Casimiro v.

Tandog, 459 SCRA 624

CHICO-NAZARIO, J.:
This is a petition for review on certiorari of the Decision[1] dated 31 May 2000 of the Court of Appeals and its Resolution dated 21
November 2000 in CA-G.R. SP No. 46952, which affirmed in toto Civil Service Commission (CSC) Resolution No. 973602 dated 12
August 1997. The said CSC Resolution affirmed the Decision of Municipal Mayor Filipino Tandog of San Jose, Romblon, finding
petitioner Haydee Casimiro guilty of dishonesty and ordering her dismissal 3from the service.
The relevant antecedents of the instant petition are as follows:
Petitioner Haydee Casimiro began her service in the government as assessment clerk in the Office of the Treasurer of San Jose,
Romblon. In August 1983, she was appointed Municipal Assessor.
On 04 September 1996, Administrative Officer II Nelson M. Andres, submitted a report [2] based on an investigation he conducted into
alleged irregularities in the office of petitioner Casimero. The report spoke of an anomalous cancellation of Tax Declarations No. 0236 in
the name of Teodulo Matillano and the issuance of a new one in the name of petitioners brother Ulysses Cawaling and Tax Declarations
No. 0380 and No. 0376 in the name of Antipas San Sebastian and the issuance of new ones in favor of petitioners brother-in-law
Marcelo Molina.
Immediately thereafter, respondent Mayor Tandog issued Memorandum Order No. 13 [3] dated 06 September 1996, placing the
petitioner under preventive suspension for thirty (30) days. Three (3) days later, Mayor Tandog issued Memorandum Order No. 15,
directing petitioner to answer the charge of irregularities in her office. In her answer,[4]petitioner denied the alleged irregularities
claiming, in essence, that the cancellation of the tax declaration in favor of her brother Ulysses Cawaling was done prior to her
assumption to office as municipal assessor, and that she issued new tax declarations in favor of her brother-in-law Marcelo Molina by
virtue of a deed of sale executed by Antipas San Sebastian in Molinas favor.
On 23 October 1996, thru Memorandum Order No. 17, [5] respondent Mayor extended petitioners preventive suspension for another
thirty (30) days effective 24 October 1996 to give him more time to verify and collate evidence relative to the alleged irregularities.
On 28 October 1996, Memorandum Order No. 18 [6] was issued by respondent Mayor directing petitioner to answer in writing the
affidavit-complaint of Noraida San Sebastian Cesar and Teodulo Matillano. Noraida San Sebastian Cesar [7] alleged that Tax
Declarations No. 0380 and No. 0376 covering parcels of land owned by her parents were transferred in the name of a certain Marcelo
Molina, petitioners brother-in-law, without the necessary documents. Noraida Cesar further claimed that Marcelo Molina had not yet
paid the full purchase price of the land covered by the said Tax Declarations. For his part, Teodulo Matillano claimed [8] that he never
executed a deed of absolute sale over the parcel of land covered by Tax Declaration No. 0236 in favor of Ulysses Cawaling, petitioners
brother.
In response to Memorandum Order No. 18, petitioner submitted a letter [9] dated 29 October 1996, stating that with respect to the
complaint of Noraida San Sebastian Cesar, she had already explained her side in the letter dated 26 September 1996. As to the
complaint of Teodulo Matillano, she alleged that it was a certain Lilia Barrientos who executed a deed of absolute sale over the parcel of
land subject of the complaint in favor of her brother, Ulysses Cawaling.
Not satisfied, respondent Mayor created a fact-finding committee to investigate the matter. After a series of hearings, the committee, on
22 November 1996, submitted its report[10] recommending petitioners separation from service, the dispositive portion of which reads:
Evaluating the facts above portrayed, it is clearly shown that Municipal Assessor Haydee Casimero is guilty of malperformance of duty
and gross dishonesty to the prejudice of the taxpayers of San Jose, Romblon who are making possible the payments of her salary and
other allowances. Consequently, we are unanimously recommending her separation from service.
Based on the above recommendation, respondent Mayor issued Administrative Order No. 1 [11] dated 25 November 1996 dismissing
petitioner, thus:
Upon unanimous recommendations of the fact finding committee Chairmained (sic) by Municipal Administrator Nelson M. Andres,
finding you (Haydee C. Casimero) guilty of Dishonesty and Malperformance of duty as Municipal Assessor of San Jose, Romblon, copy
of which is hereto attached as Annex A and made as integral part hereof, you are hereby ordered separated from service as Municipal
Assessor of San Jose, Romblon, effective upon request hereof.
Undeterred by that setback, petitioner appealed to the CSC, which affirmed [12] respondent Mayors order of dismissal. A motion for
reconsideration[13] was filed, but the same was denied.[14]
Dissatisfied, petitioner elevated her case to the Court of Appeals, which subsequently affirmed the CSC decision. [15] Her motion for
reconsideration was likewise denied.
Petitioner now comes to us raising the lone issue[16] of whether or not petitioner was afforded procedural and substantive due process
when she was terminated from her employment as Municipal Assessor of San Jose, Romblon. An underpinning query is: Was petitioner
afforded an impartial and fair treatment? She specifically points to bias and partiality on the members of the fact-finding committee. She
avers that Lorna Tandog Vilasenor, a member of the fact-finding committee, is the sister of respondent Mayor. She further alludes that
while the committee chairman, Nelson M. Andres, was appointed by the respondent Mayor to the position of Administrative Officer II
only on 01 August 1996, no sooner was he given the chairmanship of the Committee. Further the affiants-complainants were not
presented for cross examination.
We find the present petition bereft of merit.
The first clause of Section 1 of Article III of the Bill of Rights states that:

SECTION 1. No person shall be deprived of life, liberty, or property without due process of law, . . . .
In order to fall within the aegis of this provision, two conditions must concur, namely, that there is deprivation of life, liberty and property
and such deprivation is done without proper observance of due process. When one speaks of due process, however, a distinction must
be made between matters of procedure and matters of substance.
In essence, procedural due process refers to the method or manner by which the law is enforced.[17]
The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. [18] In
administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain ones side or
the opportunity to seek a reconsideration of the action or ruling complained of. [19] To be heard does not mean only verbal arguments in
court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded,
there is no denial of procedural due process.[20]
In administrative proceedings, procedural due process has been recognized to include the following: (1) the right to actual or
constructive notice of the institution of proceedings which may affect a respondents legal rights; (2) a real opportunity to be heard
personally or with the assistance of counsel, to present witnesses and evidence in ones favor, and to defend ones 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.[21]
In the case at bar, what appears in the record is that a hearing was conducted on 01 October 1996, which petitioner attended and
where she answered questions propounded by the members of the fact-finding committee. Records further show that the petitioner was
accorded every opportunity to present her side. She filed her answer to the formal charge against her. After a careful evaluation of
evidence adduced, the committee rendered a decision, which was affirmed by the CSC and the Court of Appeals, upon a move to
review the same by the petitioner. Indeed, she has even brought the matter to this Court for final adjudication.
Kinship alone does not establish bias and partiality.[22] Bias and partiality cannot be presumed. In administrative proceedings, no less
than substantial proof is required.[23]Mere allegation is not equivalent to proof.[24] Mere suspicion of partiality is not enough. There should
be hard evidence to prove it, as well as manifest showing of bias and partiality stemming from an extrajudicial source or some other
basis.[25] Thus, in the case at bar, there must be convincing proof to show that the members of the fact-finding committee unjustifiably
leaned in favor of one party over the other. In addition to palpable error that may be inferred from the decision itself, extrinsic evidence
is required to establish bias.[26] The petitioner miserably failed to substantiate her allegations. In effect, the presumption of regularity in
the performance of duty prevails.[27]
Neither are we persuaded by petitioners argument that the affidavit is hearsay because the complainants were never presented for
cross examination. In administrative proceedings, technical rules of procedure and evidence are not strictly applied; administrative due
process cannot be fully equated to due process in its strict judicial sense.[28]
Nothing on record shows that she asked for cross examination. In our view, petitioner cannot argue that she has been deprived of due
process merely because no cross examination took place. Again, it is well to note that due process is satisfied when the parties are
afforded fair and reasonable opportunity to explain their side of the controversy or given opportunity to move for a reconsideration of the
action or ruling complained of. In the present case, the record clearly shows that petitioner not only filed her letter-answer, she also filed
a motion for reconsideration of the recommendation of the committee dated 22 November 1996. The essence of due process in the
administrative proceedings is an opportunity to explain one side or an opportunity to seek reconsideration of the action or ruling
complained of.[29]
The Court finds far little basis to petitioners protestations that she was deprived of due process of law and that the investigation
conducted was far from impartial and fair.
As to the substantive due process, it is obvious to us that what petitioner means is that the assailed decision was not supported by
competent and credible evidence.[30]
The law requires that the quantum of proof necessary for a finding of guilt in administrative cases is substantial evidence or such
relevant evidence as a reasonable mind may accept as adequate to support a conclusion.[31]
Well-entrenched is the rule that substantial proof, and not clear and convincing evidence or proof beyond reasonable doubt, is sufficient
basis for the imposition of any disciplinary action upon an employee. The standard of substantial evidence is satisfied where the
employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders
him unworthy of trust and confidence demanded by his position.[32]
In the case at bar, there is substantial evidence to prove petitioners dismissal.
Two alleged irregularities provided the dismissal from service of herein petitioner:
1. The cancellation of complainant Teodulo Matillanos tax declaration and the issuance of a new one in favor of petitioners brother
Ulysses Cawaling; and
2. The cancellation of the tax declaration in the name of complainant Noraida San Sebastian Cesars parent in favor of petitioners
brother-in-law, Marcelo Molina.
On these points, we quote, with approval, the findings of the Court of Appeals for being supported by evidence on record.
Going first to the alleged irregularity accompanying the issuance of tax declarations in favor of petitioners brother Ulysses Cawaling, the
formers asseverations that she had nothing to do with the processing of the subject tax declarations is simply unacceptable. As
municipal assessor, one of petitioners duties was to keep a correct record of all transfers, leases and mortgages of real property (par.

