G.R. No. 116801. April 6, 1995.

*
GLORIA G. LASTIMOSA, First Assistant
Provincial
Prosecutor
of
Cebu,
petitioner,
vs.
HONORABLE
OMBUDSMAN CONRADO VASQUEZ,
HONORABLE ARTURO C. MOJICA,
DEPUTY
OMBUDSMAN
FOR
THE
VISAYAS, and HONORABLE FRANKLIN
DRILON, SECRETARY OF JUSTICE, and
UNDERSECRETARY
OF
JUSTICE
RAMON J. LIWAG, respondents.
Administrative Law; Ombudsman; The
power to investigate and prosecute include
the investigation and prosecution of any
crime committed by a public official
regardless of whether the acts or omissions
complained of are related to, or connected
with, or arise from, the performance of his
official duty.The Office of the Ombudsman
has the power to investigate and prosecute
on its own or on complaint by any person,
any act or omission of any public officer or
employee, office or agency, when such act
or omission appears to be illegal, unjust,
improper or inefficient. This power has
been held to include the investigation and
prosecution of any crime committed by a
public official regardless of whether the acts
or omissions complained of are related to,
or connected with, or arise from, the
performance of his official duty. It is enough
that the act or omission was committed by a
public official. Hence, the crime of rape,
when committed by a public official like a
municipal mayor, is within the power of the
Ombudsman to investigate and prosecute.
Same; Same; The Ombudsman is
authorized to call on prosecutors for
assistance.In the exercise of his power,
the Ombudsman is authorized to call on
prosecutors for assistance. 31 of the
Ombudsman Act of 1989 (R.A. No. 6770)
provides: Designation of Investigators and
Prosecutors.The Ombudsman may utilize

the personnel of his office and/or designate

or deputize any fiscal, state prosecutor or
lawyer in the government service to act as
special investigator or prosecutor to assist
in the investigation and prosecution of
certain
cases.
Thosedesignated
or
deputized to assist him as herein provided
shall be under his supervision and control.
(Emphasis added)
Same; Same; When a prosecutor is
deputized, he comes under the supervision
and control of the Ombudsman which
means he is subject to the power of the
Ombudsman to direct, review, approve,
reverse or modify his (prosecutors)
decision.It does not matter that the Office
of the Provincial Prosecutor had already
conducted the preliminary investigation and
all that remained to be done was for the
Office of the Provincial Prosecutor to file the
corresponding case in court. Even if the
preliminary investigation had been given
over to the Provincial Prosecutor to conduct,
his determination of the nature of the
offense to be charged would still be subject
to the approval of the Office of the
Ombudsman. This is because under 31 of
the Ombudsmans Act, when a prosecutor is
deputized, he comes under the supervision
and control of the Ombudsman which
means that he is subject to the power of the
Ombudsman to direct, review, approve,
reverse or modify his (prosecutors)
decision. Petitioner cannot legally act on her
own and refuse to prepare and file the
information as directed by the Ombudsman.
Same; Same; Contempt; Ombudsman Act
gives the Office of the Ombudsman the
power to punish for contempt, in
accordance with the Rules of Court and
under the same procedure and with the
same penalties provided therein.15(g)
of the Ombudsman Act gives the Office of
the Ombudsman the power to punish for

contempt, in accordance with the Rules of

Court and under the same procedure and
with the same penalties provided therein.
There is no merit in the argument that
petitioner
and
Provincial
Prosecutor
Kintanar cannot be held liable for contempt
because their refusal arose out of an
administrative,
rather
than
judicial,
proceeding before the Office of the
Ombudsman. As petitioner herself says in
another
context,
the
preliminary
investigation of a case, of which the filing of
an information is a part, is quasi judicial in
character.
Same; Same; Suspension; Prior notice and
hearing not required since suspension not
being a penalty but only a preliminary step
in
an
administrative
investigation.
Petitioner contends that her suspension is
invalid because the order was issued
without giving her and Provincial Prosecutor
Kintanar the opportunity to refute the
charges against them and because, at any
rate, the evidence against them is not
strong as required by 24. The contention is
without merit. Prior notice and hearing is not
required, such suspension not being a
penalty but only a preliminary step in an
administrative investigation.
Same; Same; Same; Whether the evidence
of guilt is strong is left to the determination
of the Ombudsman by taking into account
the evidence before him.As held in
Buenaseda v. Flavier, however, whether the
evidence of guilt is strong is left to the
determination of the Ombudsman by taking
into account the evidence before him. A
preliminary hearing as in bail petitions in
cases involving capital offenses is not
required. In rejecting a similar argument as
that made by petitioner in this case, this
Court said in that case: The import of the
Nera decision is that the disciplining
authority is given the discretion to decide

when the evidence of guilt is strong. This

fact is bolstered by Section 24 of R.A. No.
6770,
which
expressly
left
such
determination of guilt to the judgment of
the Ombudsman on the basis of the
administrative complaint.
Same; Same; Same; Preventive suspension
of petitioner and Provincial Prosecutor is
justified to the end that the proper
prosecution of the case may not be
hampered.Given the attitude displayed by
petitioner and the Provincial Prosecutor
toward the criminal case against Mayor
Rogelio
Ilustrisimo,
their
preventive
suspension is justified to the end that the
proper prosecution of that case may not be
hampered. In addition, because the charges
against the two prosecutors involve grave
misconduct, insubordination and neglect of
duty and these charges, if proven, can lead
to a dismissal from public office, the
Ombudsman was justified in ordering their
preventive suspension.
Same; Same; Same; The preventive
suspension for six (6) months without pay is
thus according to law.On the other hand,
petitioner and the Provincial Prosecutor
were placed under preventive suspension
pursuant to 24 of the Ombudsman Act
which expressly provides that the
preventive suspension shall continue until
the case is terminated by the Office of the
Ombudsman but not more than six months,
without pay. Their preventive suspension
for six (6) months without pay is thus
according to law.
REGALADO,J., Concurring Opinion:
Administrative
Law;
Ombudsman;
Suspension; The longer period of six (6)
months for preventive suspension is
induced by a desire to more meaningfully
emphasize and implement the authority of
the Office of the Ombudsman over public

officials and employees in order to serve as

a deterent against illegal, unjust, improper
and inefficient conduct on their part.The
longer period of six (6) months for
preventive suspension under Republic Act
No. 6770 was evidently induced by a desire
to more meaningfully emphasize and
implement the authority of the Office of the
Ombudsman over public officials and
employees in order to serve as a deterrent
against illegal, unjust, improper and
inefficient conduct on their part. As the
agency mandated by the Constitution to
undertake such task, it was invested with
the corresponding authority to enable it to
perform its mission. This intention is easily
deducible from the pertinent constitutional
provisions creating said office and from the
express provisions of Republic Act No.
6770. Significantly, it is the only body
authorized to investigate even officials
removable by impeachment.
PETITION for review of an Order of the
Ombudsman.
The facts are stated in the opinion of the
Court.
MENDOZA,J.:
This case requires us to determine the
extent to which the Ombudsman may call
upon
government
prosecutors
for
assistance in the investigation and
prosecution of criminal cases cognizable by
his office and the conditions under which he
may do so.
Petitioner Gloria G. Lastimosa is First
Assistant Provincial Prosecutor of Cebu.
Because she and the Provincial Prosecutor
refused, or at any rate failed, to file a
criminal charge as ordered by the
Ombudsman, an administrative complaint
for grave misconduct, insubordination, gross
neglect of duty and maliciously refraining

from prosecuting crime was filed against her

and the Provincial Prosecutor and a charge
for indirect contempt was brought against
them, both in the Office of the Ombudsman.
In the meantime the two were placed under
preventive suspension. This is a petition for
certiorari and prohibition filed by petitioner
to set aside the orders of the Ombudsman
with respect to the two proceedings.
The background of this case is as follows:
On February 18, 1993 Jessica Villacarlos
Dayon, public health nurse of Santa Fe,
Cebu, filed a criminal complaint for
frustrated rape and an administrative
complaint for immoral acts, abuse of
authority and grave misconduct against the
Municipal Mayor of Santa Fe, Rogelio
Ilustrisimo.1 The cases were filed with the
Office of the Ombudsman-Visayas where
they were docketed as OMB-VIS-(CRIM)93-0140 and OMB-VIS-(ADM)-93-0036,
respectively.
The complaint was assigned to a graft
investigation
officer
who,
after
an
investigation, found no prima facie evidence
and
accordingly
recommended
the
dismissal of the complaint. After reviewing
the matter, however, the Ombudsman, Hon.
Conrado
Vasquez,
disapproved
the
recommendation and instead directed that
Mayor Ilustrisimo be charged with attempted
rape in the Regional Trial Court.2
Accordingly, in a letter dated May 17, 1994,
the Deputy Ombudsman for Visayas,
respondent Arturo C. Mojica, referred the
case to Cebu Provincial Prosecutor Oliveros
E. Kintanar for the filing of appropriate
information with the Regional Trial Court of
Danao City, ...3 The case was eventually
assigned to herein petitioner, First Assistant
Provincial Prosecutor Gloria G. Lastimosa.
It appears that petitioner conducted a
preliminary investigation on the basis of
which she found that only acts of

lasciviousness had been committed.4 With

the approval of Provincial Prosecutor
Kintanar, she filed on July 4, 1994 an
information for acts of lasciviousness
against Mayor Ilustrisimo with the Municipal
Circuit Trial Court of Santa Fe.5
In two letters written to the Provincial
Prosecutor on July 11, 1994 and July 22,
1994, Deputy Ombudsman Mojica inquired
as to any action taken on the previous
referral of the case, more specifically the
directive of the Ombudsman to charge
Mayor Ilustrisimo with attempted rape.6
As no case for attempted rape had been
filed by the Prosecutors Office, Deputy
Ombudsman Mojica ordered on July 27,
1994 Provincial Prosecutor Kintanar and
petitioner Lastimosa to show cause why
they should not be punished for contempt
for refusing and failing to obey the lawful
directives of the Office of the Ombudsman.
For this purpose a hearing was set on
August 1, 1994. Petitioner and the
Provincial Prosecutor were given until
August 3, 1994 within which to submit their
answer.8 An answer9 was timely filed by
them and hearings were thereupon
conducted. It appears that earlier, on July
22, 1994, two cases had been filed against
the two prosecutors with the Office of the
Ombudsman for Visayas by Julian
Menchavez, a resident of Santa Fe, Cebu.
One was an administrative complaint for
violation of Republic Act No. 6713 and P.D.
No. 807 (the Civil Service Law)10 and
another one was a criminal complaint for
violation of 3(e) of Republic Act No. 3019
and Art. 208 of the Revised Penal Code.11
The complaints were based on the alleged
refusal of petitioner and Kintanar to obey
the orders of the Ombudsman to charge
Mayor Ilustrisimo with attempted rape.
In the administrative case (OMB-VIS(ADM)-94-0189)
respondent
Deputy

Ombudsman for Visayas Mojica issued an

order on August 15, 1994, placing petitioner
Gloria G. Lastimosa and Provincial
Prosecutor Oliveros E. Kintanar under
preventive suspension for a period of six (6)
months,12 pursuant to Rule 111, 9 of the
Rules of Procedure of the Office of the
Ombudsman (Administrative Order No. 7),
in relation to 24 of R.A. No. 6770. The
order was approved by Ombudsman
Conrado M. Vasquez on August 16, 1994
and on August 18, 1994 Acting Secretary of
Justice Ramon J. Liwag designated
Eduardo Concepcion of Region VII as
Acting Provincial Prosecutor of Cebu.
On the other hand, the Graft Investigation
Officer II, Edgardo G. Canton, issued
orders13 in the two cases, directing
petitioner
and
Provincial
Prosecutor
Kintanar to submit their counter affidavits
and controverting evidence.
On September 6, 1994, petitioner Gloria G.
Lastimosa filed the present petition for
certiorari and prohibition to set aside the
following orders of the Office of the
Ombudsman and Department of Justice:
(a) Letter dated May 17, 1994 of Deputy
Ombudsman for Visayas Arturo C. Mojica
and related orders, referring to the Office of
the Cebu Provincial Prosecutor the records
of OMB-VIS-CRIM-93-0140, entitled Jessica
V. Dayon vs. Mayor Rogelio Ilustrisimo, for
filing of the appropriate action (for
Attempted Rape) with the Regional Trial
Court of Danao City.
(b) Order dated July 27, 1994 of Deputy
Ombudsman Mojica and related orders
directing petitioner and Cebu Provincial
Prosecutor Oliveros E. Kintanar to explain in
writing within three (3) days from receipt
why they should not be punished for Indirect
Contempt of the Office of the Ombudsman
for refusing and failing. . . to file the

appropriate Information for Attempted Rape

against Mayor Rogelio Ilustrisimo.
(c) The 1st Indorsement dated August 9,
1994 of Acting Justice Secretary Ramon J.
Liwag, ordering the Office of the Provincial
Prosecutor to comply with the directive of
the Office of the Ombudsman that a charge
for attempted rape be filed against
respondent Mayor Ilustrisimo in recognition
of the authority of said Office.
(d) Order dated August 15, 1994 of Deputy
Ombudsman Mojica, duly approved by
Ombudsman Conrado Vasquez, and related
orders in OMB-VIS-(ADM)-94-0189, entitled
Julian Menchavez vs. Oliveros Kintanar and
Gloria Lastimosa, placing petitioner and
Provincial Prosecutor Kintanar under
preventive suspension for a period of six (6)
months, without pay.
(e) The 1st Indorsement dated August 18,
1994 of Acting Justice Secretary Liwag
directing
Assistant
Regional
State
Prosecutor Eduardo O. Concepcion (Region
VII) to implement the letter dated August 15,
1994 of Ombudsman Vasquez, together
with the Order dated August 15, 1994,
placing petitioner and Provincial Prosecutor
Kintanar under preventive suspension.
(f) Department Order No. 259 issued by
Acting Secretary Liwag on August 18, 1994,
designating Assistant Regional State
Prosecutor Concepcion Acting Provincial
Prosecutor of Cebu.
Petitioner raises a number of issues which
will be discussed not necessarily in the
order they are stated in the petition.
I.
The pivotal question in this case is whether
the Office of the Ombudsman has the power
to call on the Provincial Prosecutor to assist
it in the prosecution of the case for
attempted rape against Mayor Ilustrisimo.
Lastimosa claims that the Office of the
Ombudsman and the prosecutors office

have concurrent authority to investigate

public officers or employees and that when
the former first took cognizance of the case
against Mayor Ilustrisimo, it did so to the
exclusion of the latter. It then became the
duty of the Ombudsmans office, according
to petitioner, to finish the preliminary
investigation by filing the information in
court instead of asking the Office of the
Provincial Prosecutor to do so. Petitioner
contends that the preparation and filing of
the information were part and parcel of the
preliminary investigation assumed by the
Office of the Ombudsman and the filing of
information in court could not be delegated
by it to the Office of the Provincial
Prosecutor.
Petitioner
defends
her
actuations in conducting a preliminary
investigation as having been made
necessary by the insistence of the
Ombudsman to delegate the filing of the
case to her office.
In any event, petitioner contends, the Office
of the Ombudsman has no jurisdiction over
the case against the mayor because the
crime involved (rape) was not committed in
relation to a public office. For this reason it
is argued that the Office of the Ombudsman
has no authority to place her and Provincial
Prosecutor Kintanar under preventive
suspension for refusing to follow his orders
and to cite them for indirect contempt for
such refusal.
Petitioners contention has no merit. The
Office of the Ombudsman has the power to
investigate and prosecute on its own or on
complaint by any person, any act or
omission of any public officer or employee,
office or agency, when such act or omission
appears to be illegal, unjust, improper or
inefficient.14 This power has been held to
include the investigation and prosecution of
any crime committed by a public official
regardless of whether the acts or omissions

complained of are related to, or connected

with, or arise from, the performance of his
official duty.15 It is enough that the act or
omission was committed by a public official.
Hence, the crime of rape, when committed
by a public official like a municipal mayor, is
within the power of the Ombudsman to
investigate and prosecute.
In the exercise of his power, the
Ombudsman is authorized to call on
prosecutors for assistance. 31 of the
Ombudsman Act of 1989 (R.A. No. 6770)
provides:
Designation
of
Investigators
and
Prosecutors.The Ombudsman may utilize
the personnel of his office and/or designate
or deputize any fiscal, state prosecutor or
lawyer in the government service to act as
special investigator or prosecutor to assist
in the investigation and prosecution of
certain cases. Those designated or
deputized to assist him as herein provided
shall be under his supervision and control.
(Emphasis added)
It was on the basis of this provision that
Ombudsman Conrado Vasquez and Deputy
Ombudsman Arturo C. Mojica ordered the
Provincial Prosecutor of Cebu to file an
information for attempted rape against
Mayor Rogelio Ilustrisimo.
It does not matter that the Office of the
Provincial
Prosecutor
had
already
conducted the preliminary investigation and
all that remained to be done was for the
Office of the Provincial Prosecutor to file the
corresponding case in court. Even if the
preliminary investigation had been given
over to the Provincial Prosecutor to conduct,
his determination of the nature of the
offense to be charged would still be subject
to the approval of the Office of the
Ombudsman. This is because under 31 of
the Ombudsmans Act, when a prosecutor is
deputized, he comes under the supervision

and control of the Ombudsman which

means that he is subject to the power of the
Ombudsman to direct, review, approve,
reverse or modify his (prosecutors)
decision.16 Petitioner cannot legally act on
her own and refuse to prepare and file the
information as directed by the Ombudsman.
II.
The records show that despite repeated
orders of the Ombudsman, petitioner
refused to file an information for attempted
rape against Mayor Ilustrisimo, insisting that
after investigating the complaint in the case
she found that he had committed only acts
of lasciviousness.
15(g) of the Ombudsman Act gives the
Office of the Ombudsman the power to
punish for contempt, in accordance with the
Rules of Court and under the same
procedure and with the same penalties
provided therein. There is no merit in the
argument that petitioner and Provincial
Prosecutor Kintanar cannot be held liable
for contempt because their refusal arose out
of an administrative, rather than judicial,
proceeding before the Office of the
Ombudsman. As petitioner herself says in
another
context,
the
preliminary
investigation of a case, of which the filing of
an information is a part, is quasi judicial in
character.
Whether petitioners refusal to follow the
Ombudsmans
orders
constitutes
a
defiance, disobedience or resistance of a
lawful process, order or command of the
Ombudsman thus making her liable for
indirect contempt under Rule 71, 3 of the
Rules of Court is for respondents to
determine after appropriate hearing. At this
point it is important only to note the
existence of the contempt power of the
Ombudsman as a means of enforcing his
lawful orders.
III.

Neither is there any doubt as to the power

of the Ombudsman to discipline petitioner
should it be found that she is guilty of grave
misconduct, insubordination and/or neglect
of duty, nor of the Ombudsmans power to
place her in the meantime under preventive
suspension. The pertinent provisions of the
Ombudsman Act of 1989 state:
21.Officials
Subject
To Disciplinary
Authority; Exceptions.The Office of the
Ombudsman
shall
have
disciplinary
authority over all elective and appointive
officials of the Government and its
subdivisions,
instrumentalities
and
agencies, including Members of the
Cabinet, local government, governmentowned or controlled corporations and their
subsidiaries, except over officials who may
be removed only by impeachment or over
Members of Congress, and the Judiciary.
24.
Preventive
Suspension.The
Ombudsman or his Deputy may suspend
any officer or employee under his authority
pending an investigation, if in his judgment
the evidence of guilt is strong, and (a) the
charge against such officer or employee
involves dishonesty, oppression or grave
misconduct or neglect in the performance of
duty; (b) the charges would warrant removal
from the service; or (c) the respondents
continued stay in office may prejudice the
case filed against him.
The preventive suspension shall continue
until the case is terminated by the Office of
the Ombudsman but not more than six
months, without pay, except when the delay
in the disposition of the case by the Office of
the Ombudsman is due to the fault,
negligence or petition of the respondent, in
which case the period of such delay shall
not be counted in computing the period of
suspension herein provided.
A.

Petitioner contends that her suspension is

invalid because the order was issued
without giving her and Provincial Prosecutor
Kintanar the opportunity to refute the
charges against them and because, at any
rate, the evidence against them is not
strong as required by 24. The contention is
without merit. Prior notice and hearing is not
required, such suspension not being a
penalty but only a preliminary step in an
administrative investigation. As held in Nera
v. Garcia:17
In connection with the suspension of
petitioner before he could file his answer to
the administrative complaint, suffice it to say
that the suspension was not a punishment
or penalty for the acts of dishonesty and
misconduct in office, but only as a
preventive measure. Suspension is a
preliminary step in an administrative
investigation. If after such investigation, the
charges are established and the person
investigated is found guilty of acts
warranting his removal, then he is removed
or dismissed. This is the penalty. There is,
therefore, nothing improper in suspending
an officer pending his investigation and
before the charges against him are heard
and be given an opportunity to prove his
innocence. (Emphasis added)
It is true that, under 24 of the
Ombudsmans Act, to justify the preventive
suspension of a public official, the evidence
against him should be strong, and any of
the following circumstances is present:
(a) the charge against such officer or
employee involves dishonesty, oppression
or grave misconduct or neglect in the
performance of duty;
(b) the charges would warrant removal from
the service; or
(c) the respondents continued stay in office
may prejudice the case filed against him.

As held in Buenaseda v. Flavier,18 however,

whether the evidence of guilt is strong is left
to the determination of the Ombudsman by
taking into account the evidence before him.
A preliminary hearing as in bail petitions in
cases involving capital offenses is not
required. In rejecting a similar argument as
that made by petitioner in this case, this
Court said in that case:
The import of the Nera decision is that the
disciplining authority is given the discretion
to decide when the evidence of guilt is
strong. This fact is bolstered by Section 24
of R.A. No. 6770, which expressly left such
determination of guilt to the judgment of
the Ombudsman on the basis of the
administrative complaint ...19
In
this
case,
respondent
Deputy
Ombudsman Mojica justified the preventive
suspension of petitioner and Provincial
Prosecutor Kintanar on the following
grounds:
A careful assessment of the facts and
circumstances of the herein cases and the
records
pertaining
thereto
against
respondents [Provincial Prosecutor Kintanar
and herein petitioner] clearly leads to the
conclusion that the evidence on record of
guilt is strong and the charges involved
offenses of grave misconduct, gross neglect
of duty and dishonesty which will warrant
respondents [Provincial Prosecutor Kintanar
and herein petitioner] removal from the
service.
Moreover,
considering
the
unabashed attitude of respondents in
openly announcing various false pretexts
and alibis to justify their stubborn disregard
for the lawful directives of the Ombudsman
as their official position in their pleadings
filed in OMB-VIS-0-94-0478 and in print and
broadcast media, the probability is strong
that public service more particularly in the
prosecution of cases referred by the Office
of the Ombudsman to the Cebu Provincial

Prosecutors office will be disrupted and

prejudiced and the records of said cases
even be tampered with if respondents
[Provincial Prosecutor Kintanar and herein
petitioner] are allowed to stay in the Cebu
Provincial Prosecutors Office during the
pendency of these proceedings.
Indeed respondent Deputy Ombudsman
Mojica had personal knowledge of the facts
justifying the preventive suspension of
petitioner and the Provincial Prosecutor
since the acts alleged in the administrative
complaint against them were done in the
course of their official transaction with the
Office
of
the
Ombudsman.
The
administrative complaint against petitioner
and Provincial Prosecutor Kintanar was filed
in connection with their designation as
deputies of the Ombudsman in the
prosecution of a criminal case against
Mayor Rogelio Ilustrisimo. Respondent
Deputy Ombudsman did not have to go far
to verify the matters alleged in the
administrative complaint to determine
whether the evidence of guilt of petitioner
and Provincial Prosecutor was strong for the
purpose of placing them under preventive
suspension.
Given the attitude displayed by petitioner
and the Provincial Prosecutor toward the
criminal case against Mayor Rogelio
Ilustrisimo, their preventive suspension is
justified to the end that the proper
prosecution of that case may not be
hampered.20 In addition, because the
charges against the two prosecutors involve
grave misconduct, insubordination and
neglect of duty and these charges, if
proven, can lead to a dismissal from public
office, the Ombudsman was justified in
ordering their preventive suspension.
B.
Petitioner
questions
her
preventive
suspension for six (6) months without pay

and contends that it should only be for

ninety (90) days on the basis of cases
decided by this Court. Petitioner is in error.
She is referring to cases where the law is
either silent or expressly limits the period of
suspension to ninety (90) days. With
respect to the first situation, we ruled in the
case of Gonzaga v. Sandiganbayan21 that

To the extent that there may be cases of

indefinite suspension imposed either under
Section 13 of Rep. Act 3019, or Section 42
of Pres. Decree 807, it is best for the
guidance of all concerned that this Court set
forth the rules on the period of preventive
suspension under the aforementioned laws,
as follows:
1. Preventive suspension under Section 13,
Rep. Act 3019 as amended shall be limited
to a maximum period of ninety (90) days,
from issuances thereof, and this applies to
all public officers, (as defined in Section 2(b)
of Rep. Act 3019) who are validly charged
under said Act.
2. Preventive suspension under Section 42
of Pres. Decree 807 shall apply to all
officers or employees whose positions are
embraced in theCivil Service, as provided
under Sections 3 and 4 of said Pres. Decree
807, and shall be limited to a maximum
period of ninety (90) days from issuance,
except where there is delay in the
disposition of the case, which is due to the
fault, negligence or petition of the
respondent, in which case the period of
delay shall both be counted in computing
the period of suspension herein stated;
provided that if the person suspended is a
presidential appointee, the continuance of
his suspension shall be for a reasonable
time as the circumstances of the case may
warrant.
On the other hand, petitioner and the
Provincial Prosecutor were placed under

preventive suspension pursuant to 24 of

the Ombudsman Act which expressly
provides that the preventive suspension
shall continue until the case is terminated by
the Office of the Ombudsman but not more
than six months, without pay. Their
preventive suspension for six (6) months
without pay is thus according to law.
C.
Nor is there merit in petitioners claim that
the contempt charge should first be
resolved before any action in the
administrative complaint case can be taken
because the contempt case involves a
prejudicial question. There is simply no
basis for this contention. The two cases
arose out of the same act or omission and
may proceed hand in hand, or one can be
heard before the other. Whatever order is
followed will not really matter.
WHEREFORE, the petition is DISMISSED
for lack of merit and the Motion to Lift Order
of Preventive Suspension is DENIED.

