G.R. No.

L-16537 June 29, 1962
FRANCISCO C. CALO, Petitioner-Appellant, vs. DELFIN C. FUERTES, DIRECTOR OF LANDS
and SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, respondents-appellees.
Calo, Calo and Calo for petitioner-appellant.
Ismael B. Sanchez and Jalandoni and Jamir for respondent-appellee Delfin C. Fuertes.
Office of the Solicitor General for respondent-appellee Director of Lands and Secretary of
Agriculture and Natural Resources.
PADILLA, J.:chanrobles virtual law library
WHEREFORE, for failure to state a cause of action, for lack of jurisdiction and for not exhausting
all the administrative remedies available to the petitioner in the ordinary course of law, the Court
resolves to dismiss as it hereby dismisses the herein petition with costs against petitioner.
The petitioner appealed, but as only a question of law is raised, the Court of Appeals certified
the appeal to this Court.chanroblesvirtualawlibrarychanrobles virtual law library
This appeal has not been perfected within the reglementary period, as provided for in section 17,
Rule 41, for although the notice of appeal was filed on 31 August 1959 (p. 77, record of case No.
55) or on the 13th day from the receipt of case No. 55) the appeal bond was filed on 18
September 1959 (p. 78, record of case No. 55) or on the 31st day after notice of judgment. This
is enough to dispose of the case.chanroblesvirtualawlibrarychanrobles virtual law library

In Bureau of Lands Claim No. 224 (N), Lot No. 143-A, Cadastral Case No. 84, Butuan City
At any rate, the appellant's contention that, as the Secretary of Agriculture and Natural
entitled Francis C. Calo, claimant-contestant, vs. H.A. No. 86871 (E-40476) Delfin C. Fuertes,
Resources is the alter ego of the President and his acts or decisions are also those of the latter,
applicant-respondent, the Director of Lands rendered on 12 April 1956 an opinion denying a
he need not appeal from the decision or opinion of the former to the latter, and that, such being
dismissing former's claim and contest against the Homestead Application No. 86871 (E-40476)
the case, after he had appealed to the Secretary of Agriculture and Natural Resources from the
of Delfin C. Fuertes, was ordering him to vacate the premises within sixty days from receipt of a
decision or opinion of the Director of Lands he had exhausted all the administrative remedies, is
copy of the opinion, and stating that upon finality thereof homestead patent would be issued to
untenable.chanroblesvirtualawlibrarychanrobles virtual law library
Delfin C. Fuertes. His request for reconsideration having been denied by the Director of Lands
on 25 January 1957, Francisco C. Calo brought to the Secretary of Agriculture and Natural
Resources the case, docketed as DANR case No. 1549. On 28 February 1958 the Secretary of The withdrawal of the appeal taken to the President of the Philippines is tantamount to not
Agriculture and Natural Resources modified the opinion of the Director of Lands - appealing at all thereto. Such withdrawal is fatal, because the appeal to the President is the last
step he should take in an administrative case.chanroblesvirtualawlibrarychanrobles virtual law
library
. . . in the sense that Delfin C. Fuertes should reimburse Francisco C. Calo of the difference
between the value of the improvements the latter introduced on the land in controversy and the
value of the consequential benefits derived by him therefrom within thirty (30) days from advice Furthermore, a special civil action for certiorari and prohibition under Rule 67 of the Rules of
by the Director of Lands who is hereby directed to determine the aforementioned difference Court lies only when "there is no appeal, nor any plain, speedy, and adequate remedy in the
within sixty (60) days from receipt of a copy of this decision. ordinary course of law." In the case at bar, appeal from an opinion or order by the Secretary of
Agriculture and Natural Resources to the President of the Philippines is the plain, speedy and
adequate remedy available to the petitioner.1chanrobles virtual law library
Still dissatisfied with the above opinion, Francisco C. Calo asked the Secretary of Agriculture
and Natural Resources to reconsider it but the latter denied a reconsideration thereof. Hence, on
1 August 1958 Francisco C. Calo appealed to the President of the Philippines (Annex A Answer, The judgment appealed from already had become final and cannot be reviewed. The appeal is
p. 54, rec. of case No. 55), but on 8 August 1958 he withdrew it before the President of the dismissed, with costs against the petitioner-appellant.
Philippines could act thereon (Annex A to memorandum of the petitioner, p. 64, rec. of case No.
55).chanroblesvirtualawlibrarychanrobles virtual law library
G.R. No. 131457. April 24, 1998

On 22 August 1958 Francisco C. Calo filed in the Court of First Instance of Agusan a petition for
HON. CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF BUKIDNON, HON. REY B.
writs of certiorari and prohibition with preliminary injunction praying that the enforcement of the
BAULA, MUNICIPAL MAYOR OF SUMILAO, BUKIDNON, NQSR MANAGEMENT AND
opinions of the Director of Lands and the Secretary of Agriculture and Natural Resources be
DEVELOPMENT CORPORATION, Petitioners, v. HON. RENATO C. CORONA, DEPUTY
enjoined; that if a bond be needed for the purpose he was willing to file it; that after hearing the
EXECUTIVE SECRETARY, HON. ERNESTO D. GARILAO, SECRETARY OF THE
injunction be made final and permanent; that the respondent Delfin C. Fuertes pay him P18,000
DEPARTMENT OF AGRARIAN REFORM, Respondents.
as damages and attorney's fees and costs of the suit; that he be declared the owner entitled to
possess the parcel of land subject of the litigation; and for any other just and equitable relief
(special civil case No. 55).chanroblesvirtualawlibrarychanrobles virtual law library DECISION

On 24 December 1958 the respondent Delfin C. Fuertes filed an answer and, on 27 December
1958, an amended answer to the petition; on 29 December 1958 and 3 January 1959 the
respondent Secretary of Agriculture and Natural Resources and the Director of Lands,
respectively, filed their answers. After a preliminary hearing as provided for in section 5, Rule 8,
of the Rules of Court, on 31 July 1959 the court rendered judgment, the dispositive part of which
is -
MARTINEZ, J.:
The dramatic and well-publicized hunger strike staged by some alleged farmer-beneficiaries in
front of the Department of Agrarian Reform compound in Quezon City on October 9, 1997
commanded nationwide attention that even church leaders and some presidential candidates
tried to intervene for the strikers cause.
The strikers protested the March 29, 1996 Decision1 of the Office of the President (OP), issued
through then Executive Secretary Ruben D. Torres in OP Case No. 96-C-6424, which approved
the conversion of a one hundred forty-four (144)-hectare land from agricultural to agro-
industrial/institutional area. This led the Office of the President, through then Deputy Executive
Secretary Renato C. Corona, to issue the so-called Win-Win Resolution2 on November 7, 1997,
substantially modifying its earlier Decision after it had already become final and executory.
The said Resolution modified the approval of the land conversion to agro-industrial area only to
the extent of forty-four (44) hectares, and ordered the remaining one hundred (100) hectares to
be distributed to qualified farmer-beneficiaries.
But, did the Win-Win Resolution culminate in victory for all the contending parties?
The above-named petitioners cried foul. They have come to this Court urging us to annul and set
aside the Win-Win Resolution and to enjoin respondent Secretary Ernesto D. Garilao of the
Department of Agrarian Reform from implementing the said Resolution.
Thus, the crucial issue to be resolved in this case is: What is the legal effect of the Win-Win
Resolution issued by the Office of the President on its earlier Decision involving the same
subject matter, which had already become final and executory?
The antecedent facts of this controversy, as culled from the pleadings, may be stated as follows:
1. This case involves a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by
the Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), one of
the petitioners. The property is covered by a Transfer Certificate of Title No. 143713 of the
Registry of Deeds of the Province of Bukidnon.
2. In 1984, the land was leased as a pineapple plantation to the Philippine Packing Corporation,
now Del Monte Philippines, Inc. (DMPI), a multinational corporation, for a period of ten (10)
years under the Crop Producer and Growers Agreement duly annotated in the certificate of title.
The lease expired in April, 1994.
3. In October, 1991, during the existence of the lease, the Department of Agrarian Reform (DAR)
placed the entire 144-hectare property under compulsory acquisition and assessed the land
value at P2.38 million.4cräläwvirtualibräry
4. NQSRMDC resisted the DARs action. In February, 1992, it sought and was granted by the
DAR Adjudication Board (DARAB), through its Provincial Agrarian Reform Adjudicator (PARAD)
in DARAB Case No. X-576, a writ of prohibition with preliminary injunction which ordered the
DAR Region X Director, the Provincial Agrarian Reform Officer (PARO) of Bukidnon, the
Municipal Agrarian Reform Office (MARO) of Sumilao, Bukidnon, the Land Bank of the
Philippines (Land Bank), and their authorized representatives to desist from pursuing any activity
or activities concerning the subject land until further orders.5cräläwvirtualibräry
5. Despite the DARAB order of March 31, 1992, the DAR Regional Director issued a
memorandum, dated May 21, 1992, directing the Land Bank to open a trust account for P2.38
million in the name of NQSRMDC and to conduct summary proceedings to determine the just
compensation of the subject property. NQSRMDC objected to these moves and filed on June 9,
1992 an Omnibus Motion to enforce the DARAB order of March 31, 1992 and to nullify the
summary proceedings undertaken by the DAR Regional Director and Land Bank on the
valuation of the subject property.
6. The DARAB, on October 22, 1992, acted favorably on the Omnibus Motion by (a) ordering the
DAR Regional Director and Land Bank to seriously comply with the terms of the order dated
March 31, 1992; (b) nullifying the DAR Regional Directors memorandum, dated May 21, 1992,
and the summary proceedings conducted pursuant thereto; and (c) directing the Land Bank to
return the claim folder of Petitioner NQSRMDCs subject property to the DAR until further
orders.6cräläwvirtualibräry
7. The Land Bank complied with the DARAB order and cancelled the trust account it opened in
the name of petitioner NQSRMDC.7cräläwvirtualibräry
8. In the meantime, the Provincial Development Council (PDC) of Bukidnon, headed by
Governor Carlos O. Fortich, passed Resolution No. 6,8 dated January 7, 1993, designating
certain areas along Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones
where the subject property is situated.
9. What happened thereafter is well-narrated in the OP (TORRES) Decision of March 29, 1996,
pertinent portions of which we quote:
Pursuant to Section 20 of R.A. No. 7160, otherwise known as the Local Government Code, the
Sangguniang Bayan of Sumilao, Bukidnon, on March 4, 1993, enacted Ordinance No. 24
converting or re-classifying 144 hectares of land in Bgy. San Vicente, said Municipality, from
agricultural to industrial/institutional with a view of providing an opportunity to attract investors
who can inject new economic vitality, provide more jobs and raise the income of its people.
Parenthetically, under said section, 4th to 5th class municipalities may authorize the classification
of five percent (5%) of their agricultural land area and provide for the manner of their utilization
or disposition.
On 12 October 1993, the Bukidnon Provincial Land Use Committee approved the said
Ordinance. Accordingly, on 11 December 1993, the instant application for conversion was filed
by Mr. Gaudencio Beduya in behalf of NQSRMDC/BAIDA (Bukidnon Agro-Industrial
Development Association).
Expressing support for the proposed project, the Bukidnon Provincial Board, on the basis of a
Joint Committee Report submitted by its Committee on Laws, Committee on Agrarian Reform
and Socio-Economic Committee approved, on 1 February 1994, the said Ordinance now
docketed as Resolution No. 94-95. The said industrial area, as conceived by NQSRMDC
(project proponent) is supposed to have the following components:
1. The Development Academy of Mindanao which constitutes the following: Institute for
Continuing Higher Education; Institute for Livelihood Science (Vocational and Technical School);
Institute for Agribusiness Research; Museum, Library, Cultural Center, and Mindanao Sports
Development Complex which covers an area of 24 hectares;
2. Bukidnon Agro-Industrial Park which consists of corn processing for corn oil, corn starch,
various corn products; rice processing for wine, rice-based snacks, exportable rice; cassava
processing for starch, alcohol and food delicacies; processing plants, fruits and fruit products
such as juices; processing plants for vegetables processed and prepared for market; cold
storage and ice plant; cannery system; commercial stores; public market; and abattoir needing
about 67 hectares;
3. Forest development which includes open spaces and parks for recreation, horse-back riding,
memorial and mini-zoo estimated to cover 33 hectares; and
4. Support facilities which comprise the construction of a 360-room hotel, restaurants,
dormitories and a housing project covering an area of 20 hectares.
The said NQSRMDC Proposal was, per Certification dated January 4, 1995, adopted by the
Department of Trade and Industry, Bukidnon Provincial Office, as one of its flagship projects.
The same was likewise favorably recommended by the Provincial Development Council of
Bukidnon; the municipal, provincial and regional office of the DAR; the Regional Office (Region
X) of the DENR (which issued an Environmental Compliance Certificate on June 5, 1995); the
Executive Director, signing By Authority of PAUL G. DOMINGUEZ, Office of the President
Mindanao; the Secretary of DILG; and Undersecretary of DECS Wilfredo D. Clemente.
In the same vein, the National Irrigation Administration, Provincial Irrigation Office, Bagontaas
Valencia, Bukidnon, thru Mr. Julius S. Maquiling, Chief, Provincial Irrigation Office, interposed
NO OBJECTION to the proposed conversion as long as the development cost of the irrigation
systems thereat which is P2,377.00 per hectare be replenished by the developer x x x. Also, the
Kisolon-San Vicente Irrigators Multi Purpose Cooperative, San Vicente, Sumilao, Bukidnon,
interposed no objection to the proposed conversion of the land in question as it will provide more
economic benefits to the community in terms of outside investments that will come and
employment opportunities that will be generated by the projects to be put up x x x.
On the same score, it is represented that during the public consultation held at the Kisolan
Elementary School on 18 March 1995 with Director Jose Macalindong of DAR Central Office and
DECS Undersecretary Clemente, the people of the affected barangay rallied behind their
respective officials in endorsing the project.
Notwithstanding the foregoing favorable recommendation, however, on November 14, 1994, the
DAR, thru Secretary Garilao, invoking its powers to approve conversion of lands under Section
65 of R.A. No. 6657, issued an Order denying the instant application for the conversion of the
subject land from agricultural to agro-industrial and, instead, placed the same under the
compulsory coverage of CARP and directed the distribution thereof to all qualified beneficiaries
on the following grounds:
1. The area is considered as a prime agricultural land with irrigation facility;
2. The land has long been covered by a Notice of Compulsory Acquisition (NCA);
3. The existing policy on withdrawal or lifting on areas covered by NCA is not applicable;
4. There is no clear and tangible compensation package arrangements for the beneficiaries;
5. The procedures on how the area was identified and reclassified for agro-industrial project has
no reference to Memo Circular No. 54, Series of 1993, E.O. No. 72, Series of 1993, and E.O.
No. 124, Series of 1993.
A Motion for Reconsideration of the aforesaid Order was filed on January 9, 1995 by applicant
but the same was denied (in an Order dated June 7, 1995).9cräläwvirtualibräry
10. Thus, the DAR Secretary ordered the DAR Regional Director to proceed with the compulsory
acquisition and distribution of the property.10cräläwvirtualibräry
11. Governor Carlos O. Fortich of Bukidnon appealed11 the order of denial to the Office of the
President and prayed for the conversion/reclassification of the subject land as the same would
be more beneficial to the people of Bukidnon.
12. To prevent the enforcement of the DAR Secretarys order, NQSRMDC, on June 29, 1995,
filed with the Court of Appeals a petition for certiorari, prohibition with preliminary
injunction,12 docketed as CA-G.R. SP No. 37614.
13. Meanwhile, on July 25, 1995, the Honorable Paul G. Dominguez, then Presidential Assistant
for Mindanao, after conducting an evaluation of the proposed project, sent a memorandum 13 to
the President favorably endorsing the project with a recommendation that the DAR Secretary
reconsider his decision in denying the application of the province for the conversion of the land.
14. Also, in a memorandum14 to the President dated August 23, 1995, the Honorable Rafael
Alunan III, then Secretary of the Department of the Interior and Local Government (DILG),
recommended the conversion of the subject land to industrial/institutional use with a request that
the President hold the implementation of the DAR order to distribute the land in question.
15. On October 23, 1995, the Court of Appeals, in CA-G.R. SP No. 37614, issued a
Resolution15 ordering the parties to observe status quo pending resolution of the petition. At the
hearing held in said case on October 5, 1995, the DAR, through the Solicitor General,
manifested before the said court that the DAR was merely in the processing stage of the
applications of farmers-claimants and has agreed to respect status quo pending the resolution of
the petition.16cräläwvirtualibräry
16. In resolving the appeal, the Office of the President, through then Executive Secretary Ruben
D. Torres, issued a Decision in OP Case No. 96-C-6424, dated March 29, 1996, reversing the
DAR Secretarys decision, the pertinent portions of which read:
After a careful evaluation of the petition vis--vis the grounds upon which the denial thereof by
Secretary Garilao was based, we find that the instant application for conversion by the
Municipality of Sumilao, Bukidnon is impressed with merit. To be sure, converting the land in
question from agricultural to agro-industrial would open great opportunities for employment and
bring about real development in the area towards a sustained economic growth of the
municipality. On the other hand, distributing the land to would-be beneficiaries (who are not even
tenants, as there are none) does not guarantee such benefits.
Nevertheless, on the issue that the land is considered a prime agricultural land with irrigation
facility it maybe appropriate to mention that, as claimed by petitioner, while it is true that there is,
indeed, an irrigation facility in the area, the same merely passes thru the property (as a right of
way) to provide water to the ricelands located on the lower portion thereof. The land itself,
subject of the instant petition, is not irrigated as the same was, for several years, planted with
pineapple by the Philippine Packing Corporation.
On the issue that the land has long been covered by a Notice of Compulsory Acquisition (NCA)
and that the existing policy on withdrawal or lifting on areas covered by NCA is not applicable,
suffice it to state that the said NCA was declared null and void by the Department of Agrarian
Reform Adjudication Board (DARAB) as early as March 1, 1992. Deciding in favor of
NQSRMDC, the DARAB correctly pointed out that under Section 8 of R.A. No. 6657, the subject
property could not validly be the subject of compulsory acquisition until after the expiration of the
lease contract with Del Monte Philippines, a Multi-National Company, or until April 1994, and
ordered the DAR Regional Office and the Land Bank of the Philippines, both in Butuan City, to
`desist from pursuing any activity or activities covering petitioners land.
On this score, we take special notice of the fact that the Quisumbing family has already 21. The DAR filed on July 11, 1997 a second motion for reconsideration of the June 23, 1997
contributed substantially to the land reform program of the government, as follows: 300 hectares Order of the President.
of rice land in Nueva Ecija in the 70s and another 400 hectares in the nearby Municipality of
Impasugong, Bukidnon, ten (10) years ago, for which they have not received just compensation
22. On August 12, 1997, the said writ of preliminary injunction issued by the RTC was
up to this time.
challenged by some alleged farmers before the Court of Appeals through a petition for certiorari
and prohibition, docketed as CA-G.R. SP No. 44905, praying for the lifting of the injunction and
Neither can the assertion that there is no clear and tangible compensation package for the issuance of a writ of prohibition from further trying the RTC case.
arrangements for the beneficiaries hold water as, in the first place, there are no beneficiaries to
speak about, for the land is not tenanted as already stated.
23. On October 9, 1997, some alleged farmer-beneficiaries began their hunger strike in front of
the DAR Compound in Quezon City to protest the OP Decision of March 29, 1996. On October
Nor can procedural lapses in the manner of identifying/reclassifying the subject property for 10, 1997, some persons claiming to be farmer-beneficiaries of the NQSRMDC property filed a
agro-industrial purposes be allowed to defeat the very purpose of the law granting autonomy to motion for intervention (styled as Memorandum In Intervention) in O.P. Case No. 96-C-6424,
local government units in the management of their local affairs. Stated more simply, the asking that the OP Decision allowing the conversion of the entire 144-hectare property be set
language of Section 20 of R.A. No. 7160, supra, is clear and affords no room for any other aside.25cräläwvirtualibräry
interpretation. By unequivocal legal mandate, it grants local government units autonomy in their
local affairs including the power to convert portions of their agricultural lands and provide for the
24. President Fidel V. Ramos then held a dialogue with the strikers and promised to resolve their
manner of their utilization and disposition to enable them to attain their fullest development as
grievance within the framework of the law. He created an eight (8)-man Fact Finding Task Force
self-reliant communities.
(FFTF) chaired by Agriculture Secretary Salvador Escudero to look into the controversy and
recommend possible solutions to the problem.26cräläwvirtualibräry
WHEREFORE, in pursuance of the spirit and intent of the said legal mandate and in view of the
favorable recommendations of the various government agencies abovementioned, the subject
25. On November 7, 1997, the Office of the President resolved the strikers protest by issuing the
Order, dated November 14, 1994 of the Hon. Secretary, Department of Agrarian Reform, is
so-called Win/Win Resolution penned by then Deputy Executive Secretary Renato C. Corona,
hereby SET ASIDE and the instant application of NQSRMDC/BAIDA is hereby
the dispositive portion of which reads:
APPROVED.17cräläwvirtualibräry

WHEREFORE, premises considered, the decision of the Office of the President, through
17.On May 20, 1996, DAR filed a motion for reconsideration of the OP decision.
Executive Secretary Ruben Torres, dated March 29, 1996, is hereby MODIFIED as follows:

18 On September 11, 1996, in compliance with the OP decision of March 29, 1996, NQSRMDC
1. NQSRMDCs application for conversion is APPROVED only with respect to
and the Department of Education, Culture and Sports (DECS) executed a Memorandum of
the approximately forty-four (44) hectare portion of the land adjacent to
Agreement whereby the former donated four (4) hectares from the subject land to DECS for the
the highway, as recommended by the Department of Agriculture.
establishment of the NQSR High School.18cräläwvirtualibräry

2. The remaining approximately one hundred (100) hectares traversed by an

When NQSRMDC was about to transfer the title over the 4-hectare donated to DECS, it
irrigation canal and found to be suitable for agriculture shall be distributed
discovered that the title over the subject property was no longer in its name. It soon found out
to qualified farmer-beneficiaries in accordance with RA 6657 or the
that during the pendency of both the Petition for Certiorari, Prohibition, with Preliminary
Comprehensive Agrarian Reform Law with a right of way to said portion
Injunction it filed against DAR in the Court of Appeals and the appeal to the President filed by
from the highway provided in the portion fronting the highway. For this
Governor Carlos O. Fortich, the DAR, without giving just compensation, caused the cancellation
purpose, the DAR and other concerned government agencies are
of NQSRMDCs title on August 11, 1995 and had it transferred in the name of the Republic of the
directed to immediately conduct the segregation survey of the area,
Philippines under TCT No. T-5026419 of the Registry of Deeds of Bukidnon. Thereafter, on
valuation of the property and generation of titles in the name of the
September 25, 1995, DAR caused the issuance of Certificates of Land Ownership Award
identified farmer-beneficiaries.
(CLOA) No. 00240227 and had it registered in the name of 137 farmer-beneficiaries under TCT
No. AT-353620 of the Registry of Deeds of Bukidnon.
3. The Department of Agrarian Reform is hereby directed to carefully and
21 meticulously determine who among the claimants are qualified farmer-
19. Thus, on April 10, 1997, NQSRMDC filed a complaint with the Regional Trial Court (RTC)
beneficiaries.
of Malaybalay, Bukidnon (Branch 9), docketed as Civil Case No. 2687-97, for annulment and
cancellation of title, damages and injunction against DAR and 141 others. The RTC then issued
a Temporary Restraining Order on April 30, 199722 and a Writ of Preliminary Injunction on May 4. The Department of Agrarian Reform is hereby further directed to expedite
19, 1997,23 restraining the DAR and 141 others from entering, occupying and/or wresting from payment of just compensation to NQSRMDC for the portion of the land to
NQSRMDC the possession of the subject land. be covered by the CARP, including other lands previously surrendered by
NQSRMDC for CARP coverage.
20. Meanwhile, on June 23, 1997, an Order24 was issued by then Executive Secretary Ruben D.
Torres denying DARs motion for reconsideration for having been filed beyond the reglementary 5. The Philippine National Police is hereby directed to render full assistance to
period of fifteen (15) days. The said order further declared that the March 29, 1996 OP decision the Department of Agrarian Reform in the implementation of this Order.
had already become final and executory.
We take note of the Memorandum in Intervention filed by 113 farmers on October 10, 1997
without ruling on the propriety or merits thereof since it is unnecessary to pass upon it at this
time.
SO ORDERED.27cräläwvirtualibräry
A copy of the Win-Win Resolution was received by Governor Carlos O. Fortich of Bukidnon,
Mayor Rey B. Baula of Sumilao, Bukidnon, and NQSRMDC on November 24, 199728 and, on
December 4, 1997, they filed the present petition for certiorari, prohibition (under Rule 65 of the
Revised Rules of Court) and injunction with urgent prayer for a temporary restraining order
and/or writ of preliminary injunction (under Rule 58, ibid.), against then Deputy Executive
Secretary Renato C. Corona and DAR Secretary Ernesto D. Garilao.
On December 12, 1997, a Motion For Leave To Intervene29 was filed by alleged farmer-
beneficiaries, through counsel, claiming that they are real parties in interest as they were
previously identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare
property subject of this case. The motion was vehemently opposed30 by the petitioners.
In seeking the nullification of the Win-Win Resolution, the petitioners claim that the Office of the
President was prompted to issue the said resolution after a very well-managed hunger strike led
by fake farmer-beneficiary Linda Ligmon succeeded in pressuring and/or politically blackmailing
the Office of the President to come up with this purely political decision to appease the farmers,
by reviving and modifying the Decision of 29 March 1996 which has been declared final and
executory in an Order of 23 June 1997.31Thus, petitioners further allege, respondent then
Deputy Executive Secretary Renato C. Corona committed grave abuse of discretion and acted
beyond his jurisdiction when he issued the questioned Resolution of 7 November 1997. 32 They
availed of this extraordinary writ of certiorari because there is no other plain, speedy and
adequate remedy in the ordinary course of law.33 They never filed a motion for reconsideration of
the subject Resolution because (it) is patently illegal or contrary to law and it would be a futile
exercise to seek a reconsideration .34cräläwvirtualibräry
The respondents, through the Solicitor General, opposed the petition and prayed that it be
dismissed outright on the following grounds:
(1) The proper remedy of petitioners should have been to file a petition for review directly with
the Court of Appeals in accordance with Rule 43 of the Revised Rules of Court;
(2) The petitioners failed to file a motion for reconsideration of the assailed Win-Win Resolution
before filing the present petition; and
(3) Petitioner NQSRMDC is guilty of forum-shopping.
These are the preliminary issues which must first be resolved, including the incident on the
motion for intervention filed by the alleged farmer-beneficiaries.
Anent the first issue, in order to determine whether the recourse of petitioners is proper or not, it
is necessary to draw a line between an error of judgment and an error of jurisdiction. An error of
judgment is one which the court may commit in the exercise of its jurisdiction, and which error is
reviewable only by an appeal.35 On the other hand, an error of jurisdiction is one where the act
complained of was issued by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of
jurisdiction.36 This error is correctable only by the extraordinary writ of
certiorari.37chanroblesvirtuallawlibrary
It is true that under Rule 43, appeals from awards, judgments, final orders or resolutions of any
quasi-judicial agency exercising quasi-judicial functions,38 including the Office of the
President,39 may be taken to the Court of Appeals by filing a verified petition for review40 within
fifteen (15) days from notice of the said judgment, final order or resolution, 41 whether the appeal
involves questions of fact, of law, or mixed questions of fact and law.42cräläwvirtualibräry
However, we hold that, in this particular case, the remedy prescribed in Rule 43 is inapplicable
considering that the present petition contains an allegation that the challenged resolution is
patently illegal43 and was issued with grave abuse of discretion and beyond his (respondent
Secretary Renato C. Coronas) jurisdiction44 when said resolution substantially modified the
earlier OP Decision of March 29, 1996 which had long become final and executory. In other
words, the crucial issue raised here involves an error of jurisdiction, not an error of judgment
which is reviewable by an appeal under Rule 43. Thus, the appropriate remedy to annul and set
aside the assailed resolution is an original special civil action for certiorari under Rule 65, as
what the petitioners have correctly done. The pertinent portion of Section 1 thereof provides:
SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
xxx.
The office of a writ of certiorari is restricted to truly extraordinary cases cases in which the act of
the lower court or quasi-judicial body is wholly void.45cräläwvirtualibräry
The aforequoted Section 1 of Rule 65 mandates that the person aggrieved by the assailed illegal
act may file a verified petition (for certiorari) in the proper court. The proper court where the
petition must be filed is stated in Section 4 of the same Rule 65 which reads:
SEC. 4. Where petition filed.- The petition may be filed not later than sixty (60) days from notice
of the judgment, order or resolution sought to be assailed in the Supreme Court or, if it relates to
the acts or omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. If it involves the acts
or omissions of a quasi-judicial agency, and unless otherwise provided by law or these Rules,
the petition shall be filed in and cognizable only by the Court of Appeals. (4a)
Under the above-quoted Section 4, the Supreme Court, Court of Appeals and Regional Trial
Court have original concurrent jurisdiction to issue a writ of certiorari,46 prohibition47 and
mandamus.48 But the jurisdiction of these three (3) courts are also delineated in that, if the
challenged act relates to acts or omissions of a lower court or of a corporation, board, officer or
person, the petition must be filed with the Regional Trial Court which exercises jurisdiction over
the territorial area as defined by the Supreme Court. And if it involves the act or omission of a
quasi-judicial agency, the petition shall be filed only with the Court of Appeals, unless otherwise
provided by law or the Rules of Court. We have clearly discussed this matter of concurrence of
jurisdiction in People vs. Cuaresma, et. al.,49 through now Chief Justice Andres R. Narvasa,
thus:
x x x. This Courts original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is
shared by this Court with Regional Trial Courts (formerly Courts of First Instance), which may
issue the writ, enforceable in any part of their respective regions. It is also shared by this Court,
and by the Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate
Court), although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the
latters competence to issue the extraordinary writs was restricted to those in aid of its appellate
jurisdiction. This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to which
application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and should also serve as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against
first level (inferior) courts should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. (Citations omitted)
But the Supreme Court has the full discretionary power to take cognizance of the petition filed
directly to it if compelling reasons, or the nature and importance of the issues raised, warrant.
This has been the judicial policy to be observed and which has been reiterated in subsequent
cases, namely:50 Uy vs. Contreras, et. al.,51 Torres vs. Arranz,52 Bercero vs. De
Guzman,53 and Advincula vs. Legaspi, et. al.54 As we have further stated in Cuaresma:
x x x. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should
be allowed only when there are special and important reasons therefor, clearly and specifically
set out in the petition. This is established policy. It is a policy that is necessary to prevent
inordinate demands upon the Courts time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts
docket.
Pursuant to said judicial policy, we resolve to take primary jurisdiction over the present petition in
the interest of speedy justice55 and to avoid future litigations so as to promptly put an end to the
present controversy which, as correctly observed by petitioners, has sparked national interest
because of the magnitude of the problem created by the issuance of the assailed resolution.
Moreover, as will be discussed later, we find the assailed resolution wholly void and requiring the
petitioners to file their petition first with the Court of Appeals would only result in a waste of time
and money.
That the Court has the power to set aside its own rules in the higher interests of justice is well-
entrenched in our jurisprudence. We reiterate what we said in Piczon vs. Court of
Appeals:56cräläwvirtualibräry
Be it remembered that rules of procedure are but mere tools designed to facilitate the attainment
of justice. Their strict and rigid application, which would result in technicalities that tend to
frustrate rather than promote substantial justice, must always be avoided. Time and again, this
Court has suspended its own rules and excepted a particular case from their operation
whenever the higher interests of justice so require. In the instant petition, we forego a lengthy
disquisition of the proper procedure that should have been taken by the parties involved and
proceed directly to the merits of the case."
As to the second issue of whether the petitioners committed a fatal procedural lapse when they
failed to file a motion for reconsideration of the assailed resolution before seeking judicial
recourse, suffice it to state that the said motion is not necessary when the questioned resolution
is a patent nullity,57 as will be taken up later.
With respect to the third issue, the respondents claim that the filing by the petitioners of: (a) a
petition for certiorari, prohibition with preliminary injunction (CA-G.R. SP No. 37614) with the
Court of Appeals; (b) a complaint for annulment and cancellation of title, damages and injunction
against DAR and 141 others (Civil Case No. 2687-97) with the Regional Trial Court of
Malaybalay, Bukidnon; and (c) the present petition, constitute forum shopping.
We disagree.
The rule is that:
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies
not only with respect to suits filed in the courts but also in connection with litigation commenced
in the courts while an administrative proceeding is pending, as in this case, in order to defeat
administrative processes and in anticipation of an unfavorable administrative ruling and a
favorable court ruling. This specially so, as in this case, where the court in which the second suit
was brought, has no jurisdiction (citations omitted).
The test for determining whether a party violated the rule against forum shopping has been laid
down in the 1986 case of Buan vs. Lopez (145 SCRA 34), x x x and that is, forum shopping
exists where the elements of litis pendentia are present or where a final judgment in one
case will amount to res judicata in the other, as follows:
There thus exists between the action before this Court and RTC Case No. 86-36563 identity of
parties, or at least such parties as represent the same interests in both actions, as well
as identity of rights asserted and relief prayed for, the relief being founded on the same
facts, and the identity on the two preceding particulars is such that any judgment rendered in
the other action, will, regardless of which party is successful, amount to res adjudicata in
the action under consideration: all the requisites, in fine, of auter action
pendant.'58cräläwvirtualibräry
It is clear from the above-quoted rule that the petitioners are not guilty of forum shopping. The
test for determining whether a party has violated the rule against forum shopping is where a final
judgment in one case will amount to res adjudicata in the action under consideration. A cursory
examination of the cases filed by the petitioners does not show that the said cases are similar
with each other. The petition for certiorari in the Court of Appeals sought the nullification of the
DAR Secretarys order to proceed with the compulsory acquisition and distribution of the subject
property. On the other hand, the civil case in RTC of Malaybalay, Bukidnon for the annulment
and cancellation of title issued in the name of the Republic of the Philippines, with damages, was
based on the following grounds: (1) the DAR, in applying for cancellation of petitioner
NQSRMDCs title, used documents which were earlier declared null and void by the DARAB; (2)
the cancellation of NQSRMDCs title was made without payment of just compensation; and (3)
without notice to NQSRMDC for the surrender of its title. The present petition is entirely different
from the said two cases as it seeks the nullification of the assailed Win-Win Resolution of the
Office of the President dated November 7, 1997, which resolution was issued long after the
previous two cases were instituted.
The fourth and final preliminary issue to be resolved is the motion for intervention filed by alleged
farmer-beneficiaries, which we have to deny for lack of merit. In their motion, movants contend
that they are the farmer-beneficiaries of the land in question, hence, are real parties in interest.
To prove this, they attached as Annex I in their motion a Master List of Farmer-Beneficiaries.
Apparently, the alleged master list was made pursuant to the directive in the dispositive portion
of the assailed Win-Win Resolution which directs the DAR to carefully and meticulously
determine who among the claimants are qualified farmer-beneficiaries. However, a perusal of
the said document reveals that movants are those purportedly Found Qualified and
Recommended for Approval. In other words, movants are merely recommendee farmer-
beneficiaries.
The rule in this jurisdiction is that a real party in interest is a party who would be benefited or
injured by the judgment or is the party entitled to the avails of the suit. Real interest means
a present substantial interest, as distinguished from a mere expectancy or a future, contingent,
subordinate or consequential interest.59 Undoubtedly, movants interest over the land in question
is a mere expectancy. Ergo, they are not real parties in interest.
rendered pursuant to their quasi-judicial authority, have upon their finality, the force and binding
effect of a final judgment within the purview of the doctrine of res judicata [Brillantes v. Castro,
99 Phil. 497 (1956), Ipekdijna Merchandizing Co., Inc. v. Court of Tax Appeals, G.R. No. L-
15430, September 30, 1963, 9 SCRA 72.] The rule of res judicata which forbids the reopening of
a matter once judicially determined by competent authority applies as well to the judicial and
quasi-judicial acts of public, executive or administrative officers and boards acting within their
jurisdiction as to the judgments of courts having general judicial powers [Brillantes v.
Castro, supra at 503].

Furthermore, the challenged resolution upon which movants based their motion is, as intimated
earlier, null and void. Hence, their motion for intervention has no leg to stand on.
Now to the main issue of whether the final and executory Decision dated March 29,1996 can still
be substantially modified by the Win-Win Resolution.
The orderly administration of justice requires that the judgments/resolutions of a court or quasi-
judicial body must reach a point of finality set by the law, rules and regulations. The noble
purpose is to write finis to disputes once and for all. 61 This is a fundamental principle in our
justice system, without which there would be no end to litigations. Utmost respect and
adherence to this principle must always be maintained by those who wield the power of
adjudication. Any act which violates such principle must immediately be struck down.

We rule in the negative.
The rules and regulations governing appeals to the Office of the President of the Philippines are
embodied in Administrative Order No. 18. Section 7 thereof provides:
Therefore, the assailed Win-Win Resolution which substantially modified the Decision of March
29, 1996 after it has attained finality, is utterly void. Such void resolution, as aptly stressed by
Justice Thomas A. Street62 in a 1918 case,63 is a lawless thing, which can be treated as an
outlaw and slain at sight, or ignored wherever and whenever it exhibits its
head.64cräläwvirtualibräry

SEC. 7. Decisions/resolutions/orders of the Office of the President shall, except as otherwise WHEREFORE, the present petition is hereby GRANTED. The challenged Resolution dated
provided for by special laws, become final after the lapse of fifteen (15) days from receipt of
November 7, 1997, issued by the Office of the President in OP Case No. 96-C-6424, is hereby
a copy thereof by the parties, unless a motion for reconsideration thereof is filed within
NULLIFIED and SET ASIDE. The Motion For Leave To Intervene filed by alleged farmer-
such period.
beneficiaries is hereby DENIED.

