February 23, 2016

G.R. No. 188720

QUEZON CITY PTCA FEDERATION, INC., Petitioner,

vs.
DEPARTMENT OF EDUCATION, represented by SECRETARY JESLI A. LAPUS, Respondent.

DECISION

LEONEN, J.:

This resolves a Petition for Certiorari and Prohibition1 praying that respondent Department of Education’s Department Order
No. 54, Series of 2009 (Department Order) be nullified for being unconstitutional and contrary to law, and that a writ of
prohibition permanently enjoining the Department of Education and all persons acting on its behalf from enforcing the
assailed Department Order be issued.2

The Petition also prays that, in the interim, a temporary restraining order and/or writ of preliminary injunction be issued,
restraining the enforcement of the Department Order.

On June 1, 2009, the Department of Education, through Former Secretary Jesli A. Lapus, issued Department Order No. 54,
Series of 20093 entitled Revised Guidelines Governing Parents-Teachers Associations (PTAs) at the School Level.

The Department of Education explained the reasons for the issuance of the Department Order as follows:

The Department Order sought to address the limitations of the guidelines set forth in D.O. No. 23, s. 2003 and was
issued in response to increasing reports of malpractices by officers or members of PTAs, such as, but not limited to
(1) officers absconding with contributions and membership fees; (2) non-disclosure of the status of funds and non-
submission of financial statements; and (3) misuse of funds.4 (Citations omitted)

The Department Order is divided into 11 articles: (I) General Policy; 5 (II) Organization of PTAs at the School Level; 6 (III)
General Assembly;7 (IV) Board of Directors and Officers;8 (V) Recognition and Monitoring of PTAs;9 (VI) Privileges of
Recognized PTAs;10 (VII) Activities;11 (VIII) Financial Matters;12 (IX) Prohibited Activities and Sanctions;13 (X) Transitory
Provision;14 and (XI) Repealing Clause.15

More specifically, the Department Order provides for:

(1) The approval of the school head as a prerequisite for PTAs to be organized:

II. Organization of PTAs at the School Level

....

2. Within fifteen (15) days from the start of the school year the Homeroom Adviser and the
Parents/Guardians shall organize the Homeroom PTA with the approval of the School Head. 16

(2) The terms of office and manner of election of a PTA’s board of directors:

II. Organization of PTAs at the School Level

....

3. The elected presidents of the Homeroom PTAs and their respective Homeroom Advisers shall
elect the Board of Directors within thirty (30) days from the start of the school year. The Board of
 Directors shall immediately elect from among themselves the executive officers of the PTA on the
same day of their election to the Board.17

....

IV. Board of Directors and Officers

1. The administration of the affairs and management of activities of the PTA is vested [in] the Board
of Directors and its officers in accordance with these guidelines or their respective Constitution and
By-Laws, if any, which shall adhere to the following:

....

e. The term of office of the Board of Directors and its Officers shall be one (1) year from the
date of election. In no case shall a PTA Board Director serve for more than two (2)
consecutive terms;18

(3) The cessation of recognition of existing parents-teachers community associations (PTCAs) and of their
federations effective school year 2009–2010. The Department Order gave them until June 30, 2009 to dissolve, wind
up their activities, submit financial reports, and turn over all documents to school heads and schools division
superintendents:

X. Transitory Provision

Existing and duly recognized PTCAs and its [sic] Federations shall no longer be given recognition effective School Year 2009-
2010. They shall cease operation at the end of School Year 2008-2009 and given until June 30, 2009 to dissolve, wind up
their activities, submit their financial reports and turn-over all documents to the School Heads and Schools Division
Superintendents, respectively.19

Petitioner Quezon City PTCA Federation filed the present Petition in the belief that the above-quoted provisions undermine
the independence of PTAs and PTCAs, effectively amend the constitutions and by-laws of existing PTAs and PTCAs, and
violate its constitutional rights to organize and to due process, as well as other existing laws. 20

On November 17, 2009, the Department of Education filed its Comment, 21 and on February 9, 2010, Quezon City PTCA
Federation filed its Reply.22

In the Resolution23 dated January 8, 2013, this court gave due course to the Petition and required the parties to submit their
memoranda. Quezon City PTCA Federation complied on March 22, 2013, 24 and the Department of Education on May 15,
2013.25

For resolution is the central issue of whether the Department of Education acted with grave abuse of discretion amounting
to lack or excess of jurisdiction in issuing Department Order No. 54, Series of 2009. Subsumed under this issue are:

First, whether the issuance of the Department Order was a valid exercise of the Department of Education’s rule-making
powers:

(a) Whether the Department Order contravenes any of the laws providing for the creation and organization of
parent-teacher associations;

(b) Whether Department Order is invalid and ineffective as no public consultations were (supposedly) held before its
adoption, and/or as it was not published by the Department of Education; and

Second, whether the assailed provisions of the Department Order (i.e., Article II (2) and (3), Article IV (1)(e), and Article X)
undermine the organizational independence of parent-teacher associations.

Apart from these, the Department of Education assails the filing of this Petition as being violative of the principle of hierarchy
of courts.
We sustain the position of the Department of Education. The present Petition was filed in violation of the principle of
hierarchy of courts. Department Order No. 54, Series of 2009 was validly issued by the Secretary of Education pursuant to
his statutorily vested rule-making power and pursuant to the purposes for which the organization of parent-teacher
associations is mandated by statute. Likewise, there was no fatal procedural lapse in the adoption of Department Order No.
54, Series of 2009.

The Department of Education correctly points out that the present Petition was filed in violation of the principle of hierarchy
of courts. On this score alone, the Petition should be dismissed.

It is true that petitions for certiorari and prohibition under Rule 65 of the 1997 Rules of Civil Procedure fall under the original
jurisdiction of this court. However, this is also true of regional trial courts and the Court of Appeals.

"[T]his Court will not entertain a direct invocation of its jurisdiction unless the redress desired cannot be obtained in the
appropriate lower courts, and exceptional and compelling circumstances justify the resort to the extraordinary remedy of a
writ of certiorari."26 Indeed, "concurrence [of jurisdiction] does not allow unrestricted freedom of choice of the court forum.
A direct invocation of the Supreme Court’s original jurisdiction to issue this writ should be allowed only when there are
special and important reasons, clearly and specifically set out in the petition."27

In Vergara v. Suelto:28

The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it
by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with
causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where
absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be
exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or
agencies whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of an
extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these
courts that the specific action for the writ’s procurement must be presented. This is and should continue to be the policy in
this regard, a policy that courts and lawyers must strictly observe.29

Petitioner argues that the present Petition justifies direct recourse to this court "considering the pervasive effect of the
assailed Department Order to all the different PTCAs or PTAs across the country and in order to avoid multiple suits that
would only serve to further clog the court’s dockets."30

This reason fails to impress.

That the effects of the Department Order extend throughout the country is a concern that can be addressed by recourse to
the Court of Appeals. Its territorial jurisdiction, much like this court’s, also extends throughout the country. Moreover, the
Court of Appeals is well-equipped to render reliable, reasonable, and well-grounded judgments in cases averring grave abuse
of discretion amounting to lack or excess of jurisdiction. Recourse to the Court of Appeals is not a futile exercise that results
to nothing more than the clogging of court dockets.

II

Citing Article III, Section 8,31 Article II, Section 23,32 and Article XIII, Sections 1533 and 1634 of the 1987 Constitution,
petitioner asserts that PTCAs are "independent voluntary organization[s]" 35 "enjoying constitutional protection."36

It adds that, pursuant to Section 8(1) 37 of Batas Pambansa Blg. 232, otherwise known as the Education Act of 1982, and
Article 7738 of Presidential Decree No. 603, otherwise known as the Child and Youth Welfare Code, the PTCA "promotes and
protects the welfare of . . . students all over the country and . . . serve[s] as a forum for parents and the community to have
an active role in the efficient implementation of the . . . programs of the school [sic]." 39

Petitioner assails the Department Order as an inordinate exercise of the Department of Education’s rule-making power. It
claims that the Department Order contradicts the provisions of the Education Act of 1982 and of the Child and Youth Welfare
Code, the statutes that provide for the creation of PTAs. It also alleges that the Department Order was issued without prior
consultation and publication, contrary to the requirements for regulations issued by administrative agencies.
Noting that the Department Order lends recognition only to PTAs and not to PTCAs, petitioner assails the Department Order
as being contrary to the purposes of Republic Act No. 9155, 40 otherwise known as the Governance of Basic Education Act of
2001, and of Republic Act No. 8980,41 otherwise known as the Early Childhood Care and Development Act.

Petitioner further claims that Article II (2) of the Department Order, which provides for the organization of the Homeroom
PTA with the approval of the School Head, infringes upon the independence of PTCAs and PTAs. It asserts that this provision
gives "unbridled discretion [to the school head] to disapprove the organization of a PTA." 42 Petitioner likewise assails the
Department Order’s provisions on the terms of office of PTA officers as being violative of the right to due process. 43

III

The three powers of government—executive, legislative, and judicial—have been generally viewed as non-delegable.
However, in recognition of the exigencies that contemporary governance must address, our legal system has recognized the
validity of "subordinate legislation," or the rule-making power of agencies tasked with the administration of government. In
Eastern Shipping Lines v. Philippine Overseas Employment Administration:44

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

The reason is the increasing complexity of the task of government and the growing inability of the legislature to cope directly
with the myriad problems demanding its attention. The growth of society has ramified its activities and created peculiar and
sophisticated problems that the legislature cannot be expected reasonably to comprehend. Specialization even in legislation
has become necessary. To many of the problems attendant upon present-day undertakings, the legislature may not have the
competence to provide the required direct and efficacious, not to say, specific solutions. These solutions may, however, be
expected from its delegates, who are supposed to be experts in the particular fields assigned to them.

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

With this power, administrative bodies may implement the broad policies laid down in a statute by "filling in" the details
which the Congress may not have the opportunity or competence to provide. This is effected by their promulgation of what
are known as supplementary regulations, such as the implementing rulesissued by the Department of Labor on the new
Labor Code. These regulations have the force and effect of law.45

Administrative agencies, however, are not given unfettered power to promulgate rules. As noted in Gerochi v. Department of
Energy,46 two requisites must be satisfied in order that rules issued by administrative agencies may be considered valid: the
completeness test and the sufficient standard test:

In the face of the increasing complexity of modern life, delegation of legislative power to various specialized administrative
agencies is allowed as an exception to this principle. Given the volume and variety of interactions in today’s society, it is
doubtful if the legislature can promulgate laws that will deal adequately with and respond promptly to the minutiae of
everyday life. Hence, the need to delegate to administrative bodies – the principal agencies tasked to execute laws in their
specialized fields – the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.
All that is required for the valid exercise of this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to, but in conformity with, the standards
prescribed by the law. These requirements are denominated as the completeness test and the sufficient standard
test.47 (Emphasis supplied)

Further, in ABAKADA GURO Party List v. Purisima :48

Two tests determine the validity of delegation of legislative power:

(1) the completeness test

 A law is complete when it sets forth therein the policy to be executed, carried out or implemented by the delegate.

(2) the sufficient standard test

It lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map out the
boundaries of the delegate’s authority and prevent the delegation from running riot. To be sufficient, the standard must
specify the limits of the delegate’s authority, announce the legislative policy and identify the conditions under which it is to
be implemented.49 (Citations omitted)

In addition to the substantive requisites of the completeness test and the sufficient standard test, the Administrative Code of
1987 (Administrative Code) requires the filing of rules adopted by administrative agencies with the University of the
Philippines Law Center. Generally, rules filed with the University of the Philippines Law Center become effective 15 days after
filing. Chapter 2 of Book VII of the Administrative Code provides:

CHAPTER 2
Rules and Regulations

SECTION 3. Filing.—(1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of
every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months
from that date shall not thereafter be the basis of any sanction against any party or persons.

(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of this section
under pain of disciplinary action.

(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public inspection.

SECTION 4. Effectivity.—In addition to other rule-making requirements provided by law not inconsistent with this Book, each
rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law,
or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be
expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules
known to persons who may be affected by them.

SECTION 5. Publication and Recording.—The University of the Philippines Law Center shall:

(1) Publish a quarterly bulletin setting forth the text of rules filed with it during the preceding quarter; and

(2) Keep an up-to-date codification of all rules thus published and remaining in effect, together with a complete
index and appropriate tables.

SECTION 6. Omission of Some Rules.—(1) The University of the Philippines Law Center may omit from the bulletin or the
codification any rule if its publication would be unduly cumbersome, expensive or otherwise inexpedient, but copies of that
rule shall be made available on application to the agency which adopted it, and the bulletin shall contain a notice stating the
general subject matter of the omitted rule and new copies thereof may be obtained.

(2) Every rule establishing an offense or defining an act which, pursuant to law is punishable as a crime or subject
to a penalty shall in all cases be published in full text.

SECTION 7. Distribution of Bulletin and Codified Rules.—The University of the Philippines Law Center shall furnish one (1)
free copy each of every issue of the bulletin and of the codified rules or supplements to the Office of the President,
Congress, all appellate courts and the National Library. The bulletin and the codified rules shall be made available free of
charge to such public officers or agencies as the Congress may select, and to other persons at a price sufficient to cover
publication and mailing or distribution costs.
SECTION 8. Judicial Notice.—The court shall take judicial notice of the certified copy of each rule duly filed or as published in
the bulletin or the codified rules.

SECTION 9. Public Participation.—(1) If not otherwise required by law, an agency shall, as far as practicable, publish or
circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of
any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in
a newspaper of general circulation at least two (2) weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

IV

The Education Act of 1982 vested in the then Ministry of Education, Culture and Sports 50 "[t]he administration
of the education system and . . . the supervision and regulation of educational institutions."51 Section 70 of the
Education Act of 1982 vested rule-making authority in the Minister of Education who, under Section 55 52 of the same
statute, was the head of the Ministry:

Section 70. Rule-making Authority. – The Minister of Education, Culture and Sports charged with the administration and
enforcement of this Act, shall promulgate the necessary implementing rules and regulations.

Apart from the Education Act of 1982, Book IV, Chapter 2 of the Administrative Code provides for the rule-making
power of the secretaries heading the departments that comprise the executive branch of government:

SECTION 7. Powers and Functions of the Secretary.—The Secretary shall:

....

(4) Promulgate administrative issuances necessary for the efficient administration of the offices under the Secretary and for
proper execution of the laws relative thereto. These issuances shall not prescribe penalties for their violation, except when
expressly authorized by law;

It was pursuant to this rule-making authority that Former Secretary of Education Jesli A. Lapus promulgated Department
Order No. 54, Series of 2009. As its title denotes, the Department Order provided revised guidelines governing PTAs at the
school-level.

The Department Order does not exist in a vacuum. As underscored by the Department of Education, the Department Order
was issued "in response to increasing reports of malpractices by officers or members of PTAs." 53 Among these "malpractices"
are those noted in a resolution adopted by the "Regional Education Supervisors in-charge of THE [sic] Student Government
Program (SGP), selected Teachers-Advisers and the Officers of the National Federation of Supreme Student Governments
(NFSSG)"54 during a conference held from February 4 to 8, 2008. This same resolution formally sought to "review and
[revise] the Guidelines Governing PTAs/PTCAs at the School Level as contained in DepED Order No. 23, s. 2003." 55 The
malpractices noted were:

PTA/PICA officers absconding with the [sic] contributions and membership fees;

Non-remittance or turn-over of collected funds in the name of organizations such as SSG funds, STEP funds, School
Publication fee and the like;

Misuse of funds by re-channeling the amounts collected to other activities and projects not within the intended purpose;

Non-deposit of funds in reputable banks;

Non-disclosure of the status of the funds collected and non-submission of financial statements;
Fraudulent disbursements of funds due to the absence of resolutions, vouchers and official receipts; and,

Un-liquidated cash advances of PICA officers[.] 56

Thus, the Department Order rationalized the mechanism for the organizing and granting of official recognition to PTAs. Its
first to seventh articles read:

I. General Policy

1. Every elementary and secondary school shall organize a Parents-Teachers Association (PTA) for the purpose of
providing a forum for the discussion of issues and their solutions related to the total school program and to ensure
the full cooperation of parents in the efficient implementation of such program.

Every PTA shall provide mechanisms to ensure proper coordination with the members of the community, provide an
avenue for discussing relevant concerns and provide assistance and support to the school for the promotion of their
common interest. Standing committees may be created within the PTA organization to coordinate with community
members. Regular fora may be conducted with local government units, civic organizations and other stakeholders to
foster unity and cooperation.

2. As an organization operating in the school, the PTA shall adhere to all existing policies and implementing
guidelines issued or hereinafter may be issued by the Department of Education.

The PTA shall serve as support group and as a significant partner of the school whose relationship shall be defined
by cooperative and open dialogue to promote the welfare of the students.

II. Organization of PTAs at the School Level

1. Membership in a PTA is limited to parents, or in their absence the guardian, of duly enrolled students, and
teachers in a given school.

For this purpose, a guardian is hereby defined as any of the following: a) an individual authorized by the biological
parents to whom the care and custody of the student has been entrusted; b) a relative of the student within the
fourth degree of consanguinity or affinity provided that said relative has the care and custody over the child; c) an
individual appointed by a competent court as the legal guardian of the student; or d) in case of an orphan, the
individual/institution who has the care and custody of the student.

A teacher-member refers to homeroom advisers, subject teachers, and non-teaching personnel.

2. Within fifteen (15) days from the start of the school year the Homeroom Adviser and the Parents/Guardians shall
organize the Homeroom PTA with the approval of the School Head.

3. The elected presidents of the Homeroom PTAs and their respective Homeroom Advisers shall elect the Board of
Directors within thirty (30) days from the start of the school year. The Board of Directors shall immediately elect
from among themselves the executive officers of the PTA on the same day of their election to the Board.

4. The official name of the PTA shall bear the name of the school (example: Parents-Teachers Association of Rizal
High School or Rizal High School Parents-Teachers Association).

5. For representation in the Local School Board and other purposes, the schools’ PTAs within a municipality or city or
province shall federate and select from among the elected Presidents their respective officers. The president-elect
shall sit as representative of the Federation to the said Local School Board.

