President Benigno Simeon Aquino III issued Executive Order No. 13 (E.O. 13), abolishing the PAGC and
transferring its functions to the Office of the Deputy Executive Secretary for Legal Affairs (ODESLA), more
particularly to its newly- established Investigative and Adjudicatory Division (IAD).
Respondent Finance Secretary Cesar V. Purisima filed before the IAD-ODESLA a complaint affidavit for
grave misconduct against petitioner Prospero A. Pichay, Jr., Chairman of the Board of Trustees of the Local Water
Utilities Administration (LWUA), as well as the incumbent members of the LWUA Board of Trustees, namely,
Renato Velasco, Susana Dumlao Vargas, Bonifacio Mario M. Pena, Sr. and Daniel Landingin, which arose from the
purchase by the LWUA of Four Hundred Forty-Five Thousand Three Hundred Seventy Seven (445,377) shares of
stock of Express Savings Bank, Inc.
Petitioner received an Order signed by Executive Secretary Paquito N. Ochoa, Jr. requiring him and his co-
respondents to submit their respective written explanations under oath. In compliance therewith, petitioner filed a
Motion to Dismiss Ex Abundante Ad Cautelam manifesting that a case involving the same transaction and charge of
grave misconduct entitled, "Rustico B. Tutol, et al. v. Prospero Pichay, et al.", and docketed as OMB-C-A-10-0426-
I, is already pending before the Office of the Ombudsman.
Petitioners then filed a Petition for Certiorari and Prohibition with a prayer for the issuance of a temporary
restraining order, seeking to declare as unconstitutional Executive Order No. 13, entitled, "Abolishing the
Presidential Anti-Graft Commission and Transferring Its Investigative, Adjudicatory and Recommendatory
Functions to the Office Of The Deputy Executive Secretary For Legal Affairs, Office of the President”.
Issue:
Whether or not E.O. 13 is constitutional?
Held:
Yes. The contention that the president has no power to create an additional office cloaked with a quasi-
judicial function is not meritorious. The President has continuing authority to reorganize the Executive Department
under E.O. 292. The law grants the President this power in recognition of the recurring need of every President to
reorganize his office "to achieve simplicity, economy and efficiency." The Office of the President is the nerve center
of the Executive Branch. To remain effective and efficient, the Office of the President must be capable of being
shaped and reshaped by the President in the manner he deems fit to carry out his directives and policies. After all,
the Office of the President is the command post of the President. The abolition of the PAGC and the transfer of its
functions to a division specially created within the ODESLA is properly within the prerogative of the President
under his continuing "delegated legislative authority to reorganize" his own office pursuant to E.O. 292.
DIGESTED BY: LUCERO 47
Pilipinas Total Gas vs. Commissioner of Internal Revenue
GR. No. 207112, December 8, 2015 Topic: Administrative Body
Facts:
On April 20, 2007 and July 20, 2007, Total Gas filed its Original Quarterly VAT Returns for the First and
Second quarters of 2007, respectively with the BIR. On May 20, 2008, it filed its Amended Quarterly VAT Returns
for the first two quarters of 2007 reflecting its sales subject to VAT, zero-rated sales, and domestic purchases of
non-capital goods and services. For the First and Second quarters of 2007, Total Gas claimed it incurred unutilized
input VAT credits from its domestic purchases of noncapital goods and services in the total amount of
P8,124,400.35. Of this total accumulated input VAT, Total Gas claimed that it had P7,898,433.98 excess unutilized
input VAT. On May 15, 2008, Total Gas filed an administrative claim for refund of unutilized input VAT for the
first two quarters of taxable year 2007, inclusive of supporting documents. On August 28, 2008, Total Gas
submitted additional supporting documents to the BIR. On January 23, 2009, Total Gas elevated the matter to the
CTA in view of the inaction of the Commissioner of Internal Revenue. CTA dismissed the petition. Petitioner then
filed a petition for review on certiorari against CTA.
Issue:
Whether or not in the same petition the Supreme Court could adjudicate on the issue of Total Gas claiming
tax refund?
Held:
No. Considering that the judicial claim was denied due course and dismissed by the CTA Division on the
ground of premature and/or belated filing, no ruling on the issue of Total Gas entitlement to the refund was made.
The Supreme Court on such cases is not a trier of facts, especially when such facts have not been ruled upon by the
lower courts. In this case, the Supreme Court remanded the case back to the Court of Tax Appeal.
Total Gas filed its judicial claim due to the inaction of the BIR. Considering that the administrative claim
was never acted upon, there was no decision for the CTA to review on appeal PER SE. Consequently, the CTA may
give credence to all evidence presented by Total Gas, including those that may not have been submitted to the CIR
as the case is being essentially decided in the first instance. The Total Gas must prove every minute aspect of its
case by presenting and formally offering its evidence to the CTA, which must necessarily include whatever is
required for the successful prosecution of an administrative claim.
DIGESTED BY: LUCERO 48
Rentokil(Initial) Phil. Inc. vs Sanchez GR. No. 176219, December 23, 2008 Topic: Quasi-judicial Bodies
Facts:
Leilani D. Sanchez (respondent) was hired by Rentokil Philippines, Inc. as Financial Controller on 19 April
1996. Sometime in 1999, David McConnachie then Regional Finance Director of Rentokil Initial PLC, the parent
company of petitioner, noted questionable entries in petitioner’s year-end financial reports. Upon investigation,
petitioner’s internal audit department uncovered major discrepancies and anomalies in these financial reports. In a
meeting dated 7 June 1999, external auditor acknowledged that it should have seen the inaccuracies in the
company’s 1998 year-end financial reports and should have taken action to alert petitioner of these facts. Petitioner
thus issued a show cause notice dated 17 July 1999 requiring respondent to explain the alleged anomalies. On 21
July 1999, respondent submitted her explanation. Thereafter, an administrative hearing was conducted with the
presence of respondent and her counsel. Finding the explanations of respondent unsatisfactory, petitioner issued a
written notice of termination on 21 July 1999, dismissing respondent on the grounds of gross neglect of duty, serious
misconduct, and loss of trust and confidence. On 30 July 1999, respondent filed a complaint for illegal dismissal
against petitioner. She alleged that she had sufficiently countered the charges leveled against her and that in fact she
had been conferred positive ratings by the external auditor in the three years that she had been preparing all the
financial reports and accompanying documents for petitioner. She claimed that the charges against her were made
up to ease her out of the company. Finally, she claimed that she was denied due process when she was not shown the
internal audit report referred to in the notice of charges. On the other hand, petitioner countered that the results of
the investigation carried out by its internal audit department showed respondent’s failure and inability to
competently and properly discharge her duties and responsibilities as financial controller. Petitioner added that it
observed due process, as prior to her dismissal, she was properly notified of the charges, and was heard in an
administrative investigation. On 17 April 2000, the labor arbiter, finding that petitioner failed to substantiate its
charges, rendered a decision declaring respondent to have been illegally dismissed and ordered the payment of
backwages and separation pay. Petitioner appealed the decision to the National Labor Relations Commission
(NLRC). The NLRC found the appeal meritorious and reversed the decision of the labor arbiter. According to the
NLRC, petitioner was able to establish the inaccuracies in the accounting procedure done by respondent.
Respondent sought reconsideration of the reversal, but her motion for reconsideration was denied. Respondent filed
a petition for certiorari before the Court of Appeals, which in turn granted the petition and set aside the NLRC
decision. The Court of Appeals held that petitioner failed to prove by substantial evidence the grounds warranting
the dismissal of respondent on the ground of loss of trust and confidence. The appellate court ruled that petitioner
could not rely on the admission by a partner of the external auditor that the said firm had erred in the evaluation of
respondent’s performance, and that respondent had merely followed policies which were already in place when she
assumed her position. Petitioner filed a motion for reconsideration but the Court of Appeals denied the motion.
Petitioner argues that there is more than substantial evidence to prove that respondent had willfully, intentionally,
knowingly and purposely committed a breach of the trust and confidence reposed on her. On the other hand,
respondent counters that petitioner merely reiterates the arguments which have been thoroughly discussed and
passed upon by the Court of Appeals and the NLRC

Issue:
Whether or not the Supreme Court should accord the fact finding of NLRC as the final basis for its decision?
Held:
No. The findings of facts of quasi-judicial bodies like the NLRC are accorded great respect and, at times,
even finality. There are, however, exceptions, among which is when there is a conflict between the factual findings
of the NLRC and the Labor Arbiter. Accordingly, the Supreme Court must of necessity review the records to
determine which findings should be preferred as more conformable to the evidentiary facts. Nor is the Supreme
Court bound by conclusions which are not supported by substantial evidence. The substantial evidence rule does not
authorize any finding just as long as there is any evidence to support it. It does not excuse administrative agencies
from considering contrary evidence which fairly detracts from the evidence supporting a finding.
In the case, there are conflicting findings by the Labor Arbiter and the NLRC, the Supreme Court ruled to
examine the facts to determine on which claim to uphold. In usual cases, the Supreme Court only entertains
questions of law and not of facts. The Supreme Court in the case ruled in favor of the petitioner as substantial
evidence tilts towards the petitioner’s case more pragmatic than that of respondent’s.
DIGESTED BY: LUCERO 49
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Republic of the Philippines vs Badjao GR. No. 160596, March 20, 2009 Topic: Adjudicatory powers of the
ombudsman
Facts:
Candijay, Bohol Vice-mayor and Sanggunian Bayan members filed a case against Municipal treasurer Bajao for
failure to make delivery of public funds and for grave abuse of authority. Ombudsman found the respondent guilty
of simple
misconduct with a penalty of 1 month suspension and citing that such penalty is final and unappealable. Respondent
filed
with CA arguing that ombudsman can only recommend to the proper authorities the implementation of such penalty.
Issue:
Whether or not the Ombudsman has adjudicatory powers?
Held:
Yes. RA 6770 and the constitution specifically provides that the Ombudsman can impose the penalty of removal,
suspension, demotion, fine and censure on erring public official. RA 6770 also provides that findings of facts by the
ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing the
penalty
of public censure, or reprimand, suspension of not more than 1 month’s salary shall be final and unappealable. The
law
provides that the power of the ombudsman is not merely recommendatory but it has actual adjudicatory powers.
DIGESTED BY: LUCERO 50
Republic of the Philippines v City of Paranaque
G.R. No. 191109, July 18, 2012 Topic: Government Instrumentality
Facts:
The Public Estates Authority (PEA) is a government corporation created by virtue of Presidential Decree
(P.D.) No. 1084 (Creating the Public Estates Authority, Defining its Powers and Functions, Providing Funds
Therefor and For Other Purposes) which took effect on February 4, 1977 to provide a coordinated, economical and
efficient reclamation of lands, and the administration and operation of lands belonging to, managed and/or operated
by, the government with the object of maximizing their utilization and hastening their development consistent with
public interest.
By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore areas of Manila
Bay, including those located in Parañaque City, and was issued Original Certificates of Title (OCT Nos. 180, 202,
206, 207, 289, 557, and 559) and Transfer Certificates of Title (TCT Nos. 104628, 7312, 7309, 7311, 9685, and
9686) over the reclaimed lands.
On February 19, 2003, then Parañaque City Treasurer Liberato M. Carabeo (Carabeo) issued Warrants of
Levy on PRA's reclaimed properties (Central Business Park and Barangay San Dionisio) located in Parañaque City
based on the assessment for delinquent real property taxes made by then Parañaque City Assessor Soledad Medina
Cue for tax years 2001 and 2002.
On March 26, 2003, PRA filed a petition for prohibition with prayer for temporary restraining order
(TRO) and/or writ of preliminary injunction against Carabeo before the RTC.
On April 3, 2003, after due hearing, the RTC issued an order denying PRA’s petition for the issuance of
a temporary restraining order.
On January 8, 2010, the RTC rendered its decision dismissing PRA's petition. In ruling that PRA was not
exempt from payment of real property taxes, the RTC reasoned out that it was a GOCC under Section 3 of P.D. No.
1084. It was organized as a stock corporation because it had an authorized capital stock divided into no par value
shares. In fact, PRA admitted its corporate personality and that said properties were registered in its name as shown
by the certificates of title. Therefore, as a GOCC, local tax exemption is withdrawn by virtue of Section 193 of
Republic Act (R.A.) No. 7160 [Local Government Code (LGC)] which was the prevailing law in 2001 and 2002
with respect to real property taxation. The RTC also ruled that the tax exemption claimed by PRA under E.O. No.
654 had already been expressly repealed by R.A. No. 7160 and that PRA failed to comply with the procedural
requirements in Section 206 thereof.
Issue:
Whether or not petitioner is an incorporated instrumentality of the national government and is, therefore,
exempt from payment of real property tax under sections 234a) and 133(o) of Republic Act 7160 or the Local
Government Code vis-à-vis Manila International Airport Authority v. Court of Appeals.
Ruling:
Yes, it is government instrumentality. However, it is not a GOCC. When the law vests in a government
instrumentality corporate powers, the instrumentality does not necessarily become a corporation. Unless the
government instrumentality is organized as a stock or non-stock corporation, it remains a government
instrumentality exercising not only governmental but also corporate powers.
Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock
corporations, which is a necessary condition before an agency or instrumentality is deemed a GOCC. Examples
are
 the Mactan International Airport Authority, the Philippine Ports Authority, the University of the Philippines, and
Bangko Sentral ng Pilipinas. All these government instrumentalities exercise corporate powers but they are not
organized as stock or non-stock corporations as required by Section 2(13) of the Introductory Provisions of the
Administrative Code. These government instrumentalities are sometimes loosely called government corporate
entities. They are not, however, GOCCs in the strict sense as understood under the Administrative Code, which is
the governing law defining the legal relationship and status of DIGESTED BY: PANED 51
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
government entities.