[4] f, Sec. 159, Article VI, Chapter 3, Title II, Book II of the Local Government Code) within her jurisdiction. Thus, even if petitioner had
no hand in the processing of her brothers tax declaration, she should have seen to it that the records pertaining thereto are in order.
Furthermore, the annotation on her brothers tax declaration that the same property is also declared in the name of another person and
that all of them are paying the realty taxes thereon should have cautioned petitioner to take the necessary steps to set records right.
Under par. [4] h, (ibid.) the municipal assessors, in such a situation, are suppose to cancel assessments, in case several assessments
have been made for the same property, except the one properly made, but if any assessee or his representative shall object to the
cancellation of the assessment made in his name, such assessment shall not be cancelled but the fact shall be noted on the tax
declaration and assessment rolls and other property books of records. Preference, however, shall be given to the assessment of the
person who has the best title to the property, or in default thereof, of the person who has possession of the property (id.). On this score
alone, petitioner is already liable for gross neglect of duty, which is also penalized by dismissal at the first offense (Sec. 22 [b], Rule XIV
of the Omnibus Rule [supra]).
Secondly, petitioners vacillation on whether it was Teodulo Matillano or Leticia Barrientos Berbano who executed a deed of absolute
sale in favor of her brother Ulysses Cawaling further weakens her defense. Petitioner, in her written answer, claimed that both Teodulo
Matillano and Ulysses Cawaling have deeds of absolute sale over the same parcel of land (vide par. [4], Annex G, supra). In the course
of investigation, however, petitioner claimed before the investigating body that Teodulo Matillano executed a deed of absolute sale in
favor of her brother (vide, p. 8, Annex N, supra). Thereafter petitioner claimed that it was a certain Leticia Barrientos Berbano who
executed the deed of absolute sale in favor of her brother (vide, Annex J, supra). . . .
With respect to the irregularity involving the tax declarations of petitioners brother-in-law, Marcelo Molina, no better evidence can be
presented to support petitioners dismissal for dishonesty than the questioned tax declarations themselves (vide, pp. 87 & 88, ibid.).
Both tax declarations indicated that the declarations therein where subscribed to under oath by the declarant before herein petitioner on
August 15, 1996, in effect canceling Antipaz San Sebastians tax declaration on even date. However, the same tax declarations indicate
that the taxes due thereon (i.e., land tax, transfer tax & capital gain tax) were paid only in October of the same year or two months after
the tax declarations have already been issued in favor of petitioners brother-in-law. Under Article 224 [b] of the Rules and Regulations
Implementing the Local Government Code, no tax declaration shall be cancelled and a new one issued in lieu thereof unless the
transfer tax has first been paid.
The issuance of new tax declarations in favor of petitioners brother and brother-in-law effectively cancels the tax declarations of the
complainants. Article 299[c] of the Rules of Regulations Implementing the Local Government Code, provides that:
In addition to the notice of transfer, the previous property owner shall likewise surrendered to the provincial, city, or municipal assessor
concerned, the tax declaration covering the subject property in order that the same maybe cancelled from the assessment records of
the LGU. x x x.
Thus, the tax declaration of complainants Noraida San Sebastian and Teodulo Matillano must first be surrendered before herein
petitioner could effectively cancel their respective tax declarations and issue new ones in favor of her brother and brother-in-law.
Unfortunately, herein petitioner failed to present the complainants cancelled tax declarations. She did not even allege that the same had
been surrendered to her for cancellation.[33]
In addition, petitioner admitted using the deed of sale allegedly executed by Lilia Barrientos in favor of Cawaling in transferring the Tax
Declaration in the name of her brother Ulysses Cawaling. However, glaring in the record is the admission by the petitioner in her
petition[34] and memorandum[35] that the property was still under litigation, as both Matillano and Barrientos continue to take their claims
over it. Clearly, therefore, she had no right, or reason, to pre-empt judgment on who is the lots rightful owner who can legally dispose
the same. Prudence dictates that, under the situation, she should have refrained from taking any course of action pending the courts
final determination of this matter.
In Philippine Amusement and Gaming Corporation v. Rilloza,[36] dishonesty was understood to imply a disposition to lie, cheat, deceive,
or defraud; unworthiness; lack of integrity. Dishonesty is considered as a grave offense punishable by dismissal for the first offense
under Section 23, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 292 and Other Pertinent Civil Service
Laws. It is beyond cavil that petitioners acts displayed want of honesty.
IN ALL, we affirm the finding of the Court of Appeals that petitioner is guilty of acts of dishonesty. Her acts of cancelling the tax
declarations of Antipas San Sebastian and Teodulo Matillano in favor of her close relatives without complying with the requirements set
under the law constitute grave acts of dishonesty.
WHEREFORE, the instant petition is hereby DENIED. The Court of Appeals Decision dated 31 May 2000 and its subsequent
Resolution dated 21 November 2000, dismissing petitioner from service, are hereby AFFIRMED. With costs.
SO ORDERED.
Dy-Dumalasa v. Fernandez, 593 SCRA 656
Via petition for review on certiorari, Carmen B. Dy-Dumalasa (petitioner) seeks the reversal of the Court of Appeals Decision [1] dated
April 28, 2006 and Resolution[2] dated June 29, 2007 annulling and setting aside the Resolutions dated January 27, 2005 [3] and March
16, 2005[4] of the National Labor Relations Commission (NLRC).