III. General Assembly

1. The General Assembly shall be composed of all parents of enrolled students of the school, Board of Directors and
Officers of the PTA, School Head, Homeroom Advisers, Subject Teachers, and Non-Teaching Personnel.
 2. The General Assembly shall be convened by the PTA Board of Directors immediately after the PTA has been
organized. The General Assembly shall be convened as may be necessary but in no case less than twice a year. The
Board shall coordinate with the School Head as to time, venue and other details of the General Assembly.

3. The General Assembly shall be a venue for presentation and discussion of the PTA’s programs, projects, financial
statements, reports and other matters.

4. The General Assembly may invite or consult with other members of the community such as local government
officials and civic organizations to solicit their support or active participation in school activities.

IV. Board of Directors and Officers

1. The administration of the affairs and management of activities of the PTA is vested [in] the Board of Directors and
its officers in accordance with these guidelines or their respective Constitution and By-Laws, if any, which shall
adhere to the following:

a. The Board of Directors shall be composed of fifteen (15) members who shall elect from among
themselves the association’s executive officers; namely: President, Vice-President, Secretary, Treasurer,
Auditor, or other equivalent positions, who shall oversee the day-to-day activities of the associations;

b. Parent-members shall comprise two-thirds (2/3) and teacher-members one-third (1/3) of the Board of
Directors;

c. A teacher-member cannot hold any position in the PTA except as a member of the Board of Directors or
as Secretary;

d. The School Head shall not serve as a member of the Board of Directors but as adviser to the PTA;

e. The term of office of the Board of Directors and its Officers shall be one (1) year from the date of
election. In no case shall a PTA Board Director serve for more than two (2) consecutive terms;

f. In case of vacancy in the Board of Directors as a result of expulsion, resignation or death, the vacancy
shall be filled, for the unexpired term of the office, by a majority vote of the Board of Directors from among
the Presidents of Homeroom PTAs in a special meeting called for such purpose.

g. Among the committees that may be formed to handle specific activities of the PTAs are: a) Committee on
Finance; b) Committee on Programs and Projects; c) Audit Committee; d) Election Committee; e) Grievance
Committee; f) Ways and Means Committee; g) Committee on External and Community Affairs;

h. The heads of the committees shall preferably come from the Board of Directors, Homeroom Presidents
and Homeroom Advisers; and

i. The PTA may or may not be incorporated with the Securities and Exchange Commission (SEC). If
incorporated, the registered entity shall, as far as practicable, be used in the organization of the PTA by the
elected Board of Directors. In any event, the formal notification by the elected Board of Directors outlined
below and the issuance of the Certificate of Recognition by the School Head shall be the operative act to
recognize the PTA.

V. Recognition and Monitoring of PTAs

1. There shall be only one PTA that will operate in a school which shall be recognized by the School Head upon
formal notification in writing by the elected Board of Directors. The recognition shall be valid for one year from the
date of election.

2. Together with the formal notification in writing, the elected Board of Directors shall submit Oaths of Office of the
Board of Directors and Officers (Enclosure No. 1) including a list of directors and officers.

3. A Division PTA Affairs Committee shall be created in the Division Office to be composed of the following:
 Chairperson - Schools Division Superintendent

Members - Assistant Schools Division Superintendent

Division Administrative Officer

Division Education Supervisor (In-Charge of PTA)

Division PESPA President (Elementary) or Division NAPSSHI President (Secondary)

President of the Division Federation of PTA

President of the Division Federation of SSG

4. The Division PTA Affairs Committee shall monitor the activities of the PTAs and their compliance with reports and
other requirements, arbitrate disputes and settle matters that may be submitted to it for resolution especially on PTA
representation issue.

VI. Privileges of Recognized PTAs

1. A PTA is authorized to collect voluntary contributions from parents/ guardian-members once it has been duly
recognized and given a Certificate of Recognition by the School Head (Enclosure No. 2). Such collections, however,
shall be subject to pertinent issuances of the DepED and/or existing pertinent ordinances of the local government
unit concerned, if any.

2. In addition, a duly recognized PTA shall have the following privileges:

a. The use of any available space within the school premises as its office or headquarters, provided, that
costs pertinent to electricity, water and other utilities shall be for the account of the PTA; provided however,
that should the school need such space, the PTA shall so vacate the space immediately. The maintenance
and improvement of the office shall be in accordance with the School Improvement Plan.

The DepED may allow the PTA to construct a building or structure within the school premises for its office,
provided however, that the PTA shall donate such building or structure and other permanent fixtures to the
school. Any improvement made on such building, structure or fixture that cannot be removed from such
building or structure without causing damage thereto shall be deemed the property of the school. A written
agreement shall be executed before the improvement or construction. A Deed of Donation shall also be
executed by and between the PTA and the school immediately after the completion of the improvement or
construction;

b. Representation in the School Governing Council;

c. Authorization to undertake fund-raising activities to support the school's academic and co-curricular
programs, projects and activities subject to pertinent DepED guidelines;

d. Participation in the school’s inspection and acceptance committee and as an observer in the school's
procurement activities subject to the provisions of R.A. No. 9184; and

e. Collaboration in relevant school activities.

VII. Activities

All PTA activities within the school premises or which involve the school, its personnel or students shall be with prior
consultation and approval of the School Head. 57
Moreover, the Department Order provides measures "to ensure transparency and accountability in the safekeeping and
utilization of funds[.] . . . [S]tringent measures were introduced to eliminate the increasing number of reported incidents
wherein officers of PTAs take undue advantage of their positions." 58 Specifically, Article VIII (on financial matters) of the
Department Order provides for a detailed policy and conditions on collections of contributions, safekeeping of funds,
financial reporting, and other measures for transparency and accountability:

VIII. Financial Matters

1. Policy on Collection of Contributions Cognizant of the need of an organization for adequate funds to sustain its
operations, a duly recognized PTA may collect voluntary financial contributions from members and outside sources
to enable it to fund and sustain its operation and the implementation of its programs and projects exclusively for the
benefit of the students and the school where it operates. The PTA’s programs and projects shall be in line with the
School Improvement Plan (SIP).

Such collections shall be made by the PTA subject to the following conditions:

a. The contributions should be a reasonable amount as may be determined by the PTA Board of Directors;

b. Non-payment of the contributions by the parent member shall not be a basis for non-admission or non-
issuance of clearance(s) to the child by the school concerned;

c. The contributions shall be collected by the PTA Treasurer on a per parent-member basis regardless of the
number of their children in school;

d. No collection of PTA contributions shall be done during the enrollment period; and

e. No teacher or any school personnel shall be involved in such collection activities.

If collection of the School Publications Fee, Supreme Student Government (SSG) Developmental Fund and other club
membership fees and contributions is coursed through the PTA as requested by the concerned organization, the
amount collected shall be remitted immediately to the school, SSG or other student organizations concerned on the
day it was collected. The pertinent organization shall deposit the funds with a reputable bank on the next banking
day under the organization's account. No service fee shall be charged against any student organization by the PTA.

Non-compliance or any violation of the aforementioned conditions shall be a ground for the cancellation of the PTA's
recognition and/or the filing of appropriate charges as the case may be.

2. Safekeeping of Funds

All collections of contributions or proceeds of fundraising activities shall be deposited in a reputable banking
institution as determined by the Board of Directors. The PTA’s Treasurer or a duly authorized representative shall
undertake the collection and shall issue official receipts/acknowledgement receipts.

In no case shall any school official or personnel be entrusted with the safekeeping and disbursement of collections
made by the PTA. All disbursements of funds shall be in accordance with generally accepted accounting and auditing
rules and regulations.

All disbursements shall be accompanied by appropriate resolutions indicating thereof the purposes for which such
disbursements are made.

No cash advances shall be allowed without valid liquidation of previous cash advances.

3. Financial Statement Report

The books of accounts and other financial records of the PTA shall be made available for inspection by the School
Head and/or the Division PTA Affairs Committee at any time.
 An Annual Financial Statement signed jointly by the PTA President, Treasurer and Auditor shall be submitted to the
School Head not later than thirty (30) days after the last day of classes. Such financial statement shall be audited by
an external and independent auditor, posted in the PTA Bulletin Board, and presented to the General Assembly
during the next school year.

The PTA shall also submit to the School Head not later than November 30, a mid-school year financial statement
report ending October 30 duly audited and signed by the members of the PTA’s audit committee.

Failure to submit such financial statement report shall be a ground for the cancellation of the recognition of the PTA
by the Division PTA Affairs Committee upon the recommendation of the School Head.

4. Transparency and Accountability

For purposes of transparency and accountability, all documents pertaining to the operations of the PTA shall be open
to public examination. PTA[s] are required to install a PTA Bulletin Board outside of its office where announcements,
approved resolutions, required reports and financial statements shall be posted. 59

Article IX of the Department Order’s details the acts and practices in which PTAs are prohibited from engaging. It also
stipulates the cancellation of a PTA’s recognition as a consequence of engaging in prohibited activities:

IX. Prohibited Activities and Sanctions

1. PTAs are prohibited from:

a. Interfering in the academic and administrative management and operations of the school, and of the
DepED, in general;

b. Engaging in any partisan political activity within school premises;

c. Operating a canteen/school supplies store, or being a concessionaire thereof inside the school or nearby
premises, or offering these services to the school as its client either directly or indirectly;

d. Selling insurance, pre-need plans or similar schemes or programs to students and/ or their parents; and

e. Such other acts or circumstances analogous to the foregoing.

2. PTA Officers and members of the Board of Directors are prohibited from collecting salaries, honoraria,
emoluments or other forms of compensation from any of the funds collected or received by the PTA.

3. PTAs shall have no right to disburse, or charge any fees as service fees or percentages against the amount
collected pertinent to the School Publication Fee, Supreme Student Government (SSG) Developmental Fund and
other club membership fees and contributions.

4. In no case shall a PTA or any of its officers or members of the Board of Directors call upon students and teachers
for purposes of investigation or disciplinary action.

5. The recognition of any PTA shall be cancelled by the Division PTA Affairs Committee upon the recommendation of
the School Head concerned for any violation of the above-mentioned prohibited activities and these Guidelines.

Thereafter, the School Head may call for a special election to replace the Board of Directors of the PTA whose recognition
was cancelled. Criminal, civil and/or administrative actions may be taken against any member or officer of the Board of the
PTA who may appear responsible for failure to submit the necessary annual financial statements or for failure to account the
funds of the PTA.60

Consistent with rationalizing the mechanism for granting official recognition to PTAs, Article X of the Department Order
provides for the following transitory provision:
X. Transitory Provision

Existing and duly recognized PTCAs and its Federations shall no longer be given recognition effective School Year 2009-
2010. They shall cease operation at the end of School Year 2008–2009 and given until June 30, 2009 to dissolve, wind up
their activities, submit their financial reports and turn-over all documents to the School Heads and Schools Division
Superintendents, respectively.61

Petitioner insists that the Department Order is an invalid exercise of the rule-making power delegated to the Secretary of
Education as it supposedly disregards PTAs’ and PTCAs’ purposes, not only as partners of the Department of Education in
the implementation of programs, but also as a watchdog against "abuses, mismanagement, inefficiency[,] and excesses of
public officials within the public school system."62 Petitioner also assails the Department Order’s limitation of official
recognition to PTAs, and no longer to PTCAs, as being contrary to law.

VI

Petitioner is in error for asserting that the assailed Department Order is contrary to the statutes it aims to put into effect as
it fails to put PTCAs on the same footing as PTAs.

Article 77 of the Child and Youth Welfare Code provides for the organization and purposes of PTAs:

Article 77. Parent-Teacher Associations. – Every elementary and secondary school shall organize a parent-teacher
association for the purpose of providing a forum for the discussion of problems and their solutions, relating to the total
school program, and for insuring the full cooperation of parents in the efficient implementation of such program . All parents
who have children enrolled in a school are encouraged to be active members of its PTA, and to comply with whatever
obligations and responsibilities such membership entails.

Parent-Teacher Association[s] all over the country shall aid the municipal and other local authorities and school officials in
the enforcement of juvenile delinquency control measures, and in the implementation of programs and activities to promote
child welfare.

(Emphasis supplied)

The Education Act of 1982, a statute adopted subsequent to the Child and Youth Welfare Code, expressly
recognizes the right of parents to organize by themselves and/or with teachers:

Section 8. Rights of Parents. – In addition to other rights under existing laws, all parents who have children enrolled in a
school have the following rights:

1. The right to organize by themselves and/or with teachers for the purpose of providing a forum for the discussion
of matters relating to the total school program, and for ensuring the full cooperation of parents and teachers in the
formulation and efficient implementation of such programs .

2. The right to access to any official record directly relating to the children who are under their parental
responsibility. (Emphasis supplied)

As is evident from the Child and Youth Welfare Code’s use of the word "shall," it is mandatory for PTAs to be organized in
elementary and secondary schools. As against this, the Child and Youth Welfare Code is silent on the creation of PTCAs. The
Education Act of 1982 is equally silent on this. Hence, while the creation and/or organization of PTAs are statutorily
mandated, the same could not be said of PTCAs.

However, petitioner argues differently. In support of its position, it cites Republic Act No. 9155, otherwise known as the
Basic Education Act of 2001, more specifically its Section 3(d), on its purposes and objectives:

Section 3. Purposes and Objectives. - The purposes and objectives of this Act are:

....
(d) To ensure that schools and learning centers receive the kind of focused attention they deserve and that educational
programs, projects and services take into account the interests of all members of the community[.]

Petitioner also cites Republic Act No. 8980, otherwise known as the Early Childhood Care and Development Act. More
specifically, petitioner cites Section 7(a)(1) on implementing arrangements and operational structures:

Sec. 7. Implementing Arrangements and Operational Structures . – The implementation of the National [Early Childhood Care
and Development or] ECCD System shall be the joint responsibility of the national government agencies, local government
units, non-government organizations, and private organizations that are accredited to deliver the services or to provide
training and technical assistance.

(a) Responsibilities of the National Government – National government agencies shall be responsible for developing
policies and programs, providing technical assistance and support to the ECCD service providers in consultation with
coordinating committees at the provincial, city/municipal, and barangay levels, as provided for in Section 8 of this
Act, and monitoring of ECCD service benefits and outcomes. The Department of Social Welfare and Development
(DSWD), the Department of Education, Culture and Sports (DECS), the Department of Health (DOH), the
Department of the Interior and Local Government (DILG), the Department of Labor and Employment (DOLE), the
Department of Agriculture (DA), the Department of Justice (DOJ), the National Economic and Development Authority
(NEDA), and the National Nutrition Council (NNC) shall jointly prepare annual ECCD for work plans that will
coordinate their respective technical assistance and support for the National ECCD Program. They shall consolidate
existing program implementing guidelines that ensure consistency in integrated service delivery within the National
ECCD System.

(1) The DECS shall promote the National ECCD Progman in schools. ECCD programs in public schools shall be under
the joint responsibility of their respective school principal/school-head and parents-teachers-community association
(PTCA) within the standards set forth in the National ECCD System and under the guidance of the City/Municipal
ECCD Coordinating Committee for the effective and equitable delivery of ECCD services. It shall also make available
existing facilities of public elementary schools for ECCD classes.

Neither Republic Act No. 9155 nor Republic Act No. 8980 supports petitioner’s contentions that PTCAs should stand on
the same footing as PTAs and that their existence is statutorily mandated.

Republic Act No. 9155 does not even mention or otherwise refer to PTCAs. All it does is exhort that the interest of all
members of the community should be taken into account in the administration of the country’s basic education system. The
Department Order does not run afoul of this. On the contrary, the Department Order specifically provides for PTAs’
collaboration with members of the community:

I. General Policy

1. Every elementary and secondary school shall organize a Parents-Teachers Association (PTA) for the purpose of providing
a forum for the discussion of issues and their solutions related to the total school program and to ensure the full cooperation
of parents in the efficient implementation of such program.

Every PTA shall provide mechanisms to ensure proper coordination with the members of the community , provide an avenue
for discussing relevant concerns and provide assistance and support to the school for the promotion of their common
interest. Standing committees may be created within the PTA organization to coordinate with community members. Regular
fora may be conducted with local government units, civic organizations and other stakeholders to foster unity and
cooperation.63 (Emphasis supplied)

Republic Act No. 8980 does mention PTCAs, but this is only in the specific context of the National Early Childhood Care and
Development (ECCD) System. The ECCD System "refers to the full range of . . . programs that provide for the basic holistic
needs of young children from birth to age six (6)."64 It is not even an education program and does not involve the age
range of students—elementary to high school—that is relevant to the Department Order. In any case, an isolated and
passing mention does not equate to a mandate.

Petitioner’s invocation of Republic Act Nos. 9155 and 8980 only serve to muddle the issues by entreating considerations that
are irrelevant to the purposes of the statute (i.e., the Child and Youth Welfare Code) that actually pertains to and requires
the organization of PTAs.
From the previously quoted provisions of the Child and Youth Welfare Code and the Education Act of 1982, the purposes for
which the organization of PTAs is mandated are clear. First, a PTA is to be a forum for discussion. Second, a PTA exists
to ensure the full cooperation of parents in the implementation of school programs. The assailed Department
Order serves these purposes.

By ensuring fiscal transparency and accountability, and by providing the basic framework for organization and official
recognition, the Department Order ensures that PTAs exist and function in a manner that remains consistent with the
articulated purposes of PTAs under the Child and Youth Welfare Code and the Education Act of 1982. A framework for
organization ensures that PTAs are properly organized and are both adequately representative of and limited only to those
interests that are appropriate to the education of children in elementary and high school.

Measures for fiscal transparency and accountability ensure that PTAs are not hampered by pecuniary or proprietary interests
that have nothing to do with the effective implementation of school programs. Finally, mechanisms for official recognition
ensure that only those associations that organize and conduct themselves in a manner that is consistent with these purposes
are privileged with state sanction.

VII

Contrary to petitioner’s contentions, the adoption of the Department Order is not tainted with fatal procedural defects.

Petitioner decries the supposed lack of public consultations as being violative of its right to due process.

Notice and hearing are not essential when an administrative agency acts pursuant to its rule-making power. In Central Bank
of the Philippines v. Cloribel:65

Previous notice and hearing, as elements of due process, are constitutionally required for the protection of life or vested
property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial
proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to
the validity of general rules or regulations promulgated to govern future conduct of a class of persons or enterprises, unless
the law provides otherwise[:]

....