Two requisites must concur before one may be classified as a stock corporation, namely: (1) that it has
capital stock divided into shares; and (2) that it is authorized to distribute dividends and allotments of surplus and
profits to its stockholders. If only one requisite is present, it cannot be properly classified as a stock corporation. As
for non-stock corporations, they must have members and must not distribute any part of their income to said
members.
In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock corporation. It cannot
be considered as a stock corporation because although it has a capital stock divided into no par value shares as
provided in Section 7 of P.D. No. 1084, it is not authorized to distribute dividends, surplus allotments or profits to
stockholders. There is no provision whatsoever in P.D. No. 1084 or in any of the subsequent executive issuances
pertaining to PRA, particularly, E.O. No. 525, E.O.No. 654 and EO No. 798 that authorizes PRA to distribute
dividends, surplus allotments or profits to its stockholders.
PRA cannot be considered a non-stock corporation either because it does not have members. A non-stock
corporation must have members. Moreover, it was not organized for any of the purposes mentioned in Section 88 of
the Corporation Code. Specifically, it... was created to manage all government reclamation projects.
DIGESTED BY: PANED 52
Republic of the Philipines v Pilipinas Shell
G.R. No. 173918 April 8, 2008 Topic: Publication in the Official Gazette
Facts:
Respondent is a corporation duly organized existing under the laws of the Philippines. It is engaged in the business
of refining oil, marketing petroleum, and other related activities.
On 10 October 1984, the Oil Price Stabilization Fund (OPSF) was created under Presidential Decree No. 1956 for
the purpose of minimizing frequent price changes brought about by exchange rate adjustments and/or increase in
world
market prices of crude oil and imported petroleum products. Letter of Instruction No. 1431 dated 15 October 1984
was issued
directing the utilization of the OPSF to reimburse oil companies the additional costs of importation of crude oil and
petroleum
products due to fluctuation in foreign exchange rates to assure adequate and continuous supply of petroleum
products at
reasonable prices.
Letter of Instruction No. 1441, issued on 20 November 1984, mandated the Board of Energy (now, the Energy
Regulatory Board) to review and reset prices of domestic oil products every two months to reflect the prevailing
prices of
crude oil and petroleum. The prices were regulated by adjusting the OPSF impost, increasing or decreasing this price
component as necessary to maintain the balance between revenues and claims on the OPSF.
On 27 February 1987, Executive Order No. 137 was enacted to amend P. D. No. 1956. It expanded the sources and
utilization of the OPSF in order to maintain stability in the domestic prices of oil products at reasonable levels.
On 4 December 1991, the Office of Energy Affairs (OEA), now the DOE, informed the respondent that respondent’s
contributions to the OPSF for foreign exchange risk charge for the period December 1989 to March 1991 were
insufficient.
OEA Audit Task Force noted a total underpayment of P 14,414,860.75 by respondent to the OPSF. As a
consequence of the
underpayment, a surcharge of P 11,654,782.31 was imposed upon respondent. The said surcharge was imposed
pursuant
to MOF Circular No. 1-85, as amended by Department of Finance (DOF) Circular No. 2-94,which provides that: 2.
Remittance
of payment to the OPSF as provided for under Section 5 of MOF Order No. 11-85 shall be made not later than
20 t h
of the
month following the month of remittance of the foreign exchange payment for the import or the month of payment
to the
domestic producers in the case of locally produced crude. Payment after the specified date shall be subject to a
surcharge
of fifteen percent (15%) of the amount, if paid within thirty (30) days from the due date plus two percent (2%) per
month if
paid after thirty days.
On 9 December 1991, the OEA wrote another letter to respondent advising the latter of its additional underpayment
to the OPSF of the foreign exchange risk fee in the amount of P 10,139,526.56 for the period April 1991 to October
1991. In
addition, surcharges in the amount of P 2,806,656.65 were imposed thereon.
In a letter dated 20 January 1992 addressed to the OEA, respondent justified that its calculations for the transactions
in question were based on a valid interpretation of MOF Order NO. 11-85 dated 12 April 1985 and MOE Circular
No. 85-05-
82 dated 16 May 1985.
DIGESTED BY: PANED 53
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

On 24 March 1992, respondent paid the OEA in full the principal amount of its underpayment, totaling P
24,554,387.31, but not the surcharges. In a letter dated 15 March 1996, OEA notified the respondent that the latter is
required
to pay the OPSF a total amount of P 18,535,531.40 for surcharges on the late payment of foreign exchange risk
charges for
the period December 1989 to October 1991. In a letter dated 11 July 1996, the DOE reiterated its demand for
respondent to
settle the surcharges due. Otherwise, the DOE warned that it would proceed against the respondent’s Irrevocable
Standby
Letter of Credit to recover its unpaid surcharges.
On 19 July 1996, respondent filed a Notice of Appeal before the Office of the President. The Office of the President
affirmed the conclusion of the DOE, contained in its letters dated 15 March 1996 and 11 July 1996. While it
admitted that the
implementation of MOF Circular No. 1-85 is contingent upon its publication and filing with the ONAR, it noted that
respondent
failed to adduce evidence of lack of compliance with such requirements.
Respondent filed a Motion for Reconsideration of the Decision dated 19 August 2003 of the Office of the President,
which was denied on 28 November 2003.
On appeal, the Court of Appeals reversed the Decision of the Office of the President in O.P. CASE No. 96-H-6574
and ruled that MOF Circular 1-85, as amended, was ineffective for failure to comply with the requirement to file
with ONAR.
It decreed that even if the said circular was issued by then Acting Minister of Finance Alfredo de Roda, Jr. long
before the
Administrative Code of 1987, Section 3 of Chapter 2, Book 7 thereof specifies that rules already in force on the date
of the
effectivity of the Administrative Code of 1987 must be filed within three months from the date of effectivity of said
Code,
otherwise such rules cannot thereafter be the basis of any sanction against any party or persons.
Issue :
Whether MOF- Circular No. 1-85 is valid.
Held:
Under the doctrine of Tanada v. Tuvera, the MOF Circular No. 1-85, as amended, is one of those issuances which
should be published before it becomes effective since it is intended to enforce Presidential Decree No. 1956. The
said circular
should also comply with the requirement stated under Section 3 of Chapter 2, Book VII of the Administrative Code
of 1987 –
filing with the ONAR in the University of the Philippines Law Center – for rules that are already in force at the time
the
Administrative Code of 1987 became effective. These requirements of publication and filing were put in place as
safeguards
against abuses on the part of lawmakers and as guarantees to the constitutional right to due process and to
information on
matters of public concern and, therefore, require strict compliance.
In the present case, the Certifications dated 11 February 2004 and 9 February 2004 issued by ONAR prove that
MOF
Circular No. 1-85 and its amendatory rule, DOF Circular No. 2-94, have not been filed before said office. Moreover,
petitioner
was unable to controvert respondent’s allegation that neither of the aforementioned circulars were published in the
Official
Gazette or in any newspaper of general circulation. Thus, failure to comply with the requirements of publication and
filing of
administrative issuances renders MOF Circular No. 1-85, as amended, ineffective.
DIGESTED BY: PANED 54
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

REPUBLIC V. ASIAPRO COOPERATIVE

G.R. NO. 172101, November 23, 2007
Topic: Control Test, Employer-Employee Relationship, Power of Control
FACTS:
Respondent Asiapro Cooperative is composed of owners-members with primary objectives of providing
them savings and credit facilities and livelihood services. In discharge of said objectives, Asiapro entered into
several service contracts with Stanfilco.
Sometime later, the cooperative owners-members requested Stanfilco’s help in registering them with SSS
and remitting their contributions. Petitioner SSS informed Asiapro that being actually a manpower contractor
supplying employees to Stanfilco, it must be the one to register itself with SSS as an employer and remit the
contributions. With respondent continuously ignoring the demand of SSS, the latter filed before the SSC.
Respondent cooperative filed its Answer with Motion to Dismiss alleging that no employer-employee
relationship exists between it and its owners-members, thus, petitioner SSC has no jurisdiction over the respondent
cooperative. Stanfilco, on the other hand, filed an Answer with Cross-claim against the respondent cooperative.
On 17 February 2004, petitioner SSC issued an Order denying the Motion to Dismiss filed by the
respondent cooperative. The respondent cooperative moved for the reconsideration of the said Order, but it was
likewise denied in another Order issued by the SSC dated 16 September 2004.
Respondent cooperative filed a Petition for Certiorari before the CA which reversed the SSC
decision, holding that the SSC has no jurisdiction over the case.
ISSUE:
Whether or not the NLRC has jurisdiction over the case.
RULING:
Article 217 of the Labor Code enumerating the jurisdiction of the Labor Arbiters and the NLRC provides that:
ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a)
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.
Although the aforesaid provision speaks merely of claims for Social Security, it would necessarily include
issues on the coverage thereof, because claims are undeniably rooted in the coverage by the system. Hence, the
question on the existence of an employer-employee relationship for the purpose of determining the coverage of the
Social Security System is explicitly excluded from the jurisdiction of the NLRC and falls within the jurisdiction of
the SSC which is primarily charged with the duty of settling disputes arising under the Social Security Law of 1997.
On the basis thereof, considering that the petition-complaint of the petitioner SSS involved the issue of
compulsory coverage of the owners-members of the respondent cooperative, this Court agrees with the petitioner
SSC when it declared in its Order dated 17 February 2004 that as an incident to the issue of compulsory coverage, it
may inquire into the presence or absence of an employer-employee relationship without need of waiting for a prior
pronouncement or submitting the issue to the NLRC for prior determination. Since both the petitioner SSC and the
NLRC are independent bodies and their jurisdiction are well-defined by the separate statutes creating them,
petitioner SSC has the authority to inquire into the relationship existing between the worker and the person or entity
to whom he renders service to determine if the employment, indeed, is one that is excepted by the Social Security
Law of 1997 from compulsory coverage.
Petition GRANTED.
DIGESTED BY: PANED 55
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Review Center Association of the Philippines v Executive Secretary

G.R. NO. 180046. Apri 2, 2009 Topic: Exercise of President’s Residual Power
FACTS:
The Professional Regulation Commission (PRC) conducted the Nursing Board Examinations nationwide.
Handwritten copies of two sets of examinations were circulated during the examination period. Among the
examinees are reviewing at the R.A. Gapuz Review Center and Inress Review Center.
The PRC later admitted the leakage and traced it to two Board of Nursing members.
President Gloria Macapagal-Arroyo then replaced all the members of the PRC's Board of Nursing.
President Arroyo also ordered the examinees to re-take the Nursing Board Examinations.
President Arroyo issued EO 566 which authorized the CHED to supervise the establishment and operation
of all review centers and similar entities in the Philippines. The CHED, through its then Chairman Carlito S. Puno,
approved CHED Memorandum Order No. 49, series of 2006.
In a letter dated 24 November 2006,
[5]

the Review Center Association of the Philippines (petitioner), an

organization of independent review centers, asked the CHED to amend, if not withdraw the IRR arguing, among
other things, that giving permits to operate a review center to Higher Education Institutions (HEIs) or consortia of
HEIs and professional organizations will effectively abolish independent review centers.
The OSG argues that President Arroyo was merely exercising her executive power to ensure that the
laws are faithfully executed
ISSUES:
1. Whether EO 566 is an unconstitutional exercise by the Executive of legislative power as it expands the
CHED's jurisdiction
2. Whether the RIRR is an invalid exercise of the Executive's rule-making power
RULING:
1. Yes. The scopes of EO 566 and the RIRR clearly expand the CHED's coverage under RA 7722. The CHED's
coverage under RA 7722 is limited to public and private institutions of higher education and degree-granting
programs in all public and private post-secondary educational institutions. EO 566 directed the CHED to formulate a
framework for the regulation of review centers and similar entities.
A review center is not an institution of higher learning as contemplated by RA 7722. It does not offer a
degree-granting program that would put it under the jurisdiction of the CHED. A review course is only intended to
refresh and enhance the knowledge or competencies and skills of reviewees.
The President has no inherent or delegated legislative power to amend the functions of the CHED under RA 7722
Section 20, Title I of Book III of EO 292 speaks of other powers vested in the President under the law. The exercise
of the Presidents residual powers under this provision requires legislation, as the provision clearly states that the
exercise of the Presidents other powers and functions has to be provided for under the law. There is no law granting
the President the power to amend the functions of the CHED. The President may not amend RA 7722 through an
Executive Order without a prior legislation granting her such power.
2. Legislative power is the authority to make laws and to alter or repeal them, and this power is vested with the
Congress under Section 1, Article VI of the 1987 Constitution. Since EO 566 is an invalid exercise of legislative
power, the RIRR is also an invalid exercise of the CHEDs quasi-legislative power.
Administrative agencies exercise their quasi-legislative or rule-making power through the promulgation of
rules and regulations. The CHED may only exercise its rule-making power within the confines of its jurisdiction
under RA 7722. The RIRR covers review centers and similar entities which are neither institutions of higher
education nor institutions offering degree-granting programs.
DIGESTED BY: PANED 56
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Ruivivar v Office of the Ombudsman