Only one motion for reconsideration by any one party shall be allowed and entertained,
No pronouncement as to costs.
save in exceptionally meritorious cases. (Emphasis ours)

SO ORDERED.
It is further provided for in Section 9 that The Rules of Court shall apply in a suppletory character
whenever practicable.
G.R. No. L-21607 January 30, 1970
When the Office of the President issued the Order dated June 23,1997 declaring the Decision of
March 29, 1996 final and executory, as no one has seasonably filed a motion for reconsideration RAFAEL MACAILING, SILVESTRE MACAILING DOMINICO NECESITO and RAFAEL
thereto, the said Office had lost its jurisdiction to re-open the case, more so modify its Decision. NECESITO, plaintiffs-appellees, vs. TOMAS ANDRADA, MARIA ANDRADA, FEDERICO
Having lost its jurisdiction, the Office of the President has no more authority to entertain ANDRADA, FLORENCIA VDA. DE ANDRADA, Jesus ANDRADA, ANDREA R. GAURANA
the second motion for reconsideration filed by respondent DAR Secretary, which second motion (HEIRS OF SALVADOR ANDRADA) and ASSISTANT EXECUTIVE SECRETARY ENRIQUE
became the basis of the assailed Win-Win Resolution. Section 7 of Administrative Order No. 18 C. QUEMA (in behalf of the President), Defendants-Appellants.
and Section 4, Rule 43 of the Revised Rules of Court mandate that only one (1) motion for
reconsideration is allowed to be taken from the Decision of March 29, 1996. And even if a
Clemente M. Aliño for plaintiffs-appellees.
second motion for reconsideration was permitted to be filed in exceptionally meritorious cases,
as provided in the second paragraph of Section 7 of AO 18, still the said motion should not have
been entertained considering that the first motion for reconsideration was not seasonably filed, Melquiades S. Sucaldito for defendants-appellants.
thereby allowing the Decision of March 29, 1996 to lapse into finality. Thus, the act of the Office
of the President in re-opening the case and substantially modifying its March 29,1996 Decision
Office of the Solicitor General for nominal party only.
which had already become final and executory, was in gross disregard of the rules and basic
legal precept that accord finality to administrative determinations.
SANCHEZ, J.:
In San Luis, et al. vs. Court of Appeals, et al.60 we held:
In this appeal from a judgment of the Court of First Instance of Cotabato ruling that defendant
heirs of Salvador Andrada have lost their right to appeal from a decision of the Secretary of
Since the decisions of both the Civil Service Commission and the Office of the President had
Agriculture and Natural Resources1 and that, accordingly, defendant Executive Secretary, in
long become final and executory, the same can no longer be reviewed by the courts. It is well-
behalf of the President, may no longer review such decision, we have for factual backdrop the
established in our jurisprudence that the decisions and orders of administrative agencies,
following:chanrobles virtual law library
A dispute over four (4) parcels of land in Lebak, Cotabato, arose between plaintiffs, settlers
thereon occupying four hectares each, and Salvador Andrada (later substituted by his heirs),
sales applicant of a bigger parcel, which includes the lands occupied by plaintiffs. The District
Land Officer of Cotabato decided in plaintiffs' favor, excluded the four parcels of land claimed by
plaintiffs. The Director of Lands, however, reversed, declared that the portions adjudged to the
four plaintiffs "shall be restored to the heirs (of Salvador Andrada) who should include them
proportionately in the new application to be filed by them respectively."chanrobles virtual law
library
Appeal having been taken to the Secretary of Agriculture and Natural Resources, the latter, on
October 27, 1956, in turn reversed the Director of Lands by awarding to plaintiffs the lands they
claimed. Defendants sought reconsideration. On May 30, 1957, the Secretary denied.
Defendants moved once more to reconsider. On September 12, 1957, the Secretary rejected the
reconsideration, ruled that his judgment in the case "had long become final and executory," and
said: "Upon a review of the records, we found that the decision sought to be reconsidered in the
present motion had long become final and executory. Consequently, this Office has no more
jurisdiction to entertain the said motion." The Secretary categorically stated that the case was
"considered a closed matter insofar as this Office is concerned." Defendants received copy of
this denial on October 14, 1957.chanroblesvirtualawlibrarychanrobles virtual law library
On October 23, 1957, defendants appealed to the Office of the
President.chanroblesvirtualawlibrarychanrobles virtual law library
On August 20, 1959, in a letter-decision, Assistant Executive Secretary Enrique C. Quema, "[b]y
authority of the President reversed the decision of the Secretary and declared that the lands
involved "should be restored to the heirs of Andrada to be included in their individual
applications."chanrobles virtual law library
Plaintiffs, on December 23, 1959, started the present suit in the Cotabato court. They raised the
issue of finality of the decision of the Secretary.chanroblesvirtualawlibrarychanrobles virtual law
library
On January 21, 1963, upon a stipulation of facts entered into by the parties, the court rendered
judgment, viz:
WHEREFORE, the Court hereby declares the decision of the Secretary of Agriculture and
Natural Resources, dated October 27, 1956, marked as Exhibit "G" of the STIPULATION OF
FACTS valid, final and executory, and is hereby given due course and effect. A copy of said
Exhibit "G" of the STIPULATION OF FACTS is hereby attached and appended as part and
parcel of this decision, as Annex "A" thereof.chanroblesvirtualawlibrarychanrobles virtual law
library
The decision signed by Assistant Executive Secretary Enrique C. Quema by authority of the
President dated August 20, 1959, marked as Exhibit "L" of the Stipulation of Facts is hereby
declared null and void and without any effect.chanroblesvirtualawlibrarychanrobles virtual law
library
The Court refrains from making any special pronouncement as to costs.
Defendants appealed direct to this Court.chanroblesvirtualawlibrarychanrobles virtual law library
1. Defendants take the view that plaintiffs' remedy is certiorari, not an ordinary civil action before
the Court of First Instance. They aver that since plaintiffs did not avail of the proper remedy, the
action should be dismissed.chanroblesvirtualawlibrarychanrobles virtual law library
In the matter of judicial review of administrative decisions, some statutes especially provide for
such judicial review; others are silent. Mere silence, however, does not necessarily imply that
judicial review is unavailable. Modes of judicial review vary according to the statutes; appeal,
petition for review or a writ of certiorari. No general rule applies to all the various administrative
agencies. Where the law stands mute, the accepted view is that the extraordinary remedies in
the Rules of Court are still available.2 chanrobles virtual law library
Deducible from the foregoing is that where administrative agencies have original jurisdiction in
the premises, the court's interference with administrative action is necessarily limited. A review
thereof cannot be done through an ordinary civil action if constitutional or legislative authority
therefor is wanting. The remedies that can be availed of where the statute is silent, as in the
present case, are the special civil actions for certiorari, prohibition and/or mandamus specified in
the Rules of Court. In this case, therefore, we have no alternative but to hold that the plaintiffs'
appropriate remedy is certiorari, not an ordinary civil action.
Certiorari appears to be the real course of action here taken by plaintiffs. While the petition by
itself does not conform to the formal requirements, the allegations thereof show that plaintiffs
charge defendant Assistant Executive Secretary with grave abuse of discretion in upholding
defendants' appeal "in desecration of a solemn decision" of the Secretary of Agriculture and
Natural Resources "that had already become 'final and executory'." No necessity there was for
plaintiffs to aver that there was no plain, speedy or adequate remedy in the ordinary course of
law. This can be clearly read from the factual narration in the complaint. After all, the case has
already reached the administrative
peak - the Office of the President has already acted thereon. The fact that the petition was not
verified may be excused. The case presented was one which shaped out a question of law.
There were no facts that really needed confirmation under oath. In fact, no trial was conducted
by the court below. Absence of verification here is not fatally defective. 3chanrobles virtual law
library
Thus it is, that plaintiffs' case, as we see it, is the special civil action
of certiorari.chanroblesvirtualawlibrarychanrobles virtual law library
2. The next question is whether or not the Court of First Instance of Cotabato has jurisdiction to
issue a writ of certiorari in this case, considering that defendant Assistant Executive Secretary
holds office in Manila outside the territorial boundaries of said
court.chanroblesvirtualawlibrarychanrobles virtual law library
The pertinent statutory provision, Section 44 (h) of the Judiciary Act of 1948, reads: "Courts of
First Instance shall have original jurisdiction ... (h) Said court and their judges, or any of them,
shall have the power to issue writ of injunction, mandamus, certiorari, prohibition, quo
warranto and habeas corpus in their respective provinces and district in the manner provided in
the Rules of Court." Complementary thereto is Section 4, Rule 65, Rules of Court,4 providing
that: "The petition may be filed ... if it relates to the acts or omissions of an inferior court, or of a
corporation, board, officer or person, in a Court of First instance having jurisdiction
thereof."chanrobles virtual law library
As early as Castaño vs. Lobingier, 7 Phil. 91, 93-94, under previous legislation similar to Section
44(h) aforequoted, this Court has held that the writs of injunction and certiorari cannot be issued
by the Court of First Instance of Leyte against the Justice of the Peace of Manila, who is outside
the territorial boundaries of the issuing court. In Acosta vs. Alvendia, L-14598, October 31, 1960,
the Court of First Instance of Manila issued a writ of preliminary injunction against the provincial
sheriff of Nueva Ecija restraining the latter from executing the judgment rendered in a tenancy
case by the Court of Agrarian Relations in Nueva Ecija. Upon Section 44 (h) and Section 2, Rule
58,5 this Court nullified the injunctive writ because "the jurisdiction or authority of courts of first
instance to control or restrain acts by means of the writ of injunction is limited to acts which are
being committed or about to be committed within the territorial boundaries of their respective
provinces and districts."chanrobles virtual law library
Illuminating is Samar Mining Co., Inc. vs. Arnado, L-17109, June 30, 1961, 2 SCRA 782, 786. in
that case, a petition for certiorari and prohibition with preliminary injunction was filed in the Court
of First Instance of Manila against the Regional Administrator and Labor Attorney of the
Department of Labor assigned to Cebu City, to review the latter's acts in a workmen's
compensation case. The case was dismissed below upon the ground of wrong venue. This
Court affirmed. Speaking through then Associate, now Chief, Justice Roberto Concepcion, we
pronounced that the ordinary rules of venue in Rule 4 do not apply; the Section 4, Rule 65,
heretofore transcribed, contemplates of venue, not jurisdiction, although it makes the former co-
terminous with or dependent upon, the latter; that the jurisdiction therein alluded to is that over
"the corporation, board, officer, or person" whose acts are in question, not jurisdiction over the
subject matter of the case; and that the rule-making power of this Court is limited to matters of
pleading, practice and procedure and the admission to the practice of law, whereas the power to
define, prescribe and apportion the jurisdiction of the various courts is within the exclusive
province of Congress (Section 2, Article VIII, Constitution). We there concluded that the
issuance of the writs prayed for over persons outside the territorial boundaries of the courts of
first instance is denied said courts by the Judiciary Act of
1948.chanroblesvirtualawlibrarychanrobles virtual law library
In Hacbang vs. The Leyte Autobus Co., Inc., L-17907, May 30, 1963, 8 SCRA 103, injunctive
relief was sought in the Court of First Instance of Cebu to restrain the sheriff of Leyte from
proceeding with the sale of a passenger bus upon a writ of execution of a judgment rendered by
the Leyte court. It was held that the Cebu court acted in excess of its
jurisdiction.chanroblesvirtualawlibrarychanrobles virtual law library
In Alhambra Cigar and Cigarette Mfg. Co., Inc. vs. National Administrator of Regional Office No.
2, L-20491, August 31, 1965, 14 SCRA 1019, a petition for certiorari and prohibition was lodged
in the Court of First Instance of Manila against the Hearing Officer and Regional Administrator of
the Department of Labor in Tuguegarao, Cagayan, in connection with a workmen's
compensation case. We held that the Manila court was without power to issue the writs
of certiorari and prohibition, relying upon the authority of Samar Mining, and was bereft of
authority to issue a writ of injunction, citing Acosta.chanroblesvirtualawlibrarychanrobles virtual
law library
In People vs. Mencias, L-19633, November 28, 1966, 18 SCRA 807, the Court of First Instance
of Rizal enjoined the Manila fiscals, amongst others, from proceeding with the preliminary
investigation of a criminal complaint. This Court declared the Rizal court to be devoid of authority
to so enjoin in line with Alhambra. Then in 1967, the case of Santos vs. Moreno, L-15829,
December 4, 1967, 21 SCRA 1141, 1152, affirmed Castaño vs. Lobingier, supra. This was
followed by Cudiamat vs. Torres L-24225, February 22, 1968, 22 SCRA 695, 698. There,
preliminary injunction emanated from the Court of First Instance of Rizal restraining the
implementation of an award on a Public bidding for the supply of a police call and signal box
system for Manila. Enjoined were the members of the on awards of Manila and the winner of the
bid. This Court, thru Mr. Justice J.B.L. Reyes, ruled that: "The Preliminary injunction that may be
granted by a court of first instance under said Section 2 [Rule 58] is, in its application, co-
extensive with the territorial boundaries of the province or district in which the said court sits."
This doctrine was reiterated in NAWASA vs. Reyes, L-28597, February 29, 1968, 22 SCRA 905,
where the Court of First Instance of Rizal enjoined NAWASA with its offices in Manila from
proceeding with a particular bidding to be conducted in that
city.chanroblesvirtualawlibrarychanrobles virtual law library
3. Worth remembering, of course, is that in the foregoing jurisprudence, injunctive or prohibitory
writs are involved. Where the sole issue in court, however, is the legality of the decision of
administrative officials, a different rule obtains.chanroblesvirtualawlibrarychanrobles virtual law
library
Instructive on this point is Gayacao vs. Executive Secretary, L-21066, April 30, 1965, 13 SCRA
753, 756-757. There, plaintiff Gayacao instituted proceedings for certiorari and mandamus in the
Court of First Instance of Basilan City against the Executive Secretary, the Secretary of
Agriculture and Natural Resources, the Director of Lands, and a private respondent. Gayacao
sought nullification of the decision of the Director of Lands, and the affirmatory decisions of the
Secretary of Agriculture and Natural Resources and the Executive Secretary, for being contrary
to law. Respondent officials moved to dismiss. They averred that the Basilan court had no
jurisdiction to issue writs of certiorari or mandamus against them because the administrative
orders and decisions complained of were promulgated by officers holding office outside the
court's territorial jurisdiction. They invoked Section 44(h) of the Judiciary Act of 1948
and Castaño vs. Lobingier, supra, Acosta vs. Alvendia, supra, and Samar Mining Co., Inc. vs.
Arnado, supra. The lower court dismissed the case. Gayacao appealed. We reversed. This
Court, speaking thru Mr. Justice J.B.L. Reyes, pronounced that: "The doctrines invoked in
support of the theory of non-jurisdiction (Castaño vs. Lobingier, 7 Phil 91; Acosta vs. Alvendia, L-
14598, Oct. 31, 1960; Samar Mining vs. Arnado, L-17109, June 30, 1961) are inapplicable, in
that those cases involved petitions for writs of injunction seeking to control the actions of courts
or officers outside the territorial jurisdiction of the respondent courts involved. Here the sole point
in issue is whether the decision of the respondent public officers was legally correct or not, and,
without going into the merits of the case, we see no cogent reason why this power of judicial
review should be confined to the courts of first instance of the locality where the offices of
respondents are maintained, to the exclusion of the courts of first instance in those localities
where the plaintiffs reside, and where the questioned decisions are being enforced." We there
emphasized that: "It is easy to see that if the contested ruling of the court below is sustained the
same would result not only in hardship to litigants of limited means, practically amounting to
denial of access to the courts, but would also unnecessarily encumber the Manila courts whose
dockets are already overburdened. Actually, since Ortua vs. Singson, 59 Phil. 440, the power of
provincial courts of first instance to review administrative decisions of national officials, has been
consistently recognized."
Palanan Lumber & Plywood Co., Inc. vs. Arranz, L-27106, March 20, 1968, 22 SCRA 1186, then
drew the line between the precept enunciated in Gayacao and previous case law. This Court,
again speaking thru Mr. Justice J.B.L. Reyes, there said that "the ruling in Gayacao vs.
Executive Secretary, L-21066, April 30, 1965, has not varied the rule, at least in so far as
prohibitory writs are concerned. The Gayacao case conceded the power of the provincial Court
of First Instance to take cognizance of cases involving judicial review of administrative decisions,
where the sole issue before the Court, is 'whether the decision of respondent public officials was
legally correct or not'; but it clearly reaffirmed the non-jurisdiction rulings previously cited where
writs of injunction are issued or sought in order to control acts of non-resident
officials."6chanrobles virtual law library
In Palanan, which concerned a petition for certiorari and prohibition filed in the Court of First
Instance of Isabela against, amongst others, the Director of Forestry, the Secretary of
Agriculture and Natural Resources and the Executive Secretary, it was thus ruled that: "Since
the petition before the respondent Court of First Instance of Isabela not only questioned the legal
correctness of the decision of the Office of the President, in splitting the forest concession
between both contending logging companies, but also sought to enjoin enforcement of that
decision, it is evident that even under the Gayacao ruling, the respondent Court could not validly
issue the writ of injunction complained of when the officials sought to be restrained were not
stationed within its territory."7chanrobles virtual law library
Clearly then does the Gayacao case hold sway in the controversy before
us.chanroblesvirtualawlibrarychanrobles virtual law library
Indeed, numerous are the cases where courts of first instance of provinces have rightly assumed
jurisdiction over petitions to review acts of the Director of Lands and the Secretary of Agriculture
and Natural Resources, both of whom may be found in Manila. For instance, in the 1949 case
of Alejo vs. Garchitorena, 83 Phil. 924, 928, this Court impliedly upheld the power of the Court of
First Instance of Nueva Ecija to review land decisions of the Director of Lands and the Secretary
of Agriculture and Natural Resources.chanroblesvirtualawlibrarychanrobles virtual law library
But more to the point here is the recent case of Desiata vs. Executive Secretary,
L-21894, February 28, 1967, 19 SCRA 487, where we affirmed the decision of the Court of First
Instance of Agusan nullifying the decision of the Executive Secretary, acting for and in behalf of
the President, rendered on appeal from the decision of the Secretary of Agriculture and Natural
Resources.chanroblesvirtualawlibrarychanrobles virtual law library
We hold that the Cotabato court has jurisdiction.chanroblesvirtualawlibrarychanrobles virtual law
library
4. We now go to the merits of the appeal. Plaintiffs' position is that defendants' appeal to the
President was time-barred. The trial court sustained. The provisions of Lands Administrative
Order No. 6 are thus brought to the fore. Section 12 thereof provides:
12. Finality of decision promulgated by the Secretary.-The decision of the Secretary of
Agriculture and Commerce (now Agriculture and Natural Resources) or the Under Secretary on
an appealed case shall become final, unless otherwise specifically stated therein, after the lapse
of thirty (30) days from the date of its receipt by the interested parties.
Section 13 following reads:
13. No reconsideration of final decision or order.-After a decision or order of the Secretary of
Agriculture and [Natural Resources], the Under Secretary or the Director of Lands has become
final, no motion or petition for reconsideration of such decision or reinvestigation of the case
shall be entertained by the Secretary of Agriculture and [Natural Resources] the Under Secretary
or the Director of Lands, as the case may be, except as provided in Section 14 hereof.
And Section 14 is to this effect: "Upon such terms as may be considered just, the Secretary of
Agriculture and [Natural Resources], the Under Secretary or the Director of Lands may relieve a
party or his legal representative from a decision, order, or other proceeding taken against him
through his mistake, inadvertence, surprise, default or excusable neglect: Provided, That
application therefor be made within a reasonable time but in no case exceeding one (1) year
after such decision, order or proceeding was taken."chanrobles virtual law library
Defendants do not dispute plaintiffs' averment that they (defendants) did not move to reconsider
or appeal from the Secretary's decision of October 27, 1956 - within 30 days from their receipt
thereof. Indeed, they attempted to appeal only on October 23, 1957. They merely contend that
their appeal was but 9 days after October 14, 1957, the date defendants received the September
12, 1957 ruling of the Secretary denying their second motion for reconsideration. That ruling, it
must be remembered, drew attention to the fact that the Secretary's decision "had long become
final and executory." By reason of which, declaration was made that "this (Secretary's) Office
had no more jurisdiction to entertain the said motion."chanrobles virtual law library
It is the thesis of defendants that the power of review on appeal is inherent in the President; that
the Constitution fixes no period for such appeal, and that, therefore, appeal can be entertained
by the President even outside the 30-day period provided in Section 12, Lands Administrative
Order No. 6.chanroblesvirtualawlibrarychanrobles virtual law library
Controlling in this case is Desiata vs. Executive Secretary, supra. Desiata was also a public
lands case originating from the Bureau of Lands and appealed to the Secretary of Agriculture
and Natural Resources. After the decision of the Secretary, the case was taken to the Office of
the President outside the 30-day period mentioned in Section 12 of Lands Administrative Order
No. 6 afore-quoted. The Executive Secretary revoked the decision of the Secretary of Agriculture
and Natural Resources. Whereupon, the aggrieved party went to the Court of First Instance of
Agusan on a special civil action for certiorari and prohibition. The Agusan court and this Court on
appeal both held that there was grave abuse of discretion on the part of the Executive Secretary
in entertaining the appeal from a decision of the Secretary of Agriculture and Natural Resources
which has become final; and, therefore, the decision of the Executive Secretary was null and
void. This Court stressed in clear terms that - "The decision having become final, the Executive
Secretary had no more power to review it ... .8chanrobles virtual law library
Argument has been made in Desiata "that Administrative Order No. 6 itself recognized certain
exceptions wherein decisions of the Secretary of Agriculture do not become final even after 30
days, particularly citing Section 14 thereof." Nonetheless, this Court pronounced: "But this
proviso is unavailing to him because he does not contend that in his case there obtains any of
the recognized exceptions to finality listed thereunder, to wit: mistake, inadvertence, default or
excusable negligence."9chanrobles virtual law library
We find no reason to retreat from the foregoing precepts enunciated by this Court in Desiata.
Indeed, it is not contended that Lands Administrative Order No. 6 does not have the force and
effect of law. Nor can it be, with success. In administrative law, an administrative regulation
adopted pursuant to law, is law. Administratively speaking then, 30 days after receipt by the
interested parties, the decision of the Secretary of Agriculture and Natural Resources becomes
final, except in cases of mistakes, inadvertence, surprise, default or excusable neglect. In which
case, the Secretary may relieve a party of a decision, order or other proceeding taken against
him upon application made within a reasonable time but in no case exceeding one (1) year after
such decision, order or proceeding was taken. Defendants do not come within the exception just
noted.chanroblesvirtualawlibrarychanrobles virtual law library
The executive power itself has laid down the rules for the parties in administrative conflicts to
follow. To be borne in mind is that a Department Secretary is the alter ego of the President. We
must assume then that an administrative rule laid down by a Department Secretary is, to all
intents and purposes, that of the President, unless countermanded by the latter. It is illogical,
unreasonable and unfair for the executive branch of the government itself to set aside
administrative rules - unless previously changed beforehand - in a specific case for the
convenience of one of the parties thereof. Closed proceedings should remain closed; vested
rights should not be unsettled. A contrary view would, as correctly pointed out by plaintiffs, throw
the rule of law to the winds.chanroblesvirtualawlibrarychanrobles virtual law library
In Antique Sawmills, Inc. vs. Zayco, L-20051, May 30, 1966, 17 SCRA 316, 320 321, we find the
following pertinent passage:
The appellees' view that the period fixed in Administrative Order No. 6-2 of the Director of
Forestry cannot bind the Office of the President since the latter has supervision and control over
the former cannot commend itself to sound Public policy. Even administrative decisions must
end sometime, as fully as public policy demands that finality be written on judicial controversies
(Manila Electric Co. vs. Public Service Commission, 61 Phil.
456).chanroblesvirtualawlibrarychanrobles virtual law library
In other words, public interest requires that proceedings already terminated should not be
altered at every step. The rule of non quieta movere prescribes that what was already
terminated should not be disturbed (Espiritu vs. San Miguel Brewery, 63 Phil. 615). 10 We do not
doubt that even the Office of the President subscribes to the above rule. As aptly remarked by
Justice Malcolm in Dy Cay vs. Crossfield & O'Brien, 38 Phil. 527:
Public policy and sound practice demand that, at the risk of occasional errors, judgments of
courts should become final at some definite date fixed by law. The very object for which courts
were instituted was to put an end to controversy. To fulfill this purpose and to do so speedily,
certain time limits, more or less arbitrary, have to be set up to spur on the slothful. ...
Indeed, "[t]he rule which forbids the reopening of a matter once judicially determined by
competent authority applies as well to the judicial and quasi-judicial acts of public, executive, or
administrative officers and boards acting within their jurisdiction as to the judgments of courts
having general judicial powers. 11 chanrobles virtual law library
We, accordingly, hold that the August 20, 1959 letter decision of the Assistant Executive
Secretary "by authority of the President" reversing the decision of the Secretary of Agriculture
and Natural Resources in this case is null and void and of no force and
effect.chanroblesvirtualawlibrarychanrobles virtual law library
For the reasons given, the lower court's decision (labeled Order) of January 31, 1963 appealed
from is hereby affirmed. No costs allowed. So ordered.
G.R. No. L-37453 May 25, 1979
RIZALINA GABRIEL GONZALES, petitioner,
vs.
HONORABLE COURT OF APPEALS and LUTGARDA SANTIAGO, respondents.
Francisco D. Rilloraza, Jr. for petitioners.
Angel A. Sison for private respondent.
GUERRERO, J.:
This is a petition for review of the decision of the Court of Appeals, First Division,1 promulgated
on May 4, 1973 in CA G.R. No. 36523-R which reversed the decision of the Court of First
Instance of Rizal dated December 15, 1964 and allowed the probate of the last will and
testament of the deceased Isabel Gabriel. *
It appears that on June 24, 1961, herein private respondent Lutgarda Santiago filed a petition
with the Court of First Instance of Rizal docketed as Special Proceedings No. 3617, for the
probate of a will alleged to have been executed by the deceased Isabel Gabriel and designating
therein petitioner as the principal beneficiary and executrix.
There is no dispute in the records that the late Isabel Andres Gabriel died as a widow and
without issue in the municipality of Navotas, province of Rizal her place of residence, on June 7,
1961 at the age of eighty-five (85), having been born in 1876. It is likewise not controverted that
herein private respondent Lutgarda Santiago and petitioner Rizalina Gabriel Gonzales are
nieces of the deceased, and that private respondent, with her husband and children, lived with
the deceased at the latters residence prior an- d up to the time of her death.
The will submitted for probate, Exhibit "F", which is typewritten and in Tagalog, appears to have
been executed in Manila on the 15th day of April, 1961, or barely two (2) months prior to the
death of Isabel Gabriel. It consists of five (5) pages, including the pages whereon the attestation
clause and the acknowledgment of the notary public were written. The signatures of the
deceased Isabel Gabriel appear at the end of the will on page four and at the left margin of all
the pages. The attestation clause, which is found on page four, reads as follows:
PATUNAY NG MGA SAKSI
Kaming mga nakalagdang mga saksi o testigo na ang aming mga tinitirahan
ay nakasulat sa gawing kanan at kahilira ng aming mga pangalan sa ibaba
nito, ay pagpapatutuo na ipinakilala ipinaalam at ipinahayag sa amin ni
Isabel Gabriel na ang kasulatang ito na binubuo ng Limang Dahon (Five
Pages) pati na ang dahong ito, na siya niyang TESTAMENTO AT HULING
HABILIN, ngayong ika 15 ng Abril, 1961, ay nilagdaan ng nasabing
testadora na si Isabel Gabriel ang nasabing testamento sa ibaba o ilalim ng
kasulatan na nasa ika apat na dahon (page four) at nasa itaas ng patunay
naming ito, at sa kaliwang panig ng lahat at bawat dahon (and on the left
hand margin of each and every page), sa harap ng lahat at bawat isa sa
amin, at kami namang mga saksi ay lumagda sa harap ng nasabing
testadora, at sa harap ng lahat at bawat isa sa amin, sa ilalim ng patunay ng
mga saksi at sa kaliwang panig ng lahat at bawa't dahon ng testamentong
ito.
At the bottom thereof, under the heading "Pangalan", are written the signatures of Matilde D.
Orobia, Celso D. Gimpaya and Maria R. Gimpaya, and opposite the same, under the heading
"Tirahan", are their respective places of residence, 961 Highway 54, Philamlife, for Miss Orobia,
and 12 Dagala St., Navotas, Rizal, for the two Gimpayas. Their signatures also appear on the
left margin of all the other pages. The WW is paged by typewritten words as follows: "Unang
Dahon" and underneath "(Page One)", "Ikalawang Dahon" and underneath "(Page Two)", etc.,
appearing at the top of each page.
The will itself provides that the testatrix desired to be buried in the Catholic Cemetery of
Navotas, Rizal in accordance with the rites of the Roman Catholic Church, all expenses to be
paid from her estate; that all her obligations, if any, be paid; that legacies in specified amounts
be given to her sister, Praxides Gabriel Vda. de Santiago, her brother Santiago Gabriel, and her
nephews and nieces, Benjamin, Salud, Rizalina (herein petitioner), Victoria, Ester, Andres, all
surnamed Gabriel, and Evangeline, Rudyardo Rosa, Andrea, Marcial, Numancia, Verena an
surnamed Santiago. To herein private respondent Lutgarda Santiago, who was described in the
will by the testatrix as "aking mahal na pamangkin na aking pinalaki, inalagaan at minahal na
katulad ng isang tunay na anak" and named as universal heir and executor, were bequeathed all
properties and estate, real or personal already acquired, or to be acquired, in her testatrix name,
after satisfying the expenses, debts and legacies as aforementioned.
The petition was opposed by Rizalina Gabriel Gonzales, herein petitioner, assailing the
document purporting to be the will of the deceased on the following grounds:
1. that the same is not genuine; and in the alternative
2. that the same was not executed and attested as required by law;
 3. that, at the time of the alleged execution of the purported wilt the
decedent lacked testamentary capacity due to old age and sickness; and in
the second alternative
4. That the purported WW was procured through undue and improper
pressure and influence on the part of the principal beneficiary, and/or of
some other person for her benefit.
Lutgarda Santiago filed her Answer to the Opposition on February 1, 1962. After trial, the court a
quo rendered judgment, the summary and dispositive portions of which read:
Passing in summary upon the grounds advanced by the oppositor, this
Court finds:
1. That there is no iota of evidence to support the contentio that the
purported will of the deceased was procured through undue and improper
pressure and influence on the part of the petitioner, or of some other person
for her benefit;
2. That there is insufficient evidence to sustain the contention that at the
time of the alleged execution of the purported will, the deceased lacked
testamentary capacity due to old age and sickness;
3. That sufficient and abundant evidence warrants conclusively the fact that
the purported will of the deceased was not executed and attested as
required by law;
4. That the evidence is likewise conclusive that the document presented for
probate, Exhibit 'F' is not the purported win allegedly dictated by the
deceased, executed and signed by her, and attested by her three attesting
witnesses on April 15, 1961.
WHEREFORE, Exhibit "F", the document presented for probate as the last
wig and testament of the deceased Isabel Gabriel is here by DISALLOWED.
From this judgment of disallowance, Lutgarda Santiago appealed to respondent Court, hence,
the only issue decided on appeal was whether or not the will in question was executed and
attested as required by law. The Court of Appeals, upon consideration of the evidence adduced
by both parties, rendered the decision now under review, holding that the will in question was
signed and executed by the deceased Isabel Gabriel on April 15, 1961 in the presence of the
three attesting witnesses, Matilde Orobia, Celso Gimpaya and Maria Gimpaya, signing and
witnessing the document in the presence of the deceased and of each other as required by law,
hence allow ed probate.
Oppositor Rizalina Gabriel Gonzales moved for reconsideration 3 of the aforesaid decision and
such motion was opposed 4 by petitioner-appellant Lutgarda Santiago. Thereafter. parties
submitted their respective Memoranda, 5 and on August 28, 1973, respondent Court, Former
Special First Division, by Resolution 6 denied the motion for reconsideration stating that:
The oppositor-appellee contends that the preponderance of evidence shows
that the supposed last wig and testament of Isabel Gabriel was not
executed in accordance with law because the same was signed on several
occasions, that the testatrix did not sign the will in the presence of all the
instrumental witnesses did not sign the will in the presence of each other.
The resolution of the factual issue raised in the motion for reconsideration
hinges on the appreciation of the evidence. We have carefully re-examined
the oral and documentary evidence of record, There is no reason to alter the
findings of fact in the decision of this Court sought to be set aside. 7
In her petition before this Court, oppositor Rizalina Gabriel Gonzales contends that respondent
Court abused its discretion and/or acted without or in excess of its jurisdiction in reverssing the
findings of fact and conclusions of the trial court. The Court, after deliberating on the petition but
without giving due course resolved, in the Resolution dated Oct. 11, 1973 to require the
respondents to comment thereon, which comment was filed on Nov. 14, 1973. Upon
consideration of the allegations, the issues raised and the arguments adduced in the petition, as
well as the Comment 8 of private respondent thereon, We denied the petition by Resolution on
November 26, 1973, 9 the question raised being factual and for insufficient showing that the
findings of fact by respondent Court were unsupported by substantial evidence.
Subsequently, or on December 17, 1973, petitioner Rim Gabriel Goes fried a Motion for
Reconsideration 10 which private respondent answered by way of her Comment or
Opposition 11 filed on January 15, 1974. A Reply and Rejoinder to Reply followed. Finally, on
March 27, 1974, We resolved to give due course to the petition.
The petitioner in her brief makes the following assignment of errors:
I. The respondent Court of Appeals erred in holding that the document, Exhibit "F" was executed
and attested as required by law when there was absolutely no proof that the three instrumental
witnesses were credible witness
II. The Court of Appeals erred in reversing the finding of the lower court that the preparation and
execution of the win Exhibit "F", was unexpected and coincidental.
III. The Court of Appeals erred in finding that Atty, Paraiso was not previously furnished with the
names and residence certificates of the witnesses as to enable him to type such data into the
document Exhibit "F".
IV. The Court of Appeals erred in holding that the fact that the three typewritten lines under the
typewritten words "Pangalan" and "Tinitirahan" were left blank shows beyond cavil that the three
attesting witnesses were all present in the same occasion.
V. The Court of Appeals erred in reversing the trial court's finding that it was incredible that
Isabel Gabriel could have dictated the wilt Exhibit "F , without any note or document, to Atty.
Paraiso.
VI. The Court of Appeals erred in reversing the finding of the trial court that Matilde Orobia was
not physically present when the Will Exhibit "F" was allegedly signed on April 15, 1961 by the
deceased Isabel Gabriel and the other witnesses Celso Gimpaya and Maria Gimpaya.
VII. The Court of Appeals erred in holding that the trial court gave undue importance to the
picture takings as proof that the win was improperly executed.
VIII. The Court of Appeals erred in holding that the grave contradictions, evasions, and same Code. It is further urged that the term "credible" as used in the Civil Code should receive
misrepresentations of witnesses (subscribing and notary) presented by the petitioner had been the same settled and well- known meaning it has under the Naturalization Law, the latter being a
explained away, and that the trial court erred in rejecting said testimonies. kindred legislation with the Civil Code provisions on wigs with respect to the qualifications of
witnesses.
IX. The Court of Appeals acted in excess of its appellate jurisdiction or has so far departed from
the accepted and usual course of judicial proceedings, as to call for an exercise of the power of We find no merit to petitioner's first assignment of error. Article 820 of the Civil Code provides
supervision. the qualifications of a witness to the execution of wills while Article 821 sets forth the
disqualification from being a witness to a win. These Articles state:
X. The Court of Appeals erred in reversing the decision of the trial court and admitting to probate
Exhibit "F", the alleged last will and testament of the deceased Isabel Gabriel. Art. 820. Any person of sound mind and of the age of eighteen years or
more, and not blind, deaf or dumb, and able to read and write, may be a
witness to the execution of a will mentioned in article 806 of this Code. "Art.
It will be noted from the above assignments of errors that the same are substantially factual in
821. The following are disqualified from being witnesses to a will:
character and content. Hence, at the very outset, We must again state the oft-repeated and well-
established rule that in this jurisdiction, the factual findings of the Court of Appeals are not
reviewable, the same being binding and conclusive on this Court. This rule has been stated and (1) Any person not domiciled in the Philippines,
reiterated in a long line of cases enumerated in Chan vs. CA (L-27488, June 30, 1970, 33 SCRA
737, 743) 12 and Tapas vs. CA (L-22202, February 27; 1976, 69 SCRA 393), 13 and in the more
(2) Those who have been convicted of falsification of a document, perjury or
recent cases of Baptisia vs. Carillo and CA (L32192, July 30, 1976, 72 SCRA 214, 217)
false testimony.
and Vda. de Catindig vs. Heirs of Catalina Roque (L-25777, November 26, 1976, 74 SCRA 83,
88). In the case of Chan vs. CA, this Court said:
Under the law, there is no mandatory requirement that the witness testify initially or at any time
during the trial as to his good standing in the community, his reputation for trustworthythiness
... from Guico v. Mayuga, a 1936 decision, the opinion being penned by the then Justice Recto,
and reliableness, his honesty and uprightness in order that his testimony may be believed and
it has been well-settled that the jurisdiction of tills Court in cases brought to us from the Court of
accepted by the trial court. It is enough that the qualifications enumerated in Article 820 of the
Appeals is limited to reviewing and revising the errors of law imputed to it, its findings of fact
Civil Code are complied with, such that the soundness of his mind can be shown by or deduced
being conclusive. More specifically, in a decision exactly a month later, this Court, speaking
from his answers to the questions propounded to him, that his age (18 years or more) is shown
through the then Justice Laurel, it was held that the same principle is applicable, even if the
from his appearance, testimony , or competently proved otherwise, as well as the fact that he is
Court of Appeals was in disagreement with the lower court as to the weight of the evidence with
not blind, deaf or dumb and that he is able to read and write to the satisfaction of the Court, and
a consequent reversal of its findings of fact ...
that he has none of the disqualifications under Article 821 of the Civil Code. We reject
petitioner's contention that it must first be established in the record the good standing of the
Stated otherwise, findings of facts by the Court of Appeals, when supported by substantive witness in the community, his reputation for trustworthiness and reliableness, his honesty and
evidence are not reviewable on appeal by certiorari. Said findings of the appellate court are final uprightness, because such attributes are presumed of the witness unless the contrary is proved
and cannot be disturbed by Us particularly because its premises are borne out by the record or otherwise by the opposing party.
based upon substantial evidence and what is more, when such findings are correct.
Assignments of errors involving factual issues cannot be ventilated in a review of the decision of
We also reject as without merit petitioner's contention that the term "credible" as used in the Civil
the Court of Appeals because only legal questions may be raised. The Supreme Court is not at
Code should be given the same meaning it has under the Naturalization Law where the law is
liberty to alter or modify the facts as set forth in the decision of the Court of Appeals sought to be
mandatory that the petition for naturalization must be supported by two character witnesses who
reversed. Where the findings of the Court of Appeals are contrary to those of the trial court, a
must prove their good standing in the community, reputation for trustworthiness and
minute scrutiny by the Supreme Court is in order, and resort to duly-proven evidence becomes
reliableness, their honesty and uprightness. The two witnesses in a petition for naturalization are
necessary. The general rule We have thus stated above is not without some recognized
character witnesses in that being citizens of the Philippines, they personally know the petitioner
exceptions.
to be a resident of the Philippines for the period of time required by the Act and a person of good
repute and morally irreproachable and that said petitioner has in their opinion all the
Having laid down the above legal precepts as Our foundation, We now proceed to consider qualifications necessary to become a citizen of the Philippines and is not in any way disqualified
petitioner's assignments of errors. under the provisions of the Naturalization Law (Section 7, Commonwealth Act No. 473 as
amended).
Petitioner, in her first assignment, contends that the respondent Court of Appeals erred in
holding that the document, Exhibit "F", was executed and attested as required by law when there In probate proceedings, the instrumental witnesses are not character witnesses for they merely
was absolutely no proof that the three instrumental witnesses were credible witnesses. She attest the execution of a will or testament and affirm the formalities attendant to said execution.
argues that the require. ment in Article 806, Civil Code, that the witnesses must be credible is an And We agree with the respondent that the rulings laid down in the cases cited by petitioner
absolute requirement which must be complied with before an alleged last will and testament may concerning character witnesses in naturalization proceedings are not applicable to instrumental
be admitted to probate and that to be a credible witness, there must be evidence on record that witnesses to wills executed under the Civil Code of the Philippines.
the witness has a good standing in his community, or that he is honest and upright, or reputed to
be trustworthy and reliable. According to petitioner, unless the qualifications of the witness are
In the case at bar, the finding that each and everyone of the three instrumental witnesses,
first established, his testimony may not be favorably considered. Petitioner contends that the
namely, Matilde Orobia, Celso Gimpaya and Maria Gimpaya, are competent and credible is
term "credible" is not synonymous with "competent" for a witness may be competent under
satisfactorily supported by the evidence as found by the respondent Court of Appeals, which
