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Ang Tibay v. CIR, G.R No. L-46496 The respondent National Labor Union, Inc.

, on the other hand,

prays for the vacation of the judgement rendered by the majority
Spouses Dacudao vs. Secretary of Justice, G.R No. 188056, of this Court and the remanding of the case to the Court of
January 8, 2013 Industrial Relations for a new trial, and avers:
PHILCOMSAT v. Alcuaz and NTC G.R No. 84818, December 1. That Toribio Teodoro's claim that on September 26, 1938,
18, 1989 there was shortage of leather soles in ANG TIBAY making it
necessary for him to temporarily lay off the members of the
Sanado vs. CA, 356 SCRA 546
National Labor Union Inc., is entirely false and unsupported by
Eastern Telecom vs. Int’l Communication Corp.,435 SCRA 55 the records of the Bureau of Customs and the Books of Accounts
of native dealers in leather.
Philippine Postal Corp. v. CA, G.R No. 173590, December 9,
2013 2. That the supposed lack of leather materials claimed by Toribio
Teodoro was but a scheme to systematically prevent the
Office of the Ombudsman v. Rolson Rodriguez, G.R No. 172700 forfeiture of this bond despite the breach of his CONTRACT with
the Philippine Army.
HLC Construction vs. Emily Homes Homeowners Assn., 411
SCRA 504 3. That Toribio Teodoro's letter to the Philippine Army dated
September 29, 1938, (re supposed delay of leather soles from
Ombudsman vs. Valera, 471 SCRA 719
the States) was but a scheme to systematically prevent the
Cabarrus vs. Bernas, 279 SCRA 388 forfeiture of this bond despite the breach of his CONTRACT with
the Philippine Army.

4. That the National Worker's Brotherhood of ANG TIBAY is a

G.R. No. L-46496 February 27, 1940 company or employer union dominated by Toribio Teodoro, the
existence and functions of which are illegal. (281 U.S., 548,
ANG TIBAY, represented by TORIBIO TEODORO, manager petitioner's printed memorandum, p. 25.)
and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners, 5. That in the exercise by the laborers of their rights to collective
vs. bargaining, majority rule and elective representation are highly
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL essential and indispensable. (Sections 2 and 5, Commonwealth
LABOR UNION, INC., respondents. Act No. 213.)

LAUREL, J.: 6. That the century provisions of the Civil Code which had been
(the) principal source of dissensions and continuous civil war in
The Solicitor-General in behalf of the respondent Court of Spain cannot and should not be made applicable in interpreting
Industrial Relations in the above-entitled case has filed a motion and applying the salutary provisions of a modern labor
for reconsideration and moves that, for the reasons stated in his legislation of American origin where the industrial peace has
motion, we reconsider the following legal conclusions of the always been the rule.
majority opinion of this Court:
7. That the employer Toribio Teodoro was guilty of unfair labor
1. Que un contrato de trabajo, asi individual como colectivo, sin practice for discriminating against the National Labor Union,
termino fijo de duracion o que no sea para una determinada, Inc., and unjustly favoring the National Workers' Brotherhood.
termina o bien por voluntad de cualquiera de las partes o cada
vez que ilega el plazo fijado para el pago de los salarios segun 8. That the exhibits hereto attached are so inaccessible to the
costumbre en la localidad o cunado se termine la obra; respondents that even with the exercise of due diligence they
could not be expected to have obtained them and offered as
2. Que los obreros de una empresa fabril, que han celebrado evidence in the Court of Industrial Relations.
contrato, ya individual ya colectivamente, con ell, sin tiempo fijo,
y que se han visto obligados a cesar en sus tarbajos por haberse 9. That the attached documents and exhibits are of such far-
declarando paro forzoso en la fabrica en la cual tarbajan, dejan reaching importance and effect that their admission would
de ser empleados u obreros de la misma; necessarily mean the modification and reversal of the judgment
rendered herein.
3. Que un patrono o sociedad que ha celebrado un contrato
colectivo de trabajo con sus osbreros sin tiempo fijo de duracion The petitioner, Ang Tibay, has filed an opposition both to the
y sin ser para una obra determiminada y que se niega a motion for reconsideration of the respondent National Labor
readmitir a dichos obreros que cesaron como consecuencia de Union, Inc.
un paro forzoso, no es culpable de practica injusta in incurre en
la sancion penal del articulo 5 de la Ley No. 213 del In view of the conclusion reached by us and to be herein after
Commonwealth, aunque su negativa a readmitir se deba a que stead with reference to the motion for a new trial of the
dichos obreros pertenecen a un determinado organismo obrero, respondent National Labor Union, Inc., we are of the opinion that
puesto que tales ya han dejado deser empleados suyos por it is not necessary to pass upon the motion for reconsideration
terminacion del contrato en virtud del paro. of the Solicitor-General. We shall proceed to dispose of the
motion for new trial of the respondent labor union. Before doing

this, however, we deem it necessary, in the interest of orderly system of official investigation and compulsory arbitration in
procedure in cases of this nature, in interest of orderly procedure order to determine specific controversies between labor and
in cases of this nature, to make several observations regarding capital industry and in agriculture. There is in reality here a
the nature of the powers of the Court of Industrial Relations and mingling of executive and judicial functions, which is a departure
emphasize certain guiding principles which should be observed from the rigid doctrine of the separation of governmental powers.
in the trial of cases brought before it. We have re-examined the
entire record of the proceedings had before the Court of In the case of Goseco vs. Court of Industrial Relations et al.,
Industrial Relations in this case, and we have found no G.R. No. 46673, promulgated September 13, 1939, we had
substantial evidence that the exclusion of the 89 laborers here occasion to joint out that the Court of Industrial Relations et al.,
was due to their union affiliation or activity. The whole transcript G. R. No. 46673, promulgated September 13, 1939, we had
taken contains what transpired during the hearing and is more occasion to point out that the Court of Industrial Relations is not
of a record of contradictory and conflicting statements of narrowly constrained by technical rules of procedure, and the
opposing counsel, with sporadic conclusion drawn to suit their Act requires it to "act according to justice and equity and
own views. It is evident that these statements and expressions substantial merits of the case, without regard to technicalities or
of views of counsel have no evidentiary value. legal forms and shall not be bound by any technicalities or legal
forms and shall not be bound by any technical rules of legal
The Court of Industrial Relations is a special court whose evidence but may inform its mind in such manner as it may deem
functions are specifically stated in the law of its creation just and equitable." (Section 20, Commonwealth Act No. 103.) It
(Commonwealth Act No. 103). It is more an administrative than shall not be restricted to the specific relief claimed or demands
a part of the integrated judicial system of the nation. It is not made by the parties to the industrial or agricultural dispute, but
intended to be a mere receptive organ of the Government. may include in the award, order or decision any matter or
Unlike a court of justice which is essentially passive, acting only determination which may be deemed necessary or expedient for
when its jurisdiction is invoked and deciding only cases that are the purpose of settling the dispute or of preventing further
presented to it by the parties litigant, the function of the Court of industrial or agricultural disputes. (section 13, ibid.) And in the
Industrial Relations, as will appear from perusal of its organic light of this legislative policy, appeals to this Court have been
law, is more active, affirmative and dynamic. It not only especially regulated by the rules recently promulgated by the
exercises judicial or quasi-judicial functions in the determination rules recently promulgated by this Court to carry into the effect
of disputes between employers and employees but its functions the avowed legislative purpose. The fact, however, that the
in the determination of disputes between employers and Court of Industrial Relations may be said to be free from the
employees but its functions are far more comprehensive and rigidity of certain procedural requirements does not mean that it
expensive. It has jurisdiction over the entire Philippines, to can, in justifiable cases before it, entirely ignore or disregard the
consider, investigate, decide, and settle any question, matter fundamental and essential requirements of due process in trials
controversy or dispute arising between, and/or affecting and investigations of an administrative character. There are
employers and employees or laborers, and regulate the relations primary rights which must be respected even in proceedings of
between them, subject to, and in accordance with, the provisions this character:
of Commonwealth Act No. 103 (section 1). It shall take
cognizance or purposes of prevention, arbitration, decision and (1) The first of these rights is the right to a hearing, which
settlement, of any industrial or agricultural dispute causing or includes the right of the party interested or affected to present
likely to cause a strike or lockout, arising from differences as his own case and submit evidence in support thereof. In the
regards wages, shares or compensation, hours of labor or language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S.
conditions of tenancy or employment, between landlords and Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the
tenants or farm-laborers, provided that the number of citizen shall be protected by the rudimentary requirements of fair
employees, laborers or tenants of farm-laborers involved play.
exceeds thirty, and such industrial or agricultural dispute is
(2) Not only must the party be given an opportunity to present
submitted to the Court by the Secretary of Labor or by any or
his case and to adduce evidence tending to establish the rights
both of the parties to the controversy and certified by the
which he asserts but the tribunal must consider the evidence
Secretary of labor as existing and proper to be by the Secretary
presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S.
of Labor as existing and proper to be dealth with by the Court for
468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this
the sake of public interest. (Section 4, ibid.) It shall, before
court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce
hearing the dispute and in the course of such hearing, endeavor
evidence, without the corresponding duty on the part of the
to reconcile the parties and induce them to settle the dispute by
board to consider it, is vain. Such right is conspicuously futile if
amicable agreement. (Paragraph 2, section 4, ibid.) When
the person or persons to whom the evidence is presented can
directed by the President of the Philippines, it shall investigate
thrust it aside without notice or consideration."
and study all industries established in a designated locality, with
a view to determinating the necessity and fairness of fixing and (3) "While the duty to deliberate does not impose the obligation
adopting for such industry or locality a minimum wage or share to decide right, it does imply a necessity which cannot be
of laborers or tenants, or a maximum "canon" or rental to be paid disregarded, namely, that of having something to support it is a
by the "inquilinos" or tenants or less to landowners. (Section nullity, a place when directly attached." (Edwards vs.
5, ibid.) In fine, it may appeal to voluntary arbitration in the McCoy, supra.) This principle emanates from the more
settlement of industrial disputes; may employ mediation or fundamental is contrary to the vesting of unlimited power
conciliation for that purpose, or recur to the more effective anywhere. Law is both a grant and a limitation upon power.

(4) Not only must there be some evidence to support a finding to render final decision, with the right to appeal to board or
or conclusion (City of Manila vs. Agustin, G.R. No. 45844, commission, but in our case there is no such statutory authority.
promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia and (7) The Court of Industrial Relations should, in all controversial
Maryland Coach Co. v. national labor Relations Board, 301 U.S. questions, render its decision in such a manner that the parties
142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such to the proceeding can know the various issues involved, and the
relevant evidence as a reasonable mind accept as adequate to reasons for the decision rendered. The performance of this duty
support a conclusion." (Appalachian Electric Power v. National is inseparable from the authority conferred upon it.
Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor
In the right of the foregoing fundamental principles, it is sufficient
Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15;
to observe here that, except as to the alleged agreement
Ballston-Stillwater Knitting Co. v. National Labor Relations
between the Ang Tibay and the National Worker's Brotherhood
Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that
(appendix A), the record is barren and does not satisfy the thirst
"the rules of evidence prevailing in courts of law and equity shall
for a factual basis upon which to predicate, in a national way, a
not be controlling.' The obvious purpose of this and similar
conclusion of law.
provisions is to free administrative boards from the compulsion
of technical rules so that the mere admission of matter which This result, however, does not now preclude the concession of
would be deemed incompetent inn judicial proceedings would a new trial prayed for the by respondent National Labor Union,
not invalidate the administrative order. (Interstate Commerce Inc., it is alleged that "the supposed lack of material claimed by
Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Toribio Teodoro was but a scheme adopted to systematically
Law. ed. 860; Interstate Commerce Commission v. Louisville discharged all the members of the National Labor Union Inc.,
and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 from work" and this avernment is desired to be proved by the
Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. petitioner with the "records of the Bureau of Customs and the
Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable Books of Accounts of native dealers in leather"; that "the
flexibility in administrative procedure does not go far as to justify National Workers Brotherhood Union of Ang Tibay is a company
orders without a basis in evidence having rational probative or employer union dominated by Toribio Teodoro, the existence
force. Mere uncorroborated hearsay or rumor does not and functions of which are illegal." Petitioner further alleges
constitute substantial evidence. (Consolidated Edison Co. v. under oath that the exhibits attached to the petition to prove his
National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. substantial avernments" are so inaccessible to the respondents
4, Adv. Op., p. 131.)" that even within the exercise of due diligence they could not be
expected to have obtained them and offered as evidence in the
(5) The decision must be rendered on the evidence presented
Court of Industrial Relations", and that the documents attached
at the hearing, or at least contained in the record and disclosed
to the petition "are of such far reaching importance and effect
to the parties affected. (Interstate Commence Commission vs.
that their admission would necessarily mean the modification
L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.)
and reversal of the judgment rendered herein." We have
Only by confining the administrative tribunal to the evidence
considered the reply of Ang Tibay and its arguments against the
disclosed to the parties, can the latter be protected in their right
petition. By and large, after considerable discussions, we have
to know and meet the case against them. It should not, however,
come to the conclusion that the interest of justice would be better
detract from their duty actively to see that the law is enforced,
served if the movant is given opportunity to present at the
and for that purpose, to use the authorized legal methods of
hearing the documents referred to in his motion and such other
securing evidence and informing itself of facts material and
evidence as may be relevant to the main issue involved. The
relevant to the controversy. Boards of inquiry may be appointed
legislation which created the Court of Industrial Relations and
for the purpose of investigating and determining the facts in any
under which it acts is new. The failure to grasp the fundamental
given case, but their report and decision are only advisory.
issue involved is not entirely attributable to the parties adversely
(Section 9, Commonwealth Act No. 103.) The Court of Industrial
affected by the result. Accordingly, the motion for a new trial
Relations may refer any industrial or agricultural dispute or any
should be and the same is hereby granted, and the entire record
matter under its consideration or advisement to a local board of
of this case shall be remanded to the Court of Industrial
inquiry, a provincial fiscal. a justice of the peace or any public
Relations, with instruction that it reopen the case, receive all
official in any part of the Philippines for investigation, report and
such evidence as may be relevant and otherwise proceed in
recommendation, and may delegate to such board or public
accordance with the requirements set forth hereinabove. So
official such powers and functions as the said Court of Industrial
Relations may deem necessary, but such delegation shall not
affect the exercise of the Court itself of any of its powers.
(Section 10, ibid.)