G.R. NO. 165012 September 16, 2008
Topic: Exhaustion of Administrative Remedies; Due Process
FACTS:
Dr. Connie Bernardo is the President of the Association of Drug Testing Centers (Association) that
conducts drug testing and medical examination of applicants for driver’s license. In this capacity, Bernardo went to
the Land Transportation Office (LTO) to meet with representatives from the Department of Transportation and
Communication (DOTC) and some other errands. Before proceedings to the office of the LTO Commissioner,
Bernardo passed by the office of Rachel Beatriz Ruivivar to conduct a follow up on the status of her company’s
application for accreditation. While there, Ruivivar shouted at her in a very arrogant and insulting manner, hurled
invectives upon her person and prevented her from entering the office of the LTO Commissioner. This prompted
Bernardo to file an Affidavit-Complaint charging Ruivivar before the Ombudsman of serious misconduct, conduct
unbecoming of a public official, abuse of authority and violations of the RPC and of the Graft and Corrupt Practices
Act.
The Ombudsman rendered a Decision finding Ruivivar administratively liable for discourtesy in the course
of her official functions and imposed on her the penalty of reprimand. Ruivivar filed a MR arguing that she was
deprived of due process because she was not furnished copies of the affidavits of Bernardo’s witnesses. The
Ombudsman responded to the motion by order that Bernardo furnish Ruivivar with copies and directed the latter to
file, within 10 days from receipt of the Order, such pleading which she may deem fit under the circumstances.
Ruivivar, nonetheless, did not choose to controvert the affidavits and insisted on her previous stand that she was
deprived of due process.
Thus, the Ombudsman issued a ruling maintaining its findings. On petition for certiorari, the petition was
dismissed on the ground that Ruivivar used the wrong legal remedy and failed to exhaust administrative remedies
before the Ombudsman. The CA posits that the remedy should have been an appeal to the CA by way of petition for
review, citing the case of Fabian v. Desierto.
ISSUE:
Whether or not Ruivivar was deprived of due process
HELD:
The CA Decision dismissed the petition for certiorari on the ground that the petitioner failed to exhaust all
the administrative remedies available to her before the Ombudsman. This ruling is legally correct as exhaustion of
administrative remedies is a requisite for the filing of a petition for certiorari. Other than this legal significance,
however, the ruling necessarily carries the direct and immediate implication that the petitioner has been granted the
opportunity to be heard and has refused to avail of this opportunity; hence, she cannot claim denial of due process.
In the words of the CA ruling itself: Petitioner was given the opportunity by public respondent to rebut the affidavits
submitted by private respondent. . . and had a speedy and adequate administrative remedy but she failed to avail
thereof for reasons only known to her.
The records show that the petitioner duly filed a motion for reconsideration on due process grounds (i.e.,
for the private respondents failure to furnish her copies of the affidavits of witnesses) and on questions relating to
the appreciation of the evidence on record. The Ombudsman acted on this motion by issuing its Order of January 17,
2003 belatedly furnishing her with copies of the private respondents witnesses, together with the directive to file,
within ten (10) days from receipt of this Order, such pleading which she may deem fit under the circumstances.
Given this opportunity to act on the belatedly- furnished affidavits, the petitioner simply chose to file a
Manifestation where she took the position that The order of the Ombudsman dated 17 January 2003 supplying her
with the affidavits of the complainant does not cure the 04 November 2002 order, and on this basis prayed that the
Ombudsman’s decision be reconsidered and the complaint dismissed for lack of merit.
DIGESTED BY: PETILLA 57
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Samahan ng mga Manggagawan sa Hyatt NUWHRAIN-APL vs Bacungan
G.R. No. 149050, March 25, 2009
Topic: Decisions of Voluntary Arbitrator
Facts:
Mario Dacles and Teodoro Valencia respectively assumed their duties as glass cleaners at respondent Hyatt
pursuant to the cleaning service contract executed between respondent Hyatt and City Service Corporation (CSC).
Respondent Hyatt hired Amelia Dalmacio and Renato Dazo on a casual basis as florist/sales clerk and helper/driver,
respectively. After their contracts expired on 30 August 1998, Dalmacio and Dazo continued reporting for work. On
16 September 1998, Dalamcio and Dazo signed another employment contract with respondent Hyatt.
During the Labor Management Committee Meeting, petitioner union questioned the status as non-regular
employees of Dacles, Valencia, Dalmacio and Dazo. Petitioner union claimed that Dacles, et al. were regular
employees on account of the nature of their functions as well as the length of their service. On the other hand,
respondent Hotel maintained that Dalmacio and Dazo were mere project employees whose employments were co-
terminus with the existence of the flower shop outlet and that Dacles and Valenciawere employees of CSC, an
independent contractor. On 16 September 1999, respondent Hyatt dismissed Dacles and Valencia and disallowed
them from reporting to work on the ground that the service contract between respondent Hyatt and CSC had been
terminated.
Petitioner union and respondent Hyatt were unable to settle the dispute through the grievance procedure
and, thus, agreed to elevate the issue for voluntary arbitration. Voluntary arbitrator Bacungan rendered a decision
that Dacles and Valencia are not employees of the Hotel but of City Service Corporation.
Issue:
Whether or not the voluntary arbitrator committed an error in ruling that Dacles and Valencia were
employees of CSC.
Held:
The voluntary arbitrator did not commit any reversible error in ruling that Dacles and Valencia were
employees of CSC, an independent contractor, whose services may be terminated upon the expiration of the contract
for cleaning services between CSC and respondent Hyatt. There is no dispute that Dacles and Valencia performed
services at respondent Hyatt pursuant to the said contract. The Court affirms the ruling of the voluntary arbitrator
that Dacles and Valencia cannot be considered as employees of respondent Hyatt in the absence of evidence to
prove that CSC had been engaged in labor-only contracting.
Well-settled is the rule that findings of fact of administrative agencies and quasi-judicial bodies which have
acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great
respect but even finality. They are binding upon this Court unless there is a showing of grave abuse of discretion or
where it is clearly shown that they were arrived at arbitrarily or in utter disregard of the evidence on record.
DIGESTED BY: PETILLA 58
THE SANGGUNIANG BARANGAY OF BARANGAY DON MARIANO MARCOS vs. PUNONG
BARANGAY SEVERINO MARTINEZ G.R. NO. 170626 March 3, 2009 Topic: Doctrine of Exhaustion of
Administrative Agencies
Facts:
Sangguniang Barangay is the legislative body of Barangay Don Mariano Marcos, Bayombong, Nueva
Vizcaya, a local government unit created, organized and existing as such under pertinent laws of the Republic of the
Philippines. Martinez is the incumbent Punong Barangay of the said local government unit.
Martinez was administratively charged with Dishonesty and Graft and Corruption by THE Sanggunian
through the filing of a verified complaint before the Sangguniang Bayan as the disciplining authority over elective
barangay officials. The Sanggunian filed with the Sangguniang Bayan an Amended Administrative Complaint
against Martinez for Dishonesty, Misconduct in Office and Violation of the Anti-Graft and Corrupt Practices Act.
Upon his failure to file an Answer to the Amended Administrative Complaint, Martinez was declared by
the Sangguniang Bayan as in default. Pending the administrative proceedings, Martinez was placed under preventive
suspension for 60 days. Thereafter, the Sangguniang Bayan rendered its Decision which imposed upon Martinez the
penalty of removal from office.
The Decision was conveyed to the Municipal Mayor of Bayombong for its implementation. The Municipal
Mayor issued a Memorandum, wherein he stated that the Sangguniang Bayan is not empowered to order Martinez’s
removal from service. However, the Decision remains valid until reversed and must be executed by him. For the
meantime, he ordered the indefinite suspension of Martinez since the period of appeal had not yet lapsed.
Martinez filed a Special Civil Action for Certiorari with a prayer for Temporary Restraining Order and
Preliminary Injunction before the trial court. The trial court issued an Order declaring the Decision of the
Sangguniang Bayan and the Memorandum of the Mayor void. It maintained that the proper courts, and not the
Sanggunian, are empowered to remove an elective local official from office. Thus, the Order of the Sangguniang
Bayan removing Martinez from service is void. As a consequence, the Mayor cannot prevent Martinez from
assuming his office on the basis of a void order.
The trial court denied the motion for reconsideration. Hence, the present petition was filed.
Issue:
Whether or not the Sangguniang Bayan may remove Martinez, an elective local official, from office.
Ruling:
The pertinent legal provisions and cases decided by this Court firmly establish that the Sangguniang Bayan
is not empowered to do so. Section 60 of the Local Government Code conferred upon the courts the power to
remove elective local officials from office: Section 60. Grounds for Disciplinary Actions. — An elective local
official may be disciplined, suspended, or removed from office on any of the following grounds:
An elective local official may be removed from office on the grounds enumerated above by order of the proper
court.
They contends that administrative cases involving elective barangay officials may be filed with, heard and
decided by the Sangguniang Panlungsod or Sangguniang Bayan concerned, which can, thereafter, impose a penalty
of removal from office. It further claims that the courts are merely tasked with issuing the order of removal, after the
Sangguniang Panlungsod or Sangguniang Bayan finds that a penalty of removal is warranted.
The aforementioned position would run counter to the rationale for making the removal of elective officials
an exclusive judicial prerogative.
The rule which confers to the proper courts the power to remove an elective local official from office is intended as
a check against any capriciousness or partisan activity by the disciplining authority. Vesting the local legislative
body with the power to decide whether or not a local chief executive may be removed from office, and only
relegating to the courts a mandatory duty to implement the decision, would still not free the resolution of the case
from the capriciousness or DIGESTED BY: PETILLA 59
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
partisanship of the disciplining authority. Thus, such interpretation would defeat the clear intent of the law.
Moreover, such an arrangement clearly demotes the courts to nothing more than an implementing arm of
the Sangguniang Panlungsod, or Sangguniang Bayan. This would be an unmistakable breach of the doctrine on
separation of powers, thus placing the courts under the orders of the legislative bodies of local governments.
As the law stands, Section 61 of the Local Government Code provides for the procedure for the filing of an
administrative case against an erring elective barangay official before the Sangguniang Panlungsod or Sangguniang
Bayan. However, the Sangguniang Panlungsod or Sangguniang Bayan cannot order the removal of an erring elective
barangay official from office, as the courts are exclusively vested with this power under Section 60 of the Local
Government Code. Thus, if the acts allegedly committed by the barangay official are of a grave nature and, if found
guilty, would merit the penalty of removal from office, the case should be filed with the regional trial court. Once
the court assumes jurisdiction, it retains jurisdiction over the case even if it would be subsequently apparent during
the trial that a penalty less than removal from office is appropriate. On the other hand, the most extreme penalty that
the Sangguniang Panlungsod or Sangguniang Bayan may impose on the erring elective barangay official is
suspension; if it deems that the removal of the official from service is warranted, then it can resolve that the proper
charges be filed in court.
DIGESTED BY: PETILLA 60
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Erlinda Santos vs Ma Carest Rasalan