Article 820 and 821 of the Civil Code and still not be credible as required by Article 805 of the
findings of fact this Tribunal is bound to accept and rely upon. Moreover, petitioner has not
pointed to any disqualification of any of the said witnesses, much less has it been shown that
anyone of them is below 18 years of age, of unsound mind, deaf or dumb, or cannot read or
write.
It is true that under Article 805 of the New Civil Code, every will, other than a holographic will,
must be subscribed at the end thereof by the testator himself or by the testator's name written by
some other person in his presence, and by his express direction, and attested and subscribed by
three or more credible witnesses in the presence of the testator and of one another, While the
petitioner submits that Article 820 and 821 of the New Civil Code speak of the competency of a
witness due to his qualifications under the first Article and none of the disqualifications under the
second Article, whereas Article 805 requires the attestation of three or more credible witnesses,
petitioner concludes that the term credible requires something more than just being competent
and, therefore, a witness in addition to being competent under Articles 820 and 821 must also be
a credible witness under Article 805.
Petitioner cites American authorities that competency and credibility of a witness are not
synonymous terms and one may be a competent witness and yet not a credible one. She
exacerbates that there is no evidence on record to show that the instrumental witnesses are
credible in themselves, that is, that they are of good standing in the community since one was a
family driver by profession and the second the wife of the driver, a housekeeper. It is true that
Celso Gimpaya was the driver of the testatrix and his wife Maria Gimpaya, merely a
housekeeper, and that Matilde Orobia was a piano teacher to a grandchild of the testatrix But
the relation of employer and employee much less the humble or financial position of a person do
not disqualify him to be a competent testamentary witness. (Molo Pekson and Perez Nable vs.
Tanchuco, et al., 100 Phil. 344; Testate Estate of Raymundo, Off. Gaz., March 18,1941, p. 788).
Private respondent maintains that the qualifications of the three or more credible witnesses
mentioned in Article 805 of the Civil Code are those mentioned in Article 820 of the same Code,
this being obvious from that portion of Article 820 which says "may be Q witness to the
execution of a will mentioned in Article 805 of this Code," and cites authorities that the word
"credible" insofar as witnesses to a will are concerned simply means " competent." Thus, in the
case of Suntay vs. Suntay, 95 Phil. 500, the Supreme Court held that "Granting that a will was
duly executed and that it was in existence at the time of, and not revoked before, the death of
the testator, still the provisions of the lost wig must be clearly and distinctly proved by at least
two credible witnesses. 'Credible witnesses' mean competent witnesses and not those who
testify to facts from or upon hearsay. " emphasis supplied).
In Molo Pekson and Perez Nable vs. Tanchuco, et al., 100 Phil. 344, the Supreme Court held
that "Section 620 of the same Code of Civil Procedure provides that any person of sound mind,
and of the age of eighteen years or more, and not blind, deaf, or dumb and able to read and
write, may be a witness to the execution of a will. This same provision is reproduced in our New
Civil Code of 1950, under Art. 820. The relation of employer and employee, or being a relative to
the beneficiary in a win, does not disqualify one to be a witness to a will. The main qualification
of a witness in the attestation of wills, if other qualifications as to age, mental capacity and
literacy are present, is that said witness must be credible, that is to say, his testimony may be
entitled to credence. There is a long line of authorities on this point, a few of which we may cite:
A 'credible witness is one who is not is not to testify by mental incapacity,
crime, or other cause. Historical Soc of Dauphin County vs. Kelker 74 A.
619, 226 Pix 16, 134 Am. St. Rep. 1010. (Words and Phrases, Vol. 10, p.
340).
As construed by the common law, a 'credible witness' to a will means a
'competent witness.' Appeal of Clark, 95 A. 517, 114 Me. 105, Ann. Cas.
1917A, 837. (lbid, p. 341).
Expression 'credible witness' in relation to attestation of wins means
'competent witness that is, one competent under the law to testify to fact of
execution of will. Vernon's Ann. Civ St. art. 8283. Moos vs. First State Bank
of Uvalde, Tex . Civ. App. 60 S.W. 2nd 888, 889. (Ibid, p. 342)
The term 'credible', used in the statute of wills requiring that a will shall be
attested by two credible witnesses means competent; witnesses who, at the
time of attesting the will, are legally competent to testify, in a court of justice,
to the facts attested by subscribing the will, the competency being
determined as of the date of the execution of the will and not of the timr it is
offered for probate, Smith vs. Goodell 101 N.E. 255, 256, 258 111. 145.
(Ibid.)
Credible witnesses as used in the statute relating to wills, means competent
witnesses — that is, such persons as are not legally disqualified from
testifying in courts of justice, by reason of mental incapacity, interest, or the
commission of crimes, or other cause excluding them from testifying
generally, or rendering them incompetent in respect of the particular subject
matter or in the particular suit. Hill vs. Chicago Title & Trust co 152 N.E.
545, 546, 322 111. 42. (Ibid. p, 343)
In the strict sense, the competency of a person to be an instrumental witness to a will is
determined by the statute, that is Art. 820 and 821, Civil Code, whereas his credibility depends
On the appreciation of his testimony and arises from the belief and conclusion of the Court that
said witness is telling the truth. Thus, in the case of Vda. de Aroyo v. El Beaterio del Santissimo
Rosario de Molo, No. L-22005, May 3, 1968, the Supreme Court held and ruled that:
"Competency as a witness is one thing, and it is another to be a credible witness, so credible
that the Court must accept what he says. Trial courts may allow a person to testify as a witness
upon a given matter because he is competent, but may thereafter decide whether to believe or
not to believe his testimony." In fine, We state the rule that the instrumental witnesses in Order
to be competent must be shown to have the qualifications under Article 820 of the Civil Code
and none of the disqualifications under Article 821 and for their testimony to be credible, that is
worthy of belief and entitled to credence, it is not mandatory that evidence be first established on
record that the witnesses have a good standing in the community or that they are honest and
upright or reputed to be trustworthy and reliable, for a person is presumed to be such unless the
contrary is established otherwise. In other words, the instrumental witnesses must be competent
and their testimonies must be credible before the court allows the probate of the will they have
attested. We, therefore, reject petitioner's position that it was fatal for respondent not to have
introduced prior and independent proof of the fact that the witnesses were "credible witnesses
that is, that they have a good standing in the community and reputed to be trustworthy and
reliable.
Under the second, third, fourth, fifth, sixth, seventh and eighth assignments of errors, petitioner
disputes the findings of fact of the respondent court in finding that the preparation and execution
of the will was expected and not coincidental, in finding that Atty. Paraiso was not previously
furnished with the names and residence certificates of the witnesses as to enable him to type
such data into the document Exhibit "F", in holding that the fact that the three typewritten lines
under the typewritten words "pangalan" and "tinitirahan" were left blank shows beyond cavil that
the three attesting witnesses were all present in the same occasion, in holding credible that
Isabel Gabriel could have dictated the will without note or document to Atty. Paraiso, in holding
that Matilde Orobia was physically present when the will was signed on April 15, 1961 by the
deceased Isabel Gabriel and the other witnesses Celso Gimpaya and Maria Gimpaya, in holding
that the trial court gave undue importance to the picture takings as proof that the will was
improperly executed, and in holding that the grave contradictions, evasions and
misrepresentations of the witnesses (subscribing and notary) presented by the petitioner had
been explained away.
Since the above errors are factual We must repeat what We have previously laid down that the
findings of fact of the appellate court are binding and controlling which We cannot review,
subject to certain exceptions which We win consider and discuss hereinafter. We are convinced
that the appellate court's findings are sufficiently justified and supported by the evidence on
record. Thus, the alleged unnaturalness characterizing the trip of the testatrix to the office of
Atty. Paraiso and bringing all the witnesses without previous appointment for the preparation and
execution of the win and that it was coincidental that Atty. Paraiso was available at the moment
impugns the finding of the Court of Appeals that although Atty. Paraiso admitted the visit of
Isabel Gabriel and of her companions to his office on April 15, 1961 was unexpected as there
was no prior appointment with him, but he explained that he was available for any business
transaction on that day and that Isabel Gabriel had earlier requested him to help her prepare her
will. The finding of the appellate court is amply based on the testimony of Celso Gimpaya that he
was not only informed on the morning of the day that he witnessed the will but that it was the
third time when Isabel Gabriel told him that he was going to witness the making of her will, as
well as the testimony of Maria Gimpaya that she was called by her husband Celso Gimpaya to
proceed to Isabel Gabriel's house which was nearby and from said house, they left in a car to
the lawyer's office, which testimonies are recited in the respondent Court's decision.
The respondent Court further found the following facts: that Celso Gimpaya and his wife Maria
Gimpaya obtained residence certificates a few days before Exhibit "F" was executed. Celso
Gimpaya's residence certificate No. A-5114942 was issued at Navotas, Rizal on April 13, 1961
while Maria Gimpaya's residence certificate No. A-5114974 was issued also at Navotas, Rizal
on April 14, 1961. The respondent Court correctly observed that there was nothing surprising in
these facts and that the securing of these residence certificates two days and one day,
respectively, before the execution of the will on April 15, 1961, far from showing an amazing
coincidence, reveals that the spouses were earlier notified that they would be witnesses to the
execution of Isabel Gabriel's will.
We also agree with the respondent Court's conclusion that the excursion to the office of Atty.
Paraiso was planned by the deceased, which conclusion was correctly drawn from the testimony
of the Gimpaya spouses that they started from the Navotas residence of the deceased with a
photographer and Isabel Gabriel herself, then they proceeded by car to Matilde Orobia's house
in Philamlife, Quezon City to fetch her and from there, all the three witnesses (the Gimpayas and
Orobia) passed by a place where Isabel Gabriel stayed for about ten to fifteen minutes at the
clinic of Dr. Chikiamco before they proceeded to Atty. Cipriano Paraiso's office.
It is also evident from the records, as testified to by Atty. Paraiso, that previous to the day that.
the will was executed on April 15, 1961, Isabel Gabriel had requested him to help her in the
execution of her will and that he told her that if she really wanted to execute her will, she should
bring with her at least the Mayor of Navotas, Rizal and a Councilor to be her witnesses and that
he (Atty. Paraiso) wanted a medical certificate from a physician notwithstanding the fact that he
believed her to be of sound and disposition mind. From this evidence, the appellate court rightly
concluded, thus: "It is, therefore, clear that the presence of Isabel Gabriel and her witnesses
Matilde Orobia, Celso Gimpaya and Maria Gimpaya including the photographer in the law office
of Atty. Paraiso was not coincidental as their gathering was pre-arranged by Isabel Gabriel
herself."
As to the appellate court's finding that Atty. Paraiso was not previously furnished with the names
and residence certificates of the witnesses as to enable him to type such data into the document
Exhibit ' L which the petitioner assails as contradictory and irreconcilable with the statement of
the Court that Atty. Paraiso was handed a list (containing the names of the witnesses and their
respective residence certificates) immediately upon their arrival in the law office by Isabel
Gabriel and this was corroborated by Atty. Paraiso himself who testified that it was only on said
occasion that he received such list from Isabel Gabriel, We cannot agree with petitioner's
contention. We find no contradiction for the, respondent Court held that on the occasion of the
will making on April 15, 1961, the list was given immediately to Atty. Paraiso and that no such list
was given the lawyer in any previous occasion or date prior to April 15, 1961.
But whether Atty. Paraiso was previously furnished with the names and residence certificates of
the witnesses on a prior occasion or on the very occasion and date in April 15, 1961 when the
will was executed, is of no moment for such data appear in the notarial acknowledgment of
Notary Public Cipriano Paraiso, subscribed and sworn to by the witnesses on April 15, 1961
following the attestation clause duly executed and signed on the same occasion, April 15, 1961.
And since Exhibit "F" is a notarial will duly acknowledged by the testatrix and the witnesses
before a notary public, the same is a public document executed and attested through the
intervention of the notary public and as such public document is evidence of the facts in clear,
unequivocal manner therein expressed. It has in its favor the presumption of regularity. To
contradict all these, there must be evidence that is clear, convincing and more than merely
preponderant. (Yturalde vs. Azurin, 28 SCRA 407). We find no such evidence pointed by
petitioner in the case at bar.
Likewise, the conclusion of the Court of Appeals in holding that the fact that the three typewritten
lines under the typewritten words "pangalan ' and "tinitirahan" were left blank shows beyond
cavil that the three attesting witnesses were all present in the same occasion merits Our
approval because tills conclusion is supported and borne out by the evidence found by the
appellate court, thus: "On page 5 of Exhibit "F", beneath the typewritten words "names", "Res.
Tax Cert. date issued" and place issued the only name of Isabel Gabriel with Residence Tax
certificate No. A-5113274 issued on February 24, 1961 at Navotas Rizal appears to be in
typewritten form while the names, residence tax certificate numbers, dates and places of
issuance of said certificates pertaining to the three (3) witnesses were personally handwritten by
Atty. Paraiso. Again, this coincides with Atty. Paraiso's even the sale must be made to close
relatives; and the seventh was the appointment of the appellant Santiago as executrix of the will
without bond. The technical description of the properties in paragraph 5 of Exhibit F was not
given and the numbers of the certificates of title were only supplied by Atty. Paraiso. "
It is true that in one disposition, the numbers of the Torrens titles of the properties disposed and
the docket number of a special proceeding are indicated which Atty. Paraiso candidly admitted
were supplied by him, whereupon petitioner contends that it was incredible that Isabel Gabriel
could have dictated the will Exhibit "F" without any note or document to Atty. Paraiso,
considering that Isabel Gabriel was an old and sickly woman more than eighty-one years old and
had been suffering from a brain injury caused by two severe blows at her head and died of
terminal cancer a few weeks after the execution of Exhibit "F". While we can rule that this is a
finding of fact which is within the competency of the respondent appellate court in determining
the testamentary capacity of the testatrix and is, therefore, beyond Our power to revise and
review, We nevertheless hold that the conclusion reached by the Court of Appeals that the
testatrix dictated her will without any note or memorandum appears to be fully supported by the
following facts or evidence appearing on record. Thus, Isabel Gabriel, despite her age, was
particularly active in her business affairs as she actively managed the affairs of the movie
business ISABELITA Theater, paying the aparatistas herself until June 4, 1961, 3 days before
her death. She was the widow of the late Eligio Naval, former Governor of Rizal Province and
acted as coadministratrix in the Intestate Estate of her deceased husband Eligio Naval. The text
of the win was in Tagalog, a dialect known and understood by her and in the light of all the
circumstances, We agree with the respondent Court that the testatrix dictated her will without
any note or memorandum, a fact unanimously testified to by the three attesting witnesses and
the notary public himself.
Petitioner's sixth assignment of error is also bereft of merit. The evidence, both testimonial and
documentary is, according to the respondent court, overwhelming that Matilde Orobia was
physically present when the will was signed on April 15, 1961 by the testatrix and the other two
witnesses, Celso Gimpaya and Maria Gimpaya. Such factual finding of the appellate court is
very clear, thus: "On the contrary, the record is replete with proof that Matilde Orobia was
physically present when the will was signed by Isabel Gabriel on April '15, 1961 along with her
co-witnesses Celso Gimpaya and Maria Gimpaya. The trial court's conclusion that Orobia's
admission that she gave piano lessons to the child of the appellant on Wednesdays and
Saturdays and that April 15, 1961 happened to be a Saturday for which reason Orobia could not
have been present to witness the will on that — day is purely conjectural. Witness Orobia did not
admit having given piano lessons to the appellant's child every Wednesday and Saturday
without fail. It is highly probable that even if April 15, 1961 were a Saturday, she gave no piano
lessons on that day for which reason she could have witnessed the execution of the will. Orobia
spoke of occasions when she missed giving piano lessons and had to make up for the same.
Anyway, her presence at the law office of Atty. Paraiso was in the morning of April 15, 1961 and
there was nothing to preclude her from giving piano lessons on the afternoon of the same day in
Navotas, Rizal."
In addition to the testimony of Matilde Orobia, Celso Gimpaya and Maria Gimpaya that Matilde
was present on April 15, 1961 and that she signed the attestation clause to the will and on the
left-hand margin of each of the pages of the will, the documentary evidence which is the will
itself, the attestation clause and the notarial acknowledgment overwhelmingly and convincingly
prove such fact that Matilde Orobia was present on that day of April 15, 1961 and that she
witnessed the will by signing her name thereon and acknowledged the same before the notary
public, Atty. Cipriano P. Paraiso. The attestation clause which Matilde Orobia signed is the best
evidence as to the date of signing because it preserves in permanent form a recital of all the
material facts attending the execution of the will. This is the very purpose of the attestation
clause which is made for the purpose of preserving in permanent form a record of the facts
attending the execution of the will, so that in case of failure in the memory of the subscribing
witnesses, or other casualty they may still be proved. (Thompson on Wills, 2nd ed., Sec. 132;
Leynez vs. Leynez, 68 Phil. 745).
As to the seventh error assigned by petitioner faulting the Court of Appeals in holding that the
trial court gave undue importance to the picture-takings as proof that the win was improperly
executed, We agree with the reasoning of the respondent court that: "Matilde Orobia's
Identification of the photographer as "Cesar Mendoza", contrary to what the other two witnesses
(Celso and Maria Gimpaya) and Atty. Paraiso said that the photographer was Benjamin Cifra,
Jr., is at worst a minor mistake attributable to lapse of time. The law does not require a
photographer for the execution and attestation of the will. The fact that Miss Orobia mistakenly
Identified the photographer as Cesar Mendoza scarcely detracts from her testimony that she
was present when the will was signed because what matters here is not the photographer but
the photograph taken which clearly portrays Matilde Orobia herself, her co-witnesses Celso
Gimpaya. " Further, the respondent Court correctly held: "The trial court gave undue importance
to the picture takings, jumping therefrom to the conclusion that the will was improperly executed.
The evidence however, heavily points to only one occasion of the execution of the will on April
15, 1961 which was witnessed by Matilde Orobia, Celso Gimpaya and Maria Gimpaya. These
witnesses were quite emphatic and positive when they spoke of this occasion. Hence, their
Identification of some photographs wherein they all appeared along with Isabel Gabriel and Atty.
Paraiso was superfluous."
Continuing, the respondent Court declared: "It is true that the second picture-taking was
disclosed at the cross examination of Celso Gimpaya. But this was explained by Atty. Paraiso as
a reenactment of the first incident upon the insistence of Isabel Gabriel. Such reenactment
where Matilde Orobia was admittedly no longer present was wholly unnecessary if not pointless.
What was important was that the will was duly executed and witnessed on the first occasion on
April 15, 1961 , " and We agree with the Court's rationalization in conformity with logic, law and
jurisprudence which do not require picture-taking as one of the legal requisites for the execution
or probate of a will.
Petitioner points to alleged grave contradictions, evasions and misrepresentations of witnesses
in their respective testimonies before the trial court. On the other hand, the respondent Court of
Appeals held that said contradictions, evasions and misrepresentations had been explained
away. Such discrepancies as in the description of the typewriter used by Atty. Paraiso which he
described as "elite" which to him meant big letters which are of the type in which the will was
typewritten but which was Identified by witness Jolly Bugarin of the N.B.I. as pica the mistake in
mentioning the name of the photographer by Matilde Orobia to be Cesar Mendoza when actually
it was Benjamin Cifra, Jr.— these are indeed unimportant details which could have been
affected by the lapse of time and the treachery of human memory such that by themselves
would not alter the probative value of their testimonies on the true execution of the will, (Pascual
vs. dela Cruz, 28 SCRA 421, 424) for it cannot be expected that the testimony of every person
win be Identical and coinciding with each other with regard to details of an incident and that
witnesses are not expected to remember all details. Human experience teach us "that
contradictions of witnesses generally occur in the details of certain incidents, after a long series
of questionings, and far from being an evidence of falsehood constitute a demonstration of good
faith. In as much as not all those who witness an incident are impressed in like manner, it is but
natural that in relating their impressions, they should not agree in the minor details; hence the
contradictions in their testimony." (Lopez vs. Liboro, 81 Phil. 429).
It is urged of Us by the petitioner that the findings of the trial court should not have been
disturbed by the respondent appellate court because the trial court was in a better position to
weigh and evaluate the evidence presented in the course of the trial. As a general rule, petitioner
is correct but it is subject to well-established exceptions. The right of the Court of Appeals to
review, alter and reverse the findings of the trial court where the appellate court, in reviewing the
evidence has found that facts and circumstances of weight and influence have been ignored and
overlooked and the significance of which have been misinterpreted by the trial court, cannot be
disputed. Findings of facts made by trial courts particularly when they are based on conflicting
evidence whose evaluation hinges on questions of credibility of contending witnesses hes
peculiarly within the province of trial courts and generally, the appellate court should not interfere
with the same. In the instant case, however, the Court of Appeals found that the trial court had
overlooked and misinterpreted the facts and circumstances established in the record. Whereas
the appellate court said that "Nothing in the record supports the trial court's unbelief that Isabel
Gabriel dictated her will without any note or document to Atty. Paraiso;" that the trial court's
conclusion that Matilde Orobia could not have witnessed anybody signing the alleged will or that
she could not have witnessed Celso Gimpaya and Maria Gimpaya sign the same or that she
witnessed only the deceased signing it, is a conclusion based not on facts but on inferences;
that the trial court gave undue importance to the picture-takings, jumping therefrom to the
conclusion that the will was improperly executed and that there is nothing in the entire record to
support the conclusion of the court a quo that the will signing occasion was a mere coincidence
and that Isabel Gabriel made an appointment only with Matilde Orobia to witness the signing of
her will, then it becomes the duty of the appellate court to reverse findings of fact of the trial
court in the exercise of its appellate jurisdiction over the lower courts.
Still the petitioner insists that the case at bar is an exception to the rule that the judgment of the
Court of Appeals is conclusive as to the facts and cannot be reviewed by the Supreme Court.
Again We agree with the petitioner that among the exceptions are: (1) when the conclusion is a
finding grounded entirely on speculations, surmises or conjectures; (2) when the inference is
manifestly mistaken, absurd or impossible; (3) when there is a grave abuse of discretion; (4)
when the presence of each other as required by law. " Specifically, We affirm that on April 15,
1961 the testatrix Isabel Gabriel, together with Matilde Orobia, Celso Gimpaya and his wife
Maria Gimpaya, and a photographer proceeded in a car to the office of Atty. Cipriano Paraiso at
the Bank of P.I. Building, Manila in the morning of that day; that on the way, Isabel Gabriel
obtained a medical certificate from one Dr. Chikiamko which she gave to Atty. Paraiso upon
arriving at the latter's office and told the lawyer that she wanted her will to be made; that Atty.
Paraiso asked Isabel Gabriel to dictate what she wanted to be written in the will and the attorney
wrote down the dictation of Isabel Gabriel in Tagalog, a language known to and spoken by her;
that Atty. Paraiso read back to her what he wrote as dictated and she affirmed their correctness;
the lawyer then typed the will and after finishing the document, he read it to her and she told him
that it was alright; that thereafter, Isabel Gabriel signed her name at the end of the will in the
presence of the three witnesses Matilde Orobia, Celso Gimpaya and Maria Gimpaya and also at
the left-hand margin of each and every page of the document in the presence also of the said
three witnesses; that thereafter Matilde Orobia attested the will by signing her name at the end
of the attestation clause and at the left-hand margin of pages 1, 2, 3 and 5 of the document in
the presence of Isabel Gabriel and the other two witnesses, Celso Gimpaya and Maria Gimpaya;
then, Celso Gimpaya signed also the will at the bottom of the attestation clause and at the left-
hand margin of the other pages of the document in the presence of Isabel Gabriel, Matilde
Orobia and Maria Gimpaya; that Maria Gimpaya followed suit, signing her name at the foot of
the attestation clause and at the left-hand margin of every page in the presence of Isabel
Gabriel, Matilde Orobia and Celso Gimpaya; that thereafter, Atty. Paraiso notarized the will as
Page No. 94, Book No. IV, Series of 1961, in his Notarial Register. On the occasion of the
execution and attestation of the will, a photographer took pictures, one Exhibit "G", depicting
Matilde Orobia, the testatrix Isabel Gabriel, Celso Gimpaya, Maria Gimpaya and Atty. Paraiso,
taken on said occasion of the signing of the will, and another, Exhibit "H", showing Matilde
Orobia signing testimony that he had earlier advised Isabel Gabriel to bring with her at least the
Mayor and a Councilor of Navotas, Rizal to be her witnesses for he did not know beforehand the
Identities of the three attesting witnesses until the latter showed up at his law office with Isabel
Gabriel on April 15, 1961. Atty. Paraiso's claim which was not controverted that he wrote down
in his own hand the date appearing on page 5 of Exhibit "F" dissipates any lingering doubt that
he prepared and ratified the will on the date in question."
It is also a factual finding of the Court of Appeals in holding that it was credible that Isabel
Gabriel could have dictated the will, Exhibit "F", without any note or document to Atty. Paraiso as
against the contention of petitioner that it was incredible. This ruling of the respondent court is
fully supported by the evidence on record as stated in the decision under review, thus: "Nothing
in the record supports the trial court's unbelief that Isabel Gabriel dictated her will without any
note or document to Atty. Paraiso. On the contrary, all the three attesting witnesses uniformly
testified that Isabel Gabriel dictated her will to Atty. Paraiso and that other than the piece of
paper that she handed to said lawyer she had no note or document. This fact jibes with the
evidence — which the trial court itself believed was unshaken — that Isabel Gabriel was of
sound disposing memory when she executed her will.
Exhibit "F" reveals only seven (7) dispositions which are not complicated but quite simple. The
first was Isabel Gabriel's wish to be interred according to Catholic rites the second was a general
directive to pay her debts if any; the third provided for P1,000.00 for her sister Praxides Gabriel
Vda. de Santiago and P2,000.00 for her brother Santiago Gabriel; the fourth was a listing of her
13 nephews and nieces including oppositor-appellee Rizalina Gabriel and the amount for each
legatee the fifth was the institution of the petitioner-appellant, Lutgarda Santiago as the principal
heir mentioning in general terms seven (7) types of properties; the sixth disposed of the
remainder of her estate which she willed in favor of appellant Lutgarda Santiago but prohibiting
the sale of such properties to anyone except in extreme situations in which judgment is based on
a misapprehension of facts; (5) when the findings of fact are conflicting, (6) when the Court of
Appeals, in making its findings, went beyond the issues of the case and the same is contrary to
the admissions of both appellant and appellee. (Roque vs. Buan, et al., G.R. No. L-22459, Oct.
31, 1967; Ramos vs. Pepsi Cola Bottling Co., G.R. No. L-22533, Feb. 9, 1967; Hilarion Jr. vs.
City of Manila, G.R. No. L-19570; Sept. 14, 1967).
Petitioner's insistence is without merit. We hold that the case at bar does not fall within any of
the exceptions enumerated above. We likewise hold that the findings of fact of the respondent
appellate court are fully supported by the evidence on record. The conclusions are fully
sustained by substantial evidence. We find no abuse of discretion and We discern no
misapprehension of facts. The respondent Court's findings of fact are not conflicting. Hence, the
well-established rule that the decision of the Court of Appeals and its findings of fact are binding
and conclusive and should not be disturbed by this Tribunal and it must be applied in the case at
bar in its full force and effect, without qualification or reservation. The above holding simply
synthesize the resolutions we have heretofore made in respect ' to petitioner's previous
assignments of error and to which We have disagreed and, therefore, rejected.
The last assignments of error of petitioner must necessarily be rejected by Us as We find the
respondent Court acted properly and correctly and has not departed from the accepted and
usual course of judicial proceedings as to call for the exercise of the power of supervision by the
Supreme Court, and as We find that the Court of Appeals did not err in reversing the decision of
the trial court and admitting to probate Exhibit "F", the last will and testament of the deceased
Isabel Gabriel.
We rule that the respondent Court's factual findings upon its summation and evaluation of the
evidence on record is unassailable that: "From the welter of evidence presented, we are
convinced that the will in question was executed on April 15, 1961 in the presence of Matilde
Orobia, Celso Gimpaya and Maria Gimpaya signing and witnessing the same in the the will on a
table with Isabel Gabriel, Celso Gimpaya and Maria Gimpaya sitting around the table. Atty.
Paraiso, after finishing the notarial act, then delivered the original to Isabel Gabriel and retained
the other copies for his file and notarial register. A few days following the signing of the will,
Isabel Gabriel, Celso Gimpaya and another photographer arrived at the office of Atty. Paraiso
and told the lawyer that she wanted another picture taken because the first picture did not turn
out good. The lawyer told her that this cannot be done because the will was already signed but
Isabel Gabriel insisted that a picture be taken, so a simulated signing was performed during
which incident Matilde Orobia was not present.
Petitioner's exacerbation centers on the supposed incredibility of the testimonies of the
witnesses for the proponent of the will, their alleged evasions, inconsistencies and
contradictions. But in the case at bar, the three instrumental witnesses who constitute the best
evidence of the will making have testified in favor of the probate of the will. So has the lawyer
who prepared it, one learned in the law and long in the practice thereof, who thereafter notarized
it. All of them are disinterested witnesses who stand to receive no benefit from the testament.
The signatures of the witnesses and the testatrix have been identified on the will and there is no
claim whatsoever and by anyone, much less the petitioner, that they were not genuine. In the
last and final analysis, the herein conflict is factual and we go back to the rule that the Supreme
Court cannot review and revise the findings of facts of the respondent Court of Appeals.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby
AFFIRMED, with costs against the petitioner.
SO ORDERED.
G.R. No. 96453 August 4, 1999
NATIONAL FOOD AUTHORITY, ROSELINDA GERALDEZ, RAMON SARGAN and APELINA
A. YAP, petitioners,
vs.
THE HON. COURT OF APPEALS AND HONGFIL SHIPPING CORPORATION, respondents.
PURISIMA, J.:
At bar is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court of the
Decision,1 of the Court of Appeals which affirmed the decision of Branch 165 of the Regional
Trial Court, Pasig City in Civil Case No. 55892, entitled "Hongfil Shipping Corporation vs.
National Food Authority, Roselinda Geraldez, Ramon Sargan and Adelina A. Yap,"2 ordering the
National Food Authority to pay plaintiff's claim for demurrage and deadfreight.
The facts that matter are undisputed.
National Food Authority (NFA), thru its officers then, Emil Ong, Roselinda Geraldez, Ramon
Sargan and Adelina A. Yap, entered into a "Letter of Agreement for Vessel/Barge Hire" 3 with
Hongfil Shipping Corporation (Hongfil) for the shipment of 200,000 bags of corn grains from
Cagayan de Oro City to Manila, under the following terms and conditions, to wit:
1. Name of Vessel/Barge : MV CHARLIE/DIANE
2. Cargo : Corn grains in bag
3. Quantity : Two Hundred Thousand bags, more or less
4. Loading Port : One Safe Berth at Cagayan de Oro Port
5. Discharging Port : One safe Berth at North Harbor, Manila
6. Laydays (Loading and Unloading) : Customary Quick Dispatch (CQD)
7. Demurrage/Dispatch : None
8. Freight Rate : Seven Pesos 30/100(P7.30) per bar or a total of P1,460,000.00
based on out-turn weight at 50 kilos per bag
9. Payment of Freight : Loading — 25% upon completion of loading; 25% upon
commencement of discharge and balance 15 days after presentation of complete
billing documents subject to usual accounting auditing regulations and procedures.
NFA sent Hongfil a Letter of Advice that its (Hongfil) vessel should proceed to Cagayan de Oro
City. On February 6, 1987, M/V DIANE/CHARLIE of Hongfil arrived in Cagayan de Oro City
1500 hours. Hongfil notified the Provincial Manager of NFA in Cagayan de Oro, Eduardo A.
Mercado, of its said vessel's readiness to load and the latter received the said notification on
February 9, 1987.4
A certification of charging rate was then issued by Gold City Integrated Port Services, Inc.
(INPORT), the arrastre firm in Cagayan de Oro City, which certified that it would take them
(INPORT) seven (7) days, eight (8) hours and forty-three (43) minutes5 to load the 200,000 bags
of NFA corn grains.
On February 10, 1987, loading on the vessel commenced and was terminated on March 4,
1987. As there was a strike staged by the arrastre workers and in view of the refusal of the
striking stevedores to attend to their work, the loading of said corn grains took twenty-one (21)
days, fifteen hours (15) and eighteen (18) minutes to finish.
On March 6, 1987, the NFA Provincial Manager allowed MV CHARLIE/DIANE to depart for the
Port of Manila. On March 11, 1987, the vessel arrived at the Port of Manila and a certification of
discharging rate was issued at the instance of Hongfil, stating that it would take twelve (12) days,
six (6) hours and twenty-two (22) minutes to discharge the 200,000 bags of corn
grains.1âwphi1.nêt
Unfortunately, unloading only commenced on March 15, 1987 and was completed on April 7,
1987. It took a total period of twenty (20) days, fourteen (14) hours and thirty-three (33) minutes
to finish the unloading, due to the unavailability of a berthing space for M/V CHARLIE/DIANE.
After the discharging was completed, NFA paid Hongfil the amount of P1,006,972.11 covering
the shipment of corn grains. Thereafter, Hongfil sent its billing to NFA, claiming payment for
freight covering the shut-out load or deadfreight as well as demurrage, allegedly sustained
during the loading and unloading of subject shipment of corn grains.
When NFA refused to pay the amount reflected in the billing, Hongfil brought an action against
NFA and its officers for recovery of deadfreight and demurrage, docketed, as Civil Case No.
55892 before Branch 165 of the Regional Trial Court in Pasig City.
On February 29, 1989, after trial, the Regional Trial Court handed down its decision6 in favor of
Hongfil and against NFA and its officers, disposing thus:
IN VIEW OF THE FOREGOING, the Court hereby renders judgment in favor of
plaintiff and against the defendants, ordering:
1. defendant National Food Authority, and the public defendants, to pay the
plaintiff the following:
a) P242,367.30, in and as payment of the deadfreight or unloaded
cargo; and
b) P1,152,687.50, in and as payment as of demurrage claim;
2. defendants to pay plaintiff, jointly and severally the amount of
P50,000.00, for and as attorney's fees; and
3. Expenses of litigation or the costs of this suit.
The counterclaim of defendants are hereby dismissed for lack of merit.
SO ORDERED.
On appeal, the Court of Appeals affirmed with modification the judgment by deleting therefrom
the award of attorney's fees.
Undaunted, petitioners have come to this Court via the instant petition for review under Rule 45
of the Revised Rules of Court, raising as issues:
I
WHETHER OR NOT PETITIONERS CAN BE HELD LIABLE FOR DEADFREIGHT;
 II
WHETHER OR NOT PETITIONERS CAN BE HELD LIABLE FOR DEMURRAGE;
AND
III
WHETHER OR NOT PERSONAL CIVIL LIABILITY MAY ATTACH TO THE
OFFICERS OF NFA.
It bears stressing that subject Letter of Agreement is considered a Charter Party. A charter party
is classified into (1) "bareboat" or "demise" charter and (2) contract of affreightment. Subject
contract is one of affreightment, whereby the owner of the vessel leases part or all of its space to
haul goods for others. It is a contract for special service to be rendered by the owner of the
vessel. Under such contract the ship owner retains the possession, command and navigation of
the ship, the charterer or freighter merely having use of the space in the vessel in return for his
payment of the charter hire.7
Anent the first issue, petitioners contend that the respondent corporation is not entitled to
deadfreight as the contract itself limited their liability. Section 7 of the "Letter Agreement for
Vessel/Barge Hire" provided a freight rate of Seven and 30/100 (P7.30) Pesos per bag or a total
of P1,460,000 based on out-turn weight of 50 kilos per bag.
The Court of Appeals, however, held that since the charter of MV CHARLIE/DIANE was for the
whole vessel, and inasmuch as the vessel may no longer accept any other cargo without the
consent of the charterer NFA, the latter is liable to pay the total amount of P1,460,000.00 based
on 200,000 bags, at the rate of P7.30 per bag; in accordance with the "Letter of Agreement for
Vessel/Barge Hire" which stipulated:
xxx xxx xxx
2. Cargo : Corn Grains in Bags
3. Quantity : Two Hundred Thousand Bags, more or less
xxx xxx xxx
7. Freight Rate : Seven Pesos 30/100 (P7.30) per bag or a
total of P1,460,000.00 based on out-turn weight at 50 kilos per bag. (Exh. A)
The submission of petitioners is unsustainable. They theorize that what should be paid for was
what was actually unloaded and not the number of bags of corn grains NFA contracted to load.
Under the law, the cargo not loaded is considered as deadfreight. It is the amount paid by or
recoverable from a charterer of a ship for the portion of the ship's capacity the latter contracted
for but failed to occupy.8 Explicit and succinct is the law that the liability for deadfreight is on the
charterer. The law in point is Article 680 of the Code of Commerce, which provides:
Art. 680. A charterer who does not complete the full cargo he bound himself to ship
shall pay the freightage of the amount he fails to ship, if the captain does not take
other freight to complete the load of the vessel, in which case the first charterer shall
pay the difference, should there be any.
Petitioners anchor their stance on the phrase "200,000 bags, more or less," which, according to
them, meant more than 200,000 or less than 200,000 bags. As what was actually unloaded was
less than 200,000 bags, NFA should only to pay for the freight therefor and not for 200,000
bags; petitioners contend.
Petitioners' contention is untenable. The words "more or less" when used in relation to quantity
or distance, are words of safety and caution, intended to cover some slight or unimportant
inaccuracy. It allows an adjustment to the demands of circumstances which do not weaken or
destroy the statements of distance and quantity when no other guides are available. 9
In fact, it is further disclosed by the evidence that there was a communication from NFA
Administrator Emil Ong to Oscar Sanchez, Manager of Hongfil Shipping Corporation, stating
clearly that the vessel M/V CHARLIE/DIANE was chartered to "load our 200,000 bags corn
grains from Cagayan de Oro to Manila at P7.30 per 50 kg./bag."10 Therefrom, it can be gleaned
unerringly that the charter party was to transport 200,000 bags of corn grains.
It is thus decisively clear that the letter of agreement covered 200,000 bags of corn grains but
only 166,798 bags were unloaded at the Port of Manila. Consequently, shut-out load or
deadfreight of 33,201 bags at P7.30 per bag or P242,367.30 should be paid by NFA to Hongfil
Shipping Corporation.
On the second issue of whether or not petitioner is liable for the payment of demurrage,
petitioners theorize that NFA is not liable for the payment of demurrage since the "Letter of
Agreement for Vessel/Barge Hire" expressly stipulated "Demurrage/Dispatch: NONE."
The Court of Appeals, however, adjudged petitioners liable for demurrage, ratiocinating thus:
As regards the claim for demurrage, the letter of agreement between the parties does
not contain any provision for the amount of demurrage, which is "the sum fixed by the
contract of carriage, or which is allowed, as remuneration to the owner of the ship for
the detention of his vessel beyond the number of days allowed by the charter party for
loading or unloading for sailing (Agbayani, Commercial Laws of the Philippines, Vol.
IV, 1983 ed, p. 243). Nonetheless, despite the absence of an express provision on
demurrage in the agreement, such demurrage may be demanded under the law.
Article 656 of the Code of Commerce provides:
Art. 656. If in the charter party the time in which the loading or unloading are
to take place is not stated, the usages of the port where these acts are to
take place shall be observed. After the stipulated customary period has
passed, and there is no express provision in the charter party fixing the
indemnity for delay, the Captain shall be entitled to demand demurrage for
the lay days and extra lay days which may have elapsed in loading and
unloading. (emphasis supplied).
While the right to demand demurrage is vested in the captain of the vessel, the said
right may very well be exercised by the shipowner appellee which is the principal of
the captain.
 Moreover, while the causes of delay may not be wholly attributable to appellant NFA
(except the old and defective bags or sacks used), the same may not also be blamed
on appellee Hongfil (except the allegedly defective munkcrane).
Incidentally the Office of the Government Corporate Counsel, in its Opinion No. 130,
series of 1987, dated December 9, 1987, which is of persuasive force, opined that
appellant NFA is liable for both deadfreight and demurrage (Exhs. O and P). 11
Demurrage is the sum fixed in a charter party as a remuneration to the owner of the ship for the
detention of his vessel beyond the number of days allowed by the charter party for loading or
unloading or for sailing.12 Liability for demurrage, using the word in its strict technical sense,
exist only when expressly stipulated in the contract.13
In a contract of affreightment, the shipper or charterer merely contracts a vessel to carry its
cargo with the corresponding duty to provide for the berthing space for the loading or unloading.
Charterer is merely required to exercise ordinary diligence in ensuring that a berthing space be
made available for the vessel. The charterer does not make itself an absolute insurer against all
events which cannot be foreseen or are inevitable. The law only requires the exercise of due
diligence on the part of the charterer to scout or look for a berthing space.
Furthermore, considering that subject contract of affreightment contains an express provision
"Demurrage/Dispatch: NONE," the same left the parties with no other recourse but to apply the
literal meaning of such stipulation. The cardinal rule is that where, as in this case, the terms of
the contract are clear and leave no doubt over the intention of the contracting parties, the literal
meaning of its stipulations is controlling.17

