CHAPTER 1
1. Luzon Dev’t. Bank v. Association of LDBE
From a submission agreement of the LDB and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the
following issue:
Whether or not the company has violated the CBA provision and the MOA on
promotion.
At a conference, the parties agreed on the submission of their respective Position
Papers. Atty. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE’s
Position Paper ; LDB, on the other hand, failed to submit its Position Paper despite a
letter from the Voluntary Arbitrator reminding them to do so. As of May 23, 1995
no Position Paper had been filed by LDB.
Without LDB’s Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the CBA
provision nor the MOA on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision
of the Voluntary Arbitrator and to prohibit her from enforcing the same.
ISSUE: WON a voluntary arbiter’s decision is appealable to the CA and not the SC
HELD: the Court resolved to REFER this case to the Court of Appeals.
YES
The jurisdiction conferred by law on a voluntary arbitrator or a panel of such
arbitrators is quite limited compared to the original jurisdiction of the labor arbiter
and the appellate jurisdiction of the NLRC for that matter. The “(d)ecision, awards,
or orders of the Labor Arbiter are final and executory unless appealed to the
Commission …”Hence, while there is an express mode of appeal from the decision
of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more
often than not, elevated to the SC itself on a petition for certiorari, in effect
equating the voluntary arbitrator with the NLRC or the CA. In the view of the Court,
this is illogical and imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that
the judgments of courts and awards of quasi-judicial agencies must become final
at some definite time, this Court ruled that the awards of voluntary arbitrators
determine the rights of parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., this
Court ruled that “a voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity.” Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasi-judicial
agency but independent of, and apart from, the NLRC since his decisions are not
appealable to the latter.
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the
Court of Appeals shall exercise:
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of RTC s and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
Assuming arguendo that the voluntary arbitrator or the panel of voluntary
arbitrators may not strictly be considered as a quasi-judicial agency, board or
commission, still both he and the panel are comprehended within the concept of a
“quasi-judicial instrumentality.”
An “instrumentality” is anything used as a means or agency. Thus, the terms
governmental “agency” or “instrumentality” are synonymous in the sense that
either of them is a means by which a government acts, or by which a certain
government act or function is performed. The word “instrumentality,” with respect
to a state, contemplates an authority to which the state delegates governmental
power for the performance of a state function. An individual person, like an
administrator or executor, is a judicial instrumentality in the settling of an estate, in
the same manner that a sub-agent appointed by a bankruptcy court is an
instrumentality of the court,and a trustee in bankruptcy of a defunct corporation is
an instrumentality of the state.
The voluntary arbitrator no less performs a state function pursuant to a
governmental power delegated to him under the provisions therefor in the Labor
Code and he falls, therefore, within the contemplation of the term
“instrumentality” in the aforequoted Sec. 9 of B.P. 129. The fact that his functions
and powers are provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated
therein.
It will be noted that, although the Employees Compensation Commission is also
provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the
present Revised Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the CA under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of B.P. 129. A
fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators
should likewise be appealable to the CA, in line with the procedure outlined in
Revised Administrative Circular No. 1-95, just like those of the quasi-judicial
agencies, boards and commissions enumerated therein.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No.
876, also known as the Arbitration Law, arbitration is deemed a special proceeding
of which the court specified in the contract or submission, or if none be specified,
the RTC for the province or city in which one of the parties resides or is doing
business, or in which the arbitration is held, shall have jurisdiction.
In effect, this equates the award or decision of the voluntary arbitrator with that of
the RTC. Consequently, in a petition for certiorari from that award or decision, the
CA must be deemed to have concurrent jurisdiction with the SC. As a matter of
policy, this Court shall henceforth remand to the Court of Appeals petitions of this
nature for proper disposition.
1. In labor law context, arbitration is the reference of a labor dispute to an impartial
third person for determination on the basis of evidence and arguments presented
by such parties who have bound themselves to accept the decision of the arbitrator
as final and binding. Arbitration may be classified, on the basis of the obligation on
which it is based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled
by the government to forego their right to strike and are compelled to accept the
resolution of their dispute through arbitration by a third party. 1 The essence of
arbitration remains since a resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and binding on the parties, but in
compulsory arbitration, such a third party is normally appointed by the
government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties
is made, pursuant to a voluntary arbitration clause in their collective agreement, to
an impartial third person for a final and binding resolution. 2 Ideally, arbitration
awards are supposed to be complied with by both parties without delay, such that
once an award has been rendered by an arbitrator, nothing is left to be done by
both parties but to comply with the same. After all, they are presumed to have
freely chosen arbitration as the mode of settlement for that particular dispute.
Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to de bound by said
arbitrator’s decision.
2. Iron & Steel Authority v. CA
Iron and Steel Authority (ISA) was created by P.D. No. 272 in order, generally, to
develop and promote the iron and steel industry in the Philippines. The list of
powers and functions of the ISA included the following: xx
Sec. 4. Powers and Functions. – The authority shall have the following powers and
functions: xx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such
use of the State’s power is necessary to implement the construction of capacity
which is needed for the attainment of the objectives of the Authority; xx
The National Steel Corporation (NSC) then a wholly owned subsidiary of the
National Development Corporation which is itself an entity wholly owned by the
National Government, embarked on an expansion program embracing, among
other things, the construction of an integrated steel mill in Iligan City. Pursuant to
the expansion program of the NSC, Proc. No. 2239 was issued by the President of
the Philippines withdrawing from sale or settlement a large tract of public located in
Iligan City, and reserving that land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239 were
occupied by a non-operational chemical fertilizer plant and related facilities owned
by Maria Cristina Fertilizer Corporation (“MCFC”), Letter of Instruction (LOI), No.