Domingo Sabado S. Fernandez, et al. (respondents) are former employees of Helios Manufacturing Corporation (HELIOS), a closed
domestic corporation engaged in soap manufacturing located in Muntinlupa, of which petitioner is a stockholder, a member of the Board
of Directors, and Acting Corporate Secretary.
On October 23, 2001, respondents filed a Complaint[5] against HELIOS, docketed as NLRC-NCR South Sector Case No. 30-10-0495001, for illegal dismissal or illegal closure of business, non-payment of salaries and other money claims against HELIOS. The complaint
was later consolidated with another case filed by similarly situated employees of HELIOS, docketed as NLRC-NCR South Sector Case
No. 30-11-05301-01.[6] Both complaints also impleaded HELIOS members of the Board of Directors (The Board) including herein
petitioner. Atty. Arturo Balbastro, one of the members of the Board, was subsequently dropped from the complaint, upon manifestation
of respondents.[7]
Despite service of summons,[8] of the remaining four members of the Board, only Leonardo Dy-Dumalasa, HELIOS President and
General Manager-husband of petitioner, appeared with counsel.[9]
As amicable settlement proved not to be viable and with the repeated non-appearance of the members of the Board in the scheduled
hearings, the Labor Arbiter required the parties to submit their respective position papers. [10] Only respondents complied with this
directive.[11] Despite the grant of a 10-day extension, HELIOS et al. failed to submit theirs, hence, the cases were deemed submitted for
decision.[12]
In the meantime, or on June 6, 2002, HELIOS et al. moved to have their position paper admitted. There being no proof of service of the
motion upon respondents, hearings/conferences between the parties were again scheduled, but HELIOS et al. failed [13] to attend the
same despite due notice. Hence, by Order[14]dated July 22, 2002, Labor Arbiter Nieves V. de Castro denied HELIOS et al.s motion to
admit their position paper and again deemed the cases submitted for decision. Just the same, the Labor Arbiter, who took into account
HELIOS et al.s position paper despite the earlier denial of their motion to admit it, found HELIOS, its members of the Board, and its
stockholders, by Decision[15] dated August 30, 2002, liable for illegal dismissal and unfair labor practice, as the closure of the business
was attended with fraud and bad faith, having been largely motivated by their desire to interfere with respondents exercise of the right
to self-organization and to evade payment of their claims.
The Labor Arbiter found that the closure of the Muntinlupa office/plant was a sham, as HELIOS simply relocated its operations to a new
plant in Carmona,Cavite under the new name of Pat & Suzara, in response to the newly-established local union. The dispositive portion
of the Labor Arbiters Decision reads:
WHEREFORE, respondent HELIOS Manufacturing Corp. or Pat & Suzara and its Board of Directors and stockholders are
hereby directed to pay complainants their full backwages from the time they were illegally dismissed on 30 May 2001 up to 30 August
2002; and separation pay of one months salary for every year of service; to pay complainants service incentive leave for three (3) years
from 1998-2001; to pay proportionate 13th month pay for 2001; to pay moral and exemplary damages of P300,000.00 each as prayed
for; and to pay 10% of the total award as attorneys fees, or to pay the 29 complainants the total amount of P15,195,479.30, plus 10%
attorneys fees in the amount ofP1,519,549.93. The detailed computation of complainants award forms part of this Decision.
SO ORDERED. (Emphasis supplied)
HELIOS et al. filed a Memorandum of Appeal[16] on October 28, 2002, but the same was not accompanied by a cash or surety bond,
hence, by Resolution[17] datedMarch 21, 2003, the NLRC dismissed the appeal. HELIOS et al.s motion for reconsideration having been
denied[18] on May 30, 2003 for having been filed out of time, the Labor Arbiters Decision attained finality on July 17, 2003.[19]
After respondents filed a motion for the issuance of a writ of execution, [20] the Labor Arbiter set a pre-execution conference
on September 18, 2003. Again, only respondents appeared during the scheduled conference, drawing the Labor Arbiter to issue
on October 9, 2003 a Writ of Execution[21] the pertinent portion of which reads:
NOW THEREFORE, you are hereby commanded to proceed to respondents Helios Manufacturing Corporation or Pat & Suzara and its
Board of Directors and stockholders with address at Tahanan Compound, Poblacion Uno, Gen. Mariano Alvarez, Cavite or at
Warehouse 4, Partition 3, Sunblest Compund, Km. 23, West Service Road, Muntinlupa City, or wherever they may be presently located
or holding their business, to collect the amount of SIXTEEN MILLION SEVEN HUNDRED FIFTEEN THOUSAND AND TWENTY EIGHT
PESOS (P16,715,028.00) representing complainants [sic] full backwages, separation pay, service incentive leave pay, proportionate
13th month pay for 2001, moral and exemplary damages and attorneys fees, all pursuant to the decision in this case.
xxxx

In case you fail to collect the amounts above indicated, you are hereby ordered to cause the satisfaction of the judgment out of
respondents goods or chattels, or in the absence thereof, from respondents properties not exempt from execution.
xxxx
Pursuant to the above Writ, Sheriff Antonio Datu issued a Notice of Levy on Real Property [22] under which a house and lot in AyalaAlabang in the name of petitioner and her husband Leonardo Dy-Dumalasa[23] were levied upon.
Petitioner moved to quash[24] the Writ, putting up the defense of corporate fiction as well as lack of jurisdiction over her person, but the
same was denied by Order[25] dated January 26, 2004. Petitioner appealed to the NLRC, hence, the execution of the Writ was held in
abeyance.
By Resolution of January 27, 2005, the NLRC modified the Labor Arbiters Order, holding that petitioner is not jointly and severally liable
with HELIOS for respondents claims, there being no showing that she acted in bad faith nor that HELIOS cannot pay its
obligations. Petitioner moved for reconsideration, but this was denied by Resolution dated March 16, 2005, hence, she appealed to the
Court of Appeals.
By the assailed Decision, the appellate court reversed and set aside the NLRC Resolution, holding that what the NLRC, in effect,
modified was not the Order denying the Motion to Quash the Writ of Execution, but the Labor Arbiters Decision itself -- an impermissible
act, the Decision having become final and executory, hence, it could no longer be reversed or modified. It further held that the NLRC
gravely abused its discretion when it took cognizance of the appeal from the Order denying petitioners Motion to Quash the Writ of
Execution, as no appeal lies therefrom, especially since petitioner attempted to exculpate herself from the judgment obligation by
invoking corporate fiction, a defense which could have been raised during the hearings before the Labor Arbiter.
Respecting NLRCs pronouncement that petitioner was not jointly and severally liable, the appellate court held that the same is a
superfluity, for there was no statement, either in the main case or in the Writ, that the liability is solidary, hence, petitioner is merely
jointly liable for the judgment award.
Petitioner moved for reconsideration of the appellate courts Decision, claiming that the labor tribunal never acquired jurisdiction over
her person due to lack of summons, and reiterating her defense that HELIOS has a separate personality. Petitioners motion was denied
by the appellate court by Resolution of June 29, 2007, it holding that petitioners act of filing the Motion to Quash the Writ of Execution
as well as her submission of a Memorandum of Appeal was tantamount to submission to the Arbiters jurisdiction. Hence, the present
petition.
Petitioner maintains that as she was never summoned by the Labor Arbiter, jurisdiction over her person was not acquired; and that
although the Board and stockholders of HELIOS were impleaded in the original complaint, it was by virtue of their official, not personal
capacities.
And she reiterates that HELIOS has a personality separate and distinct from her, and there is nothing in the questioned Writ which
directed the Sheriff to attach and levy the properties of the members of the Board or stockholders which are personal to them; and that
for her and the other directors and stockholders to be held personally liable for the judgment award, they must have been found guilty
of malice and bad faith -- a finding absent in the Labor Arbiters Decision.
Finally, petitioner contends that assuming arguendo that she is personally liable together with HELIOS, still, settlement of the entire
judgment obligation cannot be claimed from her alone, under the doctrine of limited liability. She thus prays that the appellate courts
Decision be reversed and set aside and the NLRC Resolutions reinstated.
The petition is bereft of merit.
Contrary to petitioners contention, the Labor Arbiter acquired jurisdiction over her person regardless of the fact that there was allegedly
no valid service of summons.It bears noting that, in quasi-judicial proceedings, procedural rules governing service of summons are not
strictly construed. Substantial compliance therewith is sufficient. [26] In the cases at bar, petitioner, her husband and three other relatives,
were all individually impleaded in the complaint. The Labor Arbiter furnished her with notices of the scheduled hearings and other
processes. It is undisputed that HELIOS, of which she and her therein co-respondents in the subject cases were the stockholders and
managers, was in fact heard, proof of which is the attendance of her husband, President-General Manager of HELIOS, together with
counsel in one such scheduled hearing and the Labor Arbiters consideration of their position paper in arriving at the Decision, albeit the
same position paper was belatedly filed.

Clearly, petitioner was adequately represented in the proceedings conducted by the Labor Arbiter by the lawyer retained by HELIOS.
Taking into account the peculiar circumstances of the cases, HELIOS knowledge of the pendency thereof and its efforts to resist them
are deemed to be knowledge and action of petitioner. That petitioner and her fellow members of the Board refused to heed the
summons and avail of the opportunity to defend themselves as they instead opted to hide behind the corporate veil does not shield
them from the application of labor laws.
Petitioner can not now thus question the implementation of the Writ of Execution on her on the pretext that jurisdiction was not validly
acquired over her person or that HELIOS has a separate and distinct personality as a corporate entity. To apply the normal precepts on
corporate fiction and the technical rules on service of summons would be to overturn the bias of the Constitution and the laws in favor
of labor.[27]
On to the liability of petitioner.
Interestingly, the assailed Court of Appeals Decision did not categorically rule on the issue of bad faith and piercing the corporate veil, it
focusing instead on the issues of jurisdiction and the propriety of the NLRC Resolutions. However, the Labor Arbiter found HELIOS et
al. guilty of bad faith when they closed the companys Muntinlupa plant 15 days before the scheduled cessation of operations, only to
reestablish a plant in Carmona, Cavite sometime later as Pat & Suzara, in response to the newly-created workers union.
As to HELIOS being a separate juridical entity, the Labor Arbiter held that it and Pat & Suzara are one and the same, using the same
machineries and personnel in the new plant.
The Labor Arbiter thus concluded that indeed, fraud and bad faith on the part of the management are well-established and, as such,
HELIOS et al. are liable for the judgment award.
While the appellate court reinstated the Labor Arbiters decision, it held that since its fallo did not indicate with certainty the solidary
nature of the obligation, the obligation is merely joint. The Court finds this ruling well-taken. As held in Industrial Management Intl.
Development Corp v. NLRC:[28]
It is an elementary principle of procedure that the resolution of the court in a given issue as embodied in the dispositive part of a
decision or order is the controlling factor as to settlement of rights of the parties.
A perusal of the Labor Arbiters Decision readily shows that, notwithstanding the finding of bad faith on the part of the management, the
dispositive portion did not expressly mention the solidary liability of the officers and Board members, including petitioner. Further:
A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation, and each creditor is entitled to
demand the whole obligation. In ajoint obligation each obligor answers only for a part of the whole liability and to each obligee belongs
only a part of the correlative rights.
Well-entrenched is the rule that solidary obligation cannot lightly be inferred. There is a solidary liability only when the
obligation expressly so states, when the law so provides or when the nature of the obligation so requires. [29] (Emphasis and
underscoring supplied)