The provision "Demurrage/Dispatch: NONE" can be interpreted as a waiver by Hongfil of the

Shipper or charterer is liable for the payment of demurrage claims when he exceeds the period
right to claim for demurrages. Waiver is a renunciation of what has been established in favor of
for loading or unloading as agreed upon or the agreed "laydays". The period for such may or
one or for his benefit, because he prejudices nobody thereby; if he suffers loss, he is the one to
may not be stipulated in the contract.14 A charter party may either provide for a fixed laydays or
blame.18 As Hongfil freely entered into subject charter party which providing for
contain general or indefinite words such as "customary quick dispatch" or "as fast as the
"Demurrage/Dispatch: NONE," it cannot escape the inevitable consequence of its inability to
steamer can load."
collect demurrage. Well-settled is the doctrine that a contract between parties which is not
contrary to law, morals, good customs, public order or public policy, is the law binding on both of
In the case under scrutiny, the charter party provides merely for a general or indefinite words of them.19
"customary quick dispatch."
On the issue of whether personal civil liability may attach to the officers of NFA, the court rules in
The stipulation "Laydays (Loading and Unloading): Customary Quick Dispatch" implies that the negative.
loading and unloading of the cargo should be within a reasonable period of time. Due diligence
should be exercised according to the customs and usages of the port or ports of call. The
In the case of MAM Realty vs. NLRC,20 the Court held that a corporation, being a juridical entity,
circumstances obtaining at the time of loading and unloading are to be taken into account in the
may act only through its officers, directors and employees. Obligations incurred or contracted by
determination of "Customary Quick Dispatch."15
them, acting as such corporate agents, are not theirs but the direct accountability of the
corporation they represent.
What is a reasonable time depends on the existing as opposed to normal circumstances, at the
port of loading and the custom of the port.16
The exceptions wherein personal civil liability may attach to a corporate officer are:

While what was certified to by the arrastre did not tally with the actual period of loading and
1. When directors and trustees or, in appropriate cases, the officers of a corporation
unloading, it appears that the cause of delay was not imputable to either of the parties. The
—
cause of delay during the loading was the strike staged by the crew of the arrastre operator, and
the unavailability of a berthing space for the vessel during the unloading. The lack of a berthing
space was understandable under the circumstances since the North Harbor in Manila, where the a. vote for or assent to patently unlawful acts of the corporation;
unloading took place, is a large port but there was congestion due to the number of ships or
vessels which were all waiting to dock.
b. act in bad faith or with gross negligence in directing the corporate affairs;

Delay in loading or unloading, to be deemed as a demurrage, runs against the charterer as soon
c. are guilty of conflict of interest to the prejudice of the corporation, its
as the vessel is detained for an unreasonable length of time from the arrival of the vessel
stockholders or members, and other persons.
because no available berthing space was provided for the vessel due to the negligence of the
charterer or by reason of circumstances caused by the fault of the charterer.
2. When a director or officer has consented to the issuance of watered stocks, or who,
having knowledge thereof, did not forth with file with the corporate secretary his written
In the present case, charterer NFA could not be held liable for demurrage for the delay resulting
objection thereto.
from the aforementioned circumstances. The provision "Laydays: Customary Quick Dispatch"
invoked by Hongfil is unavailing as a basis for requiring the charterer to pay for demurrage
absent convincing proof that the time for the loading or unloading in question was beyond the 3. When a director, trustee or officer has contractually agreed or stipulated to hold
"reasonable time" within the contemplation of the charter party. Here, the Court holds that the himself personally and solidarily liable with the corporation.
delay sued upon was still within the "reasonable time" embraced in the stipulation of "Customary
Quick Dispatch."
4. When a director, trustee or officer is made, by specific provision of law, personally
liable for his corporate action.21 (emphasis supplied)
The present case under scrutiny does not fall under any of such exceptions. A careful perusal of
the contract litigated upon reveals that the petitioners, as officers of NFA, did not bind
themselves to be personally liable nor did they ink any undertaking that should NFA fail to pay
Hongfil's claims, they would be personally liable. Hongfil has not cited any provision of law under
which the officers of NFA are liable under the contract entered into.
What is more, there is nothing on record to show that the petitioner-officers acted in bad faith or
were guilty of gross negligence, to warrant personal liability. Neither the trial court nor the Court
of Appeals found of bad faith or gross negligence on the part of the said officers of NFA.
Bad faith or negligence is a question of fact and is evidentiary. It has been held that "bad faith
does not simply mean bad judgment or negligence; it imparts a dishonest purpose or some
moral obliquity and conscious doing of wrong. It means a breach of a known duty through some
motive or interest or ill-will; it partakes of the nature of fraud.22
As regards the deletion by the Court of Appeals of the attorney's fees awarded below, the same
is upheld, absent any factual and legal basis therefor.
WHEREFORE, the decision of the Court of Appeals, dated November 29, 1990, in CA G.R. CV
No. 21243 is hereby AFFIRMED with MODIFICATION. Petitioner NFA is ordered to pay Hongfil
Shipping Corporation the amount of P242,367.30 for deadfreight. The award of P1,152,687.50
for demurrage is deleted and set aside for lack of proper basis.
Petitioners Roselinda Geraldez, Ramon Sargan and Adelina A. Yap are absolved of any liability
to the respondent corporation.1âwphi1.nêt
No pronouncement as to costs.
SO ORDERED.
G.R. No. L-33146 May 31, 1977
THE COMMISSIONER OF CUSTOMS, and THE COLLECTOR OF CUSTOMS, petitioners,
vs.
HON. PEDRO C. NAVARRO, Judge of the Court of First Instance of Rizal, Branch II (Pasig,
Rizal), and JUANITO S. FLORES, doing business under the name and style of JS. F.
ENTERPRISES and ASIATIC INCORPORATED, represented by EUGENIO
VILLANUEVA, respondents.
Solicitor General Felix Q. Antonio, Assistant Solicitor General Conrado T. Limcaoco, Solicitor
Jaime M. Lantin and Special Attorney Vicente M. Asuncion for petitioner.
Ledesma, Saludo & Associates for private respondent.
FERNANDO, J.:
The stress, and rightly so, by the Commissioner of Customs and the Collector of Customs in
their exhaustive and scholarly petition for certiorari, filed on February 11, 1971, was on the
jurisdictional issue. It sought to nullify and set aside order 1 of respondent Judge Pedro C.
Navarro 2 dated January 4, 1971, issuing a writ of preliminary injunction as prayed for by private
respondents Juanito S. Flores and Asiatic Incorporated the importers of 1,350 cartons of fresh
fruits, restraining petitioners from proceeding with the auction sale of such perishable goods.
Classified as non-essential consumer commodities, they were banned by Central Bank Circulars
Nos. 289, 294 and 295 as prohibited importation or importation contrary to law and thus made
subject to forfeiture proceedings by petitioner Collector of Customs pursuant to the relevant
sections of the Tariff and Customs Code.3 In a detailed and specific fashion, petitioners pointed
out how violative was the assumption of jurisdiction by respondent Judge over an incident of a
pending seizure and forfeiture proceeding which, as held in a number of decisions, was a matter
falling within the exclusive competence of the customs authorities. The persuasive character of
the petition is thus evident, resulting in this Court issuing on February 15, 1971 a resolution
requiring respondents to file an answer and at the same time issuing a writ of preliminary
injunction as prayed for by petitioners to prevent the challenged order of respondent Judge from
being implemented. Instead of preparing an answer, they just submitted a manifestation stating
that "after an intensive and serious study of the merit of the case, the respondents have decided
to abandon its interest in the case." 4 The rationale behind such a move was ostensibly the
desire to avoid additional expenses, in view of the fact that "the shipments, being perishable,
have already deteriorated." 5 It is difficult to avoid the suspicion that the real reason was that the
points of law raised by petitioners could not be refuted. Private respondents concluded with a
statement of "their intention of not filing an answer to the instant petition and respectfully
[submitting] the case on the basis of the pleadings made before the lower court. " 6
It does not require too much of an effort then to ascertain the applicable legal principles that
should govern. The inescapable conclusion is that the petition possesses merit. certiorari lies.
1. The question of seizure and forfeiture is for the administrative in the first instance and then the
Commissioner of Customs. This is a field where the doctrine of primary jurisdiction controls.
Thereafter an appeal may be taken to the Court of Tax Appeals. A court of first instance is thus
devoid of competence to act on the matter. There is further judicial review, but only by this Court
in the exercise of its certiorari jurisdiction. More specifically, in Pascual v. Commissioner of
Customs,7 a 1959 decision, this Court affirmed a judgment of the Court of Tax Appeals and
categorically announced that respondent Commissioner of Customs could "seize [the
importation of goods lacking the release certificates of the Central Bank] and order their
forfeiture under the [appropriate] provisions of the Revised Administrative Code." 8 Such a
doctrine was reiterated in Commissioner of Customs v. Serree Investment
Company;9 Commissioner of Customs v. Eastern Sea Trading Co.;10 Commissioner of Customs
v. Santos;11 Commissioner of Customs v. Nepomuceno;12 Pascual v. Commissioner of
Customs;13 Serree Investment Co. v. Commissioner of Customs;14 Bombay Dept. Store v.
Commissioner of Customs;15 Yupangco and Sons v. Collector of Customs;16 Chan Kian v.
Collector of Customs;17 Capulong v. Aseron;18 Lazaro v. Commissioner of Customs;19 Capulong
v. Acting Commissioner of Customs;20 Gigare v. Commissioner of Customs.21
That such jurisdiction of the customs authorities is exclusive was made clear in Pacis v.
Averia,22 decided in 1966. This Court, speaking through Justice J. P. Bengzon, realistically
observed: "This original jurisdiction of the Court of First Instance, when exercised in an action for
recovery of personal property which is a subject of a forfeiture proceeding in the Bureau of
Customs, tends to encroach upon, and to render futile, the jurisdiction of the Collector of
Customs in seizure and forfeiture proceedings."23 The court "should yield to the jurisdiction of the
Collector of Customs."24 Such a ruling, as pointed out by Justice Zaldivar in Auyong Hian v.
Court of Tax Appeals,25 promulgated less than a year later, could be traced to Government v.
Gale,26 a 1913 decision, where there was a recognition in the opinion of Justice Carson that a
Collector of Customs when sitting in forfeiture proceedings constitutes a tribunal upon which the
law expressly confers jurisdiction to hear and determine all questions touching the forfeiture and
further disposition of the subject matter of such proceedings.27
The controlling principle was set forth anew in Ponce Enrile v. Vinuya,28 decided in 1971. Thus:
"The prevailing doctrine is that the exclusive jurisdiction in seizure and forfeiture cases vested in
the Collector of Customs precludes a court of first instance from assuming cognizance over such
a matter."29 Reference was then made in the opinion to previous cases.30 Then it continued:
"Papa v. Mago likewise deserves to be cited. The opinion of Justice Zaldivar for the Court
emphatically asserted the doctrine anew in the following language: 'It is the settled rule,
therefore, that the Bureau of Customs acquires exclusive jurisdiction over imported goods, for
the purposes of enforcement of the customs laws, from the moment the goods are actually in its
possession or control, even if no warrant of seizure or detention had previously been issued by
the Collector of Customs in connection with seizure and forfeiture proceedings. In the present
case, the Bureau of Customs actually seized the goods in question on November 4, 1966, and
so from that date the Bureau of Customs acquired jurisdiction over the goods for the purposes of
the enforcement of the tariff and customs laws, to the exclusion of the regular courts. Much less
then would the Court of First Instance of Manila have jurisdiction over the goods in question after
the Collector of Customs had issued the warrant of seizure and detention on January 12, 1967,
And so, it cannot be said, as respondents contend, that the issuance of said warrant was only an
attempt to divest the respondent Judge of jurisdiction over the subject matter of the case. The
court presided by respondent Judge did not acquire jurisdiction over the goods in question when
the petition for mandamus was filed before it, and so there was no need of divesting it of
jurisdiction. Not having acquired jurisdiction over the goods, it follows that the Court of First
Instance of Manila had no jurisdiction to issue the questioned order of March 7, 1967 releasing
said goods."31 Lopez v. Commissioner of Customs,32 as well as Luna v. Pacis,33 both 1971
decisions, speak to the same effect. The latest categorical declaration of such a rule appears in
the opinion of Justice Teehankee, speaking for the Court, in Seneres v. Frias 34 in these words:
"It is the settled law and jurisprudence in this jurisdiction that the customs authorities acquire
exclusive jurisdiction over goods sought to be imported into the Philippines, for the purpose of
enforcement of Philippine customs laws, from the moment the goods are actually under their
possession and control, even if no warrant for seizure or detention thereof has previously been
issued by the port collector of customs."35
2. The petition did not ignore the due process aspect which appeared to have bothered
respondent Judge. It was pointed out that in ordering the sale at public auction of the fruits in
question, considering their perishable character, petitioners acted in accordance with section
2607 of the Tariff and Customs Code. Insofar as pertinent, it reads: "When seizure shall be
made of property which, in the opinion of the Collector, is liable to perish or be wasted or to
depreciate greatly in value by keeping, or which cannot be kept without great disproportionate
expense, whether such property consists of live animals or of any article, the appraiser shall be
certify in his appraisal, then the Collector may proceed to advertise and sell the same of auction,
upon notice as he shall deem to be reasonable." 36 There was a literal adherence to the
procedure above set forth. The proper advertisement to sell the perishable goods of auction was
made. That was the notice required by the statute. Private respondents as the importers could
not have been unaware that such step was contemplated. The law expects them to have that
requisite degree of interest in what was happening. There is nothing unreasonable in such an
assumption. It would be futile to assert therefore that there was a denial of due process unless
the above section is considered null precisely on that ground. No attempt was made by private
respondents to impugn its validity. Perhaps it is because of the realization that it would be futile.
There is nothing arbitrary or unfair, the earmarks of a denial of due process, for the Collector to
order the sale at public auction upon notice as he shall deem to be reasonable of a commodity in
their nature perishable. That is the only way to safeguard during the pendency of a seizure and
forfeiture proceeding the rights of both the government and even the persons responsible for the
importation. That way, if the illegality of the importation is not shown and forfeiture is not
ordered, the proceeds could be turned over to the importer. If it were otherwise, he would be
deprived of property that is his, and that would be a denial of due process. What negates any
assertion of. such an infringement of a constitutional right is the admitted and undeniable fact
that the :Importation in question is banned by the applicable Central Bank circulars. Petitioners
therefore had no choice except to proceed in accordance with the mandatory provisions of the
Customs and Tariff Code.
3. The petition likewise took pains to point out that the reliance by respondent Judge
on Commissioner of Customs v. Alikpala 37 was misplaced. In that 1970 decision, this Court,
recognizing that the judiciary in the Philippines is vested with both legal and equitable powers,
did not deem it proper to set aside an injunction issued by the lower court addressed to the
customs authorities to stop the sale at public auction of imported fruits. There was thus a
semblance of similarity. A closer examination would reveal that the analogy is more apparent
than real. The case could be easily distinguished. All that is necessary is to refer to the opinion
of former Chief Justice Makalintal in the Alikpala decision: "The warrants of seizure were issued
in view of Central Bank Circulars Nos. 294 and 295, promulgated on March 10 and 20, 1970,
respectively, which provide that 'no- dollar imports not covered by Circular No. 247 shall not be
issued any release certificates and shall be referred to the Central Bank for official transmittal to
the Bureau of Customs for appropriate seizure proceedings. Evidently, in the opinion of the
Collector of Customs himself, even in the light of those circulars there exists no legal impediment
to the release of the subject importations under bond, otherwise he would not have agreed
thereto, although he changed his requirement from surety bond to cash. In any case, as pointed
out by private respondents, the said importations had been ordered before Central Bank
Circulars 294 and 295 were promulgated, and since, the orders were made in accordance with
previous practice there could be no bad faith or intent to violate those circulars." 38 Unfortunately,
in this case respondent Judge missed those significant distinctions. The importation in question
was clearly violative of the above Circulars Nos. 289, 294 and 295. Also petitioner Collector of
Customs in this case was, in accordance with law, definitely opposed to the release of the
importation in question. He could not have authorized it without being held liable for violating the
Tariff and Customs Code and the applicable doctrines of this Court previously cited. It may be
said further on this point that the Alikpala decision is the only one of its kind and has not since
been followed. As a matter of fact, the previously cited Seneres decision did set aside a
preliminary injunction issued by respondent Judge and did chide in vigorous and vehement
language the assumption of jurisdiction by the lower court when respect for the controlling
doctrines ought to have cautioned him against the issuance of a preliminary injunction. In the
even later case of Pacis v. Geronimo,39 a writ of preliminary injunction likewise issued by the
respondent Judge in a pending seizure and forfeiture proceeding was annulled by this Court,
again on the precise ground of manifest lack of jurisdiction. The petition therefore did not
exaggerate matters when it emphasized that respondent Judge, in issuing the writ of preliminary
injunction sought to be nullified, acted in a manner contrary to and in violation of the law,
assuming jurisdiction over a matter beyond his competence.
WHEREFORE, the writ of certiorari is granted and the order of respondent Judge of January 4,
1971 nullified and set aside. The preliminary injunction issued by this Court in its resolution of
February 15, 1971 against the enforcement of the above order is made permanent. Respondent
Judge, or whoever is acting in his place and in his stead, is ordered to dismiss Civil Case No.
14178 of Branch II of the Court of First Instance of Rizal, entitled Juanito S. Flores, doing
business under the name and style of J.S.F. Enterprises and Asiatic Incorporated v. the
Commissioner of Customs and the Collector of Customs. Costs against private respondents.
Separate Opinions
BARREDO, J., concurring:
Only because private respondents have submitted the case on the basis of the pleadings below,
otherwise, since they have lost interest, We could have issued a brief resolution.
G.R. No. L-12944 March 30, 1959
MARIA NATIVIDAD VDA. DE TAN, petitioner-appellee,
vs.
VETERANS BACKPAY COMMISSION, respondent-appellant.
Atilano R. Cinco and Aguilan and Rosero Law Offices for appellee.
Acting Solicitor General Guillermo E. Torres and Solicitor Camilo D. Quiason for appellant.
REYES, J.B.L., J.:
On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the Court of First
Instance of Manila a verified petition for mandamus seeking an order to compel the respondent-
appellant Veterans Back Pay Commission: (1) to declare deceased Lt. Tan Chiat Bee alias Tan
Lian Lay, a Chinese national, entitled to backpay rights, privileges, and prerogatives under
Republic Act No. 304, as amended by Republic Act No. 897; and (2) to give due course to the
claim of petitioner, as the widow of the said veterans, by issuing to her the corresponding
backpay certificate of indebtedness.
Respondent Commission filed its answer in due time asserting certain special and affirmative
defenses, on the basis of which, the Commission unsuccessfully moved to dismiss the petition.
Volunteers in the Philippines apprising the latter that the Commission has reaffirmed
its resolution granting the back pay to alien members;
7. That the Adjutant, Armed Forces of the Philippines, has verified and certified that
deceased veteran has rendered service as a recognized guerrilla for the period
indicated in his •(Adjutant's) indorsement to the Chief, Finance Service Armed Forces
of the Philippines;
8. That, likewise, the Chief of Finance Service, Camp Murphy, has computed the
backpay due the petitioner and the same was passed in audit by representatives of
the Auditor General;
9. That after due liberation respondent revoked its previous stands and ruled that
aliens are not entitled to back pay;
10. That on February 13, 1957, the respondent Veterans Back Pay Commission,
through its Secretary & Chief of Office Staff, made a formal reply to the aforesaid
claim of the herein petitioner denying her request on the ground that aliens are not
entitled to back pay;

The parties then submitted a stipulation of facts hereinbelow reproduced:
Come now the petitioner and respondent in the above-entitled case through their
respective counsel, and to this Honorable Court respectfully agree and stipulate that
the following facts are true:
11. That upon refusal of the Veterans Back Pay Commission the petitioner brought the
case direct to this Honorable Court by way of mandamus;
12. That petitioner and respondent admit the existence and authenticity of the
following documents;

1. That the petitioner is of legal age, widow, and a resident of •400 Lallana, Tondo, Annex A—Resolution of the Veterans Back Pay dated November 19, 1953.
Manila; that the respondent is a government instrumentality or agency, with offices in
the City of Manila, Philippines, duly vested with authority to implement the provisions
Annex B—Letter dated December 9, 1953.
of the Backpay Law, otherwise known as Republic Act No. 879, further amending
Republic Act No. 304;
Annex C—Letter dated June 18, 1955.
2. That the petitioner is the widow of the late Lt. Tan Chiat Bee alias Tan Lian Lay, a
Chinese national, and a bona fide member of the 1st Regiment, United States- Annex D—Executive Order No. 21 dated October 28, 1944.
Chinese Volunteers in the Philippines;
Annex E—Executive Order No. 68 dated September 26, 1945.
3. That the United States-Chinese Volunteers in the Philippines is a guerrilla
organization duly recognized by the Army of the United States and forming part and
parcel of the Philippine Army; Annex F—Minutes of the Resolution of the Back Pay Commission regarding the
opinion of the Secretary of Justice dated February 8, 1956.

4. That Tan Chiat Bee alias Tan Lian Lay died in the service on April 4, 1945 in the
battle at Ipo Dam, Rizal Province, Philippines; he was duly recognized as a guerrilla Annex G—Letter of Back Pay Commission dated February 26, 1954 to Secretary of
Justice.
veteran and certified to by the Armed Forces of the Philippines as having rendered
meritorious military services during the Japanese occupation;
Annex H—Opinion No. 213 series of 1956 of the Secretary of Justice.
5. That petitioner as the widow of the said recognized deceased veteran, filed an
application for back pay under the provisions of Republic Act No. 897, the resolution of Annex I—Reply of Veterans Backpay Commission.
the Veterans Back Pay Commissions dated November 19, 1953 and the letter of the
Veterans Back Pay Commission dated December 9, 1953;
Annex J—Explanatory Note to House Bill No. 1953.

6. That on June 18, 1955, the Secretary and the Chief of Office Staff of Veterans Back
Pay Commission sent a letter to General Vicente Lopez of the United States-Chinese Annex K—Explanatory note to Senate Bill No. 10.
 Annex L—Explanatory note to House Bill No. 1228, now Republic Act No. 897.
Annex M—Joint Resolution No. 5 of the First Congress of the Philippines.
13. That the parties waive the presentation of further evidence;
14. That the respondents will file its memorandum within ten (10) days from August 1,
1957 and the petitioner may file her memorandum within ten (10) days from receipt of
respondent's memorandum, after which the case is deemed submitted for decision.
Manila, July 31, 1957.
Based on the foregoing, the lower court rendered judgment the dispositive portion of which,
reads:
Wherefore, the petition is granted, ordering respondent Commission to give due
course to the claim of herein petitioner to the backpay to which her deceased husband
was entitled as member of a duly recognized guerrilla organization.
Against the decision, the respondent instituted this appeal averring once more, in its assignment
of errors, the special and affirmative defenses that the petitioner failed to exhaust available
administrative remedies; that the suit is, in effect, an action to enforce a money claim against the
government without its consent; that mandamus will not lie to compel the exercise of •a
discretionary function; and that the Republic Act Nos. 304 and •897 already referred to were
never intended to benefit aliens.
We find no merit in the appeal. As to the claim that mandamus is not the proper remedy to
correct the exercise of discretion of the Commission, it may well be remembered that its
discretion is limited to the facts of the case, i.e., in merely evaluating the evidence whether or not
the claimant is a member of a guerrilla force duly recognized by the United States Army.
Nowhere in the law is the respondent Commission given the power to adjudicate or determine
rights after such facts are established. Having been satisfied that deceased Tan Chiat Bee was
an officer of a duly recognized guerrilla outfit, certified to by the Armed Forces of the Philippines,
having served under the United States-Chinese Volunteers in the Philippines, a guerrilla unit
recognized by the United States army and forming part of the Philippine Army, it becomes
the ministerial duty of the respondent to give due course to his widow's application. (See
sections 1 and 6, Republic Act •897). Note that the Chief of the Finance Service, Camp Murphy,
has accepted the backpay due the petitioner's husband and the same was passed in audit by
the representatives of the Auditor General.
It is insisted by the respondent Commission that aliens are not included within the purview of the
law. We disagree. The law is contained in Republic Act Nos. 304 and 897 is explicit enough, and
it extends its benefits to members of "guerrilla forces duly recognized by the Army of the United
States." From the plain and clear language thereof, we fail to see any indication that its
operation should be limited to citizens of the Philippines only, for all that is required is that the
guerrilla unit be duly recognized by the Army of the United States. We are in full accord with
Opinion No. 213, series of 1956, of the Secretary of Justice, which reads:
Section 1 of the cited Act (Republic act No. 304, as amended by Republic Act No.
897), otherwise known as the Back Pay Law, recognizes the rights to the backpay of
members of "guerrilla forces duly recognized by the Army of the United States, among
others. A perusal of its provisions reveals nothing which may be construed to mean
that only Filipino citizens are entitled to back pay thereunder. On the contrary, the
statute expressly includes within its coverage "persons under contract with the
Government of the Commonwealth", which clause was construed by this office to refer
to service" by the government (Opinion No. •137, s. 1953), a majority of whom were
non-citizens. Thus, the Opinion No. 30, s. 1949, this office ruled that a civil service
employee of the U.S. Coast and Geodetic Survey rendering the service to the
Philippine Government when war broke out on December 8, 1941, was entitled to
back pay.
As regards guerrillas, it seems clear that all the law requires is that they be "duly
recognized by the Army of the United States." Section 1 of the Back Pay Law, it is also
noted, enumerates those who are not entitled to its benefits; recognized guerrillas who
were not Filipino citizens are not among those expressly mentioned. The
maxim expressio unius est exclusio alterius, I think, finds application here.
Moreover, Executive Order No. 21, dated October 28, 1944, expressly declared that,
Sections 22 (a) and 27 of Commonwealth Act No. 1 to the contrary notwithstanding,
"all persons of any nationality or citizenship, who are actively serving in recognized
military forces in the Philippines, are thereby considered to be on active service in the
Philippine Army."
It is the respondent's main argument that it could not have been the intention of Congress to
extend its benefit to aliens, as the purpose of the law was "precisely to help rehabilitate
members of the Armed Forces of the Philippines and recognized guerrillas by giving them the
right to acquire public lands and public property by using the back pay certificate", and "it is
fundamental under the Constitution that aliens except American citizens cannot acquire public
lands or exploit our natural resources". Respondent Commission fails to realize that this is just
one of the various uses of the certificate; and that it may also be utilized for the payment of
obligations to the Government or to any of its branches or instrumentalities, i.e., taxes,
government hospital bills, etc. (See Sec. 2, Rep. act No. 897).
As further observed by the lower court:
It is one thing to be entitled to backpay and to receive acknowledgment therefor, and
another thing to receive backpay certificates in accordance with the resolutions of the
Commission and to make use of the same.
It was, therefore, unreasonable if not arbitrary on the part of respondent Commission to deny
petitioner's claim on the basis.
It is further contended by the Commission that the petitioner should have first exhausted her
administrative remedies by appealing to the President of the Philippines, and that her failure to
do so is a bar to her action in court (Montes vs. The Civil Service Board of Appeals, 101 Phil.,
490; 54 Off. Gaz. [7] 2174. The respondent Commission is in estoppel to invoke this rule,
considering that in its resolution (Annex F of the Stipulation of Facts) reiterating its obstinate
refusal to abide by the opinion of the Secretary of Justice, who is the legal adviser of the
Executive Department, the Commission declared that —
The opinions promulgated by the Secretary of Justice are advisory in nature, which
may either be accepted or ignored by the office seeking the opinion, and any
aggrieved party has the court for recourse, (Annex F)
thereby leading the petitioner to conclude that only a final judicial ruling in her favor would be
accepted by the Commission.
Neither is there substance in the contention that the petition is, in effect, a suit against the
government without its consent. the relief prayed for is simply "the recognition of the petitioner-
appellee" under the provisions of sections 1 and 2 of Republic Act No. 897, and consists in
"directing an agency of the government to perform an act . . . it is bound to perform." Republic
Act Nos. 304 and 897 necessarily embody state consent to an action against the officers
entrusted with the implementation of said Acts in case of unjustified refusal to recognize the
rights of proper applicants.
The decision appealed from should be, and hereby is, affirmed. No costs. So ordered.
G.R. No. 140920. November 19, 2001
JUAN LORENZO B. BORDALLO, RESTITUTO G. DE CASTRO and NOEL G.
OLARTE, Petitioners, v. THE PROFESSIONAL REGULATIONS COMMISSION and THE
BOARD OF MARINE DECK OFFICERS, Respondents.
DECISION
KAPUNAN, J.:
On February 24, 1998, President Fidel V. Ramos approved Republic Act No. 8544, entitled An
Act Regulating the Practice of the Merchant Marine Profession in the Philippines, otherwise
known as the Philippine Merchant Marine Officers Act of 1998. The law took effect on March 25,
1998, after fifteen (15) days following its publication in the Malaya. 1cräläwvirtualibräry
Section 2 of R.A. No. 8544 declares it the policy of the State to institutionalize radical changes
as required by international and national standards to insure that only qualified, competent and
globally competitive Marine Deck/Engineer Officers as determined through licensure
examinations shall be allowed entry to the practice of the Merchant Marine profession. The law
provides for, and governs, among others, the examination, registration and issuance of
Certificate of Competency to Merchant Marine Officers. 2 Article V (Examination, Registration
and Certificate of Competency) of the law contains provisions requiring examinations (Section
13), prescribing qualifications of applicants for examination (Section 14) and defining the scope
of the examination (Section 15). In addition, Section 17 lays down the requirements for an
examinee to be qualified as having passed the examination:
Rating in the Board Examinations. To be qualified as having passed the board examination for
Marine Deck/Engineer Officer, a candidate must obtain a weighted general average of seventy
percent (70%), with no grade lower than sixty percent (60%) in any given subject. An examinee
who obtains a weighted general average rating of seventy (70%) but obtains a rating below sixty
percent (60%) in any given subject must take the examination in the subject or subjects where
he obtained a grade below sixty percent (60%).
Significantly, the passing rating prescribed by the above provision (70%) is lower than that
prescribed by Presidential Decree No. 97 (Regulating the Practice of the Marine Professions in
the Philippines), otherwise known as the Philippine Merchant Marine Officers Law. Section 9
thereof sets a passing rating of seventy-five percent (75%) thus:
Examination rating. An examinee having obtained a general weighted average of seventy-five
per cent or above with no rating below 60% in any subject; Provided, however, any examinee
failing to get the general weighted average of seventy-five per cent shall be required to take a re-
examination in all the subjects prescribed by the Board.
R.A. No. 8544 also provides for the creation of the Board of Marine Desk Officers. Among the
Boards powers and duties, as set forth in Section 10, are:
xxx
(k) In accordance with the STCW 78 Convention and its amendments, to prepare, adopt and
issue the syllabi of the subjects for examinations by determining and preparing the questions
which shall strictly be within the scope of the syllabus of the subjects for examination;
(l) To promulgate, administer and enforce rules and regulations necessary for carrying out the
provisions of this Act, in accordance with the charter of the Professional Regulation Commission
and the STCW 78 Convention, as amended: Provided, That in case of subsequent or future
amendments to any international convention(s)/conference of which the Philippines is a
signatory, the Board is empowered to amend/revise its rules and regulations to conform with the
amendments of said convention(s) without the need of amending this enabling Act;
xxx
The Board is also empowered to adopt and promulgate the laws Implementing Rules and
Regulations:
SEC. 34. Implementing Rules and Regulations. Subject to the approval of the commission, the
Board shall adopt and promulgate such rules and regulations, including the Code of Ethics for
Marine Deck/Engineer Officers, to carry out the provisions of this Act, which shall be effective
after thirty (30) days following their publication in the Official Gazette or in a major daily
newspaper of general circulation.
On April 25, 26 and 27, 1998, respondent Board of Marine Deck Officers conducted the
examination for deck officers. Petitioner Juan Lorenzo Bordallo took the examination for Chief
Mate, petitioner Restituto de Castro for Second Mate, and petitioner Noel Olarte for Third Mate.
At that time, the Board had not yet issued the syllabi and the rules and regulations pursuant to
Republic Act No. 8455.
Subsequently, petitioners received notices from respondent Professional Regulatory
Commission (PRC) that they failed in their respective examinations. Petitioners secured
certifications from the PRC their respective ratings. None of the petitioners obtained a general
weighted average of 75%, although all of them had general weighted averages of more than
70%. None of them had a rating of less than 60% in any of the subjects.
On May 21, 1998, petitioners filed a petition before the Board of Marine Deck Officers claiming
that, in accordance with Section 17 of R.A. No. 8544, they should be considered as having
passed the April 1998 Examination for Deck Officers.
In the meantime, the PRC issued in relation to the July 1998 examinations PRC Resolution No.
569, Series of 1998, stating:
Considering that the syllabi of the subjects for examination have not as yet been prepared,
adopted and issued pursuant to Section 10(k) in relation to Section 16 of R.A. No. 8544, the
Boards for Marine Deck and Engine Officers shall issue programs of examinations which shall
contain the subjects for examination and considering, further, that the weights of the subjects for
examination remain the same, the grading system adopted by the Boards under P.D. No. 97
shall continue to be used in the said examinations.
The Board, on June 9, 1998, promulgated Board Resolution No. 1, Series of 1998 (the Rules
and Regulations Implementing Republic Act No. 8544). 3cräläwvirtualibräry
On January 22, 1999, the Board of Marine Deck Officers issued an Order denying the petition,
ratiocinating:
The Board is guided by a directive issued by the Professional Regulation Commission under
PRC Resolution No. 569, Series of 1998, x x x.
xxx
While, admittedly, the above-quoted Resolution was issued for the licensure examinations given
in July 1998, subsequent to the licensure examination taken by petitioners, it undoubtedly
applies to the previous examination given in April 1998.
Republic Act No. 8455 may have been given effect, under its own provisions, after fifteen [15]
days following its publication in the Official Gazette or in any major newspaper of general
circulation, whichever comes earlier. However, the same law allows time for transition between
the former Philippine Merchant Marine Officers Law (Presidential Decree No. 97), and the
current Philippine Merchant Marine Officers Act of 1998 (Republic Act No. 8544). This is the
tenor of PRC Resolution No. 569, which also states that [](t)he present Boards for Marine Deck
and Engine Officers which where created under P.D. No. 97 are allowed to []continue to function
in the interim until such time as the new Boards shall be duly constituted[] under Section 33 (2)
of R.A. 8544.[]
Aside from the directive given under PRC Resolution No. 569, the non-adoption of the new
rating was also premised on the fact that the Implementing Rules and Regulations promulgated
by the Board was not yet effective during the licensure examinations given in April 1998 and July
1998. The new rating system under the new law was only implemented in the licensure
examinations given in October 1998.4cräläwvirtualibräry
rule on exhaustion of administrative remedies is not absolute but admits of exceptions. One of
these exceptions is when the question is purely legal, 6 such as the one presented in the case at
bar. The failure of petitioners to appeal to the PRC, therefore, is not fatal to petitioners cause.
Second, the Court of Appeals held that even if it disregarded the inappropriateness of Petitioners
recourse, the ratings provided for in [Section 17 of] Republic Act 8544 cannot be applied.
According to said court, [t]he approval of the Rules and Regulations implementing Republic Act
8544 [pursuant to Section 10 (l)] and the requisite syllabi [under Section 10 (k)] are conditions
sine qua non for the application of Section 17. As these conditions were not satisfied at the time
petitioners took the examination, they cannot be deemed to have passed the same.
The flaw in both the rulings of the Board of Marine Deck Officers and the Court of Appeals is that
they apply the passing rating decreed by P.D. No. 97 even when the latter had already lost its
effectivity, having been expressly repealed by Section 38 of R.A. No. 8544, thus:
SEC. 38. Repealing Clause. Presidential Decree No. 97, as amended, and all other laws,
decrees, executive orders, rules and regulations and other administrative issuances and parts
thereof which are inconsistent with the provisions of this Act are hereby repealed.
Upon the effectivity of the repealing statute, R.A. No. 8544, the repealed statute, P.D. No. 97, in
regard to its operative effect, is considered as if it had never existed. Courts, or administrative
agencies for that matter, have no power to perpetuate a rule of law that the legislature has
repealed. 7cräläwvirtualibräry
The Board rationalized its application of the 75% passing rating under P.D. No. 97 on the ground
that the syllabi 8 of the subjects had not yet been prepared, adopted and issued and the
implementing rules and regulations had not been promulgated. The Boards predicament is
understandable, considering that the law had just taken effect on March 25, 1998 and the
examination was scheduled to take place on April 25, 26 and 27, 1998. It would appear to us,
however, that the solution was to postpone the examination rather than to apply a law that had
already been rendered non-existent. 9cräläwvirtualibräry

Petitioners received a copy of the Boards Order on February 9, 1999. On February 25, 1999,
Neither is there anything in Section 33 (2), R.A. No. 8544 that justifies the Boards action. Said
petitioners filed before the Court of Appeals a petition for mandamus, naming the PRC and the
provision simply reads:
Board of Marine Deck Officers as respondents. The Court of Appeals, however, denied the
petition, prompting petitioners to seek relief in this Court.
SEC. 33. Transitory Provision.
The Court of Appeals denied the petition on two grounds. First, petitioners did not appeal from
the adverse order of the Board of Marine Deck Officers to the PRC but went straight to the Court (1) x x x
of Appeals on mandamus, in contravention of Section 10 of R.A. No. 8544, which states:
(2) The present Boards shall continue to function in the interim until such time as the new Board
The policies, resolutions, rules and regulations, issued or promulgated by the Board shall be shall be duly constituted pursuant to this Act.
subject to review and approval of the Commission. The decisions, resolutions or orders rendered
by the Board shall be final and executory unless appealed to the Commission within fifteen (15)
It does not provide for the continued application of Section 9, P.D. No. 97 pending the Boards
days from receipt of the decision.
adoption of the new syllabi and the rules and regulations.