(6) The Court of Industrial Relations or any of its judges,

therefore, 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. It may be
that the volume of work is such that it is literally Relations
personally to decide all controversies coming before them. In the
United States the difficulty is solved with the enactment of
statutory authority authorizing examiners or other subordinates
G.R. No. 188056 January 8, 2013 justice and a violation of the rule against enactment of laws with
retroactive effect.
DACUDAO, Petitioners, Petitioners also challenge as unconstitutional the issuance of
vs. DOJ Memorandum dated March 2, 2009 exempting from the
SECRETARY OF JUSTICE RAUL M. GONZALES OF THE coverage of DO No. No. 182 all the cases for syndicated estafa
DEPARTMENT OF JUSTICE, Respondent. already filed and pending in the Office of the City Prosecutor of
Cagayan de Oro City. They aver that DOJ Memorandum dated
DECISION March 2, 2009 violated their right to equal protection under the
The Office of the Solicitor General (OSG), representing
Petitioners - residents of Bacaca Road, Davao City - were
respondent Secretary of Justice, maintains the validity of DO No.
among the investors whom Celso G. Delos Angeles, Jr. and his
182 and DOJ Memorandum dated March 2, 2009, and prays that
associates in the Legacy Group of Companies (Legacy Group)
the petition be dismissed for its utter lack of merit.
allegedly defrauded through the Legacy Group's "buy back
agreement" that earned them check payments that were Issues
dishonored. After their written demands for the return of their
investments went unheeded, they initiated a number of charges The following issues are now to be resolved, to wit:
for syndicated estafa against Delos Angeles, Jr., et al. in the
Office of the City Prosecutor of Davao City on February 6, 2009. 1. Did petitioners properly bring their petition for certiorari,
Three of the cases were docketed as NPS Docket No. XI-02- prohibition and mandamus directly to the Court?
INV.-09-A-00356, Docket No. XI-02-INV.-09-C-00752, and
2. Did respondent Secretary of Justice commit grave abuse of
Docket No. XI-02-INV.-09-C-00753.1
discretion in issuing DO No. 182?
On March 18, 2009, the Secretary of Justice issued Department
3. Did DO No. 182 and DOJ Memorandum dated March 2, 2009
of Justice (DOJ) Order No. 182 (DO No. 182), directing all
violate petitioners’ constitutionally guaranteed rights?
Regional State Prosecutors, Provincial Prosecutors, and City
Prosecutors to forward all cases already filed against Delos Ruling
Angeles, Jr., et al. to the Secretariat of the DOJ Special Panel in
Manila for appropriate action. The petition for certiorari, prohibition and mandamus, being
bereft of substance and merit, is dismissed.
DO No. 182 reads:2
Firstly, petitioners have unduly disregarded the hierarchy of
All cases against Celso G. delos Angeles, Jr., et al. under courts by coming directly to the Court with their petition for
Legacy Group of Companies, may be filed with the docket certiorari, prohibition and mandamus without tendering therein
section of the National Prosecution Service, Department of any special, important or compelling reason to justify the direct
Justice, Padre Faura, Manila and shall be forwarded to the filing of the petition.
Secretariat of the Special Panel for assignment and distribution
to panel members, per Department Order No. 84 dated February We emphasize that the concurrence of jurisdiction among the
13, 2009. Supreme Court, Court of Appeals and the Regional Trial Courts
to issue the writs of certiorari, prohibition, mandamus, quo
However, cases already filed against Celso G. delos Angeles, warranto, habeas corpus and injunction did not give petitioners
Jr. et al. of Legacy group of Companies in your respective offices the unrestricted freedom of choice of court forum. 4 An undue
with the exemption of the cases filed in Cagayan de Oro City disregard of this policy against direct resort to the Court will
which is covered by Memorandum dated March 2, 2009, should cause the dismissal of the recourse. In Bañez, Jr. v.
be forwarded to the Secretariat of the Special Panel at Room Concepcion,5 we explained why, to wit:
149, Department of Justice, Padre Faura, Manila, for proper
disposition. The Court must enjoin the observance of the policy on the
hierarchy of courts, and now affirms that the policy is not to be
For information and guidance. ignored without serious consequences. The strictness of the
policy is designed to shield the Court from having to deal with
Pursuant to DO No. 182, the complaints of petitioners were
causes that are also well within the competence of the lower
forwarded by the Office of the City Prosecutor of Davao City to
courts, and thus leave time to the Court to deal with the more
the Secretariat of the Special Panel of the DOJ.3
fundamental and more essential tasks that the Constitution has
Aggrieved by such turn of events, petitioners have directly come assigned to it. The Court may act on petitions for the
to the Court via petition for certiorari, prohibition and mandamus, extraordinary writs of certiorari, prohibition and mandamus only
ascribing to respondent Secretary of Justice grave abuse of when absolutely necessary or when serious and important
discretion in issuing DO No. 182. They claim that DO No. 182 reasons exist to justify an exception to the policy. This was why
violated their right to due process, their right to the equal the Court stressed in Vergara, Sr. v. Suelto:
protection of the laws, and their right to the speedy disposition
x x x. The Supreme Court is a court of last resort, and must so
of cases. They insist that DO No. 182 was an obstruction of
remain if it is to satisfactorily perform the functions assigned to
it by the fundamental charter and immemorial tradition. It cannot
and should not be burdened with the task of dealing with causes The Court therefore closes this decision with the declaration for
in the first instance. Its original jurisdiction to issue the so-called the information and evidence of all concerned, that it will not only
extraordinary writs should be exercised only where absolutely continue to enforce the policy, but will require a more strict
necessary or where serious and important reasons exist observance thereof. (Emphasis supplied)
therefor. Hence, that jurisdiction should generally be exercised
relative to actions or proceedings before the Court of Appeals, Accordingly, every litigant must remember that the Court is not
or before constitutional or other tribunals, bodies or agencies the only judicial forum from which to seek and obtain effective
whose acts for some reason or another are not controllable by redress of their grievances. As a rule, the Court is a court of last
the Court of Appeals. Where the issuance of an extraordinary resort, not a court of the first instance. Hence, every litigant who
writ is also within the competence of the Court of Appeals or a brings the petitions for the extraordinary writs of certiorari,
Regional Trial Court, it is in either of these courts that the specific prohibition and mandamus should ever be mindful of the policy
action for the writ’s procurement must be presented. This is and on the hierarchy of courts, the observance of which is explicitly
should continue to be the policy in this regard, a policy that defined and enjoined in Section 4 of Rule 65, Rules of Court, viz:
courts and lawyers must strictly observe. (Emphasis supplied)
Section 4. When and where petition filed. - The petition shall be
In People v. Cuaresma, the Court has also amplified the need filed not later than sixty (60) days from notice of the judgment,
for strict adherence to the policy of hierarchy of courts. There, order or resolution. In case a motion for reconsideration or new
noting "a growing tendency on the part of litigants and lawyers trial is timely filed, whether such motion is required or not, the
to have their applications for the so-called extraordinary writs, sixty (60) day period shall be counted from notice of the denial
and sometimes even their appeals, passed upon and of the said motion.
adjudicated directly and immediately by the highest tribunal of
The petition shall be filed in the Supreme Court or, if it relates to
the land," the Court has cautioned lawyers and litigants against
the acts or omissions of a lower court or of a corporation, board,
taking a direct resort to the highest tribunal, viz:
officer or person, in the Regional Trial Court exercising
x x x. This Court’s original jurisdiction to issue writs of certiorari jurisdiction over the territorial area as defined by the Supreme
(as well as prohibition, mandamus, quo warranto, habeas Court. It may also be filed in the Court of Appeals whether or not
corpus and injunction) is not exclusive. It is shared by this Court the same is in the aid of its appellate jurisdiction, or in the
with Regional Trial Courts x x x, which may issue the writ, Sandiganbayan if it is in aid of its appellate jurisdiction. If it
enforceable in any part of their respective regions. It is also involves the acts or omissions of a quasi-judicial agency, unless
shared by this Court, and by the Regional Trial Court, with the otherwise provided by law or these rules, the petition shall be
Court of Appeals x x x, although prior to the effectivity of Batas filed in and cognizable only by the Court of Appeals.
Pambansa Bilang 129 on August 14, 1981, the latter's
In election cases involving an act or an omission of a municipal
competence to issue the extraordinary writs was restricted to
or a regional trial court, the petition shall be filed exclusively with
those "in aid of its appellate jurisdiction." This concurrence of
the Commission on Elections, in aid of its appellate jurisdiction. 6
jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of Secondly, even assuming arguendo that petitioners’ direct resort
choice of the court to which application therefor will be directed. to the Court was permissible, the petition must still be dismissed.
There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and should also serve as The writ of certiorari is available only when any tribunal, board
a general determinant of the appropriate forum for petitions for or officer exercising judicial or quasi-judicial functions has acted
the extraordinary writs. A becoming regard for that judicial without or in excess of its or his jurisdiction, or with grave abuse
hierarchy most certainly indicates that petitions for the issuance of discretion amounting to lack or excess of jurisdiction, and
of extraordinary writs against first level ("inferior") courts should there is no appeal, nor any plain, speedy, and adequate remedy
be filed with the Regional Trial Court, and those against the in the ordinary course of law.7"The sole office of the writ of
latter, with the Court of Appeals. A direct invocation of the certiorari," according to Delos Santos v. Metropolitan Bank and
Supreme Court's original jurisdiction to issue these writs should Trust Company:8
be allowed only when there are special and important reasons
x x x is the correction of errors of jurisdiction, which includes the
therefor, clearly and specifically set out in the petition. This is
commission of grave abuse of discretion amounting to lack of
established policy. It is a policy that is necessary to prevent
jurisdiction. In this regard, mere abuse of discretion is not
inordinate demands upon the Court’s time and attention which
enough to warrant the issuance of the writ. The abuse of
are better devoted to those matters within its exclusive
discretion must be grave, which means either that the judicial or
jurisdiction, and to prevent further over-crowding of the Court's
quasi-judicial power was exercised in an arbitrary or despotic
docket. Indeed, the removal of the restriction on the jurisdiction
manner by reason of passion or personal hostility, or that the
of the Court of Appeals in this regard, supra— resulting from the
respondent judge, tribunal or board evaded a positive duty, or
deletion of the qualifying phrase, "in aid of its appellate
virtually refused to perform the duty enjoined or to act in
jurisdiction" — was evidently intended precisely to relieve this
contemplation of law, such as when such judge, tribunal or
Court pro tanto of the burden of dealing with applications for the
board exercising judicial or quasi-judicial powers acted in a
extraordinary writs which, but for the expansion of the Appellate
capricious or whimsical manner as to be equivalent to lack of
Court corresponding jurisdiction, would have had to be filed with