1277, was issued directing the NSC to “negotiate with the owners of MCFC, for and
on behalf of the Government, for the compensation of MCFC’s present occupancy
rights on the subject land.” LOI No. 1277 also directed that should NSC and private
respondent MCFC fail to reach an agreement within a period of sixty (60) days from
the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent
domain under P.D. No. 272 and to initiate expropriation proceedings in respect of
occupancy rights of private respondent MCFC relating to the subject public land as
well as the plant itself and related facilities and to cede the same to the NSC.
Negotiations between NSC and private respondent MCFC did fail. Accordingly ISA
commenced eminent domain proceedings against MCFC in the RTC of Iligan City,
praying that it be placed in possession of the property involved upon depositing in
court representing ten percent (10%) of the declared market values of that
property.
A writ of possession was issued by the trial court in favor of ISA. ISA in turn placed
NSC in possession and control of the land occupied by MCFC’s fertilizer plant
installation.
The case proceeded to trial. While the trial was ongoing, however, the statutory
existence of petitioner ISA expired. MCFC then filed a motion to dismiss,
contending that no valid judgment could be rendered against ISA which had ceased
to be a juridical person. Petitioner ISA filed its opposition to this motion.
The trial court granted MCFC’s motion to dismiss and did dismiss the case. The
dismissal was anchored on the provision of the Rules of Court stating that “only
natural or juridical persons or entities authorized by law may be parties in a civil
case.”
Petitioner ISA moved for reconsideration which the trial court denied.
ISA went on appeal to the CA, which affirmed the order of dismissal of the trial
court. At the same time, however, the Court of Appeals held that it was premature
for the trial court to have ruled that the expropriation suit was not for a public
purpose, considering that the parties had not yet rested their respective cases.
Hence this Petition for Review.
ISSUE: WON the RP is entitled to be substituted for ISA in view of the expiration of
ISA’s term.
HELD: The Decision of the CA to the extent that it affirmed the trial court’s order
dismissing the expropriation proceedings, is hereby REVERSED and SET ASIDE and
the case is REMANDED to the court a quo which shall allow the substitution of the
RPfor petitioner ISA
YES
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
Sec. 1. Who May Be Parties. – Only natural or juridical persons or entities
authorized by law may be parties in a civil action.
Examination of the statute which created petitioner ISA shows that ISA falls under
category (b) above. P.D. No. 272, as already noted, contains express authorization
to ISA to commence expropriation proceedings like those here involved. It should
also be noted that the enabling statute of ISA expressly authorized it to enter into
certain kinds of contracts “for and in behalf of the Government” in the following
terms: xx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the
government, for the bulk purchase of materials, supplies or services for any sectors
in the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of
such sector; xxx
Clearly, ISA was vested with some of the powers or attributes normally associated
with juridical personality. There is, however, no provision in P.D. No. 272
recognizing ISA as possessing general or comprehensive juridical personality
separate anddistinct from that of the Government.
We consider that the ISA is properly regarded as an agent or delegate of the RP. The
Republic itself is a body corporate and juridical person vested with the full panoply
of powers and attributes which are compendiously described as “legal personality.”
The relevant definitions are found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. – Unless the specific words of the text, or
the context as a whole, or a particular statute, require a different meaning:
(1) Government of the RPrefers to the corporate governmental
entity through which the functions of government are exercised
throughout the Philippines, including, save as the contrary appears from
the context, the various arms through which political authority is made
effective in the Philippines, whether pertaining to the autonomous regions,
the provincial, city, municipal or barangay subdivisions or other forms of
local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units of the
Government, including a department, bureau, office, instrumentality, or
government-owned or controlled corporation, or a local government or a
distinct unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National Government, not
integrated within the department framework, vested with special functions
or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually
through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations.
xxx xxx xxx
When the statutory term of a non-incorporated agency expires, the powers, duties
and functions as well as the assets and liabilities of that agency revert back to, and
are re-assumed by, the RP, in the absence of special provisions of law specifying
some other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency or
instrumentality of the RP.
When the expiring agency is an incorporated one, the consequences of such expiry
must be looked for, in the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code.
Since, in the instant case, ISA is a non-incorporated agency or instrumentality of
the Republic, its powers, duties, functions, assets and liabilities are properly
regarded as folded back into GRP and hence assumed once again by the Republic,
no special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.
The principal or the real party in interest is thus the RP and not the NSC, even
though the latter may be an ultimate user of the properties involved should the
condemnation suit be eventually successful.
From the foregoing premises, it follows that the RP is entitled to be substituted in
the expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of
ISA having expired. Put a little differently, the expiration of ISA’s statutory term did
not by itself require or justify the dismissal of the eminent domain proceedings.
In E.B. Marcha, the Court also stressed that to require the Republic to commence all
over again another proceeding, as the trial court and CA had required, was to
generate unwarranted delay and create needless repetition of proceedings:
NOTES:
1. Since, as we have held above, the powers and functions of ISA have reverted to
the RP upon the termination of the statutory term of ISA, the question should be
addressed whether fresh legislative authority is necessary before the RP may
continue the expropriation proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the
legislative department of the government, we believe and so hold that no new
legislative act is necessary should the Republic decide, upon being substituted for
ISA, in fact to continue to prosecute the expropriation proceedings. For the
legislative authority, a long time ago, enacted a continuing or standing delegation of
authority to the President of the Philippines to exercise, or cause the exercise of,
the power of eminent domain on behalf of the Government of the Republic of the
Philippines. The 1917 Revised Administrative Code, which was in effect at the time
of the commencement of the present expropriation proceedings before the Iligan
RTC , provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. – In
addition to his general supervisory authority, the President of the Philippines shall
have such other specific powers and duties as are expressly conferred or imposed
on him by law, and also, in particular, the powers and duties set forth in this
Chapter.