The Court of Appeals ruled that the 15-day period within which petitioners could appeal to the
PRC had already lapsed and that the petition for mandamus could not be used as a substitute
for the lost appeal.
We do not agree that the resort to mandamus in the Court of Appeals was unwarranted. As a
rule, where the law provides for the remedies against the action of an administrative board,
body, or officer, relief to courts can be sought only after exhausting all remedies provided. 5 The
It may be true that R.A. No. 8544, in its intent to raise the standards of the marine profession,
prescribes a scope of examination different from that provided for under P.D. No. 97 and its
implementing rules. It may also be true that the syllabi and the subsequent examination on April
25-27, 1998 do not conform to the standards laid down by the new law and its own implementing
rules. The examinees, however, had a right to assume that respondents had performed their
functions in accordance with the applicable law and they should not be prejudiced by the
agencies mistakes in its implementation.
WHEREFORE , the petition is GIVEN DUE COURSEand is GRANTED. Petitioners are held to
be qualified as having passed the Board Examination for Marine Deck Officers conducted on
April 25-27, 1998.
SO ORDERED.
G.R. No. 85439 January 13, 1992
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG
PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM), TERESITA A. FAJARDO,
NADYESDA B. PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S.
FRANCISCO, AMADO V. MANUEL and ROLANDO G. GARCIA, incumbent members of the
Board, AMADO G. PEREZ and MA. FE V. BOMBASE, incumbent General Manager and
Secretary-Treasurer, respectively, petitioners,
vs.
HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional Director of Region IV
of the Department of Agriculture ROGELIO P. MADRIAGA, RECTO CORONADO and
Municipal Mayor IGNACIO R. BUNYE, both in his capacity as Municipal Mayor of
Muntinlupa, Metro Manila and as Presiding Officer of Sangguniang Bayan ng
Muntinglupa, and JOHN DOES, respondents.
G.R. No. 91927 January 13, 1992
IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E.
AGUINALDO, ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO
B. CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO, ROGER SMITH, RUFINO B.
JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and NESTOR SANTOS, petitioners,
vs.
THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special
Prosecutor III, respondents.
Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R. No. 85439.
Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.
DAVIDE, JR., J.:
These cases have been consolidated because they are closely linked with each other as to
factual antecedents and issues.
The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case), questions
the validity of the order of 28 October 1988 of then Secretary of Agriculture Hon. Carlos G.
Dominguez which ordered: (1) the take-over by the Department of Agriculture of the
management of the petitioner Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda ng Bagong
Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory and
supervisory powers under Section 8 of P.D. No. 175, as amended, and Section 4 of Executive
Order No. 13, (2) the creation of a Management Committee which shall assume the
management of KBMBPM upon receipt of the order, (3) the disbandment of the Board of
Directors, and (4) the turn over of all assets, properties and records of the KBMBPM the
Management Committee.
The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks the
nullification of the Resolution of 4 January 1990 of the Sandiganbayan admitting the Amended
Information against petitioners in Criminal Case No. 13966 and denying their motion to order or
direct preliminary investigation, and its Resolution of 1 February 1990 denying the motion to
reconsider the former.
The procedural and factual antecedents are not disputed.
On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality),
Metro Manila, thru its then Mayor Santiago Carlos, Jr., entered into a contract with the
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG PAMILIHANG
BAYAN NG MUNTINLUPA, INC. (KBMBPM) represented by its General Manager, Amado
Perez, for the latter's management and operation of the new Muntinlupa public market. The
contract provides for a twenty-five (25) year term commencing on 2 September 1985, renewable
for a like period, unless sooner terminated and/or rescinded by mutual agreement of the parties,
at a monthly consideration of Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM
within the first five (5) days of each month which shall, however, be increased by ten percent
(10%) each year during the first five (5) years only. 1
The KBMBPM is a service cooperative organized by and composed of vendors occupying the
New Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential
Decree No. 175 and Letter of Implementation No. 23; its articles of incorporation and by-laws
were registered with the then Office of the Bureau of Cooperatives Development (thereafter the
Bureau of Agricultural Cooperatives Development or BACOD and now the Cooperative
Development Authority). 2
Following his assumption into office as the new mayor succeeding Santiago Carlos, Jr.,
petitioner Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-year term of
the agreement, contrary to the provision of Section 143, paragraph 3 of Batas Pambansa Blg.
337," and the "patently inequitable rental," directed a review of the aforesaid contract. 3 He
sought opinions from both the Commission on Audit and the Metro Manila Commission (MMC)
on the validity of the instrument. In separate letters, these agencies urged that appropriate legal
steps be taken towards its rescission. The letter of Hon. Elfren Cruz of the MMC even granted
the Municipality authority "to take the necessary legal steps for the cancellation/recission of the
above cited contract and make representations with KBMBPM for the immediate
transfer/takeover of the possession, management and operation of the New Muntinlupa Market
to the Municipal Government of Muntinlupa." 4
Consequently, upon representations made by Bunye with the Municipal Council, the latter
approved on 1 August 1988 Resolution No. 45 abrogating the contract. To implement this
resolution, Bunye, together with his co-petitioners and elements of the Capital Command of the
Philippine Constabulary, proceeded, on 19 August 1986, to the public market and announced to
the general public and the stallholders thereat that the Municipality was taking over the
management and operation of the facility, and that the stallholders should henceforth pay their
market fees to the Municipality, thru the Market Commission, and no longer to the KBMBPM. 5
On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of Makati a
complaint for breach of contract, specific performance and damages with prayer for a writ of
preliminary injunction against the Municipality and its officers, which was docketed as Civil Case
No. 88-1702. 6 The complaint was premised on the alleged illegal take-over of the public market
effected "in excess of his (Bunye's) alleged authority" and thus "constitutes breach of contract
and duty as a public official."
The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts of Bunye
and company to complete the take-over; they continued holding office in the KBS building, under
their respective official capacities. The matter having been elevated to this Court by way
of certiorari, 8 We remanded the same to the Court of Appeals which docketed it as C.A.-G.R.
No. L-16930. 9
On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-complaint
charging Bunye and his co-petitioners with oppression, harassment, abuse of authority and
violation of the Anti-Graft and Corrupt Practices Act 10 for taking over the management and
operation of the public market from KBMBPM. 11
In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of the Special
Prosecutor directed Bunye and his co-petitioners to submit within ten (10) days from receipt
thereof counter-affidavits, affidavits of their witnesses and other supporting documents. 12 The
subpoena and letter-complaint were received on 12 October 1988.
On 20 October 1988, two (2) days before the expiration of the period granted to file said
documents, Bunye, et al. filed by mail an urgent motion for extension of "at least fifteen (15)
days from October 22, 1988" within which to comply 13 with the subpoena.
Thereafter, the following transpired which subsequently gave rise to these petitions:
WHEREAS, the on-going financial and management audit of the
Department of Agriculture auditors show (sic) that the management of the
KBMBPM is not operating that cooperative in accordance with PD. 175, LOI
No. 23, the Circulars issued by DA/BACOD and the provisions of the by-
laws of KBMBPM;
WHEREAS, the interest of the public so demanding it is evident and
urgently necessary that the KBMBPM MUST BE PLACED UNDER
MANAGEMENT TAKE-OVER of the Department of Agriculture in order to
preserve the financial interest of the members of the cooperative and to
enhance the cooperative development program of the government;
WHEREAS, it is ordered that the Department of Agriculture in the exercise
of its regulatory and supervisory powers under Section 8 of PD 175, as
amended, and Section 4 of Executive Order No. 113, take over the
management of KBMBPM under the following directives:
1. THAT a Management Committee is hereby created composed of
the following:

a) Reg. Dir. or OIC RD — DA Region IV

G.R. No. 85439

b) Atty. Rogelio P. Madriaga — BACOD

In the early morning of 29 October 1988, a Saturday, respondent Madriaga and Coronado,
allegedly accompanied by Mayor Bunye and the latters' heavily armed men, both in uniform and
in civilian clothes, together with other civilians, namely: Romulo Bunye II, Alfredo Bunye, Tomas c) Mr. Recto Coronado — KBMBPM
Osias, Reynaldo Camilon, Benjamin Taguibao, Benjamin Bulos and other unidentified persons,
allegedly through force, violence and intimidation, forcibly broke open the doors of the offices of
d) Mrs. Nadjasda Ponsones — KBMBPM
petitioners located at the second floor of the KBS Building, new Muntinlupa Public Market,
purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture dated 28
October 1988, and to implement the same, by taking over and assuming the management of e) One (1) from the Municipal Government of Muntinlupa to be
KBMBPM, disbanding the then incumbent Board of Directors for that purpose and excluding and designated by the Sangguniang Pambayan ng Muntinlupa;
prohibiting the General Manager and the other officers from exercising their lawful functions as
such. 14 The Order of the Secretary reads as follows: 15
2. THAT the Management Committee shall, upon receipt of this
Order, assume the management of KBMBPM;
ORDER
3. THAT the present Board of Directors is hereby disbanded and
WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA the officers and Manager of the KBMBPM are hereby directed to
MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, turnover all assets, properties and records of the KBMBPM to the
INC., (KBMBPM), Alabang, Muntinlupa, Metro Manila is a Cooperative Management Committee herein created;
registered under the provisions of Presidential Decree No. 175, as
amended;
4. THAT the Management Committee is hereby empowered to
promulgate rules of procedure to govern its workings as a body;
WHEREAS, the Department of Agriculture is empowered to regulate and
supervise cooperatives registered under the provisions of Presidential
Decree No. 175, as amended; 5. THAT the Management Committee shall submit to the
undersigned thru the Director of BACOD monthly reports on the
operations of KBMBPM;
WHEREAS, the general membership of the KBMBPM has petitioned the
Department of Agriculture for assistance in the removal of the members of
6. THAT the Management Committee shall call a General
the Board of Directors who were not elected by the general membership of
said cooperative; Assembly of all registered members of the KBMBPM within Ninety
(90) days from date of this Order to decide such matters affecting
the KBMBPM, including the election of a new set of Board of
Director (sic).
 This Order takes effect immediately and shall continue to be in force until
the members of the Board of Directors shall have been duly elected and
qualified.
Done this 28th day of October, 1988 at Quezon City.
As claimed by petitioners, the Order served on them was not written on the stationary of the
Department, does not bear its seal and is a mere xerox copy.
The so-called petition upon which the Order is based appears to be an unverified petition dated
10 October 1988 signed, according to Mayor Bunye, 16 by 371 members of the KBMBPM.
On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that:
(a) Respondent Secretary acted without or in excess of jurisdiction in
issuing the Order for he arrogated unto himself a judicial function by
determining the alleged guilt of petitioners on the strength of a mere
unverified petition; the disbandment of the Board of Directors was done
without authority of law since under Letter of Implementation No. 23,
removal of officers, directors or committee members could be done only by
the majority of the members entitled to vote at an annual or special general
assembly and only after an opportunity to be heard at said assembly.
(b) Respondent Secretary acted in a capricious, whimsical, arbitrary and
despotic manner, so patent and gross that it amounted to a grave abuse of
discretion.
(c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise
illegal and unlawful for it allows or tolerates the violation of the penal
provisions under paragraph (c), Section 9 of P.D. No. 175.
(d) The Order is a clear violation of the constitutional right of the individual
petitioners to be heard. 17
They pray that upon the filing of the petition, respondents, their agents, representatives or
persons acting on their behalf be ordered to refrain, cease and desist from enforcing and
implementing the questioned Order or from excluding the individual petitioners from the exercise
of their rights as such officers and, in the event that said acts sought to be restrained were
already partially or wholly done, to immediately restore the management and operation of the
public market to petitioners, order respondents to vacate the premises and, thereafter, preserve
the status quo; and that, finally, the challenged Order be declared null and void.
In the Resolution of 9 October 1988, 18 We required the respondents to Comment on the
petition. Before any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-
Parte Motion praying that respondent Atty. Rogelio Madriaga, who had assumed the position of
Chairman of the Management Committee, be ordered to stop and/or cancel the scheduled
elections of the officers of the KBMBPM on 6 January 1989 and, henceforth, desist from
scheduling any election of officers or Members of the Board of Directors thereof until further
orders on the Court. 19 The elections were, nevertheless, held and a new board of directors was
elected. So, on 19 January 1989, petitioners filed a supplemental motion 20 praying that
respondent Madriaga and the "newly elected Board of Directors be ordered to cease and desist
from assuming, performing or exercising powers as such, and/or from removing or replacing the
counsels of petitioners as counsels for KBMBPM and for Atty. Fernando Aquino, Jr., to cease
and desist from unduly interfering with the affairs and business of the cooperative."
Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies the factual
allegations in the petition and claims that petitioners failed to exhaust administrative remedies. A
reply thereto was filed by petitioners on 7 February 1989. 22
Respondent Recto Coronado filed two (2) Comments. The first was filed on 6 February
1989 23 by his counsel, Atty. Fernando Aquino, Jr., and the second, which is for both him and
Atty. Madriaga, was filed by the latter on 10 February 1989. 24
On 20 February 1989, petitioners filed a Reply to the first Comment of Coronado 25 and an Ex-
Parte Motion for the immediate issuance of a cease and desist order 26 praying that the so-called
new directors and officers of KBMBPM, namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino
Moldez, Fortunato M. Medina, Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla,
be ordered to immediately cease and desist from filing notices of withdrawals or motions to
dismiss cases filed by the Cooperative now pending before the courts, administrative offices and
the Ombudsman and Tanodbayan, and that if such motions or notices were already filed, to
immediately withdraw and desist from further pursuing the same until further orders of this Court.
The latter was precipitated by the Resolution No. 19 of the "new" board of directors withdrawing
all cases filed by its predecessors against Bunye, et al., and more particularly the following
cases: (a) G.R. No. 85439 (the instant petition), (b) Civil Case No. 88-1702, (c) OSP Case No.
88-2110 before the Ombudsman, (d) IBP Case No. 88-0119 before the Tanodbayan, and Civil
Case No. 88-118 for Mandamus. 27
On 1 March 1989, We required the Solicitor General to file his Comment to the petition and the
urgent motion for the immediate issuance of a cease and desist order. 28
A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April 1989, We
resolved to dismiss the case and consider it closed and terminated. 30 Thereupon, after some
petitioners filed a motion for clarification and reconsideration, We set aside the dismissal order
and required the new directors to comment on the Opposition to Motion to Dismiss filed by the
former. 31
The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and Opposition
dated 9 June 1989, earlier submitted it response to petitioners' motion for reconsideration of the
order dismissing the instant petition, be treated as its Comment. 32 Both parties then continued
their legal fencing, serving several pleadings on each other.
In Our Resolution of 9 August 1989, 33 We gave the petition due course and required the parties
to submit their respective Memoranda.
On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate issuance of a
cease and desist order 34 in view of the new board's plan to enter into a new management
contract; the motion was noted by this Court on 23 August 1989. A second ex-parte motion,
noted on 18 October 1989, was filed on 19 September 1989 asking this court to consider the
"Invitation to pre-qualify and bid" for a new contract published by respondent Bunye. 35
In a belated Comment 36 for the respondent Secretary of Agriculture filed on 22 September
1989, the Office of the Solicitor General asserts that individual petitioners, who were not
allegedly elected by the members or duly designated by the BACOD Director, have no right or
authority to file this case; the assailed Order of the Secretary was issued pursuant to P.D. No.
175, more particularly Section 8 thereof which authorizes him "(d) to suspend the operation or
cancel the registration of any cooperative after hearing and when in its judgment and based on
findings, such cooperative is operating in violation of this Decree, rules and regulations, existing
laws as well as the by-laws of the cooperative itself;" the Order is reasonably necessary to
correct serious flaws in the cooperative and provide interim measures until election of regular
members to the board and officers thereof; the elections conducted on 6 January 1989 are valid;
and that the motion to dismiss filed by the new board of directors binds the cooperative. It prays
for the dismissal of the petition.
Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the
Comment submitted by the Office of the Solicitor General as his memorandum; 37 petitioners and
respondents Coronado and Madriaga filed their separate Memoranda on 6 November
1989; 38 while the new board of directors submitted its Memorandum on 11 December 1989. 39
The new KBMBPM board submitted additional pleadings on 16 February 1990 which it deemed
relevant to the issues involved herein. Reacting, petitioners filed a motion to strike out improper
and inadmissible pleadings and annexes and sought to have the pleaders cited for contempt.
Although We required respondents to comment, the latter did not comply.
Nevertheless, a manifestation was filed by the same board on 25 February 1991 40 informing this
Court of the holding, on 9 January 1991, of its annual general assembly and election of its board
of directors for 1991. It then reiterates the prayer that the instant petition be considered
withdrawn and dismissed. Petitioners filed a counter manifestation alleging that the instant
petition was already given due course on 9 August 1989. 41 In its traverse to the counter
manifestation, the new board insists that it "did not derive authority from the October 28, 1988
Order, the acts of the Management Committee, nor (sic) from the elections held in (sic) January
6, 1989," but rather from the members of the cooperative who elected them into office during the
elections.
Petitioners filed a rejoinder asserting that the election of new directors is not a supervening
event independent of the main issue in the present petition and that to subscribe to the
argument that the issues in the instant petition became moot with their assumption into office is
to reward a wrong done.
G. R. NO. 91927
Petitioners claim that without ruling on their 20 October 1988 motion for an extension of at last
15 days from 22 October 1988 within which to file their counter-affidavits, which was received by
the Office of the Special Prosecutor on 3 November 1988, Special Prosecutor Onos
promulgated on 11 November 1988 a Resolution finding the evidence on hand sufficient to
establish a prima facie case against respondents (herein petitioners) and recommending the
filing of the corresponding information against them before the Sandiganbayan. 42 Petitioners
also claim that they submitted their counter-affidavits on 9 November 1988. 43
In their motion dated 2 December 1988, petitioners move for a reconsideration of the above
Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The information
against the petitioners was attached to this order.
Upon submission of the records for his approval, the Ombudsman issued a first indorsement on
4 April 1989 referring to "Judge Gualberto J. de la Llana, Acting Director , IEO/RSSO, this
Office, the within records of OSP Case No. 88-02110 . . . for further preliminary investigation . .
." 46
Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la Llana
requiring them to appear before the latter on 25 April 1989, 47 submit a report and file comment.
After being granted an extension, Bunye and company submitted their comment on 18 May
1989. 48
On 22 August 1989, de la Llana recommended the filing of an information for violation of section
3 (e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred to special prosecuting
officer Jose Parentela, Jr. who, in his Memorandum 50 to the Ombudsman through the Acting
Special Prosecutor, likewise urged that an information be filed against herein petitioners. On 3
October 1989, the Ombudsman signed his conformity to the Memorandum and approved the 18
January information prepared by Onos, which was then filed with the Sandiganbayan.
Consequently, Bunye, et al. were served arrest warrants issued by the Sandiganbayan.
Detained at the NBI on 9 October 1989, they claim to have discovered only then the existence of
documents recommending and approving the filing of the complaint and a memorandum by
special prosecutor Bernardita G. Erum proposing the dismissal of the same. 51
52
Arraignment was set for 18 October 1989.
However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus Motion to
Remand to the Office of the Ombudsman; to Defer Arraignment and to Suspend
Proceedings." 53
Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated
Manifestation and Supplemental Motion 54 praying, inter alia, for the quashal of the information
on the ground that they were deprived of their right to a preliminary investigation and that the
information did not charge an offense.
The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and directing
the parties to submit their respective memoranda, 55 which petitioners complied with on 2
November 1989. 56 On 16 November 1989, special Prosecutor Berbano filed a motion to admit
amended
information. 57
On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for lack of
merit the Omnibus Motion to Remand the Case To The Office of the Ombudsman, to Defer
Arraignment and to Suspend Proceedings. Petitioners then filed a motion to order a preliminary
investigation 59 on the basis of the introduction by the amended information of new, material and
substantive allegations, which the special prosecutor opposed, 60 thereby precipitating a
rejoinder filed by petitioners. 61
On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the Amended
Information and denying the motion to direct preliminary investigation. Their motion to reconsider
this Resolution having been denied in the Resolution of 1 February 1990, 63 petitioners filed the
instant petition on 12 February 1990.
Petitioners claim that respondent Sandiganbayan acted without or in excess of jurisdiction or
with manifest grave abuse of discretion amounting to lack of jurisdiction in denying petitioners
their right to preliminary investigation and in admitting the Amended Information.
They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the Sandiganbayan,
admitting the amended information and denying the motion for reconsideration, respectively, be
annulled; (b) a writ be issued enjoining the Sandiganbayan from proceeding further in Criminal
Case No. 13966; and (c) respondents be enjoined from pursuing further actions in the graft
case.
We required the respondents to Comment on the petition.
On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta and Rey E.
Dulay as petitioners, 64 and in the Comment they filed on 30 March 1990, in compliance with Our
Resolution of 1 March 1990, they state that they do not interpose any objection to the motion.
On 20 March 1990, the Office of the Solicitor General moved that it be excused from filing
comment for the respondents as it cannot subscribe to the position taken by the latter with
respect to the questions of law involved. 65 We granted this motion in the resolution of 8 May
1990.
Respondent Berbano filed his comment on 10 September 1991 and petitioners replied on 20
December 1990; Berbano subsequently filed a Rejoinder thereto on 11 January 1991. 66 The
Sandiganbayan then filed a manifestation proposing that it be excused from filing comment as its
position
on the matters in issue is adequately stated in the resolutions sought to be annulled. 67 On 7
March 1991, We resolved to note the manifestation and order the instant petition consolidated
with G.R. No. 85439.
The present dispute revolves around the validity of the antecedent proceedings which led to the
filing of the original information on 18 January 1989 and the amended information afterwards.
THE ISSUES AND THEIR RESOLUTION
1. G. R. No. 85439.
As adverted to in the introductory portion of this Decision, the principal issue in G.R. No. 85439
is the validity of the 28 October 1988 Order of respondent Secretary of Agriculture. The
exordium of said Order unerringly indicates that its basis is the alleged petition of the general
membership of the KBMBPM requesting the Department for assistance "in the removal of the
members of the Board of Directors who were not elected by the general membership" of the
cooperative and that the "ongoing financial and management audit of the Department of
Agriculture auditors show (sic) that the management of the KBMBPM is not operating that
cooperative in accordance with P.D. 175, LOI 23, the Circulars issued by DA/BACOD and the
provisions and by-laws of KBMBPM." It is also professed therein that the Order was issued by
the Department "in the exercise of its regulatory and supervisory powers under Section 8 of P.D.
175, as amended, and Section 4 of Executive Order No. 113."
Respondents challenge the personality of the petitioners to bring this action, set up the defense
of non-exhaustion of administrative remedies, and assert that the Order was lawfully and validly
issued under the above decree and Executive Order.
We find merit in the petition and the defenses interposed do not persuade Us.
Petitioners have the personality to file the instant petition and ask, in effect, for their
reinstatement as Section 3, Rule 65 of the Rules of Court, defining an action for mandamus,
permits a person who has been excluded from the use and enjoyment of a right or office to
which he is entitled, to file suit. 68 Petitioners, as ousted directors of the KBMBPM, are
questioning precisely the act of respondent Secretary in disbanding the board of directors; they
then pray that this Court restore them to their prior stations.
As to failure to exhaust administrative remedies, the rule is well-settled that this requirement
does not apply where the respondent is a department secretary whose acts, as an alter ego of
the President, bear the implied approval of the latter, unless actually disapproved by him. 69 This
doctrine of qualified political agency ensures speedy access to the courts when most needed.
There was no need then to appeal the decision to the office of the President; recourse to the
courts could be had immediately. Moreover, the doctrine of exhaustion of administrative
remedies also yields to other exceptions, such as when the question involved is purely legal, as
in the instant case, 70 or where the questioned act is patently illegal, arbitrary or
oppressive. 71 Such is the claim of petitioners which, as hereinafter shown, is correct.
And now on the validity of the assailed Order.
Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175) provides the
procedure for the removal of directors or officers of cooperatives, thus:
An elected officer, director or committee member may be removed by a vote
of majority of the members entitled to vote at an annual or special general
assembly. The person involved shall have an opportunity to be heard.
A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-laws,
reads:
Sec. 17. Removal of Directors and Committee Members. — Any elected
director or committee member may be removed from office for cause by a
majority vote of the members in good standing present at the annual or
special general assembly called for the purpose after having been given the
opportunity to be heard at the assembly.
Under the same article are found the requirements for the holding of both the annual general
assembly and a special general assembly.
Indubitably then, there is an established procedure for the removal of directors and officers of
cooperatives. It is likewise manifest that the right to due process is respected by the express
provision on the opportunity to be heard. But even without said provision, petitioners cannot be
deprived of that right.
The procedure was not followed in this case. Respondent Secretary of Agriculture arrogated
unto himself the power of the members of the KBMBPM who are authorized to vote to remove
the petitioning directors and officers. He cannot take refuge under Section 8 of P.D. No. 175
which grants him authority to supervise and regulate all cooperatives. This section does not give
him that right.
An administrative officer has only such powers as are expressly granted to him and those
necessarily implied in the exercise thereof. 72 These powers should not be extended by
implication beyond what may to necessary for their just and reasonable execution. 73
Supervision and control include only the authority to: (a) act directly whenever a specific function
is entrusted by law or regulation to a subordinate; (b) direct the performance of duty; restrain the
commission of acts; (c) review, approve, reverse or modify acts and decisions of subordinate
officials or
units; (d) determine priorities in the execution of plans and programs; and (e) prescribe
standards, guidelines, plans and programs. Specifically, administrative supervision is limited to
the authority of the department or its equivalent to: (1) generally oversee the operations of such
agencies and insure that they are managed effectively, efficiently and economically but without
interference with day-to-day activities; (2) require the submission of reports and cause the
conduct of management audit, performance evaluation and inspection to determine compliance
with policies, standards and guidelines of the department; (3) take such action as may be
necessary for the proper performance of official functions, including rectification of violations,
abuses and other forms of mal-administration; (4) review and pass upon budget proposals of
such agencies but may not increase or add to them. 74
The power to summarily disband the board of directors may not be inferred from any of the
foregoing as both P.D. No. 175 and the by-laws of the KBMBPM explicitly mandate the manner
by which directors and officers are to be removed. The Secretary should have known better than
to disregard these procedures and rely on a mere petition by the general membership of the
KBMBPM and an on-going audit by Department of Agriculture auditors in exercising a power
which he does not have, expressly or impliedly. We cannot concede to the proposition of the
Office of the Solicitor General that the Secretary's power under paragraph (d), Section 8 of P.D.
No. 175 above quoted to suspend the operation or cancel the registration of any cooperative
includes the "milder authority of suspending officers and calling for the election of new officers."
Firstly, neither suspension nor cancellation includes the take-over and ouster of incumbent
directors and officers, otherwise the law itself would have expressly so stated. Secondly, even
granting that the law intended such as postulated, there is the requirement of a hearing. None
was conducted.
Likewise, even if We grant, for the sake of argument, that said power includes the power to
disband the board of directors and remove the officers of the KBMBPM, and that a hearing was
not expressly required in the law, still the Order can be validly issued only after giving due
process to the affected parties, herein petitioners.
Due process is guaranteed by the Constitution 75 and extends to administrative proceedings. In
the landmark case of Ang Tibay vs. Court of Industrial Relations, 76 this Court, through Justice
Laurel, laid down the cardinal primary requirements of due process in administrative
proceedings, foremost of which is the right to a hearing, which includes the right to present one's
case and submit evidence in support thereof. The need for notice and the opportunity to be
heard is the heart of procedural due process, be it in either judicial or administrative
proceedings. 77 Nevertheless, a plea of a denial of procedural due process does not lie where a
defect consisting in an absence of notice of hearing was thereafter cured by the aggrieved party
himself as when he had the opportunity to be heard on a subsequent motion for reconsideration.
This is consistent with the principle that what the law prohibits is not the absence of previous
notice but the absolute absence thereof and lack of an opportunity to be heard. 78
In the instant case, there was no notice of a hearing on the alleged petition of the general
membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order
was based solely on an alleged petition by the general membership of the KBMBPM. There was
then a clear denial of due process. It is most unfortunate that it was done after democracy was
restored through the peaceful people revolt at EDSA and the overwhelming ratification of a new
Constitution thereafter, which preserves for the generations to come the gains of that historic
struggle which earned for this Republic universal admiration.
If there were genuine grievances against petitioners, the affected members should have timely
raise these issues in the annual general assembly or in a special general assembly. Or, if such a
remedy would be futile for some reason or another, judicial recourse was available.
Be that as it may, petitioners cannot, however, be restored to their positions. Their terms expired
in 1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to
Section 13 of the by-laws, during the election at the first annual general assembly after
registration, one-half plus one (4) of the directors obtaining the highest number of votes shall
serve for two years, and the remaining directors (3) for one year; thereafter, all shall be elected
for a term of two years. Hence, in 1988, when the board was disbanded, there was a number of
directors whose terms would have expired the next year (1989) and a number whose terms
would have expired two years after (1990). Reversion to the status quo preceding 29 October
1988 would not be feasible in view of this turn of events. Besides, elections were held in 1990
and 1991. 79 The affairs of the cooperative are presently being managed by a new board of
directors duly elected in accordance with the cooperative's by-laws.
2. G. R. No. 91927.
The right of an accused to a preliminary investigation is not among
the rights guaranteed him in the Bill of Rights. As stated in Marcos, et al. vs. Cruz, 80 "the
preliminary investigation in criminal cases is not a creation of the Constitution; its origin is
statutory and it exists and the right thereto can be invoked when so established and granted by
law. It is so specifically granted by procedural law. 81 If not waived, absence thereof may
amount to a denial of due process. 82 However, lack of preliminary investigation is not a ground
to quash or dismiss a complaint or information. Much less does it affect the court's jurisdiction.
In People vs. Casiano, 83 this Court ruled:
Independently of the foregoing, the absence of such investigation
[preliminary] did not impair the validity of the information or otherwise render
it defective. Much less did it affect the jurisdiction of the court of first
instance over the present case. Hence, had the defendant-appellee been
entitled to another preliminary investigation, and had his plea of not guilty
upon arraignment not implied a waiver of said right, the court of first
instance should have, either conducted such preliminary investigation, or
ordered the Provincial Fiscal to make it, in pursuance of section 1687 of the
Revised Administrative Code (as amended by Republic Act No. 732), or
remanded the record for said investigation to the justice of the peace court,
instead of dismissing the case as it did in the order appealed from.
This doctrine was thereafter reiterated or affirmed in several case. 84
In the instant case, even if it is to be conceded for argument's sake that there was in fact no
preliminary investigation, the Sandiganbayan, per Doromal vs. Sandiganbayan, 85 "should
merely suspend or hold in abeyance proceedings upon the questioned Amended Information
and remand the case to the Office of the Ombudsman for him to conduct a preliminary
investigation."
It is Our view, however, that petitioners were not denied the right to preliminary investigation.
They, nevertheless, insist that the preliminary investigation conducted by the Office of the
Special Prosecutor existed more in form than in substance. This is anchored on the failure by
prosecutor Onos to consider the counter-affidavits filed by petitioners. The same sin of omission
is ascribed to Acting Director de la Llana who purportedly failed to consider the comments
submitted by the petitioners pursuant to a subpoena dated 13 April 1989. The failure of special
prosecutor Berbano to conduct a preliminary investigation before amending the information is
also challenged.
It is finally urged that the Sandiganbayan completely disregarded the "glaring anomaly that on its
face the Information filed by the Office of the Special Prosecutor" was prepared and subscribed
on 18 January 1989, while the records indicate that the preliminary investigation was concluded
on 3 October 1989.
In his Comment, respondent Berbano dispassionately traces the genesis of the criminal In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the Tanodbayan
information filed before the Sandiganbayan. His assessment that a preliminary investigation to conduct another preliminary investigation of a case under review by it. On the contrary, under
sufficient in substance and manner was conducted prior to the filing of the information reflects P.D. No. 911, in relation to Rule 12, Administrative Order No. VII, the Tanodbayan may, upon
the view of the Sandiganbayan, maintained in both the 17 November 1989 and 4 January 1990 review, reverse the findings of the investigator and thereafter "where he finds a prima facie case,
resolutions, that there was compliance with the requirements of due process. to cause the filing of an information in court against the respondent, based on the same sworn
statements or evidence submitted, without the necessity of conducting another preliminary
investigation."
Petitioners were provided a reasonable period within which to submit their counter-affidavits;
they did not avail of the original period; they moved for an extension of at least fifteen (15) days
from 22 October 1988. Despite the urgency of its nature, the motion was sent by mail. The Respondent Sandiganbayan did not then commit any grave abuse of discretion in respect to its
extension prayed for was good up to 6 November 1988. But, as admitted by them, they filed the Resolutions of 4 January 1990 and 1 February 1990.
Counter-Affidavits only on 9 November 1988. Yet, they blamed prosecutor Onos for
promulgating the 11 November 1989 Resolution and for, allegedly, not acting on the motion.
The petition then must fail.
Petitioners then should not lay the blame on Onos; they should blame themselves for presuming
that the motion would be granted.
CONCLUSION
This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13 December
1988 requesting that the reviewing prosecutor consider the belatedly filed documents; 86 thus, WHEREFORE, judgment is hereby rendered:
there is the recommendation of prosecutor Bernardita Erum calling for the dismissal of the
charges on 2 March 1989, which, however, was not sustained upon subsequent review. The
1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged Order of 28
Sandiganbayan, in its 17 November 1989 Resolution, succinctly summed up the matter when it
asserted that "even granting, for the sake of argument, that prosecutor Onos . . . failed to October 1988 of the respondent Secretary of Agriculture; but denying, for having become moot
consider accused-movants' counter-affidavits, such defect was cured when a "Motion for and academic, the prayer of petitioners that they be restored to their positions in the KBMBPM.
Reconsideration" was filed, and
which . . . de la Llana took into account upon review." 2. DISMISSING, for lack of merit, the petition in G.R. No. 91927.

It may not then be successfully asserted that the counter-affidavits were not considered by the No pronouncement as to costs.
Ombudsman in approving the information. Perusal of the factual antecedents reveals that a
second investigation was conducted upon the "1st Indorsement" of the Ombudsman of 4 April
1989. As a result, subpoenas were issued and comments were asked to be submitted, which IT IS SO ORDERED.
petitioners did, but only after a further extension of fifteen (15) days from the expiration of the
original deadline. From this submission the matter underwent further review. G.R. No. 88550 April 18, 1990

Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample discussion of INDUSTRIAL ENTERPRISES, INC., petitioner,
the defenses raised by the petitioners in their counter-affidavits, thus negating the charge that vs.
the issues raised by them were not considered at all. 87 THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL CORPORATION,
THE HON. GERONIMO VELASCO in his capacity as Minister of Energy and PHILIPPINE
It is indisputable that the respondents were not remiss in their duty to afford the petitioners the NATIONAL BANK, respondents.
opportunity to contest the charges thrown their way. Due process does not require that the
accused actually file his counter-affidavits before the preliminary investigation is deemed Manuel M. Antonio and Dante Cortez for petitioner.
completed. All that is required is that he be given the opportunity to submit such if he is so Pelaez, Adriano & Gregorio for respondent MMIC.
minded. 88 The Chief Legal Counsel for respondent PNB.

In any event, petitioners did in fact, although belatedly, submit their counter-affidavits and as a
result thereof, the prosecutors concerned considered them in subsequent reviews of the
information, particularly in the re-investigation ordered by the Ombudsman.
MELENCIO-HERRERA, J.:
And now, as to the protestation of lack of preliminary investigation prior to the filing of the
Amended Information. The prosecution may amend the information without leave of court before
arraignment, 89 and such does not prejudice the accused. 90 Reliance on the pronouncements This petition seeks the review and reversal of the Decision of respondent Court of Appeals in
in Doromal vs. Sandiganbayan 91 is misplaced as what obtained therein was the preparation of CA-G.R. CV No. 12660, 1 which ruled adversely against petitioner herein.
an entirely new information as contrasted with mere amendments introduced in the amended
information, which also charges petitioners with violating Section 3 (e) of the Anti-Graft Law. Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the
Government through the Bureau of Energy Development (BED) for the exploration of two coal
blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for
another coal operating contract for the exploration of three additional coal blocks which, together
with the original two blocks, comprised the so-called "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's over-all coal
supply-demand balance . . . the logical coal operator in the area should be the Marinduque
Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in
another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to
MMIC (Rollo, p. 37). Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI
assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the
subject of IEI's coal operating contract.
Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with
damages against MMIC and the then Minister of Energy Geronimo Velasco before the Regional
Trial Court of Makati, Branch 150, 2 alleging that MMIC took possession of the subject coal
blocks even before the Memorandum of Agreement was finalized and approved by the BED; that
MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for the
adjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed upon
and to assume IEI's loan obligation as provided in the Memorandum of Agreement (Rollo, p. 38).
IEI also prayed that the Energy Minister be ordered to approve the return of the coal operating
contract from MMIC to petitioner, with a written confirmation that said contract is valid and
effective, and, in due course, to convert said contract from an exploration agreement to a
development/production or exploitation contract in IEI's favor.
Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in an
Amended Complaint when the latter with the Development Bank of the Philippines effected
extra-judicial foreclosures on certain mortgages, particularly the Mortgage Trust Agreement,
dated 13 July 1981, constituted in its favor by MMIC after the latter defaulted in its obligation
totalling around P22 million as of 15 July 1984. The Court of Appeals eventually dismissed the
case against the PNB (Resolution, 21 September 1989).
Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.
In a summary judgment, the Trial Court ordered the rescission of the Memorandum of
Agreement, declared the continued efficacy of the coal operating contract in favor of IEI; ordered
the reversion of the two coal blocks covered by the coal operating contract; ordered BED to
issue its written affirmation of the coal operating contract and to expeditiously cause the
conversion thereof from exploration to development in favor of IEI; directed BED to give due
course to IEI's application for a coal operating contract; directed BED to give due course to IEI's
application for three more coal blocks; and ordered the payment of damages and rehabilitation
expenses (Rollo, pp. 9-10).
The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide
the suit for rescission of the Memorandum of Agreement concerning a coal operating contract
over coal blocks. A corollary question is whether or not respondent Court of Appeals erred in
holding that it is the Bureau of Energy Development (BED) which has jurisdiction over said
action and not the civil court.
While the action filed by IEI sought the rescission of what appears to be an ordinary civil contract
cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be
rescinded is derived from a coal-operating contract and is inextricably tied up with the right to
develop coal-bearing lands and the determination of whether or not the reversion of the coal
operating contract over the subject coal blocks to IEI would be in line with the integrated national
program for coal-development and with the objective of rationalizing the country's over-all coal-
supply-demand balance, IEI's cause of action was not merely the rescission of a contract but the
reversion or return to it of the operation of the coal blocks. Thus it was that in its Decision
ordering the rescission of the Agreement, the Trial Court, inter alia, declared the continued
efficacy of the coal-operating contract in IEI's favor and directed the BED to give due course to
IEI's application for three (3) IEI more coal blocks. These are matters properly falling within the
domain of the BED.
For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D.
No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive
and integrated national program for the exploration, exploitation, and development and
extraction of fossil fuels, such as the country's coal resources; adopting a coal development
program; regulating all activities relative thereto; and undertaking by itself or through service
contracts such exploitation and development, all in the interest of an effective and coordinated
development of extracted resources.
Thus, the pertinent sections of P.D. No. 1206 provide:
Sec. 6. Bureau of Energy Development. There is created in the Department a Bureau
of Energy Development, hereinafter referred to in this Section as the Bureau, which
shall have the following powers and functions, among others:
a. Administer a national program for the encouragement, guidance, and whenever
necessary, regulation of such business activity relative to the exploration, exploitation,
development, and extraction of fossil fuels such as petroleum, coal, . . .
The decisions, orders, resolutions or actions of the Bureau may be appealed to the
Secretary whose decisions are final and executory unless appealed to the President.
(Emphasis supplied.)