G.R. No. 97381.November 5, 1992.*

BENIGNO V. MAGPALE, JR., petitioner,
vs. CIVIL SERVICE COMMISSION and
ROGELIO A. DAYAN, in his capacity as
the General Manager of the Philippine
Ports Authority, respondents.
Administrative
Law;
Civil
Service
Commission; Jurisdiction; Rule is settled
that a tribunal, board or officer exercising
judicial functions acts without jurisdiction if
no authority has been conferred by law to
hear and decide the case.Settled is the
rule that a tribunal, board, or officer
exercising judicial functions acts without
jurisdiction if no authority has been
conferred by law to hear and decide the
case. (Acena v. Civil Service Commission,
193 SCRA 623 [1991]).

PETITION for review on certiorari of the

resolution of the Civil Service Commission.
The facts are stated in the opinion of the
Court.
Abad, Bautista & Associates for
petitioner.
MELO,J.:
Before Us is a petition for review on
certiorari assailing Resolution No. 90-962
dated October 19, 1990 of respondent Civil
Service Commission (CSC). Said CSC
resolution set aside and modified the
decision dated February 5, 1990 of the Merit
Systems Protection Board in MSPB Case
No. 449, which ordered the immediate
reinstatement in the service of herein
petitioner Benigno V. Magpale, Jr., without
loss of seniority rights and with payment of
back salaries and other emoluments to
which he is entitled under the law.
The record shows that petitioner started his
career in government as an employee in the
Presidential Assistance on Community
Development in 1960. Fifteen years later, or
in 1975, he transferred to the Philippine
Ports
Authority
(PPA)
as
Arrastre
Superintendent. He was promoted to the
position of Port Manager in 1977 of the Port
Management Unit (PMU), General Santos
City. Then he was reassigned, in the same
year, to PPA-PMU, Tacloban City where he
likewise discharged the functions of Port
Manager. On December 1, 1982, the PPA
General Manager designated Atty. William
A. Enriquez as officer-in-charge of PPAPMU, Tacloban City effective December 6,
1982. On January 6, 1983, petitioner was
ordered to immediately report to the
Assistant General Manager (AGM) for
Operations,
PPA,
Manila.
Petitioner
reported at PPA, Manila on the same date
and performed the duties and functions
assigned to him.

In an Internal Control Department Report

dated March 5, 1984, the PMU-Tacloban
Inventory Committee and the Commission
on Audit (COA) stated that petitioner failed
to account for equipment of PPA valued at
P65,542.25 and to liquidate cash advances
amounting to P130,069.61. He was found
also to have incurred unauthorized
absences from May 25, 1984 to July 23,
1984.
On July 23, 1984, or nineteen months after
he began reporting in Manila, a formal
charge for Dishonesty, Pursuit of Private
Business without permission as required by
Civil Service Rules and Regulations,
Frequent and Unauthorized Absences and
Neglect of Duty was filed against petitioner.
Based on said charges, he was ordered
preventively suspended and has been out of
service since then.
For almost four years, the case remained
unacted upon. The formal investigation and
hearing resumed on September 18, 1987.
On January 18, 1989, a Decision was
rendered by the Secretary of the
Department
of
Transportation
and
Communications (DOTC), through its
Administrative
Action
Board,
finding
petitioner guilty of Gross Negligence on two
counts: (a) for his failure to account for the
forty-four (44) assorted units of equipment,
among them a Sony Betamax, and a TV
Camera, and (b) for failing to render the
required liquidation of his cash advances
amounting to P44,877.00 for a period of four
years. Petitioner was also found guilty of
frequent and unauthorized absences.
Accordingly, he was meted the penalty of
dismissal from the service with the
corresponding accessory penalties.
When petitioners motion for reconsideration
of the aforesaid Decision was denied in the
DOTCs Order of February 20, 1989, he
appealed to the Merit Systems and

Protection Board (MSPB) of respondent

Civil Service Commission.
On February 5, 1990, the MSPB rendered a
Decision reversing the Decision of the
DOTC. The pertinent portion of the MSPBs
Decision reads:
After a careful review of the records of the
case, this Board found the appeal
meritorious. Respondent cannot be held
liable for Gross Negligence for his alleged
failure to account for several properties and
for failure to liquidate the cash advances he
received as there was no showing that he
has been specifically required to do so
either by law or regulation. The mere detail
of respondent to PPA-Manila, in the
absence of an order requiring him to turn
over and account for the funds and property
received for his office at PMU-Tacloban will
not necessarily obligate him to make
accounting for the same.
Moreover, Section 105, Chapter 5 of
Presidential Decree 1445, otherwise known
as The Government Auditing Code of the
Philippines measured the liability of an
officer accountable for government property
only to the money value of said property.
Though respondent is the person primarily
liable for these funds and property, he holds
this liability jointly with the person who has
the actual possession thereof and who has
the immediate responsibility for their
safekeeping.
As to the charge relative to respondents
frequent unauthorized absences had been
sufficiently and convincingly explained, due
to which the Board found him not at all guilty
of the offense charged (sic).
IN VIEW THEREOF, the decision appealed
from is hereby reversed. RespondentAppellant Magpale should immediately be
reinstated in the service without loss of
seniority rights and with payment of back

salaries and other emoluments to which he

is entitled under the law. (pp. 31-32, Rollo.)
On March 1, 1990, PPA, through its General
Manager, herein respondent Rogelio A.
Dayan, filed an appeal with the Civil Service
Field Office-PPA, and the latter office
indorsed the appeal to respondent CSC in a
letter dated March 5, 1990.
On March 5, 1990, petitioner requested the
Secretary of the DOTC to direct the PPA to
implement the MSPB decision as it has
become final and executory. Said request
was reiterated in another letter also dated
March 5, 1990 by petitioner to OIC Wilfredo
M. Trinidad of the Office of the Assistant
Secretary for Administration and Legal
Affairs, DOTC.
On March 13, 1990, petitioner filed with the
MSPB a Motion for Implementation of the
MSPB decision. This was opposed by the
PPA through its General Manager.
On April 27, 1990, petitioner filed with
respondent CSC his comment to the appeal
of the PPA contending that he is not an
accountable officer and is under no
obligation to account for the property and
equipment; that said property and
equipment were not received by him as
custodian and he should not be held liable
for the loss of the same; that the said
property and equipment were placed in
PPA-PMU Tacloban City which the herein
petitioner left on October 8, 1982 and since
then had lost control over them. Moreover,
petitioner averred that as to the unliquidated
cash advances of P44,877.00, the same
had long been liquidated. Finally, petitioner
claimed that his failure to secure the
clearance for any possible property or
financial obligation in PMU-Tacloban was
due to the urgency of his transfer to PPAManila and the absence of any order or
demand to secure the clearance.

On May 29, 1990, the MSPB issued an

Order for the immediate implementation of
its February 5, 1990 Decision, ruling that:
Records further show that a copy of this
Boards decision was received by the Office
of
the
Honorable
Secretary,
that
Department, thru Mr. Frankie Tampus on
February 6, 1990. Records finally show that
as of March 5, 1990, no motion for
reconsideration
of
this
Boards
aforementioned decision has ever been filed
as evidenced by the certification of even
date issued and signed by Director Adelaida
C. Montero of the Office for Central
Personnel Records, this Commission.
Hence, said decision has long become final
and executory. (p. 34, Rollo.)
On June 28, 1990, petitioner filed a Motion
to Dismiss the appeal of PPA claiming that:
1.Appeal of PPA was filed out of time and
that the CSC has no jurisdiction over it;
2.The PPA has not exhausted administrative
remedies before appealing to the higher
body, the CSC;
3.The MSPB decision has become final and
therefore cannot be disturbed anymore.
(p. 22, Rollo.)
On October 19, 1990, respondent CSC
rendered its now assailed Resolution No.
90-962, the pertinent portion of which reads
as follows:
The Commission thus holds respondent
Magpale guilty of Gross Neglect of Duty on
two (2) counts for his failure to account for
the forty-four (44) equipments (sic) under
his charge and to render an accounting for
cash advances amounting to P44,877.90.
Accordingly, considering two mitigating
circumstances of length of service and first
offense in favor of respondent, the
commission hereby imposes a penalty of
suspension for a period of one (1) year
against him. As he has been out of the
service since 1984, the penalty is deemed

served and he should now be reinstated to

his former position. This is, however, without
prejudice to any criminal or civil proceedings
that the agency concerned or the COA may
institute as proper under the premises.
Finally, the decision of the MSPB
exonerating the respondent Magpale for
Gross Negligence is hereby reversed.
Corollarily, the order of payment of back
salaries is hereby set aside. MSPB is
likewise reminded to be more circumspect
on matters of this nature, especially as the
instant case involves accountability of public
funds and property.
WHEREFORE,
foregoing
premises
considered,
the
Commission
finds
respondent Benigno V. Magpale, Jr., guilty
of Gross Neglect of Duty on two (2) counts
for failure to account for the forty-four (44)
equipments (sic) under his charge and to
render an accounting for cash advance
amounting to P44,877.90. In view of the
attendant mitigating circumstances of length
of service and first offense in favor of
respondent and the Neglect of Duty to
account for cash advance in the amount of
P44,877.90 (second count) be appreciated
as an aggravating circumstance, the penalty
of suspension for one (1) year shall be
imposed against respondent. This shall be
without prejudice to any criminal or civil
proceedings that PPA or COA may institute
against respondent. Accordingly, the
Decision and Order of MSPB dated
February 5, 1990 and May 29, 1990,
respectively, are hereby set aside. (pp. 2728, Rollo.)
Hence, the present recourse.
The petition alleges that respondent CSC, in
issuing its Resolution No. 90-962, gravely
abused its discretion because:
1.The law did not authorize an appeal by
the government from an adverse decision of

the Merit Systems Protection Board

(MSPB);
2.Respondent PPA General Manager did
not have the right or legal personality to
appeal from the MSPB decision;
3.Assuming that the appeal was available to
respondent DAYAN, the same was filed out
of time after the MSPB decision had long
become final and executory. (pp. 6-7,
Petition; pp. 7-8, Rollo.)
In support of his first contention, petitioner
invokes Paragraph 2(a), Section 16,
Chapter 3, Subtitle A, Title I, Book V of
Executive Order No. 292, otherwise known
as the Administrative Code of 1987 which
provides:
Sec.16.Offices in the Commission.The
Commission shall have the following offices:
xxx xxx xxx
(2)The Merit Systems Protection Board
composed of a Chairman and two (2)
members shall have the following functions:
(a)
Hear
and
decide on
appeal
administrative cases involving officials and
employees of the Civil Service. Its decision
shall be final except those involving
dismissal or separation from the service
which
may
be
appealed
to
the
Commission. (Italics supplied.)
claiming that since the MSPB decision was
not for dismissal or separation from the
service, but reinstatement without loss of
seniority rights and with payment of back
salaries, the said MSPB decision should be
deemed final, immediately executory and
unappealable.
Petitioner next contends that assuming, for
the sake of argument, that the decision of
the MSPB was appealable, respondent
Dayan, even in his capacity as General
Manager of the PPA, did not have the legal
personality nor the right to appeal the
decision of the MSPB, citing Paragraph 1,
Section 49, Chapter 7, Subtitle A, Title I,

Book V, of Executive Order No. 292 and the

case of Paredes vs. CSC, G.R. No. 88177,
December 4, 1990, 192 SCRA 84.
Assuming further that the MSPB decision
was appealable and that respondent Dayan
had the legal personality to appeal the
MSPB decision, petitioner still contends that
the appeal should not have been given due
course by the respondent CSC because the
appeal was not filed with the proper
disciplining office in accordance with same
Section 49 of Executive Order No. 292,
which, in this case, should be the DOTC,
not with the CSC Field Office at the PPA.
On the merit of the petition, petitioner claims
that assuming even further that an appeal
lies from the MSPB decision, that
respondent Dayan had the legal personality
or standing to institute the appeal and that it
was filed with the proper office, still CSC
Resolution 90-962 was rendered with grave
abuse of discretion because petitioner
cannot be suspended for alleged failure to
account for pieces of equipment and cash
advances since this is not the neglect of
duty contemplated by Section 36 of
Presidential Decree No. 807 or Section 46
of the chapter on the Civil Service in
Executive Order 292. At most, petitioner can
be held liable for the money value of the
equipment and advances as mandated by
Section 105 of Presidential Decree No.
1445, the Government Auditing Code of the
Philippines.
For its part, respondent CSC maintains
First, that the finality of the MSPB decision
in disciplinary cases as stated in Section 16,
Paragraph 2(a), Book V of Executive Order
No. 292, relied upon by petitioner, is
modified by Section 12, Paragraph 11, Book
V, of the same Executive Order No. 292,
which reads:

Section12.Powers
and
Functions.The
Commission shall have the following powers
and functions:
xxx xxx xxx
(11)Hear and decide administrative cases
instituted by or brought directly or on
appeal, including contested appointments,
and review decisions and actions of its
offices and of the agencies attached to it.
Furthermore,
relevant
provisions
of
Executive Order No. 135 dated February
25, 1987 amending Section 19(b) of
Presidential Decree No. 807 and Section 8
of Presidential Decree No. 1409 state, thus:
WHEREAS, in the interest of justice, there
is a need to confer upon the Civil Service
Commission jurisdiction over appeal in
contested or provisional appointments and
to make its decision thereon, as well as in
administrative disciplinary cases final and
reviewable by the Supreme Court.
xxx xxx xxx
Relationship with the Civil Service
Commission.The Commission shall hear
and decide appeals from other decisions of
the Board provided that the decisions of the
Commission shall be subject to review on
certiorari only upon receipt of a copy thereof
by the aggrieved party.
Thus, respondent CSC argues that it is
deemed not to have lost its appellate
jurisdiction over the decisions of the MSPB
in administrative disciplinary cases.
Second, the case of Paredes v. CSC is not
applicable. Respondent Dayan appealed
the MSPB decision not in his personal
capacity nor in pursuit of his private interest,
but as head of the PPA, being the general
manager thereof.
Third, the appeal was filed with the proper
disciplining office because the decision
appealed from was that of the MSPB, one of
the offices in respondent CSC. Thus,
respondent CSC was justified in giving due

course to PPAs notice of appeal filed with

its (CSC) Field Office at the PPA.
Finally, petitioners claim that he is liable
only for the money value of the property and
cash
advances
and
cannot
be
administratively charged for such infraction
is untenable and a mockery of the civil
service law. For his failure to account for the
property under his charge and to liquidate
his cash advances, petitioner is guilty of
Gross Neglect of Duty and should have
been dismissed from the service if no
mitigating circumstances were considered in
his favor.
We gave due course to the petition and
required the parties to file their respective
memoranda. After considering the same
and the pertinent laws and jurisprudence,
We find that the petition must be granted.
After Mendez vs. Civil Service Commission,
(204 SCRA 965 [1991]), the extent of the
authority of respondent CSC to review the
decisions of the MSPB is now a settled
matter.
The Court, in said case held:
It is axiomatic that the right to appeal is
merely a statutory privilege and may be
exercised only in the manner and in
accordance with the provision of law.
(Victorias Milling Co., Inc. vs. Office of the
Presidential Assistant for Legal Affairs, 153
SCRA 318).
A cursory reading of P.D. 807, otherwise
known as The Philippine Civil Service Law
shows that said law does not contemplate a
review of decisions exonerating officers or
employees from administrative charges.
Section 37 paragraph (a) thereof, provides:
The Commission shall decide upon appeal
all
administrative
disciplinary
cases
involving the imposition of a penalty of
suspension for more than thirty days, or fine
in an amount exceeding thirty days salary,
demotion in rank or salary or transfer,

removal or dismissal from office. x x x

(italics supplied) (p. 7, Rollo)
Said provision must be read together with
Section 39 paragraph (a) of P.D. 805 which
contemplates:
Appeals, where allowable, shall be made
by the party adversely affected by the
decision x x x. (italics supplied) (p. 104,
Rollo)
The phrase party adversely affected by the
decision refers to the government
employee against whom the administrative
case is filed for the purpose of disciplinary
action which may take the form of
suspension, demotion in rank or salary,
transfer, removal or dismissal from office. In
the instant case, Coloyan who filed the
appeal cannot be considered an aggrieved
party because he is not the respondent in
the administrative case below.
Finally, pursuant to Section 37 paragraph
(b) of P.D. 807, the city mayor, as head of
the city government, is empowered to
enforce judgment with finality on lesser
penalties like suspension from work for one
month and forfeiture of salary equivalent to
one month against erring employees.
By inference or implication, the remedy of
appeal may be availed of only in a case
where the respondent is found guilty of the
charges filed against him. But when the
respondent is exonerated of said charges,
as in this case, there is no occasion for
appeal. (pp. 967-968)
The above ruling is a reiteration of the
earlier pronouncement in Paredes vs. Civil
Service Commission, (192 SCRA 84 [1990])
cited by petitioner, wherein We said:
Based on the above provisions of law,
appeal to the Civil Service Commission in
an administrative case is extended to the
party adversely affected by the decision,
that is, the person or the respondent
employee who has been meted out the

penalty of suspension for more than thirty

days; or fine in an amount exceeding thirty
days salary demotion in rank or salary or
transfer, removal or dismissal from office.
The decision of the disciplining authority is
even final and not appealable to the Civil
Service Commission in cases where the
penalty imposed is suspension for not more
than thirty days or fine in an amount not
exceeding thirty days salary. Appeal in
cases allowed by law must be filed within
fifteen days from receipt of the decision.
Here the MSPB after hearing and the
submission of memoranda exonerated
private respondent Amor of all charges
except for habitual tardiness. The penalty
was only a reprimand so that even private
respondent Amor, the party adversely
affected by the decision, cannot even
interpose an appeal to the Civil Service
Commission.
As correctly ruled by private respondent,
petitioner Paredes the complainant is not
the party adversely affected by the decision
so that she has no legal personality to
interpose an appeal to the Civil Service
Commission. In an administrative case, the
complainant is a mere witness (Gonzalo v.
D. Roda, 64 SCRA 120). Even if she is the
Head of the Administrative Services
Department of the HSRC as a complainant
she is merely a witness for the government
in an administrative case. No private
interest is involved in an administrative case
as the offense is committed against the
government. (pp. 98-99)
While it is true, as contended by respondent
Civil Service Commission that under
Section 12 (par. 11), Chapter 3, Subtitle A,
Book V of Executive Order 292, the CSC
does have the power to
Hear and decide administrative cases
instituted by or brought before it directly or
on
appeal,
including
contested

appointments, and review decisions and

actions of its offices and of the agencies
attached to it. x x x
the exercise of the power is qualified by and
should be read together with the other
sections of the same sub-title and book of
Executive Order 292, particularly Section 49
which prescribes the following requisites for
the exercise of the power of appeal, to wit:
(a)the decision must be appealable;
(b)the appeal must be made by the party
adversely affected by the decision;
(c)the appeal must be made within fifteen
days from receipt of the decision, unless a
petition for reconsideration is seasonably
filed; and
(d)the notice of appeal must be filed with the
disciplining office, which shall forward the
records of the case, together with the notice
of appeal to the appellate authority within
fifteen days from filing of the notice of
appeal, with its comments, if any.
Under Section 47 of the same Code, the
CSC shall decide on appeal all
administrative disciplinary cases involving
the imposition of:
(a)a penalty of suspension for more than
thirty days; or
(b)fine in an amount exceeding thirty days
salary; or
(c)demotion in rank or salary or transfer; or
(d)removal or dismissal from office.
The February 5, 1990 decision of the MSPB
did not involve dismissal or separation from
office, rather, the decision exonerated
petitioner and ordered him reinstated to his
former position. Consequently, in the light of
our pronouncements in the aforecited cases
of Mendez vs. Civil Service Commission
and Paredes vs. Civil Service Commission,
the MSPB decision was not a proper subject
of appeal to the CSC.
Settled is the rule that a tribunal, board, or
officer exercising judicial functions acts

without jurisdiction if no authority has been

conferred by law to hear and decide the
case. (Acena v. Civil Service Commission,
193 SCRA 623 [1991]).
WHEREFORE, the decision of the Civil
Service Commission is hereby ANNULLED
and SET ASIDE and the decision of the
Merit Systems Protection Board dated
February 5, 1990 is hereby REINSTATED.
SO ORDERED
FREEMAN,
INC.,
FREEMAN
MANAGEMENT
&
DEVELOPMENT
CORP., SAW CHIAO LIAN, LECHU S. LIM,
PERLITA S. DYOGI, OLIVIA S. SANTOS,
CARMEN S. SAW and RUBEN CHUA,
petitioners, vs. THE SECURITIES AND
EXCHANGE COMMISSION, SAW MUI,
RUBEN SAW, DIONISIO SAW, LINA S.
CHUA, LUCILA S. RUSTE and EVELYN
SAW, respondents.
Remedial Law; Securities and Exchange
Commission; Certiorari; The petition is not
an appeal from a final order of the SEC but
a special civil action questioning the legal
competence of the latter to issue the
interlocutory order.The present petition
seeks to annul and set aside the order of
the SEC for want of jurisdiction to issue the
writ of injunction, a provisional remedy to
the principal action pending in the SEC for
the dissolution of petitioner FREEMAN.
Hence, the petition is not an appeal from a
final order of the SEC but a special civil
action questioning the legal competence of
the latter to issue such interlocutory order. It
is covered by Sec. 1, Rule 65, of the Rules
of Court which allows a person aggrieved to
file a verified petition in the proper court
praying that judgments be rendered
annulling or modifying the proceedings, as
the law requires, of the tribunal, board or
officer when the latter, exercising judicial
functions, has acted without or in excess of

its or his jurisdiction or with grave abuse of

discretion and there is no appeal, nor any
plain, speedy and adequate remedy in the
ordinary course of law.
Same; Same; Same; Petition for certiorari
must be filed within a reasonable time.We
have consistently ruled that petitions for
certiorari must be filed within a reasonable
time. In the instant case, the records show
that the petition at bench was filed on 4
June 1993, or two (2) months and nineteen
(19) days from 17 March 1993, which was
the date when petitioners received copy of
the order of the SEC denying their motion
for reconsideration. There is no doubt that
this petition was seasonably filed.
Same;
Same;
Same;
Administrative
agencies like the SEC are tribunals of
limited jurisdiction and as such can exercise
only those powers which are specifically
granted to them by their enabling statutes.
Our ruling in Saw v. Court of Appeals
should be understood in the light of two (2)
basic
legal
principles.
First,
that
administrative agencies like the SEC are
tribunals of limited jurisdiction and as such
can exercise only those powers which are
specifically granted to them by their
enabling statutes. Section 5 of P.D. No. 902A, as amended, provides the cases over
which the SEC has original and exclusive
jurisdiction to hear and decide. These
include controversies arising out of intracorporate or partnership relations between
and among stockholders, members or
associates; between any or all of them and
the corporation, partnership or association
of which they are stockholders, members or
associates, respectively; and, between such
corporation, partnership or association and
the state insofar as it concerns their
individual franchise or right to exist as such
entity. Section 6 of the same decree
empowers the SEC to issue preliminary or

permanent injunction, whether prohibitory or

mandatory, in all cases in which it has
jurisdiction.
Same; Same; Same; Same; The petition for
reconveyance
of
properties
against
Freeman Management is not an intracorporate controversy.The action for
dissolution of FREEMAN filed by its minority
stockholders is well within the jurisdiction of
the SEC to resolve in accordance with P.D.
No. 902-A. However, the inclusion in the
SEC case of FREEMAN MANAGEMENT of
which private respondents are not
stockholders for the purpose of compelling it
to reconvey to FREEMAN the properties
originally owned by the latter but were
levied upon and sold to FREEMAN
MANAGEMENT in a public auction is a
matter outside of the limited jurisdiction of
the SEC. The petition for reconveyance of
properties
against
FREEMAN
MANAGEMENT is not an intra-corporate
controversy since private respondents have
no shares or interests whatsoever in
FREEMAN MANAGEMENT, a corporation
separate and distinct from FREEMAN,
which is undergoing dissolution proceedings
in the SEC.
Same; Same; Same; The SEC is at the very
least co-equal with the Regional Trial Court.
The second basic principle is the doctrine
of non-interference which should be
regarded as highly important in judicial
stability and in the administration of justice
whereby the judgment of a court of
competent jurisdiction may not be opened,
modified or vacated by any court or tribunal
of concurrent jurisdiction. The SEC is at the
very least co-equal with the Regional Trial
Court. As such, one would have no power to
control the other.
Same; Same; Same; Judgment; Execution;
It is axiomatic that after a judgment has
been fully satisfied, the case is deemed

terminated once and for all.Finally, the

judgment was fully satisfied and
a
certificate of sale was issued to FREEMAN
MANAGEMENT. It is axiomatic that after a
judgment has been fully satisfied, the case
is deemed terminated once and for all. It
cannot be modified or altered.
PETITION for certiorari to annul and set
aside the orders of the Securities and
Exchange Commission.
The facts are stated in the opinion of the
Court.
Abelardo G. Luzano for petitioner.
Benito O. Ching, Jr. for private
respondents.
BELLOSILLO, J.:
This petition for certiorari filed under Rule
65 of the Rules of Court seeks to annul and
set aside the order of respondent Securities
and Exchange Commission dated 7 January
1993 in SEC-EB No. 308 denying the action
of petitioners to nullify the 7 January 1992
order of the Securities and Exchange
Commission in SEC Case No. 3577.
Sometime in 1986 and 1987, Freeman, Inc.
(FREEMAN), was granted a loan by
Equitable
Banking
Corporation
(EQUITABLE) as evidenced by two (2)
promissory notes, P. N. No. 125957 dated 8
December 1986 for P1,700,000.00 payable
8 December 1987, and P.N. No. TL-369
dated 24 April 1987 for P6,000,000.00
payable 24 April 1988. Saw Chiao Lian,
President of Freeman, Inc., signed as comaker in both promissory notes.
When FREEMAN failed to pay its
obligations, EQUITABLE instituted a
collection suit against FREEMAN and Saw
Chiao Lian.1 EQUITABLE also prayed for
preliminary attachment.
On 27 May 1988, private respondents Saw
Mui, Ruben Saw, Dionisio Saw, Lina S.