Among such special powers and duties shall be: xx
(h) To determine when it is necessary or advantageous to exercise the right of
eminent domain in behalf of the Government of the Philippines; and to direct the
Secretary of Justice, where such act is deemed advisable, to cause the condemnation
proceedings to be begun in the court having proper jurisdiction. Xx
The Revised Administrative Code of 1987 currently in force has substantially
reproduced the foregoing provision in the following terms:
Sec. 12. Power of eminent domain. – The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of
the National Government, and direct the Solicitor General, whenever he deems the
action advisable, to institute expopriation proceedings in the proper court.
(Emphasis supplied)
In the present case, the President, exercising the power duly delegated under both
the 1917 and 1987 Revised Administrative Codes in effect made a determination
that it was necessary and advantageous to exercise the power of eminent domain in
behalf of the Government of the Republic and accordingly directed the SG to
proceed with the suit. 17
2. It is argued by private respondent MCFC that, because Congress after becoming
once more the depository of primary legislative power, had not enacted a statute
extending the term of ISA, such non-enactment must be deemed a manifestation of
a legislative design to discontinue or abort the present expropriation suit. We find
this argument much too speculative; it rests too much upon simple silence on the
part of Congress and casually disregards the existence of Section 12 of the 1987
Administrative Code already quoted above.
3. Other contentions are made by private respondent MCFC, such as, that the
constitutional requirement of “public use” or “public purpose” is not present in the
instant case, and that the indispensable element of just compensation is also
absent. We agree with the Court of Appeals in this connection that these
contentions, which were adopted and set out by the RTC in its order of dismissal,
are premature and are appropriately addressed in the proceedings before the trial
court. Those proceedings have yet to produce a decision on the merits, since trial
was still on going at the time the RTC precipitously dismissed the expropriation
proceedings. Moreover, as a pragmatic matter, the Republic is, by such substitution
as party-plaintiff, accorded an opportunity to determine whether or not, or to what
extent, the proceedings should be continued in view of all the subsequent
developments in the iron and steel sector of the country including, though not
limited to, the partial privatization of the NSC
3. PLDT v. City of Bacolod
PLDT is a holder of a legislative franchise under Act No. 3436 to render local and
international telecommunications services. On 24 August 1991, the terms and
conditions of its franchise were consolidated under Republic Act No. 7082 (Public
Telecommunications Policy Act of the Philippines), Section 12 of which embodies
the so-called “in-lieu-of-all-taxes” clause, whereunder PLDT shall pay a franchise tax
equivalent to three percent (3%) of all its gross receipts, which franchise tax shall be
“in lieu of all taxes”.
In August 1995, the City of Bacolod, invoking its authority under Section 137, in
relation to Section 151 and Section 193 of the Local Government Code, made an
assessment on PLDT for the payment of franchise tax due the City. Complying
therewith, PLDT began paying the City franchise tax from the year 1994 until the
third quarter of 1998, at which time.
On 2 June 1998, the Department of Finance through its Bureau of Local
Government Finance (BLGF), issued a ruling to the effect that as of 16 March 1995,
the effectivity date of the R.A. No. 7925, PLDT, among other telecommunication
companies, became exempt from local franchise tax. Invoking the BLGF’s ruling,
PLDT then stopped paying local franchise and business taxes to Bacolod City starting
the fourth quarter of 1998.
Sometime in 1999, PLDT applied for the issuance of a Mayor’s Permit but the City of
Bacolod withheld issuance thereof pending PLDT’s payment of its franchise tax
liability for the fourth quarter of 1998 and for the year 1999, in the aggregate
amount of PhP1,782,836.40, excluding surcharges and interest.
ISSUE:
WHETHER OR NOT Section 23 of R.A. No. 7925 operates to exempt petitioner PLDT
from the payment of franchise tax imposed by the respondent City of Bacolod.
RULING:
No, Section 23 does not operate to exempt PLDT from the payment of franchise tax
imposed upon it by the City of Bacolod.
According to Section 23 of R.A. No. 7925:
Equality of Treatment in the Telecommunications Industry – Any advantage, favor,
privilege, exemption, or immunity granted under existing franchises, or may
hereafter be granted shall ipso facto become part of previously granted
telecommunications franchises and shall be accorded immediately and
unconditionally to the grantees of such franchises: Provided, however, That the
foregoing shall neither apply to nor affect provisions of telecommunications
franchises concerning territory covered by the franchise, the life span of the
franchise, or the type of the service authorized by the franchise.
In this case, Section 23 cannot be considered as having amended petitioner’s
franchise so as to entitle it to exemption from the imposition of local franchise
taxes, as it does not appear that Congress intended it to operate as a blanket tax
exemption to all telecommunications entities. The ‘exemption’, used in Section 23
of R.A. No. 7925, is too general. Even as it is a state policy to promote a level playing
field in the communications industry, the term ‘exemption’ in Section 23 does not
mean tax exemption. The term refers to exemption from certain regulations and
requirements imposed by the National Telecommunications Commission (NTC).