G.R. No. 155749, February 8, 2007 Topic: Jurisdiction of the Ombudsman
FACTS:
Erlinda F. Santos, petitioner, and Ma. Carest A. Rasalan, respondent, are both employed as government
nurses at the Tondo Medical Center. Respondent filed with the Office of the Ombudsman an administrative
complaint for grave misconduct and conduct unbecoming of a public official against petitioner. Respondent alleged
that when she reported for work after her maternity leave, she came to know that petitioner had been spreading
untruthful and malicious statements against her. Petitioner filed a motion to dismiss
3

the administrative complaint for lack of jurisdiction.t In an Order dated

December 2, 1999, the Office of the Ombudsman denied the motion. The Ombudsman found respondent be held
GUILTY as charged, with a mitigating penalty of SUSPENSION FROM THE SERVICE for SEVEN (7) MONTHS
WITHOUT PAY. Petitioner filed a motion for reconsideration, but it was denied. The Court of Appeals rendered its
Decision affirming the Decision of the Office of the Ombudsman.
ISSUE:
Whether or not the Office of the Ombudsman has jurisdiction over respondent’s administrative complaint
considering that the acts complained of are not work-related and are purely personal between the parties
HELD:
The petition is bereft of merit.
The authority of the Ombudsman to act on respondent’s administrative complaint is anchored on Section
13(1), Article XI of the 1987 Constitution, which provides that The Office of the Ombudsman shall have the
following powers, functions, and duties: (1) Investigate on its own, or on complaint by any person, any act or
omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust,
improper, or inefficient.
Section 19 of Republic Act (R.A.) No. 6770, otherwise known as the Ombudsman Act of 1989,
7

like
wise provides that The Ombudsman shall act on all complaints relating, but not limited to acts or omissions which:
(1) Are contrary to law or regulation; (2) Are unreasonable, unfair, oppressive or discriminatory; (3) Are
inconsistent with the general course of an agency’s functions, though in accordance with law; (4) Proceed from a
mistake of law or an arbitrary ascertainment of facts; (5) Are in the exercise of discretionary powers but for an
improper purpose; or (6) Are otherwise irregular, immoral or devoid of justification.
The Office of the Ombudsman and the Court of Appeals found that the acts committed by petitioner as a
public employee are unreasonable, unfair, oppressive, irregular, immoral and devoid of justification, thus falling
within the purview of the above-quoted constitutional and statutory provisions. We find no cogent reason to deviate
from their findings. The jurisdiction of the Ombudsman encompasses all kinds of malfeasance, misfeasance, and
nonfeasance committed by any public officer or employee during his/her tenure of office. The law does not qualify
the nature of the illegal act or omission of the public official or employee that the Ombudsman may investigate. It
does not require that the act or omission be related to or be connected with or arise from the performance of official
duty. Since the law does not distinguish, neither should we.
However, we do not agree that petitioner’s offense can be categorized as "grave misconduct and conduct
prejudicial to the best interest of the service." Her offense merely constitutes simple misconduct. There is no
substantial evidence to show that any of those additional elements exist to qualify petitioner’s misconduct as grave.
Thus, to our mind, the penalty of suspension for seven (7) months without pay is too harsh.
The challenged Decision and Resolution of the Court of Appeals are AFFIRMED with MODIFICATION
in the sense that petitioner is found guilty of simple misconduct and is suspended from the service for two (2)
months without pay.
DIGESTED BY: PETILLA 61
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Securities and Exchange Commission vs. GMA Network, inc.
G.R No. 164026 , December 23, 2008
Topic: Rule-making power of the SEC
Facts:
Petitioner GMA filed an application for various amendments to its Articles of Incorporation and By-Laws
with the respondent SEC. The amendments include, among others, the change in the corporate name of from
"Republic Broadcasting System, Inc." to "GMA Network, Inc." as well as the extension of the corporate term for
another 50 years.
The petitioner had been assessed by the SEC’s Corporate and Legal Department a separate filing fee for the
application for extension of corporate term (P1,212,200.00) The petitioner formally protested the assessment. SEC
approved the other amendments. (corporate name and the principal purpose)
The petitioner requested for an official opinion/ruling from the SEC on the validity and propriety of the
assessment. SEC, through Assoc. Commissioner Fe Eloisa C. Gloria, issued its ruling upholding the validity of the
questioned assessment.
An appeal was taken by the petitioner on the ground that the assessment is not in accordance with law. SEC
En Banc issued the assailed order dismissing the petitioner’s appeal for lack of merit.
It filed an appeal with CA. GMA argued that its application for the extension of its corporate term is akin to
an amendment and not to a filing of new articles of incorporation. It further averred that the basis for the assessment
is not valid. (SEC Memorandum Circular No. 2, Series of 1994)
CA agreed with the SEC’s submission that an extension of the corporate term is a grant of a fresh license
for a corporation. As such, it is not an ordinary amendment. However, the CA ruled that the Memorandum Circular
is invalid and ineffective for not having been published in accordance with law.
Issue:
Whether or not the Memorandum Circular 2 which is the basis of the SEC for the imposition is valid.
Held:
No. We agree with the CA that the questioned MC is invalid as it was not published in the Official Gazette
or in a newspaper of general circulation. Furthermore, it has not been filed with the Office of the National
Administrative Register of the University of the Philippines Law Center as required in the Administrative Code of
1987.
R.A. No. 3531 provides SEC shall be entitled to collect and receive the same fees it assesses and collects
both for the filing of articles of incorporation and the filing of an amended articles of incorporation for purposes of
extending the term of corporate existence. It further provides for a standard which should guide the SEC in fixing
and imposing its rates and fees. If such mandate were the only consideration, the Court would have been inclined to
rule that the SEC was correct in imposing the filing fees as outlined in the questioned MC.
The MC cannot be construed as simply interpretative of R.A. No. 3531. This is an implementation of the
mandate of R.A. No. 3531 and indubitably regulates and affects the public at large. It cannot be considered a mere
internal rule or regulation, nor an interpretation of the law.
DIGESTED BY: RICARDO 62
Securities and Exchange Commission vs. Interport Resources Corporation
G.R No. 135808 , October 6, 2008
Topic: Administrative authorities have the power to promulgate rules and regulations
Facts:
The Board of Directors of IRC approved a Memorandum with Ganda Holdings Berhad (GHB). Under said
memorandum of agreement, IRC acquired 100% of the entire capital stock of GHBI, which would own and operate
a 102 megawatt gas turbine power generating barge. In exchange, IRC will issue to GHB 55% of the expanded
capital stock of IRC. On the side, IRC would acquire 67% of the entire capital of Philippine Racing Club (PRCI).
Rules in connection with the Old Securities Act when it failed to make timely disclosures of its negotiations
with GHB. In addition, the SEC found that the directors of IRC entered into transactions involving IRC shares in
violation of the Revised Securities Act.
Respondents, however, questioned the authority of the SEC to investigate on said matter since according to
PD 902- A, jurisdiction upon the matter was conferred upon the Prosecution and Enforcement Department of the
SEC, however, this issue already moot since pending the disposition of the case, the Securities Regulation Code was
passed thereby effectively repealing PD 902-A and abolishing the PED. They also contended that their right to due
process was violated when the Sec required them to appear before the SEC to show cause why sanctions should not
be imposed upon them since such requirement shifted the burden of proof to respondents.
The case reached CA and said court ruled in favor of the respondents and effectively enjoined the SEC
from filing from criminal, civil or administrative cases against respondents. It its resolution, the CA stated that since
there are no rules and regulations implementing the rules regarding disclosure, insider trading or any of the
provisions of the Revised Securities Act, the SEC has no statutory authority to file any suit against respondents. The
CA, therefore, prohibited the SEC from taking cognizance or initiating any action against the respondents for the
alleged violations of the Revised Securities Act.
Issues:
1. Whether or not the SEC has authority to file suit against respondents for violations of the RSA.
2. Whether or not their right to due process was violated when the SEC denied the parties of their right to
cross examination.
Held:
The Revised Securities Act does not require the enactment of implementing rules to make it binding and
effective. The provisions of the RSA are sufficiently clear and complete by themselves. To tule that absence of
implementing rules can render ineffective an act of Congress would empower administrative bodies to defeat the
legislative will by delaying the implementing rules. Where the statute contains sufficient standards and an
unmistakable intent (as in this case, the RSA) there should be no impediment as to its implementation.
The court does not discern any vagueness or ambiguity in the RSA such that the acts proscribed and/or required
would not be understood by a person of ordinary intelligence. The provision explains in simple terms that the
insider's misuse of nonpublic and undisclosed information is the gravamen of illegal conduct and that the intent of
the law is the protection of investors against fraud committed when an insider, using secret information, takes
advantage of an uninformed investor. Insiders are obligated to disclose material information to the other party or
abstain from trading the shares of his corporation. This duty to disclose or abstain is based on 2 factors: 1) the
existence of a relationship giving access, directly or indirectly to information intended to be available only for a
corporate purpose and not for the personal benefit of anyone and 2) the inherent unfairness involved when a party
takes advantage of such information knowing it is unavailable to those with whom DIGESTED BY: RICARDO 63
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 he is
dealing.

This obligation to disclose is imposed upon "insiders" which are particularly officers, directors or
controlling stockholders but that definition has already been expanded and not includes those persons whose
relationship of former relationship to the issuer or the security that is not generally available and the one who learns
such a fact from an insider knowing that the person from whom he learns such fact is an insider. In some case,
however, there may be valid corporate reasons for the nondisclosure of material information but it should not be
used for non-corporate purposes.
2. There is no violation of due process in this case since the proceedings before the PED are summary in nature. The
hearing officer may require the parties to submit their respective verified position papers together will all supporting
documents and affidavits of witnesses. A formal hearing is not mandatory and it is within the discretion of the
hearing officer to determine whether or not there is a need for a formal hearing.
Moreover, the law creating the PED empowers it to investigate violations of the rules and regulations and
to file and prosecute such cases. It does not have an adjudicatory powers. Thus, the PED need not comply with the
provisions of the Administrative Code on adjudication.
The SEC retained jurisdiction to investigate violations of the RSA, reenacted in the Securities Regulations
Code despite the abolition of the PED. In this case, the SEC already commenced investigating the respondents for
violations of the RSA but during the pendency of the case the Securities and Regulations Code was passed thereby
repealing the RSA. However, the repeal cannot deprive the SEC of its jurisdiction to continue investigating the case.
Investigations by the SEC is a requisite before a criminal case may be referred to the DOJ since the SEC is
an administrative agency with the special competence to do so. According to the doctrine of primary jurisdiction, the
courts will not determine a controversy involving a question within the jurisdiction of an administrative tribunal
where the question demands the exercise of sound administrative discretion requiring the specialized knowledge and
expertise of said administrative tribunal to determine technical and intricate matters of fact.
DIGESTED BY: RICARDO 64
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
UNIVERSITY OF THE PHILIPPINES, et al. v. HON. AGUSTIN S. DIZON, et al.
G.R No. 171182, August 2, 2012
Topic: Doctrine of Immutability of a final judgment
FACTS:
University of the Philippines entered into a General Construction Agreement with respondent Stern
Builders for the construction and renovation of the buildings in the campus of the UP in Los Bas. UP was able to
pay its first and second billing. However, the third billing worth P273,729.47 was not paid due to its disallowance
by the Commission on Audit (COA). Thus, Stern Builders sued the UP to collect the unpaid balance.
On November 28, 2001, the RTC rendered its decision ordering UP to pay Stern Builders. Then on January
16, 2002, the UP filed its motion for reconsideration. The RTC denied the motion. The denial of the said motion was
served upon Atty. Felimon Nolasco (Atty.Nolasco) of the UPLB Legal Office on May 17, 2002. Notably, Atty.
Nolasco was not the counsel of record of the UP but the OLS in Diliman, Quezon City.
Thereafter, the UP filed a notice of appeal on June 3, 2002. However, the RTC denied due course to the
notice of appeal for having been filed out of time. On October 4, 2002, upon motion of Stern Builders, the RTC
issued the writ of execution.
On appeal, both the CA and the High Court denied UPs petition. The denial became final and executory.
Hence, Stern Builders filed in the RTC its motion for execution despite their previous motion having already been
granted and despite the writ of execution having already issued. On June 11, 2003, the RTC granted another motion
for execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4, 2002).
Consequently, the sheriff served notices of garnishment to the UPs depositary banks and the RTC ordered the
release of the funds. Aggrieved, UP elevated the matter to the CA. The CA sustained the RTC. Hence, this petition.
ISSUES
1. W/N UP's funds validly garnished.
2. W/N the UP's appeal dated June 3, 2002 been filed out of time.
Held:
1. UP's funds, being government funds, are not subject to garnishment. (Garnishment of public funds; suability
vs. liability of the State)
Despite its establishment as a body corporate, the UP remains to be a "chartered institution" performing a
legitimate government function. Irrefragably, the UP is a government instrumentality, performing the States
constitutional mandate of promoting quality and accessible education. As a government instrumentality, the UP
administers special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of
Executive Order No. 714, and from the yearly appropriations, to achieve the purposes laid down by Section 2 of Act
1870, as expanded in Republic Act No. 9500. All the funds going into the possession of the UP, including any
interest accruing from the deposit of such funds in any banking institution, constitute a "special trust fund," the
disbursement of which should always be aligned with the UPs mission and purpose, and should always be subject to
auditing by the COA. The funds of the UP are government funds that are public in
DIGESTED BY: RICARDO 65
character. They include the income accruing from the use of real property ceded to the UP that may be spent
only for the attainment of its institutional objectives.
The Constitution strictly mandated that "no money shall be paid out of the Treasury except in pursuance of
an appropriation made by law." The execution of the monetary judgment against the UP was within the primary
jurisdiction of the COA. It was of no moment that a final and executory decision already validated the claim against
the UP.
2. The period of appeal did not start without effective service of decision upon counsel of record. (The doctrine
of immutability of a final judgment; service of judgments; fresh-period rule; computation of time)
It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be
modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and
whether the modification is made by the court that rendered it or by this Court as the highest court of the land. But
the doctrine of immutability of a final judgment has not been absolute, and has admitted several exceptions, among
them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries that cause no prejudice to any party;
(c) void judgments; and (d) whenever circumstances transpire after the finality of the decision that render its
execution unjust and inequitable. We rule that the UPs plea for equity warrants the Courts exercise of the
exceptional power to disregard the declaration of finality of the judgment of the RTC for being in clear violation of
the UPs right to due process.
Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB Legal
Office was invalid and ineffectual because he was admittedly not the counsel of record of the UP. Verily, the service
of the denial of the motion for reconsideration could only be validly made upon the OLS in Diliman, and no other. It
is settled that where a party has appeared by counsel, service must be made upon such counsel. This is clear enough
from Section 2, second paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party
himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy
of any paper served upon him by the opposite side."
Even assuming that the service upon Atty. Nolasco was valid and effective, such that the remaining period
for the UP to take a timely appeal would end by May 23, 2002, it would still not be correct to find that the judgment
of the RTC became final and immutable thereafter due to the notice of appeal being filed too late on June 3, 2002. In
so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule contained in the
second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing of a motion for
reconsideration interrupted the running of the period for filing the appeal; and that the period resumed upon notice
of the denial of the motion for reconsideration. For that reason, the CA and the RTC might not be taken to task for
strictly adhering to the rule then prevailing.
Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial,
the UPs filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-period rule. For
the UP, the fresh period of 15-days counted from service of the denial of the motion for reconsideration would end
on June 1, 2002, which was a Saturday. Hence, the UP had until the next working day, or June 3, 2002, a Monday,
within which to appeal, conformably with Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of
the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the
time shall not run until the next working day.
DIGESTED BY: RICARDO 66
Sps. Marcial Vargas and Elizabeth Vargas v Sps. Visitacion and Jose Caminas
G.R No. 137869, June 12, 2008
Topic: Jurisdiction of HLURB
Facts:
Spouses Caminas bought a 54-square meter lot with a two-storey townhouse, designated as townhouse No.
8 from Trans-American Sales and Exposition represented by its developer Garcia. Garcia bought from spouses
Vargas various construction materials. As payment to spouses Vargas, Garcia executed an absolute Deed of Sale
over townhouse No. 12. Spouses Vargas and Garcia executed a Deed of Exchange with Addendum , whereby
spouses Vargas transferred to Garcia townhouse No. 12, and in exchange Garcia transferred to spouses Vargas
townhouse No. 8.
Spouses Garcia executed a Deed of Real Estate Mortgage over townhouse No. 8 in favor of spouses De
Guzman as security for a loan. As spouses Garcia failed to pay their indebtedness, spouses De Guzman foreclosed
the mortgage and at the public auction, spouses De Guzman were the highest bidder.
Spouses Caminas filed a complaint
[8]