And as held in Carag v. NLRC:[30]

To hold a director personally liable for debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or
wrongdoing of the director must be established clearly and convincingly. Bad faith is never presumed. Bad faith does not
connote bad judgment or negligence. Bad faith imports a dishonest purpose. Bad faith means breach of a known duty through some ill
motive or interest. Bad faith partakes of the nature of fraud. (Emphasis and underscoring supplied)
Ineluctably, absent a clear and convincing showing of the bad faith in effecting the closure of HELIOS that can be individually
attributed to petitioner as an officer thereof, and without the pronouncement in the Decision that she is being held solidarily liable,
petitioner is only jointly liable.
The Court in fact finds that the present action is actually a last-ditch attempt on the part of petitioner to wriggle its way out of her share
in the judgment obligation and to discuss the defenses which she failed to interpose when given the opportunity. Even as petitioner
avers that she is not questioning the final and executory Decision of the Labor Arbiter and admits liability, albeit only joint, [31] still, she
proceeds to interpose the defenses that jurisdiction was not acquired over her person and that HELIOS has a separate juridical
personality.

As for petitioners questioning the levy upon her house and lot, she conveniently omits to mention that the same are actually conjugal
property belonging to her and her husband. Whether petitioner is jointly or solidarily liable for the judgment obligation, the levied
property is not fully absolved from any lien except if it be shown that it is exempt from execution.
WHEREFORE, the petition is DENIED. The Decision dated April 28, 2006 and the Resolution dated June 29, 2007 of the Court of
Appeals are AFFIRMED.
The liability of the respondents in NLRC-NCR South Sector Case No. 30-10-04950-01 and NLRC-NCR South Sector Case No. 30-1105301-01 pursuant to the Decision of Labor Arbiter Nieves V. de Castro dated August 30, 2002 should be, as it is hereby,
considered joint, without prejudice to the enforcement of the award against petitioners co-judgment obligors in said cases.
SO ORDERED.
Ang Tibay v. CIR, 69 Phil. 635 LEYNES
The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled case has filed a motion for
reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority
opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada, termina o
bien por voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la
localidad o cunado se termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ell, sin tiempo fijo, y que se
han visto obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser
empleados u obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sin tiempo fijo de duracion y sin ser
para una obra determiminada y que se niega a readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es
culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a
readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han dejado deser
empleados suyos por terminacion del contrato en virtud del paro.
The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement rendered by the majority of this
Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it necessary for
him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau
of Customs and the Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the forfeiture of
this bond despite the breach of his CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the States)
was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the existence
and functions of which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are highly
essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war in Spain
cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor legislation of American
origin where the industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and
unjustly favoring the National Workers' Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not
be expected to have obtained them and offered as evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily
mean the modification and reversal of the judgment rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial of the respondent
National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the SolicitorGeneral. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, we deem it
necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make
several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certain guiding principles
which should be observed in the trial of cases brought before it. We have re-examined the entire record of the proceedings had before
the Court of Industrial Relations in this case, and we have found no substantial evidence that the exclusion of the 89 laborers here was

due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of
contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that
these statements and expressions of views of counsel have no evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act
No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive
organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding
only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of
its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of
disputes between employers and employees but its functions in the determination of disputes between employers and employees but
its functions are far more comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide,
and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and
regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It
shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or
likely to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of
tenancy or employment, between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of
farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or
by any or both of the parties to the controversy and certified by the Secretary of labor as existing and proper to be by the Secretary of
Labor as existing and proper to be dealth with by the Court for the sake of public interest. (Section 4,ibid.) It shall, before hearing the
dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries
established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for such industry or
locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less
to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ
mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in
order to determine specific controversies between labor and capital industry and in agriculture. There is in reality here a mingling of
executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939, we had occasion to
joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out
that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according
to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any
technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as
it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or
demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or
agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by
the rules recently promulgated by the rules recently promulgated by this Court to carry into the effect the avowed legislative purpose.
The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does
not mean that it can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential requirements of due
process in trials and investigations of an administrative character. There are primary rights which must be respected even in
proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case
and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed.
1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he
asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80
law. ed. 1288.) In the language of this court inEdwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the
corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom
the evidence is presented can thrust it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded,
namely, that of having something to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle
emanates from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon
power.
(4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated
November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v.
national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a
reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National Labor Relations Board, 4 Cir.,
93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v.
National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence prevailing in courts of

law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of matter which would be deemed incompetent inn judicial proceedings would
not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed.
860; Interstate Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United
States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative
procedure does not go far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay
or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law.
ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the
parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining
the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case
against them. It should not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the
authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry
may be appointed for the purpose of investigating and determining the facts in any given case, but their report and decision are only
advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute or
any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public
official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official
such powers and functions as the said Court of Industrial Relations may deem necessary, but such delegation shall not affect the
exercise of the Court itself of any of its powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and
facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is
such that it is literally Relations personally to decide all controversies coming before them. In the United States the difficulty is solved
with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with the right to appeal to
board or commission, but in our case there is no such statutory authority.
(7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the
proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this duty is
inseparable from the authority conferred upon it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the
Ang Tibay and the National Worker's Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis
upon which to predicate, in a national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc., it is
alleged that "the supposed lack of material claimed by Toribio Teodoro was but a scheme adopted to systematically discharged all the
members of the National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner with the "records of
the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang
Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are so inaccessible to the respondents
that even within the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of
Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their
admission would necessarily mean the modification and reversal of the judgment rendered herein." We have considered the reply of
Ang Tibay and its arguments against the petition. By and large, after considerable discussions, we have come to the conclusion that the
interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his
motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial
Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties
adversely affected by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record
of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as
may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered.
Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.
Bautista v. WCC, 88 SCRA 121 PASCUA
Petition for review on certiorari of the December 31, 1975 decision of the respondent Commission affirming the September 29, 1975
order of dismissal of its referee in BWC Case No. 7601-ROI.
Petitioner is the surviving spouse and the only heir of the late Andres Bautista, t in BWC Case No. 7601-ROI, who died while his
disability compensation claim was pending review by the respondent Co In his lifetime, Andres Bautista was employed a switchman by
respondent Philippine National Railways since 1945. On August 16,1973, he flied his application for retirement t on the ground of
disability-, which was likewise pending action at the Urn of his death.