Chua, Lucila S. Ruste and Evelyn Saw filed

an answer in intervention claiming that they
owned the minority interest in FREEMAN.
On 12 October 1988, the trial court denied
the intervention of private respondents. The
denial was affirmed by the Court of Appeals
and thereafter by this Court.
The collection case was terminated when
the parties entered into a compromise
agreement duly approved by the court and a
decision rendered thereon on 5 December
1988. However, Freeman, Inc. (FREEMAN)
and Saw Chiao Lian, defendants in the trial
court, failed to comply with the judgment.
On 30 January 1989, a writ of execution
was issued. Two (2) parcels of land
belonging to FREEMAN covered by TCT
Nos. 34219 and 34220 were levied upon
and sold at public auction on 31 March
1989. The highest bidder was one of the
petitioners, Freeman Management and
Development
Corporation
(FREEMAN
MANAGEMENT),
which
thereafter
registered its certificate of sale with the
Register of Deeds.
On 23 May 1989, before FREEMAN
MANAGEMENT could consolidate its title
over the properties purchased at the auction
sale, private respondents, representing the
minority shareholdings of FREEMAN, filed a
petition with the Securities and Exchange
Commission (SEC) seeking the dissolution
of
FREEMAN,
accounting
and
reconveyance of the properties covered by
TCT Nos. 34219 and 34220.3
On 5 April 1990, private respondents filed a
similar complaint against petitioners with the
Regional Trial Court of Kalookan City.4 The
complaint sought to annul the compromise
agreement between EQUITABLE on one
hand and defendants FREEMAN and Saw
Chiao Lian on the other, as well as the
promissory notes executed by Saw Chiao
Lian, the auction sale, and the sheriffs

certificate of sale of the lots covered by TCT

Nos. 34219 and 34220.
Petitioners moved for the dismissal of the
complaint on the ground that the same was
a duplication of the case pending in the
SEC. But the motion was denied.
Petitioners went up on certiorari to the Court
of Appeals which reversed the trial court
and directed the dismissal of the complaint
by reason of the pendency of the SEC case.
On 7 January 1992, on motion of private
respondents in SEC Case No. 3577, and
despite the opposition thereto by petitioners,
SEC Hearing Officer Juanito B. Almosa, Jr.,
issued a writ of preliminary injunction to
prevent the consolidation of ownership of
petitioner FREEMAN MANAGEMENT over
the properties it acquired in the auction sale
of 31 March 1989, the redemption period
having expired on 7 April 1990.6
Petitioners assailed the order of the SEC
Hearing Officer by filing a petition for
certiorari with the SEC en banc which on 7
January 1993 however denied the petition.7
On 15 March 1993, petitioners motion for
reconsideration was likewise denied.8
On 22 April 1993, petitioners filed with this
Court a petition for certiorari questioning the
15 March 1993 order of the SEC.9 In a
Resolution dated 10 May 1993, this Court
dismissed the petition for its failure to state
the date when the questioned SEC Order
was received as well as the date when the
order
denying
the
Motion
for
Reconsideration was received.10
On 4 June 1993, petitioners filed the
present petition containing the matters
omitted in the petition earlier dismissed.
Petitioners allege that the SEC committed
grave abuse of discretion and acted in
excess of jurisdiction in sustaining the order
of its Hearing Officer granting the writ of
injunction
enjoining
consolidation
of
ownership in FREEMAN MANAGEMENT

and that the SEC misconstrued the

decisions of the Court of Appeals in
Equitable Banking Corp. v. Hon. Mangay11
and of this Court in Saw v. Court of
Appeals,12 which in effect ruled that SEC
has jurisdiction to take cognizance of and
determine the rights of petitioners and
private respondents as against each other.
Petitioners also argue that the assailed
order of the SEC violated the basic principle
that the SEC, being a coordinate body with
the Regional Trial Court, could not interfere
in the proceedings held therein, and neither
could it review the issues passed upon by
the said court. They likewise maintain that
although SEC Case No. 3577 could still
proceed as to the dissolution of FREEMAN,
the two (2) properties of the latter which
were levied upon and sold to FREEMAN
MANAGEMENT are already excluded from
the corporate assets of FREEMAN; and,
that these properties could no longer be the
subject of the action for reconveyance in the
SEC because they had been the subject of
execution to enforce the decision of the trial
court in Civil Case No. 88-44404 which had
already attained finality.
In their comment, private respondents
contend that the present petition was filed
beyond the reglementary period of thirty
(30) days within which to appeal to this
Court, citing Sec. 1, Rule 17, of the New
Rules of Procedure of the SEC. Private
respondents also allege that the jurisdiction
of the SEC has been resolved by this Court
in Saw v. Court of Appeals13 when it held
that even with the denial of petitioners
motion to intervene, nothing is really lost to
them. The denial did not necessarily
prejudice them as their rights are being
litigated in the case (SEC Case No. 3577)
now before the Securities and Exchange
Commission and may be fully asserted and
protected in that separate proceeding.

In its comment, the Office of the Solicitor

General expresses conformity with the
allegations in the petition and prays that the
petition be given due course. It also avers
that since the present petition, which is one
under Rule 65 of the Rules of Court, was
filed thirty-five (35) days after receipt of the
assailed resolution of the SEC, the instant
petition was filed within a reasonable time.
The Solicitor General also agrees with
petitioners contention that the SEC, as a
co-equal body with the Regional Trial Court,
cannot modify, reverse or pass upon the
decision of said court. Moreover, private
respondents had the opportunity to submit a
bid for the foreclosed properties during the
public auction and their failure to exercise
their right should not prejudice petitioners.
We sustain petitioners. The present petition
seeks to annul and set aside the order of
the SEC for want of jurisdiction to issue the
writ of injunction, a provisional remedy to
the principal action pending in the SEC for
the dissolution of petitioner FREEMAN.
Hence, the petition is not an appeal from a
final order of the SEC but a special civil
action questioning the legal competence of
the latter to issue such interlocutory order. It
is covered by Sec. 1, Rule 65, of the Rules
of Court which allows a person aggrieved to
file a verified petition in the proper court
praying that judgment be rendered annulling
or modifying the proceedings, as the law
requires, of the tribunal, board or officer
when the latter, exercising judicial functions,
has acted without or in excess of its or his
jurisdiction or with grave abuse of discretion
and there is no appeal, nor any plain,
speedy and adequate remedy in the
ordinary course of law.
We have consistently ruled that petitions for
certiorari must be filed within a reasonable
time. In the instant case, the records show
that the petition at bench was filed on 4

June 1993, or two (2) months and nineteen

(19) days from 17 March 1993, which was
the date when petitioners received copy of
the order of the SEC denying their motion
for reconsideration. There is no doubt that
this petition was seasonably filed.
SEC Case No. 3577 arose from the action
filed by private respondents as minority
shareholders of petitioner FREEMAN for the
dissolution
of
the corporation
and
reconveyance of the properties conveyed to
another
petitioner
FREEMAN
MANAGEMENT in a public auction. The
SEC maintained that it had jurisdiction to
issue the writ of injunction preventing the
consolidation of ownership in FREEMAN
MANAGEMENT on the basis of our ruling in
Saw v. Court of Appeals. We denied the
intervention of private respondents in the
trial court in Civil Case No. 88-44404 which
had already been terminated. As we stated
therein, even with the denial of herein
private respondents motion to intervene
nothing could really be lost to them as their
rights were being litigated before the SEC
and would be fully asserted and protected in
that separate proceeding.
Our ruling in Saw v. Court of Appeals should
be understood in the light of two (2) basic
legal principles. First, that administrative
agencies like the SEC are tribunals of
limited jurisdiction and as such can exercise
only those powers which are specifically
granted to them by their enabling
statutes.14 Section 5 of P.D. No. 902-A,as
amended, provides the cases over which
the SEC has original and exclusive
jurisdiction to hear and decide. These
include controversies arising out of intracorporate or partnership relations between
and among stockholders, members or
associates; between any or all of them and
the corporation, partnership or association
of which they are stockholders, members or

associates, respectively; and, between such

corporation, partnership or association and
the state insofar as it concerns their
individual franchise or right to exist as such
entity. Section 6 of the same decree
empowers the SEC to issue preliminary or
permanent injunction, whether prohibitory or
mandatory, in all cases in which it has
jurisdiction.
The action for dissolution of FREEMAN filed
by its minority stockholders is well within the
jurisdiction of the SEC to resolve in
accordance with P.D. No. 902-A. However,
the inclusion in the SEC case of FREEMAN
MANAGEMENT
of
which
private
respondents are not stockholders for the
purpose of compelling it to reconvey to
FREEMAN the properties originally owned
by the latter but were levied upon and sold
to FREEMAN MANAGEMENT in a public
auction is a matter outside of the limited
jurisdiction of the SEC. The petition for
reconveyance
of
properties
against
FREEMAN MANAGEMENT is not an intracorporate
controversy
since
private
respondents have no shares or interests
whatsoever in FREEMAN MANAGEMENT,
a corporation sepa-rate and distinct from
FREEMAN, which is undergoing dissolution
proceedings in the SEC.
The second basic principle is the doctrine of
non-interference which should be regarded
as highly important in judicial stability and in
the administration of justice whereby the
judgment of a court of competent jurisdiction
may not be opened, modified or vacated by
any court or tribunal of concurrent
jurisdiction.15 The SEC is at the very least
co-equal with the Regional Trial Court. As
such, one would have no power to control
the other.16 Moreover, in the instant case,
judgment was rendered by the trial court in
Civil Case No. 88-44404 approving the
compromise
agreement
between

EQUITABLE on one hand, and FREEMAN

and Saw Chiao Lian on the other. A writ of
execution
was
issued
against
the
defendants to enforce the judgment and two
(2) properties of FREEMAN were levied
upon
and
sold
to
FREEMAN
MANAGEMENT as highest bidder in the
public auction.
Finally, the judgment was fully satisfied and
a certificate of sale was issued to
FREEMAN MANAGEMENT. It is axiomatic
that after a judgment has been fully
satisfied, the case is deemed terminated
once and for all.17 It cannot be modified or
altered. Hence, the properties sold to
FREEMAN MANAGEMENT are now
considered excluded from the corporate
assets of FREEMAN and can no longer be
the subject of the proceedings in the SEC
for the dissolution of the latter. Therefore
SEC exceeded its jurisdiction when it issued
a writ of injunction enjoining FREE-MAN
MANAGEMENT from consolidating its
ownership over the two (2) parcels of land it
acquired as highest bidder in the execution
sale.
WHEREFORE, the petition is GRANTED
and the assailed orders of the Securities
and Exchange Commission dated 7 January
1993 and 15 March 1993 are REVERSED
and SET ASIDE.
SO ORDERED
G.R. No. 106161. February 1, 1995.*
ILOCOS SUR ELECTRIC COOPERATIVE,
INC. and EFREN BAUTISTA, petitioners,
vs. THE NATIONAL LABOR RELATIONS
COMMISSION and the NLRC REGIONAL
ARBITRATORS, BRANCH NO. I, (San
Fernando, La Union), respondents.
Administrative Law; P.D. 1645; Electric
Cooperatives; P.D. 269 as amended by P.D.
1645 pertains to NEA's power of
supervision and control over electric

cooperatives.Presidential Decree No.

269, as amended by P.D. 1645, relied upon
by petitioners, does not apply in this case.
Said Decree pertains to NEA's exercise of
its power of supervision and control over
electric cooperatives. Thus, Section 10, of
P.D.
269,
as
amended,
provides:
Enforcement Powers and Remedies. In the
exercise of its power of supervision and
control over electric cooperatives and other
borrower, supervised or controlled entities,
the NEA is empowered to issue orders,
rules and regulations and motu propio or
upon petition of third parties, to conduct
investigations, referenda and other similar
actions in all matters affecting said electric
cooperatives and other borrower, or
supervised or controlled entities.
Same; Same; Labor Law; Labor Arbiter;
Termination; P.D. 269 as amended by P.D.
1645 does not vest in NEA the power to
hear and decide termination cases of
employees in electric cooperatives. That
authority is vested in the Labor Arbiter.It is
clear from the aforequoted provision of P.D.
269, as amended by P.D. 1645 that only the
power of supervision and control over
electric cooperatives and other borrowers,
supervised or controlled, is given to the
NEA. There is nothing in said law which
provides that the NEA administration has
the power to hear and decide termination
cases of employees in electric cooperatives.
That authority is vested in the Labor Arbiter.
Same; Same; Same; Same; The dismissal
arose from a purely labor dispute which falls
within the original and exclusive jurisdiction
of Labor Arbiters.In the present case,
there is no dispute that Sabio is an
employee of ISECO whose services as
manager of the Engineering Department of
ISECO were terminated. The dismissal
arose from a purely labor dispute which falls
within the original and exclusive jurisdiction

of the Labor Arbiters and the NLRC. Thus,

Article 217 of the Labor Code provides:
ART. 217. Jurisdiction of Labor Arbiters and
the Commission.(a) Except as otherwise
provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction
to hear and decide, within thirty (30)
calendar days after the submission of the
case by the parties for decision without
extension, even in the absence of
stenographic notes, the following cases
involving all workers, whether agricultural or
non-agricultural: 1. Unfair labor practice
cases; 2. Termination disputes.
Labor Law; Labor Arbiter; Jurisdiction; It is
an undesirable practice of a party,
participating in the proceedings and
submitting his case for decision and then
accepting the judgment, only if favorable,
and attacking it for lack of jurisdiction, when
adverse.Moreover,
the
NLRC's
jurisdiction was only raised for the first time
in this petition. Petitioners did not question
the jurisdiction of the Labor Arbiter either in
a motion to dismiss or in their answer. In
fact, petitioners participated in the
proceedings before the Labor Arbiter, as
well as in the NLRC to which they appealed
the Labor Arbiter's decision. It has been
consistently held by this Court that while
jurisdiction may be assailed at any stage, a
part's active participation in the proceedings
before a court without jurisdiction will estop
such party from assailing such lack of it. It is
an undesirable practice of a party
participating in the proceedings and
submitting his case for decision and then
accepting the judgment, only if favorable,
and attacking it for lack of jurisdiction, when
adverse.
Same; Same; Same; Power of Dismissal;
Employer's prerogative / power to dismiss
an employee must not be exercised
arbitrarily and without just cause.Well

settled is the rule that the employer's

prerogative/power to dismiss an employee
must not be exercised arbitrarily and without
just cause, otherwise the constitutional
guarantee of security of tenure would be
rendered nugatory. Moreover, it must be
done without abuse of discretion.
Same; Same; Same; Same; Management
Prerogative; When instances for valid
termination of employees are not present,
said deletion of the position of Sabio cannot
be said to be a proper exercise of
management
prerogative.Here,
the
instances when the employer may validly
terminate the employment of an employee
in the exercise of management prerogative
are not present. Petitioners claim that the
position of Sabio as Manager of the
Engineering Department was already
deleted or abolished. However, the
memorandum dated January 15, 1990
which contained the recommendations for
reorganization and replacement of ISECO
personnel did not satisfactorily explain or
give a credible justification why the
Engineering Department was abolished. As
correctly observed by the Solicitor General,
there was merely a change in nomenclature
from "Engineering Department" to 'Technical
Services
Department"
while
the
classifications of the other departments,
namely, Administrative, Finance and
Member Services were retained. As there
was no evidence presented to show that the
abolishment of the Engineering Department
was due to the installation of labor saving
devices, redundancy, retrenchment to
prevent losses or the closing or cessation of
operation of the establishment, then said
deletion of the position of Sabio cannot be
said to be a proper exercise of management
prerogative. Thus, the dismissal of Sabio
was illegal.

Remedial Law; Certiorari; In certiorari

proceedings under Rule 65 of the Rules of
Court, judicial review by this Court does not
go so far as to evaluate the sufficiency of
evidence upon which the Labor Arbiter and
the NLRC based their determinations.
Finally, the findings of fact of the Labor
Arbiter that Sabio was illegally dismissed by
ISECO Board of Directors were based on
substantial
evidence.
In
certiorari
proceedings under Rule 65 of the Rules of
Court, judicial review by this Court does not
go so far as to evaluate the sufficiency of
evidence upon which the Labor Arbiter and
the NLRC based their determinations, the
inquiry being limited essentially to whether
or not said public respondents had acted
without or in excess of its jurisdiction or with
grave abuse of discretion. More importantly,
this Court is bound by the findings of fact
there being no showing that either the Labor
Arbiter or the NLRC gravely abused its
discretion or otherwise acted without
jurisdiction or in excess of the same.
PETITION for certiorari to review a decision
of
the
National
Labor
Relations
Commission.
The facts are stated in the opinion of the
Court.
Zenon S. Suarez for petitioners.
KAPUNAN, J.:
This is a petition for certiorari questioning
the jurisdiction of the National Labor
Relations Commission over termination
cases involving employees of electric
cooperatives.
Briefly, the facts of the case are as follows:
Engr. Egdon Sabio was employed as
Manager of the Engineering Department of
Ilocos Sur Electric Cooperative (ISECO),
herein petitioner, in May 1982. He was
relieved of his duties on June 10, 1989 and

was dismissed on July 1, 1989 pursuant to

ISECO's Board Resolution No. 63 s. 1989
dated July 19, 1989.
It appears that on June 8, 1989, Sabio
wrote to the ISECO Board of Directors, thru
its President, Atty. Manuel Agpalo, about the
expenses incurred by Acting General
Manager, Atty. Efren Bautista, in the total
amount of P131,788.79 from May 1988 to
May 1989 for his travel to the Office of the
National Electrification Administration (NEA)
and places outside the area serviced by the
cooperative. Sabio revealed that in one
year, Bautista was away for two hundred
twenty (220) days, while, in contrast, the
previous Acting General Manager, Genaro
Cada, who stayed out of the cooperative for
not more than thirty (30) days for the same
length of time spent not more than ten
thousand pesos (P10,000.00).
On June 9, 1989, Bautista summoned
Sabio to his office and asked him to file a
letter of irrevocable resignation with the
assurance that separation benefits will be
granted to him. Bautista also suggested to
Sabio to apply as Acting General Manager
of Abra Electric Cooperative. When asked
why he made such request, Bautista could
not give any satisfactory answer. Bautista
also offered Sabio a one-month vacation
leave with pay, but Sabio refused the offer.
Bautista made known that the resignation
letter or the application for leave must be in
before 9:00 in the morning of June 10. With
or without the letter of resignation or
application for leave, Sabio was told, he
would be terminated just the same.
Instead of filing either, Sabio on June 10,
1989 sent a letter of apology2 to Bautista
with copies furnished to the Board of
Directors, Department Managers and SubArea Managers, but maintaining that he had
not violated any of the cooperative's rules
and regulations.3 However, on that same

day Sabio received Memo No. 47-80 from

Bautista, relieving him from his position as
Engineering Manager without giving any
reason.4
On June 16, 1989, Bautista issued Memo
No. 55-89 requiring Sabio to explain in
writing within 24 hours upon receipt why he
should not be separated from the service for
grave
and
serious
misconduct
for
committing the following acts:
1. Unauthorized assumption of authority and
power to relay message through the Radio
Operator when such authority is exclusively
reposed to (sic) the General Manager or his
duly
authorized
representative
for
confidentiality of communication.
2. Unauthorized assumption of power and
authority by requesting NEA for my
replacement of another NEA Manager with
the caliber of Engr. Genaro O. Cada, when
such authority is exclusively reposed and
vested to (sic) the Board of Directors as a
corporate body for a corporate action which
authority you arrogated upon yourself
without authority.
3. Your alleged solicitation of signatures to
the petition for my replacement with another
NEA Manager, personally or thru linemen
from personnel of Main Office and subofficers during office hours, hampering the
operation of their respective offices, causing
confusion and diversion among rank and
file, factionalism among supervisors,
endangering the positive gains of the coop
as proven by the 25% system loss for the
months of March, April and May which
ultimately and finally will lead to the downfall
and disintegration of ISECO as in the part
(sic), of which you are very well aware of,
and part of the confusion, leading to the
disconnection of ISECO by NPC and
depriving the coop employees of the
benefits they are now receiving/enj oying.

4. Your failure to coordinate with NPC on

the higher contracted energy and demand
for power allocating to NPC when NPC
deferred its operation for one month causing
NPC to penalize ISECO in the amount of
P139,000.00 for failure to use the higher
contracted energy and demand allocation
for NPC.5
On June 24,1989, Sabio submitted his
answer denying all the charges against him.
On June 30, 1989 Bautista placed him
under preventive suspension without pay
effective July 1, 1989, which prompted
Sabio to file a complaint for illegal
suspension
and
a
claim
for
representation/travel allowances before the
Labor Arbiter. On July 13, 1989 Bautista
issued Office Memo No. 69-89, creating an
ad hoc committee, to investigate the case
against Sabio. Thereafter, the ad hoc
committee submitted a report of its
investigation containing the following
conclusions and recommendation, to wit:
CONCLUSIONS:
In view of the foregoing the AD HOC
Committee finds that:
1. Engr. Egdon Sabio is guilty of No. 2, of VI
of the Rules and Regulations governing the
conduct of employees for willfully ordering
his subordinate, Mr. Onofre Habon (Annex
1) to type a petition for the ouster of AGM
Bautista for his allegedly being extravagant
a charge which he failed to substantiate.
2. Egdon Sabio did indeed solicit signatures
of employees to a petition for the ouster of
the AGM, as shown and verified by the
execution of affidavits of at least 6
employees (annex 2) which act is inimical to
the smooth operation of the cooperative as
it promotes divisiveness among the
employees.

3. Egdon Sabio ordered the radio operator

to transmit a radio message quoted as
follows:
From: ISECO Concerned employees
To: NEA Administrator
Please send another GM with a caliber
of GM. Cada. Present GM is gastador.
EGDON SABIO
Although such message is not in the
possession of the Radio Operator, an
affidavit to this effect has been executed
(Annex 3). The actuation is corroborated by
Egdon Sabio himself when he sent a letter
of Apology addressed to AGM Bautista
(Annex 9). Premises above-stated, Egdon
Sabio is also guilty of Board Policy No. 3-3
dated November 3, 1974 specifically "and
all other acts prejudicial to the interest and
welfare of the coop and such other grounds
as provided by existing laws" (Annex 14).
4. For gross negligence of duty; for failure to
coordinate with the National Power
Corporation on the anticipated lean period,
causing the Coop to lose P139-T which it
could have been avoided if proper
representation was made earlier (see letter
of Engr. Cu undated). All these factors
contribute to loss of trust and confidence on
Egdon Sabio which is punishable by
dismissal as per labor laws.
5. Egdon Sabio is also guilty of No. 2 of VI
of the Rules and Regulations governing the
conduct of employees for airing publicly
over station DWRS derogatory remarks and
malicious
accusations
against
AGM
Bautista, his superior. Especially that the
informations being fed to media are
incorrect.
RECOMMENDATION:
Human considerations taken into account, it
would best serve the best interest of the
cooperative if Egdon Sabio be DISMISSED
if only to serve as a precedent and/or stern
warning to all employees especially from

among the staff, not to indulge themselves

in any act which could be detrimental to the
welfare of the coop by using their influence
or their subordinates to attain their personal
ambitions or whatever purposes, regardless
of whether they have valid grounds or none
at all.6
On July 27, 1989, Bautista recommended to
the ISECO Board of Directors the approval
of the report and recommendation of the ad
hoc committee. On July 29, 1989, the Board
adopted the recommendation of the ad hoc
committee and passed Resolution No. 63 s.
1989, terminating the services of Sabio
retroactive July 1, 1989.7 Consequently,
Sabio filed a complaint for illegal dismissal
with claim for damages against petitioner
with respondent National Labor Relations
Commission (NLRC), docketed as NLRC
Case No. RAB-1-07-1050-89, which was
assigned to Labor Arbiter Amado T.
Adquilen of the Regional Arbitration Branch,
DOLE, for compulsory arbitration.
On January 8, 1990, the Labor Arbiter, after
considering the evidence on record, held in
his decision dated January 8, 19908 that
Sabio was illegally and unjustly dismissed
without due process of law. The dispositive
portion of the decision reads:
WHEREFORE, with all the foregoing
considerations, we hereby order the
respondents
Ilocos
Sur
Electric
Cooperative, Inc. (ISECO) and/or AGM
Efren Bautista as follows:
1. To reinstate complainant Engr. Egdon
Sabio to his former position as ISECO
Engineering Department Manager, without
loss of seniority rights and to pay him full
backwages in the amount of THIRTY
THREE THOUSAND TWENTY PESOS
(P33,020.00) plus medical, rice allowances,
1989 13th month pay balance as well as all
other benefits/bonuses customarily granted
to employees by ISECO as a matter of

company policy and established practice;

and
2. To pay complainant THIRTY THOUSAND
PESOS (P30,000.00) as moral and
exemplary damages.
SO ORDERED.
Petitioners appealed to the National Labor
Relations Commission which, in a resolution
promulgated June 26,19909 dismissed the
appeal for having been filed out of time. The
NLRC found that petitioners received a copy
of the Labor Arbiter's decision on January
20, 1990 but interposed their appeal only on
January 31, 1990, which was beyond the
ten-day period prescribed by the Revised
Rules of the NLRC, specifically Rule VIII,
Section I(a). A motion for reconsideration
was, likewise, denied by the NLRC in its
resolution of November 16,1990.10 A notice
of appeal to the President was filed. This
was merely noted by the Commission. On
June 24, 1991, a petition for the issuance of
a writ of execution was submitted by Sabio.
Upon computation of the exact amount to
be awarded to Sabio, the Executive Labor
Arbiter issued a writ of execution dated April
13, 1992, to wit:
WHEREFORE, let writ of execution issue in
order to effect the following:
1. The reinstatement aspect of the decision
of the Labor Arbiter dated January 8, 1990;
and
2. The payment of the monetary award due
the complainant in the total amount of
P74,487.50, as also decreed in said
decision.
SO ORDERED.
Thus, this petition which raises the following
issues:
1. Whether or not the NLRC has jurisdiction
over the case of Engr. Egdon A. Sabio.
2. Whether or not Engr. Egdon A. Sabio was
dismissed by the Board of Directors of
ISECO in accordance with law.