against spouses Garcia, spouses De Guzman, and spouses Vargas

before the Regional Trial Court of Quezon City. or the declaration of nullity of deed of mortgage and deed of sale,
for the declaration of absolute ownership, for the delivery of title or in the alternative for refund of purchase price
and damages. Spouses Vargas filed a case against spouses Garcia and spouses De Guzman, also before the Regional
Trial Court of Quezon City, for specific performance, declaration of nullity of the mortgage contract. spouses
Vargas raised the lack of jurisdiction of the trial court on the ground that the subject matter falls within the exclusive
jurisdiction of the Housing and Land Use Regulatory Board
Issue:
Whether the Court of Appeals committed reversible error in not setting aside the decision and order of the
Regional Trial Court since the case is within the exclusive jurisdiction of the HLURB
Held:
Presidential Decree No. 1344 dated 2 April 1978 expanded the jurisdiction of the National
Housing Authority (NHA), the precursor of the HLURB, to include adjudication of the following cases:
Sec. 1. In the exercise of its function to regulate the real estate trade and business and in addition to its
powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit
buyer against the project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers
of subdivision lot or condominium unit against the owner, developer, broker or salesman.
The HLURB has jurisdiction over cases arising from (1) unsound real estate business practices; (2) claims
for refund or other claims filed by subdivision lot or condominium unit buyers against the project owner, developer,
dealer, broker or salesman; and (3) demands for specific performance of contractual and statutory obligations filed
by buyers of subdivision lots or condominium units against the owner, developer, broker, or salesman.
DIGESTED BY: RIVERA 67
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Sps. Teresito Villacastin and Lourdes Villacastin v Paul Pelaez
G.R No. 170478, May 22, 2008
Topic: Jurisdiction of MCTC
Facts:
Respondent Paul Pelaez and his wife mortgaged their agricultural lands to the DBP. For failure of the
Pelaez spouses to pay their mortgage obligation, the properties were foreclosed and subsequently sold at public
auction. The purported tenants of the property, filed an action to annul the mortgage, foreclosure and sale of the
properties, claiming that they are the owners thereof under Presidential Decree No. 27.
Petitioners filed a Complaint for Forcible Entry with Prayer for a Writ of Preliminary Mandatory
Injunction, with MCTC against respondent and a certain Elesio Monteseven. Petitioners averred that they are the
ownders and actual possessors of the subject landholding and the defendants, having entered the property through
stealth and strategy, unlawfully deprived plaintiffs of possession thereof.
Respondent countered that he is the owner of the subject property, which was foreclosed by the DBP and
later purchased by petitioners at an auction sale. Respondent further claimed that he had redeemed the property on
March 3, 1988 and accordingly reacquired possession thereof.
The MCTC rendered judgment in favor of petitioners and the same was affirmed by the RTC. The Court of
Appeals, however, ruled that regular courts should respect the primary jurisdiction vested upon the DARAB in cases
involving agricultural lands such as the property subject of this case.
Issue:
Whether or not the MCTC and also the RTC has jurisdiction over the case filed by Villacastin.
Held:
MCTC has jurisdiction. Jurisdiction over the subject matter is determined by the alegations of the
complaint. The complaint in this case alleges that the plaintiffs are the owners and legal as well as actual possessors
of the parcel of agricultural land. That Pelaez by strategy and through stealth, entered the above-designated land of
Villacastin and took possession thereof.
Rule II of the DARAB Rules, provides that the DARAB "shall have primary jurisdiction, both original and
appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving
the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive
Order Nos. 229, 228 and 129-A, Republic Act No, 3844 as amended by Republic Act No. 6389, Presidential Decree
No. 27 and other agrarian laws and their implementing rules and regulations."
Petitioners' action is clearly for the recovery of physical or material possession of the subject property only,
a question which both the MCTC and the RTC ruled petitioners are entitled to. It does not involve the adjudication
of an agrarian reform matter, nor an agrarian dispute falling within the jurisdiction of the DARAB.
Courts have jurisdiction over possessory actions involving public or private agricultural lands to determine
the issue of physical possession as this issue is independent of the question of disposition and alienation of such
lands which should be threshed out in the DAR. Thus, jurisdiction was rightfully exercised by the MCTC and the
RTC.
DIGESTED BY: RIVERA 68
Villanueva vs Judicial and Bar Council
G.R No. 211833, April 7, 2015
Topic: Authority of the Judicial and Bar Council
Facts:
Petitioner was appointed as the Presiding Judge of the Municipal Circuit Trial Court, Compostela-New
Bataan, Compostela Valley Province, Region XI, which is a first-level court. He applied for the vacant position of
Presiding Judge in the following Regional Trial Courts : Branch 31, Tagum City; Branch 13, Davao City; and
Branch 6, Prosperidad, Agusan Del Sur. In a letter dated December 18, 2013, JBC's Office of Recruitment, Selection
and Nomination, informed the petitioner that he was not included in the list of candidates for the said stations. On
the same date, the petitioner sent a letter, through electronic mail, seeking reconsideration of his non-inclusion in the
list of considered applicants and protesting the inclusion of applicants who did not pass the prejudicature
examination.
The petitioner was informed by the JBC Executive Officer, through a letter dated February 3, 2014, that his
protest and reconsideration was duly noted by the JBC en banc. However, its decision not to include his name in the
list of applicants was upheld due to the JBC's long-standing policy of opening the chance for promotion to second-
level courts to, among others, incumbent judges who have served in their current position for at least five years, and
since the petitioner has been a judge only for more than a year, he was excluded from the list. This caused the
petitioner to take recourse to this Court.
Issue:
Whether or not the policy of JBC requiring five years of service as judges of first-level courts before they
can qualify as applicant to second-level courts is constitutional.
Held:
Yes. As an offspring of the 1987 Constitution, the JBC is mandated to recommend appointees to the
judiciary and only those nominated by the JBC in a list officially transmitted to the President may be appointed by
the latter as justice or judge in the judiciary. Thus, the JBC is burdened with a great responsibility that is imbued
with public interest as it determines the men and women who will sit on the judicial bench. While the 1987
Constitution has provided the qualifications of members of the judiciary, this does not preclude the JBC from having
its own set of rules and procedures and providing policies to effectively ensure its mandate.
In carrying out its main function, the JBC has the authority to set the standards/criteria in choosing its
nominees for every vacancy in the judiciary, subject only to the minimum qualifications required by the Constitution
and law for every position. Thus, the JBC has sufficient but not unbridled license to act in performing its duties.
JBC's ultimate goal is to recommend nominees and not simply to fill up judicial vacancies in order to
promote an effective and efficient administration of justice. Thus, the adoption of the five-year requirement policy
applied by JBC to the petitioner's case is necessary and incidental to the function conferred by the Constitution to
the JBC.
DIGESTED BY: RIVERA 69
The Manila Banking Corporation v. Spouses Rabina
G.R No. 145941, December 16, 2008
Topic: Jurisdiction of HLURB
Facts:
Marenir Development Corporation (MDC), owner/developer of a subdivision project in Quezon City
obtained a loan from the Manila Banking Corporation (MBC). To secure the payment of such loan, it forged a real
estate mortgage covering real estate properties including the lot which was subject of a Contract to Sell to Amante
Sibuyan (Sibuyan). Sibuyan transferred the lot via ―Assignment and Transfer of Rightsǁ to Celestina Rabina
(Rabina), with the conformity of MDC. The said document mentioned the Contract to Sell which MDC had
executed in favor of Sibuyan.
After Rabina had fully paid the amortization payments for the lot, she asked MDC for the transfer to her of
its title. MDC, however, failed, prompting Rabina to institute a complaint for non-delivery of titles, annulment of
mortgage and incomplete development of the subdivision project Reymarville Subdivision, against MDC before the
Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board
(HLURB). MBC contended that the HLURB has no jurisdiction over it by virtue of Section 29 of Republic Act 265,
as amended by Executive Order No. 289.
Housing and Land Use Arbiter Cesar Manuel found in favor of the Rabina and ordered for the payment of
moral damages. Upon MBC‘s appeal, the HLURB Board of Commissioners affirmed the Arbiter‘s decision. MBC
then elevated the case to the Office of the President (OP) but the same have been dismissed.
On elevation to the Court of Appeals, the appeal was dismissed and the CA affirmed the Orders of the
OP. Hence, this petition.
ISSUES:
Whether or not the HLURB has jurisdiction over the case at bar under Presidential Decree 957
HELD:
The act of MDC in mortgaging the lot, without the knowledge and consent of lot Spouses Rabina and
without the approval of the HLURB, as required by P.D. 957, is not only an unsound real estate business practice
but also highly prejudicial to them.
The jurisdiction of the HLURB to regulate the real estate trade is broad enough to include jurisdiction over
complaints for annulment of mortgage. To disassociate the issue of nullity of mortgage and lodge it separately with
the liquidation court would only cause inconvenience to the parties and would not serve the ends of speedy and
inexpensive administration of justice as mandated by the laws vesting quasi-judicial powers in the agency.
DIGESTED BY: SANTOS 70
Trade Investment Development Corporation of the Philippines v. Manalang-Demigilio
G.R No. 176343, September 12, 2012
Topic: Preventive Suspension
FACTS:
The Board of Directors of Trade and Investment Development Corporation of the Philippines (TIDCORP),
a wholly owned government corporation, formally charged Maria Rosario Manalang-Demigillo (Demigillo), then a
Senior Vice- President in TIDCORP, with grave misconduct, conduct prejudicial to the best interest of the service,
insubordination, and gross discourtesy in the course of official duties.
TIDCORP alleged that Demigillo engaged in a verbal tussle with Mr. Joel Valdes (Valdes), President and
CEO of TIDCORP. Allegedly, Demigillo also sent a memorandum addressed to Valdes which contained
discourteous and arrogant words.
Pending the investigation, TIDCORP placed Demigillo under preventive suspension for 90 days.
Demigillo assailed her preventive suspension in the Civil Service Commission (CSC). The CSC ruled that
her suspension was not proper because under Section 19(2), Rule II, of the Uniform Rules on Administrative Cases
in the Civil Service (Uniform Rules), a civil service officer like Demigillo might be preventively suspended by the
disciplining authority only if any of the two grounds were present, to wit: (1) there was a possibility that the civil
service employee might unduly influence or intimidate potential witnesses against him; or (2) there was a possibility
that the civil service employee might tamper the documentary evidence on file in her office. On appeal, the CA
affirmed the CSC .
ISSUE:
Whether or not Demigillo’s 90- day preventive suspension is proper?
HELD:
The 90-day preventive suspension order issued against Demigillo was valid. Under Section 51 of the
Revised Administrative Code, the imposition of preventive suspension by the proper disciplining authority is
authorized provided the charge 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. Section 51 nowhere states or implies that before a preventive suspension may issue there must be
proof that the subordinate may unduly influence the witnesses against him or may tamper the documentary evidence
on file in her office.
Pursuant to its rule-making authority, the CSC promulgated the Uniform Rules on August 31, 1999.
Section 19 and Section 20 of Rule II of the Uniform Rules defined the guidelines in the issuance of an order of
preventive suspension and the duration of the suspension It is clear from Section 19, supra, that before an order of
preventive suspension pending an investigation may validly issue, only two prerequisites need be shown, namely:
(1) that the proper disciplining authority has served a formal charge to the affected officer or employee; and (2) that
the charge involves either dishonesty, oppression, grave misconduct, neglect in the performance of duty, or if there
are reasons to believe that the respondent is guilty of the charges which would warrant her removal from the service.
Proof showing that the subordinate officer or employee may unduly influence the witnesses against her or may
tamper the documentary evidence on file in her office is not among the prerequisites.
In Gloria v. Court of Appeals, we stated that preventive suspension pending investigation “is a measure
intended to enable the disciplining authority to investigate charges against respondent by preventing the latter from
intimidating or in any way influencing witnesses against him.” As such, preventing the subordinate officer or
employee from intimidating the witnesses during investigation or from tampering the documentary evidence in her
office is a purpose, not a condition, for imposing preventive suspension, as shown in the use of the word “intended.”
DIGESTED BY: SANTOS 71
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Unduran v. Aberasturi
G.R No. 181284, October 20, 2015
Topic: Jurisdiction
Facts:
Petitioners are members of the Miarayon, Lapok, Lirongan, Talaandig Tribal Association (MILALITTRA),
or Talaandig tribe, who claimed to have been living since birth on the land located at Barangay Miarayon, Talakag,
Bukidnon, Mindanao, which they inherited from their forefathers.
Respondents, represented by attorney-in-fact Ramon Aberasturi, claimed to be the lawful owners
and possessor of an unregistered parcel of agricultural land
On March 3, 2004, respondents filed a Petition for Accion Reivindicatoria, with Prayer for the Issuance of
a Temporary Restraining Order or Preliminary Prohibitory Injunction with Damages before the Regional Trial Court
of Manolo Fortich, Bukidnon (RTC)
On March 23, 2004, the rest of the petitioners filed their Motion to Dismiss, alleging that the RTC had
no jurisdiction over the case.
As awardees of a Certificate of Ancestral Domain Title (CADT), petitioners argued that National
Commission on Indigenous People (NCIP) has exclusive and original jurisdiction over the case, as the subject
matter concerns a dispute and controversy over an ancestral land/domain of Indigenous Cultural Communities
(ICCs)/Indigenous Peoples (IPs).
On July 1, 2004, the NCIP through Atty. Melanie Pimentel, filed a Motion to Refer the Case to the
Regional Hearing Office-National Commission on Indigenous Peoples (RHO-NCIP), alleging that the RTC had no
jurisdiction over the subject matter.
Issues:
In resolving the pivotal issue of which between the RTC and the NCIP has jurisdiction over the
respondents' amended complaint,
Ruling:
The petition has no merit.
Having spelled out the jurisdictions conferred by law to the RTC and the NCIP over the subject matters of
their respective cases, the Court now examines the allegations in the original and amended complaints to find out
which tribunal may properly exercise jurisdiction over this case.
Respondents traced the provenance of their title over said land to one Mamerto Decano, a Chieftain of
Talaandig tribe, by virtue of a Deed of Sale executed on July 27, 1957. They claimed that by means of fraud, stealth
and surreptitious means, petitioners entered the said land, without permission and against the consent of the
landowners, caused damages therein and harassed respondents by indiscriminately firing upon their farm workers.
The Court therefore finds that the CA correctly ruled that the subject matter of the amended complaint
based on allegations therein was within the jurisdiction of the RTC. Contrary to petitioners' contention, the mere fact
that this case involves members of ICCs/IPs and their ancestral land is not enough to for it to fall under the
jurisdiction of the NCIP under Section 66 of the IPRA. A careful review of Section 66 shows that the NCIP shall
have jurisdiction over claims and disputes involving rights of ICCs/IPs only when they arise between or among
parties belonging to the same ICC/IP. The qualifying provision requires two conditions before such disputes may be
brought before the NCIP, namely: (1) exhaustion of remedies under customary laws of the parties, and (2)
compliance with condition precedent through the said certification by the Council of Elders/Leaders.
In this case, while most of the petitioners belong to Talaandig Tribe, respondents do not belong to the same ICC/IP.
Thus, even if the real issue involves a dispute over land which appear to be located within the ancestral domain of
the Talaandig Tribe, it is not the NCIP but the RTC which shall have the power to hear, try and decide this case.
The Court declares Rule IX, Section 1 of the IPRA-IRR,[23] Rule III, Section 5[24] and Rule IV, Sections 13 and
14 of the NCIP Rules[25] as null and void insofar as they expand the jurisdiction of the NCIP under Section 66 of
the IPRA to include such disputes where the parties do not belong to the same ICC/IP.
DIGESTED BY: SANTOS 72
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018

