1. POTC vs.

Africa

An intra-corporate dispute involving a corporation under sequestration of the Presidential Commission

on Good Government (PCGG) falls under the jurisdiction of the Regional Trial Court (RTC), not the
Sandiganbayan, or the SEC.

FACTS:

These consolidated appeals via petitions for review on certiorari include the following:

(a) G.R. No. 184622 — the appeal from the dismissal by the Sandiganbayan of the petitioners’ complaint
for injunction docketed as Civil Case No. 0198 on the ground that the Sandiganbayan had no jurisdiction
over the issue due to its being an intra-corporate dispute;

(b) G.R. Nos. 184712-14 and G.R. No. 186066 — the appeals of the Locsin Group (in representation of
Philippine Overseas Telecommunications Corporation (POTC), Philippine Communications Satellite
Corporation (PHILCOMSAT), and Philcomsat Holdings Corporation (PHC) from the consolidated decision
the Court of Appeals (CA) promulgated on September 30, 2008 in C.A.-G.R. SP No. 101225, C.A.- G.R. SP
No. 98097 and C.A.-G.R. SP No. 98399; and

(c) G.R. No. 186590 — the appeal of the Ilusorio Group seeking the reversal of the decision promulgated
by the CA on July 16, 2008 in C.A.-G.R. SP No. 102437

POTC, PHILCOMSAT and PHC are domestic corporations in the Philippines. The ownership structure of
these corporations implies that whoever had control of POTC necessarily held 100% control of
PHILCOMSAT, and in turn whoever controlled PHILCOMSAT wielded 81% majority control of PHC.

The SEC ordered that an annual stockholders’ meeting be held for each of the corporations to elect their
Board of Directors. In the POTC meeting, elected were Nieto, Jr. as President and Guy de Leon, a
government nominee to POTC, as Chairman. In the PHILCOMSAT meeting, Nieto, Jr. and Locsin were
respectively elected as Chairman and President of PHILCOMSAT.

POTC (Africa-Bildner Group) et al. opposed the election of Nieto et al. and filed a complaint for
injunction with a prayer for TRO and WPI in the RTC Makati against Nieto et al. from acting as directors
and officers of POTC. However, this was dismissed by the RTC for lack of jurisdiction over the subject
matter.

Involved in this case is an intracorporate controversy involving election contest of the board of directors.
The parties dispute whether the RTC or the Sandiganbayan (as the corporations involved are
sequestrated corporations) has jurisdiction over the intracorporate dispute.

ISSUE

Did RTC have jurisdiction over the intra-corporate controversy (election contest)?

RULING

The RTC, not the Sandiganbayan, has jurisdiction. The case does not involve a sequestration-related
incident but an intracorporate dispute.
There is an intra-corporate controversy when the dispute involves any of the following relationships, to
wit: (a) between the corporation, partnership or association and the public; (b) between the
corporation, partnership or association and the State in so far as its franchise, permit or license to
operate is concerned; (c) between the corporation, partnership or association and its stockholders,
partners, members or officers; and (d) among the stockholders, partners or associates themselves.

Originally, PD No 902-A vested original and exclusive jurisdiction over cases involving intracorporate
disputes in the SEC. However, upon enactment of RA 8799, the jurisdiction of the SEC over
intracorporate controversies was transferred for the RTC.

The Sandiganbayan does not have jurisdiction over the case because the subject matter involved was an
intra-corporate controversy, not any incidents arising from, incidental to, or related to any case
involving assets whose nature as ill-gotten wealth was yet to be determined. the jurisdiction of the
Sandiganbayan has been held not to extend even to a case involving a sequestered company
notwithstanding that the majority of the members of the board of directors were PCGG nominees.
 2. The Manila Banking Corp. vs Sps Rabina

FACTS:

Respondent Marenir Development Corporation (MDC) is the developer of a subdivision project in QC

and obtained a loan from the petitioner to secure a real estate mortgage covering the real estate
properties including the lot subject of a Contract to Sell to Amante Sibuyan (Sibuyan).

Sibuyan transferred the lot via assignment to respondent Celestina Rabina (Celestina), with the
conformity of MDC. After Celestina had fully paid the amortization payments for the lot, she asked MDC
to transfer the rights to her but MDC failed in doing so. She, with her husband and co-respondent
Alfredo, then filed a complaint against the petitioner before the for the non-delivery of titles, annulment
of mortgage and incomplete development of the subdivision project before the adjudicatory body of the
HLURB (Office of Appeals, Adjudication, and Legal Affairs).

In the meantime, petitioner was placed under receivership by the Monetary Board.