The petition is devoid of merit.

Presidential Decree No. 269, as amended
by P.D. 1645, relied upon by petitioners,
does not apply in this case. Said Decree
pertains to NEA's exercise of its power of
supervision and control over electric
cooperatives.
Thus, Section 10, of P.D. 269, as amended,
provides:
Enforcement Powers and Remedies. In the
exercise of its power of supervision and
control over electric cooperatives and other
borrower, supervised or controlled entities,
the NEA is empowered to issue orders,
rules and regulations and motu propio or
upon petition of third parties, to conduct
investigations, referenda and other similar
actions in all matters affecting said electric
cooperatives and other borrower, or
supervised or controlled entities.
If the electric cooperative concerned or
other similar entity fails after due notice to
comply with NEA orders, rules and
regulations and/ or decisions, or with any of
the terms of the Loan Agreement, the NEA
Board of Administrators may avail of any or
all of the following remedies:
xxx
xxx
xxx
(e) Take preventive and/or disciplinary
measures including suspension and/or
removal and replacement of any or all the
members of the Board of Directors, officers
or employees of the Cooperative, other
borrower
institutions
or
supervised
controlled entities as the NEA Board of
Administrator may deem fit and necessary
and to take any other remedial measures as
the law or the Loan Agreement may provide.
(Italics supplied.)
It is clear from the aforequoted provision of
P.D. 269, as amended by P.D. 1645 that
only the power of supervision and control
over electric cooperatives and other
borrowers, supervised or controlled, is given

to the NEA. There is nothing in said law

which provides that the NEA administration
has the power to hear and decide
termination cases of employees in electric
cooperatives. That authority is vested in the
Labor Arbiter.
In the present case, there is no dispute that
Sabio is an employee of ISECO whose
services as manager of the Engineering
Department of ISECO were terminated. The
dismissal arose from a purely labor dispute
which falls within the original and exclusive
jurisdiction of the Labor Arbiters and the
NLRC. Thus, Article 217 of the Labor Code
provides:
ART. 217. Jurisdiction of Labor Arbiters and
the Commission.(a) Except as otherwise
provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction
to hear and decide, within thirty (30)
calendar days after the submission of the
case by the parties for decision without
extension, even in the absence of
stenographic notes, the following cases
involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
xxx
xxx
x x x.
Moreover, the NLRC's jurisdiction was only
raised for the first time in this petition.
Petitioners did not question the jurisdiction
of the Labor Arbiter either in a motion to
dismiss or in their answer. In fact,
petitioners participated in the proceedings
before the Labor Arbiter, as well as in the
NLRC to which they appealed the Labor
Arbiter's decision. It has been consistently
held by this Court that while jurisdiction may
be assailed at any stage, a party's active
participation in the proceedings before a
court without jurisdiction will estop such
party from assailing such lack of it.12 It is an
undesirable practice of a party participating

in the proceedings and submitting his case

for decision and then accepting the
judgment, only if favorable, and attacking it
for lack of jurisdiction, when adverse.
Petitioners also claim that the dismissal of
Sabio was an exercise of management
prerogative under Article 283 of the Labor
Code. We do not agree.
Well settled is the rule that the employer's
prerogative/power to dismiss an employee
must not be exercised arbitrarily and without
just cause, otherwise the constitutional
guarantee of security of tenure would be
rendered nugatory.14 Moreover, it must be
done without abuse of discretion.
In the case at bench, records show that
petitioner Bautista acted with grave abuse
of discretion in having Sabio dismissed.
After Sabio denounced the excessive
expenditures of Bautista for one year and
his (Bautista) absences totalling 220 days
for the same period, he was called by
Bautista himself who told him to resign and
when asked for the reason why he was
being asked to do so, Bautista was not able
to answer and instead, gave another option
to Sabio, that is, for Sabio to take a vacation
leave. Failing to convince Sabio, Bautista
informed him that he would be terminated
just the same.
It should be noted that the ad hoc
committee
which
recommended
the
dismissal of Sabio was composed of
Bautista's men and, in fact, two of them
executed affidavits in favor of Bautista.
The
factual
circumstances
clearly
demonstrate that petitioners arbitrarily
exercised their prerogative in dismissing
Sabio.
Article 283 of the Labor Code on which the
dismissal of Sabio was claimed to have
been anchored, states:
Art. 283. Closure of establishments and
reduction of personnel.The employer may

also terminate the employment of any

employee due to the installation of labor
saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation
of operation of the establishment or
undertaking unless the closing is for the
purpose of circumventing the provisions of
this Title, by serving a written notice on the
workers and the Ministry of Labor and
Employment (now Department of Labor and
Employment) at least one (1) month before
the intended date thereof. x x x. (Italics
supplied)
Here, the instances when the employer may
validly terminate the employment of an
employee in the exercise of management
prerogative are not present. Petitioners
claim that the position of Sabio as Manager
of the Engineering Department was already
deleted or abolished. However, the
memorandum dated January 15, 199018
which contained the recommendations for
reorganization and replacement of ISECO
personnel did not satisfactorily explain or
give a credible justification why the
Engineering Department was abolished. As
correctly observed by the Solicitor General,
there was merely a change in nomenclature
from
"Engineering
Department"
to
"Technical Services Department" while the
classifications of the other departments,
namely, Administrative, Finance and
Member Services were retained. As there
was no evidence presented to show that the
abolishment of the Engineering Department
was due to the installation of labor saving
devices, redundancy, retrenchment to
prevent losses or the closing or cessation of
operation of the establishment, then said
deletion of the position of Sabio cannot be
said to be a proper exercise of management
prerogative. Thus, the dismissal of Sabio
was illegal. On this point, we quote with
favor the findings of the Labor Arbiter:

On the first issue, we find complainant

illegally and unjustly dismissed and without
due process of law. Gleaned from the facts
presented and the evidence adduced,
respondents anchored the dismissal of
complainant on the alleged overt (sic) acts
of unauthorized assumption of authority and
power to relay message through the Radio
Operator when such authority is exclusively
reposed to the General Manager or his duly
authorized representative for confidentiality
of information; unauthorized assumption of
power and authority by requesting NEA for
the replacement of respondent AGM
Bautista when such authority is exclusively
reposed and vested to the Board of
Directors as a corporate body for a
corporate
action
which
complainant
arrogated unto himself without authority;
alleged solicitation of signatures to the
petition for the replacement of AGM
Bautista, personally or thru linemen from
Personnel of Main Office and Sub-Offices
during office hours, hampering the operation
of their respective offices, causing confusion
and diversion among rank and file
employees,
factionalism
among
supervisors, endangering the positive gains
of the cooperative as proven by the 25%
system loss for the months March, April and
May which ultimately and finally will lead to
the downfall and disintegration of ISECO
and as part of the confusion lead to the
disconnection of ISECO by the National
Power Corporation and depriving the
cooperative employees of the benefits they
are now enjoying; and, the alleged failure of
complainant to coordinate with the NPC on
the higher contracted energy and demand
for power allocation to NPC when National
Tobacco Corporation deferred its operation
for one month causing the NPC to penalize
ISECO in the amount of P139,000.00 for
failure to use the higher contracted energy

and demand allocation for National Tobacco

Corporation. All these accusations were
ably refuted by complainant and the record
is bereft of any substantial evidence to show
complainant's alleged offenses. Indeed,
nowhere in the record shows that
complainant sent unauthorized messages or
communication duly signed by him and
relayed through the radio operator to the
NEA or to any other agency. Nor is there
any showing that Engr. Sabio prepared any
letter/request or petition for the replacement
of respondent Bautista as ISECO Acting
General Manager. What is clear and
revealing though, and respondent admits, is
that AGM Bautista called the complainant to
his office on June 9, 1989, a day after
complainant wrote Atty. Manuel Agpalo,
President of the ISECO Board of Directors,
about the expenses of AGM Bautista in the
amount of P131,788.79 covering the period
May 1988 to May 1989 and his absences
totalling two hundred twenty (220) days as
compared to the expenses of the previous
Acting General Manager Genaro O. Cada
which is only P10,000.00 more or less
covering the same span of time. On this
occasion, AGM Bautista tried to convince
the complainant to resign so he could paid
(sic) all his separation benefits or that
complainant may apply as Acting General
Manager of the Abra Electric Cooperative.
But when complainant inquired as to the
reason why he is being asked to resign,
respondent Bautista cannot give an answer
and again presented another option to
complainant for the latter to file his vacation
leave immediately or on or before 10:00
o'clock in the morning of the following day
(June 10, 1989). And failing to convince
complainant either to resign or file his
vacation leave, AGM Bautista informed
complainant that he (Bautista) will terminate
him just the same. These acts of

respondent Bautista, taken together, clearly

manifest and indubitably show his desire to
ease out complainant from his job. And true
enough, he carried out his scheme and
succeeded in having complainant eventually
terminated by issuing his Office Order to
that effect in successionfirstly, by relieving
complainant thru Memorandum No. 47-89,
dated June 10, 1989, immediately and
directing him to turn over all the documents
and accountabilities in his (complainant)
possession to the designated OIC, Engr.
Fred R. Jacob. The said relief memo does
not contain any reason why complainant is
being relieved from his job; secondly, by
placing complainant under preventive
suspension effective July 1, 1989 for 30
days as per Official Order No. 143-89 dated
June 29,1989 on the sole ground that
complainant's explanation in compliance to
Memo No. 55-89 dated June 16,1989 is
allegedly satisfactory; thirdly, creating an Ad
Hoc Committee thru Office Memo No. 68-89
dated July 13, 1989 to investigate the
complainant which is composed of his own
chosen men two (2) of whom, before being
named as members of the Ad Hoc
Committee, executed affidavits in favor of
AGM Bautista. Hesitantly, complainant did
not submit himself to the Ad Hoc Committee
for it is evident that the body cannot act
objectively on his case. While AGM Bautista
maybe clothed with the authority to create
the same and appoint members thereto,
fairness demands and prudence dictates
that
the
members
composing
the
investigating body should be free from any
cloud of doubt of being partial, nay,
subservient to the appointing authority and
biased
against
the
person
under
investigation. This is not so in this case. As
heretofore mentioned, two members had
previously executed their written support in
favor of AGM Bautista which they have

coupled with their strongly worded

subsequent recommendation for the ouster
of complainant after their 'ex-parte'
investigation which ended with their verdict,
thus x x x
'regardless of whether they have valid
grounds or none at all/ A perusal of this
portion of the Ad Hoc Committee's
recommendation, read together with the rest
of the committee's disposition and taking
into account all the attendant circumstances
of the issue they have delved upon, creates
the impression that within the ISECO, even
legitimate grievances from employees as
what complainant did in this instant case,
seemingly, cannot be tolerated. It is too
clear that the main reason complainant
earned the ire and disgust of respondent
AGM Bautista is his courage in bringing to
the attention of the ISECO Board of
Directors what he believed as extravagance
on the part of respondent Acting General
Manager and his absences from his ISECO
office for 220 days covering the period May
26, 1988 to May 25, 1989/ and spending the
amount of P131,732.79 as compared to the
expenses and absences of the former
Acting General Manager who spent no more
than P 10,000.00 and stayed out of his
ISECO office for not more than 30-days
covering almost the same period of time in
comparison. Clearly, the complainant was
acting in good faith and merely exercising
his bounden duty, as he puts it in his letter
of apology and explanation, to protect the
interest of the cooperative of which he is a
member-consumer and incidentally its
employee.
Finally, the findings of fact of the Labor
Arbiter that Sabio was illegally dismissed by
ISECO Board of Directors were based on
substantial
evidence.
In
certiorari
proceedings under Rule 65 of the Rules of
Court, judicial review by this Court does not

go so far as to evaluate the sufficiency of

evidence upon which the Labor Arbiter and
the NLRC based their determinations, the
inquiry being limited essentially to whether
or not said public respondents had acted
without or in excess of its jurisdiction or with
grave abuse of discretion.20 More
importantly, this Court is bound by the
findings of fact there being no showing that
either the Labor Arbiter or the NLRC gravely
abused its discretion or otherwise acted
without jurisdiction or in excess of the same.
WHEREFORE, premises considered, the
petition is hereby DISMISSED for lack of
merit.
SO ORDERED.

G.R. No. 127373. March 25, 1999.*

ENERGY REGULATORY BOARD and
ILIGAN LIGHT & POWER, INC.,
petitioners, vs. COURT OF APPEALS and
ASSOCIATION OF MINDANAO
INDUSTRIES (AMI), representing among
others the following member-companies:
ALSON/ILIGAN CEMENT CORP.,
MABUHAY VINYL CORP., MCCI CORP.,
MINDANAO FERROALLOY CORP., and
NATIONAL STEEL CORP., respondents.
Administrative Law; Jurisdiction; The NPC is
not the proper authority to hear and decide
cases involving direct power connection.
While the core question raised in these
consolidated cases was whether the NPC
could supply power directly to the PIE-MO
area where CEPALCO had a franchise, we
find the Courts pronouncements on them
relevant to the instant controversy. Corollary
to the main question was the issue of
whether the NPC had the power to hear and
decide cases involving direct power
connection. This Court held that the NPC is
not the proper authority x x x, not only
because the subject matter of the hearing is

a matter involving the NPC itself, but also

because the law has created the proper
administrative body vested with authority to
conduct a hearing.
Same; Same; It is now the Department of
Energy that has jurisdiction over the
regulation of the marketing and the
distribution of energy resources.The
foregoing sufficiently indicates that it is now
the Department of Energy that has
jurisdiction over the regulation of the
marketing and the distribution of energy
resources. It may be true that this function
formerly belonged to the ERB, by virtue of
the Cabinet Policy Reforms in the Energy
Sector
embodied
in
the
Cabinet
Memorandum of January 23, 1987, and EO
172 issued May 8, 1987. However, pursuant
to Section 18 of RA 7638, which was
subsequently enacted by Congress on
December 9, 1992, the non-rate-fixing
jurisdiction, powers and functions of the
ERB have been transferred to the
Department of Energy. The applications for
the NPCs direct supply or disconnection of
power involve essentially the distribution of
energy resources, not by any incident the
determination of power rates. Consequently,
these applications must be resolved by the
DOE.
SUPREME
COURT
REPORTS
ANNOTATED
Energy Regulatory Board vs. Court of
Appeals
PETITION for review on certiorari of a
decision of the Court of Appeals.
The facts are stated in the opinion of the
Court.
Quiason, Makalintal, Barot, Torres &
Ibarra for petitioners.
Bengzon, Narciso, Cudala, Jimenez,
Gonzales
&
Liwanag
for
private
respondents.
PANGANIBAN, J.:

Normally, electric power generated by the

National Power Corporation (NPC) is sold
through private utility firms authorized to
operate within a franchise area. In the
present case, the private respondents
bypassed the franchise holder in their area
and obtained power directly from the NPC.
Petitioner, on the other hand, wants a
disconnection of such direct supply. Which
agency of the government has jurisdiction to
hear and decide the dispute-the Energy
Regulatory Board (ERB) or the Department
of Energy (DOE)?
The Case
This is the main question posed in the
Petition for Review before us, which seeks
to set aside the September 27, 1994
Decision1 and November 19, 1996
Resolution2 of the Court of Appeals3 (CA)
in CA-GR SP No. 33969. In its assailed
Decision, the CA held that it was the DOE,
no longer the ERB, which had jurisdiction
over direct connection and disconnection
issues. The dispositive portion of its
Decision reads
IN VIEW OF ALL THE FOREGOING, the
instant petition for certiorari and prohibition
is GRANTED. Accordingly, the order dated
April 7, 1994 of respondent Energy
Regulatory Board in ERB Case No. 93-97
entitled In re: Petition for Implementation of
Cabinet Policy Reforms in the Power
Sector, is ANNULLED and SET ASIDE, and
said respondent ERB is directed to cease
and desist from proceeding with the trial of
and to dismiss said ERB Case No. 93-97 for
lack of jurisdiction over the subject matter of
the petition therein.
The assailed Resolution denied the motions
for reconsideration filed separately by the
ERB and the Iligan Light and Power, Inc.
(ILPI).
The Facts

The factual antecedents of this case are not

disputed. They are related by the CA as
follows:5
x x x The members of the Association of
Mindanao Industries are enterprises based
in Mindanao and registered with the Board
of Investments which were among those
granted direct connection facility by the
National Power Corporation although
operating within the franchise area of
private respondent Iligan Light and Power,
Inc. (Iligan for short).
On October 12, 1993, Iligan filed with the
respondent Energy Regulatory Board (ERB
for short) a petition for the implementation of
the 1987 Cabinet Policy Reforms in the
Power Sector, docketed as ERB-93-97,
praying specifically that the direct supply of
power to industries within its franchise area
be discontinued by the National Power
Corporation (NPC, for short).
The Cabinet Policy Reforms referred to
were among those approved by the
President of the Philippines and her cabinet
on January 21, 1987, the pertinent portion
of which is quoted as follows:
2. Continue direct connections for
industries authorized under the BOI-NPC
Memorandum of Understanding of 12
January 1981, until such time as the
appropriate regulatory board determines
that direct connection of industry to NPC is
no longer necessary in the franchise area of
the specific utility or cooperative meeting
standards of financial and technical
capability, with satisfactory guarantees of
non-prejudice to industry, to be set in
consultation with NPC and relevant
government agencies; and reviewed
periodically by the regulatory board. x x x
In its Petition, ILPI alleged, inter alia, that it
can meet, even surpass, the set of financial
standards adopted by the ERB pursuant to

the policy guidelines set by the Cabinet x x

x.
AMI filed its Answer with Affirmative
Defenses and/or Motion to Dismiss,
without accepting jurisdiction of the
Honorable Board over the subject matter of
the petition, on the following grounds, to
wit: 1) lack of jurisdiction to hear the petition
for implementation of Cabinet Policy
Reforms in the Power Sector following the
transfer of its non-price regulatory
jurisdiction and functions to the Department
of Energy under Rep. Act No. 7638; 2) the
petition failed to state a cause of action for
non-averment of petitioners ability and
willingness to match the rates of NPC; and
3) non-joinder of indispensable parties x x x.
On January 4, 1994, the ERB denied in
open court AMIs motion to dismiss the
petition. Likewise, AMIs motion for
reconsideration was denied by the ERB in
its order dated April 7, 1994 x x x. Hence,
the instant petition for certiorari and
prohibition to annul the aforesaid order
dated April 7, 1994 and to prohibit
respondent ERB from proceeding with the
hearing of ILPIs petition.
Ruling of the Court of Appeals
The appellate court justified its ruling in
favor of private respondents in this wise:6
To resolve the issues raised in the case at
bar, it is necessary to first characterize the
petition filed by ILPI with the respondent
[herein petitioner] ERB. It seems quite clear
that ILPI sought therein to discontinue the
direct supply of power by the NPC to
BOIregistered enterprises operating within
its (ILPIs) franchise area. Although the
petition is styled as one seeking the
implementation of the Cabinet Policy
Reforms in the Power Sector, the core of
the action, as well as the ultimate relief
sought, is related to the distribution or
marketing of energy resources. The matter

treated is thus not concerned with the fixing

of power rates. Under the applicable
provisions of law, the matter of direct supply
of power, which is a ma[tt]er of energy
distribution and which is undoubtedly a nonprice regulatory matter, is among those
granted to the jurisdiction of the Department
of Energy under Republic Act No. 7638.
The ERB and the ILPI filed their separate
motions for reconsideration, which were,
however, denied in the assailed November
19, 1996 Resolution of respondent court.
Hence, this petition.7
Issues
Petitioner ILPI presents the following issues
for resolution:8
I
WHETHER THE COURT OF APPEALS
ERRED IN HOLDING THAT THE ERB HAS
NO JURISDICTION TO HEAR AND
DECIDE
CASES
INVOLVING
THE
IMPLEMENTATION OF THE POLICY
REFORMS;
II
WHETHER THE POLICY REFORMS
COULD VALIDLY CONFER ON THE ERB
THE AUTHORITY TO DETERMINE THAT
NPC DIRECT CONNECTIONS ARE NO
LONGER NECESSARY;
III
WHETHER THE DECISION IN THE NPC
AND PHIVIDEC CASES IS APPLICABLE
TO THIS CASE.
In sum, the pivotal issue in this case, as
stated by Petitioner ERB, is whether the
ERB has jurisdiction to hear and decide
cases involving direct connection issues.
The Courts Ruling
The petition has failed to show any
reversible error on the part of the Court of
Appeals.

Main Issue: Jurisdiction

Petitioners submit that ERBs jurisdiction to
hear and decide cases on direct connection
of power supply with the NPC was
conferred by the January 23, 1987 Cabinet
Memorandum approving a set of policy
reforms in the power sector, specifically
Item No. 2 thereof which provides:
Continue direct connection for industries
authorized
under
the
BOI-NPC
Memorandum of Understanding of 12
January 1981 until such time as the
appropriate regulatory board determines
that direct connection of industry to NPC is
no longer necessary in the franchise area of
the specific utility or cooperative. x x x
Petitioners claim that RA 7638 transferred to
the DOE the ERBs non-price regulatory
powers and functions relative to the
petroleum industry only, as enumerated
under Section 3 of Executive Order No. 172
(EO 172), which they quote as follows:
Section 3. Jurisdiction, Powers and
Functions of the Board.[W]hen warranted
and only when public necessity requires, the
Board may regulate the business of
importing, exporting, reexporting, shipping,
transporting, processing, refining, marketing
and distributing energy resources. Energy
resource means any substance or
phenomenon which by itself or in
combination with others, or after processing
or refining or the application to it of
technology, emanates, generates, or causes
the emanation or generation of energy, such
as but not limited to petroleum or petroleum
products, coal, marsh gas, methane gas,
geothermal and hydroelectric sources of
energy, uranium and other similar
radioactive materials, solar energy, tidal
power, as well as non-conventional existing
and potential sources.

The Board shall, upon proper notice and

hearing, exercise the following, among other
powers and functions:
a) Fix and regulate the prices of petroleum
products;
b) Fix and regulate the rate schedule or
prices of piped gas to be charged by duly
franchised gas companies which distribute
gas by means of underground pipe system;
c) Fix and regulate the rates of pipeline
concessionaires under the provisions of
Republic Act No. 387, as amended,
otherwise known as the Petroleum Act of
1949, as amended by Presidential Decree
No. 1700;
d) Regulate the capacities of new refineries
that may be organized after the issuance of
this Executive Order, under such terms and
conditions as are consistent with the
national interest;
e) Whenever the Board has determined that
there is a shortage of any petroleum
product, or when public interest so requires,
it may take such steps as it may consider
necessary,
including
the
temporary
adjustment of the levels of prices of
petroleum products and the payment to the
Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or
entities engaged in the petroleum industry
of such amounts as may be determined by
the Board, which will enable the importer to
recover its cost of importation.
While conceding that the regulation of the
marketing and the distribution of energy
resources has been expressly transferred to
the DOE, petitioners contend, however, that
electric power is not an energy resource.
They allege that since the authority to pass
upon issues of direct electric power
connection was not mentioned at all in the
above-quoted provision, it could not have
been included among the functions given to
the DOE.