Securities and Exchange Commission v. Laigo

G.R No. 188639, September 2, 2015
Topic: Trust Fund
Facts:
The Security of Exchange Commission (SEC) prescribed rules and regulations governing the pre-need industry.
The New Rules on the Registration and Sale of Pre-Need Plans (New Rules) provides that< among others;
Rule 1.9 of the New Rules, " 'Trust Fund' means a fund set up from planholders' payments, separate and distinct
from the paid-up capital of a registered pre-need company, established with a trustee under a trust agreement
approved by the SEC, to pay for the benefits as provided in the pre-need plan."
Legacy, being a pre-need provider, complied with the trust fund requirement and entered into a trust
agreement with the Land Bank of the Philippines (LBP). Mid-2000, the industry collapsed for a range of reasons.
Legacy being the subject of a petition for involuntary insolvency filed by private respondents in their
capacity as plan holders. Legacy did not object to the proceedings.
Declared insolvent by the RTC trial court, the latter also ordered Legacy to submit an inventory of its assets
and liabilities
RTC ordered the SEC, being the pre-need industry's regulator, to submit the documents pertaining to
Legacy's assets and liabilities.
SEC opposed the inclusion of the trust fund in the inventory of corporate assets on the ground that to do so
would contravene the New Rules which treated trust funds as principally established for the exclusive... purpose of
guaranteeing the delivery of benefits due to the plan holders.
It was of the position that the inclusion of the trust fund in the insolvent's estate and its being opened to
claims by non-plan holders would contravene the purpose for its establishment.
Judge Laigo viewed the trust fund as Legacy's corporate assets and, for said reason, included it in the
insolvent's estate.
SEC filed "this present recourse directly to this Honorable Court in accordance with Section 5 (1), Article
VIII of the 1987 Constitution for the reason... that the matters involve an issue of transcendental importance
SEC contends... that the trust fund should redound exclusively to the benefit of the planholders, who are the
ultimate beneficial owners;... the trust fund is held, managed and administered by the trustee bank to address and
answer the claims against the pre-need company by all its planholders and/or beneficiaries... in issuing the order,
Judge Laigo effectively allowed non-planholders to reach the trust fund in patent violation of the New Rules
established to protect the pre-need investors.
SEC stressed that the setting-up of the trust funds effectively created a demarcation line between the claims
of planholders vis-a-vis those of the other creditors of Legacy;
SEC is of the position that Section 52 of the Pre-Need Code[10] should be given retroactive effect for
being procedural in character.
The private respondents submit that nothing in the New Rules expressly provided that the trust fund is
excluded from the inventory of corporate assets which is required to be submitted to the insolvency court under the
provisions of the Insolvency Law, all claims, including those against the trust funds should be filed in the liquidation
proceedings.
 The Assignee contends that the trust fund forms part of Legacy's corporate assets insolvency court has
jurisdiction over all the claims against the insolvent. No law authorized the SEC to interfere in the insolvency
proceedings because its authority under the SRC is only to regulate the sale of pre-need plans and not to regulate the
management of trust funds.
Issues:
Whether or not Legacy retains ownership over the trust funds assets despite the execution of trust agreements
DIGESTED BY: SANTOS 73
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 Ruling:
The overarching consideration in the legislative mandate to establish trust funds is the protection of the
interest of the planholders in the investment plans.
It is in this context that this Court rules to grant the petition filed by the SEC.
The Trust Fund is for the sole benefit of the planholders and cannot be used to... satisfy the claims of other
creditors of Legacy. The Pre-Need Code clearly provides that the proceeds of trust funds shall redound solely to
the planholders.
SECTION 30. Trust Fund. — To ensure the delivery of the guaranteed benefits and services provided
under a pre- need plan contract, a trust fund per pre-need plan category shall be established. A portion of the
installment payment collected shall be deposited by the... pre-need company in the trust fund, the amount of which
will be as determined by the actuary based on the viability study of the pre-need plan approved by the Commission.
Assets in the trust fund shall at all times remain for the sole benefit of the planholders. At... no time shall any part of
the trust fund be used for or diverted to any purpose other than for the exclusive benefit of the planholders. In no
case shall the trust fund assets be used to satisfy claims of other creditors of the pre-need company. The provision
of... any law to the contrary notwithstanding, in case of insolvency of the pre-need company, the general creditors
shall not be entitled to the trust fund.
Legacy's claimed interest in the enforcement of the trust and in the trust properties is mere apparent
than real. Legacy is not a beneficiary.
A person is considered as a beneficiary of a trust if there is a manifest intention to give such a person
the beneficial interest over the trust properties.
Here, the terms of the trust agreement plainly confer the status of beneficiary to the planholders, not to Legacy.
This categorical declaration doubtless indicates that the intention of the trustor is to make the planholders
the beneficiaries of the trust properties, and not Legacy.
Second, considering the fact that a mandated pre-need trust is one imbued with public interest, the issue on
who the beneficiary is must be determined on the basis of the entire regulatory framework. Under the New Rules, it
is unmistakable that the beneficial interest over the trust properties is with the planholders.
DIGESTED BY: SANTOS 74
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Securities and Exchange Commission v. PICOP Resources Inc.
G.R No. 164314, September 26, 2008
Topic: Interpretation given to a rule or regulation by those charged with its execution is entitled to the
greatest weight.
Facts:
Respondent PICOP Resources, Inc. (PICOP) filed with petitioner Securities and Exchange Commission
(SEC) an application for amendment of its Articles of Incorporation (AOI) extending its corporate existence for
another fifty (50) years. PICOP paid the filing fee of P210.00 based on SEC Memorandum Circular No. 2, Series of
1994. The SEC, however, informed PICOP of the appropriate filing fee of P12 Million, or 1/5 of 1% of its
authorized capital stock of P6 Billion. PICOP sought clarification of the applicable filing fee and the reduction of the
amount of P12 Million prescribed by the SEC.
The SEC held that the P12 Million assessment is based on Republic Act No. 3531 which provides that in
case an amendment of the AOI consists of extending the term of corporate existence, the SEC shall be entitled to
collect and receive the same fees collectible under existing law for the filing of AOI. PICOP elevated the matter to
the SEC En Banc which asked for the reduction of the filing fee from P12 Million to P210.00.
The SEC En Banc denied PICOPs request declaring that the assessed fee is based on the pertinent
provisions of R.A. 3531. Although SEC memorandum Circular No. 2, Series of 1994 and the Schedule of Revised
Fees approved on 23 July 2001 do not provide for a filing fee for extensions of term, these do not limit the Securities
and Exchange Commission from imposing the prevailing fees.
However, the SEC En Banc reduced the filing fee to P6 Million following the formula which
was contemplated in SEC Circular Series 1986 is 1/10 of 1% of the authorized capital stock.
PICOP sought a reconsideration of the En Banc ruling. PICOP posited that SEC Memorandum Circular No.
1, Series of 1986 (1986 Circular) rules on the specific subject matter of Filing Fees for Amended Articles of
Incorporation Extending the Term of Corporate Existence. The prescribed filing fee is 1/10 of 1% of the authorized
capital stock, with the qualification that it should not be less than P200.00 or more than P100,000.00. PICOP
pointed out that no equivalent provision appears in any of the subsequent SEC circulars such as the 1994 and 2001
circulars. Hence, the 1986 Circular should prevail.
The SEC En Banc denied once more PICOPs request to reconsider the earlier ruling and reverted to the P12
Million assessment. It maintained that the provision on the maximum imposable fee under the 1986 Circular has
been amended by the 1994 Circular which removed the maximum imposable fee.
PICOP paid under protest and again moved for reconsideration. This was also denied. Dissatisfied, PICOP appealed
the matter to the Office of the President (OP) which decided in favor of PICOP. The OP pointed out that unlike the
1994 and 2001 Circulars relied on by the SEC, the 1986 Circular specifically addresses the matter of filing fees on
extension of corporate existence. Further, going by the tenet of statutory construction that a special rule cannot be
repealed, amended, or altered by a subsequent general rule, the OP concluded that the 1986 Circular cannot be
repealed, amended, or altered by the 1994 or 2001 Circulars. The fees provided by the said earlier Circular remain
the applicable filing fees.
SEC sought a reconsideration however the same was denied by the OP. Unyielding, the SEC brought the
matter to the CA.
The CA through its first Resolution denied the motion for having been filed beyond the reglementary period.
Issue:
 Whether the OP and CA correct in declaring that the applicable filing fee is P100,000.00, instead of P12
million last assessed by the SEC En Banc.
Held:
Yes. The 1986 Circular is the proper basis of the computation since it specifically provided for filing fees in cases of
extension of corporate term. A proviso of the same nature is wanting in the other circulars relied on by the SEC at
the time PICOP filed its request for extension.
DIGESTED BY: URNOS 75
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
The rule is well-entrenched in this jurisdiction that the interpretation given to a rule or regulation by those
charged with its execution is entitled to the greatest weight by the courts construing such rule or regulation. While
this Court has consistently yielded and accorded great respect to such doctrine, it will not hesitate to set aside an
executive interpretation if there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion
clearly conflicting with the letter and spirit of the law.
In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, the Court
laid the guidelines in resolving disputes concerning the interpretation by an agency of its own rules and regulations,
to wit: (1) Whether the delegation of power was valid; (2) Whether the regulation was within that delegation; (3)
Whether it was a reasonable regulation under a due process test.
In the case under review, there is an evident violation of the due process requirement. It is admitted that the
SEC failed to satisfy the requirements for promulgation when it filed the required copies of the said regulation at the
UP Law Center only fourteen (14) years after it was supposed to have taken effect.
The SEC violated the due process clause insofar as it denied the public prior notice of the regulations that
were supposed to govern them. The SEC cannot wield the provisions of the 1990 Circular against PICOP and expect
its outright compliance. The circular was not yet effective during the time PICOP filed its request to extend its
corporate existence in 2002. In fact, it was only discovered in 2004, fifteen (15) days before the SEC filed its second
motion for reconsideration.
DIGESTED BY: URNOS 76
Securities and Exchange Commission v. Universal Rightfield Property Holdings Inc.
G.R No. 181381, July 20, 2015
Topic: Requirement of Notice and Hearing in Administrative Proceeding
Facts:
Respondent Universal Rightfield Property Holdings, Inc. (URPHI) is a corporation duly registered and
existing under the Philippine Laws, and is engaged in the business of providing residential and leisure-related needs
and wants of the middle and upper middle-income market.
On May 29, 2003, petitioner Securities and Exchange Commission (SEC), through its Corporate Finance
Department, issued an Order revoking URPHI's Registration of Securities and Permit to Sell Securities to the Public
for its failure to timely file its Year 2001 Annual Report and Year 2002 1st, 2nd and 3rd Quarterly Reports pursuant
to Section 17 of the Securities Regulation Code (SRC), Republic Act No. 8799.
On October 16, 2003, URPHI filed with the SEC a Manifestation/Urgent Motion to Set Aside Revocation
Order and Reinstate Registration after complying with its reportorial requirements. On October 24, 2003, the SEC
granted URPHI's motion to lift the revocation order. Thereafter, URPHI failed again to comply with the same
reportorial requirements.In a Notice of Hearing dated June 25, 2004, the SEC directed URPHI to show cause why its
Registration of Securities and Certificate of Permit to Sell Securities to the Public should not be suspended for
failure to submit the said requirements.