For a special civil action for certiorari to prosper, therefore, the effect whenever a public prosecutor conducts a preliminary
following requisites must concur, namely: (a) it must be directed investigation to determine probable cause in order to file a
against a tribunal, board or officer exercising judicial or quasi- criminal information against a person properly charged with the
judicial functions; (b) the tribunal, board, or officer must have offense, or whenever the Secretary of Justice reviews the public
acted without or in excess of jurisdiction or with grave abuse of prosecutor’s orders or resolutions.
discretion amounting to lack or excess of jurisdiction; and (c)
there is no appeal nor any plain, speedy, and adequate remedy Petitioners have self-styled their petition to be also for
in the ordinary course of law.9 The burden of proof lies on prohibition. However, we do not see how that can be. They have
petitioners to demonstrate that the assailed order was issued not shown in their petition in what manner and at what point the
without or in excess of jurisdiction or with grave abuse of Secretary of Justice, in handing out the assailed issuances,
discretion amounting to lack or excess of jurisdiction. acted without or in excess of his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction. On the
Yet, petitioners have not shown a compliance with the other hand, we already indicated why the issuances were not
requisites. To start with, they merely alleged that the Secretary infirmed by any defect of jurisdiction. Hence, the blatant
of Justice had acted without or in excess of his jurisdiction. Also, omissions of the petition transgressed Section 2, Rule 65 of the
the petition did not show that the Secretary of Justice was an Rules of Court, to wit:
officer exercising judicial or quasi-judicial functions. Instead, the
Secretary of Justice would appear to be not exercising any Section 2. Petition for prohibition. — When the proceedings of
judicial or quasi-judicial functions because his questioned any tribunal, corporation, board, officer or person, whether
issuances were ostensibly intended to ensure his subordinates’ exercising judicial, quasi-judicial or ministerial functions, are
efficiency and economy in the conduct of the preliminary without or in excess of its or his jurisdiction, or with grave abuse
investigation of all the cases involving the Legacy Group. The of discretion amounting to lack or excess of jurisdiction, and
function involved was purely executive or administrative. there is no appeal or any other plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved
The fact that the DOJ is the primary prosecution arm of the thereby may file a verified petition in the proper court, alleging
Government does not make it a quasi-judicial office or agency. the facts with certainty and praying that judgment be rendered
Its preliminary investigation of cases is not a quasi-judicial commanding the respondent to desist from further proceedings
proceeding. Nor does the DOJ exercise a quasi-judicial function in the action or matter specified therein, or otherwise granting
when it reviews the findings of a public prosecutor on the finding such incidental reliefs as law and justice may require.
of probable cause in any case. Indeed, in Bautista v. Court of
Appeals,10 the Supreme Court has held that a preliminary The petition shall likewise be accompanied by a certified true
investigation is not a quasi-judicial proceeding, stating: copy of the judgment, order or resolution subject thereof, copies
of all pleadings and documents relevant and pertinent thereto,
x x x the prosecutor in a preliminary investigation does not and a sworn certification of non-forum shopping as provided in
determine the guilt or innocence of the accused. He does not the third paragraph of section 3, Rule 46. (2a) Similarly, the
exercise adjudication nor rule-making functions. Preliminary petition could not be one for mandamus, which is a remedy
investigation is merely inquisitorial, and is often the only means available only when "any tribunal, corporation, board, officer or
of discovering the persons who may be reasonably charged with person unlawfully neglects the performance of an act which the
a crime and to enable the fiscal to prepare his complaint or law specifically enjoins as a duty resulting from an office, trust,
information. It is not a trial of the case on the merits and has no or station, or unlawfully excludes another from the use and
purpose except that of determining whether a crime has been enjoyment of a right or office to which such other is entitled, and
committed and whether there is probable cause to believe that there is no other plain, speedy and adequate remedy in the
the accused is guilty thereof. While the fiscal makes that ordinary course of law, the person aggrieved thereby may file a
determination, he cannot be said to be acting as a quasi-court, verified petition in the proper court."12 The main objective of
for it is the courts, ultimately, that pass judgment on the accused, mandamus is to compel the performance of a ministerial duty on
not the fiscal.11 the part of the respondent. Plainly enough, the writ of mandamus
does not issue to control or review the exercise of discretion or
There may be some decisions of the Court that have to compel a course of conduct,13 which, it quickly seems to us,
characterized the public prosecutor’s power to conduct a was what petitioners would have the Secretary of Justice do in
preliminary investigation as quasi-judicial in nature. Still, this their favor. Consequently, their petition has not indicated how
characterization is true only to the extent that the public and where the Secretary of Justice’s assailed issuances
prosecutor, like a quasi-judicial body, is an officer of the excluded them from the use and enjoyment of a right or office to
executive department exercising powers akin to those of a court which they were unquestionably entitled.
of law.
Thirdly, there is no question that DO No. 182 enjoyed a strong
But the limited similarity between the public prosecutor and a presumption of its validity. In ABAKADA Guro Party List v.
quasi-judicial body quickly endsthere. For sure, a quasi-judicial Purisima,14 the Court has extended the presumption of validity
body is an organ of government other than a court of law or a to legislative issuances as well as to rules and regulations
legislative office that affects the rights of private parties through issued by administrative agencies, saying:
either adjudication or rule-making; it performs adjudicatory
functions, and its awards and adjudications determine the rights Administrative regulations enacted by administrative agencies
of the parties coming before it; its decisions have the same effect to implement and interpret the law which they are entrusted to
as the judgments of a court of law. In contrast, that is not the enforce have the force of law and are entitled to respect. Such
rules and regulations partake of the nature of a statute and are universal application of the laws to all persons or things without
just as binding as if they have been written in the statute itself. distinction; what it requires is simply equality among equals as
As such, they have the force and effect of law and enjoy the determined according to a valid classification. 18 Hence, the
presumption of constitutionality and legality until they are set Court has affirmed that if a law neither burdens a fundamental
aside with finality in an appropriate case by a competent court.15 right nor targets a suspect class, the classification stands as
long as it bears a rational relationship to some legitimate
DO No. 182 was issued pursuant to Department Order No. 84 government end.19
that the Secretary of Justice had promulgated to govern the
performance of the mandate of the DOJ to "administer the That is the situation here. In issuing the assailed DOJ
criminal justice system in accordance with the accepted Memorandum dated March 2, 2009, the Secretary of Justice
processes thereof"16 as expressed in Republic Act No. 10071 took into account the relative distance between Cagayan de
(Prosecution Service Act of 2010) and Section 3, Chapter I, Title Oro, where many complainants against the Legacy Group
III and Section 1, Chapter I, Title III of Book IV of Executive Order resided, and Manila, where the preliminary investigations would
292 (Administrative Code of 1987). be conducted by the special panel. He also took into account
that the cases had already been filed in the City Prosecutor’s
To overcome this strong presumption of validity of the Office of Cagayan de Oro at the time he issued DO No. 182.
questioned issuances, it became incumbent upon petitioners to Given the considerable number of complainants residing in
prove their unconstitutionality and invalidity, either by showing Cagayan de Oro City, the Secretary of Justice was fully justified
that the Administrative Code of 1987 did not authorize the in excluding the cases commenced in Cagayan de Oro from the
Secretary of Justice to issue DO No. 182, or by demonstrating ambit of DO No. 182. The classification taken into consideration
that DO No. 182 exceeded the bounds of the Administrative by the Secretary of Justice was really valid. Resultantly,
Code of 1987 and other pertinent laws. They did not do so. They petitioners could not inquire into the wisdom behind the
must further show that the performance of the DOJ’s functions exemption upon the ground that the non-application of the
under the Administrative Code of 1987 and other pertinent laws exemption to them would cause them some inconvenience.
did not call for the impositions laid down by the assailed
issuances. That was not true here, for DO No 182 did not deprive Fifthly, petitioners contend that DO No. 182 violated their right
petitioners in any degree of their right to seek redress for the to the speedy disposition of cases guaranteed by the
alleged wrong done against them by the Legacy Group. Instead, Constitution. They posit that there would be considerable delay
the issuances were designed to assist petitioners and others like in the resolution of their cases that would definitely be "a flagrant
them expedite the prosecution, if warranted under the law, of all transgression of petitioners’ constitutional rights to speedy
those responsible for the wrong through the creation of the disposition of their cases."20
special panel of state prosecutors and prosecution attorneys in
order to conduct a nationwide and comprehensive preliminary We cannot favor their contention.
investigation and prosecution of the cases. Thereby, the
In The Ombudsman v. Jurado,21 the Court has clarified that
Secretary of Justice did not act arbitrarily or oppressively against
although the Constitution guarantees the right to the speedy
disposition of cases, such speedy disposition is a flexible
Fourthly, petitioners attack the exemption from the consolidation concept. To properly define that concept, the facts and
decreed in DO No. 182 of the cases filed or pending in the Office circumstances surrounding each case must be evaluated and
of the City Prosecutor of Cagayan de Oro City, claiming that the taken into account. There occurs a violation of the right to a
exemption traversed the constitutional guaranty in their favor of speedy disposition of a case only when the proceedings are
the equal protection of law.17 attended by vexatious, capricious, and oppressive delays, or
when unjustified postponements of the trial are sought and
The exemption is covered by the assailed DOJ Memorandum secured, or when, without cause or justifiable motive, a long
dated March 2, 2009, to wit: period of time is allowed to elapse without the party having his
case tried.22 It is cogent to mention that a mere mathematical
It has come to the attention of the undersigned that cases for reckoning of the time involved is not determinant of the
syndicated estafa were filed with your office against officers of concept.23
the Legacy Group of Companies. Considering the distance of
the place of complainants therein to Manila, your Office is The consolidation of the cases against Delos Angeles, Jr., et al.
hereby exempted from the directive previously issued by the was ordered obviously to obtain expeditious justice for the
undersigned requiring prosecution offices to forward the records parties with the least cost and vexation to them. Inasmuch as
of all cases involving Legacy Group of Companies to the Task the cases filed involved similar or related questions to be dealt
Force. with during the preliminary investigation, the Secretary of Justice
rightly found the consolidation of the cases to be the most
Anent the foregoing, you are hereby directed to conduct feasible means of promoting the efficient use of public resources
preliminary investigation of all cases involving the Legacy Group and of having a comprehensive investigation of the cases.
of Companies filed in your office with dispatch and to file the
corresponding informations if evidence warrants and to On the other hand, we do not ignore the possibility that there
prosecute the same in court. would be more cases reaching the DOJ in addition to those
already brought by petitioners and other parties. Yet, any delays
Petitioners’ attack deserves no consideration. The equal in petitioners’ cases occasioned by such other and subsequent
protection clause of the Constitution does not require the cases should not warrant the invalidation of DO No. 182. The
Constitution prohibits only the delays that are unreasonable, REGALADO, J.:
arbitrary and oppressive, and tend to render rights nugatory. 24 In
fine, we see neither undue delays, nor any violation of the right This case is posed as one of first impression in the sense that it
of petitioners to the speedy disposition of their cases. involves the public utility services of the petitioner Philippine
Communications Satellite Corporation (PHILCOMSAT, for
Sixthly, petitioners assert that the assailed issuances should short) which is the only one rendering such services in the
cover only future cases against Delos Angeles, Jr., et al., not Philippines.
those already being investigated. They maintain that DO No.
182 was issued in violation of the prohibition against passing The petition before us seeks to annul and set aside an
laws with retroactive effect. Order 1 issued by respondent Commissioner Jose Luis Alcuaz
of the National Telecommunications Commission (hereafter,
Petitioners’ assertion is baseless. NTC), dated September 2, 1988, which directs the provisional
reduction of the rates which may be charged by petitioner for
As a general rule, laws shall have no retroactive effect. certain specified lines of its services by fifteen percent (15%)
However, exceptions exist, and one such exception concerns a with the reservation to make further reductions later, for being
law that is procedural in nature. The reason is that a remedial violative of the constitutional prohibition against undue
statute or a statute relating to remedies or modes of procedure delegation of legislative power and a denial of procedural, as
does not create new rights or take away vested rights but only well as substantive, due process of law.
operates in furtherance of the remedy or the confirmation of
already existing rights.25 A statute or rule regulating the The antecedental facts as summarized by petitioner 2 are not in
procedure of the courts will be construed as applicable to actions dispute. By virtue of Republic Act No. 5514, PHILCOMSAT was
pending and undetermined at the time of its passage. All granted "a franchise to establish, construct, maintain and
procedural laws are retroactive in that sense and to that extent. operate in the Philippines, at such places as the grantee may
The retroactive application is not violative of any right of a person select, station or stations and associated equipment and
who may feel adversely affected, for, verily, no vested right facilities for international satellite communications." Under this
generally attaches to or arises from procedural laws. franchise, it was likewise granted the authority to "construct and
operate such ground facilities as needed to deliver
Finally, petitioners have averred but failed to establish that DO telecommunications services from the communications satellite
No. 182 constituted obstruction of justice. This ground of the system and ground terminal or terminals."
petition, being unsubstantiated, was unfounded.
Pursuant to said franchise, petitioner puts on record that it
Nonetheless, it is not amiss to reiterate that the authority of the undertook the following activities and established the following
Secretary of Justice to assume jurisdiction over matters installations:
involving the investigation of crimes and the prosecution of
offenders is fully sanctioned by law. Towards that end, the 1. In 1967, PHILCOMSAT established its provisional earth
Secretary of Justice exercises control and supervision over all station in Pinugay, Rizal.
the regional, provincial, and city prosecutors of the country; has
broad discretion in the discharge of the DOJ’s functions; and 2. In 1968, earth station standard "A" antenna (Pinugay I) was
administers the DOJ and its adjunct offices and agencies by established. Pinugay I provided direct satellite communication
promulgating rules and regulations to carry out their objectives, links with the Pacific Ocean Region (the United States, Australia,
policies and functions. Canada, Hawaii, Guam, Korea, Thailand, China [PROC], New
Zealand and Brunei) thru the Pacific Ocean INTELSAT satellite.
Consequently, unless and until the Secretary of Justice acts
beyond the bounds of his authority, or arbitrarily, or whimsically, 3. In 1971, a second earth station standard "A" antenna(Pinugay
or oppressively, any person or entity who may feel to be thereby III) was established. Pinugay II provided links with the Indian
aggrieved or adversely affected should have no right to call for Ocean Region (major cities in Europe, Middle East, Africa, and
the invalidation or nullification of the rules and regulations issued other Asia Pacific countries operating within the region) thru the
by, as well as other actions taken by the Secretary of Justice. Indian Ocean INTELSAT satellite.

WHEREFORE, the Court DISMISSES the omnibus petition for 4. In 1983, a third earth station standard "B" antenna (Pinugay
certiorari, prohibition, and mandamus for lack of merit. III) was established to temporarily assume the functions of
Pinugay I and then Pinugay II while they were being refurbished.
Petitioners shall pay the costs of suit. SO ORDERED. Pinugay III now serves as spare or reserved antenna for
possible contingencies.

5. In 1983, PHILCOMSAT constructed and installed a standard

G.R. No. 84818 December 18, 1989 "B" antenna at Clark Air Field, Pampanga as a television
receive-only earth station which provides the U.S. Military bases
with a 24-hour television service.
CORPORATION, petitioner,
vs. 6. In 1989, petitioner completed the installation of a third
JOSE LUIS A. ALCUAZ, as NTC Commissioner, and standard "A" earth station (Pinugay IV) to take over the links in
NATIONAL TELECOMMUNICATIONS Pinugay I due to obsolescence. 3
COMMISSION, respondents.