In reversing the Trial Court, the Court of Appeals held that the rendition of the summary
That law further provides that the powers and functions of the defunct Energy Development
judgment was not proper since there were genuine issues in controversy between the parties,
Board relative to the implementation of P.D. No. 972 on coal exploration and development have
and more importantly, that the Trial Court had no jurisdiction over the action considering that,
been transferred to the BED, provided that coal operating contracts including the transfer or
under Presidential Decree No. 1206, it is the BED that has the power to decide controversies
assignment of interest in said contracts, shall require the approval of the Secretary (Minister) of
relative to the exploration, exploitation and development of coal blocks (Rollo, pp. 43-44).
Energy (Sec. 12, P.D. No. 1206).

Hence, this petition, to which we resolved to give due course and to decide.
Sec. 12. . . . the powers and functions transferred to the Bureau of Energy
Development are:
Incidentally, the records disclose that during the pendency of the appeal before the Appellate
Court, the suit against the then Minister of Energy was dismissed and that, in the meantime, IEI
xxx xxx xxx
had applied with the BED for the development of certain coal blocks.
 ii. The following powers and functions of the Energy Development Board under PD
No. 910 . . .
(1) Undertake by itself or through other arrangements, such as service contracts, the
active exploration, exploitation, development, and extraction of energy resources . . .
(2) Regulate all activities relative to the exploration, exploitation, development, and
extraction of fossil and nuclear fuels . . .
(P.D. No. 1206) (Emphasis supplied.)
P.D. No. 972 also provides:
Sec. 8. Each coal operating contract herein authorized shall . . . be executed by the
Energy Development Board.
Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, to
pass upon any question involving the Memorandum of Agreement between IEI and MMIC,
revolving as its does around a coal operating contract, should be sustained.
In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction
in many cases involving matters that demand the special competence of administrative
agencies. It may occur that the Court has jurisdiction to take cognizance of a particular case,
which means that the matter involved is also judicial in character. However, if the case is such
that its determination requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions of facts are involved, then
relief must first be obtained in an administrative proceeding before a remedy will be supplied by
the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine
of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes
into play whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an administrative body,
in such case the judicial process is suspended pending referral of such issues to the
administrative body for its view" (United States v. Western Pacific Railroad Co., 352 U.S. 59,
Emphasis supplied).
Clearly, the doctrine of primary jurisdiction finds application in this case since the question of
what coal areas should be exploited and developed and which entity should be granted coal
operating contracts over said areas involves a technical determination by the BED as the
administrative agency in possession of the specialized expertise to act on the matter. The Trial
Court does not have the competence to decide matters concerning activities relative to the
exploration, exploitation, development and extraction of mineral resources like coal. These
issues preclude an initial judicial determination. It behooves the courts to stand aside even when
apparently they have statutory power to proceed in recognition of the primary jurisdiction of an
administrative agency.
One thrust of the multiplication of administrative agencies is that the interpretation of
contracts and the determination of private rights thereunder is no longer a uniquely
judicial function, exercisable only by our regular courts (Antipolo Realty Corp. vs.
National Housing Authority, 153 SCRA 399, at 407).
The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of
the case below. It need only be suspended until after the matters within the competence of the
BED are threshed out and determined. Thereby, the principal purpose behind the doctrine of
primary jurisdiction is salutarily served.
Uniformity and consistency in the regulation of business entrusted to an administrative
agency are secured, and the limited function of review by the judiciary are more
rationally exercised, by preliminary resort, for ascertaining and interpreting the
circumstances underlying legal issues, to agencies that are better equipped than
courts by specialization, by insight gained through experience, and by more flexible
procedure (Far East Conference v. United States, 342 U.S. 570).
With the foregoing conclusion arrived at, the question as to the propriety of the summary
judgment rendered by the Trial Court becomes unnecessary to resolve.
WHEREFORE, the Court Resolved to DENY the petition. No costs.
SO ORDERED.
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM,
SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION IV,
MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the
validity of the acquisition of these haciendas by the government under Republic Act No. 6657,
the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate
of Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470,
0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571
hectares in area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional
Constitution. As head of the provisional government, the President exercised legislative power
"until a legislature is elected and convened under a new Constitution." 1 In the exercise of this
legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the
mechanisms necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. 2 This Congress passed Republic Act No. 6657, the Comprehensive
Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988
and took effect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary
offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico
and Banilad were later placed under compulsory acquisition by respondent DAR in accordance
with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform
Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner.
The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein,
the MARO invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to
discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation
and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares
under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and
actually occupied and cultivated by 34 tillers of sugarcane. 5 In the second Report, the MARO
identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234
which also had several actual occupants and tillers of sugarcane; 6 while in the third Report, the
MARO found approximately 75 hectare under Tax Declaration No. 0354 as "flat to undulating"
with 33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank of
the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report
recommended that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition
at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They
recommended that 270.0876 hectares and 75.3800 hectares be placed under compulsory
acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D.
Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the
DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800
hectares; that whether this offer was to be accepted or rejected, petitioner was to inform the
Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's
rejection or failure to reply within thirty days, respondent DAR shall conduct summary
administrative proceedings with notice to petitioner to determine just compensation for the land;
that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an
accessible bank if it rejects the same, the DAR shall take immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP
Land Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust
Account." Each Memoranda requested that a trust account representing the valuation of three
portions of Hacienda Palico be opened in favor of the petitioner in view of the latter's rejection of
its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of
the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating
its request for conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition
of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were
replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the
mother title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land
Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer
beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent
a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory
acquisition under the CARL; that should petitioner wish to avail of the other schemes
such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was
willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the
latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss
the results of the MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax
Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were
discovered 162 actual occupants and tillers of sugarcane. 20 In the second Report, it was found
that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on
which were 92 actual occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel
on behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a
Summary Investigation Report was submitted jointly by the MARO, representatives of the BARC,
LBP, and the PARO. They recommended that after ocular inspection of the property, 234.6498
hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution
by CLOA. 23 The following day, September 22, 1989, a second Summary Investigation was
submitted by the same officers. They recommended that 737.2590 hectares under Tax
Declaration Nos. 0236 and 0237 be likewise placed under compulsory acquisition for
distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner
two (2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the
same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda
Palico, however, the Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190
hectares and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18,
1991 over 723.4130 hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and
P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for petitioner's
land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before
the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered
by four (4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989,
respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2) separate
Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT
Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-
44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a
"Notice of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares
under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a
letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda
Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR
that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over
18 degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner
filed its application for conversion of both Haciendas Palico and Banilad. 36 On July 14, 1993,
petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over
Hacienda Caylaway in light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge,
Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman,
Quezon City dated March 1, 1993 stating that the lands subject of
referenced titles "are not feasible and economically sound for further
agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas
approving the Zoning Ordinance reclassifying areas covered by the
referenced titles to non-agricultural which was enacted after extensive
consultation with government agencies, including [the Department of
Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated
March 8, 1993 approving the Zoning Ordinance enacted by the Municipality
of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the
Municipal Planning & Development, Coordinator and Deputized Zoning
Administrator addressed to Mrs. Alicia P. Logarta advising that the
Municipality of Nasugbu, Batangas has no objection to the conversion of the
lands subject of referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent
DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where
the haciendas are located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It
questioned the expropriation of its properties under the CARL and the denial of due process in
the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on
November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner
moved for reconsideration but the motion was denied on January 17, 1997 by respondent
court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR
FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE
PATENT ILLEGALITY OF THE RESPONDENTS' ACTS, THE
IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE
ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
ORDINARY COURSE OF LAW — ALL OF WHICH ARE EXCEPTIONS TO
THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE
UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF
THE UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE
BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING
ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING
CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY
LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS
CONCEDED BY RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT
DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING
THAT RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE
FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE
PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS
SOUGHT TO BE ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND
ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST
COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID
JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY
STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF
CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A.
6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take
cognizance of this petition despite petitioner's failure to exhaust administrative remedies; (2)
whether the acquisition proceedings over the three haciendas were valid and in accordance with
law; and (3) assuming the haciendas may be reclassified from agricultural to non-agricultural,
whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in
finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party
may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have
exhausted all means of administrative redress. This is not absolute, however. There are
instances when judicial action may be resorted to immediately. Among these exceptions are: (1)
when the question raised is purely legal; (2) when the administrative body is in estoppel; (3)
when the act complained of is patently illegal; (4) when there is urgent need for judicial
intervention; (5) when the respondent acted in disregard of due process; (6) when the
respondent is a department secretary whose acts, as an alter ego of the President, bear the
implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8)
when there is no other plain, speedy and adequate remedy; (9) when strong public interest is
involved; (10) when the subject of the controversy is private land; and (11) in quo
warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and
to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy
and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries
over portions of petitioner's land without just compensation to petitioner. A Certificate of Land
Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657,
the Comprehensive Agrarian Reform Law of 1988. 43 Before this may be awarded to a farmer
beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the
government are conditioned upon the receipt by the landowner of the corresponding payment or
deposit by the DAR of the compensation with an accessible bank. Until then, title remains with
the landowner. 44 There was no receipt by petitioner of any compensation for any of the lands
acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's opening of trust
account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute
payment under the law. Trust account deposits are not cash or LBP bonds. The replacement of
the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process. In fact, in
the entire acquisition proceedings, respondent DAR disregarded the basic requirements of
administrative due process. Under these circumstances, the issuance of the CLOA's to farmer
beneficiaries necessitated immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in
the acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for
two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private
lands, the following procedures shall be followed:
a). After having identified the land, the landowners and the beneficiaries, the DAR shall send its
notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post
the same in a conspicuous place in the municipal building and barangay hall of the place where
the property is located. Said notice shall contain the offer of the DAR to pay a corresponding
value in accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions
hereof.
b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase
price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor
of the Government and surrenders the Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just compensation for the land, within fifteen
(15) days from receipt of the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is
submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR
of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of
Acquisition to the landowner, by personal delivery or registered mail, and post it in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If
the landowner accepts, he executes and delivers a deed of transfer in favor of the government
and surrenders the certificate of title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the
landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and
inform the owner of its decision and the amount of just compensation. Upon receipt by the owner
of the corresponding payment, or, in case of rejection or lack of response from the latter, the
DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR
shall immediately take possession of the land and cause the issuance of a transfer certificate of
title in the name of the Republic of the Philippines. The land shall then be redistributed to the
farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for
final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten
the implementation of the Comprehensive Agrarian Reform Program (CARP). 46 Under Section
16 of the CARL, the first step in compulsory acquisition is the identification of the land, the
landowners and the beneficiaries. However, the law is silent on how the identification process
must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order
No. 12, Series or 1989, which set the operating procedure in the identification of such lands. The
procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the
pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of
responsibility. The masterlist shall include such information as required under the attached
CARP Masterlist Form which shall include the name of the landowner, landholding area,
TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or
landholding covered under Phase I and II of the CARP except those for which the landowners
have already filed applications to avail of other modes of land acquisition. A case folder shall
contain the following duly accomplished forms:
a) CARP CA Form 1 — MARO Investigation Report
b) CARP CA Form 2 — Summary Investigation Report of Findings and Evaluation
c) CARP CA Form 3 — Applicant's Information Sheet
d) CARP CA Form 4 — Beneficiaries Undertaking
e) CARP CA Form 5 — Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned forms have
been examined and verified by him and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a conference/meeting
to the landowner covered by the Compulsory Case Acquisition
Folder. Invitations to the said conference/meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC representative(s), the Land Bank
of the Philippines (LBP) representative, and other interested parties to discuss
the inputs to the valuation of the property. He shall discuss the MARO/BARC
investigation report and solicit the views, objection, agreements or suggestions
of the participants thereon. The landowner shall also be asked to indicate his
retention area. The minutes of the meeting shall be signed by all participants in
the conference and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer
(PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land
in accordance with A.O. No. 6, Series of 1988. 47 The valuation worksheet and
the related CACF valuation forms shall be duly certified correct by the PARO
and all the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular
inspection and verification of the property. This ocular inspection and
verification shall be mandatory when the computed value exceeds = 500,000
per estate.
4. Upon determination of the valuation, forward the case folder, together with
the duly accomplished valuation forms and his recommendations, to the
Central Office. The LBP representative and the MARO concerned shall be
furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and
Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review,
evaluate and determine the final land valuation of the property covered by the
case folder. A summary review and evaluation report shall be prepared and
duly certified by the BLAD Director and the personnel directly participating in
the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a Notice of Acquisition (CARP CA Form 8) for the subject
property. Serve the Notice to the landowner personally or through registered
mail within three days from its approval. The Notice shall include, among
others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall
prepare and submit to the Secretary for approval the Order of Acquisition.
However, in case of rejection or non-reply, the DAR Adjudication Board
(DARAB) shall conduct a summary administrative hearing to determine just
compensation, in accordance with the procedures provided under
Administrative Order No. 13, Series of 1989. Immediately upon receipt of the
DARAB's decision on just compensation, the BLAD shall prepare and submit
to the Secretary for approval the required Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon
deposit of payment in the designated bank, in case of rejection or non-
response, the Secretary shall immediately direct the pertinent Register of
Deeds to issue the corresponding Transfer Certificate of Title (TCT) in the
name of the Republic of the Philippines. Once the property is transferred, the
DAR, through the PARO, shall take possession of the land for redistribution to
qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer
(MARO) keep an updated master list of all agricultural lands under the CARP in his area of
responsibility containing all the required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the
land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the
representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of the parties. At the meeting,
the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO)
who shall complete the valuation of the land. Ocular inspection and verification of the property by
the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00.
Upon determination of the valuation, the PARO shall forward all papers together with his
recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the
Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the
final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or
his duly authorized representative, a Notice of Acquisition for the subject property. 48 From this
point, the provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to
DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner under
Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply
with the requirements of administrative due process. The implementation of the CARL is an
exercise of the State's police power and the power of eminent domain. To the extent that the
CARL prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. 50 But where, to carry out such
regulation, the owners are deprived of lands they own in excess of the maximum area allowed,
there is also a taking under the power of eminent domain. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title to and physical
possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life, liberty
or property without due process of law." 52 The CARL was not intended to take away property
without due process of law. 53 The exercise of the power of eminent domain requires that due
process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was
amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of
1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded
and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to R.A. 6657,"
requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting
documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at least
one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for agriculture and productivity
of the land and jointly prepare Field Investigation Report (CARP Form No. 2), including the Land
Use Map of the property.
b) Interview applicants and assist them in the preparation of the Application For Potential CARP
Beneficiary (CARP Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found qualified, cause the signing of
the respective Application to Purchase and Farmer's Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the ocular
inspection/investigation of the property and documents submitted. See to it that Field
Investigation Report is duly accomplished and signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision survey delineating
areas covered by OLT, retention, subject of VOS, CA (by phases, if possible), infrastructures,
etc., whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or his duly authorized
representative inviting him for a conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public hearing to prospective
farmer-beneficiaries, landowner, representatives of BARC, LBP, DENR, DA, NGO's, farmers'
organizations and other interested parties to discuss
d) Prepares Summary of Minutes of the conference/public hearing to be guided by CARP Form
No. 7
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office (PARO) using
CARP Form No. 8 (Transmittal Memo to PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell
Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be,
over a particular landholding. The MARO notifies the landowner as well as representatives of the
LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at
least one week before the scheduled date and invites them to attend the same. The MARO, LBP
or BARC conducts the ocular inspection and investigation by identifying the land and landowner,
determining the suitability of the land for agriculture and productivity, interviewing and screening
prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC prepares
the Field Investigation Report which shall be signed by all parties concerned. In addition to the
field investigation, a boundary or subdivision survey of the land may also be conducted by a
Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted
by the MARO. 55 This survey shall delineate the areas covered by Operation Land Transfer
(OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to VOS
and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the
landowner or his duly authorized representative inviting him to a conference or public hearing
with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of
Agriculture (DA), non-government organizations, farmer's organizations and other interested
parties. At the public hearing, the parties shall discuss the results of the field investigation,
issues that may be raised in relation thereto, inputs to the valuation of the subject landholding,
and other comments and recommendations by all parties concerned. The Minutes of the
conference/public hearing shall form part of the VOCF or CACF which files shall be forwarded by
the MARO to the PARO. The PARO reviews, evaluates and validates the Field Investigation
Report and other documents in the VOCF/CACF. He then forwards the records to the RARO for
another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O.
No. 1, Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/ Agency/Unit Document (requirements)
A. Identification and Documentation x x x xxx x x x 5 DARMO Issue Notice of
Coverage CARP to LO by personal delivery Form No. 2 with proof of service, or registered mail
with return card, informing him that his property is now under CARP coverage and for LO to
select his retention area, if he desires to avail of his right of retention; and at the same time
invites him to join the field investigation to be conducted on his property which should be
scheduled at least two weeks in advance of said notice. A copy of said Notice shall CARP be
posted for at least one Form No. 17 week on the bulletin board of the municipal and barangay
halls where the property is located. LGU office concerned notifies DAR about compliance with
posting requirements thru return indorsement on CARP Form No. 17.
6 DARMO Send notice to the LBP, CARP BARC, DENR representatives Form No. 3 and
prospective ARBs of the schedule of the field investigation to be conducted on the subject
property.
7 DARMO With the participation of CARP BARC the LO, representatives of Form No. 4 LBP the
LBP, BARC, DENR Land Use DENR and prospective ARBs, Map Local Office conducts the
investigation on subject property to identify the landholding, determines its suitability and
productivity; and jointly prepares the Field Investigation Report (FIR) and Land Use Map.
However,the field investigation shall proceed even if the LO, the representatives of the DENR
and prospective ARBs are not available provided, they were given due notice of the time and
date of investigation to be conducted. Similarly, if the LBP representative is not available or
could not come on the scheduled date, the field investigation shall also be conducted, after
which the duly accomplished Part I of CARP Form No. 4 shall be forwarded to the LBP
representative for validation. If he agrees to the ocular inspection report of DAR, he signs the
FIR (Part I) and accomplishes Part II thereof. In the event that there is a difference or variance
between the findings of the DAR and the LBP as to the propriety of covering the land under
CARP, whether in whole or in part, on the issue of suitability to agriculture, degree of
development or slope, and on issues affecting idle lands, the conflict shall be resolved by a
composite team of DAR, LBP, DENR and DA which shall jointly conduct further investigation
thereon. The team shall submit its report of findings which shall be binding to both DAR and
LBP, pursuant to Joint Memorandum Circular of the DAR, LBP, DENR and DA dated 27 January
1992. 8 DARMO Screen prospective ARBs BARC and causes the signing of CARP the
Application of Purchase Form No. 5 and Farmer's Undertaking(APFU).
9 DARMO Furnishes a copy of the CARP duly accomplished FIR to Form No. 4 the landowner
by personal delivery with proof of service or registered mail will return card and posts a copy
thereof for at least one week on the bulletin board of the municipal and barangay halls where the
property is located. LGU office concerned CARP notifies DAR about Form No. 17 compliance
with posting requirement thru return endorsement on CARP Form No. 17. B. Land Survey
10 DARMO Conducts perimeter or Perimeter And/or segregation survey or DENR delineating
areas covered Segregation Local Office by OLT, "uncarpable Survey Plan areas such as 18%
slope and above, unproductive/ unsuitable to agriculture, retention, infrastructure. In case of
segregation or subdivision survey, the plan shall be approved by DENR-LMS.
C. Review and Completion of Documents
11. DARMO Forward VOCF/CACF CARP to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of
government agencies involved in the identification and delineation of the land subject to
acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of
the field investigation and the sending must comply with specific requirements. Representatives
of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
"personal delivery with proof of service, or by registered mail with return card," informing him that
his property is under CARP coverage and that if he desires to avail of his right of retention, he
may choose which area he shall retain. The Notice of Coverage shall also invite the landowner
to attend the field investigation to be scheduled at least two weeks from notice. The field
investigation is for the purpose of identifying the landholding and determining its suitability for
agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one
week on the bulletin board of the municipal and barangay halls where the property is located.
The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field
investigation shall be conducted on the date set with the participation of the landowner and the
various representatives. If the landowner and other representatives are absent, the field
investigation shall proceed, provided they were duly notified thereof. Should there be a variance
between the findings of the DAR and the LBP as to whether the land be placed under agrarian
reform, the land's suitability to agriculture, the degree or development of the slope, etc., the
conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall
jointly conduct further investigation. The team's findings shall be binding on both DAR and LBP.
After the field investigation, the DAR Municipal Office shall prepare the Field Investigation
Report and Land Use Map, a copy of which shall be furnished the landowner "by personal
delivery with proof of service or registered mail with return card." Another copy of the Report and
Map shall likewise be posted for at least one week in the municipal or barangay halls where the
property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of
Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid
down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series
of 1990 and DAR A.O. No. 1, Series of 1993. This Notice of Coverage does not merely notify the
landowner that his property shall be placed under CARP and that he is entitled to exercise his
retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public
hearing, shall be conducted where he and representatives of the concerned sectors of society
may attend to discuss the results of the field investigation, the land valuation and other pertinent
matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also informs the
landowner that a field investigation of his landholding shall be conducted where he and the other
representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a
letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was
received on the same day it was sent as indicated by a signature and the date received at the
bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims
that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation
to the conference. Pimentel actually attended the conference on September 21, 1989 and
signed the Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes was also
signed by the representatives of the BARC, the LBP and farmer beneficiaries. 59 No letter of
invitation was sent or conference meeting held with respect to Hacienda Caylaway because it
was subject to a Voluntary Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the
various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12, Series
of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR
Administrative Order No. 12 does not specify how notices or letters of invitation shall be sent to
the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other
interested parties. The procedure in the sending of these notices is important to comply with the
requisites of due process especially when the owner, as in this case, is a juridical entity.
Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders,
officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before
the DAR, the distinction between natural and juridical persons in the sending of notices may be
found in the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of
pleadings before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of
Procedure. Notices and pleadings are served on private domestic corporations or partnerships in
the following manner:
 Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president,
manager, secretary, cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. — If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president,
manager, secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent
or any of its directors. These persons are those through whom the private domestic corporation
or partnership is capable of action. 62
required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the
areas found actually subject to CARP were not properly identified before they were taken over
by respondent DAR. Respondents insist that the lands were identified because they are all
registered property and the technical description in their respective titles specifies their metes
and bounds. Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason of elevation
or character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but
only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576
hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only
964.0688 hectares were subject to CARP. The haciendas are not entirely agricultural lands. In
fact, the various tax declarations over the haciendas describe the landholdings as "sugarland,"
and "forest, sugarland, pasture land, horticulture and woodland." 71