Respondents, on the other hand, insist that

jurisdiction over the connection issue in the
case at bar now belongs to the DOE. In
support of their stand, they cite the
consolidated cases (1) National Power
Corp. v. Court of Appeals and Cagayan
Electric Power and Light Co.9 and (2)
Phividec Industrial Authority v. Court of
Appeals and Cagayan Electric Power and
Light Co.,10 in which this Court stated:
The determination of which of the two
public utilities has the right to supply electric
power to an area which is within the
coverage of both is certainly not a rate fixing
function which should remain with ERB. It
deals with the regulation of the distribution
of energy resources which, under Executive
Order No. 172, was expressly a function of
ERB. However, with the enactment of
Republic Act No. 7638, the Department of
Energy took over such function. Hence, it is
this Department which should then
determine whether CEPALCO or PIA
[Phividec Industrial Authority] should supply
power to PIEMO [Phividec Industrial EstateMisamis Oriental].
Consequently, the Court disposed of the
consolidated cases as follows:11
WHEREFORE, both petitions in G.R. No[s].
112702 and 113613 are hereby DENIED.
The Department of Energy is directed to
conduct a hearing with utmost dispatch to
determine whether it is the Cagayan Electric
Power and Light Co., Inc. or the National
Power Corporation, through the PHIVIDEC
Industrial Authority, which should supply
electric power to the industries in the
PHIVIDEC
Industrial
Estate-Misamis
Oriental.
While the core question raised in these
consolidated cases was whether the NPC
could supply power directly to the PIEMO
area where CEPALCO had a franchise, we
find the Courts pronouncements on them

relevant to the instant controversy. Corollary

to the main question was the issue of
whether the NPC had the power to hear and
decide cases involving direct power
connection. This Court held that the NPC is
not the proper authority x x x, not only
because the subject matter of the hearing is
a matter involving the NPC itself, but also
because the law has created the proper
administrative body vested with authority to
conduct a hearing.12 As to which was the
proper administrative body, the Court
made
the
following
illuminating
disquisition:13
The ERB, which used to be the Board of
Energy, is tasked with the following powers
and functions by Executive Order No. 172
which took effect immediately after its
issuance on May 8, 1987:
SEC. 3. Jurisdiction, Powers and Functions
of the Board.When warranted and only
when public necessity requires, the Board
may regulate the business of importing,
exporting,
re-exporting,
shipping,
transporting, processing, refining, marketing
and distributing energy resources. x x x
The Board shall, upon proper notice and
hearing, exercise the following, among other
powers and functions:
(a) Fix and regulate the prices of petroleum
products;
(b) Fix and regulate the rate schedule or
prices of piped gas to be charged by duly
franchised gas companies which distribute
gas by means of underground pipe system;
(c) Fix and regulate the rates of pipeline
concessionaires under the provisions of
Republic Act No. 387, as amended,
otherwise known as the Petroleum Act of
1949, as amended by Presidential Decree
No. 1700;
(d) Regulate the capacities of new refineries
or additional capacities of existing refineries
and license refineries that may be organized

after the issuance of this Executive Order,

under such terms and conditions as are
consistent with the national interest;
(e) Whenever the Board has determined
that there is a shortage of any petroleum
product, or when public interest so requires,
it may take such steps as it may consider
necessary,
including
the
temporary
adjustment of the levels of prices of
petroleum products and the payment to the
Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or
entities engaged in the petroleum industry
of such amounts as may be determined by
the Board, which will enable the importer to
recover its cost of importation.
As may be gleaned from said provisions,
the ERB is basically a price or rate-fixing
agency. Apparently recognizing this basic
function, Republic Act No. 7638 (An Act
Creating the Department of Energy,
Rationalizing
the
Organization
and
Functions of Government Agencies Related
to Energy, and for Other Purposes), which
was approved on December 9, 1992 and
which took effect fifteen days after its
complete publication in at least two (2)
national newspapers of general circulation,
specifically provides as follows:
SEC. 18. Rationalization or Transfer of
Functions of Attached or Related Agencies.
The non-price regulatory jurisdiction,
powers, and functions of the Energy
Regulatory Board as provided for in Section
3 of Executive Order No. 172 are hereby
transferred to the Department.
The foregoing transfer of powers and
functions shall include all applicable funds
and appropriations, records, equipment,
property, and such personnel as may be
necessary; Provided, That only such
amount of funds and appropriations of the
Board as well as only the personnel thereof
which are completely or primarily involved in

the exercise by said Board of its non-price

regulatory powers and functions shall be
affected by such transfer.
The power of the NPC to determine, fix,
and prescribe the rates being charged to its
customers under Section 4 of Republic Act
No. 6395, as amended, as well as the
power of electric cooperatives to fix rates
under Section 16 (o), Chapter II of
Presidential Decree No. 269, as amended,
are hereby transferred to the Energy
Regulatory Board. The Board shall exercise
its new powers only after due notice and
hearing and under the same procedure
provided for in Executive Order No. 172.
Upon the effectivity of Republic Act No.
7638, then Acting Chairman of the Energy
Coordinating
Council
Delfin
Lazaro
transmitted to the Department of Justice the
query of whether or not the non-power rate
powers and functions of the ERB are
included in the jurisdiction, powers and
functions transferred to the Department of
Energy. Answering the query in the
affirmative, the Department of Justice
rendered Opinion No. 22 dated February
12, 1993 the pertinent portion of which
states:
x x x we believe that since the provision of
Section 18 on the transfer of certain powers
and functions from ERB to DOE is clear and
unequivocal, and devoid of any ambiguity, in
the sense that it categorically refers to nonprice jurisdiction, powers and functions of
ERB under Section 3 of E.O. No. 172, there
is no room for interpretation, but only for
application, of the law. This is a cardinal rule
of statutory construction.
Clearly, the parameters of the transfer of
functions for ERB to DOE pursuant to
Section 18, are circumscribed by the
provision of Section 3 of E.O. No. 172
alone, so that, if there are other related
functions of ERB under other provisions of

E.O. No. 172 or other energy laws, these

related functions, which may conceivably
refer to what you call non-power rate
powers and functions of ERB, are clearly
not contemplated by Section 18 and are,
therefore, not to be deemed included in the
transfer of functions from ERB to DOE
under the said provision.
It may be argued that Section 26 of R.A.
No. 7638 contains a repealing clause which
provides that:
All laws, presidential decrees, executive
orders, rules and regulations, or parts
thereof, inconsistent with the provisions of
this Act, are hereby repealed or modified
accordingly. x x x.
and, therefore, all provisions of E.O. No.
172 and related laws which are inconsistent
with the policy, purpose and intent of R.A.
No. 7638 are deemed repealed. It has been
said, however, that a general repealing
clause of such nature does not operate as
an express repeal because it fails to identify
or designate the act or acts that are
intended to be repealed. Rather, it is a
clause which predicates the intended repeal
upon the condition that a substantial conflict
must be found[ed] on existing and prior acts
of the same subject matter. Such being the
case, the presumption against implied
repeals and the rule on strict construction
regarding implied repeals shall apply ex
proprio vigore. For the legislature is
presumed to know the existing laws so that,
if repeal of particular or specific laws is
intended, the proper step is to so express it.
The failure to add a specific repealing
clause particularly mentioning the statute to
be repealed indicates that the intent was not
to repeal any existing law on the matter,
unless an irreconcilable inconsistency and
repugnancy exists in the terms of the new
and the old laws (Iloilo Palay and Corn
Planters Association, Inc. vs. Feliciano, 13

SCRA 377; City of Naga vs. Agna, 71 SCRA

176, cited in Agpalo, Statutory Construction,
1990 Edition, pp. 191-192).
In view of the foregoing, it is our opinion
that only the non-price regulatory functions
of ERB under Section 3 of E.O. 172 are
transferred to the DOE. All the powers of
ERB which are not within the purview of its
non-price regulatory jurisdiction, powers
and functions as defined in Section 3 are
not so transferred to DOE and accordingly
remain vested in ERB.
The determination of which of two public
utilities has the right to supply electric power
to an area which is within the coverage of
both is certainly not a rate-fixing function
which should remain with the ERB. It deals
with the regulation of the distribution of
energy resources which, under Executive
Order No. 172, was expressly a function of
ERB. However, with the enactment of
Republic Act No. 7638, the Department of
Energy took over such function. Hence, it is
this Department which shall then determine
whether CEPALCO or PIA should supply
power to PIE-MO.
The foregoing sufficiently indicates that it is
now the Department of Energy that has
jurisdiction over the regulation of the
marketing and the distribution of energy
resources. It may be true that this function
formerly belonged to the ERB, by virtue of
the Cabinet Policy Reforms in the Energy
Sector
embodied
in
the
Cabinet
Memorandum of January 23, 1987, and EO
172 issued May 8, 1987. However, pursuant
to Section 18 of RA 7638, which was
subsequently enacted by Congress on
December 9, 1992, the non-rate-fixing
jurisdiction, powers and functions of the
ERB have been transferred to the
Department of Energy. The applications for
the NPCs direct supply or disconnection of
power involve essentially the distribution of

energy resources, not by any incident the

determination of power rates. Consequently,
these applications must be resolved by the
DOE.
It is of no moment that the petition instituted
by ILPI before the ERB was captioned for
the Implementation of the 1987 Cabinet
Policy Reforms in the Power Sector. The
relief it specifically sought was the
discontinuation of NPCs direct supply of
power to private respondents membercompanies. Definitely then, the distribution
of an energy resource was its main
purpose.
Neither does the Court agree with the
petitioners claim that the regulatory
functions of the ERB that were transferred
to the DOE concerned those relating to the
petroleum industry only and not to electric
power. Section 3 of EO 172 broadly defines
energy resource as any substance or
phenomenon which by itself or in
combination with others x x x emanates, [or]
generates x x x energy, x x x. Electric
power or electricity has been in turn defined
as an imponderable and invisible agent
producing
light,
heat,
chemical
decomposition,
and
other
physical
phenomena.14 Undoubtedly, electricity
produces or generates energy. By simple
logic, it is an energy resource. The
regulation of its distribution is, therefore,
among those functions formerly belonging
to the ERB, which have been transferred to
the DOE as expressly directed in Section 18
of RA 7638. Nowhere in this provision is
there any restriction of its scope to
petroleum and its products only. The
reference to petroleum is merely by way of
example of what an energy resource is. In
fact, the set of examples of energy
resources enumerated in the law is
prefaced with such as but not limited to.

This can only mean that the enumeration is

nonrestrictive.
Moreover, Section 5 of RA 7638 defines the
powers and functions of the DOE as follows:
SEC. 5. Powers and Functions.The
Department shall have the following powers
and functions:
xxx xxx xxx
(d) Exercise supervision and control over all
government activities relative to energy
projects in order to attain the goods
embodied in Section 2 of this Act.
(e) Regulate private sector activities relative
to energy projects as provided for under
existing
laws;
Provided,
That
the
Department shall endeavor to provide for an
environment conducive to free and active
private sector participation and involvement
in all energy activities.
As to what energy projects encompass,
Section 3 of the same law gives this
definition:
Sec. 3. Definition of Terms.(a) Energy
projects shall mean activities or projects
relative to the exploration, extraction,
production,
importation-exportation,
processing,
transportation,
marketing,
distribution,
utilization,
conservation,
stockpiling or storage of all forms of energy
products and resources. (Italics supplied).
Definitely, the exploration, the production,
the marketing, the distribution, the
utilization, or any other activity involving any
energy resource or product falls within the
supervision and control of the DOE.
WHEREFORE, the petition is hereby
DENIED and the assailed Decision is
AFFIRMED.
SO ORDERED.

ERDULFO C. BOISER, doing business

under the name and style PREMIERE
AUTOMATIC TELEPHONE NETWORK,

petitioner, vs. COURT OF APPEALS,

PHILIPPINE LONG DISTANCE
TELEPHONE CO., CONRADO
HERNANDEZ, ROMAN JUEZAN and
WILSON MORRELL, respondents.
Contracts; Jurisdiction; Whether or not the
notice requirements specified in the contract
was followed requires presentation of
evidence before the proper tribunal.It may
be noted that the above provision mentions
a default or violation continuing for thirty
days after written notice and the termination
of the agreement by another written notice.
There is nothing in the provision about the
period when such written notice should be
given by the party wishing to terminate.
Such period can be found in paragraph 13
of the Interconnecting Agreement quoted
earlier. Therefore, even granting that there
was default on the part of the petitioner, the
30-day requisite notice should have been
followed. Whether or not the requirement
was followed calls for the presentation of
evidence before the proper tribunal.
Jurisdiction; Administrative Law; Damages;
Communications;
The
National
Telecommunications Commission has no
authority to decide breach of contract cases
and to award moral and exemplary
damages.PLDT has cited in full the
authority and powers given by Presidential
Decree No. 1 to the Board of
Communications,
now
National
Telecommunications Commission. There is
nothing in the Commissions powers which
authorizes it to adjudicate breach of contract
cases, much less to award moral and
exemplary damages. The two authorities
cited by the private respondents in the bid to
dissolve the CFI restraining order do not
appear adequate to disregard the thirty (30)
day prior notice provided by the
Interconnecting Agreement. But even if they
were, this question is one which should be

clarified in the civil case for breach of

contract.
Same; Certiorari; Injunction, Failure of a
party to press urgently for lifting of a
restraining order militate against a finding of
grave abuse sufficient to justify a writ of
certiorari.The Court of First Instance of
Cebu issued its restraining order on March
2, 1979. The motion to lift the order was
filed five months later on August 2, 1979.
The motion was properly filed with the trial
court, but the lack of urgency in its filing and
the failure of the private respondents to
immediately and vigorously press for the
lifting of the restraining order militate against
a finding of grave abuse sufficient to justify
a writ of certiorari. The petitioners point out
that from the filing of the motion to lift
restraining order on August 2, 1979 up to
the filing of the petition for certiorari with the
Court of Appeals on July 20, 1982, almost
three years lapsed and in all that time, there
was no request, motion, nor hint for the trial
court to resolve the pending motion to lift
the restraining order.
Same; Same; Same; Same.Quite the
contrary, the private respondents submitted
to a trial on the merits and formally agreed
that, in addition to the merits, the motion to
dissolve or lift temporary restraining order
and the propriety of the writ of preliminary
injunction would be considered and
resolved in the trial of the case. The private
respondents
agreed
that
evidence
submitted during trial would include
evidence on the pending motion. In fact, the
petitioner was already in the process of
winding up its evidence before the Court of
First Instance when the private respondents
filed their petition with the Court of Appeals.
Private respondents handling of their case
dispels any suspicion of unreasonable delay
on the part of the Court of First Instance to
resolve such motion.

Same; Same; Same; Respondent PLDT has

not shown any special circumstance to
warrant intervention by a higher tribunal on
the preliminary injunction issued by the trial
court. Cutting off one connecting station will
not affect PLDTs national expansion
program.Special
circumstances
may
indeed warrant immediate intervention of a
higher court even while the lower court is
deliberating on the action to take on a
pending matter. (Matute v. Court of Appeals,
26 SCRA 768; De Gala-Sison v. Maddela,
67 SCRA 478). The private respondents,
however, have failed to make a showing of
such special or exceptional circumstances.
We fail to see how closing one relay station
serving the province of Bohol would hasten
PLDTs program of national expansion.
There are various other legal remedies,
administrative and judicial, available to
handle the alleged non-payment by
Premiere of PLDTs share in long distance
and overseas calls. The case before the
Court of Appeals is not the proper remedy
for enforcing collections from Premiere
under the circumstances of this case. And
more important, matters dependent on the
presentation of evidence are best handled
at the trial court level.
Same; Same; Communication; Public
Utilities; The telephone and communication
industry is affected by a high degree of
public interest which should not suffer from
a
dispute
between
two
telephone
companies.The
private
respondents
overlook the fact that telephone and
telecommunications services are affected
by a high degree of public interest. It is not
Premiere alone which will suffer from the
appellate injunction but the people of Bohol.
And as far as we can gather from the
records, the consumers have been paying
for the services given them. They are not at

fault in this controversy between Premiere

and PLDT.
Same; Same; Same; Same; Same.In the
petition now before us, we do not grapple
with such issues as legalization of illegal
services or compelling unwilling parties to
enter into interconnection of services. We
simply rule that pending final determination
of the case before the trial court, the
appellate court should refrain from acting on
the petition now before it and from issuing
orders that would punish the people of
Bohol because Premiere and PLDT cannot
see eye to eye.
PETITION for certiorari and prohibition with
preliminary injunction to review the order of
the Court of Appeals.
The facts are stated in the opinion of the
Court.
GUTIERREZ, JR., J.:
This is a petition for certiorari and
prohibition, with a prayer for preliminary
injunction or restraining order, to set aside
the July 26, 1982 resolution of the
respondent Court of Appeals which enjoined
the enforcement of a March 2, 1979
restraining order of the Court of First
Instance of Cebu. The resolution of the
Court of Appeals, in effect, allows the
disconnection of telephone communications
between Tagbilaran, Bohol and Mandaue,
Cebu
thus
cutting
telephone
communications with the rest of the country
and the world, for the duration of the
restraining order.
The petitioner has been operating a
telephone system in Tagbilaran City and
other municipalities in the province of Bohol
since April 15, 1965, doing business under
the name and style of Premiere Automatic
Telephone Network. Sometime in August,
1965, the petitioner and private respondent

Philippine
Long
Distance
Telephone
Company (PLDT) entered into a contract
denominated
as
Interconnecting
Agreement whereby PLDT bound itself to
provide Premiere with long distance and
overseas facilities through the use of the
PLDT relay station in Mandaue City,
Province of Cebu. The arrangement
enabled subscribers of Premiere in Bohol to
make or receive long distance and overseas
calls to and from any part of the Philippines
and other countries of the world. Petitioner
on the other hand had the obligation to
preserve and maintain the facilities provided
by respondent PLDT, provide relay
switching services and qualified radio
operators, and otherwise maintain the
required standards in the operation of
facilities under the agreement.
On February 27, 1979, without any prior
notice to the petitioner, respondent PLDT
issued a circuit authorization order to its
co-respondents, PLDT employees Roman
Juezan and Wilson Morrell to terminate the
connection of PLDTs relay station with the
facilities of the petitioners telephone system
in the province of Bohol. Petitioner avers
that this order was in gross violation of the
aforecited Interconnecting Agreement. To
avert serious consequences to the public
and private sectors resulting from any
disruption of the petitioners telephone
network and, of course, to the long distance
and overseas aspects of its business, the
petitioner was compelled to seek judicial
relief. It instituted Civil Case No. 17867 with
the then Court of First Instance of Cebu now
a Regional Trial Court, for injunction and
damages.
On March 2, 1979, the Court of First
Instance of Cebu issued a temporary
restraining order against respondent PLDT
and directed the preservation of the status
quo between the parties.

On August 2, 1979, or five (5) months after

the issuance of the temporary restraining
order, the private respondents filed a motion
to dissolve or lift the restraining order.
Thereafter, the petitioner and the private
respondents submitted the merits of the
main case to a hearing and agreed to
consider jointly in said trial on the merits the
motion to dissolve or lift temporary
restraining order including the propriety of
the issuance of the writ of preliminary
injunction.
The hearing on the merits progressed and
petitioner was already in the process of
winding up its evidence in Civil Case No.
17867 before the Court of First Instance,
Cebu when on July 20, 1982, or nearly
three (3) years after the filing of their motion
to dissolve or lift temporary restraining
order, the private respondents elevated the
case to the respondent Court of Appeals by
filing the petitioner for certiorari. CA-G.R.
No. 14554-SP.
The petition filed with the Court of Appeals
had for its object the setting aside of the CFI
restraining order which enjoined PLDT and
the other respondents from disconnecting
the
Mandaue-Tagbilaran
telephone
connections. The ground alleged in the
petition was:
RESPONDENT
JUDGE
HAS
NO
AUTHORITY
TO
ISSUE
THE
RESTRAINING ORDER, DATED MARCH
2, 1979, CONSIDERING THAT THE ISSUE
OR
SUBJECT-MATTER
OF
THE
COMPLAINT FOR WHICH THE SAID
ORDER
WAS
ISSUED
PROPERLY
DEVOLVES WITHIN THE JURISDICTION
OF
THE
NATIONAL
TELECOMMUNICATIONS COMMISSION
AND
NOT
WITH THE
REGULAR
COURTS. THE REGULAR COURTS.

As earlier mentioned, the respondent Court

of Appeals issued its July 26, 1982
resolution which reads:
Without necessarily giving the course to the
petition, respondents are directed to file
their Comments (not a motion to dismiss),
sufficient in form and substance to
constitute an answer, within ten (10) days
from notice of this resolution.
Meanwhile, the respondents are restrained
from enforcing the Order of March 2, 1979,
until further orders from Us.
The hearing of the application for the
issuance of a writ of preliminary injunction is
hereby set on August 10, 1982, x x x.
Subsequently, the hearing was re-set by the
respondent Court of Appeals for September
6, 1982. The petitioner countered by filing
this petition.
The petitioner states that the Court of
Appeals, now Intermediate Appellate Court,
should dismiss CA-G.R. No. 14554-SP on
the following grounds:
That the respondent Court of Appeals has
no jurisdiction or has committed a grave
abuse of discretion amounting to lack or in
excess of jurisdiction in taking cognizance
of CA-G.R. No. 14554-SP; and
That the petition CA-G.R. No. 14554-SP,
before respondent Court of Appeals (now
Intermediate Appellate Court) is premature
and has no legal and factual basis.
The jurisdictional issue raised by Premiere
in this petition is tied up to the jurisdictional
issue raised by PLDT in its petition filed with
the Court of Appeals.
According to PLDT, the principal issue in
dispute is the propriety or validity of the
Circuit Authorization Order it issued to its
own employees co-respondents Ramon
Juezan and Wilson Morrell regarding the
use of its own relay station by petitioner
Boiser. PLDT emphasizes, and this is the
main thrust of its case both here and below,

that the order which cut off the TagbilaranMandaue phone connections is an internal
transaction and business of PLDT, and that
it relates to a purely technical matter
pertaining basically to the operation of the
communications network of a public utility
corporation. According to PLDT, the CFI of
Cebu has arrogated upon itself the authority
of supervising or overseeing the operations
of PLDT at its Cebu relay station.
Respondent PLDT maintains that the
National Telecommunications Commission
is the body with jurisdiction to hear and
decide controversies arising from the
operation of telephone systems or the
interconnection of communications facilities,
not the Court of First Instance.
Petitioner Boiser or Premiere, in turn,
contends in the petition before this Court
that the CFI of Cebu acted within its
jurisdiction and there being no grave abuse
of discretion, the challenge to its
interlocutory order should not have been
entertained by the Court of Appeals.
In seeking the dissolution or lifting of the
March 2, 1979 CFI restraining order, PLDT
stated that the disconnection it effected was
authorized by:
(1) The interconnecting agreement between
PLDT and Premiere Automatic Telephone
Network, and
(2) The decision of the Board of
Communications dated July 29, 1977 in
BOC Case No. 76-53.
Paragraph 13 of the Interconnecting and
Operating Agreement between PLDT and
Premiere provides:
Violation of any of the conditions or terms of
this Agreement or of the Interconnecting
and Traffic Agreement attached hereto shall
constitute
sufficient
cause
for
the
cancellation of this Agreement and the
severance of connection on thirty (30) days
advance notice given in writing by either

party unless such violation creates manifest

hazard to life, property or to facilities of
transmission and reception in which event
severance may be made without notice.
Section 2 of the Intercollecting and Traffic
Agreement mentioned in the above
Paragraph 13, in turn, provides:
Sec. 2. If either company defaults in the
payment of any amounts hereunder or
violates any other provision of this
Agreement, and if such default or violation
continues for thirty (30) days after written
notice thereof, the other company may
terminate this Agreement forthwith by
written notice.
It may be noted that the above provision
mentions a default or violation continuing for
thirty days after written notice and the
termination of the agreement by another
written notice.
There is nothing in the provision about the
period when such written notice should be
given by the party wishing to terminate.
Such period can be found in paragraph 13
of the Interconnecting Agreement quoted
earlier. Therefore, even granting that there
was default on the part of the petitioner, the
30-day requisite notice should have been
followed. Whether or not the requirement
was followed calls for the presentation of
evidence before the proper tribunal.
The second authority for disconnection cited
by the private respondents is the decision in
BOC Case No. 76-53. The decision deals
with members of PAPTELCO, of which
petitioner is one who have outstanding
accounts with PLDT. The BOC decision
refers
to
outstanding
accounts
of
PAPTELCO members representing PLDTs
unremitted shares for domestic long
distance and overseas calls. The pertinent
provision of the decision is Sec. 3(f) which
states that:

In addition to the penalty clause imposed

under the preceding paragraph, if any
PAPTELCO member neglects or fails to
comply with obligations under this
Agreement, its service may be disconnected
by PLDT after sixty (60) days written notice
to said PAPTELCO member, unless its
delinquency shall have been fully paid or
made current.
It appears clear from the aforecited
provision that 60 days prior notice must be
given before disconnection may be effected.
There is, therefore, more than ample basis
for the Cebu CFI, now Cebu Regional Trial
Court, to assume jurisdiction and to
continue trying Civil Case No. 17867.
The case before the trial court is for
injunction arising from breach of contract.
Premiere asks for compliance with the
terms of the contract and for the payment of
P100,000.00
exemplary
and
moral
damages in addition to attorneys fees.
PLDT has cited in full the authority and
powers given by Presidential Decree No. 1
to the Board of Communications, now
National Telecommunications Commission.
There is nothing in the Commissions
powers which authorizes it to adjudicate
breach of contract cases, much less to
award moral and exemplary damages. The
two authorities cited by the private
respondents in the bid to dissolve the CFI
restraining order do not appear adequate to
disregard the thirty (30) day prior notice
provided by the Interconnecting Agreement.
But even if they were, this question is one
which should be clarified in the civil case for
breach of contract.
Clearly, therefore, what the petitioner is
questioning is an order which does not
merely involve a purely internal transaction
of a telecommunications company but one
which would necessarily affect rights

guaranteed it by the contract allegedly

violated.
We ruled in RCPI v. Board of
Communications (80 SCRA 471):
We agree with petitioner RCPI. In one case
We have ruled that the Public Service
Commission and its successor in interest,
the Board of Communications, being a
creature of the legislature and not a court,
can exercise only such jurisdiction and
powers as are expressly or by necessary
implication, conferred upon it by statute.
(Filipino Bus Co. vs. Phil. Railway Co., 57
Phil. 860.) The functions of the Public
Service Commission are limited and
administrative in nature and it has only
jurisdiction and power as are expressly or
by necessary implication conferred upon it
by Statute. (Batangas Laguna Tayabas Bus
Co. vs. Public Service Commission, L25994 and L-26004-26046, August 31,
1966, 17 SCRA 1111.) As successor in
interest of the Public Service Commission,
the Board of Communications exercises the
same powers, jurisdiction and functions as
that provided for in the Public Service Act
for the Public Service Commission. x x x
The Board of Communications has been
renamed National Telecommunications
Commission. The NTC has no jurisdiction,
and the PLDT has made no showing of any,
not even by necessary implication, to decide
an issue involving breach of contract. And
as we stated in RCPI v. Board of
Communications, if in the two cases before
us, complainants Diego Morales and
Pacifico Inocencio allegedly suffered injury
due to petitioners breach of contractual
obligation, x x x the proper forum for them to
ventilate their grievances for possible
recovery of damages against petitioner
should be in the courts and not in the
respondent Board of Communications.
Jurisdiction is conferred only by the

Constitution or the law. (Pimentel v.