"It is also clear from the authorities that where the function of the administrative body is legislative, notice of
hearing is not required by due process of law. See Oppenheimer, Administrative Law, 2 Md. L.R. 185, 204, supra,
where it is said: ‘If the nature of the administrative agency is essentially legislative, the requirements of notice and
hearing are not necessary. The validity of a rule of future action which affects a group, if vested rights of liberty or
property are not involved, is not determined according to the same rules which apply in the case of the direct
application of a policy to a specific individual.’ . . .

It is said in 73 C.J.S. Public Administrative Bodies and Procedure, sec. 130, pages 452 and 453: Aside from statute, the
necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the
circumstances involved. In so far as generalization is possible in view of the great variety of administrative proceedings, it
may be stated as a general rule that notice and hearing are not essential to the validity of administrative action where the
administrative body acts in the exercise of executive, administrative, or legislative functions; but where a public
administrative body acts in a judicial or quasi-judicial matter, and its acts are particular and immediate rather than general
and prospective, the person whose rights or property may be affected by the action is entitled to notice and hearing."66

In any case, petitioner’s claim that no consultations were held is belied by the Department of Education’s detailed
recollection of the actions it took before the adoption of the assailed Department Order:

1. On March 1, 2003, pursuant to D.O. No.14, s. 2004, respondent DepEd created a task force to review, revise, or
modify D.O. No. 23, s. 2003 (the existing guidelines), in order to address numerous complaints involving PTAs and
PTCAs and to resolve disputes relative to the recognition and administration of said associations. The task force
came up with draft guidelines after consultations with parents, teachers and students ;

2. On May 3, 2003, pursuant to D.O. No. 28, s. 2007, the task force was reconstituted to evaluate the draft
guidelines prepared by the original task force and to review the provisions of D.O. No. 23;
 3. On February 2, 2009, the reconstituted task force, after soliciting comments, suggestions and recommendations
from school heads and presidents of PTAs or PTCAs, submitted a draft of the "Revised Guidelines governing
PTAs/PTCAs at the School Level;"

4. The draft was submitted for comments and suggestions to the participants to the Third National Federation
Supreme Student Governments (NFSSG) Conference held in February 2009. The participants, composed of regional
education supervisors, presidents of regional federations of Supreme Student Governments (SSG), and
representatives from the SSG advisers, submitted another set of revised guidelines;

5. The draft was subjected to further review and consultations, which resulted in the final draft of D.O. No. 54, s.
2009.67 (Emphasis supplied)

Apart from claiming that no consultations were held, petitioner decries the non-publication, by the Department of Education
itself, of the assailed Department Order.

This does not invalidate the Department Order. As is evident from the previously quoted provisions of Book VII, Chapter 2 of
the Administrative Code, all that is required for the validity of rules promulgated by administrative agencies is the filing of
three (3) certified copies with the University of the Philippine Law Center. Within 15 days of filing, administrative rules
become effective.68

VIII

Pointing to Article II (2) of the assailed Department Order, which calls for the approval of the school head in the organizing
of homeroom PTAs, petitioner claims that the Department Order undermines the organizational independence of PTAs. It
claims that the assailed Department Order lacks standards or guidelines and effectively gives the school head unbridled
discretion to impede the organizing of PTAs.

This is erroneous.

To begin with, and as previously noted, the organizing of PTAs is mandated by statute. Under Article 77 of the Child and
Youth Welfare Code, every elementary school and high school is required to have a PTA. School heads are bound by this
requirement. Moreover, the mandatory nature of organizing PTAs is recognized by the assailed Department Order itself.
Article I (1) of the Department Order provides that "[e]very elementary and secondary school shall organize a Parents-
Teachers Association."

Likewise, Article I of the assailed Department Order echoes the Child and Youth Welfare Code and the Education Act of 1982
in providing for the purposes and functions of PTAs. In doing so, it lays out the standards that are to guide school heads in
deciding on whether official sanction shall be vested in a group seeking recognition as a PTA:

I. General Policy

1. Every elementary and secondary school shall organize a Parents-Teachers Association (PTA) for the purpose of providing
a forum for the discussion of issues and their solutions related to the total school program and to ensure the full
cooperation of parents in the efficient implementation of such program.

Every PTA shall provide mechanisms to ensure proper coordination with the members of the community, provide an avenue
for discussing relevant concerns and provide assistance and support to the school for the promotion of their common
interest. Standing committees may be created within the PTA organization to coordinate with community members. Regular
fora may be conducted with local government units, civic organizations and other stakeholders to foster unity and
cooperation.

2. As an organization operating in the school, the PTA shall adhere to all existing policies and implementing guidelines issued
or hereinafter may be issued by the Department of Education .

The PTA shall serve as support group and as a significant partner of the school whose relationship shall be defined by
cooperative and open dialogue to promote the welfare ofthe students. 69 (Emphasis supplied)
The involvement of school heads is limited to the initial stages of formation of PTAs. Once organized, the school heads hold
no power over PTAs as they are limited to acting in an advisory capacity. Article IV (1) (d) of the Department Order
categorically provides:

IV. Board of Directors and Officers

1. The administration of the affairs and management of activities of the PTA is vested with the Board of Directors and its
officers in accordance with these guidelines or their respective Constitution and By-Laws, if any, which shall adhere to the
following:

....

d. The School Head shall not serve as a member of the Board of Directors but as adviser to the PTA [.]70 (Emphasis supplied)

Petitioner makes much of how "the assailed Department Order provides that the recognition of the PTCA or any PTA shall be
cancelled by the Division PTA Affairs Committee upon the mere recommendation of the School Head. And in case of
cancellation of the recognition of the PTA, the School Head is given the power the [sic] call a special election to replace the
Board of Directors of the PTA whose recognition was cancelled."71 It claims that this buttresses its claim that the Department
Order 2009 undermines the organizational independence of PTAs.

In the first place, all that a school head has is recommending authority. More importantly, petitioner overlooks the qualifier
to the school head’s recommending authority:

IX. Prohibited Activities and Sanctions

....

5. The recognition of any PTA shall be cancelled by the Division PTA Affairs Committee upon the recommendation of the
School Head concerned for any violation of the above-mentioned prohibited activities and these Guidelines .

Thereafter, the School Head may call for a special election to replace the Board of Directors of the PTA whose recognition
was cancelled.Criminal, civil and/or administrative actions may be taken against any member or officer of the Board of the
PTA who may appear responsible for failure to submit the necessary annual financial statements or for failure to account the
funds of the PTA.72 (Emphasis supplied)

It is evident that the recommending authority of the school head is not as "unbridled" as petitioner claims it to be. On the
contrary, the assailed Department Order specifically limits a school head’s competence to recommend cancellation of
recognition to the instances defined by Article IX as prohibited activities.

IX

Reference to an approving authority in order that an organization may be given official recognition by state organs, and thus
vested with the competencies and privileges attendant to such recognition, is by no means unique to PTAs. By way of
example, similar processes and requirements are observed and adhered to by organizations seeking recognition as business
organizations (e.g., corporations),73 government contractors,74 legitimate labor organizations,75 and political parties
participating in the party-list system.76

The demarcation of the broad right to form associations vis-à-vis regulations such as registration, requisite approval by
defined authorities, and other such formalities is settled in jurisprudence.

In Philippine Association of Free Labor Unions v. Secretary of Labor ,77 this court was confronted with allegations that Section
2378 of Republic Act No. 875, otherwise known as the Industrial Peace Act, which spelled out the requirements for
registration of labor organizations, "unduly curtail[ed] the freedom of assembly and association guaranteed in the Bill of
Rights."79

Sustaining the validity of Section 23, this court put to rest any qualms about how registration and approval, as requisites t o
the acquisition of legal personality and the exercise of rights and privileges that are accorded to an officially recognized
organization, are not incompatible with the right to form associations. On the contrary, this court underscored that the
establishment of these requirements is a valid exercise of police power as public interest underlies the conduct of
associations seeking state recognition:

The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of said Section is not a
limitation to the right of assembly or association, which may be exercised with or without said registration. The latter is
merely a condition sine qua non for the acquisition of legal personality by labor organizations, associations or unions and the
possession of the "rights and privileges granted by law to legitimate labor organizations." The Constitution does not
guarantee these rights and privileges, much less said personality, which are mere statutory creations, for the possession and
exercise of which registration is required to protect both labor and the public against abuses, fraud, or impostors who pose
as organizers, although not truly accredited agents of the union they purport to represent. Such requirement is a valid
exercise of the police power, because the activities in which labor organizations, associations and union of workers are
engaged affect public interest, which should be protected. Furthermore, the obligation to submit financial statements, as a
condition for the non-cancellation of a certificate of registration, is a reasonable regulation for the benefit of the members of
the organization, considering that the same generally solicits funds or membership, as well as oftentimes collects, on behalf
of its members, huge amounts of money due to them or to the organization. 80 (Citations omitted)

The right to organize does not equate to the state’s obligation to accord official status to every single association that comes
into existence. It is one thing for individuals to galvanize themselves as a collective, but it is another for the group that they
formed to not only be formally recognized by the state, but also bedecked with all the benefits and privileges that are
attendant to official status. In pursuit of public interest, the state can set reasonable regulations—procedural, formal, and
substantive—with which organizations seeking state imprimatur must comply.

In this court’s January 9, 1973 Resolution, In the Matter of the Integration of the Bar of the Philippines ,81 this court
underscored the importance of the state’s regulation of the collectivity (although hitherto "unorganized and incohesive" 82) of
those who, by their admission to the bar, are burdened with responsibilities to society, courts, colleagues, and clients.

This court quoted with approval the following statements made by the Commission on Bar Integration:

In all cases where the validity of Bar integration measures has been put in issue, the Courts have upheld their
constitutionality.

The judicial pronouncements support this reasoning:

— Courts have inherent power to supervise and regulate the practice of law.

— The practice of law is not a vested right but a privilege; a privilege, moreover, clothed with public interest,
because a lawyer owes duties not only to his client, but also to his brethren in the profession, to the courts, and to
the nation; and takes part in one of the most important functions of the State, the administration of justice, as an
officer of the court.

— Because the practice of law is privilege clothed with public interest, it is far and just that the exercise of that
privilege be regulated to assure compliance with the lawyer's public responsibilities[.]83

For the same purpose of protecting and advancing public interest, this court has sustained the validity not only of those
requirements relating to the establishment and registration of associations, but also the substantive standards delimiting
who may join organizations. This is illustrated in United Pepsi-Cola Supervisory Union v. Laguesma,84 where this court
recognized the validity of the first sentence of Art. 245 of the Labor Code, 85 which prohibits managerial employees from
forming, assisting, or joining labor organizations, in relation to Article III, Section 8 of the 1987 Constitution. Here, this court
recognized that a classification distinguishing managerial employees from rank-and-file employees permitted to form and
join labor organizations is grounded on identifiable and appreciable differences. Thus, "there is a rational basis for
prohibiting managerial employees from forming or joining labor organizations;" 86 and, "as to [managerial employees] the
right of self-organization may be regulated and even abridged."87

Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against managerial employees forming a union.
The right guaranteed in Art. III, §8 is subject to the condition that its exercise should be for purposes "not contrary to law."
In the case of Art. 245, there is a rational basis for prohibiting managerial employees from forming or joining labor
organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in his ponencia in Philips Industrial
Development, Inc. v. NLRC:
In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are
confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs
between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they
assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial
functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist
or joint a labor union equally applies to them.

In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:

". . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the presence of managerial employees in Union membership."

To be sure, the Court in Philips Industrial was dealing with the right of confidential employees to organize. But the same
reason for denying them the right to organize justifies even more the ban on managerial employees from forming unions.
After all, those who qualify as top or middle managers are executives who receive from their employers information that not
only is confidential but also is not generally available to the public, or to their competitors, or to other employees. It is hardly
necessary to point out that to say that the first sentence of Art. 245 is unconstitutional would be to contradict the decision in
that case.88

Our educational system demonstrates the integral role of parents. It is a system founded not just on the relationship
between students on the one hand and educators or schools on the other, but as much on the participation of parents and
guardians. Parents and guardians are foremost in the Education Act of 1982’s enumeration of the "members and elements of
the educational community":

Section 6. Definition and Coverage – "Educational community" refers to those persons or groups of persons as such or
associated in institutions involved in organized teaching and learning systems.

The members and elements of the educational community are:

1. "Parents" or guardians or the head of the institution or foster home which has custody of the pupil or student.

2. "Students," or those enrolled in and who regularly attend and educational institution of secondary or higher level
of a person engaged in formal study. "Pupils," are those who regularly attend a school of elementary level under the
supervision and tutelage of a teacher.

3 "School personnel," or all persons working for an educational institution, which includes the following:

a. "Teaching or academic staff," or all persons engaged in actual teaching and/or research assignments,
either on full-time or part-time basis, in all levels of the educational system.

b. "School administrators," or all persons occupying policy implementing positions having to do with the
functions of the school in all levels.

c. "Academic non-teaching personnel," or those persons holding some academic qualifications and
performing academic functions directly supportive of teaching, such as registrars, librarians, research
assistants, research aides, and similar staff.

d. "Non-academic personnel," or all other school personnel not falling under the definition and coverage of
teaching and academic staff, school administrators and academic non-teaching personnel.

4. "Schools," or institutions recognized by the State which undertake educational operations.

A parent-teacher association is a mechanism for effecting the role of parents (who would otherwise be viewed as outsiders)
as an indispensable element of educational communities. Rather than being totally independent of or removed from schools,
a parent-teacher association is more aptly considered an adjunct of an educational community having a particular school as
its locus. It is an "arm" of the school. Given this view, the importance of regulation vis-à-vis investiture of official status
becomes manifest. According a parent-teacher association official status not only enables it to avail itself of benefits and
privileges but also establishes upon it its solemn duty as a pillar of the educational system.

WHEREFORE, in light of the foregoing, the Petition is DISMISSED.

SO ORDERED.

EN BANC

G.R. No. 187317 April 11, 2013

CARLITO C. ENCINAS, Petitioner,

vs.
PO1 ALFREDO P. AGUSTIN, JR., and PO1 JOEL S. CAUBANG,** Respondents.

DECISION

SERENO, CJ.:

This is a Rule 45 Petition for Review on Certiorari assailing the Decision dated 20 November 2008 1 and Resolution dated 30
March 20092 issued by the Court of Appeals (CA). Affirming the findings of the Civil Service Commission (CSC), the CA found
petitioner Carlito C. Encinas (petitioner) administratively liable for grave misconduct and conduct prejudicial to the best
interest of service- offenses proscribed by Section 46(b)(4) and (27), Book V of Executive Order No. 292, or the
Administrative Code of 1987 - and affirmed his dismissal.

The relevant facts are summarized as follows:

Respondents were then both holding positions as Fire Officer I in Nueva Ecija. They claim that on 11 March 2000, at around
9:00 p.m., petitioner – who was then Provincial Fire Marshall of Nueva Ecija – informed them that unless they gave him five
thousand pesos (₱5,000), they would be relieved from their station at Cabanatuan City and transferred to far-flung areas.
Respondent Alfredo P. Agustin (Agustin) would supposedly be transferred to the Cuyapo Fire Station (Cuyapo), and
respondent Joel S. Caubang (Caubang) to Talugtug Fire Station (Talugtug). Fearing the reassignment, they decided to pay
petitioner. On 15 March 2000, in the house of a certain "Myrna," respondents came up short and managed to give only two
thousand pesos (₱2,000), prompting petitioner to direct them to come up with the balance within a week. When they failed
to deliver the balance, petitioner issued instructions effectively reassigning respondents Agustin and Caubang to Cuyapo and
Talugtug, respectively.3

Based on the above-narrated circumstances, respondents filed with the Bureau of Fire Protection (BFP) a letter-
complaint (BFP Complaint) on 27 March 2000 for illegal transfer of personnel under Republic Act (R.A.) No. 6975 or the
Department of Interior and Local Government (DILG) Act of 1990. 4 The record is not clear as to why this Complaint was
later docketed by the BFP for preliminary investigation for violation of R.A. No. 3019 or the Anti-Graft and
Corrupt Practices Act.5 The BFP Complaint provides in pertinent part:

Chief Inspector Carlito C. Encinas relieved us from our present assignment and transferred us to different far places without
any cause and due process of law based from the BFP Manual (Republic Act 6975)

The reason why he relieved us was due to our failure to give the money he was asking from both of us in the amount of
Five Thousand Pesos (₱5,000) in exchange for our present assignment to be retained.

x xx.

On 12 April and 25 April 2000, on the basis of similar facts, respondents likewise filed with the CSC Regional Office in San
Fernando, Pampanga (CSCRO), as well as with the CSC Field Office in Cabanatuan City,6 their Joint
Affidavit/Complaint (CSCRO Complaint).7 This time, they accused petitioner of violation of Section 4(c) of R.A. No. 6713
or the Code of Conduct and Ethical Standards for Public Officials and Employees. The relevant portion of the CSCRO
Complaint provides:

6. That we executed this affidavit to file a complaint against C. Insp. Carlito C. Encinas BFP for violation of Section 4 (C) R.A.
6713, that is "Justness and sincerity. - Public officials and employees shall remain true to the people at all times. They must
act with justness and sincerity and shall not discriminate against anyone, especially the poor and the underprivileged. They
shall at all times respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good customs,
public policy, public order, public safety and public interest."

The CSCRO Complaint erroneously pertained to the above-quoted provision as Section 4(c), but it should be denoted as
Section 4(A)(c).

On 27 October 2000, after a fact-finding investigation was conducted in connection with his alleged extortion activities,
petitioner was formally charged with dishonesty, grave misconduct, and conduct prejudicial to the best interest of service.
He was required to file an answer within five (5) days from notice.8 The Formal Charge specifically reads in part:

WHEREFORE, Carlito C. Encinas is hereby formally charged with the offenses of Dishonesty, Grave Misconduct and Conduct
Prejudicial to the Best Interest of the Service. Accordingly, he is given five (5) days from receipt hereof to submit to this
Office a written answer under oath, together with the affidavits of his witnesses and documentary evidence, if any, and a
statement whether or not he elects a formal investigation. He is advised of his right to the assistance of his counsel of his
own choice.9

Although it was not specifically mentioned in the records, the offenses of dishonesty, grave misconduct, and conduct
prejudicial to the best interest of service can be found in Section 46(b)(1), (4) and (27), Book V, respectively, of the
Administrative Code of 1987.10 The record does not indicate whether petitioner was formally charged with violation of R.A.
No. 6713.