On August 12, 1974, t Andres Bautista filed a notice of injury or sickness and claim for compensation dated July 29, 1974 with the
Department of Labor Region I at Dagupan City all that he is sick of PTB and Rheumatism that the date of accident was August 10,
1973, that he stopped working on August 16, 1973 and that he orally named on August 10, 1973 his employer of the fact of his sickness
(p. 59, WCC rec.). Attached to, and made an integral part of, the claim for compensation was a physician's report dated July 28, 1974
with a diagnostic finding that claimant was suffering from PTB, far advanced; prognosis Poor, which required hospitalization (p. 60,
WCC rec.). Respondent employer, which received a copy of the decision on August 26, 1974, filed on September 11, 1974 its
Employer's Report of Accident or Sickness (pp. 56-58. WCC rec.).
Thereafter or on September 29, 1975, the hearing officer dismissed the compensation claim of claimant for the reasons that:
In view of the repeated non-appearance of the claimant and counsel during the scheduled hearings of this case despite due notice to
the and it appearing that the evidence adduced was not enough to warrant an immediate award in favor of the claimant let this case be
dismissed and respondent PNR is absolved from any liability (Emphasis supplied).
On October 16, 1975, counsel for claimant filed a motion for reconsideration pointing out that the hearing of the case was delayed by
reason of the repeated non-appearance and motions for postponement on the part of counsels for the respondent employer and the
consequent withdrawal of the original counsel; that his failure to appear at the last two (2) scheduled hearings was excusable for the
reason that he received the notice of hearing two (2) days after the scheduled date of hearing and he informed the clerk of the hearing
officer of this fact; that the counsel of respondent employer was likewise not present at the last scheduled hearing; that all
notwithstanding, the evidence already presented was sufficient to entitle claimant of an Award; and prayed therefore that the September
29, 1975 order of dismissal be set aside and that further hearing be held or that a decision be rendered on the basis of the evidence
already presented. In the same motion, he informed the hearing officer of the fact that claimant is already dead (p. 6, WCC rec.) without
however stating the date and cause of death.
On November 7, 1975, the hearing officer denied the aforesaid motion, but ordered the elevation of the entire records of the case to the
respondent Commission for review.
Thereafter or on December 31, 1975, the respondent Commission, on the basis of the evidence on record, affirmed the order of
dismissal. It held:
Records show that claimant was employed as Switchman with the Philippine National Railways who stopped working on August 16,
1973 because he filed his retirement.
On September 1, 1973, he fell ill of Pulmonary Tuberculosis (Testimony, November 27, 1974, p. 2). which necessitated his confinement
at the Doa Gregoria Memorial Hospital on September 20, 1974 to October 29, 1974.
Since claimant has already applied for retirement on August 16, 1973 and stopped working on said date, the subsequent contraction of
his PTB illness on September 1, 1973 could not be attributable to his employment, especially so that on the alleged date that he
contracted his illness on September 1, 1973, no proof of any kind, like x-ray Report was ever presented. The findings of PTB far
advanced one year after separation from the service could no longer have any bearing with claimant's employment. (p. 3, WCC rec.).
Hence, this petition, which We subsequently treated as a special civil action,
With the submission by the parties of their respective memoranda, the case was considered submitted for decision.
I
1.
The claim of the petitioner that her deceased husband was deprived of due process by the respondent Commission's hearing
officer is meritorious.
The September 29, 1975 order of dismissal of the hearing officer which charged claimant and his counsel of "repeated nonappearance" was precipitated by their failure to appear in the scheduled hearings of August 6, 1975, August 20, 1975 and September
9,1975.
In his October 16, 1975 motion for reconsideration, counsel for claimant contended that his failure to appear at the aforesaid scheduled
September 9, 1975 hearing was excusable; because he received the notice of hearing by ordinary mail two (2) day after the scheduled
date. Despite this explanation of counsel for claimant, the factual allegations of which were not disputed by the respondent employer

which was furnished a copy of the motion, the hearing officer refused to reconsider its order of dismissal. Further more, the WCC record
does not show that indeed counsel for claimant received notice of hearing prior to the aforesaid scheduled date of hearing.
With respect to the August 6, 1975 scheduled hearing, the claim of claimant's counsel that he was not notified thereof is not disputed;
nor do the records show that he was ever furnished a notice thereof..
Relative to the August 20, 1975 scheduled hearing, the counsel for claimant was not again notified of the same; although his client,
claimant Andres Bautista, was sent a notice; the same was received by his representative only on August 25, 1975, or five (5) days
after the scheduled hearing, at which date Andres Bautista had already died (see p. 47, WCC rec.).
In the light of the foregoing facts, We rule that the respondent Commission gravely abused its discretion in ignoring and in not passing
upon the issue of denial of due process squarely presented by claimant's counsel. The very rules of the Commission require the giving
of reasonable notice of hearing to each party interested by service upon him personally or by registered mail of a copy thereof at his
last known post office address or if he is represented by a counsel, through the latter (Sec. 2, Rule 15, Revised rules of the WCC,
1973), so as to ensure observance and protection of an interested party's right to a hearing (Sec. 1, Rule 15, Revised Rules of the
WCC Patent therefore is the failure of the hearing officer to observe these rules. Under the circumstances, claimant was clearly
deprived of his day in court. Consequently, the dismissal of the claim premised on claimant and his counsel's "repeated nonappearance" at the aforestated hearings cannot stand.
2.
In passing, We noted that hearing officer tilted his discretion in favor of the employer and to the prejudice of the laborer, the
late claimant Andres Bautista, as demonstrated by his obdurate handling of claimant's excusable non-appearances at scheduled
hearings, on one hand, and his mild treatment of respondent employer's repeated failure to appear at scheduled hearings and its
motions for postponement, on the other. The records clearly show that while respondent had asked for and was granted at least five (5)
postponements; claimant, on the other hand, only moved for postponement once and that was even on a joint motion with respondent
employer (pp. 16, 20, 21, 27, 28, 31, 44, 52, 53, & 54, WCC rec). This posture of the hearing officer unabated by the respondent
Commission is a foul blow to the social justice clause of the Constitution and its injunction for the State to afford protection to labor.
Indeed We have repeatedly reminded agencies of the government, especially labor agencies, that they are under obligation at all times
to give meaning and substance to these constitutional guarantees in favor of the working man; for otherwise these constitutional
safeguards would be merely a lot of "meaningless pattern."
II
1.
The foregoing notwithstanding, it is the contention of the petitioner that the evidence on record is already sufficient as a basis
for the rendition of a decision on the merits; and prays that the claim be now resolved on the basis thereof. Under the circumstances
obtaining in this case, We agree with petitioner. WE have previously ruled that on the basis of the pleadings before Us, despite a
technical or procedural lapse in the hearing below, We can decide a compensation claim and terminate the matter here and now. WE
reasoned out that, the law being in claimant's favor, humane reasons aimed at promoting justice and the general welfare of the
workingman, justify the rendition of a decision on the merits. The niceties and refinements of technical rules on procedure must give
way to effect substantial justice to the claimant (Justo vs. WCC, 75 SCRA 220,222 [1978]).
2.
The records of the case show that claimant Andres Bautista was employed by respondent employer since 1945 (p. 47, WCC
rec.); and on August 10, 1973, or after 28 years, more or less, he was found ill of tuberculosis, by reason of which he was forced to stop
working even before the compulsory age of retirement. Dr. Romulo Lopez, who submitted the supporting Physician's Report, diagnosed
claimant's illness as PTB, Far Advanced; and further opined that claimant's illness of PTB was the result of the nature of his
employment (p. 61, WCC rec.). Dr. Lopez testified at the hearing that when admitted to the hospital, claimant was semi-conscious, pale,
with frequent cough and very weak and that his (Dr. Lopez) clinical impression during admission was PTB, and affirmed his statement
in the Physician's Report that the nature of claimant's work caused his sickness (pp. 38-43, WCC rec.).
Claimant Andres Bautista testified that before his employment with the respondent employer, he was stout and healthy. The nature of
his work was rigorous and the place of his work was dusty and he was constantly exposed to the elements. His duties include the
loading and unloading of cargoes, operating the railroad switch, and cleaning the premises of the PNR station at Aringay, La Union. His
time schedule was from 2:00 in the afternoon to 10:00 in the evening. The first time he became sick, he consulted Dr. Guillermo
Ordona, the company physician; he notified his employer of this fact; he was confined at Doa Gregoria Memorial Hospital and x-rayed
by Dr. Lopez and was found suffering from PTB (pp. 47-50, WCC rec.).
The above undisputed evidence on record clearly warrants the conclusion of claimant's attending physician that his illness of
tuberculosis was the result of the nature of his employment. Under Section 2 of the Workmen's Compensation Act, as amended,
tuberculosis directly caused by employment, or either aggravated by or the result of the nature of said employment, is compensable. In