By designation of the Republic of the Philippines, the petitioner The NTC order now in controversy had further extended the
is also the sole signatory for the Philippines in the Agreement provisional authority of the petitioner for another six (6) months,
and the Operating Agreement relating to the International counted from September 16, 1988, but it directed the petitioner
Telecommunications Satellite Organization (INTELSAT) of 115 to charge modified reduced rates through a reduction of fifteen
member nations, as well as in the Convention and the Operating percent (15%) on the present authorized rates. Respondent
Agreement of the International Maritime Satellite Organization Commissioner ordered said reduction on the following ground:
(INMARSAT) of 53 member nations, which two global
commercial telecommunications satellite corporations were The Commission in its on-going review of present service rates
collectively established by various states in line with the takes note that after an initial evaluation by the Rates Regulation
principles set forth in Resolution 1721 (XVI) of the General Division of the Common Carriers Authorization Department of
Assembly of the United Nations. the financial statements of applicant, there is merit in a
REDUCTION in some of applicant's rates, subject to further
Since 1968, the petitioner has been leasing its satellite circuits reductions, should the Commission finds (sic) in its further
to: evaluation that more reduction should be effected either on the
basis of a provisional authorization or in the final consideration
1. Philippine Long Distance Telephone Company; of the case. 6
2. Philippine Global Communications, Inc.; PHILCOMSAT assails the above-quoted order for the following
3. Eastern Telecommunications Phils., Inc.;
1. The enabling act (Executive Order No. 546) of respondent
4. Globe Mackay Cable and Radio Corp. ITT; and
NTC empowering it to fix rates for public service
5. Capitol Wireless, Inc. communications does not provide the necessary standards
constitutionally required, hence there is an undue delegation of
or their predecessors-in-interest. The satellite services thus legislative power, particularly the adjudicatory powers of NTC;
provided by petitioner enable said international carriers to serve
the public with indispensable communication services, such as 2. Assuming arguendo that the rate-fixing power was properly
overseas telephone, telex, facsimile, telegrams, high speed and constitutionally conferred, the same was exercised in an
data, live television in full color, and television standard unconstitutional manner, hence it is ultra vires, in that (a) the
conversion from European to American or vice versa. questioned order violates procedural due process for having
been issued without prior notice and hearing; and (b) the rate
Under Section 5 of Republic Act No. 5514, petitioner was reduction it imposes is unjust, unreasonable and confiscatory,
exempt from the jurisdiction of the then Public Service thus constitutive of a violation of substantive due process.
Commission, now respondent NTC. However, pursuant to
Executive Order No. 196 issued on June 17, 1987, petitioner I. Petitioner asseverates that nowhere in the provisions of
was placed under the jurisdiction, control and regulation of Executive Order No. 546, providing for the creation of
respondent NTC, including all its facilities and services and the respondent NTC and granting its rate-fixing powers, nor of
fixing of rates. Implementing said Executive Order No. 196, Executive Order No. 196, placing petitioner under the jurisdiction
respondents required petitioner to apply for the requisite of respondent NTC, can it be inferred that respondent NTC is
certificate of public convenience and necessity covering its guided by any standard in the exercise of its rate-fixing and
facilities and the services it renders, as well as the adjudicatory powers. While petitioner in its petition-in-chief
corresponding authority to charge rates therefor. raised the issue of undue delegation of legislative power, it
subsequently clarified its said submission to mean that the order
Consequently, under date of September 9, 1987, petitioner filed mandating a reduction of certain rates is undue delegation not
with respondent NTC an application 4 for authority to continue of legislative but of quasi-judicial power to respondent NTC, the
operating and maintaining the same facilities it has been exercise of which allegedly requires an express conferment by
continuously operating and maintaining since 1967, to continue the legislative body.
providing the international satellite communications services it
has likewise been providing since 1967, and to charge the Whichever way it is presented, petitioner is in effect questioning
current rates applied for in rendering such services. Pending the constitutionality of Executive Orders Nos. 546 and 196 on
hearing, it also applied for a provisional authority so that it can the ground that the same do not fix a standard for the exercise
continue to operate and maintain the above mentioned facilities, of the power therein conferred.
provide the services and charge therefor the aforesaid rates
We hold otherwise.
therein applied for.
Fundamental is the rule that delegation of legislative power may
On September 16, 1987, petitioner was granted a provisional
be sustained only upon the ground that some standard for its
authority to continue operating its existing facilities, to render the
exercise is provided and that the legislature in making the
services it was then offering, and to charge the rates it was then
delegation has prescribed the manner of the exercise of the
charging. This authority was valid for six (6) months from the
delegated power. Therefore, when the administrative agency
date of said order. 5 When said provisional authority expired on
concerned, respondent NTC in this case, establishes a rate, its
March 17, 1988, it was extended for another six (6) months, or
act must both be non- confiscatory and must have been
up to September 16, 1988.
established in the manner prescribed by the legislature;

otherwise, in the absence of a fixed standard, the delegation of of data or information since respondent is currently engaged in
power becomes unconstitutional. In case of a delegation of rate- a continuing review of the rates charged.
fixing power, the only standard which the legislature is required
to prescribe for the guidance of the administrative authority is We find merit in petitioner's contention.
that the rate be reasonable and just. However, it has been held
In Vigan Electric Light Co., Inc. vs. Public Service
that even in the absence of an express requirement as to
Commission,9 we made a categorical classification as to when
reasonableness, this standard may be implied. 7
the rate-filing power of administrative bodies is quasi-judicial and
It becomes important then to ascertain the nature of the power when it is legislative, thus:
delegated to respondent NTC and the manner required by the
Moreover, although the rule-making power and even the power
statute for the lawful exercise thereof.
to fix rates- when such rules and/or rates are meant to apply to
Pursuant to Executive Orders Nos. 546 and 196, respondent all enterprises of a given kind throughout the Philippines-may
NTC is empowered, among others, to determine and prescribe partake of a legislative character, such is not the nature of the
rates pertinent to the operation of public service communications order complained of. Indeed, the same applies exclusively to
which necessarily include the power to promulgate rules and petitioner herein. What is more, it is predicated upon the finding
regulations in connection therewith. And, under Section 15(g) of of fact-based upon a report submitted by the General Auditing
Executive Order No. 546, respondent NTC should be guided by Office-that petitioner is making a profit of more than 12% of its
the requirements of public safety, public interest and reasonable invested capital, which is denied by petitioner. Obviously, the
feasibility of maintaining effective competition of private entities latter is entitled to cross-examine the maker of said report, and
in communications and broadcasting facilities. Likewise, in to introduce evidence to disprove the contents thereof and/or
Section 6(d) thereof, which provides for the creation of the explain or complement the same, as well as to refute the
Ministry of Transportation and Communications with control and conclusion drawn therefrom by the respondent. In other words,
supervision over respondent NTC, it is specifically provided that in making said finding of fact, respondent performed a function
the national economic viability of the entire network or partaking of a quasi-judicial character, the valid exercise of
components of the communications systems contemplated which demands previous notice and hearing.
therein should be maintained at reasonable rates. We need not
This rule was further explained in the subsequent case of The
go into an in-depth analysis of the pertinent provisions of the law
Central Bank of the Philippines vs. Cloribel, et al. 10 to wit:
in order to conclude that respondent NTC, in the exercise of its
rate-fixing power, is limited by the requirements of public safety, It is also clear from the authorities that where the function of the
public interest, reasonable feasibility and reasonable rates, administrative body is legislative, notice of hearing is not
which conjointly more than satisfy the requirements of a valid required by due process of law (See Oppenheimer,
delegation of legislative power. Administrative Law, 2 Md. L.R. 185, 204, supra, where it is said:
'If the nature of the administrative agency is essentially
II. On another tack, petitioner submits that the questioned order
legislative, the requirements of notice and hearing are not
violates procedural due process because it was issued motu
necessary. The validity of a rule of future action which affects a
proprio, without notice to petitioner and without the benefit of a
group, if vested rights of liberty or property are not involved, is
hearing. Petitioner laments that said order was based merely on
not determined according to the same rules which apply in the
an "initial evaluation," which is a unilateral evaluation, but had
case of the direct application of a policy to a specific individual)
petitioner been given an opportunity to present its side before
... It is said in 73 C.J.S. Public Administrative Bodies and
the order in question was issued, the confiscatory nature of the
Procedure, sec. 130, pages 452 and 453: 'Aside from statute,
rate reduction and the consequent deterioration of the public
the necessity of notice and hearing in an administrative
service could have been shown and demonstrated to
proceeding depends on the character of the proceeding and the
respondents. Petitioner argues that the function involved in the
circumstances involved. In so far as generalization is possible in
rate fixing-power of NTC is adjudicatory and hence quasi-
view of the great variety of administrative proceedings, it may be
judicial, not quasi- legislative; thus, notice and hearing are
stated as a general rule that notice and hearing are not essential
necessary and the absence thereof results in a violation of due
to the validity of administrative action where the administrative
body acts in the exercise of executive, administrative, or
Respondents admit that the application of a policy like the fixing legislative functions; but where a public administrative body acts
of rates as exercised by administrative bodies is quasi-judicial in a judicial or quasi-judicial matter, and its acts are particular
rather than quasi-legislative: that where the function of the and immediate rather than general and prospective, the person
administrative agency is legislative, notice and hearing are not whose rights or property may be affected by the action is entitled
required, but where an order applies to a named person, as in to notice and hearing. 11
the instant case, the function involved is
The order in question which was issued by respondent Alcuaz
adjudicatory. 8 Nonetheless, they insist that under the facts
no doubt contains all the attributes of a quasi-judicial
obtaining the order in question need not be preceded by a
adjudication. Foremost is the fact that said order pertains
hearing, not because it was issued pursuant to respondent
exclusively to petitioner and to no other. Further, it is premised
NTC's legislative function but because the assailed order is
on a finding of fact, although patently superficial, that there is
merely interlocutory, it being an incident in the ongoing
merit in a reduction of some of the rates charged- based on an
proceedings on petitioner's application for a certificate of public
initial evaluation of petitioner's financial statements-without
convenience; and that petitioner is not the only primary source
affording petitioner the benefit of an explanation as to what
particular aspect or aspects of the financial statements in respondents' order of September 16, 1987 in NTC Case No.
warranted a corresponding rate reduction. No rationalization 87-94 which granted PHILCOMSAT a provisional authority "to
was offered nor were the attending contingencies, if any, continue operating its existing facilities, to render the services it
discussed, which prompted respondents to impose as much as presently offers, and to charge the rates as reduced by them
a fifteen percent (15%) rate reduction. It is not far-fetched to "under the condition that "(s)ubject to hearing and the final
assume that petitioner could be in a better position to rationalize consideration of the merit of this application, the Commission
its rates vis-a-vis the viability of its business requirements. The may modify, revise or amend the rates ..." 12
rates it charges result from an exhaustive and detailed study it
conducts of the multi-faceted intricacies attendant to a public While it may be true that for purposes of rate-fixing respondents
service undertaking of such nature and magnitude. We are, may have other sources of information or data, still, since a
therefore, inclined to lend greater credence to petitioner's hearing is essential, respondent NTC should act solely on the
ratiocination that an immediate reduction in its rates would basis of the evidence before it and not on knowledge or
adversely affect its operations and the quality of its service to information otherwise acquired by it but which is not offered in
the public considering the maintenance requirements, the evidence or, even if so adduced, petitioner was given no
projects it still has to undertake and the financial outlay involved. opportunity to controvert.
Notably, petitioner was not even afforded the opportunity to
Again, the order requires the new reduced rates to be made
cross-examine the inspector who issued the report on which
effective on a specified date. It becomes a final legislative act as
respondent NTC based its questioned order.
to the period during which it has to remain in force pending the
At any rate, there remains the categorical admission made by final determination of the case. 13An order of respondent NTC
respondent NTC that the questioned order was issued pursuant prescribing reduced rates, even for a temporary period, could be
to its quasi-judicial functions. It, however, insists that notice and unjust, unreasonable or even confiscatory, especially if the rates
hearing are not necessary since the assailed order is merely are unreasonably low, since the utility permanently loses its just
incidental to the entire proceedings and, therefore, temporary in revenue during the prescribed period. In fact, such order is in
nature. This postulate is bereft of merit. effect final insofar as the revenue during the period covered by
the order is concerned. Upon a showing, therefore, that the
While respondents may fix a temporary rate pending final order requiring a reduced rate is confiscatory, and will unduly
determination of the application of petitioner, such rate-fixing deprive petitioner of a reasonable return upon its property, a
order, temporary though it may be, is not exempt from the declaration of its nullity becomes inductible, which brings us to
statutory procedural requirements of notice and hearing, as well the issue on substantive due process.
as the requirement of reasonableness. Assuming that such
power is vested in NTC, it may not exercise the same in an III. Petitioner contends that the rate reduction is confiscatory in
arbitrary and confiscatory manner. Categorizing such an order that its implementation would virtually result in a cessation of its
as temporary in nature does not perforce entail the applicability operations and eventual closure of business. On the other hand,
of a different rule of statutory procedure than would otherwise respondents assert that since petitioner is operating its
be applied to any other order on the same matter unless communications satellite facilities through a legislative
otherwise provided by the applicable law. In the case at bar, the franchise, as such grantee it has no vested right therein. What it
applicable statutory provision is Section 16(c) of the Public has is merely a privilege or license which may be revoked at will
Service Act which provides: by the State at any time without necessarily violating any vested
property right of herein petitioner. While petitioner concedes this
Section 16. Proceedings of the Commission, upon notice and thesis of respondent, it counters that the withdrawal of such
hearing the Commission shall have power, upon proper notice privilege should nevertheless be neither whimsical nor arbitrary,
and hearing in accordance with the rules and provisions of this but it must be fair and reasonable.
Act, subject to the limitations and exceptions mentioned and
saving provisions to the contrary: There is no question that petitioner is a mere grantee of a
legislative franchise which is subject to amendment, alteration,
xxx xxx xxx or repeal by Congress when the common good so
requires. 14 Apparently, therefore, such grant cannot be
(c) To fix and determine individual or joint rates, ... which shall unilaterally revoked absent a showing that the termination of the
be imposed, observed and followed thereafter by any public operation of said utility is required by the common good.
service; ...
The rule is that the power of the State to regulate the conduct
There is no reason to assume that the aforesaid provision does and business of public utilities is limited by the consideration that
not apply to respondent NTC, there being no limiting, excepting, it is not the owner of the property of the utility, or clothed with the
or saving provisions to the contrary in Executive Orders Nos. general power of management incident to ownership, since the
546 and 196. private right of ownership to such property remains and is not to
be destroyed by the regulatory power. The power to regulate is
It is thus clear that with regard to rate-fixing, respondent has no
not the power to destroy useful and harmless enterprises, but is
authority to make such order without first giving petitioner a
the power to protect, foster, promote, preserve, and control with
hearing, whether the order be temporary or permanent, and it is
due regard for the interest, first and foremost, of the public, then
immaterial whether the same is made upon a complaint, a
of the utility and of its patrons. Any regulation, therefore, which
summary investigation, or upon the commission's own motion
operates as an effective confiscation of private property or
as in the present case. That such a hearing is required is evident
constitutes an arbitrary or unreasonable infringement of property
rights is void, because it is repugnant to the constitutional were formulated on the premise that rates are maintained at
guaranties of due process and equal protection of the laws. 15 their present or at reasonable levels. Hence, an undue reduction
thereof may practically lead to a cessation of its business. While
Hence, the inherent power and authority of the State, or its we concede the primacy of the public interest in an adequate
authorized agent, to regulate the rates charged by public utilities and efficient service, the same is not necessarily to be equated
should be subject always to the requirement that the rates so with reduced rates. Reasonableness in the rates assumes that
fixed shall be reasonable and just. A commission has no power the same is fair to both the public utility and the consumer.
to fix rates which are unreasonable or to regulate them
arbitrarily. This basic requirement of reasonableness Consequently, we hold that the challenged order, particularly on
comprehends such rates which must not be so low as to be the issue of rates provided therein, being violative of the due
confiscatory, or too high as to be oppressive. 16 process clause is void and should be nullified. Respondents
should now proceed, as they should heretofore have done, with
What is a just and reasonable rate is not a question of formula the hearing and determination of petitioner's pending application
but of sound business judgment based upon the evidence 17 it is for a certificate of public convenience and necessity and in which
a question of fact calling for the exercise of discretion, good proceeding the subject of rates involved in the present
sense, and a fair, enlightened and independent judgment. 18 In controversy, as well as other matter involved in said application,
determining whether a rate is confiscatory, it is essential also to be duly adjudicated with reasonable dispatch and with due
consider the given situation, requirements and opportunities of observance of our pronouncements herein.
the utility. A method often employed in determining
reasonableness is the fair return upon the value of the property WHEREFORE, the writ prayed for is GRANTED and the order
to the public utility. Competition is also a very important factor in of respondents, dated September 2, 1988, in NTC Case No. 87-
determining the reasonableness of rates since a carrier is 94 is hereby SET ASIDE. The temporary restraining order
allowed to make such rates as are necessary to meet issued under our resolution of September 13, 1988, as
competition. 19 specifically directed against the aforesaid order of respondents
on the matter of existing rates on petitioner's present authorized
A cursory perusal of the assailed order reveals that the rate services, is hereby made permanent. SO ORDERED.
reduction is solely and primarily based on the initial evaluation
made on the financial statements of petitioner, contrary to
respondent NTC's allegation that it has several other sources of
information without, however, divulging such sources. G.R. No. 108338 April 17, 2001
Furthermore, it did not as much as make an attempt to elaborate
CALIXTO SAÑADO, petitioner,
on how it arrived at the prescribed rates. It just perfunctorily
declared that based on the financial statements, there is merit
for a rate reduction without any elucidation on what implications NEPOMUCENO, respondents.
and conclusions were necessarily inferred by it from said
statements. Nor did it deign to explain how the data reflected in MELO, J.:
the financial statements influenced its decision to impose a rate
reduction. This case is one of the older ones which was raffled to
undersigned ponente pursuant to the Court's Resolution in A.M.
On the other hand, petitioner may likely suffer a severe 00-9-03 dated February 27, 2001 and concerns a petition
drawback, with the consequent detriment to the public service, seeking the reversal of the decision of the Court of Appeals
should the order of respondent NTC turn out to be unreasonable dated September 11, 1992 and its resolution dated October 15,
and improvident. The business in which petitioner is engaged is 1992 denying reconsideration. The Court of Appeals modified
unique in that its machinery and equipment have always to be the decision of Branch 18 of the Regional Trial Court of the Ninth
taken in relation to the equipment on the other end of the Judicial Region stationed in Pagadian City which was rendered
transmission arrangement. Any lack, aging, acquisition, in favor of herein petitioner. Disposed thus the Court of Appeals
rehabilitation, or refurbishment of machinery and equipment in its CA-G.R. CV No. 23165 per Justice Montenegro, with
necessarily entails a major adjustment or innovation on the Justices Paras and Ordoñez-Benitez concurring:
business of petitioner. As pointed out by petitioner, any change
in the sending end abroad has to be matched with the WHEREFORE, premises considered, judgment is hereby
corresponding change in the receiving end in the Philippines. rendered:
Conversely, any in the receiving end abroad has to be matched
(a) affirming the judgment appealed from with modification as
with the corresponding change in the sending end in the
Philippines. An inability on the part of petitioner to meet the
variegations demanded be technology could result in a 1. Ordering and sentencing defendant-appellant Simeon G.
deterioration or total failure of the service of satellite Nepomuceno to pay the share of plaintiff-appellee in the amount
communications. of P168,000.00 covering the period of four (4) years from
February 19, 1975 to February 19, 1979, with only eight (8)
At present, petitioner is engaged in several projects aimed at
hectares considered to be productive;
refurbishing, rehabilitating, and renewing its machinery and
equipment in order to keep up with the continuing charges of the
times and to maintain its facilities at a competitive level with the
technological advances abroad. There projected undertakings
2. Ordering defendant-appellant Simeon G. Nepomuceno to pay That the whole amount invested by the SECOND PARTY for the
reasonable rental of the fishpond area in question from February development of the aforesaid area for fishpond shall first be
20, 1979 to March 20, 1980 in the amount of P25,000.00; recovered out of the products of the fishpond area;