BFP Complaint

In answer to the BFP Complaint against him, petitioner claimed that in an alleged Confidential Investigation Report dated 31
July 2000 (Confidential Report), no copy of which was attached to the record, 11 the investigating body recommended that
charges against him be dropped for insufficiency of evidence. Instead, it recommended that respondents be charged with
conducting unauthorized fire safety inspection and engaging in the sale of fire extinguishers, both in violation of the rules.

It appears on record that the Internal Audit Services (IAS) of the BFP issued a Resolution dated 05 July 2005,12
recommending that the administrative complaint against petitioner be dismissed for insufficiency of evidence.13 The
IAS ruled that the reassignment of respondents was within the ambit of authority of the head of office. Thus, said
reassignment may have been ordered as long as the exigencies of the service so required .14 The Resolution dated 05 July
2005 states in pertinent part:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated 11 February 1993,
the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when the exigencies of
the service so require but subject to the condition that there will be no reduction in rank, status or salary, further on
Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held [sic] that "on general principle petitioner may be
transferred as to the exigencies of the service require". x xx

In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant the filing of
appropriate administrative offense against the respondent.

WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the administrative complaint against
C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of evidence.

CSCRO Complaint

In his Answer to the formal charge of dishonesty, grave misconduct, and conduct prejudicial to the best interest of service, 15
petitioner claimed that the CSCRO Complaint was an offshoot of the reassignment of respondents. He alleged that they were
reassigned after it was discovered that they had conducted a fire safety inspection of establishments within Nueva Ecija
without any mission order. In relation to this operation, they supposedly sold fire extinguishers to the owners of the
establishments they had inspected.16 He cited the alleged Confidential Report in which the investigating body recommended
the dropping of charges against him. 17 He further added that, in view of his exemplary and faithful service, the then-
incumbent governor even requested the continuance of his stint as Provincial Fire Marshall of Nueva Ecija. 18 In his Position
Paper,19 petitioner claimed that respondents’ transfer had been made in compliance with the directive of Supt. Simeon C.
Tutaan (Supt. Tutaan) and pursuant to law.20

CSCRO Ruling

Subsequently, the CSCRO issued its Decision dated 30 July 2004, 21finding petitioner administratively liable for grave
misconduct and conduct prejudicial to the best interest of service, and ordered his dismissal from service.

The CSCRO ruled that respondents, through their respective testimonies, were able to establish the fact that petitioner
demanded from them the amount of ₱5,000 in exchange for their non-reassignment to far-flung fire stations.22 The fact that
they did not present any document to show that petitioner received ₱2,000 did not preclude a finding of administrative
liability.23 The consistency of their oral testimonies already constituted substantial evidence. Granting that they committed
illegal acts prior to their reassignment, this allegation nevertheless did not rebut their claims that petitioner had extorted
money from them. The admission of Supt. Tutaan that he gave instructions for their reassignment did not disprove the
accusation of extortion, but merely established that there was indeed an order to reassign them. 24

Petitioner filed a Motion for Reconsideration.25 He argued that the Sworn Statements of his witnesses should have been
given weight instead of respondents’ testimonies. He explained that Mrs. Angelina Calanoc (Mrs. Calanoc), owner of
Reynand Gas Dealer, confirmed that respondents had conducted a physical inspection of her establishment, after which they
recommended that she pay conveyance permit fees as a requisite for the issuance of a Fire Safety Certificate. 26 Also, Carlito
Umali confirmed that he had indeed accompanied petitioner when the latter investigated the Complaint filed by Mrs. Calanoc
against respondents.27 Furthermore, Myrna Villanueva – the owner of the house where respondents supposedly paid
petitioner ₱2,000 – claimed that she did not know them personally or recall either petitioner or respondents ever visiting her
house.28 Likewise, Supt. Tutaan confirmed that he had instructed petitioner to cause the transfer of respondents. 29The latter
also argued that the BFP Complaint had already been dismissed by virtue of the Confidential Report, and that the dismissal
had already served as a bar to the further prosecution of any administrative charge against him. 30

The Motion, however, was subsequently denied by the CSCRO in its Order dated 19 May 2006. 31 It affirmed its previous
ruling that the statements of petitioner’s witnesses were incompetent and immaterial, having failed to disprove that
petitioner had indeed extorted money from respondents. 32It likewise rejected the argument of res judicata proffered
by petitioner and ruled that the dismissal of the BFP Complaint by virtue of the Confidential Report was not a
judgment on the merits rendered by a competent tribunal. Furthermore, the Confidential Report was the result of
the recommendation of a fact-finding committee formed to determine the veracity of the Complaint charging petitioner with
extortion, unjustified transfer of BFP personnel, and malversation of funds. 33 Res judicata cannot be raised as a defense,
since the dismissal of the BFP Complaint did not constitute a bar by former judgment. 34

Aggrieved, petitioner filed an Appeal Memorandum 35 with the CSC main office. In his Appeal, he argued that respondents
were guilty of forum-shopping for having filed two (2) separate administrative Complaints before the CSCRO on the one
hand, and before the BFP/DILG on the other. 36 Petitioner argued that respondents failed to attach a certificate of non-forum
shopping to either Complaint.37 Moreover, the CSCRO should not have entertained the Complaint filed before it, considering
that it already knew of the then-pending investigation conducted by the BFP/DILG.38

Petitioner further argued that the CSCRO only had appellate jurisdiction or authority to decide cases brought before it by the
head of agency or, in this case, the BFP.39 He explained that the administrative Complaint was investigated and heard by the
BFP/DILG. The BFP department head or fire director, Rogelio F. Asignado, by virtue of the Resolution dated 05 July 2005,
dismissed the complaint for insufficiency of evidence. 40 On the basis of the dismissal of the case, and there being no appeal
or petition filed pertaining thereto, the CSCRO Complaint should have been dismissed as well. 41 Petitioner further argued
that the CSCRO erred in concluding that the resolution of the fact-finding committee was not a judgment on the merits. 42
The BFP being an agency of the government, any decision or resolution it arrives at is also a judgment on the merits. 43

Petitioner likewise reiterated his previous arguments on the appreciation of the testimonies of his witnesses. 44 He alleged
that on 09 June 2006, respondent Agustin executed an Affidavit of Desistance in the former’s favor and was no longer
interested in pursuing the case against him.45
In answer to the Appeal Memorandum, the CSCRO argued that there was no forum-shopping, considering that the BFP
Complaint was based on a different cause of action. 46 The Complaint, which pertained to the alleged illegal transfer of
personnel under R.A. No. 6975, was docketed for preliminary investigation of the alleged violation of the Anti-Graft and
Corrupt Practices Act or R.A. No. 3019. 47 The CSCRO further argued that there could be no res judicata, since the dismissal
of the BFP Complaint by virtue of the Resolution dated 05 July 2005 48 was not a judgment on the merits rendered by a
competent tribunal. The dismissal was, instead, the result of the recommendation of the preliminary investigators of the
Internal Audit Service (IAS) of the BFP.49

CSC Ruling (Central)

Petitioner’s appeal was subsequently denied by CSC in its Resolution No. 080941 dated 19 May 2008 (CSC Resolution). 50 It
ruled that there was no forum-shopping committed by respondents, and that substantial evidence existed to hold petitioner
administratively liable for grave misconduct and conduct prejudicial to the best interest of the service.

The CSC explained that the CSCRO Complaint was for violation of R.A. No. 6713, while the BFP Complaint was
for violation of R.A. No. 6975.51 It further ruled that, although both Complaints were anchored on a similar set of facts,
there was no identity of causes of action: thus, even if they were successively filed before different fora, no forum-shopping
existed.52 Although an investigation was then ongoing at the BFP when the CSCRO took cognizance of the case, no forum-
shopping resulted. A perusal of the proceedings conducted at the BFP shows that only a preliminary investigation was
initiated by the IAS-BFP, a fact-finding committee that recommended the dismissal of the case, which was accordingly
approved by the fire director. The approval of this recommendation cannot be regarded as one based on merits. Otherwise,
it would bar the filing of another case, particularly, with the CSCRO. 53

With regard to petitioner’s administrative liability, the CSC found that because of the nature of the case – extortion of money
– hardly any documentary evidence could be gathered to prove the act complained of. As expected, the CSCRO based its
findings on the written and oral testimonies of the parties and their witnesses, as well as on the circumstances surrounding
the incident. Respondents clearly established that petitioner had demanded ₱5,000 in exchange for their reassignment. 54
The CSC further ruled that it was contrary to human nature for respondents, who were merely rank-and-file employees, to
impute such a grave act to their boss. Their disparity in rank would show that respondents could not have fabricated their
charges.55 It further ruled that the withdrawal of the complaint would not result in their outright dismissal or absolve the
person complained of from administrative liability. 56

Aggrieved yet again, petitioner filed a Rule 43 Petition with the CA. His main argument was that the CSC erred in not
dismissing respondents’ Complaint despite the absence of a certification of non-forum shopping and respondent’s actual
forum-shopping, as well as the lack of substantial evidence to hold him administratively liable.57

In his Rule 43 Petition, petitioner claimed that a certificate of non-forum shopping attached to a complaint is a mandatory
requirement as stated in Section 8, Rule I of the Uniform Rules on Administrative Cases. 58 He argued that the causes of
action in the two Complaints were similar. With regard to the proceedings before the CSC, aside from respondents’ sole
charge of violation of R.A. No. 6713, also included were charges of dishonesty, grave misconduct, and conduct prejudicial to
the best interest of service. Petitioner reasoned that the additional offenses charged were equivalent to a violation of R.A.
No. 6975, so the issues investigated were substantially the same. 59

In relation to his administrative liability, petitioner argued that the testimonies of respondents should not be given weight, as
their credibility had been rendered questionable by their dismissal from the service. 60 Also, they had already withdrawn their
Complaints against him, as stated in their Affidavit of Desistance (Affidavit), 61 in which they admitted that the cases were
filed out of a misapprehension of facts and a misunderstanding between the parties. 62

Significantly, respondent Caubang denounced the supposed execution of the Affidavit. He claimed that he did not sign it,
and that his purported signature therein was a forgery.63

CA Ruling

Subsequently, the CA, in its assailed Decision,64denied petitioner’s appeal. The CA ruled that it was not the letter-
complaint filed by respondents that commenced the administrative proceedings against petitioner; instead, it was the formal
charge filed by Atty. Marasigan-De Lima.The letter-complaint merely triggered the CSCRO’s fact-finding investigation.
Considering that the Complaint was initiated by the proper disciplining authority, it need not contain a
certification of non-forum-shopping.65
The CA similarly ruled that respondents’ act of simultaneously filing Complaints against petitioner both at the CSC and the
BFP did not constitute forum-shopping. While it was conceded that the two Complaints were founded on the same set of
facts involving the same parties, they were nonetheless based on different causes of action—more specifically, the BFP
Complaint was for alleged violation of R.A. No. 3019, while the CSC Complaint was for violation of the provisions of R.A. No.
6713.66Furthermore, the doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the
exercise of administrative powers.67

With regard to the administrative liability of petitioner, the CA found that substantial evidence supported the CSC’s
findings.68 It likewise ruled that the testimonies of the witnesses of petitioner were incompetent and immaterial, as these
could prove something else entirely, but did not disprove petitioner’s extortion.69 Also, the withdrawal of a complaint does
not result in outright dismissal or discharge a person from any administrative liability.70

Petitioner filed a Motion for Reconsideration,71 but the CA denied it in its assailed Resolution dated 30 March 2009. 72

Petitioner is now before this Court arguing the following: (1) the CA erred in affirming the CSC Resolution and in ruling that
respondents were not guilty of forum-shopping; and (2) substantial evidence does not exist to hold petitioner
administratively liable for grave misconduct and conduct prejudicial to the best interest of the service.

In their Comment, respondents counter that a certificate of non-forum shopping is not required if the one who files the
formal charge is the head of agency. 73 They further argue that the case filed with the BFP was in the nature of violation
under R.A. No. 3019, whereas the case filed before the CSC was in violation of R.A. No. 6713. A single act may result in two
or more unlawful transgressions punishable under different laws. 74 As to the matter of administrative liability, the CSC’s
findings, especially when affirmed by the CA, are binding upon this Court. 75

Issues

Based on the submissions of both parties, the following main issues are presented for resolution by this Court:

I. Whether or not respondents are guilty of forum-shopping.

II. Whether the CA erred in ruling that substantial evidence exists to hold petitioner
administratively liable for grave misconduct and conduct prejudicial to the best interest of
service.

The Court’s Ruling

The Petition is devoid of merit. We rule that petitioner is administratively liable for grave misconduct and conduct prejudicial
to the best interest of the service under the Administrative Code of 1987; thus, we affirm his dismissal from service.

Discussion

I.

Respondents are not guilty of forum-shopping.

Petitioner argues that respondents are guilty of forum-shopping for filing two allegedly identical Complaints in violation of
the rules on forum-shopping.76 He explains that dishonesty, grave misconduct, and conduct prejudicial to the best interest
of the service—charges included in the CSCRO Complaint—were charges that were equivalent to the BFP Complaint, the
subject of which was his alleged violation of R.A. 6975 or illegal transfer of personnel.77

We do not agree with petitioner. In Yu v. Lim,78 this Court enumerated the requisites of forum-shopping as follows:

Forum-shopping exists when the elements of litispendentia are present or where a final judgment in one case
will amount to res judicata in another. Litispendentia requires the concurrence of the following requisites:

(1) identity of parties, or at least such parties as those representing the same interests in both actions;

(2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and
(3) identity with respect to the two preceding particulars in the two cases, such that any judgment that may be rendered in
the pending case, regardless of which party is successful, would amount to res judicata in the other case.79 (Emphasis
supplied)

Applying the foregoing requisites to this case, we rule that the dismissal of the BFP Complaint does not constitute res
judicata in relation to the CSCRO Complaint. Thus, there is no forum-shopping on the part of respondents.

Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment." It
lays down the rule that an existing final judgment or decree on the merits, rendered without fraud or collusion by a court of
competent jurisdiction upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies in all
other actions or suits, in the same or any other judicial tribunal of concurrent jurisdiction, on the points and matters in issue
in the first suit.80

In order that res judicata may bar the institution of a subsequent action, the following requisites must
concur:

(a) the former judgment must be final;

(b) it must have been rendered by a court having jurisdiction over the subject matter and the parties;

(c) it must be a judgment on the merits; and

(d) there must be between the first and the second actions (i) identity of parties, (ii) identity of subject matter, and (iii)
identity of cause of action.81

A judgment may be considered as one rendered on the merits "when it determines the rights and liabilities of the parties
based on the disclosed facts, irrespective of formal, technical or dilatory objections;"or when the judgment is rendered "after
a determination of which party is right, as distinguished from a judgment rendered upon some preliminary or formal or
merely technical point."82

In this case, there is no "judgment on the merits" in contemplation of the definition above. The dismissal of the BFP
Complaint in the Resolution dated 05 July 2005 was the result of a fact-finding investigation for purposes of determining
whether a formal charge for an administrative offense should be filed. Hence, no rights and liabilities of parties were
determined therein with finality.

The CA was correct in ruling that the doctrine of res judicata applies only to judicial or quasi-judicial proceedings, and not to
the exercise of administrative powers.83Administrative powers here refer to those purely administrative in nature, 84 as
opposed to administrative proceedings that take on a quasi-judicial character.85

In administrative law, a quasi-judicial proceeding involves

(a) taking and evaluating evidence;

(b) determining facts based upon the evidence presented; and

(c) rendering an order or decision supported by the facts proved.86

The exercise of quasi-judicial functions involves a determination, with respect to the matter in controversy, of what the law
is; what the legal rights and obligations of the contending parties are; and based thereon and the facts obtaining, the
adjudication of the respective rights and obligations of the parties. 87 In Bedol v. Commission on Elections,88 this Court
declared:

Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative agency to
adjudicate the rights of persons before it. It is the power to hear and determine questions of fact to which the legislative
policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering
the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which
is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial
functions the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold
hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a
judicial nature.

The Court has laid down the test for determining whether an administrative body is exercising judicial or
merely investigatory functions: adjudication signifies the exercise of the power and authority to adjudicate upon the
rights and obligations of the parties. Hence, if the only purpose of an investigation is to evaluate the evidence
submitted to an agency based on the facts and circumstances presented to it, and if the agency is not authorized to make a
final pronouncement affecting the parties, then there is an absence of judicial discretion and judgment.89

In this case, an analysis of the proceedings before the BFP yields the conclusion that they were purely administrative in
nature and constituted a fact-finding investigation for purposes of determining whether a formal charge for an administrative
offense should be filed against petitioner.

It can be gleaned from the Resolution dated 05 July 2005 itself that the purpose of the BFP proceedings was to determine
whether there was sufficient ground to warrant the filing of an appropriate administrative offense against petitioner. To
recall, the Resolution dated 05 July 2005 states:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated 11 February 1993,
the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when the exigencies of
the service so require but subject to the condition that there will be no reduction in rank, status or salary, further on
Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held [sic] that "on general principle petitioner may be
transferred as to the exigencies of the service require". x xx

In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant the filing of
appropriate administrative offense against the respondent.

WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the administrative complaint against
C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of evidence. 90 (Emphases supplied)

The proceedings before the BFP were merely investigative, aimed at determining the existence of facts for the purpose of
deciding whether to proceed with an administrative action. This process can be likened to a public prosecutor’s preliminary
investigation, which entails a determination of whether there is probable cause to believe that the accused is guilty, and
whether a crime has been committed.