numerous cases involving similar and/or substantially similar nature of work as well as conditions or circumstances of work as that of
the claimant Andres Bautista, We ruled that tuberculosis is an occupational disease; hence compensable (Justo vs. WCC, 7 5 SCRA
220, 225 [1978]; National Development Company vs. WCC, 19 SCRA 861 [1967]; Caltex (Phil.) vs. Serpo & WCC, 16 SCRA 77[1966]
Manila Railroad Company vs. Perez & WCC, 14 SCRA 504 [1965]; Manila Railroad Company vs. Vda. de Chavez, 120 Phil. 944, 12
SCRA 142 [1964]; Batangas Transportation Company vs. Perez, 120 Phil. 767, 11 SCRA 793 [1964]; Pantranco vs. WCC & Gatdula,
118 Phil. 358, 8 SCRA 352 [1963]; Manila Railroad Company vs. Ferrer, 109, Phil. 716 [1960]).
3.
Fortifying the aforesaid conclusion of work-connection, is the well-recognized presumption of compensability, very well
applicable to this case as it is undisputed that claimant's illness of tuberculosis supervened in the course of his employment on or
before August 10, 1973. Consequently, claimant's illness of tuberculosis is presumed compensable; and the employer assumed by
force thereof the burden of showing the contrary by substantial evidence (Abordo vs. WCC & PNR, L-43073, July 31, 1978; Canonero
vs. WCC, 3 PHILAJUR 236, 81 SCRA 712 [1978]; Gonzales vs. WCC, 3 PHILAJUR 229, 81 SCRA 703 [1978]). Respondent employer
failed to discharge this burden even at this late stage. Hence, the prima facie presumption became conclusive (Canonero vs. WCC,
supra).
4.
The conclusion of the respondent Commission that "... since claimant has already applied for retirement on August 16, 1973
and stopped working on said date, the subsequent contraction of his PTB illness on September 1, 1973 could not be attributable to his
employment ..." because ... (t)he findings of PTB far advanced one year after separation from the service could not longer have any
bearing with claimant's employment" is erroneous and unrealistic.
Firstly, claimant's illness was discovered on August 10, 1973 (Notice of Claim or Sickness and Claim for Compensation, P. 50, WCC
rec.) although claimant erroneously testified in the hearing that he first got sick of PTB on September 1, 1973 (p. 48, WCC rec.);
secondly, even on the assumption that indeed claimant's illness was discovered only on September 1, 1973 and that claimant
permanently ceased working on August 16, 1973, it does not mean that claimant instantly acquired his illness of tuberculosis only on
September 1, 1973 barely 15 days from August 16, 1973; not one year as mistakenly computed by the respondent Commission; for
as We rationalized in the case of Lorenzo vs. WCC (81 SCRA 440, 441 [1978]),
... By the very nature of tuberculosis, petitioner could not have suddenly and instantaneously contracted such illness during the threeday period from October 4, 1974, when the respondent company stopped its operation, to October 7, 1974, when the examination were
conducted on petitioner. Tuberculosis is not an instantaneous disease; it is an imperceptible disease caused by a germ which is
breathed in and feeds on the lungs or taken with food. It is medically accepted that exposure to dust and dirt is a predisposing cause of
tuberculosis and tends to produce fibrosis of the lungs which weakens resistance to any latent tuberculosis infection and reactivates
that infection (Justo vs. WCC, 75 SCRA 224-225 [1976]). And on this specific point, the case of Valencia vs. WCC (72 SCRA 245
[1976]) is strikingly similar to the present case. In that case, claimant 'showed or established that after she stopped working on July
31,1971, she was treated by Dr. Evangelina Gonzales from August 3, 1971 up to February 15, 1972 as per medical certificate issued to
her dated January 17, 1972, and according to the physician's report, it was clearly shown that she was sick of "Minimal pulmonary
tuberculosis" ... And the Court therein ruled and pointed out that:
... It is clear therefore that when Dr. Gonzales examined petitioner herein on August 3, 1971, just three days after she stopped working,
she was already found suffering from tuberculosis although in its minimal stage. Obviously, petitioner's ailment could not just have
appeared simply on the third day of her separation.
Tuberculosis is a chronic infection caused in humans by bacteria and initiated almost always by inhalation of infectious bacteria.
Medical authorities are agreed that the incubation period of tuberculosis is from two (2) to ten (10) weeks from the time of infection.
'tuberculosis in its minimal stage indicates a slight lesion without demonstrable cavitation confined to a small area of one or both lungs,
the total extent of which does not exceed the equivalent of the volume of the lung tissue which lies above the 2nd chondrosternal
junctions and the spine of the 4th or body of the 5th thoracic vertebra on one side. As stated in Batangas Transportation Co. vs. Perez
& WCC, L-19522, August 31, 1964, tuberculosis is not an instantaneous disease, it is an imperceptible germ disease that feeds on the
lungs whose presence in the body cannot be easily discerned and its incipient stage may not be readily discovered.
Lastly, it must be clarified that although claimant Andres (Bautista on August 16, 1973 applied for retirement on the ground of disability
and stopped working on that date, he apparently resumed working when his retirement application was not acted upon and thereafter
again filed and/or reiterated his application for retirement. These account for his conflicting claims as to the exact date when he filed his
application for retirement and stopped working for respondent employer (pp. 33- 37, 47, 50, 59, WCC rec.; p. 1, rec.). At any rate, those
conflicting dates cannot prejudice this compensation claim as it is clear that claimant's illness supervened in the course of employment
and his disability took place before the compulsory age of retirement.

4.
The absence of an x-ray report cannot prejudice claimant's right to compensation. For We have already ruled that an x-ray
report result is not an indispensable prerequisite to compensation (Romero vs. WCC, 77 SCRA 483, 488 [1977]); and that said x-ray
finding need not be attached to the Physician's Report, because it can be logically inferred from the said report that a previous x-ray
examination was made. Otherwise, the physician could not have arrived at his diagnosis. (Landayan vs. WCC, 77 SCRA 350-307
[1978]).
III
The claim of petitioner that there was no effective controversion of his right to compensation is likewise meritorious. Respondent
employer had knowledge of claimant's illness as early as August 10, 1973 or even earlier as claimant consulted respondent's employer
physician the first time he was sick. Notwithstanding its knowledge, respondent employer did not comply with Section 37 of the Act, as
amended, (in relation to Section 45 thereof which requires it to submit a report of accident or sickness within 14 days from disability or
10 days from knowledge thereof. Hence, the report is submitted on September 11, 1974 was too late (see pp. 56- 59, WCC rec.). By
failing to comply with Section 37 in relation to Section 45 of the Act, as amended, respondent employer lost its right to controvert the
claim. Consequently, the claim was uncontroverted. All defenses available to respondent employer were thus barred.
IV
The claim filed in this instant case was one for disability compensation but claimant died allegedly by reason of PTB (Memorandum for
Petitioner, p. 30, rec.) during the pendency of the claim in the Commission, The records do not however show that the claim was ever
amended so as to include a claim for death benefits; neither the exact date of the death of claimant Andres Bautista. Consequently, We
limit the award to disability benefits; and under the obtaining circumstances We feel that petitioner who is the surviving spouse of
claimant should be given the maximum amount allowed by law.
WHEREFORE, THE DECISION OF THE RESPONDENT COMMISSION IS HEREBY SET ASIDE AND RESPONDENT EMPLOYER IS
HEREBY ORDERED
1.
TO PAY PETITIONER THE SUM OF SIX THOUSAND (P6,000.00) PESOS AS DISABILITY BENEFITS;
2.
TO REIMBURSE TO PETITIONER THE MEDICAL AND HOSPITAL EXPENSES OF THE LATE CLAIMANT, DULY
SUPPORTED BY RECEIPTS;
3.
TO PAY COUNSEL OF PETITIONER ATU-KILUSAN ATTORNEYS FEES EQUIVALENT TO 10% OF THE RECOVERABLE
AMOUNT; AND
4.
TO PAY ADMINISTRATIVE FEES.
SO ORDERED.
National Development Company v. Collector of Customs, 9 SCRA 429 PASCUAL DEANN
The National Development Company which is engaged in the shipping business under the name of "Philippine National Lines" is the
owner of steamship "S.S. Doa Nati" whose local agent in Manila is A. V. Rocha. On August 4, 1960, the Collector of Customs sent a
notice to C.F. Sharp & Company as alleged operator of the vessel informing it that said vessel was apprehended and found to have
committed a violation of the customs laws and regulations in that it carried an unmanifested cargo consisting of one RCA Victor TV set
21" in violation of Section 2521 of the Tariff and Customs Code. Inserted in said notice is a note of the following tenor: "The above
article was being carried away by Dr. Basilio de Leon y Mendez, official doctor of M/S "Doa Nati" who readily admitted ownership of
the same." C.F. Sharp & Company was given 48 hours to show cause why no administrative fine should be imposed upon it for said
violation.
C.F. Sharp & Company, not being the agent or operator of the vessel, referred the notice to A. V. Rocha, the agent and operator thereof,
who on August 8, 1960, answered the notice stating, among other things, that the television set referred to therein was not a cargo of
the vessel and, therefore, was not required by law to be manifested. Rocha stated further: "If this explanation is not sufficient, we
request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to
sustain the charge and to present evidence in its defense."
The Collector of Customs replied to Rocha on August 9, 1960 stating that the television set in question was a cargo on board the vessel
and that he does not find his explanation satisfactory enough to exempt the vessel from liability for violating Section 2521 of the Tariff
and Customs Code. In said letter, the collector imposed a fine of P5,000.00 on the vessel and ordered payment thereof within 48 hours
with a threat that he will deny clearance to said vessel and will issue a warrant of seizure and detention against it if the fine is not paid.
And considering that the Collector of Customs has exceeded his jurisdiction or committed a grave abuse of discretion in imposing the
fine of P5,000.00 on the vessel without the benefit of an investigation or hearing as requested by A. V. Rocha, the National
Development Company, as owner of the vessel, as well as A. V. Rocha as agent and operator thereof, filed the instant special civil