During the scheduled hearing on July 6, 2004, URPHI, informed the SEC why it failed to submit the
reportorial requirements, viz.: (1) it was constrained to reduce its accounting staff due to cost-cutting measures; thus,
some of the audit requirements were not completed within the original timetable; and (2) its audited financial
statements for the period ending December 31, 2003 could not be finalized by reason of the delay in the completion
of some of its audit requirements.
In an Order dated July 27, 2004, the SEC suspended URPHI's Registration of Securities and Permit to Sell
Securities to the Public for failure to submit its reportorial requirements despite the lapse of the extension period,
and due to lack of sufficient justification for its inability to comply with the said requirements. On August 23, 2004,
the SEC informed URPHI that it failed to submit its 2004 2nd Quarter Report in violation of the Amended
Implementing Rules and Regulations of the SRC Rule 17 .1(1)(A)(ii).It also directed URPHI to file the said report,
and to show cause why it should not be held liable for violation of the said rule. In a letter dated September 28,
2004, URPHI requested for a final extension, or until November 15, 2004, within which to submit its reportorial
requirements. On December 1, 2004, URPHI filed with the SEC its 2003 Annual Report. In an Order of Revocation
dated December 8, 2004, the SEC revoked URPHI's Registration of Securities and Permit to Sell Securities to the
Public for its failure to submit its reportorial requirements within the final extension period.
On December 9, 10, and 14, 2004, URPHI finally submitted to the SEC its 1st Quarterly Report for 2004,
2nd Quarterly Report for 2004, and 3rd Quarterly Report for 2004, respectively. Meantime, URPHI appealed the
SEC Order of Revocation dated December 8, 2004 by filing a Notice of Appeal. The SEC denied URPHI's appeal.
URPHI filed a petition for review with the CA.
The CA granted the petition after finding that URPHI was not afforded due process because no due notice
was given and no hearing was conducted before its registration of securities and permit to sell them to the public
was revoked. The CA noted that the hearing conducted on July 6, 2004 was only for the purpose of determining
whether URPHI's registration and permit to sell should be suspended and not whether said registration should be
revoked. The CA also held that the SEC cannot brush aside the specific mandate of Section 13 .1 of the SRC by
merely invoking the doctrine that administrative due process is satisfied when the party is given the opportunity to
explain one's side or the opportunity to seek a reconsideration of the action or ruling taken.
Citing Globe Telecom, Inc. the CA explained that while such doctrine remains valid and has been applied
in numerous instances, it must give way in instances when the statute itself, such as Section 13 .1, demands prior
notice and hearing. It added that the imperativeness for a hearing in cases of revocation of registration of securities
assumes greater significance,
DIGESTED BY: URNOS 77
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
considering that revocation is a measure punitive in character undertaken by an administrative agency in the exercise
of its quasi-judicial functions.
Dissatisfied with the CA Decision, the SEC filed the instant petition for review on certiorari.
Issue:
Whether the Order of Revocation was issued by SEC without affording URPHI due process due to absence
of notice and hearing.
Held:
No. There is no dispute that the violation of reportorial requirements under Sec 17.1 of the Amended IRR
of the SRC is a ground for suspension or revocation of the registration of securities pursuant to Sec 13.1 and 54.1 of
the SRC to wit:
13.1. The Commission may reject a registration statement and refuse registration of the security thereunder, or
revoke the effectivity of a registration statement and the registration of the security thereunder after due notice and
hearing by issuing an order to such effect, setting forth its findings in respect thereto, if it finds that:
a) The issuer: (ii) Has violated any of the provisions of this Code, the rules promulgated pursuant thereto, or any
order of the Commission of which the issuer has notice in connection with the offering for which a registration
statement has been filed;
54.1. If, after due notice and hearing, the Commission finds that: (a) There is a violation of this Code, its
rules, or its orders; (b) Any registered broker or dealer, associated person thereof has failed reasonably to supervise,
with a view to preventing violations, another person subject to supervision who commits any such violation; (c) Any
registrant or other person has, in a registration statement or in other reports, applications, accounts, records or
documents required by law or rules to be filed with the Commission, made any untrue statement of a material fact,
or omitted to state any material fact required to be stated therein or necessary to make the statements therein not
misleading; or, in the case of an underwriter, has failed to conduct an inquiry with reasonable diligence to insure that
a registration statement is accurate and complete in all material respects; or (d) Any person has refused to permit any
lawful examinations into its affairs, it shall, in its discretion, and subject only to the limitations hereinafter
prescribed, impose any or all of the following sanctions as may be appropriate in light of the facts and
circumstances:
(i) Suspension, or revocation of any registration for the offering of securities;
SC further held that the essence of due process is simply giving an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side or an opportunity to seek are consideration of the
action or ruling complained of.
What the law prohibits is not the absence of previous notice but the absolute absence thereof and the lack
of opportunity to be heard. The due notice of revocation given to URPHI through the SEC Order dated July 27,
2004. Due notice simply means the information must be given or made to a particular person or to the public within
a legally mandated period of time so that its recipient will have the opportunity to respond to a situation or to
allegations that affect the individual's or public's legal rights or duties. Furthermore, the SC notes that SEC has both
regulatory and adjudicative functions. The revocation of registration of securities and permit to sell them to the
public is not an exercise of the SEC's quasi-judicial power, but of its regulatory power.
The case used by URPHI which is the Globe Telecom ruling is different from the case at hand. The SC in
Globe Case ruled that the fined imposed by the NTC without notice and hearing was null and void due to the denial
of petitioner's right to due process. The revocation of URPHI's registration of securities and permit to sell them to
the public cannot be considered a penalty but a withdrawal of a privilege, which regulatory power the SEC validly
exercised after giving it due notice and opportunity to be heard.
DIGESTED BY: URNOS 78
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Solid Homes Inc. v. Evelina Laserna and Gloria Cajipe, represented by Cruz
G.R No. 1166051, April 8 2008
Topic: Inability of Sec. 14, Art. VIII in Administrative Proceedings
Facts:
Respondents Evelina Laserna and Gloria Cajipe, represented by their attorney-in-fact entered into a
Contract to Sell with petitioner Solid Homes, Inc. (SHI), a corporation engaged in the development and sale of
subdivision lots.
The total contract price of the said parcel of land was P172,260.00, to be paid in the following manner: (1)
the P33,060.00 down payment should be paid upon the signing of the contract; and (2) the remaining balance of
P166,421.88 was payable for a period of three years at a monthly installment of P4,622.83 beginning 1 April 1977.
When the respondents had allegedly paid 90% of the purchase price, they demanded the execution and
delivery of the Deed of Sale and the Transfer Certificate of Title (TCT) of the subject property upon the final
payment of the balance. But the petitioner did not comply.
The respondents filed against the petitioner a Complaint for Delivery of Title and Execution of Deed of
Sale with Damages before the Housing and Land Use Regulatory Board (HLURB). Respondents alleged that as their
outstanding balance was only P5,928.18, they were already demanding the execution and delivery of the Deed of
Sale and the TCT of the subject property upon final payment of the said amount. The petitioner asserted that the
respondents have no cause of action against it because the respondents failed to show that they had complied with
their obligations under the Contract to Sell, since the respondents had not yet paid in full the total purchase price of
the subject property.
HLURB Arbiter rendered a Decision denying respondents’ prayer for the issuance of the Deed of Sale and
the delivery of the TCT. He, however, directed the petitioner to execute and deliver the aforesaid Deed of Sale and
TCT the moment that the purchase price is fully settled.
Feeling aggrieved, the petitioner appealed the aforesaid Decision to the HLURB Board of Commissioners.
The HLURB Board of Commissioners modified the decision.
Respondent was directed to pay the balance within thirty (30) days from finality of the decision to execute the
necessary deed of sale and deliver the TCT over the subject property immediately upon full payment.
Petitioner appealed the same before the Office of the President who rendered decision affirming in toto the
decision of the HLURB Board of Commissioners.
The petitioner elevated its case to the Court of Appeals which rendered a Decision denying due course and
dismissing the petitioner’s Petition for Review for lack of merit. Hence, this Petition.
Issue:
Whether or not the CA seriously erred in holding that the decision of the Office of the President, which
merely adopts by reference the findings and conclusions of the Board of Commissioners of the HLURB, is in
accordance with the mandate of the Constitution that the decision should be based on the findings of facts and law to
arrive at a decision
DIGESTED BY: URNOS 79
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 Held:
NO.
It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply to decisions rendered
in administrative proceedings, as in the case a bar. Said section applies only to decisions rendered in judicial
proceedings. In fact, Article VIII is titled "Judiciary," and all of its provisions have particular concern only with
respect to the judicial branch of government. Certainly, it would be error to hold or even imply that decisions of
executive departments or administrative agencies are oblige to meet the requirements under Section 14, Article VIII.
The rights of parties in administrative proceedings are not violated as long as the constitutional requirement
of due process has been satisfied. In the landmark case of Ang Tibay v. CIR, the Court laid down the cardinal rights
of parties in administrative proceedings, as follows:
1) The right to a hearing, which includes the right to present one’s case and submit evidence in support thereof. 2)
The tribunal must consider the evidence presented. 3) The decision must have something to support itself. 4) The
evidence must be substantial. 5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. 6) The tribunal or body or any of its judges must act on
its or his own independent consideration of the law and facts of the controversy and not simply accept the views of a
subordinate in arriving at a decision. 7) The board or body should, in all controversial question, render its decision
in such a manner that the parties to the proceeding can know the various issues involved, and the reason for the
decision rendered.
At bar, the Office of the President apparently considered the Decision of HLURB as correct and sufficient,
and said so in its own Decision. The brevity of the assailed Decision was not the product of willing concealment of
its factual and legal bases. Such bases, the assailed Decision noted, were already contained in the HLURB decision,
and the parties adversely affected need only refer to the HLURB Decision in order to be able to interpose an
informed appeal or action for certiorari under Rule 65.
However, it bears observation that while decisions of the Office of the President need not comply with the
constitutional requirement imposed on courts under Section 14, Article VIII of the Constitution, the Rules of Court
may still find application, although suppletory only in character and apply only whenever practicable and
convenient. There is no mandate that requires the application of the Rules of Court in administrative proceedings.
DIGESTED BY: URNOS 80
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Standard Chartered Bank v. Standard Chartered Bank Employees Remedies
G.R No. 165550, 2008-10-08
Topic: Findings of labor officials deemed to have acquired expertise in matters within their jurisdiction are
accorded not only respect but finality.
Facts:
On August 25, 1998, petitioner Standard Chartered Bank entered into a Collective Bargaining Agreement
[6] (CBA) with respondent Standard Chartered Bank Employees Union (SCBEU), which provided, among others,
for medical benefits. Article XI, Section 1 of the CBA provides that petitioner committed to "continue to cover all