3. Ordering and sentencing defendant-appellant Simeon G. That after the full investment of the SECOND PARTY shall have
Nepomuceno and defendant Edgar J. Chu, to jointly pay plaintiff- been recovered, the sharing basis with the FIRST PARTY shall
appellee the reasonable rentals of the fishpond area in question immediately commence for a period of Four (4) years and the
at the rate of P25,000.00 per annum from March 21, 1980 to sharing basis shall be in accordance with the following
January 2, 1985; percentage:

4. Ordering and sentencing defendant-appellant Simeon G. THIRTY FIVE PERCENT (35%) of the Net per harvest — FIRST
Nepomuceno and defendant Edgar J. Chu, to jointly and PARTY;
severally pay plaintiff-appellee the sum of P100,000.00 as
attorney' fees; SIXTY FIVE PERCENT (65%) of the Net per harvest —
5. Ordering and sentencing defendant-appellant Simeon G.
Nepomuceno and Edgar J. Chu to pay the costs; and That after the expiration of the Four (4) years of sharing basis
on the Net harvest, this contract of sharing basis shall be
(b) reversing the decision appealed from insofar as it ordered renewed at the option of the second party for a period of another
"defendants jointly to restore possession and control of the Four (4) years;
fishpond area in question to the plaintiff".
(pp. 26-27, Rollo.)
(pp. 37-38, Rollo.)
On July 18, 1973, the contracting parties executed a handwritten
The generative facts are chronicled as follows: agreement, modifying the earlier agreement by excluding the
area of ten hectares already cultivated and fully developed by
The controversy began on October 28, 1969 when the defunct petitioner and providing that "the contract will be renewed for
Philippine Fisheries Commission issued in favor of petitioner another four (4) years with another agreement beneficial to both
Sañado Ordinary Fishpond Permit No. F-5810-X covering an parties." Simply stated, instead of the renewal being at the
area of fifty hectares situated in Bo. Monching, Siay, option of private respondent, it shall be renewed on terms
Zamboanga del Sur. As a consequence, petitioner on January acceptable to both petitioner and private respondent.
6, 1972 executed a deed of quitclaim involving twenty hectares
of the original area of fifty hectares in favor of his uncle and Based on the agreement as modified by the aforestated
brother (Decision of the Office of the President, p. 46, Rollo). handwritten agreement, private respondent proceeded with the
development of the fishpond area, excluding the area of ten
On July 16, 1973, petitioner as First Party and private hectares already developed by petitioner.
respondent Nepomuceno as Second Party executed a contract
entitled "Contract of Fishpond Development and Financing", On September 28, 1979, the Director of Fisheries and Aquatic
which pertinently provided: Resources recommended to the then Ministry of Natural
Resources the conversion of Ordinary Fishpond Permit No. F-
That the FIRST PARTY is the possessor and holder of a piece 5810-X into a 25-year fishpond loan agreement which covered
of agricultural land with an area of approximately FIFTY (50) a reduced area of 26.7450 hectares (p. 165, Rollo). Pursuant to
HECTARES COVERED BY Ordinary Fishpond Permit No. F- said recommendation, Fishpond Lease Agreement No. 3090
5810-X situated at Monching, Siay, Zamboanga del Sur; was issued to petitioner on October 8, 1979.
That the SECOND PARTY agreed to undertake full expenses On March 20, 1980, private respondent waived his rights,
for the development of an area of THIRTY (30) hectares, out of interest, and participation over the fishpond area in favor of one
the approximately FIFTY (50) hectares, covered by Ordinary Edgar J. Chu.
Fishpond Permit No. F-5810-X of the FIRST PARTY and which
parcel is described and bounded as follows: On March 28, 1980, apparently to oppose the issuance of the
25-year fishpond lease agreement in favor of petitioner, private
xxx xxx xxx respondent informed the Bureau of Fisheries and Aquatic
Resources in writing of his financing/development contract with
That the development which shall be undertaken by the
petitioner and that the fishpond was almost fully developed at
SECOND PARTY on the aforesaid area of THIRTY (30)
his expense (Ibid.).
hectares, consists of:
Parenthetically, sometime that year, private respondent
a Construction of dumps; gates, buildings and other accessories
submitted to petitioner an accounting of the income or proceeds
pertinent to the full development of the fishpond area;
of the fishpond as well as his expenditures in the development
b Construction of dikes and the purchase of Bangus Fry for the thereof (tsn, July 5, 1983, pp. 10-14). This document, marked as
said fishpond; Exhibit "D" and dated February 19, 1975, showed earnings of
the fishpond in the amount of P98,106.35, expenses and
advances in the sum of P87,405.25, and cash on hand of
P10,701.10. The original copy thereof was filed with the Bureau

of Fisheries and Development as evidenced by the stamp of the Private respondent and Edgar J. Chu both appealed the trial
office thereon. court's decision. However, for failure to file brief, Chu's appeal
was dismissed.
On July 17, 1981, petitioner filed a complaint against private
respondent and Edgar J. Chu with the regional trial court For his part, private respondent maintained that: (a) the trial
docketed as Civil Case No. 2085 for recovery of possession and court erred in ruling that private respondent has fully recovered
damages, wherein he alleged that on February 19, 1975, private his financial investment in the fishpond area in question as of
respondent had already recovered his investment in full; that as February 19, 1975 (hence the sharing of the net harvest should
of said date, the total earnings had amounted to P98,106.35 not commence on said date); (b) the trial court erred in ruling
leaving an excess of P10,701.10 to be divided between that private respondent cannot waive his right to finance the
petitioner and private respondent at 35-65 sharing; that the 4- development of the fishpond area; and (c) the trial court
year period during which petitioner and private respondent committed grave error and injustice in not dismissing petitioner's
would share the net harvest commenced on February 19, 1975 complaint and in ordering respondent to pay petitioner the
and expired on February 18, 1979; that after February 18, 1975, amounts of P168,000.00 as petitioner's share covering the
private respondent has not accounted for the income of the period beginning February 19, 1975 to February 19, 1979,
fishpond and has failed and refused, in gross and evident bad P25,000.00 per annum constituting reasonable rentals from
faith despite renewed and repeated demands, to deliver February 19, 1979 up to the time the fishpond area shall have
petitioner's share of the net harvest for four years which totaled been restored to petitioner, as well as P100,000.00 as attorney's
P250,000.00 more or less. fees.