Hence, the Supreme Court (SC) denied PLDT’s petition, in the same ruling as PLDT v.
City of Davao. Inherently, tax exemption must be expressed in the statute in clear
language that leaves no doubt of the intention of the legislature to grant such
exemption. And, even if it is granted, tax exemption is strictly construed against the
taxpayer and liberally construed in favor of the government. The SC held that that
the “in-lieu-of-all-taxes” clause does not refer to “tax exemption” but to “tax
exclusion” nor ‘exemption’ in Section 23 means tax exemption. Consequently, the
petitioner is liable to pay local franchise taxes covering fourth quarter of 1998 and
for the year 1999 onwards.
4. Solid Homes v. Payawal
Teresita Payawal, herein respondent filed a complaint against Solid Homes, Inc.
before the Regional Trial Court of Quezon City. It was alleged that petitioner
contracted to sell to her a subdivision lot in Marikina, and had already paid the
defendant the agreed amount of P38,949.87 in monthly instalments. Solid Homes
subsequently executed a deed of sale over the land but failed to deliver the
certificate of title. It was found that the former had mortgaged the property in bad
faith to a financing company. Payawal asked either for delivery of the title to the lot
or, the return of all the amounts paid by her plus interest.
Solid Homes moved to dismiss the complaint on the ground that the court had no
jurisdiction, this being vested in the National Housing Authority (NHA)
under PD
No. 957 citing Sec. 3 of the decree. Payawal on the other hand relies on BP 129
which confers on regional trial courts jurisdiction to hear and decide cases
mentioned in its Sec. 19. After trial, judgment was rendered in favor of the herein
respondent. Solid Homes appealed but the decision was affirmed by the respondent
court.
ISSUE: W/N NHA has jurisdiction to try the case and the competence to award
damages
HELD:
The Court reversed the decision of the CA, and sustained the contention of Solid
Homes Inc. in finding that the National Housing Authority (NHA) has jurisdiction
over the case.
The applicable law is PD No. 957, as amended by PD No. 1344, Section 1 of the
latter decree provides: In the exercise of its function to regulate the real estate
trade and business and in addition to its powers provided for in Presidential Decree
No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and
decide cases of the following nature: A. Unsound real estate business practices; B.
Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman; and
C. Cases involving specific performance of contractual and statutory obligations
filed by buyers of subdivision lot or condominium unit against the owner,
developer, dealer, broker or salesman.
Undoubtedly, "exclusive jurisdiction" over the case between the petitioner and the
private respondent is vested not in the Regional Trial Court but in the National
Housing Authority.
In case of conflict between a general law and a special law, the latter must prevail
regardless of the dates of their enactment. A strict construction of the subject
provisions of PD No. 1344 which would deny the HSRC the authority to adjudicate
claims for damages and for damages and for attorney's fees would result in
multiplicity of suits in that the subdivision/condominium buyer who wins a case in
the HSRC and who is thereby deemed entitled to claim damages and attorney's fees
would be forced to litigate in the regular courts for the purpose, a situation which is
obviously not in the contemplation of the law.
As a result of the growing complexity of the modern society, it has become
necessary to create more and more administrative bodies to help in the regulation
of its ramified activities. Specialized in the particular fields assigned to them, they
can deal with the problems thereof with more expertise and dispatch than can be
expected from the legislature or the courts of justice. This is the reason for the
increasing vesture of quasi- legislative and quasi-judicial powers in what is now not
unreasonably called the fourth department of the government.
Statutes conferring powers on their administrative agencies must be liberally
construed to enable them to discharge their assigned duties in accordance with the
legislative purpose.
5. Christian general Assembly v. Ignacio
CGA entered into a Contract to Sell a subdivision lot with the respondents – the
registered owners and developers of a housing subdivision, Villa Priscilla. The price
was payable in instalments at an extended period of 5 years.
CGA religiously paid the monthly installments until it was discovered that the title
covering the subject property was actually part of two consolidated lots that the
respondents had acquired from his former tenant- beneficiaries whose subject
property had been placed under PD 27’s Operation Land Transfer. According to
CGA, Imperial applied for the retention of five hectares of her land under Republic
Act No. 6657, which the Department of Agrarian Reform (DAR) granted.
CGA filed a complaint against the respondents before the RTC; and claimed that the
respondents fraudulently concealed the fact that the subject property was part of a
property under litigation. CGA sought for the rescission of contract
Ignacio filed a motion to dismiss asserting that the RTC had no jurisdiction over the
case and claimed that the case falls within the exclusive jurisdiction of the HLURB
since it involved the sale of a subdivision lot. CGA opposed the motion to dismiss,
claiming that the action is for rescission of contract, not specific performance, and is
not among the actions within the exclusive jurisdiction of the HLURB.
ISSUE
Which of the two – the regular court or the HLURB – has exclusive jurisdiction over
CGA’s action for rescission and damages.
HELD
The Court affirmed the decision of the CA in finding that HLURB has exclusive
jurisdiction over CGA’s action for rescission and damages.
Based on the allegations, the main thrust of the CGA complaint is clear — to compel
the respondents to refund the payments already made for the subject property
because the respondents were selling a property that they apparently did not own.
Since the respondents cannot comply with their obligations under the contract, i.e.,
to deliver the property free from all liens and encumbrances, CGA is entitled to
rescind the contract and get a refund of the payments already made. The cause of
action falls under the actions contemplated by Paragraph (b), Section 1 of PD No.