its employees with a group hospitalization and major surgical insurance plan including maternity benefits. After the
signing of the CBA, petitioner changed its insurance provider from Philamlife to Maxicare, a Health Maintenance
Organization, to allegedly provide its employees with improved medical benefits.
Subsequently, respondent charged petitioner with unfair labor practice before the DOLE for alleged gross
violation of the economic provisions of the CBA and diminution or removal of benefits. Respondent contested,
among others, the exclusion of the outpatient medicine, reimbursements of the employees and the maternity benefits
granted to the spouses of the male employees of petitioner in the new insurance policy provided by Maxicare.
Respondent also cited Schedule L of CBA and affidavits of employees to prove that the spouses of the male
employees of petitioner were entitled to maternity benefits.
Petitioner, in turn, argued that there was no diminution of benefits as the insurance policy issued by
Maxicare contained similar benefits to those contained in the previous Philamlife policy. In a Decision dated May
31, 2001, the DOLE gave credit to the claims of respondent. It ruled that the "outpatient benefit [had] been a regular
feature of the [petitioner's] medical coverage and as a regular feature, cannot be withdrawn unilaterally.”
The DOLE also held that the spouses of the male employees of petitioner were entitled to maternity
benefits as a matter of practice. Petitioner elevated this case before the appellate court through a special civil action
for certiorari under Rule 65 of the Rules of Court. The said court dismissed the petition and affirmed the assailed
Orders dated March 11, 2002 and April 29, 2002 of the DOLE and held that the basis for the grant of the subject
maternity benefits was Schedule L of the CBA of the parties. The appellate court likewise denied petitioner's motion
for reconsideration thereto for lack of merit. Petitioner claims that the spouses of its male employees are not entitled
to maternity benefits as these are exclusively intended for its female employees.
Petitioner points out Section 1 of Article XI of the CBA and claims that this provision shows that the
maternity benefits provided in Schedule L extend only to its employees, thus, the spouses of its male employees are
not entitled to these benefits. Petitioner asserts that the CBA would have stated expressly that spouses of male
employees are entitled to the said benefit had this been the intention of the parties, similar to the provision granting
of advances and medicine allowances to the employees and their dependents. Moreover, the CA allegedly erred in
applying Article 4 of the Labor Code in interpreting Schedule L of the CBA instead of Articles 1370-1379 of the
Civil Code.
Petitioner adds that its previous medical insurance policy which was provided by Philamlife granted
insurance benefits only to its "regular, full-time employees" and that there is nothing in the said policy granting
maternity benefits to the spouses of its male employees. Hence, petitioner asserts that the CA, having correctly ruled
that petitioner had no company practice of extending such benefits to the spouses of its male employees, should not
have granted such benefits on the basis of Schedule L of the CBA.
DIGESTED BY: VENTURA 80
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
Anent the second issue, petitioner claims that the appellate court erred in ruling that its employees are entitled to
"outpatient medicine reimbursements" distinct and separate from the "medicine allowances" granted in the
CBA. This would allegedly result in the unjust... enrichment of the employees at the expense of petitioner.
In its Reply, petitioner claims that "when the facts are undisputed, then the question of whether or not the
conclusion drawn therefrom by the Court of Appeals is correct is a question of law." The issues before this Court are
thus questions of law because petitioner seeks the review of the "evidence on record and the conclusion drawn by
the appellate court."
ISSUES:
1. Whether or not, on the basis of evidence on record, the appellate court is correct in ruling that spouses of male
employees are entitled to maternity benefits despite its own finding that there was no established company practice
of granting maternity benefits to male employees' spouses; and
2. Whether or not, on the basis of the evidence on record, the appellate court is correct in ruling that there is
an established company practice of granting outpatient medicine reimbursements to petitioner's employees.
HELD:
1. The Court finds that the element of consistency in the alleged practice of giving maternity benefits to spouses of
petitioner's male employees is lacking in this case. Nonetheless, the Court still sustains the grant of maternity
benefits to spouses of male employees on the basis of Schedule L of the 1998-2000 CBA, explicitly providing the
coverage of the "Group Hospitalization Benefits" (which include maternity benefit), to include married staff and
spouses and eligible children.
In its pleadings, petitioner conveniently omits the second sentence of the foregoing quote but this Court is
not misled by such dissembling tactic. It is undeniable from the full text of petitioner's explanation of maternity
benefits that the dependent of an insured employee can claim maternity benefits subject only to the condition that
she has been continuously insured for a period of nine months. This booklet appears to be a publication solely of
petitioner and it is clear evidence that petitioner itself interprets Philamlife Group Policy No. P-1620 as authorizing
the grant of maternity benefits to dependents of its employees.
Having knowingly and voluntarily incorporated by reference the provisions of its Philamlife group
hospitalization insurance plan in the CBA (as can be seen in Article XI, Section 1 thereof in relation to Schedule L),
petitioner cannot now assert that it never intended to extend maternity benefits to the spouses of its male employees
under the CBA.
2. Insofar as the outpatient benefit is concerned, it must be stressed that this Office directed the Bank to continue
with the outpatient benefit under the old insurance plan and to carry it over to the new health care plan. This means
that the components of the old health insurance scheme on this particular benefit should be the same component
under the new health plan. In the Decision dated 31 May 2001, this Office made particular mention of the claims for
reimbursement appearing as Annex "O" of the Union's Position Paper as basis for its directive to the Bank to
continue with the outpatient benefits. These claims refer not only to x-ray services but also to reimbursement of
prescription drugs. The existence of these benefits were further buttressed in the Union's "Reply to SCB's Motion for
Reconsideration" (dated 11 July 2001) where the Union submitted copies of claims for doctor's fees, prescription
drugs and laboratory fees processed, approved and paid. These should provide ample guidance to the parties in the
grant of outpatient benefits, which includes medicine reimbursements as earlier practiced [sic].
DIGESTED BY: VENTURA 81
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018
We see no reversible error in the CA's adoption of said findings of the DOLE. It is elementary that factual
findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are
accorded not only respect but finality. In a recent case, it was similarly held that where the factual findings of the
labor tribunals or agencies conform to, and are affirmed by, the CA, the same are accorded respect and finality, and
are binding upon this Court.
Principles:
With respect to the procedural issue, we agree with respondent that the issues raised by the bank are
essentially questions of fact that cannot be the subject of this petition for review on certiorari. Section 1 of Rule 45
of the Rules of Court provides that only questions of law may be raised on appeal by certiorari. Well-settled in our
jurisprudence is the principle that this Court is not a trier of facts and that it is neither the function of this Court to
analyze or weigh the evidence of the parties all over again.
The ruling in Microsoft Corporation v. Maxicorp, Inc. elucidates the distinction of a question of law and
a question of fact as follows:
A question of law exists when the doubt or difference centers on what the law is on a certain state of facts.
A question of fact exists if the doubt centers on the truth or falsity of the alleged facts. There is a question of law if
the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The
resolution of the issue must rest solely on what the law provides on the given set of circumstances
DIGESTED BY: VENTURA 82
Sy Tiong Shiou v. Sy Chim and Felicidad Chan Sy
G.R No. 174168, March 30, 2009
Topic: Third-party complaint
FACTS:
February 3 2003, Juanita Tan, corporate treasurer of Sy Siy Ho & Sons, Inc. (the corporation), a family
corporation doing business under the name and style Guan Yiac Hardware, submitted a letter to the corporation’s
Board of Directors (Board) stating that Felicidad Chan Sy did not make cash deposits to any of the corporation’s
banks from 1 November 2001 to 31 January 2003, thus the total bank remittances for the past years were less than
reflected in the corporate financial statements, accounting books and records. Juanita Tan sought to be free from any
responsibility over all corporate funds.
In April 5, 2003, Banaria, Banaria & Company in its report, the accounting firm attributed to the Spouses
Sy P67,117,230.30 as unaccounted receipts and disbursements from 1994 to 2002. In April 15, 2003, a demand
letter was subsequently served on the Spouses Sy. On the same date, the children of the Spouses Sy allegedly stole
from the corporation cash, postdated checks and other important documents. After the incident, the Spouses Sy
allegedly transferred residence and ceased reporting to the corporation. Thereupon, the corporation filed a criminal
complaint for robbery against the Spouses Sy before the City Prosecutor’s Office of Manila.
In July 1, 2003, the corporation, through Romer S. Tan, filed its Amended Complaint for Accounting and
Damages against the Spouses Sy before the RTC Manila, praying for a complete and true accounting of all the
amounts paid to, received and earned by the company since 1993 and for the restitution of the said amount. The
complaint also prayed for a temporary restraining order (TRO) and or preliminary injunction to restrain Sy Chim
from calling a stockholders’ meeting on the ground of lack of authority.
September 9, 2003, the Spouses Sy filed their Motion for Leave to File Third-Party Complaint, praying that
their attached Third Party Complaint be allowed and admitted against Sy Tiong Shiou and his spouse. In the said
third-party complaint, the Spouses Sy accused Sy Tiong Shiou and Juanita Tan as directly liable for the
corporation’s claim for misappropriating corporate funds.
October 8, 2003, the trial court granted the motion for leave to file the third-party complaint, and forthwith
directed the issuance of summons against Sy Tiong Shiou and Juanita Tan. January 16, 2004, their counsel allegedly
discovered that Sy Tiong Shiou and Juanita Tan were not furnished with the copies of several pleadings, as well as a
court order, which resulted in their having been declared in default for failure to file their answer to the third-party
complaint; thus, they instead filed a petition for certiorari before the Court of Appeals.
May 26, 2004, the Court of Appeals granted the petition of Sy Tiong Shiou and Juanita Tan.61The
appellate court declared that a third-party complaint is not allowed under the Interim Rules of Procedure Governing
Intra-Corporate Controversies Under R.A. No. 8799 (Interim Rules).
ISSUE:
● Whether or not a third-party complaint is prohibited by the Interim Rules
DIGESTED BY: VENTURA 83
MARIANO MARCOS STATE UNIVERSITY COLLEGE OF LAW ADMINISTRATIVE LAW; A.Y. 2017-2018 HELD:
No, the third-party complaint should be allowed. For while a third-party complaint is not included in the
allowed pleadings, neither is it among the prohibited ones. Nevertheless, this conflict may be resolved by following
the well-entrenched rule in statutory construction, that every part of the statute must be interpreted with reference to
the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient
to the general intent of the whole enactment. Statutes, including rules, should be construed in the light of the object
to be achieved and the evil or mischief to be suppressed and they should be given such construction as will advance
the object, suppress the mischief and secure the benefits intended. A statute should therefore be read with reference
to its leading idea, and its general purpose and intention should be gathered from the whole act, and this
predominant purpose will prevail over the literal import of particular terms or clauses, if plainly apparent, operating
as a limitation upon some and as a reason for expanding the signification of others, so that the interpretation may
accord with the spirit of the entire act, and so that the policy and object of the statute as a whole may be made
effectual and operative to the widest possible extent. Otherwise stated, the spirit, rather than the letter of a law
determines its construction; hence, a statute, as in the rules in this case, must be read according to its spirit and
intent.
DIGESTED BY: VENTURA 84