Meanwhile, during the pendency of the aforesaid Civil Case No. As mentioned earlier, the Court of Appeals affirmed the trial
2085 with the trial court, an order was issued by then Minister of court's decision as regards petitioner's share in the produce from
Agriculture and Food Salvador H. Escudero III, on January 28, February 19, 1975 to February 19, 1979 (P168,000.00), the
1985 cancelling Fishpond Lease Agreement No. 3090 and reasonable rental of the fishpond area (P25,000.00 per annum)
forfeiting the improvements thereon in favor of the government. from February 20, 1979 to March 20, 1980 and from March 21,
Later, said order was reconsidered to the extent that private 1980 to January 2, 1986, as well as attorney's fees
respondent was given priority to apply for the area and that his (P100,000.00), and costs.
improvements thereon were not considered forfeited in favor of
the government. Petitioner elevated the matter to the Office of The petition before us hinges on the argument that the Court of
the President but his appeal was dismissed in a decision Appeals entertained evidence and/or other matters not duly
rendered on July 31, 1989. covered or taken up in the trial of Civil Case No. 2085. Petitioner
posits that the appellate court committed grave abuse of
On June 19, 1989, the trial court rendered its decision in Civil discretion in doing so and in applying said matters in its
Case No. 2085, the dispositive portion of which reads as follows: disposition of the case. Verily, petitioner's grumble and protest
is confined to that portion of the June 19, 1989 decision of the
WHEREFORE, IN VIEW OF ALL THE FOREGOING, judgment Court of Appeals directing "defendants jointly to restore
is hereby rendered in favor of the plaintiff and against the possession and control of the fishpond area to the plaintiff."
Petitioner points out that the July 31, 1989 decision rendered by
1. Ordering defendants jointly to restore possession and control the Office of the President through Deputy Executive Secretary
of the fishpond area in question to the plaintiff; Magdangal B. Elma is a new matter which should not have been
treated by the appellate court with legal force and effect because
2. Declaring the Waiver of All Rights, Interests and Participations
"it was merely incidental to the propriety or impropriety of the
Over a Fishpond Area (Part) (Exhibit "E") executed by defendant
issuance of a writ of preliminary mandatory injunction respecting
Nepomuceno in favor of defendant Edgar Chu as null and void;
the earlier Writ of Execution granted by the trial court in favor of
3. Ordering defendant Simeon Nepomuceno to pay the share of Calixto Sañado" (p. 19, Rollo).
plaintiff in the amount of P168,000.00 covering the period of four
In this light, petitioner mentions that on December 11, 1990,
years from February 19, 1975 to February 19, 1979, with only
during the pendency of the appeal of Civil Case No. 2085, he
eight (8) hectares considered to be productive;
filed with the appellate court a motion for execution pending
4. Ordering defendants to jointly pay plaintiff the rentals of the appeal, stating that the appeal of Edgar J. Chu (who was said to
fishpond area in question at the reasonable rate of P25,000.00 be the actual possessor of the area) had been dismissed. The
per annum reckoned from February 19, 1979 up to the time the appellate court denied the same. On May 21, 1991, petitioner
same fishpond area shall have been duly restored to the filed another motion for issuance of writ of execution, claiming
possession of the plaintiff; that the Sheriff's Return of Service dated June 6, 1991 stated
that "the restoration to and/or placement of plaintiff Sañado
5. Ordering defendants jointly and severally pay plaintiff the sum thereof on said fishpond area in controversy . . . ., are hereby
of P100,000.00 as attorney's fees; and considered complied with." Thereafter private respondent filed a
petition for relief from judgment and or execution which resulted
6. To pay the costs.
in an order dated June 7, 1991 restoring possession of the
IT IS SO ORDERED.; fishpond area to him. Petitioner then proceeds to mention that
on June 11, 1991, private respondent filed with the appellate
(pp. 24-25, Rollo.) court an "Ex-Parte Urgent Motion for Issuance of Writ of
Preliminary Mandatory Injunction", alleging that the trial court agreement; (2) the Sañado-Nepomuceno contract is not the only
has not yet issued the corresponding writ of preliminary instance when petitioner transferred/subleased his rights over
mandatory injunction to restore private respondent to the the fishpond area without approval of the appropriate ministry
possession of the subject fishpond area. Petitioner stresses that head since on January 6, 1972, he transferred 20 hectares of
it was at this particular stage of the proceedings that the subject the original 50-hectare fishpond area to his brother and uncle,
July 31, 1989 Malacañang decision was initially mentioned by and on September 12, 1982, he transferred his rights over the
private respondent who thereby argued that the trial court failed 26.7450 area to the Samahang Kabuhayan ng Barangay
to consider that prior to the issuance of the writ of execution, the Monching Association which later assigned its leasehold rights
restoration of the subject fishpond to herein petitioner would in in favor of the Development Bank of the Philippines in
effect destroy the essence of said Malacañang decision which consideration of the amount of P653,153.46; and (3) petitioner's
affirmed the cancellation of the Fishpond Lease Agreement No. failure to develop forty percent of the area within three years and
3050. In consequence thereof, the appellate court issued a to completely develop the remaining portions within five years,
resolution dated June 14, 1991 ordering that anyone who had both to commence from the date of the issuance of the lease
anything to do with the enforcement of the writ of execution agreement in accordance with the terms and conditions of the
issued by the trial court was restrained temporarily from lease agreement (out of the whole area occupied by petitioner,
enforcing said writ, such that private respondent, who was only four hectares more or less, corresponding to 60% to 70%
acknowledged to be in possession of the subject property was developed). The appellate court thus held that all these
consisting of five ponds at the time of the issuance of the violations are recognized grounds for the termination and
aforesaid writs; should remain in the possession thereof until cancellation of a fishpond lease agreement under Section 9 of
further notice by the court. Later, the trial court itself ordered the the FAO No. 125, series of 1979. As a last note, the subject
immediate restoration of possession of the subject fishpond area decision stated that it mainly deals with the validity of the
to herein private respondent. An exchange of pleadings followed cancellation by the Ministry of Agriculture and Food of
where, as an attachment to his comment, private respondent petitioner's Fishpond Lease Agreement No. 3090 for violation of
presented a photostat copy of the subject July 31, 1989 decision the terms thereof and/or fisheries rules, and that a decision in
of the Office of the President.1âwphi1.nêt Civil Case No. 2085 which is a possessory action has hardly any
bearing in the resolution of the aforestated appeal.
Setting aside the factual ramifications of the instant case, we find
that the only issue thereof refers to the legal effect and True, the subject July 31, 1989 decision was rendered a few
evidentiary weight of the July 19, 1989 decision rendered by the days after the trial court handed down its decision ordering
Office of the President in relation to Civil Case No. 2085 and CA- herein petitioner to be restored to the possession of the subject
G.R. CV No. 23165. fishpond area. However, such fact is of no moment considering
that said decision of the trial court did not attain finality and was
Let us first examine the premise and basis of the aforesaid July seasonably appealed. In other words, the July 31, 1989 decision
31, 1989 decision of the Office of the President. A perusal was rendered while Civil Case No. 2085 was pending appeal. It
thereof reveals that it resolved the appeal filed by petitioner and is thus proper to consider the same a supervening event the
the Samahang Kabuhayan ng Barangay Monching from the existence of which cannot just be disregarded by the appellate
order of the then Minister of Agriculture and Food, dated January court.
28, 1985 which cancelled the Fishpond Lease Agreement No.
3090 issued to petitioner and forfeited in favor of the government What is the nature of the July 31, 1989 Malacañang decision
the improvements thereof, including the bond, and ruled that the and what is its effect on the resolution of Civil Case No. 2085?
area with the improvements shall be disposed of in accordance The action of an administrative agency in granting or denying,
with Presidential Decree No. 704 (Revising and Consolidating or in suspending or revoking, a license, permit, franchise, or
All Laws and Decrees Affecting Fishing and Fisheries) to any certificate of public convenience and necessity is administrative
qualified applicant pursuant to applicable rules and regulations or quasi-judicial. The act is not purely administrative but quasi-
thereon. Said cancellation was premised on the following judicial or adjudicatory since it is dependent upon the
factors: (1) violation by petitioner of the terms of the fishpond ascertainment of facts by the administrative agency, upon which
lease agreement and of Fisheries Administrative Order (FAO) a decision is to be made and rights and liabilities determined (De
125 (s. 1979) when he transferred/subleased his leasehold Leon, Administrative Law: Text and Cases, 1993 ed., pp. 143-
rights without government approval; and (2) failure of petitioner 144). As such, the July 31, 1989 decision of the Office of the
to comply with the development requirements. President is explicitly an official act of and an exercise of quasi-
judicial power by the Executive Department headed by the
In the subject July 31, 1989 decision, the Office of the President, highest officer of the land. It thus squarely falls under matters
through then Deputy Executive Secretary Magdangal B. Elma, relative to the executive department which courts are
upholding the January 28, 1985 Escudero Order, dismissed mandatorily tasked to take judicial notice of under Section 1,
petitioner's appeal and affirmed the cancellation of the subject Rule 129 of the Rules of Court. Judicial notice must be taken of
Fishpond Lease Agreement No. 3090 on the following grounds: the organization of the Executive Department, its principal
(1) Section 5(k) of Fisheries Administrative Order (FAO) No. 125 officers, elected or appointed, such as the President, his powers
prohibits the awardee of a fishpond lease agreement from and duties (Francisco, Evidence [Rules 128-134], 1996 ed., p.
transferring or subletting the fishpond granted to him without the 24, citing Canal Zone vs. Mena, 2 Canal Zone 170).
previous consent or approval of the ministry concerned, and
similarly, the lessee shall not sublet or enter into a sub-lease The rendition of the subject July 31, 1989 Malacañang decision
contract over the area or portion covered by the fishpond lease is premised on the essential function of the executive
department — which is to enforce the law. In this instance, what in favor of the government. In this regard, the July 31, 1989
is being enforced is Presidential Decree No. 704 which decision stated:
consolidated and revised all laws and decrees affecting fishing
and fisheries. Such enforcement must be true to the policy The Escudero Order of May 14, 1985 stands unchallenged. As
behind such laws which is "to accelerate and promote the such, the herein appeal of Sañado, et al., from the Escudero
integrated development of the fishery industry and to keep the Order of January 25, 1985 remains the only obstacle, on the
fishery resources of the country in optimum productive condition administrative level, to the said May 14, 1985 Order being
through proper conservation and protection" (Section 2, P.D. considered in force and effect.
No. 704).
(p. 50, Rollo.)
Further, the issue of whether or not petitioner is still entitled to
Accordingly, the Court of Appeals correctly held —
possession of the subject fishpond area is underpinned by an
ascertainment of facts. And such task belongs to the . . . The issue (on waiver of rights and interests and participation
administrative body which has jurisdiction over the matter — the by respondent) is rendered moot and academic by the order of
Ministry of Agriculture and Food. The policy of the courts as then MAF Minister Salvador H. Escudero III cancelling Fishpond
regards such factual findings is not to interfere with actions of Lease Agreement No. 3090 of plaintiff-appellee which was
the executive branch on administrative matters addressed to the affirmed on appeal by the Office of the President. The lease
sound discretion of government agencies. This policy is agreement having been cancelled, possession of the fishpond
specially applicable in the grant of licenses, permits, and leases, area covered by the lease agreement cannot be returned to
or the approval, rejection, or revocation of applications therefor plaintiff-appellee even if the waiver of rights, interests, and
(Manuel vs. Villena, 37 SCRA 745 [1971]). Such respect is participation is held null and void . . .
based on the time-honored doctrine of separation of powers and
on the fact that these bodies are considered co-equal and (p. 31, Rollo.)
coordinate rank as courts. The only exception is when there is a
In addition, petitioner considers the July 31, 1989 decision a
clear showing of capricious and whimsical exercise of judgment
foreign matter which was not raised in the court below and hence
or grave abuse of discretion, which we find absent in the case at
should not have been treated by the Court of Appeals with legal
force and effect. To reiterate, petitioner also notes that the
The reasons given by the Office of the President in dismissing decision of the Office of the President is dated July 31, 1989,
petitioner's appeal are quite clear. Transferring or subletting the whereas the decision of Civil Case No. 2085 was rendered June
fishpond granted to a licensee without the consent or approval 19, 1989. Further, petitioner argues that the subject decision of
of the administrative body concerned, as well as the failure to the Office of the President was merely incidental to the propriety
develop the area required by the fisheries rules, are definitely or impropriety of the issuance of a writ of preliminary mandatory
solid and logical grounds for the cancellation of one's license. injunction to restore private respondent to the possession of the
Withal, if petitioner disagrees with the decision of the Office of fishpond area after a writ of execution was issued by the trial
the President, he should have elevated the matter by petition for court in favor of petitioner.
review before the Court of Appeals for the latter's exercise of
Rules of fair play, justice, and due process dictate that parties
judicial review. Nowhere in the record do we find such action on
cannot raise for the first time on appeal issues which they
petitioner's part.
could have raised but never did during the trial (Reburiano
Understandably, to restore petitioner to the possession of the vs. Court of Appeals, 301 SCRA 342 [1999]). Significantly,
fishpond area is to totally disregard the July 31, 1989 decision private respondent could have not been expected to present the
of the Office of the President which can hardly be described as July 31, 1989 decision during the trial because it was obviously
an unrelated matter, considering its patent implications in the not yet extant during that time. But one thing is for sure,
result of both Civil Case No. 2085 and CA-G.R. CV No. 23165. petitioner knew that there was a pending administrative case
For how could the appellate court award possession to the very (O.P. Case No. 2958) on the subject fishpond area. He knew
same party whose license has been cancelled by the executive about the appeal since he was precisely the one who filed it,
or administrative officer tasked to exercise licensing power as challenging the January 28, 1985 order of then Minister
regards the development of fishpond areas, and which Escudero which cancelled Fishpond Lease Agreement No.
cancellation has been sustained by the Office of the President? 3090. Hence, the presentation of the July 31, 1989 decision
Petitioner must remember the essence of the grant of a license. before the appellate court had caused no undue surprise upon
It is not a vested right given by the government but a privilege petitioner who, we repeat, was the one who filed the appeal.
with corresponding obligations and is subject to governmental
Verily, the trial court's decision of July 19, 1989 did not attain
regulation. Hence, to allow petitioner to possess the subject area
finality. It was appealed within the reglementary period. If the
is to run counter to the execution and enforcement of the July
court could modify or alter a judgment even after the same has
31, 1989 decision which would easily lose its "teeth" or force if
become executory whenever circumstances transpire
petitioner were restored in possession. In addition, as pointed
rendering its decision unjust and inequitable, as where
out in the July 31, 1989 decision, petitioner is not assailing the
certain facts and circumstances justifying or requiring such
May 14, 1985 order of Minister Escudero which gave private
modification or alteration transpired after the judgment has
respondent priority in applying for the subject area and which
become final and executory (David vs. Court of Appeals, 316
considered respondent's improvements thereon as not forfeited
SCRA 710 [1999]) and when it becomes imperative in the