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the
corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain
that the corporation will receive prompt and proper notice in an action against it. 63 Service must
be made on a representative so integrated with the corporation as to make it a priori supposable
that he will realize his responsibilities and know what he should do with any legal papers served
on him, 64 and bring home to the corporation notice of the filing of the action. 65 Petitioner's
evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's
haciendas. The evidence does not indicate whether Pimentel's duties is so integrated with the
corporation that he would immediately realize his responsibilities and know what he should do
with any legal papers served on him. At the time the notices were sent and the preliminary
conference conducted, petitioner's principal place of business was listed in respondent DAR's
records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101
Aguirre St., Makati, Metro Manila." 67 Pimentel did not hold office at the principal place of
business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in
Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually
resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of
business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
petitioner at its offices in Manila and Makati. These Notices were sent barely three to four
months after Pimentel was notified of the preliminary conference. 68 Why respondent DAR chose
to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that
the land subject to land reform be first identified. The two haciendas in the instant case cover
vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact
areas of the landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions
were compact or contiguous, and which portions were excluded from CARP coverage. Even
respondent DAR's evidence does not show that petitioner, through its duly authorized
representative, was notified of any ocular inspection and investigation that was to be conducted
by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired compulsorily. The right of
retention and how this right is exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. — . . . .
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in case
the area selected for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be
considered a leaseholder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by
the landowner. The tenant must exercise this option within a period of one
(1) year from the time the landowner manifests his choice of the area for
retention.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices
Under the law, a landowner may retain not more than five hectares out of the total area of his
and letters of invitation were validly served on petitioner through him, there is no showing that
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted,
and LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of
the tenant shall have the option to choose whether to remain on the portion or be a beneficiary in
petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On
the same or another agricultural land with similar or comparable features.
the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not
have given Pimentel the authority to bind it to whatever matters were discussed or agreed upon
by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel C. The Voluntary Acquisition of Hacienda Caylaway
was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of
a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6,
1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first
governed by DAR Administrative Order No. 19, series of 1989, 73 and under this order, all VOS
filed before June 15, 1988 shall be heard and processed in accordance with the procedure
provided for in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for
which no payment has been made shall be subject to the notice and hearing
requirements provided in Administrative Order No. 12, Series of 1989, dated
26 July 1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall
be heard and processed in accordance with the procedure provided for in
Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. — The government shall purchase all
agricultural lands it deems productive and suitable to farmer cultivation
voluntarily offered for sale to it at a valuation determined in accordance with
Section 6. Such transaction shall be exempt from the payment of capital
gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set
forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for
the identification of the land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that
these requirements may be dispensed with regard to VOS filed before June 15, 1988? The
answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner
and beneficiaries of the land subject to agrarian reform be identified before the notice of
acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The
Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles. In two separate
Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director,
formally accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544
hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it does not know
where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles
were conducted in 1989, and that petitioner, as landowner, was not denied participation therein,
The results of the survey and the land valuation summary report, however, do not indicate
whether notices to attend the same were actually sent to and received by petitioner or its duly
authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the
operating procedure, much less the notice requirements, before the VOS is accepted by
respondent DAR. Notice to the landowner, however, cannot be dispensed with. It is part of
administrative due process and is an essential requisite to enable the landowner himself to
exercise, at the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they
have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the
municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject
haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A.
No. 6657. 79 In 1993, the Regional Director for Region IV of the Department of Agriculture
certified that the haciendas are not feasible and sound for agricultural development. 80 On March
20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas
adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-agricultural. 81 This
Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning
Ordinance of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for Planning
Areas for New Development allegedly prepared by the University of the
Philippines. 83 Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang
Panlalawigan of Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when
it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao
Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist
belt. 85 Petitioner present evidence before us that these areas are adjacent to the haciendas
subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this
Court to take cognizance of the conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of
petitioner's landholdings does not ipso facto give this Court the power to adjudicate over
petitioner's application for conversion of its haciendas from agricultural to non-agricultural. The
agency charged with the mandate of approving or disapproving applications for conversion is the
DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series
of 1990. Under this A.O., the application for conversion is filed with the MARO where the
property is located. The MARO reviews the application and its supporting documents and
conducts field investigation and ocular inspection of the property. The findings of the MARO are
subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO
may conduct further field investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same.
For lands less than five hectares, the RARO shall approve or disapprove applications for
conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and
forward the records and his report to the Undersecretary for Legal Affairs. Applications over
areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian
Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and
Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and
Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's
jurisdiction over applications for conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove
applications for conversion, restructuring or readjustment of agricultural lands into
non-agricultural uses," pursuant to Section 4 (j) of Executive Order No. 129-A, Series
of 1987.
 B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to the Secretary shall be the same as that of the Regional Director to the
approve or disapprove applications for conversion of agricultural lands for residential, Office of the Secretary. 90
commercial, industrial and other land uses.
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform authority to resolve a controversy the jurisdiction over which is initially lodged with an
Law of 1988, likewise empowers the DAR to authorize under certain conditions, the administrative body of special competence. 91 Respondent DAR is in a better position to resolve
conversion of agricultural lands. petitioner's application for conversion, being primarily the agency possessing the necessary
expertise on the matter. The power to determine whether Haciendas Palico, Banilad and
Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR,
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the
not with this Court.
President, provides that "action on applications for land use conversion on individual
landholdings shall remain as the responsibility of the DAR, which shall utilize as its
primary reference, documents on the comprehensive land use plans and Finally, we stress that the failure of respondent DAR to comply with the requisites of due process
accompanying ordinances passed upon and approved by the local government units in the acquisition proceedings does not give this Court the power to nullify the CLOA's already
concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative
E.O. No. 129-A. 87 process, which has yet to run its regular course. Respondent DAR must be given the chance to
correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's
were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
have been cultivating their lands. 93 It goes against the basic precepts of justice, fairness and
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-
equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the
Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing
farmer beneficiaries hold the property in trust for the rightful owner of the land.
the Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the
issuance, the guiding principle in land use conversion is: three haciendas are nullified for respondent DAR's failure to observe due process therein. In
accordance with the guidelines set forth in this decision and the applicable administrative
procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings
to preserve prime agricultural lands for food production while, at the same
and determination of petitioner's application for conversion.
time, recognizing the need of the other sectors of society (housing, industry
and commerce) for land, when coinciding with the objectives of the
Comprehensive Agrarian Reform Law to promote social justice, SO ORDERED.
industrialization and the optimum use of land as a national resource for
public welfare. 88
Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and
De Leon, Jr., JJ., concur.
"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of
Melo, J., please see concurring and dissenting opinion.
a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of
agricultural land to uses other than agricultural requires field investigation and conferences with
the occupants of the land. They involve factual findings and highly technical matters within the Ynares-Santiago, J., concurring and dissenting opinion.
special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with
specificity how the DAR must go about its task. This time, the field investigation is not conducted
by the MARO but by a special task force, known as the Center for Land Use Policy Planning and Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.
Implementation (CLUPPI-DAR Central Office). The procedure is that once an application for
conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts the notice Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.
and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field
investigation and dialogues with the applicants and the farmer beneficiaries to ascertain the
information necessary for the processing of the application. The Chairman of the CLUPPI Pardo, J., I join the concurring and dissenting opinion of J. Santiago.
deliberates on the merits of the investigation report and recommends the appropriate action.
This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Separate Opinions
Secretary of Agrarian Reform. Applications involving more than fifty hectares are approved or
disapproved by the Secretary. The procedure does not end with the Secretary, however. The
Order provides that the decision of the Secretary may be appealed to the Office of the President MELO, J., concurring and dissenting opinion;
or the Court of Appeals, as the case may be, viz:
I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its
Appeal from the decision of the Undersecretary shall be made to the treatment of the issues. However, I would like to call attention to two or three points which I
Secretary, and from the Secretary to the Office of the President or the Court believe are deserving of special emphasis.
of Appeals as the case may be. The mode of appeal/motion for
reconsideration, and the appeal fee, from Undersecretary to the Office of
The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled
the non-agricultural nature of the property as early as 1975. Related to this are the inexplicable
contradictions between DAR's own official issuances and its challenged actuations in this
particular case.
Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law
declared Nasugbu, Batangas as a tourist zone.
Considering the new and pioneering stage of the tourist industry in 1975, it can safely be
assumed that Proclamation 1520 was the result of empirical study and careful determination, not
political or extraneous pressures. It cannot be disregarded by DAR or any other department of
Government.
In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we
ruled that local governments need not obtain the approval of DAR to reclassify lands from
agricultural to non-agricultural use. In the present case, more than the exercise of that power,
the local governments were merely putting into effect a law when they enacted the zoning
ordinances in question.
Any doubts as to the factual correctness of the zoning reclassifications are answered by the
February 2, 1993 certification of the Department of Agriculture that the subject landed estates
are not feasible and economically viable for agriculture, based on the examination of their slope,
terrain, depth, irrigability, fertility, acidity, and erosion considerations.
I agree with the ponencia's rejection of respondent's argument that agriculture is not
incompatible and may be enforced in an area declared by law as a tourist zone. Agriculture may
contribute to the scenic views and variety of countryside profiles but the issue in this case is not
the beauty of ricefields, cornfields, or coconut groves. May land found to be non-agricultural and
declared as a tourist zone by law, be withheld from the owner's efforts to develop it as such?
There are also plots of land within Clark Field and other commercial-industrial zones capable of
cultivation but this does not subject them to compulsory land reform. It is the best use of the land
for tourist purposes, free trade zones, export processing or the function to which it is dedicated
that is the determining factor. Any cultivation is temporary and voluntary.
The other point I wish to emphasize is DAR's failure to follow its own administrative orders and
regulations in this case.
The contradictions between DAR administrative orders and its actions in the present case may
be summarized:
1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion
No. 44, Series of 1990 that lands classified as non-agricultural prior to June 15, 1988 when the
CARP Law was passed are exempt from its coverage. By what right can DAR now ignore its
own Guidelines in this case of land declared as forming a tourism zone since 1975?
2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous
property of Group Developers and Financiers, Inc. (GDFI) into the Batulao Tourist Resort. Why
should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found
to be similar in nature and declared as such?
3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted
13.5 hectares of petitioner's property also found in Caylaway together, and similarly situated,
with the bigger parcel (Hacienda Caylaway) subject of this petition from CARL coverage. To that
extent, it admits that its earlier blanket objections are unfounded.
4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage
as:
(a) Land found by DAR as no longer suitable for
agriculture and which cannot be given appropriate
valuation by the Land Bank;
(b) Land where DAR has already issued a conversion
order;
(c) Land determined as exempt under DOJ Opinions
Nos. 44 and 181; or
(d) Land declared for non-agricultural use by
Presidential Proclamation.
It is readily apparent that the land in this case falls under all the above categories except the
second one. DAR is acting contrary to its own rules and regulations.
I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity
of the above administrative orders.
DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV
outlines the procedure for reconveyance of land where CLOAs have been improperly issued.
The procedure is administrative, detailed, simple, and speedy. Reconveyance is implemented by
DAR which treats the procedure as "enshrined . . . in Section 50 of Republic Act No. 6657"
(Respondent's Rejoinder). Administrative Order No. 3, Series of 1996 shows there are no
impediments to administrative or judicial cancellations of CLOA's improperly issued over exempt
property. Petitioner further submits, and this respondent does not refute, that 25 CLOAs
covering 3,338 hectares of land owned by the Manila Southcoast Development Corporation also
found in Nasugbu, Batangas, have been cancelled on similar grounds as those in the case at
bar.
The CLOAs in the instant case were issued over land declared as non-agricultural by a
presidential proclamation and confirmed as such by actions of the Department of Agriculture and
the local government units concerned. The CLOAs were issued over adjoining lands similarly
situated and of like nature as those declared by DAR as exempt from CARP coverage. The
CLOAs were surprisingly issued over property which were the subject of pending cases still
undecided by DAR. There should be no question over the CLOAs having been improperly
issued, for which reason, their cancellation is warranted.
YNARES-SANTIAGO, J., concurring and dissenting opinion;
I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions
and the dispositive portion.
With all due respect, the majority opinion centers on procedure but unfortunately ignores the
substantive merits which this procedure should unavoidably sustain.
The assailed decision of the Court of Appeals had only one basic reason for its denial of the
petition, i.e., the application of the doctrine of non-exhaustion of administrative remedies. This
Court's majority ponencia correctly reverses the Court of Appeals on this issue.
The ponencia now states that the issuance of CLOA's to farmer beneficiaries deprived petitioner
Roxas & Co. of its property without just compensation. It rules that the acts of the Department of
Agrarian Reform are patently illegal. It concludes that petitioner's rights were violated, and thus
to require it to exhaust administrative remedies before DAR was not a plain, speedy, and
adequate remedy. Correctly, petitioner sought immediate redress from the Court of Appeals to
this Court.
However, I respectfully dissent from the judgment which remands the case to the DAR. If the
acts of DAR are patently illegal and the rights of Roxas & Co. violated, the wrong decisions of
DAR should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case
the illegally issued CLOAs, must be declared null and void.
Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu,
Batangas, namely: Hacienda Palico comprising of an area of 1,024 hectares more or less,
covered by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda
Banilad comprising an area of 1,050 hectares and covered by TCT No. 924 (Petition, Annex
"I"; Rollo, p. 205); and Hacienda Caylaway comprising an area of 867.4571 hectares and
covered by TCT Nos. T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex
"P"; Rollo, p. 217), T-44663 (Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition, Annex
"R"; Rollo, p. 221).
Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of
either denying or approving the applications, DAR ignored and sat on them for seven (7) years.
In the meantime and in acts of deceptive lip-service, DAR excluded some small and scattered
lots in Palico and Caylaway from CARP coverage. The majority of the properties were parceled
out to alleged farmer-beneficiaries, one at a time, even as petitioner's applications were pending
and unacted upon.
The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for
acquisition of private lands.
The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of
1989 for the identification of the land to be acquired. DAR did not follow its own prescribed
procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.
The procedure on the evaluation and determination of land valuation, the duties of the Municipal
Agrarian Reform Officer (MARO), the Barangay Agrarian Reform Committee (BARC), Provincial
Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD),
the documentation and reports on the step-by-step process, the screening of prospective
Agrarian Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other
mandatory procedures were not followed. The landowner was not properly informed of anything
going on.
Equally important, there was no payment of just compensation. I agree with the ponencia that
due process was not observed in the taking of petitioner's properties. Since the DAR did not
validly acquire ownership over the lands, there was no acquired property to validly convey to any
beneficiary. The CLOAs were null and void from the start.
Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only,
thereby disregarding the procedural requirement that notices be served personally or by
registered mail. This is not disputed by respondents, but they allege that petitioner changed its
address without notifying the DAR. Notably, the procedure prescribed speaks of only two modes
of service of notices of acquisition — personal service and service by registered mail. The non-
inclusion of other modes of service can only mean that the legislature intentionally omitted them.
In other words, service of a notice of acquisition other than personally or by registered mail is not
valid. Casus omissus pro omisso habendus est. The reason is obvious. Personal service and
service by registered mail are methods that ensure the receipt by the addressee, whereas
service by ordinary mail affords no reliable proof of receipt.
Since it governs the extraordinary method of expropriating private property, the CARL should be
strictly construed. Consequently, faithful compliance with its provisions, especially those which
relate to the procedure for acquisition of expropriated lands, should be observed. Therefore, the
service by respondent DAR of the notices of acquisition to petitioner by ordinary mail, not being
in conformity with the mandate of R.A. 6657, is invalid and ineffective.
With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no
notices of acquisition were issued by the DAR, should be declared invalid.
The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures
promulgated by law and DAR and how they have not been complied with. There can be no
debate over the procedures and their violation. However, I respectfully dissent in the conclusions
reached in the last six pages. Inspite of all the violations, the deprivation of petitioner's rights, the
non-payment of just compensation, and the consequent nullity of the CLOAs, the Court is
remanding the case to the DAR for it to act on the petitioner's pending applications for
conversion which have been unacted upon for seven (7) years.
Petitioner had applications for conversion pending with DAR. Instead of deciding them one way
or the other, DAR sat on the applications for seven (7) years. At that same time it rendered the
applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a
denial of the applications because DAR had effectively denied the application against the
applicant without rendering a formal decision. This kind of action preempted any other kind of
decision except denial. Formal denial was even unnecessary. In the case of Hacienda Palico,
the application was in fact denied on November 8, 1993.
There are indisputable and established factors which call for a more definite and clearer
judgment.
The basic issue in this case is whether or not the disputed property is agricultural in nature and
covered by CARP. That petitioner's lands are non-agricultural in character is clearly shown by
the evidence presented by petitioner, all of which were not disputed by respondents. The
disputed property is definitely not subject to CARP.
The nature of the land as non-agricultural has been resolved by the agencies with primary
jurisdiction and competence to decide the issue, namely — (1) a Presidential Proclamation in
1975; (2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the
Municipality of Nasugbu, approved by the Province of Batangas; and (4) by clear inference and
admissions, Administrative Orders and Guidelines promulgated by DAR itself.
The records show that on November 20, 1975 even before the enactment of the CARP law, the
Municipality of Nasugbu, Batangas was declared a "tourist zone" in the exercise of lawmaking
power by then President Ferdinand E. Marcos under Proclamation No. 1520 (Rollo, pp. 122-
123). This Presidential Proclamation is indubitably part of the law of the land.
On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a
zonification ordinance (Rollo, pp. 124-200), pursuant to its powers under Republic Act No.
7160, i.e., the Local Government Code of 1991. The municipal ordinance was approved by the
Sangguniang Panlalawigan of Batangas (Rollo, p. 201). Under this enactment, portions of the
petitioner's properties within the municipality were re-zonified as intended and appropriate for
non-agricultural uses. These two issuances, together with Proclamation 1520, should be
sufficient to determine the nature of the land as non-agricultural. But there is more.
The records also contain a certification dated March 1, 1993 from the Director of Region IV of
the Department of Agriculture that the disputed lands are no longer economically feasible and
sound for agricultural purposes (Rollo, p. 213).
DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-
agricultural when it affirmed the force and effect of Presidential Proclamation 1520. In an Order
dated January 22, 1991, DAR granted the conversion of the adjoining and contiguous
landholdings owned by Group Developer and Financiers, Inc. in Nasugbu pursuant to the
Presidential Proclamation. The property alongside the disputed properties is now known as
"Batulao Resort Complex". As will be shown later, the conversion of various other properties in
Nasugbu has been ordered by DAR, including a property disputed in this petition, Hacienda
Caylaway.
Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's
haciendas are agricultural, citing, among other things, petitioner's acts of voluntarily offering
Hacienda Caylaway for sale and applying for conversion its lands from agricultural to non-
agricultural.
Respondents, on the other hand, did not only ignore the administrative and executive decisions.
It also contended that the subject land should be deemed agricultural because it is neither
residential, commercial, industrial or timber. The character of a parcel of land, however, is not
determined merely by a process of elimination. The actual use which the land is capable of
should be the primordial factor.
RA 6657 explicitly limits its coverage thus:
The Comprehensive Agrarian Reform Law of 1998 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order
No. 229, including other lands of the public domain suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive
Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or
suitable for agriculture. No reclassification of forest or mineral lands to
agricultural lands shall be undertaken after the approval of this Act until
Congress, taking into account, ecological, developmental and equity
considerations, shall have determined by law, the specific limits of the public
domain;
(b) All lands of the public domain in excess of the specific limits as
determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for
agriculture; and
(d) All private lands devoted to or suitable for a agriculture regardless of the
agricultural products raised or that can be raised thereon." (RA 6657, Sec.
4; emphasis provided)
In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty,
Inc. v. Department of Agrarian Reform, this Court had occasion to rule that agricultural lands are
only those which are arable and suitable.
It is at once noticeable that the common factor that classifies land use as agricultural, whether it
be public or private land, is its suitability for agriculture. In this connection, RA 6657 defines
"agriculture" as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the
cultivation of the soil, planting of crops, growing of fruit trees, raising of
livestock, poultry or fish, including the harvesting of such farm products, and
other farm activities, and practices performed by a farmer in conjunction
with such farming operations done by persons whether natural or juridical.
(RA 6657, sec. 3[b])
In the case at bar, petitioner has presented certifications issued by the Department of Agriculture
to the effect that Haciendas Palico, Banilad and Caylaway are not feasible and economically
viable for agricultural development due to marginal productivity of the soil, based on an
examination of their slope, terrain, depth, irrigability, fertility, acidity, and erosion factors (Petition,
Annex "L", Rollo, p. 213; Annex "U", Rollo, p. 228). This finding should be accorded respect
considering that it came from competent authority, said Department being the agency possessed
with the necessary expertise to determine suitability of lands to agriculture. The DAR Order
dated January 22, 1991 issued by respondent itself stated that the adjacent land now known as
the Batulao Resort Complex is hilly, mountainous, and with long and narrow ridges and deep
gorges. No permanent sites are planted. Cultivation is by kaingin method. This confirms the
findings of the Department of Agriculture.
Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity
of the reclassification of petitioner's lands by the Sangguniang Bayan of Nasugbu, Batangas,
pursuant to Section 20 of the Local Government Code of 1991. It shows that the condition
imposed by respondent Secretary of Agrarian Reform on petitioner for withdrawing its voluntary
offer to sell Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been
adequately met. In fact, the DAR in its Order in Case No. A-9999-050-97, involving a piece of
land also owned by petitioner and likewise located in Caylaway, exempted it from the coverage
of CARL (Order dated May 17, 1999; Annex "D" of Petitioner's Manifestation), on these grounds.
Furthermore, and perhaps more importantly, the subject lands are within an area declared in
1975 by Presidential Proclamation No. 1520 to be part of a tourist zone. This determination was
made when the tourism prospects of the area were still for the future. The studies which led to
the land classification were relatively freer from pressures and, therefore, more objective and
open-minded. Respondent, however, contends that agriculture is not incompatible with the
lands' being part of a tourist zone since "agricultural production, by itself, is a natural asset and,
if properly set, can command tremendous aesthetic value in the form of scenic views and variety
of countryside profiles." (Comment, Rollo, 579).
The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush
greeneries. Verily, tourism is enhanced by structures and facilities such as hotels, resorts, rest
houses, sports clubs and golf courses, all of which bind the land and render it unavailable for
cultivation. As aptly described by petitioner:
The development of resorts, golf courses, and commercial centers is
inconsistent with agricultural development. True, there can be limited
agricultural production within the context of tourism development. However,
such small scale farming activities will be dictated by, and subordinate to the
needs or tourism development. In fact, agricultural use of land within
Nasugbu may cease entirely if deemed necessary by the Department of
Tourism (Reply, Rollo, p. 400).
The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell
Hacienda Caylaway should not be deemed an admission that the land is agricultural. Rather, the
offer was made by petitioner in good faith, believing at the time that the land could still be
developed for agricultural production. Notably, the offer to sell was made as early as May 6,
1988, before the soil thereon was found by the Department of Agriculture to be unsuitable for
agricultural development (the Certifications were issued on 2 February 1993 and 1 March 1993).
Petitioner's withdrawal of its voluntary offer to sell, therefore, was not borne out of a whimsical or
capricious change of heart. Quite simply, the land turned out to be outside of the coverage of the
CARL, which by express provision of RA 6657, Section 4, affects only public and private
agricultural lands. As earlier stated, only on May 17, 1999, DAR Secretary Horacio Morales, Jr.
approved the application for a lot in Caylaway, also owned by petitioner, and confirmed the
seven (7) documentary evidences proving the Caylaway area to be non-agricultural (DAR Order
dated 17 May 1999, in Case No. A-9999-050-97, Annex "D" Manifestation).
The DAR itself has issued administrative circulars governing lands which are outside of CARP
and may not be subjected to land reform. Administrative Order No. 3, Series of 1996 declares in
its policy statement what landholdings are outside the coverage of CARP. The AO is explicit in
providing that such non-covered properties shall be reconveyed to the original transferors or
owners.
These non-covered lands are:
a. Land, or portions thereof, found to be no longer suitable for agriculture and, therefore, could
not be given appropriate valuation by the Land Bank of the Philippines (LBP);
b. Those were a Conversion Order has already been issued by the DAR allowing the use of the
landholding other than for agricultural purposes in accordance with Section 65 of R.A. No. 6657
and Administrative Order No. 12, Series of 1994;
c. Property determined to be exempted from CARP coverage pursuant to Department of Justice
Opinion Nos. 44 and 181; or
d. Where a Presidential Proclamation has been issued declaring the subject property for certain
uses other than agricultural. (Annex "F", Manifestation dated July 23, 1999)
The properties subject of this Petition are covered by the first, third, and fourth categories of the
Administrative Order. The DAR has disregarded its own issuances which implement the law.
To make the picture clearer, I would like to summarize the law, regulations, ordinances, and
official acts which show beyond question that the disputed property is non-agricultural, namely:
(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law
of the land. It declares the area in and around Nasugbu, Batangas, as a
Tourist Zone. It has not been repealed, and has in fact been used by DAR
to justify conversion of other contiguous and nearby properties of other
parties.
(b) Ordinances of Local Governments. Zoning ordinance of the
Sangguniang Bayan of Nasugbu, affirmed by the Sangguniang
Panlalawigan of Batangas, expressly defines the property as tourist, not
agricultural. The power to classify its territory is given by law to the local
governments.
(c) Certification of the Department of Agriculture that the property is not
suitable and viable for agriculture. The factual nature of the land, its
marginal productivity and non-economic feasibility for cultivation, are
described in detail.
(d) Acts of DAR itself which approved conversion of contiguous or adjacent
land into the Batulao Resorts Complex. DAR described at length the non-
agricultural nature of Batulao and of portion of the disputed property,
particularly Hacienda Caylaway.
(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series
of 1994 subscribes to the Department of Justice opinion that the lands
classified as non-agricultural before the CARP Law, June 15, 1988, are
exempt from CARP. DAR Order dated January 22, 1991 led to the Batulao
Tourist Area. DAR Order in Case No. H-9999-050-97, May 17, 1999,
exempted 13.5 hectares of Caylaway, similarly situated and of the same
nature as Batulao, from coverage. DAR Administrative Order No. 3, Series
of 1996, if followed, would clearly exclude subject property from coverage.
As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.
In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has
submitted a municipal map of Nasugbu, Batangas (Annex "E", Manifestation dated July 23,
1999). The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI
property, now Batulao Tourist Resort, shows that the properties subject of this case are equally,
if not more so, appropriate for conversion as the GDFI resort.
Petitioner's application for the conversion of its lands from agricultural to non-agricultural was
meant to stop the DAR from proceeding with the compulsory acquisition of the lands and to seek
a clear and authoritative declaration that said lands are outside of the coverage of the CARL and
can not be subjected to agrarian reform.
Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to
recognize Presidential Proclamation No. 1520, stating that respondent DAR has not been
consistent in its treatment of applications of this nature. It points out that in the other case
involving adjoining lands in Nasugbu, Batangas, respondent DAR ordered the conversion of the
lands upon application of Group Developers and Financiers, Inc. Respondent DAR, in that case,
issued an Order dated January 22, 1991 denying the motion for reconsideration filed by the
farmers thereon and finding that:
In fine, on November 27, 1975, or before the movants filed their instant
motion for reconsideration, then President Ferdinand E. Marcos issued
 Proclamation No. 1520, declaring the municipalities of Maragondon and
Ternate in the province of Cavite and the municipality of Nasugbu in the
province of Batangas as tourist zone. Precisely, the landholdings in question
are included in such proclamation. Up to now, this office is not aware that
said issuance has been repealed or amended (Petition, Annex "W"; Rollo, p.
238).
The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of
DAR dated August 20, 1999), show that DAR has been inconsistent to the extent of being
arbitrary.
Apart from the DAR Orders approving the conversion of the adjoining property now called
Batulao Resort Complex and the DAR Order declaring parcels of the Caylaway property as not
covered by CARL, a major Administrative Order of DAR may also be mentioned.
The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of
Petitioner's Manifestation) stated that DAR was given authority to approve land conversions only
after June 15, 1988 when RA 6657, the CARP Law, became effective. Following the DOJ
Opinion, DAR issued its AO No. 06, Series of 1994 providing for the Guidelines on Exemption
Orders (Annex "B", Id.). The DAR Guidelines state that lands already classified as non-
agricultural before the enactment of CARL are exempt from its coverage. Significantly, the
disputed properties in this case were classified as tourist zone by no less than a Presidential
Proclamation as early as 1975, long before 1988.
The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the
Constitution guarantees that "(n)o person shall be deprived of life, liberty or property without due
process of law, nor shall any person be denied the equal protection of the laws" (Constitution,
Art. III, Sec. 1). Respondent DAR, therefore, has no alternative but to abide by the declaration in
Presidential Proclamation 1520, just as it did in the case of Group Developers and Financiers,
Inc., and to treat petitioners' properties in the same way it did the lands of Group
Developers, i.e., as part of a tourist zone not suitable for agriculture.
On the issue of non-payment of just compensation which results in a taking of property in
violation of the Constitution, petitioner argues that the opening of a trust account in its favor did
not operate as payment of the compensation within the meaning of Section 16 (e) of RA 6657.
In Land Bank of the Philippines v. Court of Appeals (249 SCRA 149, at 157 [1995]), this Court
struck down as null and void DAR Administrative Circular No. 9, Series of 1990, which provides
for the opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in
Section 16 (e) of RA 6657.
It is very explicit therefrom (Section 16 [e]) that the deposit must be made
only in "cash" or in "LBP bonds." Nowhere does it appear nor can it be
inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit, that
should have been made express, or at least, qualifying words ought to have
appeared from which it can be fairly deduced that a "trust account" is
allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to
warrant an expanded construction of the term "deposit."
xxx xxx xxx
In the present suit, the DAR clearly overstepped the limits of its powers to
enact rules and regulations when it issued Administrative Circular No. 9.
There is no basis in allowing the opening of a trust account in behalf of the
landowner as compensation for his property because, as heretofore
discussed, section 16(e) of RA 6657 is very specific that the deposit must
be made only in "cash" or in "LBP bonds." In the same vein, petitioners
cannot invoke LRA Circular Nos. 29, 29-A and 54 because these
implementing regulations cannot outweigh the clear provision of the law.
Respondent court therefore did not commit any error in striking down
Administrative Circular No. 9 for being null and void.
There being no valid payment of just compensation, title to petitioner's landholdings cannot be
validly transferred to the Government. A close scrutiny of the procedure laid down in Section 16
of RA 6657 shows the clear legislative intent that there must first be payment of the fair value of
the land subject to agrarian reform, either directly to the affected landowner or by deposit of cash
or LBP bonds in the DAR-designated bank, before the DAR can take possession of the land and
request the register of deeds to issue a transfer certificate of title in the name of the Republic of
the Philippines. This is only proper inasmuch as title to private property can only be acquired by
the government after payment of just compensation In Association of Small Landowners in the
Philippines v. Secretary of Agrarian Reform (175 SCRA 343, 391 [1989]), this Court held:
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt of the landowner of the
corresponding payment or the deposit by the DAR of the compensation in
cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. No outright change of ownership is contemplated either.
Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their
distribution to farmer-beneficiaries were illegal inasmuch as no valid payment of compensation
for the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only
to the beneficiaries after the DAR takes actual possession of the land (RA 6657, Sec. 24), which
in turn should only be after the receipt by the landowner of payment or, in case of rejection or no
response from the landowner, after the deposit of the compensation for the land in cash or in
LBP bonds (RA 6657, Sec. 16[e]).
Respondents argue that the Land Bank ruling should not be made to apply to the compulsory
acquisition of petitioner's landholdings in 1993, because it occurred prior to the promulgation of
the said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on
constitutional considerations, where the prospective application would result in a violation of a
constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without
a valid payment of just compensation, thus violating the Constitutional mandate that "(p)rivate
property shall not be taken for public use without just compensation" (Constitution, Art. III, Sec.
9). Hence, to deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that
it came later than the actual expropriation would be repugnant to petitioner's fundamental rights.
The controlling last two (2) pages of the ponencia state:
Finally, we stress that the failure of respondent DAR to comply with the
requisites of due process in the acquisition proceedings does not give this
Court the power to nullify the CLOA's already issued to the farmer
beneficiaries. To assume the power is to short-circuit the administrative
process, which has yet to run its regular course. Respondent DAR must be
given the chance to correct its procedural lapses in the acquisition
proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer
beneficiaries in 1993. Since then until the present, these farmers have been
cultivating their lands. It goes against the basic precepts of justice, fairness
and equity to deprive these people, through no fault of their own, of the land
 they till. Anyhow, the farmer beneficiaries hold the property in trust for the case into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order,
rightful owner of the land. has decided that the land —

I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the
DAR to first reverse and correct itself.
Given the established facts, there was no valid transfer of petitioner's title to the Government.
This being so, there was also no valid title to transfer to third persons; no basis for the issuance
of CLOAs.
Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of
title is sufficient to invalidate them.
The Court of Appeals said so in its Resolution in this case. It stated:
1. Is, as contended by the petitioner GDFI "hilly, mountainous, and
characterized by poor soil condition and nomadic method of cultivation,
hence not suitable to agriculture."
2. Has as contiguous properties two haciendas of Roxas y Cia and found by
Agrarian Reform Team Leader Benito Viray to be "generally rolling, hilly and
mountainous and strudded (sic) with long and narrow ridges and deep
gorges. Ravines are steep grade ending in low dry creeks."
3. Is found in an. area where "it is quite difficult to provide statistics on rice
and corn yields because there are no permanent sites planted. Cultivation is
by Kaingin Method."

Contrary to the petitioner's argument that issuance of CLOAs to the

4. Is contiguous to Roxas Properties in the same area where "the people
beneficiaries prior to the deposit of the offered price constitutes violation of
entered the property surreptitiously and were difficult to stop because of the
due process, it must be stressed that the mere issuance of the CLOAs does
wide area of the two haciendas and that the principal crop of the area is
not vest in the farmer/grantee ownership of the land described therein.
sugar . . .." (emphasis supplied).

At most the certificate merely evidences the government's recognition of the

I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by
grantee as the party qualified to avail of the statutory mechanisms for the
Torrens Titles, the properties falling under improperly issued CLOAs are cancelled by mere
acquisition of ownership of the land. Thus failure on the part of the
administrative procedure which the Supreme Court can declare in cases properly and
farmer/grantee to comply with his obligations is a ground for forfeiture of his
adversarially submitted for its decision. If CLOAs can under the DAR's own order be cancelled
certificate of transfer. Moreover, where there is a finding that the property is
administratively, with more reason can the courts, especially the Supreme Court, do so when the
indeed not covered by CARP, then reversion to the landowner shall
matter is clearly in issue.
consequently be made, despite issuance of CLOAs to the beneficiaries.
(Resolution dated January 17, 1997, p. 6)
With due respect, there is no factual basis for the allegation in the motion for intervention that
farmers have been cultivating the disputed property.
DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of
Petitioner's Manifestation) outlines the procedure for the reconveyance to landowners of
properties found to be outside the coverage of CARP. DAR itself acknowledges that they can The property has been officially certified as not fit for agriculture based on slope, terrain, depth,
administratively cancel CLOAs if found to be erroneous. From the detailed provisions of the irrigability, fertility, acidity, and erosion. DAR, in its Order dated January 22, 1991, stated that "it
Administrative Order, it is apparent that there are no impediments to the administrative is quite difficult to provide statistics on rice and corn yields (in the adjacent property) because
cancellation of CLOAs improperly issued over exempt properties. The procedure is followed all there are no permanent sites planted. Cultivation is by kaingin method." Any allegations of
over the country. The DAR Order spells out that CLOAs are not Torrens Titles. More so if they cultivation, feasible and viable, are therefore falsehoods.
affect land which is not covered by the law under which they were issued. In its Rejoinder,
respondent DAR states:
The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered
the property surreptitiously and were difficult to stop . . .."
3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously
issued Emancipation Patents (EPs) or Certificate of Landownership Awards
The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their
(CLOAs), same is enshrined, it is respectfully submitted, in Section 50 of
dissenting opinion (Rollo, p. 116), are relevant:
Republic Act No. 6657.