action of certiorari with preliminary injunction before the Court of First Instance of Manila against the official abovementioned. The court,
finding the petition for injunction sufficient in form and substance, issued ex parte the writ prayed for upon the filing of a bond in the
amount of P5,00.00.
Respondent set up the following special defenses: (1) the court a quo has no jurisdiction to act on matters arising from violations of the
Customs Law, but the Court of Tax Appeals; (2) assuming that it has, petitioners have not exhausted all available administrative
remedies, one of which is to appeal to the Commissioner of Customs; (3) the requirements of administrative due process have already
been complied with in that the written notice given by respondent to petitioner Rocha clearly specified the nature of the violation
complained of and that the defense set up by Rocha constitute merely a legal issue which does not require further investigation; and (4)
the investigation conducted by the customs authorities showed that the television set in question was unloaded by the ship's doctor
without going thru the custom house as required by law and was not declared either in the ship's manifest or in the crew declaration list.
On the basis of the stipulation of facts submitted by the parties, the court a quo rendered decision setting aside the ruling of respondent
which imposes a fine of P5,000.00 on the vessel Doa Nati payable within 48 hours from receipt thereof. The court stated that said
ruling appears to be unjust and arbitrary because the party affected has not been accorded the investigation it requested from the
Collector of Customs.
Respondent interposed the present appeal.
When the customs authorities found that the vessel Doa Nati carried on board an unmanifested cargo consisting of one RCA Victor TV
set 21" in violation of Section 2521 of the Tariff and Customs Code, respondent sent a written notice to C. F. Sharp & Company,
believing it to be the operator or agent of the vessel, and when the latter referred the notice to A. V. Rocha, the real operator of the
vessel, for such step as he may deem necessary to be taken the latter answered the letter stating that the television set was not cargo
and so was not required by law to be manifested, and he added to his answer the following: "If this explanation is not sufficient, we
request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to
sustain the charge and to present evidence in its defense. "Respondent, however, replied to this letter saying that said television was a
cargo within the meaning of the law and so he does not find his explanation satisfactory and then and there imposed on the vessel a
fine of P5,00.00. Respondent even went further. He ordered that said fine be paid within 48 hours from receipt with a threat that the
vessel would be denied clearance and a warrant of seizure would be issued if the fine will not be paid. Considering this to be a grave
abuse of discretion, petitioners commenced the present action for certiorari before the court a quo.
We find this action proper for it really appears that petitioner Rocha was not given an opportunity to prove that the television set
complained of is not a cargo that needs to be manifested as required by Section 2521 of the Tariff and Customs Code. Under said
section, in order that an imported article or merchandise may be considered a cargo that should be manifested it is first necessary that
it be so established for the reason that there are other effects that a vessel may carry that are excluded from the requirement of the law,
among which are the personal effects of the members of the crew. The fact that the set in question was claimed by the customs
authorities not to be within the exception does not automatically make the vessel liable. It is still necessary that the vessel, its owner or
operator, be given a chance to show otherwise. This is precisely what petitioner Rocha has requested in his letter. Not only was he
denied this chance, but respondent collector immediately imposed upon the vessel the huge fine of P5,000.00. This is a denial of the
elementary rule of due process.
True it is that the proceedings before the Collector of Customs insofar as the determination of any act or irregularity that may involve a
violation of any customs law or regulation is concerned, or of any act arising under the Tariff and Customs Code, are not judicial in
character, but merely administrative, where the rules of procedure are generally disregarded, but even in the administrative
proceedings due process should be observed because that is a right enshrined in our Constitution. The right to due process is not
merely statutory. It is a constitutional right. Indeed, our Constitution provides that "No person shall be deprived of life, liberty, or property
without due process of law", which clause epitomize the principle of justice which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial. That this principle applies with equal force to administrative proceedings was well
elaborated upon by this Court in the Ang Tibay case as follows:
... The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements
does not mean that it can, in justiciable case coming before it, entirely ignore or disregard the fundamental and essential requirements
of due process in trials and investigations of an administrative character.
... There are cardinal primary rights which must be respected even in proceedings of this character. The first of these rights is the right
to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof.
Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he
asserts but the tribunal must consider the evidence presented. While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. No only must
there be some evidence to support a finding or conclusion, but the evidence must be substantial. 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. The Court of Industrial
Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy,
and not simply accept the views of a subordinate in arriving at a decision. The Court of Industrial Relations should, in all controversial
questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reason
for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. (Ang Tibay, et al. v. The
Court of Industrial Relations, et al., 40 O.G., No. 11, Supp. p. 29).

There is, therefore, no point in the contention that the court a quo has no jurisdiction over the present case because what is here
involved is not whether the imposition of the fine by the Collector of Customs on the operator of the ship is correct or not but whether he
acted properly in imposing said fine without first giving the operator an opportunity to be heard. Here we said that he acted
improvidently and so the action taken against him is in accordance with Rule 67 of our Rules of Court.
Another point raised is that petitioners have brought this action prematurely for they have not yet exhausted all the administrative
remedies available to them, one of which is to appeal the ruling to the Commissioner of Customs. This may be true, but such step we
do not consider a plain, speedy or adequate remedy in the ordinary course of law as would prevent petitioners from taking the present
action, for it is undisputed that respondent collector has acted in utter disregard of the principle of due process.
WHEREFORE, the decision appealed from is affirmed. No costs.

Corona v. United Harbor Pilots Assn. of the Phils. 283 SCRA 31 PASCUAL JENNETTE
In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92), limiting the term of appointment of harbor pilots to one year subject to
yearly renewal or cancellation, did the Philippine Ports Authority (PPA) violate respondents right to exercise their profession and their
right to due process of law?
The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On December 23, 1975, Presidential Decree No. 857
was issued revising the PPAs charter. Pursuant to its power of control, regulation, and supervision of pilots and the pilotage
profession, [1] the PPA promulgated PPA-AO-03-85 [2] on March 21, 1985, which embodied the Rules and Regulations Governing
Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports. These rules mandate, inter alia, that aspiring pilots must
be holders of pilot licenses [3] and must train as probationary pilots in outports for three months and in the Port of Manila for four
months. It is only after they have achieved satisfactory performance [4] that they are given permanent and regular appointments by the
PPA itself [5] to exercise harbor pilotage until they reach the age of 70, unless sooner removed by reason of mental or physical unfitness
by the PPA General Manager. [6] Harbor pilots in every harbor district are further required to organize themselves into pilot associations
which would make available such equipment as may be required by the PPA for effective pilotage services. In view of this mandate,
pilot associations invested in floating, communications, and office equipment. In fact, every new pilot appointed by the PPA
automatically becomes a member of a pilot association and is required to pay a proportionate equivalent equity or capital before being
allowed to assume his duties, as reimbursement to the association concerned of the amount it paid to his predecessor.
Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92 [7] on July 15, 1992, whose avowed policy was
to instill effective discipline and thereby afford better protection to the port users through the improvement of pilotage services. This was
implemented by providing therein that all existing regular appointments which have been previously issued either by the Bureau of
Customs or the PPA shall remain valid up to 31 December 1992 only and that all appointments to harbor pilot positions in all pilotage
districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to yearly renewal or cancellation by the
Authority after conduct of a rigid evaluation of performance.
On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots Association, through Capt. Alberto C. Compas,
questioned PPA-AO No. 04-92 before the Department of Transportation and Communication, but they were informed by then DOTC
Secretary Jesus B. Garcia that the matter of reviewing, recalling or annulling PPAs administrative issuances lies exclusively with its
Board of Directors as its governing body.
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92 [8] which laid down the criteria or factors to be
considered in the reappointment of harbor pilots, viz.: (1) Qualifying Factors: [9] safety record and physical/mental medical exam report
and (2) Criteria for Evaluation: [10] promptness in servicing vessels, compliance with PPA Pilotage Guidelines, number of years as a
harbor pilot, average GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age.
Respondents reiterated their request for the suspension of the implementation of PPA-AO No. 04-92, but Secretary Garcia insisted on
his position that the matter was within the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling to the Office of
the President (OP), reiterating his arguments before the DOTC.
On December 23, 1992, the OP issued an order directing the PPA to hold in abeyance the implementation of PPA-AO No. 04-92. In its
answer, the PPA countered that said administrative order was issued in the exercise of its administrative control and supervision over
harbor pilots under Section 6-a (viii), Article IV of P. D. No. 857, as amended, and it, along with its implementing guidelines, was
intended to restore order in the ports and to improve the quality of port services.
On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal Affairs Renato C. Corona, dismissed the
appeal/petition and lifted the restraining order issued earlier. [11] He concluded that PPA-AO No. 04-92 applied to all harbor pilots and,
for all intents and purposes, was not the act of Dayan, but of the PPA, which was merely implementing Section 6 of P.D. No. 857,
mandating it to control, regulate and supervise pilotage and conduct of pilots in any port district.
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing memoranda and circulars, Secretary Corona
opined that:

The exercise of ones profession falls within the constitutional guarantee against wrongful deprivation of, or interference with, property
rights without due process. In the limited context of this case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone
a wrongful deprivation of, the property rights of those affected thereby. As may be noted, the issuance aims no more than to improve
pilotage services by limiting the appointment to harbor pilot positions to one year, subject to renewal or cancellation after a rigid
evaluation of the appointees performance.
PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their profession in PPAs jurisdictional area.
(Emphasis supplied)
Finally, as regards the alleged absence of ample prior consultation before the issuance of the administrative order, Secretary Corona
cited Section 26 of P.D. No. 857, which merely requires the PPA to consult with relevant Government agencies. Since the PPA Board of
Directors is composed of the Secretaries of the DOTC, the Department of Public Works and Highways, the Department of Finance, and
the Department of Environment and Natural Resources, as well as the Director-General of the National Economic Development
Agency, the Administrator of the Maritime Industry Authority (MARINA), and the private sector representative who, due to his knowledge
and expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently complied with by the PPA
in issuing the assailed administrative order.
Consequently, respondents filed a petition for certiorari, prohibition and injunction with prayer for the issuance of a temporary restraining
order and damages, before Branch 6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93-65673. On
September 6, 1993, the trial court rendered the following judgment: [12]
WHEREFORE, for all the foregoing, this Court hereby rules that:
1. Respondents (herein petitioners) have acted in excess of jurisdiction and with grave abuse of discretion and in a capricious,
whimsical and arbitrary manner in promulgating PPA Administrative Order 04-92 including all its implementing Memoranda, Circulars
and Orders;
2. PPA Administrative Order 04-92 and its implementing Circulars and Orders are declared null and void;
3. The respondents are permanently enjoined from implementing PPA Administrative Order 04-92 and its implementing Memoranda,
Circulars and Orders.
No costs.
SO ORDERED.
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA, recognized pilotage as a profession and, therefore,
a property right under Callanta v.Carnation Philippines, Inc. [13] Thus, abbreviating the term within which that privilege may be exercised
would be an interference with the property rights of the harbor pilots.Consequently, any withdrawal or alteration of such property right
must be strictly made in accordance with the constitutional mandate of due process of law. This was apparently not followed by the PPA
when it did not conduct public hearings prior to the issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its
publication in the newspapers. From this decision, petitioners elevated their case to this Court on certiorari.
After carefully examining the records and deliberating on the arguments of the parties, the Court is convinced that PPA-AO No. 04-92
was issued in stark disregard of respondents right against deprivation of property without due process of law. Consequently, the instant
petition must be denied.
Section 1 of the Bill of Rights lays down what is known as the due process clause of the Constitution, viz.:
SECTION 1. No person shall be deprived of life, liberty, or property without due process of law, x x x.
In order to fall within the aegis of this provision, two conditions must concur, namely, that there is a deprivation and that such
deprivation is done without proper observance of due process. When one speaks of due process of law, however, a distinction must be
made between matters of procedure and matters of substance. In essence, procedural due process refers to the method or manner by
which the law is enforced, while substantive due process requires that the law itself, not merely the procedures by which the law would
be enforced, is fair, reasonable, and just. [14] PPA-AO No. 04-92 must be examined in light of this distinction.
Respondents argue that due process was not observed in the adoption of PPA-AO No. 04-92 allegedly because no hearing was
conducted whereby relevant government agencies and the pilots themselves could ventilate their views. They are obviously referring to
the procedural aspect of the enactment. Fortunately, the Court has maintained a clear position in this regard, a stance it has stressed in
the recent case of Lumiqued v. Hon. Exevea, [15] where it declared that (a)s long as a party was given the opportunity to defend his
interests in due course, he cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence
of due process. Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration
of the action or ruling complained of.
In the case at bar, respondents questioned PPA-AO No. 04-92 no less than four times [16] before the matter was finally elevated to this
Tribunal. Their arguments on this score, however, fail to persuade. While respondents emphasize that the Philippine Coast Guard,
which issues the licenses of pilots after administering the pilots examinations, was not consulted, [17] the facts show that the MARINA,
which took over the licensing function of the Philippine Coast Guard, was duly represented in the Board of Directors of the PPA. Thus,
petitioners correctly argued that, there being no matters of naval defense involved in the issuance of the administrative order, the
Philippine Coast Guard need not be consulted.[18]
Neither does the fact that the pilots themselves were not consulted in any way taint the validity of the administrative order. As a general
rule, notice and hearing, as the fundamental requirements of procedural due process, are essential only when an administrative body

exercises its quasi-judicial function. In the performance of its executive or legislative functions, such as issuing rules and regulations, an
administrative body need not comply with the requirements of notice and hearing.[19]
Upon the other hand, it is also contended that the sole and exclusive right to the exercise of harbor pilotage by pilots is a settled
issue. Respondents aver that said right has become vested and can only be withdrawn or shortened by observing the constitutional
mandate of due process of law. Their argument has thus shifted from the procedural to one of substance. It is here where PPA-AO No.
04-92 fails to meet the condition set by the organic law.
There is no dispute that pilotage as a profession has taken on the nature of a property right. Even petitioner Corona recognized this
when he stated in his March 17, 1993, decision that (t)he exercise of ones profession falls within the constitutional guarantee against
wrongful deprivation of, or interference with, property rights without due process.[20] He merely expressed the opinion that (i)n the limited
context of this case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property
rights of those affected thereby, and that PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their
profession. As will be presently demonstrated, such supposition is gravely erroneous and tends to perpetuate an administrative order
which is not only unreasonable but also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed individuals. Licensure is the granting of license especially to
practice a profession. It is also the system of granting licenses (as for professional practice) in accordance with established
standards. [21] A license is a right or permission granted by some competent authority to carry on a business or do an act which, without
such license, would be illegal. [22]
Before harbor pilots can earn a license to practice their profession, they literally have to pass through the proverbial eye of a needle by
taking, not one but fiveexaminations, each followed by actual training and practice. Thus, the court a quo observed:
Petitioners (herein respondents) contend, and the respondents (herein petitioners) do not deny, that here (sic) in this jurisdiction, before
a person can be a harbor pilot, he must pass five (5) government professional examinations, namely, (1) For Third Mate and after which
he must work, train and practice on board a vessel for at least a year; (2) For Second Mate and after which he must work, train and
practice for at least a year; (3) For Chief Mate and after which he must work, train and practice for at least a year; (4) For a Master
Mariner and after which he must work as Captain of vessels for at least two (2) years to qualify for an examination to be a pilot; and
finally, of course, that given for pilots.
Their license is granted in the form of an appointment which allows them to engage in pilotage until they retire at the age 70 years. This
is a vested right. Under the terms of PPA-AO No. 04-92, (a)ll existing regular appointments which have been previously issued by the
Bureau of Customs or the PPA shall remain valid up to 31 December 1992 only, and (a)ll appointments to harbor pilot positions in all
pilotage districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to renewal or cancellation by the
Authority after conduct of a rigid evaluation of performance.
It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to enjoy their profession before their compulsory
retirement. In the past, they enjoyed a measure of security knowing that after passing five examinations and undergoing years of onthe-job training, they would have a license which they could use until their retirement, unless sooner revoked by the PPA for mental or
physical unfitness. Under the new issuance, they have to contend with an annual cancellation of their license which can be temporary
or permanent depending on the outcome of their performance evaluation. Veteran pilots and neophytes alike are suddenly confronted
with one-year terms which ipso facto expire at the end of that period. Renewal of their license is now dependent on a rigid evaluation of
performance which is conducted only after the license has already been cancelled. Hence, the use of the term renewal. It is this preevaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally infirm. In a real sense, it is a
deprivation of property without due process of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 03-85, which is still
operational. Respondents are correct in pointing out that PPA-AO No. 04-92 is a surplusage [23] and, therefore, an unnecessary
enactment. PPA-AO 03-85 is a comprehensive order setting forth the Rules and Regulations Governing Pilotage Services, the Conduct
of Pilots and Pilotage Fees in Philippine Ports. It provides, inter alia, for the qualification, appointment, performance evaluation,
disciplining and removal of harbor pilots - matters which are duplicated in PPA-AO No. 04-92 and its implementing memorandum
order. Since it adds nothing new or substantial, PPA-AO No. 04-92 must be struck down.
Finally, respondents insinuation that then PPA General Manager Dayan was responsible for the issuance of the questioned
administrative order may have some factual basis; after all, power and authority were vested in his office to propose rules and
regulations. The trial courts finding of animosity between him and private respondents might likewise have a grain of truth. Yet the
number of cases filed in court between private respondents and Dayan, including cases which have reached this Court, cannot
certainly be considered the primordial reason for the issuance of PPA-AO No. 04-92. In the absence of proof to the contrary, Dayan
should be presumed to have acted in accordance with law and the best of professional motives. In any event, his actions are certainly
always subject to scrutiny by higher administrative authorities.
WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of the court a quo dated September 6, 1993, in Civil
Case No. 93-65673 is AFFIRMED.No pronouncement as to costs.
SO ORDERED.