1344, which reads:
SEC. 1.In the exercise of its functions to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the
National Housing Authority shall have exclusive jurisdiction to hear and decide cases
of the following nature:
xxx xxx xxx
B.Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman;
The surge in the real estate business in the country brought with it an increasing
number of cases between subdivision owners/developers and lot buyers on the
issue of the extent of the HLURB’s exclusive jurisdiction.
The provisions of PD 957 were intended to encompass all questions regarding
subdivisions and condominiums. The intention was aimed at providing for an
appropriate government agency, the HLURB, to which all parties aggrieved in the
implementation of provisions and the enforcement of contractual rights with
respect to said category of real estate may take recourse. The business of
developing subdivisions and corporations being imbued with public interest and
welfare, any question arising from the exercise of that prerogative should be
brought to the HLURB which has the technical know- how on the matter. In the
exercise of its powers, the HLURB must commonly interpret and apply contracts
and determine the rights of private parties under such contracts. This ancillary
power is no longer a uniquely judicial function, exercisable only by the regular
courts.
Regardless of whether the rescission of contract is based on Article 1191 or 1381 of
the Civil Code, the fact remains that what CGA principally wants is a refund of all
payments it already made to the respondents. This intent, amply articulated in its
complaint, places its action within the ambit of the HLURB's exclusive jurisdiction
and outside the reach of the regular courts. Accordingly, CGA has to file its
complaint before the HLURB, the body with the proper jurisdiction.
6. Dadubo v. CSC
Dadubo and Cidro of the DBP Borongan branch bank were administratively charged
with conduct prejudicial to best interest of the service, based on allegations on the
unposted withdrawal of P60,000 from the savings accounts of the Tius. DBP found
Dadubo guilty of dishonesty for embezzlement of bank funds. She was penalized
with dismissal and fined an amount equal to 1 month basic salary. However, Civil
Service Commission reversed the DBP findings and reduced Dadubos penalty to
suspension for 6 months. DBP moved for reconsideration and CSC affirmed the
earlier findings as to Dadubos guilt. Dadubo brought the present case to SC on
certiorari, claiming that CSC failed to comply w/ constitutional requirement to state
clearly and distinctly the facts and the law on which the decision is based.
Issue: Whether or not there is violation of the administrative due process
Held: Compliance with the constitutional requirement to state clearly and distinctly
the facts and the law on which a decision is based on applies only to courts of
justice and not to administrative bodies like the Civil Service Commission.In any
event, there was an earlier statement of the facts and the law involved in the
decision rendered by the MSPB dated February 28, 1990, which affirmed DBP's
decision to dismiss the petitioner. In both decisions, the facts and the law on which
they were based were clearly and distinctly stated
7. Lianga Bay v. Enage
The parties are both forest concessionaries whose licensed areas are adjacent to
each other. Since the concessions of petitioner and respondent are adjacent to each
other, they have a common boundary. Reports of encroachment by both parties on
each others concessions triggered a survey to establish the common boundary of
the respective concession areas and was held that the claim of Ago Timber
Corporation runs counter to the intentions of the Office granting the Timber License
Agreement to Lianga Bay Logging. Ago Timber appealed to Department of
Agriculture and Natural Resources and set aside the appealed decision of the
Director of Forestry and ruled in favor of Ago. Lianga Bay Logging elevated the case
to office of President and ruling of Agriculture and Natural Resources was affirmed.
On Motion for Recon, decision was reversed and reinstated decision of Director of
Forestry. A civil action was instituted by Ago Timber to determine the correct
boundary line of license timber areas. TRO was set in place. Lianga brought the case
to SC on certiorari.
Issue: WON respondent court has jurisdiction over the administrative case
Held: Respondent Judge erred in taking cognizance of the complaint filed by
respondent Ago, asking for the determination anew of the correct boundary line of
its licensed timber area, for the same issue had already been determined by the
Director of Forestry, the Secretary of Agriculture and Natural Resources and the
Office of the President, administrative officials under whose jurisdictions the matter
properly belongs.
Section 1816 of the Revised Administrative Code vests in the Bureau of Forestry, the
jurisdiction and authority over the demarcation, protection, management,
reproduction, reforestation, occupancy, and use of all public forests and forest
reserves and over the granting of licenses for game and fish, and for the taking of
forest products, including stone and earth therefrom.
The Secretary of Agriculture and Natural Resources, as department head, may
repeal or modify the decision of the Director of Forestry when advisable in the
public interests, whose decision is in turn appealable to the Office of the President.
For the respondent court to consider and weigh again the evidence already
presented and passed upon by said officials would be to allow it to substitute its
judgment for that of said officials who are in a better position to consider and weigh
the same in the light of the authority specifically vested in them by law.
It is a well-settled doctrine that the courts of justice will generally not interfere with
purely administrative matters which are addressed to the sound discretion of
government agencies and their expertise unless there is a clear showing that the
latter acted arbitrarily or with grave abuse of discretion or when they have acted in
a capricious and whimsical manner such that their action may amount to an excess
or lack of jurisdiction.
CHAPTER 2
8. Dario v. Mison
Pres. Aquino promulgated Proclamation No. 3, providing for the intention of the
President to, “completely reorganize the government, eradicate unjust and
oppressive structures, and all iniquitous vestiges of the previous regime.”
Subsequently, Pres. Aquino promulgated E.O. No. 127, “Reorganizing the Ministry
of Finance”, where, in Sec. 59, it provided for the reorganization of the Bureau of
Customs. Pursuant to the reorganization, Commissioner Mison issued separation
notices to a total of 394 officials, including the petitioner, Cesar Dario, in his
capacity as Deputy Commissioner.