Petitioner contended that the HLURB has no jurisdiction over the complaint by virtue of Sec. 29, RA 265,
that its assets are deemed to be in custodia legis of the receiver and thus exempt from garnishment,
levy, attachment of execution.

The HLURB found for the respondent spouses Rabina and directed TMBC to release the mortgage on the
lot and transfer the titles to the complainant and awarded moral damages. MDC did not appeal,
rendering the decision final and executory as to it.

Petitioner appealed and the HLURB Board of Commissioners affirmed the Arbiter’s decision. Petitioner
elevated the case to the Office of the President, which directed him to remit the appeal fee with the
appeal memorandum. However, he failed to pay. The OP dismissed the petitioner’s appeal for non-
payment of fees. The petitioner appealed to the CA and the CA affirmed the orders of the OP and ruled
that the HLURB has jurisdiction over petitioner under PD 957.

ISSUE:

Whether or not the HLURB has jurisdiction over TMBC (petitioner).

RULING:

The act of MDC in mortgaging the lot to petitioner, without the knowledge and consent of lot buyer-
respondent spouses and without the approval of the HLURB, as required by P.D. 957, is not only an
unsound real estate business practice but also highly prejudicial to them.

The jurisdiction of the HLURB to regulate the real estate trade is broad enough to include jurisdiction
over complaints for annulment of mortgage. To disassociate the issue of nullity of mortgage and lodge it
separately with the liquidation court would only cause inconvenience to the parties and would not serve
the ends of speedy and inexpensive administration of justice as mandated by the laws vesting quasi-
judicial powers in the agency.

Petitioner’s argument that the mortgage does not fall under the prohibition in Section 18 of P.D. 957
since the loan obligation of MDC was contracted to finance its purchase of other real properties and not
for the development of the subdivision project does not lie.
Section 18 provides: “No mortgage on any unit or lot shall be made by the owner or developer without
prior written approval of the Authority.

Section 18 of P.D. 957 is a prohibitory law and acts committed contrary to it are void. Concededly, P.D.
957 aims to protect innocent lot buyers. Section 18 of the decree directly addresses the problem of
fraud committed against buyers when the lot they have contracted to purchase, and which they have
religiously paid for, is mortgaged without their knowledge. The avowed purpose of P.D. 957 compels the
reading of Section 18 as prohibitory—acts committed contrary to it are void. Such construal ensures the
attainment of the purpose of the law; to protect lot buyers so they do not end up still homeless despite
having fully paid for their home lots with their hard earned cash.
 3. PLDT vs Tiamson

FACTS:

PLDT employed Antonio Tiamson as a Radio Technician II and was assigned to Clark-TMC in Pampanga.
The president of the Angeles City Telephone System and Datelcom Corporation informed PLDT of his
complaint against their employees in Clark-TMC, stating that he suspected them to be in cohorts with
the local subscribers in effecting illegal overseas calls.

PLDT Quality Control and Inspection Department (QCID) conducted surveillance and caught Vidal Busa in
flagrante delicto while monitoring an illegally connected overseas call using the company’s radio
facilities. Busa readily admitted to his involvement and named other employees, including Tiamson as
also engaged in the illegal practice. QCID’s investigation also showed that unauthorized overseas calls
were originating from Clark-TMC during Tiamson’s tour of duty. Tiamson denied this by saying he was
off duty during those times.

The QCID recommended that administrative action for serious misconduct be instituted against the
employees. The company issued to Tiamson an Inter-Office Memorandum dated August 12, 1994,
charging him with violation of the company’s disciplinary rules and regulations. He was required to
explain within 72 hours why he should not be dismissed and was placed under preventive suspension.

Tiamson submitted his written explanation denying participation in the illegal activities, but PLDT found
his explanation unsatisfactory and terminated his employment on the ground of serious misconduct
and/or fraud.

Tiamson filed a case against PLDT for illegal suspension, illegal dismissal, damages and other monetary
claims before the LA, and the Labor Arbiter ruled in favor of Tiamson.

PLDT elevated the case to the NLRC and the NLRC ruled that there was just cause to dismiss Tiamson but
the penalty for dismissal was too harsh and ordered that he be reinstated. Both parties assailed this
ruling. The CA affirmed the ruling of the NLRC.

ISSUE:

Whether or not the CA was correct in upholding the NLRC’s decision.

RULING:

The Court agrees with the contentions of the respondent and the findings and rulings of the CA.

It is a settled rule that factual findings of labor officials, who are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality.
The quantum of proof required in determining the legality of an employee’s dismissal is only substantial
evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise.

“Procedural due process requires that an employee be apprised of the charge against him, given
reasonable time to answer the same, allowed ample opportunity to be heard and defend himself, and
assisted by a representative if the employee so desires Procedural due process requires that the
employer serve the employees to be dismissed two (2) written notices before the termination of their
employment is effected: (a) the first, to apprise them of the particular acts or omission for which their
dismissal is sought; and (b) second, to inform them of the decision of the employer that they are being
dismissed.