The Ruling of this Court in Bautista v. Court of Appeals 91 is analogously applicable to the case at bar. In that case, we ruled
that the preliminary investigation conducted by a public prosecutor was merely inquisitorial and was definitely not a quasi-
judicial proceeding:

A closer scrutiny will show that preliminary investigation is very different from other quasi-judicial proceedings. A quasi-
judicial body has been defined as "an organ of government other than a court and other than a legislature which affects the
rights of private parties through either adjudication or rule-making."

xxxx

On the other hand, the prosecutor in a preliminary investigation does not determine the guilt or innocence of the accused.
He does not exercise adjudication nor rule-making functions. Preliminary investigation is merely inquisitorial, and is often the
only means of discovering the persons who may be reasonably charged with a crime and to enable the fiscal to prepare his
complaint or information. It is not a trial of the case on the merits and has no purpose except that of determining whether a
crime has been committed and whether there is probable cause to believe that the accused is guilty thereof. While the fiscal
makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts, ultimately, that pass judgment
on the accused, not the fiscal. (Emphases supplied)

This principle is further highlighted in MERALCO v. Atilano,92 in which this Court clearly reiterated that a public prosecutor, in
conducting a preliminary investigation, is not exercising a quasi-judicial function. In a preliminary investigation, the public
prosecutor inspects the records and premises, investigates the activities of persons or entities coming under the formers’
jurisdiction, or secures or requires the disclosure of information by means of accounts, records, reports, statements,
testimony of witnesses, and production of documents. In contrast, judicial adjudication signifies the exercise of power and
authority to adjudicate upon the rights and obligations of concerned parties, viz.:

This is reiterated in our ruling in Spouses Balangauan v. Court of Appeals, Special Nineteenth Division, Cebu City, where we
pointed out that a preliminary investigation is not a quasi-judicial proceeding, and the DOJ is not a quasi-judicial agency
exercising a quasi-judicial function when it reviews the findings of a public prosecutor regarding the presence of probable
cause. A quasi-judicial agency performs adjudicatory functions when its awards determine the rights of parties, and its
decisions have the same effect as a judgment of a court." This is not the case when a public prosecutor conducts a
preliminary investigation to determine probable cause to file an information against a person charged with a criminal
offense, or when the Secretary of Justice reviews the former's orders or resolutions" on determination of probable cause.

In Odchigue-Bondoc, we ruled that when the public prosecutor conducts preliminary investigation, he thereby exercises
investigative or inquisitorial powers. Investigative or inquisitorial powers include the powers of an administrative body to
inspect the records and premises, and investigate the activities of persons or entities coming under his jurisdiction, or to
secure, or to require the disclosure of information by means of accounts, records, reports, statements, testimony of
witnesses, and production of documents. This power is distinguished from judicial adjudication which signifies the exercise of
power and authority to adjudicate upon the rights and obligations of concerned parties. Indeed, it is the exercise of
investigatory powers which sets a public prosecutor apart from the court. (Emphasis supplied)

Indeed, the public prosecutor exercises investigative powers in the conduct of a preliminary investigation to determine
whether, based on the evidence presented, further action should be taken through the filing of a criminal complaint in court.
Similarly, in the instant case, the BFP exercised its investigative or fact-finding function to determine whether, based on the
facts and the evidence presented, further administrative action—in the form of a formal charge—should be taken against
petitioner. In neither instance is there in adjudication upon the rights, obligations, or liabilities of the parties before them.

With the above disquisition, we rule that the dismissal of the BFP Complaint cannot operate as res judicata. Therefore,
forum-shopping is unavailing in this case.

II.

The CA was correct in ruling that there was substantial evidence to hold petitioner administratively liable for grave
misconduct and conduct prejudicial to the best interest of the service.

On the substantive issue, petitioner claims that the findings are based on a misapprehension of facts. The dismissal of
respondents from service allegedly placed their credibility in question. 93

We do not agree. We find petitioner administratively liable for his act of demanding ₱5,000 from respondents in exchange
for their non-reassignment.

At the outset, we stress the settled rule that the findings of fact of administrative bodies will not be interfered with by the
courts in the absence of grave abuse of discretion on the part of the former, or unless the aforementioned findings are not
supported by substantial evidence.94 These factual findings carry even more weight when affirmed by the CA, in which case
they are accorded not only great respect, but even finality. These findings are binding upon this Court, unless it is shown
that the administrative body has arbitrarily disregarded or misapprehended evidence before the latter to such an extent as
to compel a contrary conclusion, had the evidence been properly appreciated. 95 This rule is rooted in the doctrine that this
Court is not a trier of facts.96 By reason of the special knowledge and expertise of administrative agencies over matters
falling under their jurisdiction, they are in a better position to pass judgment on those matters. 97

This Court will not disturb the factual findings of both the CSC and the CA, absent any compelling reason to do so. The
conclusion reached by the administrative agencies involved – after their own thorough investigations and hearings, as well
as their consideration of the evidence presented before them and their findings thereon, especially when affirmed by the CA
– must now be regarded with great respect and finality by this Court.

We rule that the alleged dismissal of respondents from the service would not suffice to discredit them as witnesses. In
People v. Dominguez,98 this Court had occasion to rule that even a prior criminal conviction does not by itself suffice to
discredit a witness; the testimony of that witness must be assayed and scrutinized in exactly the same way the testimonies
of other witnesses must be examined for their relevance and credibility. 99 In Gomez v. Gomez-Samson,100 this Court echoed
its previous pronouncement that even convicted criminals are not excluded from testifying as long as, having organs of
sense, they "can perceive and perceiving can make known their perceptions to others." 101

This pronouncement is even more significant in this case, as what petitioner is alleging is not any past criminal conviction of
respondents, but merely their dismissal from the service. 102 Scrutinizing the testimonies of respondents, we find, as did both
the CSC and the CA, that these testimonies carry more weight than petitioner’s self-serving statements and blanket denials.

Respondents, through their testimonies, were able to establish that petitioner told them that unless they paid him ₱5,000,
they would be re-assigned to far-flung areas. The consistency of their testimonies was further bolstered by the fact that they
had been cross-examined by petitioner’s counsel. Petitioner was unable to rebut their claims other than by mere denials.
Even the admission of Supt. Tutaan that he gave the instructions to reassign respondents cannot disprove the latter’s claims.
As regards the testimonies of the witnesses of petitioner, we hold that even these testimonies are irrelevant in disproving
the alleged extortion he committed, as these were mainly related to respondents’ supposed illegal activities, which are not
the issue in this case.

Even assuming that an Affidavit of Desistance was indeed executed by respondents, petitioner is still not exonerated from
liability. The subsequent reconciliation of the parties to an administrative proceeding does not strip the court of its
jurisdiction to hear the administrative case until its resolution. Atonement, in administrative cases, merely obliterates the
personal injury of the parties and does not extend to erase the offense that may have been committed against the public
service.103 The subsequent desistance by respondents does not free petitioner from liability, as the purpose of an
administrative proceeding is to protect the public service based on the time-honored principle that a public office is a public
trust.104 A complaint for malfeasance or misfeasance against a public servant of whatever rank cannot be withdrawn at any
time for whatever reason by a complainant, as a withdrawal would be "anathema to the preservation of the faith and
confidence of the citizenry in their government, its agencies and instrumentalities." 105 Administrative proceedings "should not
be made to depend on the whims and caprices of complainants who are, in a real sense, only witnesses therein." 106

In view of the foregoing, we rule that petitioner’s act of demanding money from respondents in exchange for their non-
reassignment constitutes grave misconduct. We have defined grave misconduct as follows:

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross
negligence by a public officer; and the misconduct is grave if it involves any of the additional elements of corruption, such as
willful intent to violate the law or to disregard established rules, which must be established by substantial evidence.107
(Emphasis supplied)

Furthermore, petitioner’s acts likewise constitute conduct prejudicial to the best interest of the service. In Philippine
Retirement Authority v. Rupa108 this Court elaborated on the specific acts that constitute the grave offense of conduct
prejudicial to the best interest of the service, considering that no concrete description is provided under the Civil Service Law
and rules.1âwphi1 The Court outlined therein following acts: misappropriation of public funds, abandonment of office, failure
to report back to work without prior notice, failure to keep in safety public records and property, making false entries in
public documents, and falsification of court orders. 109

Applying this principle to the present case, we hold that petitioner's offense is of the same gravity or odiousness as that of
the aforementioned acts and would likewise amount to conduct prejudicial to the best interest of the service.

As to the imposable penalty, grave misconduct is a grave offense punishable by dismissal even for the first offense. 110 The
penalty of dismissal includes forfeiture of retirement benefits, except accrued leave credits, and perpetual disqualification
from reemployment in government service and bar from taking civil service examinations. 111 On the other hand, conduct
prejudicial to the best interest of the service is likewise a grave offense, but with a less severe penalty of suspension of six (
6) months and one ( 1) day to one ( 1) year for the first offense and dismissal for the second offense.112

Considering that petitioner was found guilty of two (2) offenses, then the penalty of dismissal from the service-the penalty
corresponding to the most serious offense-was properly imposed.113

WHEREFORE, in view of the foregoing, this petition is hereby DENIED. The Decision dated 20 November 2008
and the Resolution dated 30 March 2009 issued by the CA in CA-G.R. SP No. 104074 are hereby AFFIRMED.

SO ORDERED.
G.R. No. 84811 August 29, 1989

SOLID HOMES, INC., petitioner,

vs.
TERESITA PAYAWAL and COURT OF APPEALS, respondents.

CRUZ, J.:

We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the Regional Trial Court of Quezon
City over a complaint filed by a buyer, the herein private respondent, against the petitioner, for delivery of title to a
subdivision lot. The position of the petitioner, the defendant in that action, is that the decision of the trial court is null and
void ab initio because the case should have been heard and decided by what is now called the Housing and Land Use
Regulatory Board.

The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before the Regional Trial Court
of Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged that the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the agreed price of P 28,080.00, and that by September 10, 1981, she had
already paid the defendant the total amount of P 38,949.87 in monthly installments and interests. Solid Homes subsequently
executed a deed of sale over the land but failed to deliver the corresponding certificate of title despite her repeated
demands because, as it appeared later, the defendant had mortgaged the property in bad faith to a financing company. The
plaintiff asked for delivery of the title to the lot or, alternatively, the return of all the amounts paid by her plus interest. She
also claimed moral and exemplary damages, attorney's fees and the costs of the suit.

Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this being vested in the
National Housing Authority under PD No. 957. The motion was denied. The defendant repleaded the objection in its answer,
citing Section 3 of the said decree providing that "the National Housing Authority shall have exclusive jurisdiction to regulate
the real estate trade and business in accordance with the provisions of this Decree." After trial, judgment was rendered in
favor of the plaintiff and the defendant was ordered to deliver to her the title to the land or, failing this, to refund to her the
sum of P 38,949.87 plus interest from 1975 and until the full amount was paid. She was also awarded P 5,000.00 moral
damages, P 5,000.00 exemplary damages, P 10,000.00 attorney's fees, and the costs of the suit.1

Solid Homes appealed but the decision was affirmed by the respondent court, 2 which also berated the appellant for its
obvious efforts to evade a legitimate obligation, including its dilatory tactics during the trial. The petitioner was also reproved
for its "gall" in collecting the further amount of P 1,238.47 from the plaintiff purportedly for realty taxes and registration
expenses despite its inability to deliver the title to the land.

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

SEC. 41. Other remedies.-The rights and remedies provided in this Decree shall be in addition to any and all
other rights and remedies that may be available under existing laws.
and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that the court a quowas
bereft of jurisdiction." The decision also dismissed the contrary opinion of the Secretary of Justice as impinging on the
authority of the courts of justice. While we are disturbed by the findings of fact of the trial court and the respondent court
on the dubious conduct of the petitioner, we nevertheless must sustain it on the jurisdictional issue.

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

SECTION 1. In the exercise of its function to regulate the real estate trade and business and in addition to
its powers provided for in Presidential Decree No. 957, the National Housing Authority shall haveexclusive
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 contractuala statutory obligations filed by buyers of subdivision
lot or condominium unit against the owner, developer, dealer, broker or salesman. (Emphasis supplied.)

The language of this section, especially the italicized portions, leaves no room for doubt that "exclusive jurisdiction" over the
case between the petitioner and the private respondent is vested not in the Regional Trial Court but in the National Housing
Authority. 3

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

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

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

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

xxx xxxxxx

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

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

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

The fact that one law is special and the other general creates a presumption that the special act is to be
considered as remaining an exception of the general act, one as a general law of the land and the other as
the law of the particular case. 4

xxx xxxxxx

The circumstance that the special law is passed before or after the general act does not change the
principle. Where the special law is later, it will be regarded as an exception to, or a qualification of, the prior
 general act; and where the general act is later, the special statute will be construed as remaining an
exception to its terms, unless repealed expressly or by necessary implication. 5

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

The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. 957, earlier quoted, is also
unacceptable. We do not read that provision as vesting concurrent jurisdiction on the Regional Trial Court and the Board
over the complaint mentioned in PD No. 1344 if only because grants of power are not to be lightly inferred or merely
implied. The only purpose of this section, as we see it, is to reserve to the aggrieved party such other remedies as may be
provided by existing law, like a prosecution for the act complained of under the Revised Penal Code. 6

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

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

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

xxx xxxxxx

Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the HSRC the
authority to adjudicate claims for damages and for damages and for attorney's fees would result in
multiplicity of suits in that the subdivision condominium buyer who wins a case in the HSRC and who is
thereby deemed entitled to claim damages and attorney's fees would be forced to litigate in the regular
courts for the purpose, a situation which is obviously not in the contemplation of the law . (Emphasis
supplied.)7

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

Statutes conferring powers on their administrative agencies must be liberally construed to enable them to discharge their
assigned duties in accordance with the legislative purpose. 8 Following this policy in Antipolo Realty Corporation v. National
Housing Authority, 9 the Court sustained the competence of the respondent administrative body, in the exercise of the
exclusive jurisdiction vested in it by PD No. 957 and PD No. 1344, to determine the rights of the parties under a contract to
sell a subdivision lot.

It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v. National Housing
Authority 10 is not in point. We upheld in that case the constitutionality of the procedure for appeal provided for in PD No.
1344, but we did not rule there that the National Housing Authority and not the Regional Trial Court had exclusive
jurisdiction over the cases enumerated in Section I of the said decree. That is what we are doing now.

It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on
appeal before this Court. 11 The only exception is where the party raising the issue is barred by estoppel, 12 which does not
appear in the case before us. On the contrary, the issue was raised as early as in the motion to dismiss filed in the trial court
by the petitioner, which continued to plead it in its answer and, later, on appeal to the respondent court. We have no choice,
therefore, notwithstanding the delay this decision will entail, to nullify the proceedings in the trial court for lack of
jurisdiction.

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

SO ORDERED.

January 30, 2017

G.R. No. 178842

RENE H. IMPERIAL and NIDSLAND RESOURCES AND DEVELOPMENT CORPORATION, Petitioners,

vs.
HON. EDGAR L. ARMES, Presiding Judge of Branch 4, Regional Trial Court, 5th Judicial Region, Legazpi City
and ALFONSO B. CRUZ, JR.,, Respondents.

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

G.R. No. 195509

ALFONSO B. CRUZ, Petitioner,

vs.
RENE IMPERIAL and NIDSLAND RESOURCES AND DEVELOPMENT CORPORATION, Respondents.

DECISION

JARDELEZA, J.:

An action for the annulment of a void judgment, like the remedy of appeal, is a statutory right. No party may invoke it
unless a law expressly grants the right and identifies the tribunal which has jurisdiction over this action. While a void
judgment is no judgment at all in legal contemplation, any action to challenge it must be done through the correct remedy
and filed before the appropriate tribunal. Procedural remedies and rules of jurisdiction are in place in order to ensure that
litigants are able to employ the proper legal tools to obtain complete relief from the tribunal fully equipped to grant it.

The Case

Before us are two (2) consolidated petitions for review on certiorari under Rule 45 of the Rules of Court. The first petition,
docketed as G.R. No. 178842, is filed by Rene H. Imperial (Imperial) and NIDSLAND Resources and Development
Corporation (NIDSLAND) against Alfonso B. Cruz, Jr. (Cruz). It seeks the reversal of the resolutions of the Court of Appeals
(CA) dated March 6, 2007 and July 3, 2007, respectively. The second petition, G.R. No. 195509, filed by Cruz against
Imperial and NIDSLAND, seeks the reversal of the Decision of the CA dated September 13, 2010.

The Facts

On September 24, 1993, Julian C. Napal(Napal) and Imperial entered into a Memorandum of Agreement 1 to organize a
domestic corporation to be named NIDSLAND. Under the Memorandum of Agreement, Napal and Imperial agreed to engage
in the real estate business. For his capital contribution to the corporation, Napal undertook to convey to NIDSLAND a tract of
land consisting of four lots (the Property) covered by Transfer Certificate of Title (TCT) Nos. 37737, 37738, 37739 and
21026, and to Imperial a two hectare portion of the Property situated in Taysan, Legazpi City. 2Napal and Imperial intended
to develop this land into a subdivision. Imperial, on the other hand, as his contribution to NIDSLAND, committed to perform
the following obligations: to settle Napal's obligation to the Rural Bank of Ligao, Inc., which was about to foreclose its
mortgage on the Property; pay Napal's tax liabilities to the Bureau of Internal Revenue (BIR) which encumbered with a tax
lien the largest portion of the Property; fund NIDSLAND's initial operating capital; and provide for Napal's personal drawings
in an amount not exceeding ₱l,200,000.3

While Imperial faithfully complied with his obligations under the Memorandum of Agreement, Napal failed to convey to
NIDSLAND a certain portion of the Property, in particular Lot 15-C covered by TCT No. 21026 (the Subject Property). 4 On
July 24, 1996, Napal sold the Subject Property to Cruz as evidenced by a Deed of Absolute Sale. 5 While the Deed of
Absolute Sale between Napal and Cruz bore the date July 24, 1996, the sale was registered in the Registry of Deeds of
Legazpi City only on August 27, 1996. 6

As Napal continued to refuse to convey the Subject Property to NIDSLAND under the Memorandum of Agreement, Imperial
filed on July 30, 1996, for himself and in representation of NIDSLAND, a derivative suit (SEC Petition) before the Securities
and Exchange Commission (SEC).7This was filed after the sale to Cruz but before its registration. The case was docketed as
SEC LEO Case No. 96-0004 (SEC Case).8 On the same day, Imperial also filed a notice of lispendensfor the SEC Case with
the Registry of Deeds of Legazpi City. This was annotated on TCT No. 21026 9 as Entry No. 99956/99957. 10

Since the annotation of the lispendensoccurred after the sale of the Subject Property to Cruz but before its registration with
the Registry of Deeds, the notice of lispendenswas carried over to the new TCT No. 4393611 issued in Cruz's name.
12
Meanwhile, the SEC Case proceeded without the participation of Cruz who had possession of the new TCT covering the
Subject Property during the continuation of the hearings.