Thus, Cesar Dario petitioned for reinstatement on the ground that the Provisional
Constitution giving the power to dismiss public officials without cause ended on
February 25, 1987, seeing as the public officials enjoyed security of tenure under
the provisions of the 1987 Constitution. However, respondent
Commissioner Mison contended that Sec. 16, Article XVIII (Transitory Provisions)
allows the reorganization of the Bureau of Customs under E.O. No. 127 (authorizing
separation without cause) to continue even after the ratification of the 1987
Constitution – citing the case of Jose v. Arroyo, wherein the Court decided in favor
of a similar notion. Thus, there was no violation of security of tenure.
The Civil Service Commission, nevertheless, ordered the reinstatement of the
petitioner. Whereas, the respondent motioned for reconsideration.
ISSUE:
Does E.O. No. 127, providing reorganization, allow the “separation” of Dario from
the Bureau of Customs despite his right to security of tenure under the 1987
Constitution?
HELD:
No. The Court held that E.O. No. 127, providing reorganization, does not allow the
“separation” of Dario from the Bureau of Customs despite his right to security of
tenure under the 1987 Constitution.
In line with this, the Court maintains that reorganization entails that an office is
abolished, thus there actually no separation or dismissal such that these concepts
imply that there is an office to be separated from. However, the Court asserts that,
reorganizations abolishing an office would only be valid if it passes the test of good
faith. A Reorganization carried out in good faith must have for its purpose the
efficiency of both the economy and bureaucracy. In this case, there is lack of good
faith such that there is no showing that legitimate structural changes were made,
only that personnel were reduced. Thus, it cannot be said that it was done by
reason of economy or redundancy of functions. Thus, since there is lack of good
faith, there is no valid reorganization that would allow the “separation” of the
petitioners, in keeping with their security of tenure. The act of reorganization of the
Bureau of Customs dismissing Dario is unconstitutional
9. Larin v. Executive Secretary
Petitioner Aquilino Larin is the Assistant Commissioner of the Bureau of Internal
Revenue, and he also appears to be a co- accused in two criminal cases for
violating Section 268(4) of the National Internal Revenue Code and Section 3 of R.A.
3019. Subsequently petitioner was convicted and this was reported to the
President, the then Senior Deputy Executive Secretary by the authority of the
president issued Memo order 164 creating an executive committee to investigate
the administrative charges.
The committee required that petitioner filed a position paper with regard to the
charges against him, the petitioner complied, and however his statement was that
he cannot comment on the merits of the case for fear of being cited in contempt by
the court. Petitioner also alleged that the committee doesn’t have any jurisdiction
over his person, that the case cannot be validly filed without violating res judicata,
his rights against double jeopardy and lastly to proceed with the investigation
would be redundant and oppressive against him.
While all this is pending, the president issued an order for the streamlining of BIR, in
which case the office of the petitioner was abolished by the order. His office being
abolished, the petitioner was not reinstated as an assistant commissioner of BIR,
instead another Administrative order was issued in which it stated that he is being
dismissed for being guilty of grave misconduct in connection to the criminal cases
filed against him.
ISSUES:
1. Whether the dismissal of the petitioner was valid or not. a. Who has the power to
discipline the petitioner b. Was due process observed c. What is the effect of the
petitioners acquittal in the criminal case d. Does the president have the power to
reorganize BIR e. Was the reorganization done in bad faith.
HELD:
The court ruled that the office of the petitioner falls under the category of Career
Executive Service, which is appointed by the president and being a presidential
appointee, it follows that the president have the power to discipline the petitioner.
Despite the fact that the constitution grants the president the power to appoint and
the inherent power to remove, such power is not without limit. Under
the Administrative code of 1987, career services are characterized to have security
of tenure, therefore the petitioner is protected from being willfully removed by the
president, the only way that the petitioner can be validly removed is for a valid
cause and in accordance with the procedural due process. According to the Court it
found that, although the procedural due process was followed and complied with
the petitioner was not removed for a valid cause, since to start with the committee
was created to investigate the administrative aspect of the criminal cases being
faced by the petitioner at that time.
Now taking into consideration that the petitioner was acquitted from the
criminal cases, the court believes that there is no ground for the administrative case
to continue. It is admitted that criminal cases and administrative cases usually
progress independently, however in this case it was proven in the criminal case that
the petitioner never committed any of the alleged acts, therefore the case for
the administrative case was also terminated, and therefore there is no longer any
valid cause for the removal of the petitioner.
As for the validity of E.O. 132 which reorganized the BIR, the court ruled that the
president has the authority to do so, as seen in the preamble of the E.O. which
stated the legal basis of its issuance. Though it is admitted that the president had
the power to reorganize the BIR, the court stated that such power is not limitless, 11. Domingo v. Zamora
the reorganization to be valid must be done in good faith. In the instant case the President Estrada issued EO entitled Transferring the Sports Programs and Activities
court found that the reorganization was done in bad faith or at least there are of the DECS to the Philippine Sports Commission in School-Based Sports. Pursuant
indications of bad faith, such as when the E.O. abolished the intelligence and to EO 81, former DECS Secretary Gonzales issued a Memorandum which
investigation office and at the same time creating Intelligence and Investigation temporarily reassigned, in the exigency of the service, all remaining BPESS Staff to
service to do the same functions of the abolished office. Most importantly is the other divisions or bureaus of the DECS.
non reappointment of the petitioner, the petitioner being a holder of a career Issue: Is the reassignment valid?