The LA is therefore correct in ruling that Tiamson was illegally dismissed.”

The petitioner maintains that contrary to the findings and conclusions of the appellate court, it has
established through substantial evidence that there was just cause for the respondent’s dismissal. (1)
the sworn statements of Vidal Busa specifically implicating the respondent; (2) the sworn statement of
Arnel Cayanan; and (3) the printout of the CAMA tape, recording the unauthorized overseas calls
originating from Clark-TMC during the respondent’s tour of duty

The respondent disputes the admissibility of Busa’s sworn statements for being hearsay since the latter
was not presented for cross-examination. This argument, however, is not persuasive because the rules
of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where
decisions may be reached based on position papers only.

Although admissible in evidence, affidavits being self-serving must be received with caution. This is
because the adverse party is not afforded any opportunity to test their veracity.

The petitioner submits that the printout of the CAMA tapes corroborated Busa’s sworn statement. A
perusal of the printout, however, shows that it is not authenticated by the proper officer of the
company. Moreover, the name of the respondent and the other annotations in the said printout are
handwritten and unsigned. Mere self-serving evidence (of which the listing and printouts are of that
nature) should be rejected as evidence without any rational probative value even in administrative
proceedings.

Administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure
in the adjudication of cases. However, this procedural rule should not be construed as a license to
disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of
law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must
at least have a modicum of admissibility for it to be given some probative value.

The Court agrees with the contentions of the respondent and the findings and rulings of the CA.

The petitioner has not established by substantial evidence that there was just cause for the
respondent’s termination from his employment. The sworn statements of Busa and Cayanan alone are
not enough to establish that the respondent was guilty of serious misconduct. Considering such finding,
there is no need to delve into whether the respondent was afforded due process when he was dismissed
by the petitioner.
 4. Perez vs People

FACTS:

An audit team conducted a cash examination on the account of the petitioner, Perez, who was then the
acting municipal treasurer of Tubigon, Bohol. The audit team found that there was a shortage of
P72,784.57 of the cash on hand. The petitioner was required to produce the missing amount.

When asked by the auditing team as to the location of the missing funds, the petitioner verbally
explained that part of the money was used to pay for the loan of his late brother, another portion was
spent for the food of his family and the rest for his medicine.

The auditing team addressed the Provincial Auditor of Bohol to recommend the filing of the appropriate
criminal case against the petitioner.

The petitioner made remittances of money to the Provincial Treasurer to restitute his shortage.
Meanwhile, an administrative case was filed against him to which he filed an Answer dated Feb. 22,
1989 reiterating his verbal admission before the auditing team.

The petitioner again remitted money to the Provincial Treasurer and had then fully restituted his
shortage, confirmed and shown by receipts.

Later, the petitioner was charged before the SB with malversation of public funds. The petitioner
entered a plea of not guilty.

During the trial, the defense presented evidence through the petitioner, Zenon Perez himself. He denied
the contents of his first Answer (dated Feb. 22, 1989) to the administrative case and claimed that it was
prepared without the assistance of counsel. He had revoked his first Answer and field a second Answer
dated March 2, 1989, in which he had vehemently denied that he incurred a cash shortage. He also said
that he had already fully restored the cash shortage. Petitioner argued that the government did not
suffer any damage or prejudice.

The SB found Perez guilty for the crime of malversation. The petitioner appealed the decision to the
Supreme Court.

ISSUE:

Whether or not the conviction of the petitioner for the crime of malversation is correct.

RULING:

The SB’s conviction of the petitioner was correct.

The petitioner gave himself away in his first Answer in the administrative case. By his explicit admission
of the and the testimony of the audit team, the elements of malversation were duly established.

The contention that the petitioner’s first Answer should not be given any probative weight because it
was accomplished without the assistance of counsel is incorrect.
There is no law, jurisprudence or rule which mandates that an employee should be assisted by counsel
in an administrative case. On the contrary, jurisprudence is in unison in saying that assistance of counsel
is not indispensable in administrative proceedings.

The right to counsel, which cannot be waived unless the waiver is in writing and in the presence of
counsel, is a right afforded a suspect or accused during custodial investigation. It is not an absolute right
and may be invoked or rejected in a criminal proceeding and, with more reason, in an administrative
inquiry.

While investigations conducted by an administrative body may at times be akin to a criminal proceeding,
the fact remains that under existing laws, a party in an administrative inquiry may or may not be
assisted by counsel, irrespective of the nature of the charges and of respondent’s capacity to represent
himself, and no duty rests on such body to furnish the person being investigated with counsel.