On August 8, 1997 and during the pendency of the SEC Case, Imperial and NIDSLAND filed an action for annulment of sale
against Cruz (Annulment of Sale Action) before the Regional Trial Court, Legazpi City (RTC Legazpi City). This was docketed
as Civil Case No. 9419. 13 On August 14, 1997, the RTC Legazpi City dismissed the action and held that it should have been
filed in the original case where the decree of registration was entered. 14 Imperial and NIDSLAND elevated the case to the
CA through an appeal. 15 The CA affirmed the RTC Legazpi City's ruling. 16

On November 10, 1998, SEC Hearing Officer Santer G. Gonzales (SEC Hearing Officer Gonzales) rendered a Decision 17 in
favor of Imperial and NIDSLAND (SEC Decision). The Decision declared the Deed of Absolute Sale between Napal and Cruz
void ab initio as the SEC found that the sale was simulated and was intentionally made to appear to have been perfected
prior to the filing of the notice of lispendens. Thus, the SEC ordered the cancellation of the TCT in the name of Cruz.
Further, the SEC directed Napal to execute the proper deed of conveyance of the Subject Property in favor of NIDSLAND.
The SEC also mandated Napal to deliver the possession of the Subject Property to NIDSLAND. 18

Since Napal did not appeal the SEC Decision, it became final and executory and was enforced on January 13, 1999. As
ordered in the SEC Decision, a Deed of Conveyance 19 was issued on the same date, transferring the Subject Property to
NIDSLAND. TCT No. 43936 in the name of Cruz was cancelled and a new TCT No. 49730 was issued in the name of
NIDSLAND on January 19, 1999.20

On February 18, 1999, Napal filed with the CA a Petition for Annulment of Judgment under Rule 4 7 of the Rules of Court
(Annulment of Judgment Action). This was docketed as CA-G.R. SP No. 51258.21Napal sought the nullification of the SEC
Decision as well as the orders and writs issued pursuant to it. Napal argued that the SEC has no jurisdiction over the SEC
Case as it did not involve any intra-corporate controversy. On April 15, 1999, Cruz filed in the Annulment of Judgment Action
a Motion to Join as Party-Petitioner.22 In his motion, Cruz claimed that he is a transferee pendente lite of the Subject
Property.23

The CA promulgated a Decision24 on August 31, 1999 dismissing the Petition for Annulment of Judgment. The CA explained
that Rule 47 of the Rules of Court is not available to annul the judgment of the SEC. According to the CA, the proper remedy
in this case is a special civil action for certiorari and prohibition. None of the parties appealed the CA Decision. Thus, entry of
judgment was made on November 16, 2000.25

On January 22, 2001,26Cruz filed a pleading denominated as a "Petition" before RTC Legazpi City (RTC Petition),27 which
sought to nullify the SEC Decision. This was docketed as Civil Case No. SR-09 and raffled to Branch 4 of RTC Legazpi City.28
In the RTC Petition, Cruz prayed for the following reliefs:
WHEREFORE, it is respectfully prayed that after hearing, judgment be rendered as follows:

a) Declaring the Decision dated 10 November 1998 of respondent Gonzales to be null and void insofar as it affects the
property rights of petitioner to the Subject Property

b) Declaring the Deed of Conveyance dated January 13, 1999 as null and void for having been issued pursuant to an invalid
and void judgment

c) Declaring the cancellation of the TCT No. 43936 of petitioner, as well as the issuance of TCT No. 49730 (and its
derivatives TCT Nos. 50398, 50399, 50400 and 50401) of respondent Nidsland, by respondent Register of Deeds of Legazpi
City, to be invalid and illegal.

d) Directing the respondent Register of Deeds of Legazpi City to duly cancel the TCT Nos. 50398, 50399, 50400 and 50401,
and restore the status of TCT No. 43936 of plaintiff prior to its cancellation, or otherwise reconvey and/or issue a new title to
the Subject Property in the name of plaintiff,

e) Ordering respondents to solidarily pay to petitioner the amount of P500,000.00, as and for moral damages.

f) Ordering respondents to solidarily pay attorney's fees in the amount of P100,000.00, appearance fees and costs of suit. 29

Presiding Judge Gregorio A. Consulta, without issuing summons, dismissed the Petition motu proprio.30He justified his
dismissal on the ground that regional trial courts have no jurisdiction over the SEC and as such, an action assailing the
decision of the SEC should be brought before the CA. As his motion for reconsideration of the decision was denied, 31 Cruz
elevated the case to the CA by way of a special civil action for certiorari. This was docketed as CA G.R. SP No. 65720. 32 In a
Decision33 dated October 28, 2002, the CA held that RTC Legazpi City acted with grave abuse of discretion in dismissing the
Petition, and therefore ordered that the case be remanded to RTC Legazpi City to be given due course.34

In accordance with the Decision of the CA, the RTC Petition was re-docketed as Civil Case No. 10325 and was reraffled to
Branch 3 of the RTC Legazpi City.35 However, even before summons could be issued, Presiding Judge Henry B. Basilla issued
an Order36 dated April 15, 2004 dismissing the Petition. The Order stated that the RTC Petition failed to comply with the
reglementary period and other procedural requirements under Rule 65 for the proper filing of a special civil action for
certiorari.

However, upon Cruz's motion for reconsideration, Judge Basilla reversed his ruling in an Order 37 dated May 7, 2004. Thus,
RTC Legazpi City summoned Imperial and NIDSLAND on July 1, 2004. 38 On July 30, 2004, Imperial and NIDSLAND filed a
motion to dismiss39 which was denied by Judge Basilla.40

Imperial and NIDSLAND then failed to file their answer and were declared in default. 41 Thus, Cruz was allowed to present
evidence ex-parte. Judge Basilla eventually set aside the order of default upon motion of Imperial and NIDSLAND.42 Judge
Basilla subsequently voluntarily inhibited himself, and the RTC Petition was reraffled to Branch 4 presided by Respondent
Judge Edgar L. Armes(Respondent Judge Armes).43

After trial, the parties to the RTC Petition submitted their respective memoranda. In Imperial and NIDSLAND's memorandum
and supplemental memorandum, they again sought the dismissal of the RTC Petition on the ground of lack of jurisdiction.
Judge Armes refused the dismissal.44

On August 22, 2006, Imperial and NIDSLAND filed an Omnibus Motion. This was followed by a Supplemental Motion filed on
September 7, 2006.45 In the two motions, Imperial and NIDSLAND once again prayed for the dismissal of the RTC Petition
and raised, for the first time, the following grounds:

1. The failure of herein private respondent CRUZ, as petitioner in Civil Case No. 10325, to state the required material dates
in his initiatory Petition necessary in order to determine compliance with the 60-days reglementary period;

2. The failure of herein private respondent CRUZ, as petitioner in Civil Case No. 10325, to show by any allegation in his
initiatory Petition that there is no appeal or any other plain, speedy and adequate remedy under the ordinary course of law
against the assailed decision in SEC LEO Case No. 96-0004 to warrant recourse to the extra-ordinary writ of certiorari;
3. The indisputable fact that the Petition in Civil Case No. 10325 was filed by herein private respondent CRUZ far beyond the
60-days reglementary period allowed under Section 4 of Rule 65 of the Rules of Court in view of the admission by said
respondent CRUZ in the Motion to Join as Party-Petitioner that he filed in CA-G.R. SP No. 51258 wherein he expressly
admitted having received a copy of the assailed decision in SEC LEO Case No. 96-0004 in February, 1999; and

4. The decision in SEC LEO Case No. 96-0006, which has become final and had been fully executed, is binding against herein
private respondent CRUZ, he being a successor-in-interest pendente lite to the title over the Subject Property, of therein
respondent Napal, pursuant to Section 19 of Rule 3 of the Rules of Court. 46

Respondent Judge Armes denied the Omnibus Motion and Supplemental Motion in an Order dated September 21, 2006. 47
According to the Order, the issues raised by Imperial and NIDSLAND have already been settled by the CA in the certiorari
case filed by Cruz. The Order held that the CA ruled that the RTC Legazpi City has jurisdiction over the case and even
directed the latter to give due course to the RTC Petition.

Imperial and NIDSLAND filed a motion for reconsideration of this RTC Order on October 6, 2006. 48 In this motion, Imperial
and NIDSLAND argued that the ruling of the CA pertained to an entirely different jurisdictional issue from that raised in their
Omnibus Motion and Supplemental Omnibus Motion.49Respondent Judge Armes denied the motion for reconsideration in an
Order50 dated November 23, 2006. This Order reiterated that the CA's directive that the RTC Legazpi City give due course to
the RTC Petition was unqualified and unconditional. Further, the Order explained that Imperial and NIDSLAND's arguments
had no merit for the following reasons:

1. This action is geared to declare the nullity of a void judgment. In the case of Paluwagan ng Bayan Savings Bank vs. King,
172 SCRA 60, it was held that an action to declare the nullity of a void judgment does not prescribe, citing also Ang Lam vs.
Rosillosa and Santiago, 86 Phil. 447-452. This imprescriptibility of the action places it beyond the ambit of the 60-day
reglementary period under Sec. 4, Rule 65 of the Revised Rules of Court.

2. The petitioner in this case, not being a party in SEC LEO Case No. 96-0004, was never officially notified of the assailed
Decision, dated November 10 1998 by the deciding authority simply because there was no basis therefor. The notice of the
judgment, order or resolution, from which the 60-day period shall be computed under Sec. 4, Rule 65 of the Rules of Court,
contemplates of an official notice from the deciding authority and not mere informal information from other sources like
what happened in the case at bar[.] Since the official notice from the deciding authority in SEC LEO Case No. 96-0004 was
not and is not forthcoming because there was no basis thereof, it follows that the 60-day period aforesaid is not applicable
to the case at bar. 51

FIRST CONSOLIDATED CASE-G.R. NO. 178842

Imperial and NIDSLAND then filed a Petition for Certiorari and Prohibition52 under Rule 65 of the Rules of Court before the
CA. This petition assailed the validity of Respondent Judge Armes' Orders dated September 21, 2006 and November 23,
2006. This was docketed as CA-G.R. SP No. 97823. The CA rendered a Resolution dated March 6, 200753 (First Assailed
Resolution) dismissing Imperial and NIDSLAND's Petition for Certiorari and Prohibition for lack of merit. Imperial and
NIDSLAND filed a motion for reconsideration which was denied by the CA in a Resolution dated July 3, 2007 54 (Second
Assailed Resolution).

Hence, on August 2, 2007, Imperial and NIDSLAND filed this Petition for Review on Certiorari55under Rule 45 of the Rules of
Court seeking a reversal of the two assailed resolutions (First Petition). In their petition, Imperial and NIDSLAND argue that
the CA erred in affirming the RTC Decision on the RTC Petition. They argue that the CA should have reversed the error of
the RTC Legazpi City in allowing the filing of the RTC Petition way beyond the 60-day period for the filing of a special civil
action for certiorari.They stress that the RTC Petition was filed three and a half years after the finality of the SEC Decision
and two years and three months from the time Cruz received notice of its promulgation. They argue that neither the CA nor
Cruz was able to present any compelling reason for the relaxation of the reglementary period.

SECOND CONSOLIDATED CASE-G.R. No. 195509

While the First Petition was pending, RTC Legazpi City rendered a Decision56 dated March 24, 2009 (RTC Main Decision). The
RTC Legazpi City ruled that SEC Hearing Officer Gonzales acted with grave abuse of discretion when he annulled the Deed of
Sale of the Subject Property between Napal and Cruz, ordered the cancellation of Cruz's TCT, and directed Napal to execute
a deed of conveyance in favor of NIDSLAND. According to the RTC Main Decision, the CA has already definitively settled the
issue of RTC Legazpi City's jurisdiction over the case. It held that there is no merit in Imperial and NIDSLAND's contention
that the RTC Petition should have been dismissed for non-compliance with the 60-day period for the filing of a special civil
action for certiorari and for failure of the R TC Petition to state the material dates. On the other hand, the RTC Main Decision
found that the SEC had no jurisdiction over Cruz and as such, in issuing orders affecting his ownership over the Subject
Property, it violated Cruz's right not to be deprived of property without due process of law. Further, the RTC Main Decision
stated that RTC Legazpi City cannot settle the issue as to the rightful ownership of the Subject Property in a special civil
action for certiorari. The RTC Main Decision however affirmed the award of damages in favor of Imperial and NIDSLAND in
the SEC Case. The dispositive portion held-

WHEREFORE, premises considered, judgment is hereby rendered in favor of the petitioner, as follows:

1. The Decision in SEC-LEO Case No. 96-0004, dated November 10, 1998, signed by respondent Santer G. Gonzales, is
hereby DECLARED NULL AND VOID ONLY WITH RESPECT TO PARAGRAPHS 1 AND 2 OF THE DISPOSITIVE PORTION
THEREOF regarding the annulment of the Deed of Sale of the subject property by Napal to petitioner Cruz, the cancellation
of the title issued pursuant to the said sale in the name of petitioner Cruz and the directive to Napal to execute the deed o f
conveyance in favor of respondent herein Nidsland as well as the delivery of possession of the subject property to Nidsland
and the designation of then Clerk of Court Atty. Antonio C. Bagagnan to execute the proper deed of conveyance in the event
ofrefusal on the part of Napal.

2. The following documents are hereby DECLARED NULL AND VOID:

a) Deed of Conveyance, dated [January] 13, 1999 issued by Atty. Antonio C. Bagagnan, Clerk of Court MTCC, Legazpi City
(Exh. "E" and Exh. "11")

b) CT No. 49730 in the name of respondent Nidsland (Exh. "F" and Exh. "12")

c) TCT No. 50398 in the name of respondent Nidsland (Exh. "F-1" and Exh. "13")

d) TCT No. 50399 (Exh. "F-2" and Exh. "14")

e) TCT No. 50400 (Exh. "F-3" and Exh. "15")

f) TCT No. 50401 (Exh. "F-4" and Exh. "16")

3. Respondent Register of Deeds of Legazpi City Atty. Danilo B. Lorena is hereby ordered to cancel the foregoing titles, to
wit: TCT Nos. 49730; 50398; 50399; 50400; and 50401;

4. Respondent Lorena is hereby further ordered to recall or lift the cancellation of TCT No. 43936 in the name of petitioner
Alfonso Cruz, Jr., covering the subject property.

The parties' claims and counterclaims on their respective damages are hereby ordered DISMISSED.

SO ORDERED. 57

Aggrieved by the RTC Main Decision, Imperial and NIDSLAND filed before the CA an appeal under Rule 41 of the Rules of
Court. In a Decision58 dated September 13, 2010 (Second Assailed Decision), the CA reversed the R TC Decision. The
dispositive portion of the Assailed Decision states-

WHEREFORE, the assailed decision dated March 24, 2009, issued by the Regional Trial Court, Branch 4 , Legazpi City is
hereby REVERSED and SET ASIDE; accordingly, Civil Case No. 10325 is hereby DISMISSED.

No costs.

SO ORDERED.59

On March 24, 2011, Cruz filed a Petition for Review on Certiorari60 (Second Petition) challenging the Second Assailed
Decision. Cruz raised the following arguments: first, Cruz claimed that he is the registered owner of the Subject Property. He
was thus an indispensable party to the SEC Case and as such, should have been impleaded. Since the SEC Case was a
personal action and he was never impleaded, Cruz argues that the SEC never acquired jurisdiction over him. Thus, any
decision cannot prejudice his property rights over the Subject Property. Further, as an indispensable party, any judgment
obtained by Imperial and NIDSLAND in the SEC Case has no binding effect on Cruz. Second, Cruz also claims that since the
property was already registered in his name, any deed of conveyance which Napal executed pursuant to the SEC Decision
transfers no rights since Napal no longer had rights over the Subject Property at the time. Third, Cruz states that the CA
erred when it held that he is already estopped from challenging the cancellation of his TCT. He explains that he could not
have participated in the SEC Case to protect his rights. The SEC Case pertained to an intracorporate dispute. As he was
obviously not a stockholder of NIDSLAND, he had no basis to intervene. He also emphasizes that Imperial and NIDSLAND
never prayed for the cancellation of his TCT in the SEC Case and thus, had no real reason to interfere until SEC Hearing
Officer Gonzales ruled that his TCT should be cancelled. Cruz also raises the argument that he could not have filed a
separate action to protect his rights over the property since Imperial and NIDSLAND had already filed the Annulment of Sale
action against him for the annulment of the sale and cancellation of his TCT before RTC Legazpi City. Cruz claims that he
actively participated in this case which attained finality only in 2003. According to Cruz, filing another case while this case
was pending would have amounted to multiplicity of suits.

We resolve the issues raised in these two consolidated cases.

The Issues

The core issue is whether RTC Legazpi City has jurisdiction to declare the nullity of the Decision of the SEC. To resolve this
issue, we once again clarify the apparent clash of jurisdiction between the SEC and the ordinary courts in cases involving
Presidential Decree No. 902-A61 (PD 902-A).

The Ruling of the Court

We rule that that the RTC Petition should have been dismissed for lack of jurisdiction. We likewise rule that the SEC Decision
was issued with grave abuse of discretion amounting to an excess of jurisdiction.

Nature of a void judgment

A void judgment is no judgment at all in legal contemplation. In Canero v. University of the Philippines62we held that-

x x x A void judgment is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or
declared inoperative by any tribunal in which effect is sought to be given to it. It has no legal or binding effect or efficacy for
any purpose or at any place. It cannot affect, impair or create rights. It is not entitled to enforcement and is, ordinarily, no
protection to those who seek to enforce. In other words, a void judgment is regarded as a nullity, and the situation is the
same as it would be if there was no judgment. x x x63

A judgment rendered without jurisdiction is a void judgment. This want of jurisdiction may pertain to lack of jurisdiction over
the subject matter or over the person of one of the parties.

A void judgment may also arise from the tribunal's act constituting grave abuse of discretion amounting to lack or excess of
jurisdiction. In Yu v. Judge Reyes-Carpio, 64 we explained-

The term "grave abuse of discretion" has a specific meaning. An act of a court or tribunal can only be considered as with
grave abuse of discretion when such act is done in a "capricious or whimsical exercise of judgment as is equivalent to lack of
jurisdiction." x xx [T]he use of a petition for certiorari is restricted only to "truly extraordinary cases wherein the act of the
lower court or quasi-judicial body is wholly void" x x x.65

In Guevarra v. Sandiganbayan, Fourth Division,66we further explained-

x x x However, if the Sandiganbayan acts in excess or lack of jurisdiction, or with grave abuse of discretion amounting to
excess or lack of jurisdiction in dismissing a criminal case, the dismissal is null and void. A tribunal acts without jurisdiction if
it does not have the legal power to determine the case; there is excess of jurisdiction where a tribunal, being clothed with
the power to determine the case, oversteps its authority as determined by law. A void judgment or order has no legal and
binding effect, force or efficacy for any purpose. In contemplation of law, it is nonexistent. Such judgment or order may be
resisted in any action or proceeding whenever it is involved. x x x67
To give flesh to these doctrines, the Rules of Court, particularly the 1997 Revised Rules on Civil Procedure, provides for a
remedy that may be used to assail a void judgment on the ground of lack of jurisdiction. Rule 47 of the Rules of Court states
that an action for the annulment of judgment may be filed before the CA to annul a void judgment of regional trial courts
even after it has become final and executory. If the ground invoked is lack of jurisdiction, which we have explained as
pertaining to both lack of jurisdiction over the subject matter and over the person, the action for the annulment of the
judgment may be filed at any time for as long as estoppel has not yet set in. In cases where a tribunal's action is tainted
with grave abuse of discretion, Rule 65 of the Rules of Court provides the remedy of a special civil action for certiorari to
nullify the act.