service, should have been prioritized or preferred in appointing people to new Ruling: Yes. Since EO 81 is based on the Presidents continuing authority under
offices created by the reorganization, but in this case the petitioner was never Section 31 (2) and (3) of EO 292, it is a valid exercise of the Presidents delegated
reappointed instead he was dismissed from service without any separation benefits power to reorganize the Office of the President. The law grants the President this
at all. The court ruled that the petitioner is reinstated as an assistant commissioner power in recognition of the recurring need of every President to reorganize his
and is entitled to back wages. office to achieve simplicity, economy and efficiency. The Office of the President is
the nerve center of the Executive Branch. To remain effective and efficient, the
10. Buklod ng Kawani ng EIIB v. Zamora Office of the President must be capable of being shaped and reshaped by the
On June 1987 Pres. Cory issued EO 127, establishing the Economic Intelligence and President in the manner he deems fit to carry out his directives and policies. After
Investigation Bureau (EIIB) as part of the Ministry of Finance. Aquino issued another all, the Office of the President is the command post of the President. This is the
memo providing that the EIIB shall be the agency of primary responsibility for anti rationale behind the Presidents continuing authority to reorganize the
smuggling operations in all land areas and inland water and waterways outside the administrative structure of the Office of the President.
areas of sole jurisdiction of the Bureau of Customs. On January 2000 Pres. Estrada
issued EO 191 entitled “Deactivation of the EIIB.” The order of deactivation was 12. Bagaolsan v. NTA
motivated by the fact that the designated functions of the EIIB are also being The petitioner was terminated from there position in the national tobacco
performed by the other exiting agencies of the government. On March 200, Estrada administration as a result of the executive order issued by president Estradawhic
issued EO 223 providing for the separation from the service of all personnel of EIIB mandates for the stream lining of the national tobacco administration, a
pursuant to a bonafide reorganization resulting in the abolition, redundancy, government agency under the department of agriculture.
merger, division, or consolidation of positions.
The petitioners filed a letter of appeal to the civil service commission to recall the
ISSUES: ossp. Petitioner all file a petition for certiorari with prohibition an mandamus with
Does the president have the authority to reorganize the executive department? prayer for preliminary mandatory injunction and a temporary restraining
How shall the reorganization be carried out? order with the regional trial court of Batak to prevent the respondent from
enforcing the notice of termination and from austing the petitioners in there
RULING: respective offices.
YES, the President has the authority to reorganize the executive
department. Bureaus, agencies, or offices in the executive department are under The regional trial court issued an order ordering the national tobacco
the President’s power of control. Hence he is justified in deactivating the functions administration to appoint the petitioner to the osspto position similar to the
of a particular office, or in carrying out reorganizations when a certain law grants one that they hold before.
him such power. Sec. 31, Book III of the Revised Administrative Code provides the
President with the continuing authority to reorganize the administrative structure The national tobacco administration appealed to the court of appeals who reversed
of the Office of the President in order to achieve economy and efficiency. b. The the decision of the RTC.
reorganization should be carried out in good faith. The EOs issued by Estrada was Petitioner appealed to the supreme court.
motivated by the fact that the functions of EIIB are also being performed by other
agencies. The Court also pointed out that the deactivation of EIIB was intended to ISSUE:
lessen the expenses of the government. Whether or not, the reorganization of the national tobacco administration is valid
true issuance of executive orderby the president.
According to the supreme court,The president has the power to reorganized an
office to achieve simplicity ,economy and efficiency as provided under executive
order 292 sec. 31 and section 48 of RA 7645 which provides that activities of
executive agencies may be scaled down if it is no longer essential for the
delivery of public service.
CHAPTER 3
13. Makati Stock Exchange v. SEC
Makati Exchange Commission (MakEC) filed a review on the resolution issued by the
SEC denying them to operate a stock exchange because the list of securities on its
trading board is already listed in the Manila Stock Exchange (ManEC).
MakEC argued that the Commission has no power to impose it because it is illegal,
discriminatory and unjust.
Under the law, a stock exchange can only do a business in the Ph when it is
previously registered with the Commission by filing a statement containing the
information required by law (Sec. 17, Securities Act/ Commonwealth Act 83). It is
assumed that the Commission may permit registration if this is complied with; if
not, it may refuse.
MakEC is challenging this particular requirement of the Commission (rule against
double listing) may deemed to have shown inability or refusal to abide by its rules,
and thereby given ground for denying registration.
Rule against double listing
Such rule provides: “… nor shall a security already listed in any securities exchange
be listed anew in any other securities exchange… .”
Objection of the MakEC on the above rule
The ManEC has been operating alone for 25years, and presumably, all available
securities for trading in the market are already listed there. In effect, the
Commission permits MakEC to deal only with other securities, which tantamount to
a monopoly.
The Commission’s order/resolution makes it impossible for the MakEC to operate,
thus, “permission is tantamount to prohibition.
Issue/s
1. Whether or not the Commission has authority to promulgate and
implement rules prohibiting another exchange to operate on the ground
that it is of the protection of “public interest”.
2. Whether or not the establishment of another exchange environs of Manila
would be inimical to the public interest
3. Whether or not the double or multiple listing of securities should be
prohibited for the “protection of the investors”
Action of the court
The Court granted the petition.
Court rationale on the above case
Authority of the Commission to promulgate and implement the rule in question
It is fundamental that an administrative officer has only such powers as are
expressly granted to him by the statute, and those necessarily implied in the
exercise thereof.