higher interest of justice or when supervening events exchange service in a given area. Pursuant thereto, the National
warrant it (People vs. Gallo, 315 SCRA 461 [1999]), what more Telecommunications Commission (NTC) was tasked to define
if the judgment has not yet attained finality? the boundaries of local exchange areas and authorize only one
franchised local exchange carrier to provide local exchange
It is thus plain in the case at bar that the July 31, 1989 decision service within such areas.
of the Office of the President is a substantial supervening event
which drastically changed the circumstances of the parties to the Thereafter, on July 12, 1993, then President Fidel V. Ramos
subject fishpond lease agreement. For to award possession to issued Executive Order No. 109 entitled Local Exchange Carrier
petitioner is futile since he has lost the fishpond license. In point Service. Section 2 thereof provides that all existing International
is our ruling in Baluyot vs. Guiao (315 SCRA 396 [1997]) where Gateway Facility (IGF) operators[2] are required to provide local
we held that judgment is not confined to what appears on the exchange carrier services in unserved and underserved areas,
face of the decision, but also covers those necessarily included including Metro Manila, thereby promoting universal access to
therein or necessary thereto. For example, where the ownership basic telecommunications service.
of a parcel of land is decreed in the judgment, the delivery of the
possession of the land should be considered included in the The NTC promulgated Memorandum Circular No. 11-9-93 on
decision, it appearing that the defeated party's claim to the September 17, 1993 implementing the objectives of E.O. No.
possession thereof is based on his claim of ownership. By 109.[3] Section 3 of the Circular mandates existing IGF operators
analogy, the July 31, 1989 decision, is not confined to the validity to file a petition for the issuance of Certificate of Public
of the cancellation by the Ministry of Agriculture and Food of Convenience and Necessity (CPCN) to install, operate and
petitioner's Fishpond Lease Agreement No. 3090 for violation of maintain local exchange carrier services within two years from
the terms thereof and/or the fisheries rules. The right to possess effectivity thereof. Section 4 further requires IGF operators to
the subject fishpond area is necessarily included in the decision. provide a minimum of 300 local exchange lines per one
The cancellation or revocation of petitioner's license necessarily international switch termination and a minimum of 300,000 local
eliminated his right to possess the same since the new licensee exchange lines within three years from grant of authority.
would then be the one to enjoy this right.
To cap the governments efforts, Republic Act No. 7925,
WHEREFORE, the instant petition is hereby DENIED for lack of otherwise known as the Public Telecommunications Policy Act
merit. The September 11, 1992 decision of the Court of Appeals of the Philippines, was enacted on March 23, 1995. With regard
in CA-G.R. CV No. 23165 is hereby AFFIRMED.SO ORDERED. to local exchange service, Section 10 thereof mandates an
international carrier to comply with its obligation to provide local
[G.R. No. 135992. July 23, 2004] exchange service in unserved or underserved areas within three
years from the grant of authority as required by existing
EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and regulations. On September 25, 1995, the NTC issued the
TELECOMMUNICATIONS TECHNOLOGIES, Implementing Rules and Regulations for R.A. No. 7925 per its
CORPORATION, respondent.
Taking advantage of the opportunities brought about by the
DECISION passage of these laws, several IGF operators applied for CPCN
AUSTRIA-MARTINEZ, J.: to install, operate and maintain local exchange carrier services
in certain areas. Respondent International Communication
The role of the telecommunications industry in Philippine Corporation, now known as Bayan Telecommunications
progress and development cannot be understated. Time was Corporation or Bayantel,[4] applied for and was given by the NTC
when the industry was dominated by a few -- an oligarchy of a Provisional Authority (PA)[5] on March 3, 1995, to install,
sorts where the elite made the decisions and serfdom had no operate and provide local exchange service in Quezon City,
choice but acquiesce. Sensing the need to abrogate their Malabon and Valenzuela, Metro Manila, and the entire Bicol
dominion, the government formulated policies in order to create region. Meanwhile, petitioner Telecommunications
an environment conducive to the entry of new players. Thus, in Technologies Philippines, Inc. (TTPI), as an affiliate of petitioner
October 1990, the National Telecommunications Development Eastern Telecommunications Philippines, Inc. (ETPI), was
Plan 1991-2010 (NTDP) was formulated and came into being. granted by the NTC a PA on September 25, 1996, to install,
Designed by the Department of Transportation and operate and maintain a local exchange service in the Provinces
Communications (DOTC), the NTDP provides for the framework of Batanes, Cagayan Valley, Isabela, Kalinga-Apayao, Nueva
of government policies, objectives and strategies that will guide Vizcaya, Ifugao, Quirino, the cities of Manila and Caloocan, and
the industrys development for the next 20 years. As expected, the Municipality of Navotas, Metro Manila.
with it came the increase in the demand for telecommunications
It appears, however, that before TTPI was able to fully
services, especially in the area of local exchange carrier service
accomplish its rollout obligation, ICC applied for and was given
a PA by the NTC on November 10, 1997, to install, operate and
Concomitantly, the DOTC issued guidelines for the maintain a local exchange service in Manila and Navotas, [6] two
rationalization of local exchange telecommunications service. In areas which were already covered by TTPI under its PA dated
particular, the DOTC issued on September 30, 1991, September 25, 1996.
Department Circular No. 91-260, with the purpose of minimizing
Aggrieved, petitioners filed a petition for review with the Court of
or eliminating situations wherein multiple operators provide local
Appeals with application for a temporary restraining order and a
writ of preliminary injunction, docketed as CA-G.R. SP No. operations in less profitable areas covered by it and will threaten
46047, arguing that the NTC committed grave abuse of its viability to continue as a local exchange operator.[10]
discretion in granting a provisional authority to respondent ICC
to operate in areas already assigned to TTPI. After a review of the records of this case, the Court finds no
grave abuse of discretion committed by the Court of Appeals in
On April 30, 1998, the Court of Appeals dismissed[7] the petition sustaining the NTCs grant of provisional authority to ICC.
for review on the ground that the NTC did not commit any grave
abuse of discretion in granting the PA to TTPI. It sustained the The power of the NTC to grant a provisional authority has long
NTCs finding that ICC is legally and financially competent and been settled. As the regulatory agency of the national
its network plan technically feasible. The Court of Appeals also government with jurisdiction over all telecommunications
ruled that there was no violation of the equal protection clause entities, it is clothed with authority and given ample discretion to
because the PA granted to ICC and TTPI were given under grant a provisional permit or authority.[11] It also has the authority
different situations and there is no point of comparison between to issue Certificates of Public Convenience and Necessity
the two.[8] (CPCN) for the installation, operation, and maintenance of
communications facilities and services, radio communications
Hence, the present petition for review on certiorari, raising the systems, telephone and telegraph systems, including the
following issues: authority to determine the areas of operations of applicants for
telecommunications services.[12] In this regard, the NTC is
I clothed with sufficient discretion to act on matters solely within
its competence.[13]
Whether or not the Honorable Court of Appeals committed a
serious error of law in upholding the Order of the NTC granting In granting ICC the PA to operate a local exchange carrier
a PA to Respondent to operate LEC services in Manila and service in the Manila and Navotas areas, the NTC took into
Navotas which are areas already assigned to petitioner TTPI consideration ICCs financial and technical resources and found
under a prior and subsisting PA. them to be adequate. The NTC also noted ICCs performance in
II complying with its rollout obligations under the previous PA
granted to it, thus:
Whether or not Petitioner is entitled to a Writ of Preliminary
With the proven track record of herein applicant as one of the
Injunction to restrain Respondent from installing LEC services in
pacesetters in carrying out its landlines commitment in its
the areas granted to it by the Order under review.[9]
assigned areas, applicant can best respond to public demand
In support thereof, petitioners posit the following arguments: for faster installation of telephone lines in Manila and Navotas.

(1) The assignment to ICC of areas already allocated to TTPI The grant of this application is, therefore, a fitting recognition
violates the Service Area Scheme (SAS), which is the guidepost that should be accorded to any deserving applicant, such as
of the laws and issuances governing local exchange service; herein applicant ICC whose remarkable performance in terms of
public service as mandated by Executive Order 109 and
(2) ICC did not make any showing that an existing operator, TTPI Republic Act No. 7925 has persuaded this Commission to affix
in this case, failed to comply with the service performance and the stamp of its approval.[14]
technical standards prescribed by the NTC, and that the area is
underserved, as required under Section 23 of MC No. 11-9-93; The Court will not interfere with these findings of the NTC, as
these are matters that are addressed to its sound discretion,
(3) The facts and figures cited by the NTC, i.e., ICCs alleged being the government agency entrusted with the regulation of
remarkable performance in fulfilling its rollout obligation and the activities coming under its special and technical
growth rate in the installation of telephone lines in Manila and forte.[15] Moreover, the exercise of administrative discretion is a
Navotas, do not justify the grant of the PA in favor of ICC, nor policy decision and a matter that can best be discharged by the
are they supported by the evidence on record as these were not government agency concerned, and not by the courts. [16]
presented during the proceedings before the NTC;
Petitioner insists compliance with the service area scheme
(4) ICC did not comply with the requirement of prior consultation (SAS) mandated by DOTC Dept. Circular No. 91-260, to wit:
with the NTC before it filed its application, in violation of Sections
3 and 3.1 of MC 11-9-93; 1. The National Telecommunications Commission (NTC) shall
define the boundaries of local exchange areas, and shall
(5) ICC did not comply with Section 27 of MC 11-9-93 requiring henceforth authorize only one franchised Local Exchange
that an escrow deposit be made equivalent to 20% and a Carrier (LEC) to provide LEC service within such areas.
performance bond equivalent to 10% of the investment required
for the first two years of the project; The Court is not persuaded. Said department circular was
issued by the DOTC in 1991, before the advent of E.O. No. 109
(6) ICC is not financially and technically capable of undertaking and R.A. No. 7925. When E.O. No. 109 was promulgated in
the project; 1993, and R.A. No. 7925 enacted in 1995, the service area
scheme was noticeably omitted therefrom. Instead, E.O. No.
(7) The grant of a PA in favor of ICC to operate in areas covered
109 and R.A. No. 7925 adopted a policy of healthy competition
by TTPI will render it difficult for the latter to cross-subsidize its
among the local exchange carrier service providers.

The need to formulate new policies is dictated by evolving goals franchise, certificate, or any other form of authorization to
and demands in telecommunications services. Thus, E.O. No. operate a public utility. In Republic v. Express
109 acknowledges that there is a need to promulgate new policy Telecommunications Co., the Court held that the Constitution
directives to meet the targets of Government through the is quite emphatic that the operation of a public utility shall not be
National Telecommunications Development Plan (NTDP) of the exclusive. Section 11, Article XII of the Constitution provides:
Department of Transportation and Communications (DOTC),
specifically: (1) to ensure the orderly development of the Sec. 11. No franchise, certificate, or any other form of
telecommunications sector through the provision of service to all authorization for the operation of a public utility shall be granted
areas of the country; (2) to satisfy the unserviced demand for except to citizens of the Philippines or to corporations or
telephones; and (3) to provide healthy competition among associations organized under the laws of the Philippines at least
authorized service providers. Likewise, one of the national sixty per centum of whose capital is owned by such citizens, nor
policies and objectives of R.A. No. 7925 is to foster the shall such franchise, certificate or authorization be
improvement and expansion of telecommunications services in exclusive in characteror for a longer period than fifty years.
the country through a healthy competitive environment, in which Neither shall any such franchise or right be granted except under
telecommunications carriers are free to make business the condition that it shall be subject to amendment, alteration, or
decisions and to interact with one another in providing repeal by the Congress when the common good so requires. xxx
telecommunications services, with the end in view of (Emphasis supplied)
encouraging their financial viability while maintaining affordable
Thus, in Radio Communications of the Philippines, Inc. v.
National Telecommunications Commission, the Court ruled
Recently, in Pilipino Telephone Corporation vs. NTC,[18] the that the Constitution mandates that a franchise cannot be
Court had occasion to rule on a case akin to the present dispute, exclusive in nature.
involving the same respondent ICC, and the Pilipino Telephone
Corporation (Piltel). In the Piltel case, ICC applied for a
provisional authority to operate a local exchange service in Among the declared national policies in Republic Act No. 7925,
areas already covered by Piltel, which includes Misamis otherwise known as the Public Telecommunications Policy Act
Occidental, Zamboanga del Sur, Davao del Sur, South Cotabato of the Philippines, is the healthy competition among
and Saranggani. Piltel opposed ICCs application but the NTC telecommunications carriers, to wit:
denied it, and granted ICCs application. The Court of Appeals
dismissed Piltels petition for review, and on certiorari before this Obviously, the need for a healthy competitive environment in
Court, we affirmed the dismissal. The Court found that the NTC telecommunications is sufficient impetus for the NTC to consider
did not commit any grave abuse of discretion when it granted all those applicants, who are willing to offer competition, develop
the ICC a provisional authority to operate in areas covered by the market and provide the environment necessary for greater
Piltel. We held: public service.