Void judgments may also be collaterally attacked. A collateral attack is done through an action which asks for a relief other
than the declaration of the nullity of the judgment but requires such a determination if the issues raised are to be definitively
settled.

Nature of the RTC Petition

The RTC Petition filed by Cruz has been treated by the CA and the parties as a special civil action for certiorari. The RTC
Petition, however, prays for the nullification of the SEC Decision and thus purports to be an action for the annulment of a
void judgment. Ascertaining the true nature of the RTC Petition is crucial as it determines whether Cruz properly invoked the
correct remedy in assailing the SEC Decision.

The nature of an action is determined bythe material allegations in the complaint and the type of relief prayed for. 68 We
have examined the RTC Petition, and we rule that contrary to the findings of the lower courts, it is an action for the
annulment of judgment on the ground of lack of jurisdiction. The meat of the RTC Petition's allegation is that the SEC
declared as void ab initio the sale between Napal and Cruz without impleading Cruz in the proceedings. The SEC also had no
power to order the transfer of title over the Subject Property from Cruz to NIDSLAND because Cruz was never heard in these
proceedings. Cruz asserts that the SEC never acquired jurisdiction over his person. Cruz thus prayed in the RTC Petition that
the SEC Decision be declared null and void.

The RTC Petition clearly captures the material allegations in a petition for annulment of judgment on the ground of lack of
jurisdiction over the person of one of the parties under Rule 4 7 of the Rules of Court. In sharp contrast, the RTC Petition
makes no allegations that the SEC Decision was rendered with grave abuse of discretion. It cannot be treated as a special
civil action for certiorari under Rule 65.

The necessary question before us now is whether Cruz invoked the proper remedy. There have been several attempts to use
an action for annulment of judgment under Rule 4 7 of the Rules of Court to set aside a void judgment of a quasi-judicial
body. We retrace our jurisprudence on the matter in order to ascertain if this remedy may be properly invoked. A review of
the relevant cases reveals two interrelated issues. First, whether this remedy is available to set aside a void judgment of a
quasi-judicial body; and second, which tribunal has jurisdiction over it.

Jurisdiction over annulment ofjudgment of quasi-judicialbodies

Prior to Batas Pambansa Bilang129 (BP 129),69 we had the chance to rule on the question of jurisdiction over the annulment
of judgment of quasi-judicial bodies in BF Northwest Homeowners Association, Inc. v. Intermediate Appellate Court. 70 In
that case, we held that regional trial courts can annul the judgment of quasi-judicial bodies which are of the same rank as
courts of first instance. This ruling established two things: first, an action for the annulment of judgment is a remedy
available against a void judgment of a quasi-judicial body. Second, regional trial courts had jurisdiction whenever the quasi-
judicial body involved is of inferior rank.

With the passage of BP 129, this doctrine appears to have been altered. Section 9(a) of BP 129expressly vested the CA
with jurisdiction over annulment of judgments of regional trial courts. Notably, it does not mention jurisdiction over
annulment of judgment of quasi-judicial bodies. In fact, quasi-judicial bodies are mentioned only in Section 9(3)771 which
provides for the CA's appellate jurisdiction over their judgments, orders, resolutions and awards.

In 1997, the new rules of civil procedure took effect. These rules provided, for the first time, a remedy called
annulment of judgment on the ground of extrinsic fraud and lack of jurisdiction. Rule 47, however, limits its application to
regional trial courts and municipal trial courts.

We had the opportunity to apply these relevant provisiojjns in the 2000 case of Cole v. Court of Appeals. 72 In this case, we
explained that the CA has no jurisdiction over a petition for annulment of judgment under Rule 47 against a decision of the
Housing and Land Use Regulatory Board, a quasi-judicial body. Rule 47 allows a resort to the CA only in instances where the
judgment challenged was rendered by regional trial courts. This was also the import of our ruling in Elcee Farms, Inc. v.
Semillano73when we held that the CA has no jurisdiction over the annulment of judgment of the National Labor Relations
Commission.

This was reiterated in the 2005 case Galang v. Court of Appeals 74 which dealt with decisions rendered by the SEC. In that
case, we categorically ruled that the CA has no jurisdiction over annulment of a void judgment rendered by the SEC since
Rule 47 of the Rules of Court clearly states that this jurisdiction only pertains to judgments rendered by regional trial courts.

Springfield Development Corporation, Inc. v. Presiding Judge, RTC, Misamis Oriental, Br. 40, Cagayan de Oro
City75summarized our foregoing rulings in determining whether the CA has jurisdiction to annul a void judgment of the
Department of Agrarian Reform Adjudication Board (DARAB). This case was a significant development in the then growing
jurisprudence which all merely said that an action to annul a judgment of a quasi-judicial body cannot be brought before the
CA, and which did not categorically state whether the action may be filed before any other court.

In Springfield, we explained that regional trial courts have no jurisdiction to annul judgments of quasi-judicial bodies of equal
rank. It then proceeded to state that the CA also has no jurisdiction over such an action. Springfield emphasized that Section
9 of BP 129 and Rule 4 7 of the Rules of Court both state that the CA has jurisdiction over annulment of judgments of
regional trial courts only. We ruled in this case that the "silence of B.P. Blg. 129 on the jurisdiction of the CA to annul
judgments or final orders and resolutions of quasi-judicial bodies like the DARAB indicates its lack of such authority."76 While
this case explained that neither the regional trial courts nor the CA possess jurisdiction over an action to annul the judgment
of quasi-judicial bodies, it did not categorically state that the remedy itself does not exist in the first place. Notably, we
disposed of this case by remanding the action filed before us-a special civil action for prohibition- to the CA because the
matter required a determination of facts which this Court cannot do. We then held that the CA may rule upon the validity of
the judgment by noting that a void judgment may be collaterally attacked in a proceeding such as an action for prohibition.
77

The seeming confusion in the string of cases pertaining to the jurisdiction over petitions for annulment of judgment of quasi-
judicial bodies is clarified when these cases are read in conjunction with Macalalagv. Ombudsman.78While we repeated our
consistent ruling that Rule 47 of the Rules of Court only applies to judgments of regional trial courts, Macalalagalso explains
that an action for the annulment of judgment is similar in nature to an appeal-both are merely statutory. No right exists
unless expressly granted by law. 79 In Macalalag, we implied that the key to determining whether this remedy may be had
and where such action may be filed is to ascertain whether there is a law expressly allowing a resort to this action before a
particular tribunal. This then requires an examination of the laws and rules relevant to a specified quasi-judicial body. While
it is correct that both the regional trial courts and the CA cannot take cognizance of a petition for annulment of judgment of
a quasi-judicial body under Rule 47 of the Rules of Court, they may nevertheless do so, if a law categorically provides for
such a remedy and clearly provides them with jurisdiction.

Applying this to the present case, we rule that there is no law at the time pertinent to this case, which allows the filing o f a
petition for annulment of judgment before the regional trial courts and the CA to set aside a void judgment of the SEC on
the basis of lack of jurisdiction. We hasten to emphasize, however, that this pertains only to cases filed prior to Republic Act
No. 879980 (RA 8799) which transferred the jurisdiction over intra-corporate disputes to regional trial courts designated as
commercial courts. As to the latter, Rule 47 clearly applies.

This leads to the conclusion that the RTC Petition is not the proper remedy to assail the SEC Decision. Since it is an action
for the annulment of judgment, the R TC Petition cannot prosper as we have already ruled that this remedy is not available
in this particular case.

However, the error in Cruz's RTC Petition does not automatically warrant a dismissal of these proceedings. We rule that the
SEC, in nullifying the sale between Napal and Cruz and in ordering the cancellation of Cruz's TCTs in favor of NIDSLAND,
overstepped its jurisdiction. The SEC Decision was rendered with grave abuse of discretion.

Grave Abuse of Discretion andthe SEC 's Jurisdiction

In 1976, PD 902-A vested the SEC with the quasi-judicial power over intra-corporate disputes. While this
jurisdiction was eventually transferred to regional trial courts designated as special commercial courts by The Securities
Regulation Code in 2000, the SEC had the authority over intra-corporate disputes at the time relevant to this case.
Through the years that the SEC had quasi-judicial power over intra-corporate controversies, this Court explained the
delineation of jurisdiction between the trial courts and the SEC. Our finding in this case that the SEC acted with grave abuse
of discretion is rooted on the proper understanding of the limits of the jurisdiction of the SEC. We now review this Court's
pertinent rulings on the jurisdiction of the SEC.

Under Section 5 of PD 902-A, the applicable law at the time the SEC Case was filed, the SEC has original and exclusive
jurisdiction to hear and decide cases involving the following:

(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership,
amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder,
partners, members of associations or organizations registered with the Commission;

(b) Controversies arising out of intra-corporate 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; and

(c) Controversies in the election or appointments of directors, trustees, officers or managers; of such corporations,
partnerships or associations

In Union Glass & Container Corporation v. Securities and Exchange Commission81we said that "the law [PD 902-A] explicitly
specified and delimited its jurisdiction to matters intrinsically connected with the regulation of corporations, partnerships and
associations and those dealing with the internal affairs of such corporations, partnerships or associations."82 We added that
in order for the SEC to take cognizance of a case, the controversy must pertain to any of the following relationships: (1)
between the corporation, partnership or association and the public; (2) between the corporation, partnership or association
and the state in so far as its franchise, permit or license to operate is concerned; (3) between the corporation, partnership or
association and its stockholders, partners, members or officers; and (4) among the stockholders, partners or associates
themselves. 83

This is the relationship test, under which the existence of any of these relationships vested the SEC with jurisdiction. In
Abejov. De la Cruz,84we even declared that "an intra-corporate controversy is one which arises between a stockholder and
the corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision is broad and covers all
kinds of controversies between stockholders and corporations."85

Later decisions of this Court, however, have moved away from this rather simplistic determination of what constitutes an
intra-corporate controversy. In the 1990 case of Virayv. Court of Appeals, 86 we held, thus:

The establishment of any of the relationships mentioned in Union will not necessarily always confer jurisdiction over the
dispute on the SEC to the exclusion of the regular courts. The statement made in one case that the rule admits of no
exceptions or distinctions is not that absolute. The better policy in determining which body has jurisdiction over a case would
be to consider not only the status or relationship of the parties but also the nature of the question that is the subject of their
controversy.87

This is the controversy test. In Lozano v. De los Santos, 88 we explained that the controversy test requires that the dispute
among the parties be intrinsically connected with the regulation of the corporation, partnership or association. 89 In Speed
Distribution Corp. v. Court of Appeals,90we added that "[i]f the nature of the controversy involves matters that are purely
civil in character, necessarily, the case does not involve an intra-corporate controversy."91

Taking all these holdings together, the issue of whether the SEC has the power to hear and decide a case depends on two
determinants: (1) the status or relationship of the parties; and (2) the nature of the question that is the subject of their
controversy.92

The application of these two tests has allowed for the proper delineation of the seeming overlap in the jurisdiction of the
SEC and the courts.

By way of illustration, in Union Glass we ruled that the action filed by the dissenting stockholders against their corporation
Pioneer Glass Manufacturing (Pioneer) questioning its dacionenpagoof Pioneer's plant in favor of Union Glass is an intra-
corporate dispute as it clearly pertained to the internal affairs of the corporation. However, we held that the recovery of the
possession of the plant should have been filed with the trial court because the SEC possesses no jurisdiction over Union
Glass (the third-party purchaser) because it has no intra-corporate relationship with any of the parties.

In Embassy Farms, Inc. v. Court of Appeals,93the respondent, under a memorandum of agreement, undertook to deliver
certain parcels of land and shares of stock of Embassy Farms, Inc. to the other party in exchange for the latter's payment of
a certain amount. When the other party failed to comply with his obligation to pay the amount, we held that the conflict
arising between them pertains to their contractual obligations under the memorandum of agreement. It does not refer to the
enforcement of rights and obligations under the Corporation Code or the internal or intra-corporate affairs of the
corporation.

In Saura v. Saura, Jr., 94certain stockholders sold a parcel of land to a corporation without the consent of the other
stockholders. When the latter filed an action for the annulment of the sale against the purchasing corporation and the selling
stockholders before the trial court, the question of whether the case is an intra-corporate dispute arose. Applying the two
tests, we found that the case is not intra-corporate. The action was ultimately directed against a third party even if the
selling stockholders of the corporation were also impleaded.

Further, in Intestate Estate of Alexander T Ty v. Court of Appeals, 95 where a stockholder filed an action against the estate of
another stockholder for the annulment of a sale of shares which the former claims was simulated for lack of consideration,
we ruled that the jurisdiction properly belongs to the regional trial court. We explained that "[t]he determination whether a
contract is simulated or not is an issue that could be resolved by applying pertinent provisions of the Civil Code, particularly
those relative to obligations and contracts. Disputes concerning the application of the Civil Code are properly cognizable by
courts of general jurisdiction."96

The development of both the concept and application of the relationship test and controversy test reveals a growing
emphasis on the delineated jurisdiction between the SEC and ordinary courts. The delineation is based on the very purpose
for which the SEC was granted quasi-judicial powers in the first place. Under PD 902-A, the SEC exercised jurisdiction over
intra-corporate controversies precisely because it is a highly-specialized administrative body in specialized corporate matters.
It follows therefore, that where the controversy does not call for the use of any technical expertise, but the application of
general laws, the case is cognizable by the ordinary courts. In Macapalan v. Katalbas-Moscardon,97we said-

It is true that the trend is towards vesting administrative bodies like the SEC with the power to adjudicate matters coming
under their particular specialization, to insure a more knowledgeable solution of the problems submitted to them. This would
also relieve the regular courts of a substantial number of cases that would otherwise swell their already clogged dockets. But
as expedient as this policy may be, it should not deprive the courts of justice of their power to decide ordinary cases in
accordance with the general laws that do not require any particular expertise or training to interpret and apply. Otherwise,
the creeping take-over by the administrative agencies of the judicial power vested in the courts would render the judiciary
virtually impotent in the discharge of the duties assigned to it by the Constitution.98

Applying these principles to this case, we rule that the SEC does not have jurisdiction to order the cancellation of the sale
between Napal and Cruz. It also has no jurisdiction to cancel Cruz's TCT and order its transfer to NIDSLAND.

To assail the validity of the sale, Imperial and NIDSLAND sought to prove that the sale to Cruz was simulated. This involves
the application of the law on sales. As we have already held in Intestate Estate of Alexander T. Ty, the issue of whether a
sale is simulated falls within the jurisdiction of ordinary civil courts. It does not concern an adjudication of the rights of
Imperial, NIDSLAND and Napal under the Corporation Code and the internal rules of the corporation. The resolution of these
questions requires the application of an entire gamut of laws that goes well beyond the expertise of the SEC.

Meanwhile, the question of whether Cruz's TCT should be cancelled goes into the proper application of Presidential Decree
No. 152999 and related doctrines. Specifically, there is a need to take into consideration whether the SEC Petition is a
collateral attack on the certificate of title which goes against the well-established rule of indefeasibility. The resolution of this
question demands the application of our laws on land title and deeds, a matter outside the ambit of the SEC's special
competence.

Indeed, our jurisprudence has leaned in favor of recognizing the jurisdiction of quasi-judicial bodies. However, this
jurisdiction must always be viewed within the context of its grant. The law vests quasi-judicial powers to administrative
bodies over matters that require their particular competence and specialized expertise. This grant of jurisdiction is not and
should not be justification to deprive courts of law of their jurisdiction as determined by law and the Constitution. Courts of
law are the instruments for the adjudication of legal disputes. In a system of government where courts of law exist
alongside quasi-judicial bodies, the need to harmonize apparent conflicts in jurisdiction require a determination of whether
the matter to be resolved pertains to a general question of law which belongs to ordinary courts or whether it refers to a
highly specialized question that can be better resolved by a quasi-judicial body in accordance with its power vested by law.

In overstepping its jurisdiction, the SEC committed grave abuse of discretion. Grave abuse of discretion is the capricious and
whimsical exercise of judgment. It is the exercise of a power in an arbitrary manner. It must be so patent or gross as to
amount to the evasion of a positive duty or to a virtual refusal to perform a duty enjoined or to act at all in contemplation of
law. In Air Transportation Office v. Court of Appeals, 100 we explained that grave abuse of discretion exists when the act is:
(1) done contrary to the Constitution, the law or jurisprudence; or (2) executed whimsically, capriciously or arbitrarily out of
malice, ill will or personal bias. 101

In Thenamaris Philippines Inc. v. Court of Appeals, 102 we ruled that grave abuse of discretion exists where the assailed
decision of the CA displayed patent errors. In Air Transportation Office, the patent violation of the Rules of Court merited a
finding that there was grave abuse of discretion.

In this case, the SEC, in rendering the decision, disregarded established law and jurisprudence on the jurisdiction of the SEC.
Further, it adjudicated on the rights of Cruz, cancelled the deed of sale, and took away his property without giving him the
opportunity to be heard. It is a breach of the basic requirements of due process.

Further, the incorrectness and impracticality of presenting these issues before the SEC are highlighted by the reliefs granted
by SEC Hearing Officer Gonzales in the SEC Case. The SEC annulled the deed of sale between Napal and Cruz. This was
based on evidence presented during the SEC Hearing which consisted of Imperial's testimony that the price that Cruz paid
for the Subject Property was grossly below its value. While we will not delve into the propriety of the SEC's factual findings,
we note that there appears nothing in the record, other than Imperial's statements, to support the contention that the
consideration was indeed grossly below the actual value of the Subject Property. Furthermore, the SEC also found that the
Deed of Sale was antedated to make it appear that it took place prior to the annotation of the notice of lispendens. Again,
this was based solely on Imperial's testimony during the SEC Hearing. We note that there was nothing in the records, other
than Imperial's bare statement, to establish this.