Comelec, 101 SCRA 769). It cannot be
conferred by the will of the parties.
(Salandanan v. Tizon, 62 SCRA 388). The
jurisdiction of the court is determined by the
allegations in the complaint. (Lat. v. PLDT,
67 SCRA 425.)
The petitioner alleges in its second ground
for this petition that the case before the
Court of Appeals is premature and has no
legal or factual basis.
The private respondents explain that they
elevated the case to the Court of Appeals
because the Cebu CFI had taken an
unreasonably long time to resolve the
motion to lift its restraining order. PLDT
argues that further delays would be
prejudicial and, therefore, the restraining
order issued by the Court of Appeals is
proper.
The Court of First Instance of Cebu issued
its restraining order on March 2, 1979. The
motion to lift the order was filed five months
later on August 2, 1979. The motion was
properly filed with the trial court, but the lack
of urgency in its filing and the failure of the
private respondents to immediately and
vigorously press for the lifting of the
restraining order militate against a finding of
grave abuse sufficient to justify a writ of
certiorari. The petitioners point out that from
the filing of the motion to lift restraining
order on August 2, 1979 up to che filing of
the petition for certiorari with the Court of
Appeals on July 20, 1982, almost three
years lapsed and in all that time, there was
no request, motion, nor hint for the trial
court to resolve the pending motion to lift
the restraining order.
As stated in Butuan Bay Wood Export
Corporation v. Court of Appeals (97 SCRA
297, 305):
Indeed, before a petition for certiorari can
be brought against an order of a lower

court, all available remedies must be

exhausted. (Plaza v. Mencias, No. L-18253,
October 31, 1962, 6 SCRA 563.) likewise, in
a host of case (Aquino v. Estenzo, L-20791,
May 19, 1965, citing Herrera v. Barreto, 25
Phil. 345; Uy Chu v. Imperial, 44 Phil. 27;
Amante v. Sison, 60 Phil. 949; Manzanares
v. Court of First Instance, 61 Phil. 850;
Vicencio v. Sison, 62 Phil. 300, 306; Manila
Post Publishing Co. v. Sanchez, 81 Phil.
614; Alvarez v. Ibaez, 83 Phil. 104; Nicolas
v. Castillo, 97 Phil. 336; Collector of Internal
Revenue v. Reyes, 100 Phil. 822; Ricafort v.
Fernan, 101 Phil. 575; Cueto v. Ortiz, L11555, May 31, 1960; Pagkakaisa
Samahang Manggagawa sa San Miguel
Brewery v. Enriquez, L-12999, July 26,
1960; Santos v. Cardenola, L-18412, July
31, 1962; Sy It v. Tiangco, L-18376, Feb.
27, 1962; Plaza v. Mencias, L-18253, Oct.
31, 1962), We ruled that before a petition for
certiorari in a higher court, the attention of
the lower court should first be called to its
supposed error and its correction should be
sought. If this is not done, the petition for
certiorari should be denied. The reason for
this rule is that issues which Courts of First
Instance are bound to decide should not
summarily be taken from them and
submitted to an appellate court without first
giving such lower courts the opportunity to
dispose of the same with due deliberation.
Quite the contrary, the private respondents
submitted to a trial on the merits and
formally agreed that, in addition to the
merits, the motion to dissolve or lift
temporary restraining order and the
propriety of the writ of preliminary injunction
would be considered and resolved in the
trial of the case. The private respondents
agreed that evidence submitted during trial
would include evidence on the pending
motion. In fact, the petitioner was already in
the process of winding up its evidence

before the Court of First Instance when the

private respondents filed their petition with
the Court of Appeals.
Private respondents handling of their case
dispels any suspicion of unreasonable delay
on the part of the Court of First Instance to
resolve such motion.
The private respondents aver that there are
special circumstances which warrant
immediate and direct action of an appellate
court. The alleged circumstances include
the failure of respondent PLDT to make full
use of its own relay station and the alleged
refusal of the petitioner to pay for its use
thereby grievously affecting the expansion
and modernization program of the
respondent PLDT.
Special circumstances may indeed warrant
immediate intervention of a higher court
even while the lower court is deliberating on
the action to take on a pending matter.
(Matute v. Court of Appeals, 26 SCRA 768;
De Gala-Sison v. Maddela, 67 SCRA 478).
The private respondents, however, have
failed to make a showing of such special or
exceptional circumstances. We fail to see
how closing one relay station serving the
province of Bohol would hasten PLDTs
program of national expansion. There are
various other legal remedies, administrative
and judicial, available to handle the alleged
non-payment by Premiere of PLDTs share
in long distance and overseas calls. The
case before the Court of Appeals is not the
proper remedy for enforcing collections from
Premiere under the circumstances of this
case. And more important, matters
dependent on the presentation of evidence
are best handled at the trial court level.
The private respondents overlook the fact
that telephone and telecommunications
services are affected by a high degree of
public interest. It is not Premiere alone
which will suffer from the appellate

injunction but the people of Bohol. And as

far as we can gather from the records, the
consumers have been paying for the
services given them. They are not at fault in
this controversy between Premiere and
PLDT.
In Republic Telephone Co. v. Philippine
Long Distance Telephone Co. (25 SCRA
80), we sustained the legalization of
unauthorized services maintained by PLDT
for fifteen (15) years instead of ordering the
discontinuance of the telephone system
found operating illegally. The reason
public interest would thus be better served.
In Republic v. Philippine Long Distance
Telephone Co. (26 SCRA 620) we restated
the rule that the Republic, acting for and in
behalf of the Government Telephone
System, and the PLDT cannot be coerced
to enter into an interconnecting contract,
where the two could not agree on terms. We
ruled, however, that while the Republic may
not compel PLDT to celebrate a contract
with it, the Republic may, in the exercise of
the sovereign power of eminent domain,
require PLDT to permit interconnection with
the Government Telephone System, as the
needs of the government service may
require, subject to payment of just
compensation. The justification was, again,
the general interest or public interest.
In Cababa v. Remigio (8 SCRA 50), we
sustained the acts of the Public Service
Commission under the principle that while
an already established public utility operator
must be protected in his investments, the
first consideration is still the protection of
public interests and convenience. The
question which ultimately determines issues
raised by or against public utilities isWhat
action is for the best interests of the public?
In the petition now before us, we do not
grapple with such issues as legalization of
illegal services or compelling unwilling

parties to enter into interconnection of

services. We simply rule that pending final
determination of the case before the trial
court, the appellate court should refrain from
acting on the petition now before it and from
issuing orders that would punish the people
of Bohol because Premiere and PLDT
cannot see eye to eye.
The basic policies for the telephone industry
embodied in Presidential Decree No. 217
are premised on the principle that telephone
service is a crucial element in the conduct of
business
activity,
efficient
telephone
services contribute directly to national
development, and telephone services must
be made available at reasonable cost to as
many subscribers as possible. Both law and
policy considerations call for the issuance of
the prayer for writs.
WHEREFORE, the petition for writs of
certiorari and prohibition is GRANTED. The
questioned resolution of the Court of
Appeals is SET ASIDE and our restraining
order issued on August 25, 1982 is made
PERMANENT. The Intermediate Appellate
Court is directed to dismiss the petition in
CA-G.R. No. 14554.
SO ORDERED.
No. L-41315. November 13,1986.*
PILIPINAS SHELL PETROLEUM
CORPORATION, petitioner, vs. THE OIL
INDUSTRY COMMISSION and MANUEL
B. YAP, respondents.
Political Law; Administrative Law; Oil
Industry Commission; Absence ofexpress
provision in the OilIndustry Act conferring
upon it the power to hear and decide
contractual disputes between a gasoline
dealer and an oil company; Principle of
administrative law that unless expressly
empowered, administrative agencies are
bereft of quasi-judicial powers.The
contentions of petitioner are wellfounded. A

detailed reading of the entire OIC Act (R.A.

#6173) will reveal that there is no express
provision conferring upon respondent OIC
the power to hear and decide contractual
disputes between a gasoline dealer and an
oil company. It is of course a well-settled
principle of administrative law that unless
expressly
empowered,
administrative
agencies like respondent OIC, are bereft of
quasijudicial powers.
Same;
Same;
Same;
Statutory
Construction; Principle tkat in making a
detailed enumeration, the law-making body
intended to accomplish a purpose and that
the all~embracing and general word
jurisdiction must be restricted to mere
regulatory and superuisory (not judiciaty
powers.A contrary interpretation would
collide with the familiar principles of
statutory construction that, in making a
detailed enumeration, the law-making body
intended to accomplish a purpose and that
the all-embracing and general word
jurisdiction must be restricted to mere
regulatory and supervisory (not judicial)
powers.
Same; Same; Same; Same; Phrase to set
the conditions in subpar. (a) ofRA 6173 (Oil
Industry Act) refers to the right to prescribe
rules of conduct and appertains to rulemaking functions and cannot include quasijudicial powers.The phrase to set the
conditions under subparagraph a refers to
the right to prescribe rules of conduct. It
appertains to rule-making functions and
cannot include quasi-judicial powers. The
limitations of supervision and regulation are
reiterated in the provisions of Sec. 7 (4) (d).
Same; Same; Same; Act of respondent in
submitting a single and indivisible
controversy to two different entities cannot
be permitted without making a mockery of
justice.There is no question that
respondent Yap first invoked the jurisdiction

of the then CFI of lioilo to resolve the

dispute and without waiting for the
determination of the issues, he filed a
complaint with respondent OIC raising the
same issues. Respondent Yap thus
submitted
a
single
and
indivisible
controversy to two different entities. This
cannot be permitted without making a
mockery of justice.
Same; Same; Same; Before creation of the
Oil Industry Commission in 1971, theparties
were already bound by their dealership
agreement; Provisions of agreement not
contrary to law.lt is not amiss tp mention
that even before the ereation of the OIC in
1971, petitioner Shell and respondent Yap
were already bound by their dealership
agreement. From the time said agreement
was registered with the OIC as required by
R.A. 6173, respondent OIC never informed
the petitioner that said agreement or any of
its provisions was contrary to the provisions
of R.A. No. 6173. Neither did respondent
Yap show any disapprovai of the provisions
of Sec. 5 of their agreement. Said provision
is not contrary to law.
PETITION for certiorari to review the orders
of the Oil Industry Commission.
The facts are stated in the opinion of the
Court.
Angara, Concepcion, Regala and Cruz
Law Office for petitioner.
J.T. Barrera & Associates for respondent
Manuel B. Yap.
PARAS, J.:
This is a Petition for Certiorari assailing
certain orders issued by respondent Oil
Industry Commission (hereinafter known as
OIC) in OIC Case No. 144.
Briefly the facts of the case are as follows:
Respondent Manuel B. Yap is a gasoline
dealer by virtue of aSublease and Dealer
Agreement entered into with petitioner

Pilipinas Shell Petroleum Corporation

(hereinafter known as Shell) originally in the
year 1965 and superseded in the year 1969
(Annex A") of the petition). The latter was
filed and registered with the OIC on April 30,
1971 as required by Republic Act #6173
(R.A. #6173).
Whiie petitioner Shell complied with its
contractual commitments, Manuel B. Yap
defaulted in his obligations upon failure to
pay for his purchases of gasoline and other
petroleuin products. Petitioner Shell sent
demand letters to responderit Manuel B.
Yap who continued to ignore these
demands letters forcing petitioner Shell to
exercise its contractual rights to terminate
the
contract.
Petitioner
Shell
sent
respondent Yap the required 90-day written
notice to terminate their contract as
provided for by Sec, 5 of their Sublease
and Dealer Agreement, towit:
5. Effective Date, Direction and Termination
of Agreement.This Agreement, duly
signed by the DEALER, shaii become
effective for both parties first of January,
1969 and shall continue indefinitely
thereafter, until terminated by either party
giving to the other ninety (90) days notice in
writing of such tenriination.
Respondent Yap filed a complaint with the
then Court of First Instance (CFI) of Iloilo
docketed as Civil Case No. 9507 for
damages with preliminary injunction against
petitioner
Shell.
Respondent
Yap
questioned the validity of the exercise by
petitioner of its contractual right to terminate
the contract. Barely less than a month from
the filing of his complaint, respondent Yap
again filed with the respondent OIC Case
#144 where he likewise raised the same
issue. Without affording the petitioner an
opportunity to be heard on the matter,
respondent OIC issued an ex-parte
preliminary
mandatory
injunction

commanding petitioner to perform the

following acts: 1) to continue selling to
respondent Yap petroleum products 2) to
maintain the status quo insofar as the
operation by respondent Yap of the gasoline
station is concerned 3) to submit a verified
statement of the unpaid accounts of
respondent Yap.
Petitioner Shell also filed a complaint with
the then CFI of Cebu docketed as Civil
Case No. 13675 to collect the long overdue
debts of respondent Yap. Shell filed with the
OIC an Urgent Ex-parte Motion to Dissolve
the Writ (Annex I") and filed its answer to
complaint of respondent Yap principally
impugning the jurisdiction of the OIC. A
decision was rendered in Civil Case No.
13675 ordering respondent Yap to pay his
overdue
liabilities:
1)
P47,537.30
representing the value of petroleum
products he bought from the petitioner 2)
Fl,000, litigation expenses 3) F5,000,
attorneys fees.
Despite the pendency of the controversy
before the ordinary civil courts, OIC
persisted in asserting jurisdiction over it by
rendering a decision stating it has
jurisdiction to pass upon the alleged
contractual right of petitioner to declare
Yaps contract terminated. The OIC negated
the existence of such right because the
stipulation is an unfair and onerous trade
practice. Respondent OIC also allowed
respondent Yap reasonable time from
receipt of the decision within which to pay
his judgment debt to petitioner as adjudered
in Civil Case No. 13675.
Petitioner Shell moved for a reconsideration
but respondent OIC denied it. However, a
modification was made by declaring that the
permission it gave respondent Yap to pay
his judgment debt was merely a
suggestion. OIC ordered that petitioner

must comply within ten (10) days from

notice.
The issues now of the petition are the
aforementioned orders of the respondent
OIC, petitioner Shell submitting that they are
null and void on any, or all, of the following
grounds:
1. Respondent OIC has no jurisdiction to
hear and decide contractual disputes
between a gasoline dealer and an oil
company.
2. Respondent Manuel B. Yap himself first
invoked the jurisdiction of the then CFI of
Iloilo to resolve the dispute so that he is now
estopped from impugning the jurisdiction of
the civil courts.
3. Peremptory declaration by respondent
OIC that the contractual stipulation that
either party may declare the contract
terminated after a 90-day written notice
constitutes an unfair and onerous trade
practice is an unconstitutional impairment
of the obligation of contracts and a
deprivation of property without due process
of law.
4. There is no factual basis for respondent
OICs conclusion and ruling that the
disputed contract is an unfair and onerous
trade practice.
The contentions of petitioner are wellfounded. A detailed reading of the entire
OIC Act (R.A. #6173) will reveai that there is
no express provision conferring upon
respondent OIC the power to hear and
decide contractual disputes between a
gasoline dealer and an oil company. It is of
course
a
welisettled
principle
of
administrative law that unless expressly
empowered, administrative agencies like
respondent OIC, are bereft of quasi-judicial
powers. As We declared in Miller vs. Mardo,
et al (2 SCRA 898):
x x x It may be conceded that the
Legislature may confer on administrative

boards or bodies quasi-judicial powers

involving the exercise of judgment and
discretion, as incident to the performance of
administrative functions, but in so doing, the
legislature must state its intention in express
terms that would leave no doubt, as even
such quasi-judicial prerogatives must be
limited, if they are to be valid, only to those
incidental to, or in connection with, the
performance of administrative duties which
do not amount to conferment of jurisdiction
over a matter exclusively vested in the
courts.
Sec. 6 of R.A. #6173 restricts the extent and
scope of the OIC prerogative of jurisdiction
in sub-paragraphs a to f.
A contrary interpretation would collide with
the
familiar
principles
of
statutory
construction that, in making a detailed
enumeration, the law-making body intended
to accomplish a purpose and that the allembracing arid general word jurisdiction
must be restricted to mere regulatory and
supervisory (not judicial) powers.
The phrase to set the conditions under
subparagraph a refers to the right to
prescribe rules of conduet. It appertains to
rule-making functions and cannot include
quasi-judicial powers. The limitations of
supervision and regulation are reiterated in
the provisions of Sec. 7 (4) (d), to wit:
"(4) (d) To regulate the operations and trade
practices of the industry in order to
encourage orderly competition, prevent
monopolies and collusive practices within
the industry, giving due regard to the
ecological and environmental needs of the
eountry;
There is no question that respondent Yap
first invoked the jurisdiction of the then CFI
of Iloilo to resolve the dispute and without
waiting for the determination of the issues,
he filed a complaint with respondent OIC
raising the same issues. Respondent Yap

thus submitted a single and indivisible

controversy to two different entities. This
cannot be permitted without making a
mockery of justice.
It is not amiss to mention that even before
the creation of the OIC in 1971, petitioner
Shell and respondent Yap were already
bound by their dealership agreement. From
the time said agreernent was registered with
the OIC as required by R.A. 6173,
respondent OIC never informed the
petitioner that said agreement or any of its
provisions was contrary to the provisions of
R.A. No. 6173. Neither did respondent Yap
show any disapproval of the provisions of
Sec. 5 of their agreement. Said provision is
not contrary to law.
WHEREFORE, the questioned orders of
respondent OIC, in OIC Case #144 are
hereby declared null and void.
SO ORDERED.
G.R. No. 137174. July 10, 2000.*
REPUBLIC OF THE PHILIPPINES,
represented by the POLLUTION
ADJUDICATION BOARD (DENR),
petitioner, vs. MARCOPPER MINING
CORPORATION, respondent.
Ecology and Environment; Mines and
Mining; Philippine Mining Act of 1995; Mine
Wastes and Tailings; Words and Phrases;
The Philippine Mining Act of 1995 defines
Mine wastes and tailings as soil and rock
materials from surface or underground
mining and milling operations with no
economic value to the generator of the
same.The Philippine Mining Act of 1995
defines Mine wastes and tailings as soil
and rock materials from surface or
underground mining and milling operations
with no economic value to the generator of
the same.
Same; Same; Same; Pollution Control Law;
Statutes; Statutory Construction; The

provisions of RA 7942 (Philippine Mining Act

of 1995) do not necessarily repeal RA 3931
(Pollution Control Law), as amended by P.D.
984 and E.O. 192repeals of laws by
implication are not favored and that courts
must generally assume their congruent
application.From a careful reading of the
foregoing provisions of law, we hold that the
provisions of RA 7942 do not necessarily
repeal RA 3931, as amended by PD 984
and EO 192. RA 7942 does not contain any
provision which categorically and expressly
repeals the provisions of the Pollution
Control Law. Neither could there be an
implied repeal. It is well-settled that repeals
of laws by implication are not favored and
that courts must generally assume their
congruent application. Thus, it has been
held: The two laws must be absolutely
incompatible, and a clear finding thereof
must surface, before the inference of
implied repeal may be drawn. The rule is
expressed in the maxim, interpretare et
concordare
leqibus
est
optimus
interpretendi, i.e., every statute must be so
interpreted and brought into accord with
other laws as to form a uniform system of
jurisprudence. The fundament is that the
legislature should be presumed to have
known the existing laws on the subject and
not to have enacted conflicting statutes.
Hence, all doubts must be resolved against
any implied repeal, and all efforts should be
exerted in order to harmonize and give
effect to all laws on the subject.
Same; Same; Same; Same; Pollution;
Words and Phrases; Pollution refers to any
alteration of the physical, chemical and
biological properties of any water, air and/or
land resources of the Philippines, or any
discharge thereto of any liquid, gaseous or
solid wastes as will or is likely to create or to
render such water, air and land resources
harmful, detrimental or injurious to public

health, safety or welfare or which will

adversely affect their utilization for
domestic,
commercial,
industrial,
agricultural, recreational or other legitimate
purposes.There is no irreconcilable
conflict between the two laws. Section 19 of
EO 192 vested the PAB with the specific
power to adjudicate pollution cases in
general. Sec. 2, par. (a) of PD 984 defines
the term pollution as referring to any
alteration of the physical, chemical and
biological properties of any water, air and/or
land resources of the Philippines, or any
discharge thereto of any liquid, gaseous or
solid wastes as will or is likely to create or to
render such water, air and land resources
harmful, detrimental or injurious to public
health, safety or welfare or which will
adversely affect their utilization for
domestic,
commercial,
industrial,
agricultural, recreational or other legitimate
purposes.
Same; Same; Same; Same; Administrative
Law; The authority of the mines director is
complementary to that of the Pollution
Adjudication Board.On the other hand,
the authority of the mines regional director
is complementary to that of the PAB.
Section 66 of RA 7942 gives the mines
regional director exclusive jurisdiction over
the safety inspection of all installations,
surface
or
underground
in
mining
operations. Section 67 thereof vests upon
the regional director power to issue orders
requiring a contractor to remedy any
practice connected with mining or quarrying
operations which is not in accordance with
safety and anti-pollution laws and
regulations; and to summarily suspend
mining or quarrying operations in case of
imminent danger to life or property. The law
likewise requires every contractor to
undertake an environmental protection and
enhancement program which shall be

incorporated in the work program which the

contractor shall submit as an accompanying
document to the application for a mineral
agreement or permit. In addition, an
environmental clearance certificate is
required based on an environment impact
assessment. The law also requires
contractors and permittees to rehabilitate
the mined-out areas, and set up a mine
rehabilitation fund. Significantly, the law
allows
and
encourages
peoples
organizations
and
non-governmental
organizations to participate in ensuring that
contractors/permittees shall observe all the
requirements of environmental protection.
Same; Same; Same; Same; Same; The
power of the mines regional director does
not foreclose PABs authority to determine
and act on complaints filed before itwhile
the mines regional director has express
administrative and regulatory powers over
mining operations and installations, it has
no adjudicative powers over complaints for
violation of pollution control statutes and
regulations.From the foregoing, it readily
appears that the power of the mines
regional director does not foreclose PABs
authority to determine and act on
complaints filed before it. The power
granted to the mines regional director to
issue orders requiring the contractor to
remedy any practice connected with mining
or quarrying operations or to summarily
suspend the same in cases of violation of
pollution laws is for purposes of effectively
regulating and monitoring activities within
mining operations and installations pursuant
to the environmental protection and
enhancement program undertaken by
contractors and permittees in procuring their
mining permit. While the mines regional
director has express administrative and
regulatory powers over mining operations
and installations, it has no adjudicative

powers over complaints for violation of

pollution control statutes and regulations.
Same; Same; Same; Same; Same;
Arbitration; Panel of Arbitrators; Mines
Adjudication Board; The provisions creating
the Panel of Arbitrators for the settlement of
conflicts refers to disputes involving rights to
mining areas, mineral agreements or
permits and those involving surface owners,
occupants
and
claimholders/concessionairesthe
scope
of
authority of the Panel of Arbitrators and the
Mines Adjudication Board conferred by R.A.
7942
clearly
exclude
adjudicative
responsibility over pollution cases.Neither
was such authority conferred upon the
Panel of Arbitrators and the Mines
Adjudication Board which were created by
the said law. The provisions creating the
Panel of Arbitrators for the settlement of
conflicts refer to disputes involving rights to
mining areas, mineral agreements or
permits and those involving surface owners,
occupants
and
claimholders/concessionaires. The scope of
authority of the Panel of Arbitrators and the
Mines Adjudication Board conferred by RA
7942
clearly
exclude
adjudicative
responsibility over pollution cases. Nowhere
is there vested any authority to adjudicate
cases involving violations of pollution laws
and regulations in general.
Same; Same; The order of the Office of the
President directing a mining company to
rehabilitate a particular bay at a specified
cost per day during the efficacy of the
restraining order became functus officio
when said company voluntarily stopped
dumping mine tailings into the bay.We
must sustain the appellate court on this
point on account of the testimony of Mr.
Edel Genato. Further, we note that the
Office of the President never objected nor
ruled on the manifestation dated July 9,

1991 filed by MMC that it would stop paying

since it already ceased dumping mine
tailings into the bay. Still further, the order of
the OP directing MMC to rehabilitate at a
cost of P30,000.00 a day during the
efficacy of the restraining order had
become functus officio since MMC
voluntarily stopped dumping mine tailings
into the bay.
PETITION for review on certiorari of a
decision of the Court of Appeals.
The facts are stated in the opinion of the
Court.
The Solicitor General for petitioner.
Siguion Reyna, Montecillo & Ongsiako
for private respondent.
In this petition for review on certiorari,
petitioner
REPUBLIC
OF
THE
PHILIPPINES
through
the
Pollution
Adjudication Board of the Department of
Environment and Natural Resources seeks
to annul the Decision1 of the Court of
Appeals2 in CA-G.R. SP No. 44656 setting
aside the Order3 of the Pollution
Adjudication Board4 in DENR-PAB Case
No. 04-00597-96; as well as the
Resolution5 denying reconsideration of said
Decision.
The following antecedent facts are
undisputed:
Respondent Marcopper Mining Corporation
(MMC) was issued a temporary permit to
operate a tailings6 sea disposal system
under TPO No. POW-85-454-EJ for the
period October 31, 1985 to October 21,
1986. Before it expired, MMC filed an
application for the renewal thereof with the
National Pollution Control Commission
(NPCC). On September 20, 1986, MMC
received a telegraphic order from the NPCC
directing the former to (i)mmediately cease
and desist from discharging mine tailings

into Calancan Bay. The directive was

brought about through the efforts of certain
religious groups which had been protesting
MMCs tailings sea disposal system. MMC
requested the NPCC to refrain from
implementing the aforesaid directive until its
adoption of an alternative tailings disposal
system. The NPCC granted MMCs request
and called a conference to discuss possible
alternative disposal systems. Consequently,
an Environmental Technical Committee,
composed of representatives from the
NPCC, the Bureau of Mines and GeoSciences, and MMC was created to study
the feasibility of various tailings disposal
systems that may be appropriate for
utilization by MMC and to submit its findings
and recommendations thereon.
Meanwhile, after the expiration of MMCs
TPO No. POW-85-454-EJ on October 21,
1986, the NPCC issued to MMC a new
temporary permit, TPO No. POW-86-454-EJ
dated November 11, 1986, to expire on
February 10, 1987, with the condition that
[t]he tailings disposal system shall be
transferred to San Antonio Pond within two
(2) months from the date of this permit.
MMC moved for the deletion of the condition
stating that it needed to develop and mine
the ore deposits underneath the San
Antonio pond for it to continue its mining
operations. In a letter-manifestation dated
February 5, 1987, MMC requested the
NPCC for an extension of TPO No. POW86-454-EJ and the indefinite suspension of
the condition in said permit until such time
that the NPCC shall have finally resolved
the NPCC case entitled Msgr. Roily
Oliverio, et al. vs. Marcopper Mining
Corporation.
In the meantime, the NPCC was abolished
by Executive Order No. 1927 dated June
10, 1987, and its powers and functions were
integrated
into
the
Environmental