The test is not whether the Act forbids the Commission from imposing a
prohibition, but whether it empowers the Commission to prohibit. No specific
portion of the statute has been cited to uphold this power.
The general power to “regulate” which the Commission has (Sec. 33) does not imply
authority to prohibit.
ManEC contends that the power may be inferred from the express power of the
Commission to suspend trading in a security, under said sec. 28:
And if in its opinion, the public interest so requires, summarily to suspend trading in
any registered security on any securities exchange … . (Sec. 28[3], Securities Act.)
The Commission has not acted in pursuance of such authority, for the simple reason
that suspension under it may only be for ten days. Besides, the suspension of
trading in the security should not be on one exchange only, but on all exchanges;
bearing in mind that suspension should be ordered “for the protection of investors”
(first par., sec. 28) in all exchanges, naturally, and if “the public interest so requires”
[sec. 28(3)].
The law allows the operation of two or more exchanges
Wherever two or more exchanges exist, the Commission, by order, shall require and
enforce uniformity of trading regulations in and/or between said exchanges. (Sec.
28b-13, Securities Act.)
The legislature has specified the conditions under which a stock exchange may
operate (Sec. 17, Securities Act); it is not for the Commission to impose others. Until
otherwise directed by law, the operation of exchanges should not be so regulated
as practically to create a monopoly by preventing the establishment of other stock
exchanges and thereby contravening:
1. the organizers’ (Makati’s) Constitutional right to equality before the law;
2. their guaranteed civil liberty to pursue any lawful employment or trade;
and
3. the investor’s right to choose where to buy or to sell, and his privilege to
select the brokers in his employment.
Where the licensing statute does not expressly or impliedly authorize the officer in
charge, he may not refuse to grant a license simply on the ground that a sufficient
number of licenses to serve the needs of the public have already been issued.
Ruling
Surely, this petition for review has suitably been coursed. And making reasonable
allowances for the presumption of regularity and validity of administrative action,
we feel constrained to reach the conclusion that the respondent Commission
possesses no power to impose the condition of the rule, which, additionally, results
in discrimination and violation of constitutional rights.
ACCORDINGLY, the license of the petition to operate a stock exchange is approved
without such condition. Costs shall be paid by the Manila Stock Exchange. So
ordered.
 It is the exclusive original jurisdiction of the inferior to hear election protest and the
14. Solid Homes v. Payawal COMELEC have the appellate jurisdiction over it.
15. Taule v. Santos
An election for the officers of the Federation of Associations of Barangay Council 2) Yes. The Governor has the personality to file the protest. Under Section 205 of
(FABC) was held on June 18, 1989 despite the absence of other members of the said the Local Government Code, the membership of the sangguniang panlalawigan
council. Including Petitioner was elected as the president. Respondent Verceles sent consists of the governor, the vice-governor, elective members of the said
a letter of protest to respondent Santos, seeking its nullification in view of several sanggunian, etc.
flagrant irregularities in the manner it was conducted.
He acted as the presiding officer of the sangguniang panlalawigan. As presiding
Petitioner denied the allegations of respondent Verceles and denouncing officer, he has an interest in the election of the officers of the FABC since its elected
respondent for intervening in the said election which is a purely non-partisan affair. president becomes a member of the assembly. If said member assumes his place
And requesting for his appointment as a member of the Sangguniang Panlalawigan under questionable circumstances, the sanggunian may be vulnerable to attacks as
of the province being the duly elected President of the FABC in Catanduanes. to their validity or legality. Therefore, respondent governor is a proper party to
question the regularity of the elections of the officers of the FABC.
Respondent Santos issued a resolution on August 4, 1989 nullifying the election and
ordering a new one to be conducted as early as possible to be presided by the The election of officers of the FABC held on June 18, 1989 is null and void for not
Regional Director of Region V of the Department of Local Government. Petitioner complying with the provisions of DLG Circular No. 89-09. DLG Circular No. 89-09
filed a motion for reconsideration but it was denied by respondent Santos in his provides that "the incumbent FABC President or the Vice-President shall preside
resolution on September 5, 1989. Thus this petition before the Supreme Court. over the reorganizational meeting, there being a quorum." It is admitted that
neither the incumbent FABC President nor the Vice-President presided over the
Issues: meeting and elections but Alberto P. Molina, Jr., the Chairman of the Board of
Election Supervisors/Consultants. Therefore, there was a clear violation of the said
1) WON the respondent Santos has jurisdiction to entertain an election protest mandatory provision.
involving the election of the officers of the FABC.
Pending resolution, petitioner also filed a supplemental petition alleging that public
2) WON the respondent Verceles has the legal personality to file an election respondent Local Government Secretary, in his memorandum dated June 7, 1990,
protest. designated Augusto Antonio, despite him being absent on said election. The
Secretary of Local Government has no authority to appoint anyone who does not
Decision: meet the minimum qualification to be the president of the federation of barangay
councils.
Petition GRANTED. Assailed August 4, 1989 and September 5, 1989 resolution is SET
ASIDE for having been issued in excess of jurisdiction. However, the election on
June 18, 1989 is annulled. A new election of officers of the FABC be conducted
immediately in accordance with the governing rules and regulations. Supplemental
petition is likewise partially granted.

Ratio Decidendi:

1. No. The Secretary of Local Government has no jurisdiction to entertain any

protest involving the election of officers of the FABC. He is only vested with the
power to promulgate rules and regulations and to exercise general supervision over
the local government as provided in the Local Government Code and in the
Administrative Code.