2.9 The enhanced value of land in Nasugbu, Batangas, has attracted

In its Supplemental Manifestation, petitioner points out, and this has not been disputed by
respondents, that DAR has also administratively cancelled twenty five (25) CLOAs covering
Nasugbu properties owned by the Manila Southcoast Development Corporation near subject
Roxas landholdings. These lands were found not suitable for agricultural purposes because of
soil and topographical characteristics similar to those of the disputed properties in this case.
The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991
approving the development of property adjacent and contiguous to the subject properties of this
unscrupulous individuals who distort the spirit of the Agrarian Reform
Program in order to turn out quick profits. Petitioner has submitted copies of
CLOAs that have been issued to persons other than those who were
identified in the Emancipation Patent Survey Profile as legitimate Agrarian
Reform beneficiaries for particular portions of petitioner's lands. These
persons to whom the CLOAs were awarded, according to petitioner, are not
and have never been workers in petitioner's lands. Petitioners say they are
not even from Batangas but come all the way from Tarlac. DAR itself is not
unaware of the mischief in the implementation of the CARL in some areas of
 the country, including Nasugbu. In fact, DAR published a "WARNING TO
THE PUBLIC" which appeared in the Philippine Daily Inquirer of April 15,
1994 regarding this malpractice.
2.10 Agrarian Reform does not mean taking the agricultural property of one
and giving it to another and for the latter to unduly benefit therefrom by
subsequently "converting" the same property into non-agricultural purposes.
2.11 The law should not be interpreted to grant power to the State, thru the
DAR, to choose who should benefit from multi-million peso deals involving
lands awarded to supposed agrarian reform beneficiaries who then apply for
conversion, and thereafter sell the lands as non-agricultural land.
Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not
titles. They state that "rampant selling of rights", should this occur, could be remedied by the
cancellation or recall by DAR.
In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R.
No. 131457, April 24, 1998), this Court found the CLOAs given to the respondent farmers to be
improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has
presented a stronger case than petitioners in the aforementioned case. The procedural problems
especially the need for referral to the Court of Appeals are not present. The instant petition
questions the Court of Appeals decision which acted on the administrative decisions. The
disputed properties in the present case have been declared non-agricultural not so much
because of local government action but by Presidential Proclamation. They were found to be
non-agricultural by the Department of Agriculture, and through unmistakable implication, by DAR
itself. The zonification by the municipal government, approved by the provincial government, is
not the only basis.
On a final note, it may not be amiss to stress that laws which have for their object the
preservation and maintenance of social justice are not only meant to favor the poor and
underprivileged. They apply with equal force to those who, notwithstanding their more
comfortable position in life, are equally deserving of protection from the courts. Social justice is
not a license to trample on the rights of the rich in the guise of defending the poor, where no act
of injustice or abuse is being committed against them. As we held in Land Bank (supra.):
It has been declared that the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to deny
justice to the landowner whenever truth and justice happen to be on his
side. As eloquently stated by Justice Isagani Cruz:
. . . social justice — or any justice for that matter — is
for the deserving, whether he be a millionaire in his
mansion or a pauper in his hovel. It is true that, in case
of reasonable doubt, we are called upon to tilt the
balance in favor of the poor simply because they are
poor, to whom the Constitution fittingly extends its
sympathy and compassion. But never is it justified to
prefer the poor simply because they are poor, or to
eject the rich simply because they are rich, for justice
must always be served, for poor and rich alike,
according to the mandate of the law.
IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare
Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu, Batangas, to be non-
agricultural and outside the scope of Republic Act No. 6657. I further vote to declare the
Certificates of Land Ownership Award issued by respondent Department of Agrarian Reform null
and void and to enjoin respondents from proceeding with the compulsory acquisition of the lands
within the subject properties. I finally vote to DENY the motion for intervention.
G.R. No. 187714 March 8, 2011
AQUILINO Q. PIMENTEL, JR., MANUEL B. VILLAR, JOKER P. ARROYO, FRANCIS N.
PANGILINAN, PIA S. CAYETANO, and ALAN PETER S. CAYETANO, Petitioners,
vs.
SENATE COMMITTEE OF THE WHOLE represented by SENATE PRESIDENT JUAN
PONCE ENRILE, Respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for prohibition1 with prayer for issuance of a writ of preliminary
injunction and/or temporary restraining order filed by Senators Aquilino Q. Pimentel, Jr. (Senator
Pimentel), Manuel B. Villar (Senator Villar), Joker P. Arroyo, Francis N. Pangilinan, Pia S.
Cayetano, and Alan Peter S. Cayetano (petitioners). Petitioners seek to enjoin the Senate
Committee of the Whole (respondent) from conducting further hearings on the complaint filed by
Senator Maria Ana Consuelo A.S. Madrigal (Senator Madrigal) against Senator Villar pursuant to
Senate Resolution No. 706 (P.S. Resolution 706) on the alleged double insertion of ₱200 million
for the C-5 Road Extension Project in the 2008 General Appropriations Act.
The Antecedents
On 15 September 2008, Senator Panfilo Lacson (Senator Lacson) delivered a privilege speech
entitled "Kaban ng Bayan, Bantayan!"2 In his privilege speech, Senator Lacson called attention
to the congressional insertion in the 2008 General Appropriations Act, particularly the ₱200
million appropriated for the construction of the President Carlos P. Garcia Avenue Extension
from Sucat Luzon Expressway to Sucat Road in Parañaque City including Right-of-Way (ROW),
and another ₱200 million appropriated for the extension of C-5 road including ROW. Senator
Lacson stated that C-5 is what was formerly called President Carlos P. Garcia Avenue and that
the second appropriation covers the same stretch – from Sucat Luzon Expressway to Sucat
Road in Parañaque City. Senator Lacson inquired from DBM Secretary Rolando Andaya, Jr.
about the double entry and was informed that it was on account of a congressional insertion.
Senator Lacson further stated that when he followed the narrow trail leading to the double entry,
it led to Senator Villar, then the Senate President.
On 8 October 2008, Senator Madrigal introduced P.S. Resolution 706, 3 the full text of which
reads:
WHEREAS the Senate President has repeatedly and publicly "advocated" (sic) the construction
of the C-5 Road/Pres. C.P. Garcia Avenue Extension linking Sucat Road in Parañaque City to
the South Luzon Expressway;
WHEREAS it was discovered that there was a double insertion of ₱200 million for the C-5 Road
Extension project in the 2008 General Appropriations Act;
WHEREAS Committee on Finance Chair Sen. Juan Ponce Enrile confirmed that the double
insertion for the C-5 Road Extension Project was made by the Senate President;
WHEREAS this double insertion is only the tip of the iceberg;
WHEREAS there is overwhelming evidence to show that the Senate President, from the time he
was member of the House of Representatives, used his influence on the executive to cause the
realignment of the C-5 Road Extension project to ensure that his properties in Barangay San
Dionisio, Parañaque City and Barangays Pulang Lupa and Mayuno Uno, Las Piñas would be
financially benefited by the construction of the new road;
WHEREAS there is overwhelming evidence to show that the Senate President, through his
corporations, negotiated the sale of his properties as roads right of way to the government, the
same properties affected by the projects he proposed;
WHEREAS there is overwhelming evidence to show that the Senate President caused the sale
of his landholdings to government as a grossly overpriced cost prejudicial to other lot owners in
the area, the government, and the Filipino people;
WHEREAS there is overwhelming evidence to show that the Senate President, in the overpriced
sale of another property, used his power and influence to extort from the original landowner the
profit made from the overprice by the Villar owned corporations;
WHEREAS these acts of the Senate President are in direct violation of the Constitution, the Anti-
Graft and Corrupt Practices Act, the Code of Conduct and Ethical Standards of Public Officers;
WHEREAS the Senate President has violated the public trust of the people in order to serve his
personal interests thereby sacrificing the people’s welfare;
WHEREAS the illegal and unethical conduct of the Senate President has betrayed the trust of
the people, and by doing so has shamed the Philippine Senate;
WHEREAS it is incumbent upon the members of the Senate now to reclaim the people’s trust
and confidence and show that the illegal conduct of any of its member, even of its leaders, shall
not go unpunished;
WHEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, TO DIRECT THE
COMMITTEE ON ETHICS AND PRIVILEGES TO INVESTIGATE THE CONDUCT OF SENATE
PRESIDENT MANUEL B. VILLAR, JR. FOR USING HIS POSITION OF POWER TO
INFLUENCE PUBLIC OFFICIALS IN RELOCATING THE C-5 ROAD EXTENSION PROJECT
TO DELIBERATELY PASS THRU HIS PROPERTIES, AND TO NEGOTIATE THE
OVERPRICED PURCHASE OF ROAD RIGHTS OF WAY THRU SEVERAL PROPERTIES
ALSO OWNED BY HIS CORPORATIONS REDOUNDING IN HUGE PERSONAL FINANCIAL
BENEFITS FOR HIM TO THE DETRIMENT OF THE FILIPINO PEOPLE, THEREBY
RESULTING IN A BLATANT CONFLICT OF INTEREST.
Adopted,
(Sgd.)
M.A. MADRIGAL4
On even date, P.S. Resolution 706 was referred to the Committee on Ethics and Privileges
(Ethics Committee) which at that time was composed of the following members:
Sen. Pia S. Cayetano - Chairperson
Sen. Loren Legarda - Member in lieu of Sen. Madrigal
Sen. Joker Arroyo - Member
Sen. Alan Peter Cayetano- Member
Sen. Miriam Defensor-Santiago- Member
Sen. Gregorio Honasan - Member
Sen. Panfilo Lacson - Inhibited and replaced by Sen. Rodolfo Biazon
On 17 November 2008, Senator Juan Ponce Enrile (Senator Enrile) was elected Senate
President. The Ethics Committee was reorganized with the election of Senator Lacson as
Chairperson, and Senators Richard Gordon, Gregorio Honasan, Loren Legarda, and Mar Roxas
as members for the Majority. On 16 December 2008, Senator Lacson inquired whether the
Minority was ready to name their representatives to the Ethics Committee. 5 After consultation
with the members of the Minority, Senator Pimentel informed the body that there would be no
member from the Minority in the Ethics Committee.6 On 26 January 2009, Senator Lacson
reiterated his appeal to the Minority to nominate their representatives to the Ethics
Committee.7 Senator Pimentel stated that it is the stand of the Minority not to nominate any of
their members to the Ethics Committee, but he promised to convene a caucus to determine if the
Minority’s decision on the matter is final.8 Thereafter, the Senate adopted the Rules of the
Senate Committee on Ethics and Privileges (Committee Rules) which was published in the
Official Gazette on 23 March 2009.9
On 20 April 2009, Senator Villar delivered a privilege speech10 where he stated that he would
answer the accusations against him on the floor and not before the Ethics Committee. On 27
April 2009, Senator Lacson delivered another privilege speech11 where he stated that the Ethics
Committee was not a kangaroo court. However, due to the accusation that the Ethics Committee
could not act with fairness on Senator Villar’s case, Senator Lacson moved that the
responsibility of the Ethics Committee be undertaken by the Senate, acting as a Committee of
the Whole. The motion was approved with ten members voting in favor, none against, and five
abstentions.12
Respondent Senate Committee of the Whole conducted its hearings on 4 May 2009, with eleven
Senators present, and on 7 May 2009, with eight Senators present. On both hearings,
petitioners objected to the application of the Rules of the Ethics Committee to the Senate
Committee of the Whole. In particular, petitioners questioned the determination of the quorum.
On 11 May 2009, petitioners proposed 11 amendments to the Rules of the Ethics Committee
that would constitute the Rules of the Senate Committee of the Whole, out of which three
amendments were adopted. On 14 May 2009, Senator Pimentel raised as an issue the need to
publish the proposed amended Rules of the Senate Committee of the Whole. On even date,
respondent proceeded with the Preliminary Inquiry on P.S. Resolution 706. On 18 May 2009, the
Chairman submitted a report on the Preliminary Inquiry with a directive to all Senators to come
up with a decision on the preliminary report on 21 May 2009. On 21 May 2009, respondent
declared that there was substantial evidence to proceed with the adjudicatory hearing. The
preliminary conference was set on 26 May 2009.
Petitioners came to this Court for relief, raising the following grounds:
1. The transfer of the complaint against Senator Villar from the Ethics Committee to
the Senate Committee of the Whole is violative of Senator Villar’s constitutional right
to equal protection;
2. The Rules adopted by the Senate Committee of the Whole for the investigation of
the complaint filed by Senator Madrigal against Senator Villar is violative of Senator
Villar’s right to due process and of the majority quorum requirement under Art. VI, Sec.
16(2) of the Constitution; and
3. The Senate Committee of the Whole likewise violated the due process clause of the
Constitution when it refused to publish the Rules of the Senate Committee of the
Whole in spite of its own provision [which] require[s] its effectivity upon publication. 13
In its Comment, respondent argues that:
1. The instant petition should be dismissed for failure to join or implead an
indispensable party. In the alternative, the instant petition should be archived until
such time that the said indispensable party has been joined or impleaded and afforded
the opportunity to be heard;
2. There was no grave abuse of discretion on the part of respondent Committee;
3. Petitioners are not entitled to a writ of prohibition for failure to prove grave abuse of
discretion on the part of respondent Committee of the Whole;
4. The principle of separation of powers must be upheld;
5. The instant petition must be dismissed for being premature. Petitioners failed to
observe the doctrine or primary jurisdiction or prior resort;
6. It is within the power of Congress to discipline its members for disorderly behavior;
7. The determination of what constitutes disorderly behavior is a political question
which exclusively pertains to Congress;
8. The Internal Rules of the Senate are not subject to judicial review in the absence of
grave abuse of discretion; [and]
9. The Rules of the Ethics Committee, which have been duly published and adopted[,]
allow the adoption of supplementary rules to govern adjudicatory hearings. 14
The Issues
The issues for the Court’s resolution are the following:
1. Whether Senator Madrigal, who filed the complaint against Senator Villar, is an
indispensable party in this petition;
2. Whether the petition is premature for failure to observe the doctrine of primary
jurisdiction or prior resort;
3. Whether the transfer of the complaint against Senator Villar from the Ethics
Committee to the Senate Committee of the Whole is violative of Senator Villar’s right
to equal protection;
4. Whether the adoption of the Rules of the Ethics Committee as Rules of the Senate
Committee of the Whole is a violative of Senator Villar’s right to due process and of
the majority quorum requirement under Art. VI, Section 16(2) of the Constitution; and
5. Whether publication of the Rules of the Senate Committee of the Whole is required
for their effectivity.
The Ruling of this Court
Indispensable Party
Section 7, Rule 3 of the 1997 Rules of Civil Procedure provides:
SEC. 7 – Compulsory joinder of indispensable parties. - Parties in interest without whom no final
determination can be had of an action shall be joined as plaintiffs or defendants.
The test to determine if a party is an indispensable party is as follows:
An indispensable party is a party who has an interest in the controversy or subject matter that a
final adjudication cannot be made, in his absence, without injuring or affecting that interest, a
party who has not only an interest in the subject matter of the controversy, but also has an
interest of such nature that a final decree cannot be made without affecting his interest or
leaving the controversy in such a condition that its final determination may be wholly inconsistent
with equity and good conscience. It has also been considered that an indispensable party is a
person in whose absence there cannot be a determination between the parties already before
the court which is effective, complete or equitable. Further, an indispensable party is one who
must be included in an action before it may properly go forward.
A person who is not an indispensable party, however, if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be directly
or injuriously affected by a decree which does complete justice between them. Also, a person is
not an indispensable party if his presence would merely permit a complete relief between him
and those already parties to the action, or if he has no interest in the subject matter of the action.
It is not a sufficient reason to declare a person to be an indispensable party that his presence
will avoid multiple litigation.15
In this case, Senator Madrigal is not an indispensable party to the petition before the Court.
While it may be true that she has an interest in the outcome of this case as the author of P.S.
Resolution 706, the issues in this case are matters of jurisdiction and procedure on the part of
the Senate Committee of the Whole which can be resolved without affecting Senator Madrigal’s
interest. The nature of Senator Madrigal’s interest in this case is not of the nature that this case
could not be resolved without her participation.1awphi1
Doctrine of Primary Jurisdiction
Respondent asserts that the doctrine of primary jurisdiction "simply calls for the determination of
administrative questions, which are ordinarily questions of fact, by administrative agencies rather
than by courts of justice."16 Citing Pimentel v. HRET,17 respondent avers that primary recourse of
petitioners should have been to the Senate and that this Court must uphold the separation of
powers between the legislative and judicial branches of the government.
The doctrine of primary jurisdiction does not apply to this case. The Court has ruled:
x x x It may occur that the Court has jurisdiction to take cognizance of a particular case, which
means that the matter involved is also judicial in character. However, if the case is such that its
determination requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions of fact are involved, then
relief must first be obtained in an administrative proceeding before a remedy will be supplied by
the courts even though the matter is within the proper jurisdiction of the court. x x x18
The issues presented here do not require the expertise, specialized skills and knowledge of
respondent for their resolution. On the contrary, the issues here are purely legal questions which
are within the competence and jurisdiction of the Court, and not an administrative agency or the
Senate to resolve.19
As regards respondent’s invocation of separation of powers, the Court reiterates that "the
inviolate doctrine of separation of powers among the legislative, executive or judicial branches of
government by no means prescribes for absolute autonomy in the discharge by each of that part
of the governmental power assigned to it by the sovereign people." 20 Thus, it has been held that
"the power of judicial review is not so much power as it is [a] duty imposed on this Court by the
Constitution and that we would be remiss in the performance of that duty if we decline to look
behind the barriers set by the principle of separation of powers."21 The Court, therefore, is not
precluded from resolving the legal issues raised by the mere invocation by respondent of the
doctrine of separation of powers. On the contrary, the resolution of the legal issues falls within
the exclusive jurisdiction of this Court.
Transfer of the Complaint from the Ethics Committee
to the Senate Committee on the Whole
Petitioners allege that the transfer of the complaint against Senator Villar to the Senate
Committee of the Whole violates his constitutional right to equal protection. Petitioners allege
that the Senate Committee of the Whole was constituted solely for the purpose of assuming
jurisdiction over the complaint against Senator Villar. Petitioners further allege that the act was
discriminatory and removed Senator Villar’s recourse against any adverse report of the Ethics
Committee to the Senate as a body.
We do not agree with petitioners.
Reviewing the events that led to the constitution of the Senate Committee of the Whole, the
Court notes that upon the election of Senator Enrile as Senate President on 17 November 2008,
the Ethics Committee was also reorganized. Senator Lacson, who first called the Senate’s
attention to the alleged irregularities committed by Senator Villar, was elected as Chairperson.
On 16 December 2008, when Senator Lacson inquired whether the Minority was ready to name
their representatives to the Ethics Committee, Senator Pimentel informed the body that there
would be no member from the Minority in the Ethics Committee. On 26 January 2009, Senator
Lacson reiterated his appeal to the Minority to nominate their representatives to the Ethics
Committee. Senator Pimentel informed him that it is the stand of the Minority not to nominate
any of their members to the Ethics Committee. Senator Pimentel promised to convene a caucus
to determine if the Minority’s decision on the matter is final but the records did not show that a
caucus was convened.
On 20 April 2009, Senator Villar delivered a privilege speech where he stated that he would
answer the accusations against him on the floor and not before the Ethics Committee. It was
because of the accusation that the Ethics Committee could not act with fairness on Senator
Villar’s case that Senator Lacson moved that the responsibility of the Ethics Committee be
undertaken by the Senate acting as a Committee of the Whole, which motion was approved with
ten members voting in favor, none against, and five abstentions.
The Rules of the Ethics Committee provide that "all matters relating to the conduct, rights,
privileges, safety, dignity, integrity and reputation of the Senate and its Members shall be under
the exclusive jurisdiction of the Senate Committee on Ethics and Privileges."22 However, in this
case, the refusal of the Minority to name its members to the Ethics Committee stalled the
investigation. In short, while ordinarily an investigation about one of its members’ alleged
irregular or unethical conduct is within the jurisdiction of the Ethics Committee, the Minority
effectively prevented it from pursuing the investigation when they refused to nominate their
members to the Ethics Committee. Even Senator Villar called the Ethics Committee a kangaroo
court and declared that he would answer the accusations against him on the floor and not before
the Ethics Committee. Given the circumstances, the referral of the investigation to the
Committee of the Whole was an extraordinary remedy undertaken by the Ethics Committee and
approved by a majority of the members of the Senate.
Adoption of the Rules of the Ethics Committee
by the Senate Committee of the Whole
Petitioners allege that the adoption of the Rules of the Ethics Committee by the Senate
Committee of the Whole is violative of Senator Villar’s right to due process.
We do not agree.
Again, we reiterate that, considering the circumstances of this case, the referral of the
investigation by the Ethics Committee to the Senate Committee of the Whole is an extraordinary
remedy that does not violate Senator Villar’s right to due process. In the same manner, the
adoption by the Senate Committee of the Whole of the Rules of the Ethics Committee does not
violate Senator Villar’s right to due process.
The Constitutional right of the Senate to promulgate its own rules of proceedings has been
recognized and affirmed by this Court. Thus:
First. Section 16(3), Article VI of the Philippine Constitution states: "Each House shall determine
the rules of its proceedings."
This provision has been traditionally construed as a grant of full discretionary authority to the
House of Congress in the formulation, adoption and promulgation of its own rules. As such, the
exercise of this power is generally exempt from judicial supervision and interference, except on a
clear showing of such arbitrary and improvident use of the power as will constitute a denial of
due process.
x x x. The issue partakes of the nature of a political question which, under the Constitution, is to
be decided by the people in their sovereign capacity, or in regard to which full discretionary
authority has been delegated to the legislative or executive branch of the government. Further,
pursuant to his constitutional grant of virtually unrestricted authority to determine its own rules,
the Senate is at liberty to alter or modify these rules at any time it may see fit, subject only to the
imperatives of quorum, voting and publication.23
The only limitation to the power of Congress to promulgate its own rules is the observance of
quorum, voting, and publication when required. As long as these requirements are complied
with, the Court will not interfere with the right of Congress to amend its own rules.
Prior Publication
Petitioners assail the non-publication of the Rules of the Senate Committee of the Whole.
Respondent counters that publication is not necessary because the Senate Committee of the
Whole merely adopted the Rules of the Ethics Committee which had been published in the
Official Gazette on 23 March 2009. Respondent alleges that there is only one set of Rules that
governs both the Ethics Committee and the Senate Committee of the Whole.
In Neri v. Senate Committee on Accountability of Public Officers and Investigations, 24 the Court
declared void unpublished rules of procedure in Senate inquiries insofar as such rules affect the
rights of witnesses. The Court cited Section 21, Article VI of the Constitution which mandates:
Sec. 21. The Senate or the House of Representatives or any of its respective Committees may
conduct inquiries in aid of legislation in accordance with its duly published rules of procedure.
The rights of persons appearing in or affected by such inquiries shall be respected. (Emphasis
supplied)
The Court explained in the Resolution25 denying the motion for reconsideration:
The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted
in accordance with the duly published rules of procedure is categorical. It is incumbent upon
the Senate to publish the rules of its legislative inquiries in each Congress or otherwise make the
published rules clearly state that the same shall be effective in the subsequent Congresses or
until they are amended or repealed to sufficiently put public on notice.
If it was the intention of the Senate for its present rules on legislative inquiries to be effective
even in the next Congress, it could have easily adopted the same language it had used in its
main rules regarding effectivity.
Lest the Court be misconstrued, it should likewise be stressed that not all orders issued or
proceedings conducted pursuant to the subject Rules are null and void. Only those that result
in violation of the rights of witnesses should be considered null and void, considering
that the rationale for the publication is to protect the rights of the witnesses as expressed
in Section 21, Article VI of the Constitution. Sans such violation, orders and proceedings are
considered valid and effective.26 (Emphasis supplied)
In the recent case of Gutierrez v. The House of Representatives Committee on Justice, et
al.,27 the Court further clarified:
x x x inquiries in aid of legislation under Section 21, Article VI of the Constitution is
the sole instance in the Constitution where there is a categorical directive to duly publish a set
of rules of procedure. Significantly notable in Neri is that with respect to the issue of publication,
the Court anchored its ruling on the 1987 Constitution’s directive, without any reliance on or
reference to the 1986 case of Tañada v. Tuvera. Tañada naturally could neither have interpreted
a forthcoming 1987 Constitution nor had kept a tight rein on the Constitution’s intentions as
expressed through the allowance of either a categorical term or a general sense of making
known the issuances.28
The Constitution does not require publication of the internal rules of the House or Senate. Since
rules of the House or the Senate that affect only their members are internal to the House or
Senate, such rules need not be published, unless such rules expressly provide for their
publication before the rules can take effect.
In this case, the proceedings before the Senate Committee of the Whole affect only members of
the Senate since the proceedings involve the Senate’s exercise of its disciplinary power over
one of its members. Clearly, the Rules of the Senate Committee of the Whole are internal to the
Senate. However, Section 81, Rule 15 of the Rules of the Senate Committee of the Whole
provides:
Sec. 81. EFFECTIVITY. These Rules shall be effective after publication in the Official Gazette or
in a newspaper of general circulation.29
Hence, in this particular case, the Rules of the Senate Committee of the Whole itself provide that
the Rules must be published before the Rules can take effect. Thus, even if publication is not
required under the Constitution, publication of the Rules of the Senate Committee of the Whole
is required because the Rules expressly mandate their publication. The majority of the members
of the Senate approved the Rules of the Senate Committee of the Whole, and the publication
requirement which they adopted should be considered as the will of the majority. Respondent
cannot dispense with the publication requirement just because the Rules of the Ethics
Committee had already been published in the Official Gazette. To reiterate, the Rules of the
Senate Committee of the Whole expressly require publication before the Rules can take effect.
To comply with due process requirements, the Senate must follow its own internal rules if the
rights of its own members are affected.
Incidentally, we note that Section 4, Rule 1 of the Rules of the Senate Committee of the
Whole30 is an exact reproduction of Section 4, Rule 1 of the Rules of the Senate Committee on
Ethics and Privileges31 which states that the Ethics Committee shall be composed of seven
members, contrary to the fact that the Senate Committee of the Whole consists of all members
of the Senate. In addition, Section 5(B), Rule 1 of the Rules of the Senate Committee of the
Whole32 is an exact reproduction of Section 5(B), Rule 1 of the Rules of the Senate Committee
on Ethics and Privileges33 which states that only two members of the Ethics Committee shall
constitute a quorum, contrary to respondent’s allegation in its Comment that eight members of
the Senate Committee of the Whole shall constitute a quorum. 34
However, if the Senate is constituted as a Committee of the Whole, a majority of the Senate is
required to constitute a quorum to do business pursuant to Section 16(2), Article VI of the
Constitution.35 Otherwise, there will be a circumvention of this express provision of the
Constitution on quorum requirement. Obviously, the Rules of the Senate Committee of the
Whole require modification to comply with requirements of quorum and voting which the Senate
must have overlooked in this case. In any event, in case of conflict between the Rules of the
Senate Committee of the Whole and the Constitution, the latter will of course prevail.
WHEREFORE, we GRANT the petition in part. The referral of the complaint by the Committee
on Ethics and Privileges to the Senate Committee of the Whole shall take effect only upon
publication of the Rules of the Senate Committee of the Whole.
SO ORDERED.
G.R. No. 117577 December 1, 1995
ALEJANDRO B. TY AND MVR PICTURE TUBE, INC., petitioners,
vs.
THE HON. AURELIO C. TRAMPE, in his capacity as Judge of the Regional Trial Court of
Pasig, Metro Manila, THE HON. SECRETARY OF FINANCE, THE MUNICIPAL ASSESSOR
OF PASIG AND THE MUNICIPAL TREASURER OF PASIG, respondents.
PANGANIBAN, J.:
ARE THE INCREASED REAL ESTATE TAXES imposed by and being collected in the
Municipality (now City) of Pasig, effective from the year 1994, valid an legal? This is the question
brought before this Court for resolution.
The Parties
Petitioner Alejandro B. Ty is a resident of and registered owner of lands and buildings in the
Municipality (now City) of Pasig, while petitioner MVR Picture Tube, Inc. is a corporation duly
organized and existing under Philippine laws and is likewise a registered owner of lands and
buildings in said Municipality1 .
Respondent Aurelio C. Trampe is being sued in his capacity as presiding judge of Branch 163.
Regional Trial Court of the National Capital Judicial Region, sitting in Pasig, whose Decision
dated 14 July 1994 and Order dated 30 September 1994 in Special Civil Action No. 629 (entitled
"Alejandro B. Ty and MVR Picture Tube, Inc. vs. The Hon. Secretary of Finance. et al.") are
sought to be set aside. Respondent Secretary of Finance is impleaded as the government officer
who approved the Schedule of Market Values used as basis for the new tax assessments being
enforced by respondents Municipal Assessor and Municipal Treasurer of Pasig and the legality
of which is being questioned in this petition2 .
The Antecedent Facts
On 06 January 1994, respondent Assessor sent a notice of assessment respecting certain real
properties of petitioners located in Pasig, Metro Manila. In a letter dated 18 March 1994,
petitioners through counsel "request(ed) the Municipal Assessor to reconsider the subject
assessments"3 .
Not satisfied, petitioners on 29 March 1994 filed with the Regional Trial Court of the National
Capital Judicial Region, Branch 163, presided over by respondent Judge, a Petition for
Prohibition with prayer for a restraining order and/or writ of preliminary injunction to declare null
and void the new tax assessments and to enjoin the collection of real estate taxes based on said
assessments. In a Decision4 dated 14 July 1994, respondent Judge denied the petition "for lack
of merit" in the following disposition.
WHEREFORE, foregoing premises considered, petitioners' prayer to
declare unconstitutional the schedule of market values as prepared by the
Municipal Assessor of Pasig, Metro Manila, and to enjoin permanently the
Municipal Treasurer of Pasig, Metro Manila, from collecting the real property
taxes based thereof (sic) is hereby DENIED for lack of merit. Cost (sic) de
oficio.
Subsequently, petitioners' Motion for Reconsideration was also denied by respondent Judge in
an Order 5 dated 30 September 1994.
Rebuffed by said Decision and Order, petitioners filed this present Petition for Review directly
before this Court, raising pure questions of law and assigning the following errors:
The Court a quo gravely erred in holding that Presidential Decree No. 921
was expressly repealed by R.A. 7160 and that said presidential decree
including its Implementing Rules (P.D. 464) went down to the statutes'
graveyard together with the other decision(s) of the Supreme Court affecting
the same.
The Court a quo while holding that the new tax assessments have
tremendously increased ranging from 418.8% to 570%, gravely erred in
blaming petitioners for their failure to exhaust administrative remedies
provided for by law.
The Court a quo blatantly erred in not declaring the confiscatory and
oppressive nature of the assessments as illegal. void ab initio and
unconstitutional constituting a deprivation of property without due process of
law.6
In a resolution dated 21 November 1994, this Court, without giving due course to the petition,
required respondents to comment thereon. Respondents Municipal Treasurer and Municipal
Assessor, through counsel, filed their Comment on 19 December 1994, and respondent
Secretary of Finance, through the Solicitor General, submitted his on 11 May 1995. Petitioners
filed their Reply to the Comment of respondent Assessor and Treasurer 06 January 1995, and
their Reply to that of the respondent Secretary on 18 May 1995. After careful deliberation on the
above pleadings, the Court resolved to give due course to the petition, and, inasmuch as the
issues are relatively simple, the Court dispensed with requiring the parties to submit further
memoranda and instead decided to consider the respondents' respective Comments as their
answers and memoranda. Thus the case is now considered submitted for resolution.
The Issues
The issues brought by the parties for decision by this Court are:
1. Whether Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, repealed the provisions of Presidential Decree
No. 921;
2. Whether petitioners are required to exhaust administrative remedies prior
to seeking judicial relief; and
 3. Whether the new tax assessments are oppressive and confiscatory, and
therefore unconstitutional.
In disposing of the above issues against petitioners, the court a quo ruled that the schedule of
market values and the assessments based thereon prepared solely by respondent assessor are
valid and legal, they having been prepared in accordance with the provisions of the Local
Government Code of 1991 (R.A. 7160). It held also that said Code had effectively repealed the
previous law on the matter, P.D. 921, which required, in the preparation of said
schedule, joint action by all the city and municipal assessors in the Metropolitan Manila area.
The lower court also faulted petitioners with failure to exhaust administrative remedies provided
under Sections 226 and 252 of R.A. 7160. Finally, it found the questioned assessments
consistent with the "tremendously increased . . . price of real estate anywhere in the country." 7
Stated the court:
This Court is inclined to agree with the view of defendants that R.A. 7160 in
its repealing clause provide (sic) that Presidential Decree Nos. . . . 464 . . .
are hereby repealed and rendered of no force and effect. Hence said
presidential decrees including their implementing rules went down to the
statutes' graveyard together with the decisions of the Supreme Court on
cases effecting (sic) the same.
This Court is also in accord with respondents (sic) view that petitioners
failed to avail of either Section 226 of R.A. 7160, that is by appealing the
assessment of their properties to the Board of Assessment Appeal within
sixty 160) days from the date of receipt of the written Notice of Assessment,
and if it is true that petitioner (sic) as alleged in their pleadings was not
afforded the opportunity to appeal to the board of assessment appeal, then
they could have availed of the provisions of Section 252, of the same R.A.
7160 by paying the real estate tax under protest. Because of petitioners
(sic) failure to avail of either Sections 226 or 252 of R.A. 7160, they failed to
exhaust administratives (sic) remedies provided for by law before bringing
the case to Court. (Buayan Cattle Co., Inc. vs. Quintillan, 128 SCRA 276).
Therefore the filing of this case before this Court is premature, the same not
falling under the exception because the issue involved is not a question of
law but of fact (Valmonte vs. Belmonte, Jr., 170 SCRA 256).
Petitioners also alleged that the New Tax Assessments are not only
oppressive and confiscatory but also destructive in view of the tremendous
increase in its valuation, from P855,360.00 to P4,121,280.00 a marked
increase of 418.8% of one of its properties, while the other, from
P857,600.00 to P4,374,410.00, an increased (sic) of 510%. This Court
agree (sic) with petitioners (sic) observation, but the reality (sic) the price of
real property anywhere in the country tremendously increased. This is
shown in the Real Estate Monitor of Economic Incorporated (copy attached
with the memorandum of respondents). For example real properties in Pasig
in 1991 located at the Ortigas Commercial Complex command (sic) a price
of P42,000.00 per square meter which price is supported by a case filed
before this Court (civil case no. 64506, Jesus Fajardo, et al. vs. Ortigas and
Co.) for Recovery (sic) of agents (sic) commission. The property subject of
the sale which was also located at the Ortigas Commercial Complex at
Pasig, Metro Manila was sold to a Taiwanese at P42,000.00 per square
meter. It is therefore not surprising that the assessment of real properties in
Pasig has increased tremendously. Had petitioners first exhausted
administrative remedies they would have realized the fact that prices of real
estate has (sic) tremendously increased and would have known the
reason/reasons why.8
In its Order dated 30 September 1994 denying the Motion for Reconsideration, the court a
quo ruled:
This Court despite petitioners' exhaustive and thorough research and
discussion of the point in issue, is still inclined to sustain the view that P.D.
921 was impliedly repealed by R.A. 7160. P.D. 921 to the mind of this Court
is an implementing law of P.D. 464, Sections 3, 6, 9, 12 and 13 of said P.D.
provide how certain provisions of P.D. 464 shall be implemented. Since P.D.
464 was expressly repealed by R.A. 7160. P.D. 921 must necessarily be
considered repealed, otherwise, what should Sections 3, 6, 9, 12 and 13 of
P.D. 921 implement? And, had the law makers intended to have said P.D.
921 remain valid and enforceable they would have provided so in R.A.
7160. Since there is none, P.D. 921 must be considered repealed. 9
Re: The First Issue:
Repeal of P.D. 921?
To resolve the first issue, it is necessary to revisit the following provisions of law:
1. Section 15 of P.D. No. 464, promulgated on 20 May 1974, otherwise known as the Peal
Property Tax Code:
Sec. 15. Preparation of Schedule of Values. — Before any general revision
of property assessments is made, as provided in this Code, there shall be
prepared for the province or city a Schedule of Market Value for the different
classes of real property therein situated in such form and detail as shall be
prescribed by the Secretary of Finance.
Said schedule, together with an abstract of the data (on) which it is based,
shall be submitted to the Secretary of Finance for review not later than the
thirty-first day of December immediately preceding the calendar year the
general revision of assessments shall be undertaken. The Secretary of
Finance shall have ninety days from the date of receipt within which to
review said schedule to determine whether it conforms with the provisions of
this Code.
2. Subsequently, on 12 April 1976, P.D. 921 was promulgated, which in Section 9 thereof,
states:
Sec. 9. Preparation of Schedule of Values for Real Property within the
Metropolitan Area. — The Schedule of Values that will serve as the basis for
the appraisal and assessment for taxation purposes of real properties
located within the Metropolitan Area shall be prepared jointly by the City
Assessors of the Districts created under Section one hereof, with the City
Assessor of Manila acting as Chairman, in accordance with the pertinent
provisions of Presidential Decree No. 464, as amended, otherwise known
as the Real Property Tax Code, and the implementing rules and regulations
thereof issued by the Secretary of Finance.
3. Section One of P.D. 921, referred to above, provides:
Sec. 1. Division of Metropolitan Manila into Local Treasury and Assessment
Districts. — For purposes of effective fiscal management, Metropolitan
Manila is hereby divided into the following Local Treasury and Assessment
Districts:
First District — Manila
Second District — Quezon City, Pasig, Marikina,
Mandaluyong and San Juan
Third District — Caloocan City, Malabon,
Navotas and Valenzuela
Fourth District — Pasay City, Makati, Paranaque,
Muntinlupa, Las Piñas, Pateros and
Taguig
Manila, Quezon City, Caloocan City and Pasay City shall be the respective
Centers of the aforesaid Treasury and Assessment Districts.
4. On 01 January 1992, Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, took effect. Section 212 of said law is quoted as follows:
Sec. 212. Preparation of Schedule of Fair Market Values. — Before any
general revision of property assessment is made pursuant to the provisions
of this Title, there shall be prepared a schedule of fair market values by the
provincial, city and the municipal assessors of the municipalities within the
Metropolitan Manila Area for the different classes of real property situated in
their respective local government units for enactment by ordinance of the
sanggunian concerned. The schedule of fair market values shall be
published in a newspaper of general circulation in the province, city or
municipality concerned, or in the absence thereof, shall be posted in the
provincial capitol, city or municipal hall and in two other conspicuous public
place therein.
5. The repealing clause of R.A. 7160 found in the Section 534 thereof is hereby reproduced as
follows:
Sec. 534. Repealing Clause. —
(a) . . .
(b) . . .
(c) . . . ; and Presidential Decree Nos. 381, 436, 464, 477, 626, 632, 752,
and 1136 are hereby repealed and rendered of no force and effect.
xxx xxx xxx
(f) All general and special laws, acts, city charter, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed
or modified accordingly. (emphasis supplied)
It is obvious from the above provisions of R.A 7160, specifically Sec. 534, that P.D. 921 was
NOT EXPRESSLY repealed by said statute. Thus, the question is: Was P.D. 921 IMPLIEDLY
repealed by R.A. 7160?
Petitioners contend that, contrary to the aforequoted Decision of the lower court, "whether the
assessment is made before or after the effectivity of R.A. 7160, the observance of, and
compliance with, the explicit requirement of P.D. 921 is strict and mandatory either" because
P.D. 921 was not impliedly repealed by R.A. 7160 and is therefore still the applicable statute, or
because the Supreme Court, in three related cases 10 promulgated on 16 December 1993 —
after the Local Government Code of 1991 already took effect — ruled that a schedule of market
values and the corresponding assessments based thereon "prepared solely by the city assessor
. . . failed to comply with the explicit requirement (of collegial and joint action by all the assessors
in the Metropolitan Manila area under P.D. 921) . . . and are on that account illegal and void."
On the other hand, respondents aver that Section 9 of P.D. 921 and Section 212 of R.A. 7160
are clearly and unequivocally incompatible because they dwell on the same subject matter,
namely, the preparation of a schedule of values for real property within the Metropolitan Manila
Area. Under P.D. 921, the schedule shall be prepared jointly by the city assessors of the District,
while, under R.A. 7160, such schedule shall be prepared "by the provincial, city and municipal
assessors of the municipalities within the Metropolitan Manila area . . . ". Furthermore, they
claim that "Section 9 (of P.D. 921) merely supplement(ed) Section 15 of P.D. 464 in so far as the
preparation of the schedule of values in Metro Manila (is concerned)." Thus, "with the express
repeal of P.D. 464 . . . P.D. 921 . . .can not therefore exist independently on its own." They also
argue that although the aforecited Supreme Court decision was promulgated after R.A. 7160
took effect, "the assessment of the Municipal Assessors in those three (3) cited cases were
assessed in 1990 prior to the effectivity of the Code." Hence, the doctrine in said cases cannot
be applied to those prepared in 1994 under R.A. 7160.
We rule for petitioners.
R.A. 7160 has a repealing provision (Section 534) and, if the intention of the legislature was to
abrogate P.D. 921, it would have included it in such repealing clause, as it did in expressly
rendering of no force and effect several other presidential decrees. Hence, any repeal or
modification of P.D. 921 can only be possible under par. (f) of said Section 534, as follows:
(f) All general and special laws, acts, city charter, decrees, executive orders,
proclamations and administrative regulations, part or parts thereof which are
inconsistent with any of the provisions of the Code are hereby repealed or
modified accordingly.
The foregoing partakes of the nature of a general repealing provision. It is a basic rule of
statutory construction that repeals by implication are not favored. An implied repeal will not be
allowed unless it is convincingly and unambiguously demonstrated that the two laws are so
clearly repugnant and patently inconsistent that they cannot co-exist. This is based on the
rationale that the will of the legislature cannot be overturned by the judicial function of
construction and interpretation. Courts cannot take the place of Congress in repealing statutes.
Their function is to try to harmonize, as much as possible, seeming conflicts in the laws and
resolve doubts in favor of their validity and co-existence.
In Villegas v. Subido,11 the issue raised before the Court was whether the Decentralization Act
had the effect of repealing what was specifically ordained in the Charter of the City of Manila.
Under the Charter, it was provided in its Section 22 that "The President of the Philippines with
the consent of the Commission on Appointments shall appoint . . . the City Treasurer and his
Assistant." Under the Decentralization Act, it was provided that "All other employees, except
teachers paid out of provincial, city or municipal general funds and other local funds shall . . . be
appointed by the provincial governor, city or municipal mayor upon recommendation of the head
of office concerned."
The Court, in holding that there was no implied repeal in this
case12 , said:
. . . It has been the constant holding of this Court that repeals by implication
are not favored and will not be so declared unless it be manifest that the
legislature so intended. Such a doctrine goes as far back as United States
v. Reyes, a 1908 decision (10 Phil. 423, Cf. U.S. v. Academia, 10 Phil. 431
[1908]). It is necessary then before such a repeal is deemed to exist that it
be shown that the statutes or statutory provisions deal with the same
subject matter and that the latter be inconsistent with the former. (Cf.
Calderon v. Provincia del Santisimo Rosario, 28 Phil. 164 [1914]). There
must be a showing of repugnancy clear and convincing in character. The
language used in the latter statute must be such as to render it
irreconcilable with what has been formerly enacted. An inconsistency that
falls short of that standard does not suffice. What is needed is a manifest
indication of the legislative purpose to repeal. [Citing numerous cases]
More specifically, a subsequent statute, general in character as to its terms
and application, is not to be construed as repealing a special or specific
enactment, unless the legislative purpose to do so is manifest. This is so
even if the provisions of the latter are sufficiently comprehensive to include
what was set forth in the special act. This principle has likewise been
consistently applied in decisions of the Court from Manila Railroad
Co. v. Rafferty (40 Phil 224), decided as far back as 1919. A citation from an
opinion of Justice Tuason is illuminating. Thus: "From another angle the
presumption against repeal is stronger. A special law is not regarded as
having been amended or repealed by a general law unless the intent to
repeal or alter is manifest. Generalia specialibus non derogant. An this is
true although the terms of the general act are broad enough to include the
matter in the special statute. . . . At any rate, in the event harmony between
provisions of this type in the same law or in two laws is impossible, the
specific provision controls unless the statute, considered in its entirety,
indicates a contrary intention upon the part of the legislature. . . . A general
law is one which embraces a class of subjects or places and does not omit
any subject or place naturally belonging to such class, while a special act is
one which relates to particular persons or things of a class." (citing Valera v.
Tuason, 80 Phil. 823, 827-828 [1948].)
In the relatively recent case of Mecano vs. Commission on Audit 13 , the Court en banc had
occasion to reiterate and to reinforce the rule against implied repeals, as follows:
Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. Hence, before
there can be a repeal, there must be a clear showing on the part of the law
maker that the intent in enacting the new law was to abrogate the old one.
The intention to repeal must be clear and manifest; otherwise, at least, as a
general rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and will continue so far as the two acts are the
same from the time of the first enactment.
There are two categories of repeal by implication. The first is where
provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an
implied repeal of the earlier one. The second is if the later act covers the
whole subject of the earlier one and is clearly intended as a substitute, it will
operate to repeal the earlier law.
Implied repeal by irreconcilable inconsistency take place when the two
statutes cover the same subject matter; they are so clearly inconsistent and
incompatible with each other that they cannot be reconciled or harmonized;
and both cannot be given effect, that is that one law cannot be enforced
without nullifying the other.
In the same vein, but in different words, this Court ruled in Gordon vs. Veridiano 14 :
Courts of justice, when confronted with apparently conflicting statutes,
should endeavor to reconcile the same instead of declaring outright the
invalidity of one as against the other. Such alacrity should be avoided. The
wise policy is for the judge to harmonize them if this is possible, bearing in
mind that they are equally the handiwork of the same legislature, and so
give effect to both while at the same time also according due respect to a
coordinate department of the government. It is this policy the Court will
apply in arriving at the interpretation of the laws above-cited and the
conclusions that should follow therefrom.
In the instant case, and using the Courts' standard for implied repeal in Mecano, we compared
the two laws.
Presidential Decree No. 921 was promulgated on 12 April 1976, with the aim of, inter alia,
evolving "a progressive revenue raising program that will not unduly burden the tax payers . . .
" 15 in Metropolitan Manila. Hence, it provided for the "administration of local financial services in
Metropolitan Manila" only, and for this purpose, divided the area into four Local Treasury and
Assessment Districts, regulated the duties and functions of the treasurers and assessors in the
cities and municipalities in said area and spelled out the process of assessing, imposing and
distributing the proceeds of real estate taxes therein.
Upon the other hand, Republic Act No. 7160, otherwise "known and cited as the Local
'Government Code of 1991'" 16 took effect on 01 January 1992 17. It declared "genuine and
meaningful local autonomy" as a policy of the state. Such policy was meant to decentralize
government "powers, authority, responsibilities and resources" from the national government to
the local government units "to enable them to attain their fullest development as self-reliant
communities and make them more effective partners in the attainment of national goals." 18 In the
formulation and implementation of policies and measures on local autonomy, ''(l)ocal
government units may group themselves, consolidate or coordinate their efforts, services and
resources for purposes commonly beneficial to them." 19
From the above, it is clear that the two laws are not co-extensive and mutually inclusive in their
scope and purpose. While R.A. 7160 covers almost all governmental functions delegated to local
government units all over the country, P.D. 921 embraces only the Metropolitan Manila area and
is limited to the administration of financial services therein, especially the assessment and
collection of real estate (and some other local) taxes.
Coming down to specifics, Sec. 9 of P.D. 921 requires that the schedule of values of real
properties in the Metropolitan Manila area shall be prepared jointly by the city assessors in the
districts created therein: while Sec. 212 of R.A. 7160 states that the schedule shall be prepared
"by the provincial, city and municipal assessors of the municipalities within the Metropolitan
Manila Area for the different classes of real property situated in their respective local government
units for enactment by ordinance of the sanggunian concerned. . . ."
It is obvious that harmony in these provisions is not only possible, but in fact desirable,
necessary and consistent with the legislative intent and policy. By reading together and
harmonizing these two provisions, we arrive at the following steps in the preparation of the said
schedule, as follows:
1. The assessor in each municipality or city in the Metropolitan Manila area
shall prepare his/her proposed schedule of values, in accordance with Sec.
212, R.A. 7160.
2. Then, the Local Treasury and Assessment District shall meet, per Sec. 9,
P.D. 921. In the instant case, that district shall be composed of the
assessors in Quezon City, Pasig, Marikina, Mandaluyong and San Juan,
pursuant to Sec. 1 of said P.D. In this meeting, the different assessors shall
compare their individual assessments, discuss and thereafter jointly agree
and produce a schedule of values for their district, taking into account the
preamble of said P.D. that they should evolve "a progressive revenue
raising program that will not unduly burden the taxpayers".
3. The schedule jointly agreed upon by the assessors shall then be
published in a newspaper of general circulation and submitted to the
sanggunian concerned for enactment by ordinance, per Sec. 212, R.A.
7160.
By this harmonization, both the preamble of P.D. 921 decreeing that the real estate taxes shall
"not unduly burden the taxpayer" and the "operative principle of decentralization" provided under
Sec. 3, R.A. 7160 encouraging local government units to "consolidate or coordinate their efforts,
services and resources" shall be fulfilled. Indeed the essence of joint local action for common
good so cherished in the Local Government Code finds concrete expression in this
harmonization.
How about respondents' claim that, with the express repeal of P.D. 464, P.D. 921 — being
merely a "supplement" of said P.D. — cannot "exist independently on its own"? Quite the
contrary is true. By harmonizing P.D. 921 with R.A. 7160, we have just demonstrated that it can
exist outside of P.D. 464, as a support, supplement and extension of R.A. 7160, which for this
purpose, has replaced P.D. 464.
Since it is now clear that P.D. 921 is still good law, it is equally clear that this Court's ruling in the
Mathay/Javier/Puyat-Reyes cases (supra) is still the prevailing and applicable doctrine. And,
applying the said ruling in the present case, it is likewise clear that the schedule of values
prepared solely by the respondent municipal assessor is illegal and void.
Re: The Second Issue:
Exhaustion of Administrative Remedies
We now come to the second issue. The provisions of Sections 226 and 252 of R.A. 7160 being
material to this issue, are set forth below:
Sec. 226. Local Board of Assessment Appeals. — Any owner or person
having legal interest in the property who is not satisfied with the action of the
provincial, city or municipal assessor in the assessment of his property may,
within sixty (60) days from the date of receipt of the written notice of
assessment, appeal to the Board of Assessment Appeals of the province or
city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or
documents submitted in support of the appeal.
Sec. 252. Payment under Protest. — (a) No protest shall be entertained
unless the taxpayer first pays the tax. There shall be annotated on the tax
receipts the words "paid under protest". The protest in writing must be filed
within thirty (30) days from payment of the tax to the provincial, city
treasurer or municipal treasurer, in the case of a municipality within
Metropolitan Manila Area, who shall decide the protest within sixty (60) days
from receipt.
(b) The tax or a portion thereof paid under protest shall be held in trust by
the treasurer concerned.
(c) In the event that the protest is finally decided in favor of the taxpayer, the
amount or portion of the tax protested shall be refunded to the protestant, or
applied as tax credit against his existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the sixty-day
period prescribed in subparagraph (a), the taxpayer may avail of the
remedies as provided for in Chapter 3, Title Two, Book II of this Code.
Respondents argue that this case is premature because petitioners neither appealed the
questioned assessments on their properties to the Board of Assessment Appeal, pursuant to
Sec. 226, nor paid the taxes under protest, per Sec. 252.
We do not agree. Although as a rule, administrative remedies must first be exhausted before
resort to judicial action can prosper, there is a well-settled exception in cases where the
controversy does not involve questions of fact but only of law. 20 In the present case, the parties,
even during the proceedings in the lower court on 11 April 1994, already agreed "that the issues
in the petition are legal" 21 , and thus, no evidence was presented in said court.
In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160 provides in
Sec. 229 (b) that "(t)he proceedings of the Board shall be conducted solely for the purpose of
ascertaining the facts . . . ." It follows that appeals to this Board may be fruitful only where
questions of fact are involved. Again, the protest contemplated under Sec. 252 of R.A. 7160 is
needed where there is a question as to the reasonableness of the amount assessed. Hence, if a
taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is
required to "first pay the tax" under protest. Otherwise, the city or municipal treasurer will not act
on his protest. In the case at bench however, the petitioners are questioning the very authority
and power of the assessor, acting solely and independently, to impose the assessment and of
the treasurer to collect the tax. These are not questions merely of amounts of the increase in the
tax but attacks on the very validity of any increase.
Finally, it will be noted that in the consolidated cases of Mathay/Javier/Puyat-Reyes cited earlier,
the Supreme Court referred the petitions (which similarly questioned the schedules of market
values prepared solely by the respective assessors in the local government units concerned) to
the Board of Assessment Appeal, not for the latter, to exercise its appellate jurisdiction, but
rather to act only as a fact-finding commission. Said the
Court 22 thru Chief Justice Andres R. Narvasa:
On November 5, 1991, the Court issued a Resolution clarifying its earlier
one of May 16, 1991. It pointed out that the authority of the Central Board of
Assessment Appeals "to take cognizance of the factual issues raised in
these two cases by virtue of the referral by this Court in the exercise of its
extraordinary or certiorari jurisdiction should not be confused with its
appellate jurisdiction over appealed assessment cases under Section 36 of
P.D. 464 otherwise known as the Real Property Tax Code. The Board is not
acting in its appellate jurisdiction in the instant cases but rather, it is acting
as a Court-appointed fact-finding commission to assist the Court in resolving
the factual issues raised in G.R. Nos. 97618 and 97760."
In other words, the Court gave due course to the petitions therein in spite of the fact that the
petitioners had not, a priori, exhausted administrative remedies by filing an appeal before said
Board. Because there were factual issues raised in the Mathay, et al. cases, the Supreme Court
constituted the Central Board of Assessment Appeals as a fact-finding body to assist the Court
in resolving said factual issues. But in the instant proceedings, there are no such factual issues.
Therefore, there is no reason to require petitioners to exhaust the administrative remedies
provided in R.A. 7160, nor to mandate a referral by this Court to said Board.
Re: The Third Issue:
Constitutionality of the Assessments
[1937]). The Court will not pass upon a constitutional question although
properly presented by the record if the case can be disposed of on some
other ground such as the application of a statute or general law (Siler v.
Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission
v. Pullman Co., 312 U.S. 496 [1941]). 25 (emphasis supplied)
In view of the foregoing ruling, the question may be asked: what happens to real estate tax
payments already made prior to its promulgation and finality? Under the law 26 , "the taxpayer
may file a written claim for refund or credit for taxes and interests . . . ."
Finally, this Tribunal would be remiss in its duty as guardian of the judicial branch if we let pass
unnoticed the ease by which the respondent Judge consigned "to the statutes' graveyard" a
legislative enactment "together with the (three) decisions of the Supreme Court" promulgated
jointly and unanimously en banc. An elementary regard for the sacredness of laws and the
stability of judicial doctrines laid down by superior authority should have constrained him to be
more circumspect in rendering his decision and to spell out carefully and precisely the reasons
for his decision to invalidate such acts, instead of imperiously decreeing an implied repeal. He
knows or should have known the legal precedents against implied repeals. Respondent Judge,
in his decision, did not even make an attempt to try to reconcile or harmonize the laws involved.
Instead, he just unceremoniously swept them and this Court's decisions into the dustbin of
"judicial history." In his future acts and decisions, he is admonished to be more judicious in
setting aside established laws, doctrines and precedents.
WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the questioned
Decision and Order of respondent Judge, DECLARING as null and void the questioned
Schedule of Market Values for properties in Pasig City prepared by respondent Assessor, as
well as the corresponding assessments and real estate tax increases based thereon; and
ENJOINING the respondent Treasurer from collecting the real estate tax increases made on the
basis of said Schedule and assessments. No costs.

SO ORDERED.
Having already definitively disposed of the case through the resolution of the foregoing two
issues, we find no more need to pass upon the third. It is axiomatic that the constitutionality of a
law, regulation, ordinance or act will not be resolved by courts if the controversy can be, as in
this case it has been, settled on other grounds. In the recent case of Macasiano vs. National
Housing Authority 23 , this Court declared:

It is a rule firmly entrenched in our jurisprudence that the constitutionality of

an act of the legislature will not be determined by the courts unless that
question is properly raised and presented in appropriate cases and is
necessary to a determination of the case, i.e., the issue of constitutionality
must be the very lis mota presented. To reiterate, the essential requisites for
a successful judicial inquiry into the constitutionality of a law are: (a) the
existence of an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, (b) the constitutional question must be
raised by a proper party, (c) the constitutional question must be raised at the
earliest opportunity, and (d) the resolution of the constitutional question
must be necessary to the decision of the case. (emphasis supplied)

The aforequoted decision in Macasiano merely reiterated the ruling in Laurel vs. Garcia 24,
where this Court held:

The Court does not ordinarily pass upon constitutional questions unless
these questions are properly raised in appropriate cases and their resolution
is necessary for the determination of the case (People v. Vera, 65 Phil. 56