The SEC Decision even went further and ordered the cancellation of Cruz's TCT. This did not take into consideration the
indefeasibility of a Torrens title. While this is not a question that we seek to resolve in these consolidated cases, we
emphasize that a proper adjudication of this matter requires, at the very least, an analysis of the effect of the notice of
lispendens, the rights of a transferee pendente lite, and the propriety of a collateral attack on a certificate of title. Clearly,
the SEC is not the appropriate forum to delve into these civil law concepts.

The SEC also does not possess the expertise to go into the reception of evidence and the conduct of hearings geared for the
purpose of resolving issues proper for a civil action. The resolution of a civil action requires preponderance of evidence as a
burden of proof. On the other hand, cases before quasi-judicial bodies require only substantial evidence. Hence,
the propriety of annulling a sale and cancelling a Torrens title-which are in the nature of a civil action-on the basis merely of
substantial evidence determined by an administrative body raises due process concerns.

Effects of a void judgment

When grave abuse of discretion taints a judgment, it becomes wholly void.It may be challenged by direct action which has
for its object the declaration of the nullity of the judgment. It may also be set aside through a collateral attack.

Thus, in Guevarra, we allowed the filing of a motion for reconsideration even if it was made beyond the reglementary 15-day
period We based our ruling on the ground that the order challenged by the motion for reconsideration was issued with grave
abuse of discretion and is null and void. We explained-

Such judgment or order may be resisted in any action or proceeding whenever it is involved. It is not even necessary to take
any steps to vacate or avoid a void judgment or final order; it may simply be ignored. 103

Our ruling in Gonzales v. Solid Cement Corporation104is more unequivocal.In this case, we found that the CA committed
grave abuse of discretion amounting to lack or excess of jurisdiction, therefore acting outside the contemplation of law.
Hence, even when the period to assail the CA decision had already lapsed, we ruled that it did not become final and
immutable. A void judgment never becomes final. We ruled thus-
The CA's actions outside its jurisdiction cannot produce legal effects and cannot likewise be perpetuated by a simple
reference to the principle of immutability of final judgment; a void decision can never become final. "The only exceptions
to the rule on the immutability of final judgments are (1) the correction of clerical errors, (2) the so-called nunc pro
tuncentries which cause no prejudice toany party, and (3) void judgments." x x x 105

More, our ruling in Banco Español-Filipino v. Palanca106on the effects of a void judgment has reappeared consistently in
jurisprudence touching upon the matter. In this case, we said that a void judgment is "a lawless thing, which can be treated
as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head." 107 In concrete terms, this means
that a void judgment creates no rights and imposes no duties. Any act performed pursuant to it and any claim emanating
from it have no legal effect. 108 Thus, in Heirs of Mayor Nemencio Galvez v. Court of Appeals,109we nullified an auction sale
of a land as well as the resulting deed of sale and transfer certificate of title as they were the offshoot of a writ of execution
carried pursuant to a void judgment.

Hence, because the SEC Decision was issued with grave abuse of discretion and is therefore void, all acts emanating from it
have no force and effect. Thus, the Deed of Conveyance issued pursuant to it has no legal effect.

Nevertheless, while the certificates of title issued in the name of NIDSLAND arose from a void judgment, this Court cannot
nullify them in these proceedings. The indefeasibility of a Torrens title prevents us from doing so. Further, we are bound by
rules on jurisdiction and the nature of the proceedings before us.

Our Torrens system serves a very important purpose. As a general rule, a Torrens certificate of title is conclusive proof of
ownership. Thus, provided that the requirements of law are met, a certificate of title under the Torrens system of
registration is indefeasible. The value of this rule finds real meaning when viewed in practical terms. A registration under the
Torrens system confirms that the person whose name appears as owner of the land is indeed the true owner. Except for
specific circumstances allowed by law, a person who registers his or her ownership over a piece of land makes his or her title
indefeasible because the law does not allow any other person to attack or challenge it. Because the title is indefeasible, third
persons interested in the registered land can simply look at the certificate of title and rely on the information stated in it.
This creates stability in our system of registration. This rule is so zealously protected that our laws even prohibit a collateral
attack of a void certificate of title.

This is the spirit that infused our ruling in Heirs of Spouses Benito

Gavina and Juana Euste v. Court of Appeals.110 In this case, we explained that the general rule that the direct result of a
void contract cannot be valid is inapplicable when the integrity of the Torrens system is involved. Thus, a void certificate of
title cannot be cancelled in a proceeding not instituted for the purpose. We further said-

x x x The effect of such outright cancellation will be to impair public confidence in the certificate of title. The sanctity of the
Torrens system must be preserved; otherwise, everyone dealing with the property registered under the system will have to
inquire in every instance as to whether the title had been regularly or irregularly issued, contrary to the evident purpose of
the law. Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued
therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. 111

We cited this ruling in subsequent cases such as Rabaja Ranch Development Corporation v. AFP Retirement and Separation
Benefits System, 112Spouses Chua v. Soriano, 113 and Republic v. Orfinada, Sr. 114 The stability and reliability of the Torrens
system is so important that we cannot, in this case, undermine it for the sake of expediency.

Hence, we cannot order the direct cancellation of the certificates of title issued to NIDSLAND even if they are the direct
result of a void decision. The nullity of the certificates of title should be threshed out in a petition for cancellation of title
brought before the proper court. 115

Moreover, there are procedural barriers that prevent us from determining the validity of the certificates of title questioned in
this case. First, we do not have jurisdiction over the cancellation of certificates of title. Second, the nature of the action
before us bars us from going into the certificates of title themselves. We emphasize that this case is a petition for review on
certiorari of an action for annulment of judgment on the ground of lack of jurisdiction. Our ruling is anchored on the lack of
jurisdiction of the SEC to annul the sale to Cruz and order the cancellation of the certificates of title. In this Decision, we
emphasized that the proper jurisdiction to annul the sale and to cancel the certificates of title belongs to the regular courts,
in particular, the regional trial courts. We must thus also respect the rule on jurisdiction and exercise restraint in this case.
The proper action to cancel the void certificates of title must be brought before the tribunal designated by law to possess
jurisdiction over the matter. The proper party may, however, use this Decision as it definitively settles that the certificates of
title issued to NIDSLAND arose out of a void judgment and as such, should have no force and effect. This Decision is res
judicata as to this question.

Further, we also cannot rule on the validity of the sale of the Subject Property to Cruz as well as Napal's obligation to
Imperial and NIDSLAND under the Memorandum of Agreement. These matters require the presentation of facts before the
proper forum and through appropriate procedural remedies. While we endeavor to fully settle legal disputes brought before
us, we must also place premium on the importance of rules of procedure. Rules of procedure serve to protect the interests
of litigants who seek redress before the courts. They ensure that litigants plead before the proper forum that has the
necessary expertise and legal tools to fully resolve a legal problem. They also ensure that litigants employ the proper
remedies that will allow them to successfully obtain the appropriate relief. With this in mind, litigants must be more
circumspect in invoking the jurisdiction of the various tribunals and the multiple remedies available to them.

WHEREFORE, the Court of Appeals' Resolution dated March 6, 2007 in the First Consolidated Case is REVERSED and SET
ASIDE. Further, we rule that Branch 4, Regional Trial Court, Legazpi City has no jurisdiction over Cruz's Petition. Thus, the
Regional Trial Court's Decision dated March 24, 2009 is NULLIFIED.

The Court of Appeals' Decision dated September 13, 2010 in the Second Consolidated Case is also REVERSED and SET
ASIDE. We rule that the Securities and Exchange Commission's Decision dated November 10, 1998 is VOID. Thus, the
Deed of Conveyance dated January 13, 1999 executed in compliance with this Decision is NULLIFIED. The proper parties
can file the appropriate petition for cancellation of title in the trial court which has jurisdiction to nullify the certificates of title
issued to NIDSLAND by virtue of the void SEC Decision.

SO ORDERED.

EN BANC

G.R. No. 96938 October 15, 1991

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,

vs.
CIVIL SERVICE COMMISSION, HEIRS OF ELIZAR NAMUCO, and HEIRS OF EUSEBIO MANUEL, respondents.

Benigno M. Puno for private respondents.

Fetalino, Llamas-Villanueva and Noro for CSC.

NARVASA, J.:

In May, 1981, the Government Service Insurance System (GSIS) dismissed six (6) employees as being "notoriously
undersirable," they having allegedly been found to be connected with irregularities in the canvass of supplies and materials.
The dismissal was based on Article IX, Presidential Decree No. 807 (Civil Service Law) 1 in relation to LOI 14-A and/or LOI
No. 72. The employees' Motion for Reconsideration was subsequently denied.

Five of these six dismissed employees appealed to the Merit Systems Board. The Board found the dismissals to be illegal
because effected without formal charges having been filed or an opportunity given to the employees to answer, and ordered
the remand of the cases to the GSIS for appropriate disciplinary proceedings.

The GSIS appealed tothe Civil Service Commission. By Resolution dated October 21, 1987, the Commission ruled that the
dismissal of all five was indeed illegal and disposed as follows:
 WHEREFORE, it being obvious that respondents' separation from the service is illegal, the GSIS is directed to
reinstate them with payment of back salaries and benefits due them not later than ten (10) days from receipt of a
copy hereof, without prejudice to the right of the GSIS to pursue proper disciplinary action against them. It is also
directed that the services of their replacement be terminated effective upon reinstatement of herein respondents.

xxx xxx xxx

Still unconvinced, the GSIS appealed to the Supreme Court (G.R. Nos. 80321-22). Once more, it was rebuffed. On July 4,
1988 this Court's Second Division promulgated a Resolution which:

a) denied its petition for failing to show any grave abuse of discretion on the part of the Civil Service Commission,
the dismissals of the employees having in truth been made without formal charge and hearing, and

b) declared that reinstatement of said five employees was proper, "without prejudice to the right of the GSIS to
pursue proper disciplinary action against them;"

c) MODIFIED, however, the challenged CSC Resolution of October 21, 1987 " by eliminating the payment of back
salaries to private respondents (employees) until the outcome of the disciplinary proceedings is known, considering
the gravity of the offenses imputed to them ..., 2

d) ordered reinstateement only of three employees, namely: Domingo Canero, Renato Navarro and Belen Guerrero,
"it appearing tht respondents ElizarNamuco and Eusebio Manuel have since passed away." 3

On January 8, 1990, the aforesaid Resolution of July 4, 1988 having become final, the heirs of Namuco and Manuel filed a
motion for execution of the Civil Service Commission Resolution of October 21, 1987, supra. The GSIS opposed the motion.
It argued that the CSC Resolution of October 21, 1987 — directing reinstatement of the employees and payment to them of
back salaries and benefits — had been superseded by the Second Division's Resolution of July 4, 1988 — precisely
eliminating the payment of back salaries.

The Civil Service Commission granted the motion for execution in an Order dated June 20, 1990. It accordingly directed the
GSIS "to pay the compulsory heirs of deceased ElizarNamuco and Eusebio Manuel for the period from the date of their illegal
separation up to the date of their demise." The GSIS filed a motion for reconsideration. It was denied by Order of the CSC
dated November 22, 1990.

Once again the GSIS has come to this Court, this time praying that certiorari issue to nullify the Orders of June 20, 1990 and
November 22, 1990. Here it contends that the Civil Service Commission has no power to execute its judgments and final
orders or resolutions, and even conceding the contrary, the writ of execution issued on June 20, 1990 is void because it
varies this Court's Resolution of July 4, 1988.

The Civil Service Commission, like the Commission on Elections and the Commission on Audit, is a consitutional commission
invested by the Constitution and relevant laws not only with authority to administer the civil service, 4but also with quasi-
judicial powers. 5 It has the authority to hear and decide administrative disciplinary cases instituted directly with it or
brought to it on appeal. 6 The Commission shall decide by a majority vote of all its Members any case or matter brought
before it within sixty days from the date of its submission for decision it within sixty days from the date of its submission for
on certiorari by any aggrieved party within thirty days from receipt of a copy thereof. 7 It has the power, too, sitting en
banc, to promulgate its own rules concerning pleadings and practice before it or before any of its offices, which rules should
not however diminish, increase, or modify substantive rights. 8

On October 9, 1989, the Civil Service Commission promulgated Resolution No. 89-779 adopting, approving and putting into
effect simplified rules of procedure on administrative disciplinary and protest cases, pursuant tothe authority granted by the
constitutional and statutory provisions above cited, as well as Republic Act No. 6713. 9 Those rules provide, among other
things, 10 that decision in "administrative disciplinary cases" shall be immediately executory unless a motion for
reconsideration is seasonably filed. If the decision of the Commission is brought to the Supreme Court on certiorari, the
same shall still be executory unless a restraining order or preliminary injunction is issued by the High Court." 11 This is similar
to a provision in the former Civil Service Rules authorizing the Commissioner, "if public interest so warrants, ... (to) order his
decision executed pending appeal to the Civil Service Board of Appeals." 12 The provisions are analogous and entirely
consistent with the duty or responsibility reposed in the Chairman by PD 807, subject to policies and resolutions adopted by
the Commission, "to enforce decision on administrative discipline involving officials of the Commission," 13 as well as with
Section 37 of the same decree declaring that an appeal to the Commission 14 "shall not stop the decision from being
executory, and in case the penalty is suspension or removal, the respondent shall be considered as having been under
preventive suspension during the pendency of the appeal in the event he wins an appeal."

In light of all the foregoing constitutional and statutory provisions, it would appear absurd to deny to the Civil Service
Commission the power or authority or order execution of its decisions, resolutions or orders which, it should be stressed, it
has been exercising through the years. It would seem quite obvious that the authority to decide cases is inutile unless
accompanied by the authority to see that what has been decided is carried out. Hence, the grant to a tribunal or agency of
adjudicatory power, or the authority to hear and adjudge cases, should normally and logically be deemed to include the
grant of authority to enforce or execute the judgments it thus renders, unless the law otherwise provides.

In any event, the Commission's exercise of that power of execution has been sanctioned by this Court in several cases.

In Cucharo v. Subido, 15 for instance, this Court sustained the challenged directive of the Civil Service Commissioner, that his
decision "be executed immediately 'but not beyond ten days from receipt thereof ...". The Court said:

As a major premise, it has been the repeated pronouncement of this Supreme Tribunal that the Civil Service
Commissioner has the discretion toorder the immediate execution in the public interest of his decision separating
petitioner-appellant from the service, always subject however to the rule that, in the event the Civil Service Board of
Appeals or the proper court determines that his dismissal is illegal, he should be paid the salary corresponding to the
period of his separation from the service until his reinstatement.

Petitioner GSIS concedes that the heirs of Namuco and Manuel "are entitled tothe retirement/death and other benefits due
them as government employees" since, at the time of their death, they "can be considered not to have been separated from
the separated from the service." 16

It contend, however, that since Namuco and Manuel had not been "completely exonerated of the administrative charge filed
against them — as the filing of the proper disciplinary action was yet to have been taken had death not claimed them" — no
back salaries may be paid to them, although they "may charge the period of (their) suspension against (their) leave credits,
if any, and may commute such leave credits to money
value;"17 this, on the authority of this Court's decision in Clemente v. Commission on Audit. 18 It is in line with these
considerations, it argues, that the final and executory Resolution of this Court's Second Division of July 4, 1988 should be
construed; 19 and since the Commission's Order of July 20, 1990 makes a contrary disposition, the latter order obviously
cannot prevail and must be deemed void and ineffectual.

This Court's Resolutionof July 4, 1988, as already stated, modified the Civil Service Commission's Resolution of October
21, 1987 — inter alia granting back salaries tothe five dismissed employees, including Namuco and Manuel — and
pertinently reads as follows:

We modify the said Order, however, by eliminating the payment of back salaries to private respondents until the
outcome of the disciplinary proceedings is known, considering the gravity of the offense imputed to them in
connection with the irregularities in the canvass of supplies and materials at the GSIS.

The reinstatement order shall apply only to respondents Domingo Canero, Renato Navarro and Belen Guerrero, it
appearing that respondents ElizarNamuco and Eusebio Manuel have since passed away. ....

On the other hand, as also already stated, the Commission's Order of June 20, 1990 directed the GSIS "to pay the
compulsory heirs of deceased ElizarNamuco and Eusebio Manuel for the period from the date of their illegal separation up to
the date of their demise."

The Commission asserted that in promulgating its disparate ruling, it was acting "in the interest of justice and for other
humanitarian reasons," since the question of whether or not Namuco and Manuel should receive back salaries was
"dependent on the result of the disciplinary proceedings against their co-respondents in the administrative case before the
GSIS," and since at the time of their death, "no formal charge ... (had) as yet been made, nor any finding of their personal
culpability ... and ... they are no longer in a position to refute the charge."
The Court agrees that the challenged orders of the Civil Service Commission should be upheld, and not merely upon
compassionate grounds, but simply because there is no fair and feasible alternative in the circumstances. To be sure, if the
deceased employees were still alive, it would at least be arguable, positing the primacy of this Court's final dispositions, that
the issue of payment of their back salaries should properly await the outcome of the disciplinary proceedings referred to in
the Second Division's Resolution of July 4, 1988.

Death, however, has already sealed that outcome, foreclosing the initiation of disciplinary administrative proceedings, or the
continuation of any then pending, against the deceased employees. Whatever may be said of the binding force of the
Resolution of July 4, 1988 so far as, to all intents and purposes, it makes exoneration in the administrative proceedings a
condition precedent to payment of back salaries, it cannot exact an impossible performance or decree a useless exercise.
Evenin the case of crimes, the death of the offender extinguishes criminal liability, not only as to the personal, but also as to
the pecuniary, penalties if it occurs before final judgment. 20In this context, the subsequent disciplinary proceedings, even if
not assailable on grounds of due process, would be an inutile, empty procedure in so far as the deceased employees are
concerned; they could not possibly be bound by any substantiation in said proceedings of the original charges: irregularities
in the canvass of supplies and materials. The questioned order of the Civil Service Commission merely recognized the
impossibility of complying with the Resolution of July 4, 1988 and the legal futility of attempting a post-mortem investigation
of the character contemplated.

WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

SO ORDERED.