Thus, the right to counsel is not imperative in administrative investigations because such inquiries are
conducted merely to determine whether there are facts that merit disciplinary measures against erring
public officers and employees, with the purpose of maintaining the dignity of government service.

There is nothing in the Constitution that says that a party in a nonlitigation proceeding is entitled to be
represented by counsel and that, without such representation, he shall not be bound by such
proceedings. The assistance of lawyers, while desirable, is not indispensable.
 5. Solid Homes Inc vs Laserna

FACTS:

Evelina Laserna and Gloria Cajipe, as buyers, entered into a Contract to Sell with petitioner Solid Homes,
Inc., a corporation engaged in the development and sale of subdivision lots, as a seller. The subject of
the contract is a parcel of land in Quezon City. It was paid in the following manner: (1) the P33,060.00
down payment should be paid upon the signing of the contract; and (2) the remaining balance of
P166,421.884 was payable for a period of three years at a monthly installment of P4,622.83 beginning 1
April 1977.

When the respondents allegedly paid 90% of the purchase price, they demanded the execution and
delivery of the Deed of Sale and Transfer Certificate Title (TCT) of the property, but the petitioner did
not comply.

The respondents filed a complaint with the HLURB for the delivery of the documents. The HLURB arbiter
denied the respondents’ prayer but directed the petitioner to execute and deliver the said documents
upon full payment by the respondents.

The petitioner appealed the decision to the HLURB Board of Commissioners, which rendered a decision,
substantially affirming the decision of the arbiter. Unsatisfied, the petitioner appealed the decision
before the Office of the President, who affirmed the decision of the board of commissioners. In
rendering its Decision, the Office of the President merely adopted by reference the findings of fact and
conclusions of law contained in the Decision of the HLURB Board of Commissioners. Petitioner moved
for reconsideration but was denied.

The petitioner elevated the case to the Court of Appeals, which dismissed the petition for lack of merit
and affirming the decision of the OP.

Hence, this petition.

Petitioner alleges that the OP violated Sec. 14, Art. VIII of the Constitution, which provides that: “No
decision shall be rendered by any court without expressing therein clearly and distinctly the facts and
law on which it is based.” The Office of the President, being a government agency, should have adhered
to this principle.

Petitioner further avers that a full exposition of the facts and the law upon which a decision was based
goes to the very essence of due process as it is intended to inform the parties of the factual and legal
considerations employed to support a decision. The same was not complied with by the Office of the
President.

ISSUE

Whether or not the CA erred in holding that the Decision of the OP, which merely adopted by reference
the findings of fact and conclusions of law contained in the Decision of the HLURB Board of
Commissioners, is in accordance with the decision should be based on findings of fact and law to arrive
at a decision
RULING:

The petition is unmeritorious.

The constitutional mandate does not preclude the validity of “memorandum decisions,” which adopt by
reference the findings of fact and conclusions of law contained in the decisions of inferior tribunals.

It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply to decisions
rendered in administrative proceedings, as in the case a bar. Said section applies only to decisions
rendered in judicial proceedings.

The rights of parties in administrative proceedings are not violated as long as the constitutional
requirement of due process has been satisfied. In the landmark case of Ang Tibay v. CIR, 69 Phil. 635
(1940), we laid down the cardinal rights of parties in administrative proceedings, as follows:

1) The right to a hearing, which includes the right to present one’s case and submit evidence in support
thereof.
2) The tribunal must consider the evidence presented.
3) The decision must have something to support itself.
4) The evidence must be substantial.
5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the
record and disclosed to the parties affected.
6) The tribunal or body or any of its judges must act on its or his own independent consideration of the
law and facts of the controversy and not simply accept the views of a subordinate in arriving at a
decision.
7) The board or body should, in all controversial question, render its decision in such a manner that the
parties to the proceeding can know the various issues involved, and the reason for the decision
rendered.

Note that there is no requirement in Ang Tibay that the decision must express clearly and distinctly the
facts and the law on which it is based. For as long as the administrative decision is grounded on
evidence, and expressed in a manner that sufficiently informs the parties of the factual and legal bases
of the decision, the due process requirement is satisfied

As was ruled by the CA,

“The case already had gone through the Offices of the HLURB Arbiter and the Board of Commissioners
where petitioner was given the opportunity to be heard and present its evidence, before the case
reached the Office of the President which rendered the assailed [D]ecision after a thorough evaluation
of the evidence presented. What is important is that the parties were given the opportunity to be heard
before the [D]ecision was rendered. To nullify the assailed [D]ecision would in effect be a violation of the
Constitution because it would deny the parties of the right to speedy disposition of cases.”