Management Bureau and into the Pollution

Adjudication Board (PAB).8
On April 11, 1988, the Secretary of
Environment and Natural Resources, in his
capacity as Chairman of the PAB, issued an
Order directing MMC to cease and desist
from discharging mine tailings into Calancan
Bay. The order reads:
The Temporary Permit to Operate issued to
Marcopper Mining Corporation expired on
February 10, 1987.
Section 96 of the National Pollution Control
Commission
(NPCC)
Rules
and
Regulations, which were adopted by the
Board, provides that in no case can a permit
be valid for more than one (1) year.
Records show that Marcopper Mining
Corporation has not filed any application for
renewal of the permit.
Marcopper Mining Corporation is hereby
ordered to cease and desist from
discharging mine tailings into Calancan Bay
immediately upon receipt of this Order.
SO ORDERED.9
Immediately
thereafter,
the
DENR
Undersecretary for Environment and
Research issued a telegraphic order dated
April 15, 1988, enjoining immediate
compliance by MMC of the cease and desist
order of April 11, 1988.
MMC appealed the above orders of April 11,
1988 and April 15, 1988 to the Office of the
President, docketed as O.P. Case No. 3802.
In an Order dated May 2, 1988, the Office of
the President denied MMCs requests for
issuance of restraining orders against the
orders of the PAB. Consequently, MMC filed
an Urgent Ex-Parte Partial Motion for
Reconsideration dated May 6, 1988,
seeking the reconsideration of the above
Order. In an Order dated May 13, 1988, the
Office of the President granted the above
partial motion for reconsideration, thus:

WHEREFORE, the instant Urgent ExParte Motion for Reconsideration is hereby

GRANTED, and the Order of this Office,
dated May 2, 1988, is hereby set aside
insofar as it denies respondent-appellants
requests for issuance of restraining orders.
Accordingly, the Pollution Adjudication
Board,
its
agents,
deputies
or
representatives are hereby enjoined from
enforcing its cease and desist order of April
15, 1988 pending resolution by this Office of
respondent-appellants appeal from said
orders.
It is further directed that the status quo
obtaining prior to the issuance of said cease
and desist order be maintained until further
orders from this Office.
It is understood, however, that during the
efficacy
of
this
restraining
order,
respondent-appellant shall immediately
undertake, at a cost of not less than
P30,000.00 a day, the building of artificial
reefs and planting of sea grass, mangroves
and vegetation on the causeway of
Calancan Bay under the supervision of the
Pollution Adjudication Board and subject to
such guidelines as the Board may impose.
SO ORDERED.10
In line with the directive from the Office of
the
President,
the
Calancan
Bay
Rehabilitation Project (CBRP) was created,
and MMC remitted the amount of
P30,000.00 a day, starting from May 13,
1988 to the Ecology Trust Fund (ETF)
thereof. However, on June 30, 1991, MMC
stopped discharging its tailings in the Bay,
hence, it likewise ceased from making
further deposits to the ETF.
From the issuance of the Order on May 13,
1988 until the cessation of the tailings
disposal on June 30, 1991, MMC made its
contribution to the ETF in the total amount
of Thirty-Two Million Nine Hundred and
Seventy-Five
Thousand
Pesos

(P32,975,000.00). Thereafter, MMC filed a

Motion dated July 9, 1991 manifesting that it
would discontinue its contributions/deposits
to the ETF since it had stopped dumping
tailings in the Bay. MMC prayed that the
Order issued by the Office of the President
on May 13, 1988 be lifted.
On February 5, 1993, the Office of the
President rendered a decision in O.P. Case
No. 3802 dismissing the appeal; affirming
the cease and desist Order issued by the
PAB; and lifting the TRO dated May 13,
1988. The Office of the President resolved
the appeal in this wise:
This brings to the fore the primordial issue
of whether or not the Secretary of
Environment and Natural Resources gravely
erred in declaring the TPO No. POW-86454-EJ issued to respondent-appellant
MMC expired on February 10, 1987, and in
ordering the latter to cease and desist from
discharging mine tailings into Calancan Bay.
Respondent-appellant argues that the
cease and desist orders were issued by the
PAB ex-parte, in violation of its procedural
and substantive rights provided for under
Section 7 (a) of P.D. No. 984 requiring a
public hearing before any order or decision
for the discontinuance of discharge of a
sewage or industrial wastes into the water,
air or land could be issued by the PAB.
We are not persuaded.
Section 7(a) of P.D. No. 984, reads in part:
Sec. 7(a) Public Hearing.Public hearing
shall be conducted by the Commissioner,
Deputy Commissioner or any senior official
duly designated by the Commissioner prior
to issuance or promulgation of any order or
decision by the Commissioner requiring the
discontinuance of discharge of sewage,
industrial wastes and other wastes into the
water, air or land resources of the
Philippines as provided in the Decree:
provided, that whenever the Commission

finds a prima facie evidence that the

discharged sewage or wastes are of
immediate threat to life, public health, safety
or welfare, or to animal or plant life, or
exceeds the allowable standards set by the
Commission, the Commissioner may issue
an
ex-parte
order
directing
the
discontinuance of the same or the
temporary suspension or cessation of
operation of the establishment or person
generating such sewage or wastes without
the necessity of a prior public hearing. xxx.
(italics supplied).
Clearly then, it is self-indulgent nonsense to
assume that the DENR Secretary, acting as
PAB Chairman, is absolutely without
authority to issue an ex-parte order
requiring the discontinuance of discharge of
sewage or other industrial wastes without
public hearing. As can be gleaned from the
aforequoted proviso, this authority to issue
an ex-parte order suspending the discharge
of industrial wastes is postulated upon his
finding of prima-facie evidence of an
imminent threat to life, public health, safety
or welfare, to animal or plant life or exceeds
the allowable standards set by the
Commission.11
In a letter dated January 22, 1997,12
Municipal Mayor Wilfredo A. Red of Sta.
Cruz, Marinduque informed the PAB that
MMC stopped remitting the amount of
P30,000.00 per day as of July 1, 1991 to the
ETF of the CBRP. This letter-complaint of
Mayor Red was docketed as DENR-PAB
Case No. 04-00597-96, for violation of P.D.
98413 and its implementing Rules and
Regulations.
In an order dated April 23, 1997, the PAB
ruled that the obligation of MMC to deposit
P30,000.00 per day to the ETF of the CBRP
subsists, as provided for in the Order of the
Office of the President dated May 13, 1988,
during the efficacy of said order restraining

the PAB from enforcing its cease and desist

order against MMC. Since the Order was
lifted only on February 5, 1993, the
obligation of MMC to remit was likewise
extinguished only on said date and not
earlier as contended by MMC from the time
it ceased dumping tailings into the Bay on
July 1, 1991. We quote in part:
The issue before this Board is whether
Marcopper Mining Corporation is still
obliged to remit the amount of P30,000.00
to the CBRP. The answer by the Order from
the Office of the President dated 13 May
1988, which states that the obligation on the
part of Marcopper Mining to pay the amount
of P30,000.00 per day for the rehabilitation
of Calancan Bay is binding only during the
efficacy of the said Order.
The record further shows that on 05
February 1993, the Office of the President
lifted its Order dated 13 May 1988. This
means that as of the date of the lifting,
Marcopper Mining Corporation no longer
had any obligation to remit the amount of
P30,000.00
to
the
CBRP.
Thus,
Marcoppers obligation only runs from 13
May 1988 to 05 February 1993. Beyond the
cut-off date of 05 February 1993, Marcopper
is no longer obligated to remit the amount of
P30,000.00 per day to the CBRP.
It does not matter whether Marcopper was
no longer dumping its tail minings into the
sea even before the cut-off date of 05
February 1993. The obligation of Marcopper
to pay the amount of P30,000.00 to the
CBRP arises from the Office of the
President Order dated 13 May 1988, not
from its dumping of mine tailings.
WHEREFORE,
Marcopper
Mining
Corporation is hereby ordered to pay the
CBRP the amount of P30,000.00 per day,
computed from the date Marcopper Mining
Corporation stopped paying on 01 July
1991, up to the formal lifting of the subject

Order from the Office of the President on 05

February 1993.
SO ORDERED.14
MMC assailed the aforequoted Order dated
April 23, 1997 of the PAB as null and void
for having been issued without jurisdiction
or with grave abuse of discretion in a
petition for Certiorari and Prohibition (with
prayer for temporary restraining order and
preliminary injunction) before the Court of
Appeals which was docketed as CA-G.R.
No. SP-44656. In a Resolution dated July
15, 1997, the Court of Appeals required the
PAB and its members to comment on said
petition.
On November 19, 1997, the Office of the
Solicitor General, on behalf of the PAB and
its members, filed with the Court of Appeals
the required comment.
On September 15, 1997, for purposes of
determining whether or not to grant MMCs
prayer for a temporary restraining order and
preliminary injunction, the Court of Appeals
conducted a hearing where counsel for the
parties were heard on oral arguments.
In a Resolution dated September 19, 1997,
the Court of Appeals issued a writ of
preliminary injunction, conditioned upon the
filing of a bond by MMC in the amount of
P500,000.00 enjoining the PAB and its
members to cease and desist from
enforcing the assailed Order dated April 23,
1997, until it had made a full determination
on the merits of the case.
On January 7, 1998, the Court of Appeals
promulgated a Decision in CA-G.R. SP No.
44656, the dispositive portion of which
reads:
In view of the foregoing, the instant petition
is hereby GRANTED and, accordingly, the
questioned Order of respondent Pollution
Adjudication Board dated 23 April 1997 is
hereby SET ASIDE. Respondents are
ordered to REFRAIN and DESIST from

enforcing aforesaid Order. The injunctive

bond filed by the petitioner in the amount of
Five Hundred Thousand (P500.000.00) is
hereby RELEASED.
The motion for reconsideration of the above
decision was denied in a Resolution dated
January 13, 1999 of the Court of Appeals.
Hence, the instant petition on the following
grounds:
I
The Court of Appeals erred in ruling that
Republic Act No. 7942 (otherwise known as
the Philippine Mining Act of 1995) repealed
the provisions of Republic Act No. 3931, as
amended by Presidential Decree No. 984,
(otherwise known as the National Pollution
Control Decree of 1976), with respect to the
power and function of petitioner Pollution
Adjudication Board to issue, renew or deny
permits for the discharge of the mine
tailings.
II
Respondent Marcopper Mining Corporation
bound itself to pay the amount of
P30,000.00 a day for the duration of the
period starting May 13, 1988 up to February
5, 1993.
III
Respondent Marcopper Mining Corporation
was not deprived of due process of law
when petitioner Pollution Adjudication Board
directed it to comply with its long-existing
P30,000.00 per day obligation under the
Order of the Office of the President dated
May 13, 1988.15
In setting aside the Order of the PAB dated
April 23, 1997, requiring MMC to pay its
arrears in deposits, the Court of Appeals
ruled that the PAB exceeded its power and
authority in issuing the subject Order for the
following reasons:

The applicable and governing law in this

petition is Republic Act No. 7942 otherwise
known as the Philippine Mining Act of 1995
(Mining Act, approved on March 3, 1995).
Chapter XI of the Mining Act contains a
series of provisions relating to safety and
environmental protection on mining and
quarrying operations. More specifically,
Section 67 of the Mining Act in essence,
grants the mines regional director the power
to issue orders or to take appropriate
measures to remedy any practice
connected with mining or quarrying
operations which is not in accordance with
safety and anti-pollution laws and
regulations.
From a reading of that provision, it would
appear therefore that prior to the passage of
the Mining Act, the Pollution Adjudication
Board had jurisdiction to act on pollutionrelated matters in the mining business. With
the effectivity of the Mining Act and in
congruence with its Sec. 115 (i.e.,
Repealing and Amending Clause), the
power to impose measures against
violations of environmental policies by
mining operators is now vested on the
mines regional director. Be that as it may,
we are constrained to enunciate that the
PAB had no authority to issue the
challenged Order dated 23 April 1997. More
so, respondent PAB as petitioner argued
and We note, had remained perplexingly
silent on the matter for almost six (6) years
from July 1991 when MMC ceased to make
its deposits up to April 1997 when
respondent PAB precipitately issued the
Order requiring MMC to pay its arrears in
deposits to the ETF. And PAB, apparently
oblivious to MMCs economic quandary had
issued said Order exparte without hearing
or notice.
xxx

As a general rule, the adjudication of

pollution cases pertains to the Pollution
Adjudication Board (PAB), except in cases
where the special law, expressly or
impliedly, provides for another forum, as in
the instant petition.
Thus under Republic Act No. 7942 and its
implementing rules and regulations, the
mines regional director, in consultation with
the Environmental Management Bureau
(italics ours), is specifically mandated to
carry out and make effective the declared
national policy that the State shall promote
the rational exploration, development,
utilization and conservation of all mineral
resources in public and private lands within
the territory and exclusive economic zone of
the Republic of the Philippines, through the
combined efforts of government and the
private sector in order to enhance national
growth and protect the rights of affected
communities. (Sec. 2, R.A. 7942).
Under this expansive authority, the Mines
Regional Director, by virtue of this special
law, has the primary responsibility to protect
the communities surrounding a mining site
from the deleterious effects of pollutants
emanating from the dumping of tailing
wastes from the surrounding areas. Thus, in
the exercise of its express powers under
this special law, the authority of the Mines
Regional Director to impose appropriate
protective and/or preventive measures with
respect to pollution cases within mining
operations is perforce, implied. Otherwise,
the special law granting this authority may
well be relegated to a mere paper tiger
talking protection but allowing pollution.
It bears mention that the Pollution
Adjudication Board has the power to issue
an ex-parte order when there is prima facie
evidence of an establishment exceeding the
allowable standards set by the anti-pollution
laws of the country. (Pollution Adjudication

Board v. Court of Appeals, et al., 195 SCRA

112). However, with the passage of R.A.
7942, insofar as the regulation, monitoring
and enforcement of anti-pollution laws are
concerned
with
respect
to
mining
establishments, the Mines Regional Director
has a broad grant of power and authority.
Clearly, pollution-related issues in mining
operations are addressed to the Mines
Regional Director, not the Pollution
Adjudication Board.
This being the case, the questioned Order
dated 23 April 1997 requiring MMC to pay
its arrears in deposits was beyond the
power and authority of the Pollution
Adjudication Board to issue and as such,
petitioner may seek appropriate injunctive
relief from the court. Thus, certiorari lies
against public respondent PAB.16
The Court of Appeals likewise ruled that the
obligation of MMC to contribute to the ETF
of the CBRP ceased inasmuch as the latter
discontinued dumping tailings into the Bay
and the actual funds in the ETF are
sufficient to rehabilitate the Bay. It
ratiocinated thus:
In the instant case, it is of record that
petitioner MMC undertakes its obligation to
provide for the rehabilitation of the Bay
waters. This obligation, through its monetary
contribution to the ETF, is however
anchored on its continuing disposal of the
mines tailings waste into the Bay. Hence,
since it ceased its mining operations in the
affected area as of July 1991 and had not
been discharging any tailings wastes since
then, its consequent duty to rehabilitate the
polluted waters, if any, no longer exists.
xxx
Be that as it may, this Court observes that
out of the approximate sum of thirty-two (32)
million pesos contributed by the petitioner to
the ETF there is admittedly an existing
estimated balance of fourteen (14) million

pesos in the Fund. For its part, petitioner

does not renege on its obligation to
rehabilitate and in fact undertakes to
continue the rehabilitation process until its
completion within two (2) years time and
which would only cost six (6) million pesos.
Thus, as petitioner convincingly argued and
which respondent unsatisfactorily rebuked,
the existing fourteen (14) million pesos in
the ETF is more than enough to complete
the rehabilitation project. (TSN, Hearing
dated 15 September 1997, at pp. 56 to 62,
Rollo).
x x x. Without much ado, the Court concurs
with the finding that to demand a daily
deposit of thirty thousand (P30,000.00)
pesos even if the root of the obligation, that
is, the dumping of tailings waste, had
ceased to exist, is indubitably of a herculean
and onerous burden on the part of petitioner
amounting to a deprivation of its property
and a denial of its right to due process.17
Unsatisfied, the OSG argues that the
Philippine Mining Act of 1995 did not amend
or repeal the provisions of Republic Act No.
3931, as amended by Presidential Decree
No. 984 (otherwise known as the National
Pollution Control Decree of 1976); that the
Mines Regional Director has no power over
areas outside mining installations and over
areas which are not part of the mining or
quarrying operations such as Calancan Bay;
that the powers of the Mines Regional
Director cannot be exercised to the
exclusion of other government agencies;
that the jurisdiction of a Mines Regional
Director with respect to anti-pollution laws is
limited to practices committed within the
confines of a mining or quarrying
installation; that the dumping of mine
tailings into Calancan Bay occurred long
before the effectivity of the Philippine Mining
Act and that MMC cannot hide under cover
of this new law. The OSG fur-

ther argues that the portion of the Order of

May 13, 1988, setting the period of time
within which MMC shall pay P30,000.00 per
day, which is during the efficacy of the
restraining order was never questioned or
appealed by MMC. Finally, the OSG argues
that PAB did not violate MMCs right to due
process by the issuance of the Order dated
April 23, 1988 without notice and hearing as
it was simply requiring MMC to comply with
an obligation in an Order which has long
become final and executory.
In the context of the established facts, the
issue that actually emerges is: Has the PAB
under RA 3931 as amended by PD 984
(National Pollution Control Decree of 1976)
been divested of its authority to try and hear
pollution cases connected with mining
operations by virtue of the subsequent
enactment of RA 7942 (Philippine Mining
Act of 1995)? As mentioned earlier, the PAB
took cognizance and ruled on the lettercomplaint (for violation of PD 984 and its
implementing rules and regulations) filed
against MMC by Marinduque Mayor
Wilfredo Red. In the subject Order dated
April 23, 1997, the PAB ruled that MMC
should pay its arrears in deposits to the ETF
of the CBRP computed from the day it
stopped dumping and paying on July 1,
1991 up to the lifting of the Order of the
Office of the President dated May 13, 1988
on February 5, 1993.
The answer is in the negative. We agree
with the Solicitor General that the Court of
Appeals committed reversible error in ruling
that the PAB had no authority to issue the
Order dated April 23, 1997.
Republic Act No. 3931 (An Act Creating The
National Water And Air Pollution Control
Commission) was passed in June 18, 1964
to maintain reasonable standards of purity
for the waters and air of the country with
their utilization for domestic, agricultural,

industrial and other legitimate purposes.

Said law was revised in 1976 by
Presidential Decree No. 984 (Providing For
The Revision Of Republic Act No. 3931,
Commonly Known As The Pollution Control
Law, And For Other Purposes) to strengthen
the National Pollution Control Commission
to best protect the people from the growing
menace
of
environmental
pollution.
Subsequently, Executive Order No. 192, s.
1987 (The Reorganization Act of the DENR)
was passed. The internal structure,
organization and description of the functions
of the new DENR, particularly the Mines
and Geosciences Bureau, reveals no
provision pertaining to the resolution of
cases involving violations of the pollution
laws.18 The Mines and Geo-Sciences
Bureau was created under the said EO 192
to absorb the functions of the abolished
Bureau of Mines and Geo-Sciences, Mineral
Reservations Development Board and the
Gold Mining Industry Development Board
to, among others, recommend policies,
regulations and programs pertaining to
mineral resources development; assist in
the monitoring and evaluation of the
Bureaus programs and projects; and to
develop and promulgate standards and
operating procedures on mineral resources
development.
SEC. 15. Mines and Geo-Sciences Bureau.
There is hereby created the Mines and
Geo-Sciences Bureau which shall absorb
the functions of the Bureau of Mines and
Geo-Sciences (BMGS),
On the other hand, the PAB was created
and granted under the same EO 192 broad
powers to adjudicate pollution cases in
general. Thus,
SEC. 19. Pollution Adjudication Board.
There is hereby created a Pollution
Adjudication Board under the Office of the
Secretary. The Board shall be composed of

the Secretary as Chairman, two (2)

Undersecretaries as may be designated by
the Secretary, the Director of Environmental
management, and three (3) others to be
designated by the Secretary as members.
The Board shall assume the powers and
functions
of
the
Commission/Commissioners of the National
Pollution Control Commission with respect
to the adjudication of pollution cases under
Republic Act 3931 and Presidential Decree
984, particularly with respect to Section 6
letters e, f, g, j, k, and p of P.D. 984. The
Environmental Management Bureau shall
serve as the Secretariat of the Board. These
powers and functions may be delegated to
the regional offices of the Department in
accordance with rules and regulations to be
promulgated by the Board.20
Section 6 letters e, f, g, j, k, and p of PD 984
referred to above are quoted as follows:
SEC. 6. Powers and Functions.The
Commission shall have the following powers
and functions:
(e) Issue orders or decision to compel
compliance with the provisions of this
Decree and its implementing rules and
regulations only after proper notice and
hearing.
(d) Make, alter or modify orders requiring
the discon-tinuance of pollution specifying
the conditions and the time within which
such discontinuance must be accomplished.
(g) Issue, renew, or deny permits, under
such conditions as it may determine to be
reasonable, for the prevention and
abatement of pollution, for the discharge of
sewage, industrial waste, or for the
installation or operation of sewage works
and industrial disposal system or parts
thereof: Provided, however, That the
Commission, by rules and regulations, may
require
subdivisions,
condominium,
hospitals, public buildings and other similar

human settlements to put up appropriate

central sewerage system and sewage
treatment works, except that no permits
shall be required to any sewage works or
changes to or extensions of existing works
that discharge only domestic or sanitary
wastes from a singles residential building
provided with septic tanks or their
equivalent. The Commission may impose
reasonable fees and charges for the
issuance or renewal of all permits required
herein.
(j) Serve as arbitrator for the determination
of reparations, or restitution of the damages
and losses resulting from pollution.
(k) Deputize in writing or request assistance
of appropriate government agencies or
instrumentalities for the purpose of
enforcing this Decree and its implementing
rules and regulations and the orders and
decisions of the Commission.
(p) Exercise such powers and perform such
other functions as may be necessary to
carry out its duties and responsibilities
under this Decree.
Section 7(a) of P.D. No. 984 further provides
in part:
Sec. 7(a) Public Hearing.Public hearing
shall be conducted by the Commissioner,
Deputy Commissioner or any senior official
duly designated by the Commissioner prior
to issuance or promulgation of any order or
decision by the Commissioner requiring the
discontinuance of discharge of sewage,
industrial wastes and other wastes into the
water, air or land resources of the
Philippines as provided in the Decree:
Provided, that whenever the Commission
finds a prima fade evidence that the
discharged sewage or wastes are of
immediate threat to life, public health, safety
or Welfare, or to animal or plant life, or
exceeds the allowable standards set by the
Commission, the Commissioner may issue

an
ex-parte
order
directing
the
discontinuance of the same or the
temporary suspension or cessation of
operation of the establishment or person
generating such sewage or wastes without
the necessity of a prior public hearing. x x x.
(italics supplied).
The ruling of the Court of Appeals that the
PAB has been divested of authority to act
on pollution-related matters in mining
operations is anchored on the following
provisions of R.A 7942 (Philippine Mining
Act of 1995):
SEC. 67. Power to Issue Orders.The
mines regional director shall, in consultation
with the Environmental Management
Bureau, forthwith or within such time as
specified in his order, require the contractor
to remedy any practice connected with
mining or quarrying operations, which is not
in accordance with safety and anti-pollution
laws and regulations. In case of imminent
danger to life or property, the mines regional
director may summarily suspend the mining
or quarrying operations until the danger is
removed, or appropriate measures are
taken by the contractor or permittee.
And
SEC. 115. Repealing and Amending Clause.
All laws, executive orders, presidential
decrees, rules and regulations, or parts
thereof which are inconsistent with any of
the provisions of this Act are hereby
repealed or amended accordingly.
The other provisions in Chapter XI on
Safety and Environmental Protection found
in RA 7942 promote the safe and sanitary
upkeep of mining areas to achieve wastefree and efficient mine development with
particular concern for the physical and
social
rehabilitation
of
areas
and
communities affected by mining activities,21
without however, arrogating

21
SEC.
63.
Mines
Safety
and
Environmental Protection.-All contractors
and permittees shall strictly comply with all
the mines safety rules and regulations as
may be promulgated by the Secretary
concerning the safe and sanitary upkeep of
the mining operations and achieve wastefree and efficient mine development.
Personnel of the Department involved in the
implementation of mines safety, health and
environmental rules and regulations shall be
covered under Republic Act No. 7305.
xxx
SEC. 66. Mine Inspection.The regional
director shall have exclusive jurisdiction
over the safety inspection of all installations,
surface or underground, in mining
operations at reasonable hours of the day or
night and as much as possible in a manner
that will not impede or obstruct work in
progress of a contractor or permittee.
xxx
xxx
x x x.
xxx
xxx
x x x.
SEC. 69. Environmental Protection.Every
contractor shall undertake an environmental
protection and enhancement program
covering the period of the mineral
agreement or permit. Such environmental
program shall be incorporated in the work
program which the contractor or permittee
shall submit as an accompanying document
to the application for a mineral agreement or
permit. The work program shall include not
only plans relative to mining operations but
also
to
rehabilitation,
regeneration,
revegetation
and
reforestation
of
mineralized areas, slope and stabilization of
mined-out and tailings covered areas,
aquaculture, watershed development and
water conservation; and socioeconomic
development.
SEC. 70. Environmental Impact Assessment
(EIA).Except during the exploration period
of a mineral agreement or financial or

technical assistance agreement or an

exploration permit, an environmental
clearance certificate shall be required based
on an environmental impact assessment
and procedures under the Philippine
Environmental Impact Assessment system
including Sections 26 and 27 of the Local
Government Code of 1991 which require
national government agencies to maintain
ecological balance, and prior consultation
with the local government units, nongovernmental and peoples organizations
and other concerned sectors of the
community: Provided, That a completed
ecological profile of the proposed mining
area shall also constitute part of the
environmental impact assessment. Peoples
organizations
and
non-governmental
organizations shall be allowed and
encouraged to participate in ensuring that
contractors/permittees shall observe all the
requirements of environmental protection.
SEC. 71. Rehabilitation.Contractors and
permittees shall technically and biologically
rehabilitate the excavated mined-out,
tailings covered and disturbed areas to the
condition of environmental safety, as may
be provided in the implementing rules and
regulations of this Act. A mine rehabilitation
fund shall be created, based on the
contractors approved work program, and
shall be deposited as a trust fund in a
government depository bank and used for
physical and social rehabilitation of areas
and communities affected by mining
activities and for research on the social,
technical and preventive aspects of
rehabilitation. Failure to fulfill the above
obligation shall mean immediate suspension
or closure of the mining activities of the
contractor/permittee concerned.
From a careful reading of the foregoing
provisions of law, we hold that the
provisions of RA 7942 do not necessarily

repeal RA 3931, as amended by PD 984

and EO 192. RA 7942 does not contain any
provision which categorically and expressly
repeals the provisions of the Pollution
Control Law. Neither could there be an
implied repeal. It is well-settled that repeals
of laws by implication are not favored and
that courts must generally assume their
congruent application. Thus, it has been
held:
The two laws must be absolutely
incompatible, and a clear finding thereof
must surface, before the inference of
implied repeal may be drawn. The rule is
expressed in the maxim, interpretare et
concordare
leqibus
est
optimus
interpretendi, i.e., every statute must be so
interpreted and brought into accord with
other laws as to form a uniform system of
jurisprudence. The fundament is that the
legislature should be presumed to have
known the existing laws on the subject and
not to have enacted conflicting statutes.
Hence, all doubts must be resolved against
any implied repeal, and all efforts should be
exerted in order to harmonize and give
effect to all laws on the subject.22
There is no irreconcilable conflict between
the two laws. Section 19 of EO 192 vested
the PAB with the specific power to
adjudicate pollution cases in general. Sec.
2, par. (a) of PD 984 defines the term
pollution as referring to any alteration of
the physical, chemical and biological
properties of any water, air and/or land
resources of the Philippines, or any
discharge thereto of any liquid, gaseous or
solid wastes as will or is likely to create or to
render such water, air and land resources
harmful, detrimental or injurious to public
health, safety or welfare or which will
adversely affect their utilization for
domestic,
commercial,
industrial,

agricultural, recreational or other legitimate

purposes.
On the other hand, the authority of the
mines regional director is complementary to
that of the PAB. Section 66 of RA 7942
gives the mines regional director exclusive
jurisdiction over the safety inspection of all
installations, surface or underground in
mining operations. Section 67 thereof vests
upon the regional director power to issue
orders requiring a contractor to remedy any
practice connected with mining or quarrying
operations which is not in accordance with
safety and anti-pollution laws and
regulations; and to summarily suspend
mining or quarrying operations in case of
imminent danger to life or property. The law
likewise requires every contractor to
undertake an environmental protection and
enhancement program which shall be
incorporated in the work program which the
contractor shall submit as an accompanying
document to the application for a mineral
agreement or permit. In addition, an
environmental clearance certificate is
required based on an environment impact
assessment. The law also requires
contractors and permittees to rehabilitate
the mined-out areas, and set up a mine
rehabilitation fund. Significantly, the law
allows
and
encourages
peoples
organizations
and
non-governmental
organizations to participate in ensuring that
contractors/permittees shall observe all the
requirements of environmental protection.
From the foregoing, it readily appears that
the power of the mines regional director
does not foreclose PABs authority to
determine and act on complaints filed
before it. The power granted to the mines
regional director to issue orders requiring
the contractor to remedy any practice
connected with mining or quarrying
operations or to summarily suspend the

same in cases of violation of pollution laws

is for purposes of effectively regulating and
monitoring
activities
within
mining
operations and installations pursuant to the
environmental protection and enhancement
program undertaken by contractors and
permittees in procuring their mining permit.
While the mines regional director has
express administrative and regulatory
powers over mining operations and
installations, it has no adjudicative powers
over complaints for violation of pollution
control statutes and regulations.
True, in Laguna Lake Development
Authority vs. Court of Appeals,23 this Court
held that adjudication of pollution cases
generally pertains to the Pollution
Adjudication Board (PAB) except where the
special law provides for another forum.
However, contrary to the ruling of the Court
of Appeals, RA 7942 does not provide for
another forum inasmuch as RA 7942 does
not vest quasi-judicial powers in the Mines
Regional Director. The authority is vested
and remains with the PAB.
Neither was such authority conferred upon
the Panel of Arbitrators and the Mines
Adjudication Board which were created by
the said law. The provisions creating the
Panel of Arbitrators for the settlement of
conflicts refer to disputes involving rights to
mining areas, mineral agreements or
permits and those involving surface owners,
occupants
and
claimholders/concessionaires. The scope of
authority of the
SEC. 77. Panel of Arbitrators.There shall
be a panel of arbitrators in the regional
office of the Department composed of three
(3) members, two (2) of whom must be
members of the Philippine Bar in good
standing and one a licensed mining
engineer or a professional in a related field,
and duly designated by the Secretary as

recommended
by
the
Mines
and
Geosciences Bureau Director. Those
designated as members of the panel shall
serve as such in addition to their work in the
Department without receiving any additional
compensation. As much as practicable, said
members shall come down from the
different bureaus of the Department in the
region. The presiding officer thereof shall be
selected by the drawing of lots. His tenure
as presiding officer shall be on a yearly
basis. The members of the panel shall
perform their duties and obligations in
hearing and deciding cases until their
designation is withdrawn or revoked by the
Secretary. Within thirty (30) working days,
after the submission of the case by the
parties for decision, the panel shall have
exclusive and original jurisdiction to hear
and decide on the following:
(a) Disputes involving rights to mining
areas;
(b) Disputes involving mineral agreements
or permits;
Panel of Arbitrators and the Mines
Adjudication Board conferred by RA 7942
clearly exclude adjudicative responsibility
(c) Disputes involving surface owners,
occupants
and
claimholders/concessionaires; and
(d) Disputes pending before the Bureau and
the Department at the date of the effectivity
of this Act.
SEC. 78. Appellate Jurisdiction.The
decision or order of the panel of arbitrators
may be appealed by the party not satisfied
thereto to the Mines Adjudication Board
within fifteen (15) days from receipt thereof
which must decide the case within thirty (30)
days from submission thereof for decision.
SEC. 79. Mines Adjudication Board.The
Mines Adjudication Board shall be
composed of three (3) members. The
Secretary shall be the chairman with the

Director of the Mines and Geosciences

Bureau and the Undersecretary for
Operations of the Department as members
thereof. The Board shall have the following
powers and functions:
(a) To promulgate rules and regulations
governing the hearing and disposition of
cases before it, as well as those pertaining
to its internal functions, and such rules and
regulations as may be necessary to carry
out its functions;
(b) To administer oaths, summon the parties
to a controversy, issue subpoenas requiring
the attendance and testimony of witnesses
or the production of such books, papers,
contracts, records, statement of accounts,
agreements, and other documents as may
be material to a just determination of the
matter under investigation, and to testify in
any investigation or hearing conducted in
pursuance of this Act;
(c) To conduct hearings on all matters within
its jurisdiction, proceed to hear and
determine the disputes in the absence of
any party thereto who has been summoned
or served with notice to appear, conduct its
proceedings or any part thereof in public or
in private, adjourn its hearings at any time
and place, refer technical matters or
accounts to an expert and to accept his
report as evidence after hearing of the
parties upon due notice, direct parties to be
joined in or excluded from the proceedings,
correct, amend, or waive any error, defect or
irregularity, whether in substance or in form,
give all such directions as it may be deemed
necessary
or
experiment
in
the
determination of the dispute before it, and
dismiss the mining over pollution cases.
Nowhere is there vested any authority to
adjudicate cases involving violations of
pollution laws and regulations in general.
Thus, there is no genuine conflict between
RA 7942 and RA 3931 as amended by PD

984 that precludes their co-existence.

Moreover, it has to be conceded that there
was no intent on the part of the legislature
to repeal the said law. There is nothing in
the sponsorship speech25 of the laws
proponent, dispute as part thereof, where it
is trivial or where further proceedings by the
Board are not necessary or desirable;
(1) To hold any person in contempt, directly
or indirectly, and impose appropriate
penalties therefor; and
(2) To enjoin any or all acts involving or
arising from any case pending before it
which, if not restrained forthwith, may cause
grave or irreparable damage to any of the
parties to the case or seriously affect social
and economic stability.
In any proceeding before the Board, the
rules of evidence prevailing in courts of law
or equity shall not be controlling and it is the
spirit and intention of this Act that shall
govern. The Board shall use every and all
reasonable means to ascertain the facts in
each case speedily and objectively and
without regard to technicalities of law or
procedure, all in the interest of due process.
In any proceeding before the Board, the
parties may be represented by legal
counsel. The findings of fact of the Board
shall be conclusive and binding on the
parties and its decision or order shall be
final and executory.
25 It is an undisputed fact that the
Philippines is one of the highly mineralized
countries in the world with a wide range of
economic minerals found in over 77 percent
of its 76 provinces.
The country was estimated to have 30.8
billion metric tons, of which 11.5 billion
metric tons (37.3%) are metallic and 19.3
billion metric tons (62.3%) are non-metallic.
As of 1990, the countrys total mineral ore
reserves was 18 million metric tons. Metallic
ores such as primary gold, primary copper,

Chromite and iron, were pegged at 8.8

billion metric tons. Non-metallic ores, on the
other hand, such as cement raw materials,
magnesite and marble, were placed at
around
9.1
billion
metric
tons.
Representative Renato Yap, and the
deliberations that followed thereafter, to
indicate a legislative intent to repeal the
In the 1970s when the mining industry was
contributing about 23% of the countrys total
export earnings, it had 32 metal producing
firms.
The heydays of the mining industry was not
to be sustained when world metal prices
started to decline in 1982.
While there were 31 gold and copper mining
firms in 1982, this dwindled to only 16 in
1987, and to 12 as of this month.
Today, almost all the remaining mining firms
are declaring losses in millions and are
laying off thousands of workers.
Where lies the problem? What needs to be
done?
While the most obvious explanation for the
sorry state of the mining industry is the
plummeting worldwide market prices
especially for metals, much blame is pointed
at inconsistent and changing laws that fail to
optimize the use of our mineral resources
and make the industry incompetitive in the
global market.
The mining industry has also been hit by
environmental groups. . . /ala
xxx
MR. YAP (R.) . . . by environmental groups
who have been painting mining as a dirty,
unnecessary and ecologically devastating
exercise.
In the past months, your Committees on
Natural Resources, Ways and Means, and
Local Government have been working to
resuscitate the mining industry by coming
up with a most practicable mining package.
These measures are: Committee Report

No. 294 on House Bill No. 10816;

Committee Report No. 289 on House Bill
No. 10693 and Committee Report to be filed
on House Bill No. 10694.
This mining package seeks to address the
three major concerns of the industry: the
need for a comprehensive law to cover the
exploration, development, utilization and
conservation of mineral resources; the need
to address the mining safety and
environmental protection concerns in the
mining operations; and the need to revitalize
the mining industry for it to be able to
compete in the world market through: (1)
incentives under the Omnibus Investments
Acts: (2) the setting of the government
share or excise tax under the National
Internal Revenue Act at 2% to make the
mining industry pollution law. Instead, it
appears that the legislature intended to
maximize the exploration, development and
utilization of the countrys mineral resources
to contribute to the achievement of national
economic and social development with due
regard to the social and environmental cost
implications relative thereto. The law
intends to increase the productivity of the
countrys mineral resources while at the
same time assuring its sustainability through
judicious use and systematic rehabilitation.
Henceforth, the Department of Environment
and Natural Resources as the primary
government agency responsible for the
conservation, management, development,
and proper use of the States mineral
resources, through its Secretary, has the
authority to enter into mineral agreements
on behalf of the Government upon the
recommendation of the Director, and to
promulgate such rules and regulations as
may be necessary to carry out the
provisions of RA 7942.26 The PAB and the
Mines Regional Director, with their
complementary functions and through their

combined efforts, serve to accomplish the

mandate of RA 3931 (National Pollution
Control Decree of 1976) as amended by PD
984 and EO 192 and that of RA 7942
(Philippine Mining Act of 1995).
That matter settled, we now go to the issue
of whether the appellate court erred in ruling
that there is no basis for further payments
by MMC to the Ecology Trust Fund of the
Calancan
Bay Rehabilitation
Project
considering that MMC convincingly argued
and which respondent unsatisfactorily
competitive worldwide; and lastly, the
exemption to tailings dam or pond and other
pollution control devices from the real
property tax under the Local Government
Code.
xxx
On the aspect of mining safety and
environmental protection, the Act mandates
strict compliance by the contractors and
permittees with the mines safety rules and
regulations that shall be promulgated by the
DENR Secretary.
Furthermore, Mr. Speaker, the Act also
requires
contractors,
licensees
and
permittees to rehabilitate technically and
biologically the excavated mined-out,
tailings covered and disturbed areas.
rebuked, the existing fourteen (14) million
pesos in the ETF is more than enough to
complete the rehabilitation project. Indeed,
the records reveal that witness for PAB, Mr.
Edel Genato, who is the Technical Resource
person of the PAB for the project admitted
that the funds in the ETF amounting to
about Fourteen Million Pesos are more than
sufficient to cover the costs of rehabilitation.
Hereunder are excerpts from the transcript
of stenographic notes taken during the
hearing held on September 15, 1997:
ATTY. HERNANDEZ:27

I would like your Honor, if the court will

allow, our witness from the EBRB Your
Honor would attest to that...
JUSTICE JACINTO:
Is it not being taken from the 14 million?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
What is his role?
ATTY. HERNANDEZ:
He is our Technical Resource person Your
Honor, of the project.
JUSTICE RASUL:
In other words, he has participated in the..
(inaudible)?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
Do you agree with him?
MR. EDEL GENATO:
Yes, Your Honor, that the Calancan
rehabilitation program is being funded by
Marcopper through the Ecology Trust Fund.
JUSTICE RASUL:
Will the construction be finished in two
years time?
MR. EDEL GENATO:
Presently, under the Steering Committee of
the Calancan Bay Rehabilitation, there is
another phase that is being proposed.
Actually the two years time will definitely
cover the other phase of the . . . (inaudible)
JUSTICE RASUL:
Never mind that. Will the amount be
sufficient to the end of the construction?
MR. EDEL GENATO:
Yes, Sir.
JUSTICE RASUL:
Enough?
MR. EDEL GENATO:
Yes, Sir.
JUSTICE RASUL:

There is no more need for collecting the 30

thousand a day? Do not. . . I will hold you
for contempt . . .
ATTY. HERNANDEZ:
Im sorry Your Honor.
JUSTICE RASUL:
Again.
MR. EDEL GENATO:
Well Your Honor, I cannot comment on the
amount Your Honor.
JUSTICE RASUL:
You have already made your comment, but
you received some signal from your lawyer.
ATTY. HERNANDEZ:
Your Honor . . .
MR. EDEL GENATO:
No, no Your Honor . . .
JUSTICE RASUL:
My question is, do you agree with him that
the 14 million fund will be enough to sustain
the construction up to the end?
MR. EDEL GENATO:
Two years?
JUSTICE RASUL:
Yes.
MR. EDEL GENATO:
Your Honor . . .
JUSTICE AMIN:
Categorical answer.
JUSTICE RASUL:
You just answer, is it enough, in your own
honest way, on your honor?
MR. EDEL GENATO:
I think so Your Honor.
We must sustain the appellate court on this
point on account of the testimony of Mr.
Edel Genato. Further, we note that the
Office of the President never objected nor
ruled on the manifestation dated July 9,
1991 filed by MMC that it would stop paying
since it already ceased dumping mine
tailings into the bay. Still further, the order of
the OP directing MMC to rehabilitate at a
cost of P30,000.00 a day during the

efficacy of the restraining order had

become functus officio since MMC
voluntarily stopped dumping mine tailings
into the bay.
To sum up, PAB has jurisdiction to act and
rule on the letter-complaint of Mayor
Wilfredo Red of Marinduque for violation of
PD 984 and its implementing rules and
regulations which jurisdiction was not lost
upon the passage of RA 7942 (the
Philippine
Mining
Act
of
1995).
Nevertheless, MMC must be declared not to
have arrears in deposits as admittedly, the
ETF already has more than sufficient funds
to undertake the rehabilitation of Calancan
Bay.
WHEREFORE, the petition is hereby
partially GRANTED. The assailed Decision
is REVERSED insofar as the jurisdiction of
the PAB to act on the complaint is
concerned; but AFFIRMED insofar as
Marcopper Mining Corporation has no
arrears in deposits with the Ecology Trust
Fund of the Calancan Bay Rehabilitation
Project.
SO ORDERED.
G.R. No. 92461. September 2, 1992.*
ESTATE DEVELOPERS AND INVESTORS
CORPORATION, petitioner, vs. COURT
OF APPEALS, ROSALIE OROPESA
and/or NESTOR OROPESA, respondents.
Administrative
Law;
Administrative
Agencies; Jurisdiction over cases involving
sale of subdivision lots.In a similar case
entitled, Estate Developers and Investors
Corporation vs. Antonio Sarte, et al., the
Court affirmed the exclusive jurisdiction of
the NHA to hear and decide cases falling
within Section 1 of P.D. No. 1344. Said the
Court: The language of this section,
particularly, the second portion thereof,
leaves no room for doubt that exclusive
jurisdiction over the case between the

petitioner and private respondent is vested

not on the RTC but on the NHA. The NHA
was
re-named
Human
Settlements
Regulatory Commission and thereafter it
was re-named as the Housing and Land
Use Regulatory Board (HLURB). x x x
Petitioners reliance on Section 19
paragraph 8 of the Judiciary Reorganization
Act of 1980 is misplaced. Section 19
paragraph 6 of the same law is material to
the issue of where jurisdiction lies: Section
19. Regional trial courts shall exercise
exclusive original jurisdiction. (6) In all
other cases not within the exclusive
jurisdiction of any court, tribunal, persons or
body exercising judicial or quasi-judicial
functions.
(Italics
supplied)
The
constitutionality of such grant of exclusive
jurisdiction to the National Housing Authority
(now HLURB) over cases involving the sale
of commercial subdivisions was upheld in
Tropical Homes, Inc. vs. National Housing
Authority, and again sustained in a later
decision in Antipolo Realty Corporation vs.
National Housing Authority.
PETITION for review of the decision of the
Court of Appeals.
The facts are stated in the opinion of the
Court.
Lino M. Patajo for petitioners.
Guerrero Lazo & Associates for
respondents.
NOCON, J.:
The sole issue before Us is one of
jurisdiction. In an action filed by a developer
of a subdivision against a buyer of a lot in
said subdivision for collection of the balance
of the unpaid price of said lot evidenced by
a promissory note executed by the lot buyer,
does jurisdiction lie with the regular courts
under Batas Pambansa Bilang 129 or with
the Housing and Land Use Regulatory

Board, being the successor of the National

Housing Authority under Presidential
Decree No. 957?
The undisputed facts of the case are as
follows:
On May 23, 1988, petitioner filed a
complaint before Branch XXXII of the
Regional Trial Court of Manila for collection
of the amount due under a promissory note
executed
by
herein
respondents
representing the unpaid balance of the
purchase price of a lot bought by the latter
from the former.
Respondents refused to pay the balance of
the purchase price of the subdivision lot due
to petitioners abandonment
of
its
undertaking to fully develop the Antipolo
Hills Subdivision. This was the same reason
which prompted the other buyers of the
subdivision units to group themselves and
form the Antipolo Hills Homeowners
Association,
Inc.,
of
which
herein
respondents are members, in order that
they may better be heard by petitioner.
The Association filed a complaint against
petitioner before the Housing and Land Use
Regulatory Board (HLURB), pursuant to its
exclusive jurisdiction as provided under P.D.
957, for non-development of the Antipolo
Hills Subdivision.
In its Very Urgent Omnibus Motion before
the HLURB, the Association prayed that
petitioner be restrained from collecting the
monthly amortization of the homeowners, to
take over the development of the Antipolo
Hills Subdivision and to allow respondents
to directly make their payment of monthly
amortizations with the HLURB.
The HLURB rendered its Order,1 stating:
In view of
the
above
provision
complainants members may suspend
payments of their monthly amortizations
after giving due notice to the owner or
developers of said subdivision.

The Housing and Land Use Arbiter likewise

rendered its decision,2 the dispositive
portion of which reads:
WHEREFORE,
PREMISES
CONSIDERED,
judgment
is
hereby
rendered ordering respondent upon finality
hereof, to report and coordinate with the
Land Use Planning Office and the
Development Monitoring Office of this Board
for the purpose of complying with the
directives hereinbelow enumerated:
1. To provide sufficient water supply and fire
hydrants in the subdivision in accordance
with the approved development plan;
2. To construct, repair and maintain said
subdivisions drainage in accordance with
the approved plan;
3. To make strong representations with the
MERALCO for the early completion of the
electrical facilities as respondent has paid
the total amount of P404,525.00 as of June
2, 1988, for Phase II and to desist from
collecting the expenses incurred therefore
from complainant;
4. To repair and maintain the damaged
streets as shown in the ocular inspection
reports on March 5, 1988 and April 29,
1987;
The above directives shall be completed
within a period of six (6) months from finality
of this decision.
Further, respondent is hereby ordered to
pay the Board within fifteen (15) days from
finality hereof the amount of P5,000.00 as
administrative fine for violation of Section 20
in relation to Section 38 of P.D. 957.
Copies of this decision shall be furnished
the Development Monitoring Office and the
Land Use Planning office of this Board for
monitoring.
IT IS SO ORDERED.3
Petitioners then appealed the Arbiters
decision to the Housing and Land Use
Regulatory Board. The HLURB on July 25,

1989 rendered its decision,4 sustaining the

Arbiters earlier decision.
On the other hand, the complaint of
petitioner against respondents before the
civil court for collection of the amount due
under their promissory notes was decided
on September 26, 1988, in favor of the
petitioner, the dispositive portion of which
reads:
ACCORDINGLY, judgment is hereby
rendered in favor of plaintiff and against
defendants, ordering defendants, jointly and
severally, to pay plaintiff:
(1) P39,440 plus 26% interest per annum
from May 8, 1985 until the whole amount is
fully paid;
(2) P2,000 as attorneys fees; and
(3) to pay the costs.
SO ORDERED.5
Their motion for reconsideration having
been denied, respondents elevated the
case to the Court of Appeals, which
rendered a decision6 in their favor, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing
considerations, the default judgment
appealed from is therefore REVERSED and
set aside and another one is hereby
rendered
granting
the
appeal,
by
DISMISSING the case for lack of
jurisdiction, with costs against the plaintiffappellee.
SO ORDERED.
Hence, the present petition, which We find
unmeritorious.
Section 1 of Presidential Decree No. 1344
gives the National Housing Authority (NHA)
the exclusive jurisdiction to hear and decide
certain cases as follows:
SECTION 1. In the exercise of its function
to regulate the real estate trade and
business and in addition to its powers
provided for in Presidential Decree No. 957,
the National Housing Authority shall have

exclusive jurisdiction to hear and decide

cases of the following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other
claims filed by subdivision lot or
condominium unit buyer against the project
owner, developer, dealer, broker or
salesman; and
C. Cases involving specific performance of
contractual and statutory obligations filed by
buyers of subdivision lot or condominium
unit against the owner, developer, dealer,
broker or salesman.
In a similar case entitled, Estate Developers
and Investors Corporation vs. Antonio Sarte,
et al.,7 the Court affirmed the exclusive
jurisdiction of the NHA to hear and decide
cases falling within Section 1 of P.D. No.
1344. Said the Court:
The language of this section, particularly,
the second portion thereof, leaves no room
for doubt that exclusive jurisdiction over the
case between the petitioner and private
respondent is vested not on the RTC but on
the NHA. The NHA was renamed Human
Settlements Regulatory Commission and
thereafter it was re-named as the Housing
and Land Use Regulatory Board (HLURB).8
This was reinforced by Section 8 of
Executive Order 648,9 otherwise known as
the Charter of the Human Settlements
Regulatory Commission, which states:
SECTION 8. Transfer of Functions:The
regulatory functions of the National Housing
Authority pursuant to Presidential Decrees
Nos. 957, 1216, 1344 and other related
laws are hereby transferred to the Human
Settlements Regulatory Commission. x x x
Among the regulatory functions are x x x (1)
Hear and decide cases of unsound real
estate business practices, claims involving
refund filed against project owners,
developers, dealers, brokers, or salesmen
and cases of specific performance.

Petitioners reliance on Section 19

paragraph 8 of the Judiciary Reorganization
Act of 1980 is misplaced. Section 19
paragraph 6 of the same law is material to
the issue of where jurisdiction lies:
Section 19. Regional trial courts shall
exercise exclusive original jurisdiction.
(6) In all other cases not within the
exclusive jurisdiction of any court, tribunal,
persons or body exercising judicial or
quasijudicial functions. (Italics supplied)
The constitutionality of such grant of
exclusive jurisdiction to the National
Housing Authority (now HLURB) over cases
involving
the
sale
of
commercial
subdivisions was upheld in Tropical Homes,
Inc. vs. National Housing Authority,10 and
again sustained in a later decision in
Antipolo Realty Corporation vs. National
Housing Authority.11
A close scrutiny of the complaint discloses
that the promissory note upon which the
collection suit is predicated, merely
schedules the amortization of the balance or
unpaid portion of the purchase price of the
house and lot. What appellant is collecting
involves the sales of lots in commercial
subdivisions, which per the Tropical Homes
case jurisdiction lies with the HLURB, and
not with the civil courts.

As We have said in Estate Developers and

Investors Corporation vs. Sarte, et al.:
We cannot uphold the contention of the
petitioner that the NHA (now HLURB) has
jurisdiction under PD 1344 over complaints
filed by a subdivision buyer against the
project owner or developer but not over
claims filed by a developer against the lot
buyer for the purchase price of the lot sold
by the latter. While PD 957 was designed to
meet the need basically to protect lot buyers
from the fraudulent manipulations of
unscrupulous subdivision owners, sellers
and operators (See Whereas clauses) the
exclusive jurisdiction vested in the NHA is
broad and generalto regulate the real
estate trade and business in accordance
with the provisions of said law. As clarified in
PD 1344, such exclusive jurisdiction
includes jurisdiction to hear and decide
cases involving unsound real estate
business practices (Sec. 1 [A]) as well as
claims for refund and complaints for specific
performance filed by the buyer (paragraphs
B&C).12
WHEREFORE, finding no reversible error in
the decision appealed herefrom, the same
is hereby AFFIRMED in toto.
SO ORDERED.