We will not disturb the factual findings of the NTC on the Furthermore, free competition in the industry may also provide
technical and financial capability of the ICC to undertake the the answer to a much-desired improvement in the quality and
proposed project. We generally accord great weight and even delivery of this type of public utility, to improved technology, fast
finality to factual findings of administrative bodies such as the and handy mobil[e] service, and reduced user dissatisfaction.
NTC, if substantial evidence supports the findings as in this
PILTELs contention that the NTC Order amounts to a
case. The exception to this rule is when the administrative
confiscation of property without due process of law is untenable.
agency arbitrarily disregarded evidence before it or
Confiscation means the seizure of private property by the
misapprehended evidence to such an extent as to compel a
government without compensation to the owner. A franchise to
contrary conclusion had it properly appreciated the evidence.
operate a public utility is not an exclusive private property of the
PILTEL gravely failed to show that this exception applies to the
franchisee. Under the Constitution, no franchisee can demand
instant case. Moreover, the exercise of administrative discretion,
or acquire exclusivity in the operation of a public utility. Thus, a
such as the issuance of a PA, is a policy decision and a matter
franchisee of a public utility cannot complain of seizure or taking
that the NTC can best discharge, not the courts.
of property because of the issuance of another franchise to a
PILTEL contends that the NTC violated Section 23 of NTC competitor. Every franchise, certificate or authority to operate a
Memorandum Circular No. 11-9-93, otherwise known as the public utility is, by constitutional mandate, non-exclusive.
Implementing Guidelines on the Provisions of EO 109 which PILTEL cannot complain of a taking of an exclusive right that it
states: does not own and which no franchisee can ever own.

Section 23. No other company or entity shall be authorized to Likewise, PILTELs argument that the NTC Order violates
provide local exchange service in areas where the LECs comply PILTELs rights as a prior operator has no merit. The Court
with the relevant provisions of MTC MC No. 10-17-90 and NTC resolved a similar question in Republic v. Republic Telephone
MC No. 10-16-90 and that the local exchange service area is not Company, Inc. In striking down Retelcos claim that it had a right
underserved. (Emphasis supplied) to be protected in its investment as a franchise-holder and prior
operator of a telephone service in Malolos, Bulacan, the Court
Section 23 of EO 109 does not categorically state that the held:
issuance of a PA is exclusive to any telecommunications
company. Neither Congress nor the NTC can grant an exclusive
RETELCOs foremost argument is that such operations and It is also true that NTC MC No. 8-9-95 allows a duly enfranchised
maintenance of the telephone system and solicitation of entity to maintain a local exchange network if it is shown that an
subscribers by [petitioners] constituted an unfair and ruinous existing authorized local exchange operator fails to satisfy the
competition to the detriment of [RETELCO which] is a grantee demand for local exchange service.[22] In this case, the NTC
of both municipal and legislative franchises for the purpose. In noted the increasing rate in the demand for local lines within the
effect, RETELCO pleads for protection from the courts on the Manila and Navotas areas, and in order for these areas to catch
assumption that its franchises vested in it an exclusive right as up with its neighboring cities, installation of lines must be sped
prior operator. There is no clear showing by RETELCO, up.[23] This, in fact, is tantamount to a finding that the existing
however, that its franchises are of an exclusive character. xxx At local exchange operator failed to meet the growing demand for
any rate, it may very well be pointed out as well that neither did local lines.
the franchise of PLDT at the time of the controversy confer
exclusive rights upon PLDT in the operation of a telephone ICCs technical and financial capabilities, as well as the growth
system. In fact, we have made it a matter of judicial notice that rate in the number of lines in particular areas, are matters within
all legislative franchises for the operation of a telephone system NTCs competence and should be accorded respect. The NTC
contain the following provision: is given wide latitude in the evaluation of evidence and in the
exercise of its adjudicative functions, and this includes the
It is expressly provided that in the event the Philippine authority to take judicial notice of facts within its special
Government should desire to maintain and operate for itself the competence.[24]
system and enterprise herein authorized, the grantee shall
surrender his franchise and will turn over to the Government said TTPI anticipates that allowing ICC to enter its service areas will
system and all serviceable equipment therein, at cost, less make it difficult for it to cross-subsidize its operations in the less
reasonable depreciation.[19] profitable areas. Such argument, however, is futile. The cross-
subsidy approach is apparently the governments response to
Similarly in this case, the grant of a PA to ICC to operate in areas the foreseen situation wherein given its policy of universal
covered by TTPI is not tainted with any grave abuse of discretion access, a local exchange provider will find itself operating in
as it was issued by the NTC after taking into account ICCs areas where the demand and the publics capacity to subscribe
technical and financial capabilities, and in keeping with the will be lesser than in other areas, making these areas more of a
policy of healthy competition fostered by E.O. No. 109 and R.A. liability than an asset. Thus, Section 4 of E.O. No. 109 provides:
No. 7925.
SEC. 4. Cross-Subsidy. Until universal access to basic
In addition, Section 6 of R.A. No. 7925 specifically limits the telecommunications is achieved, and such service is priced to
DOTC from exercising any power that will tend to influence or reflect actual costs, local exchange service shall continue to be
effect a review or a modification of the NTCs quasi-judicial cross-subsidized by other telecommunications services within
functions, to wit: the same company.

Section 6. Responsibilities of and Limitations to Department Meanwhile, NTC MC No. 8-9-95 provides:
Powers. -- The Department of Transportation and
Communications (Department) shall not exercise any power ACCESS CHARGES
which will tend to influence or effect a review or a modification
of the Commissions quasi-judicial function.
(a) Until the local exchange service is priced reflecting actual
The power of the NTC in granting or denying a provisional
costs, the local exchange service shall be cross-subsidized by
authority to operate a local exchange carrier service is a quasi-
other telecommunications services.
judicial function,[20] a sphere in which the DOTC cannot intrude
upon. If at all, the service area scheme provided in DOTC Dept. (c) The subsidy need by the LE service operator to earn a rate
Circular No. 91-260 is only one of the factors, but should not in of return at parity with other segments of telecommunications
any way, tie down the NTC in its determination of the propriety industry shall be charged against the international and domestic
of a grant of a provisional authority to a qualified applicant for toll and CMTS interconnect services.[25]
local exchange service.
Both issuances allow a local exchange operator to cross-
True, NTC MC No. 11-9-93 requires prior consultation with the subsidize its operations from its other telecommunications
NTC of the proposed service areas. As petitioners themselves services, and not solely on the revenues derived from the
argue, prior consultation allows the NTC to assess the impact of operators local exchange service.
the proposed application on the viability of the local exchange
operator in the area desired by the would-be applicant and on Notably, R.A. No. 7617, as amended by R.A. No. 7674, grants
the viability of the entire telecommunications industry as well as TTPI the legislative franchise to install, operate and maintain
rationalize the plans to minimize any adverse impact. [21] In this telecommunications systems throughout the Philippines but not
case, prior consultation was substantially complied with and its limited to the operations of local exchange service or public
purpose accomplished, when ICC filed its application and the switched network, public-calling stations, inter-exchange carrier
NTC was given the opportunity to assess ICCs viability to render or national toll transmission, value-added or enhanced services
local exchange service in the Manila and Navotas areas, and its intelligent networks, mobile or personal communications
impact on the telecommunications industry. services, international gateway facility, and paging services,
among others.[26] From these services, TTPI has other sources
of revenue from which it may cross-subsidize its local exchange immunity granted under existing franchises, or may hereafter be
operations. granted, shall ipso facto become part of previously granted
telecommunications franchises and shall be accorded
The Court, however, agrees with petitioners that the NTC erred immediately and unconditionally to the grantees of such
when it failed to require ICC to make an escrow deposit and a franchises: Provided, however, That the foregoing shall
performance bond. Section 27 of NTC MC No. 11-9-93 neither apply to nor affect provisions of
specifically provides: telecommunications franchises concerning territory
covered by the franchise, the life span of the franchise, or the
SEC. 27. Authorized public telecommunications carriers shall
type of service authorized by the franchise. (Emphasis Ours)
be required to deposit in escrow in a reputable bank 20% of
the investment required for the first two years of the More than anything else, public service should be the primordial
implementation of the proposed project. objective of local exchange operators. The entry of another
provider in areas covered by TTPI should pose as a challenge
In addition to escrow, the authorized public telecommunications
for it to improve its quality of service. Ultimately, it will be the
carriers shall be required to post a performance
public that will benefit. As pointed out in Republic of the Phils.
bond equivalent to 10% of the investment required for the first
vs. Rep. Telephone Co, Inc.:[30]
two years of the approved project but not to exceed P500
Million. The performance bond shall be forfeited in favor of the Free competition in the industry may also provide the answer to
government in the event that the authorized PTC fail to comply a much-desired improvement in the quality and delivery of this
with the terms and conditions of the authority granted. type of public utility, to improved technology, fast and handy
(Emphases Ours) mobil service, and reduced user dissatisfaction. After all, neither
PLDT nor any other public utility has a constitutional right to a
The escrow deposit and the posting of a performance bond are
monopoly position in view of the Constitutional proscription that
required in each proposed and approved project of a local
no franchise certificate or authorization shall be exclusive in
exchange operator. Project refers to a planned
character or shall last longer than fifty (50) years (ibid., Section
undertaking.[27] ICCs project for local exchange service in the
11; Article XIV, Section 5, 1973 Constitution; Article XIV, Section
Manila and Navotas areas is separate and distinct from its
8, 1935 Constitution).
projects in other areas; hence, the NTC should have directed
ICC to submit such requirements. Evidently, the escrow deposit WHEREFORE, the petition for review on certiorari is
is required to ensure that there is available money on hand to PARTIALLY GRANTED. The Order of the National
defray ICCs expenditures for its project, while the performance Telecommunications Commission dated November 10, 1997 in
bond will answer for the faithful compliance and performance of NTC Case No. 96-195 is AFFIRMED with the following
ICCs rollout obligation and to compensate the government for modifications:
any damages incurred in case of ICCs default. Without these,
the government will be left holding an empty bag in the event Respondent International Communication Corporation, in
ICC reneges in its rollout obligation. accordance with Section 27 of NTC MC No. 11-9-93, is required
Section 27 of NTC MC No. 11-9-93 is silent as to whether the
posting of an escrow deposit and performance bond is a (1) Deposit in escrow in a reputable bank 20% of the investment
condition sine qua non for the grant of a provisional authority. required for the first two years of the implementation of the
While the provision uses the term shall, said directive pertains proposed project; and
to the NTC, which shall require the public telecommunications
carrier to make such deposit and posting. In any event, records (2) Post a performance bond equivalent to 10% of the
show that as of May 20, 2004, ICC has been granted an investment required for the first two years of the approved
extension of its provisional authority up to November 10, project but not to exceed P500 Million.
2006.[28] Records also show that ICC has already been providing
within such period to be determined by the National
local exchange carrier service in the areas concerned, having
Telecommunications Commission.
installed 16,000 lines in the City of Manila, 12,000 of which have
already been subscribed, 624 lines in Caloocan City, all of which No pronouncement as to costs. SO ORDERED.
have been subscribed, while the roll-out plan for facilities
and provisioning in the City of Navotas is being
finalized.[29]Hence, so as not to disrupt ICCs rollout plan
G.R. NO. 135992 January 31, 2006
compliance, it would be more judicious for the Court to
merely require ICC to comply with Section 27 of NTC MC No. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and
11-9-93, within such period to be determined by the NTC. TELECOMMUNICATIONS TECHNOLOGIES,
Furthermore, it is well to stress that petitioner TTPI cannot claim
any exclusive right to render telecommunications service in
areas which the NTC considers to be in need of additional
CORPORATION, Respondent.
providers. R.A. No. 7925 is quite emphatic on this score, viz.:
SEC. 23. Equality of Treatment in the Telecommunications
Industry. Any advantage, favor, privilege, exemption, or AUSTRIA-MARTINEZ, J.:
On July 23, 2004, the Court promulgated its Decision in the Petitioners did not file any comment and it was only after the
above-captioned case with the following dispositive portion: Court issued a show cause and compliance Resolution on
October 19, 2005 that petitioners manifested in their Entry of
WHEREFORE, the petition for review on certiorari is Special Appearance, Manifestation and Compliance dated
PARTIALLY GRANTED. The Order of the National November 25, 2005 that they have no further comments on
Telecommunications Commissions dated November 10, 1997 in respondent’s motion for partial reconsideration.4
NTC Case No. 96-195 is AFFIRMED with the following
modifications: The Court has observed in its Decision that Section 27 of NTC
MC No. 11-9-93 is silent as to whether the posting of an escrow
Respondent International Communication Corporation, in deposit and performance bond is a condition sine qua non for
accordance with Section 27 of NTC MC No. 11-9-93, is required the grant of a provisional authority. The NTC, through the OSG,
to: explicitly clarified, which was not disputed by petitioners, that the
escrow deposit and performance bond are not required in
(1) Deposit in escrow in a reputable bank 20% of the investment
subsequent authorizations for additional/new areas outside its
required for the first two years of the implementation of the
original roll-out obligation under E.O. No. 109. The OSG agreed
proposed project; and
with respondent’s stance that since the provisional authority in
(2) Post a performance bond equivalent to 10% of the this case involves a voluntary application not covered by the
investment required for the first two years of the approved original service areas created by the NTC under E.O. No. 109,
project but not to exceed P500 Million. then it is not subject to the posting of an escrow deposit and
performance bond as required by E.O. No. 109, but only to the
within such period to be determined by the National conditions provided in the provisional authority. Further, the
Telecommunications Commission. OSG adapted the ratiocination of the Court of Appeals on this
matter, i.e., respondent was not subjected to the foregoing
No pronouncement as to costs.
escrow deposit and performance bond requirement because the
SO ORDERED.1 landline obligation is already outside its original roll-out
commitment under E.O. No. 109.5
Respondent now seeks a partial reconsideration of the portion
of the Court’s decision requiring it to make a 20% escrow deposit The NTC, being the government agency entrusted with the
and to post a 10% performance bond. Respondent claims that regulation of activities coming under its special and technical
Section 27 of NTC MC No. 11-9-93, which required the forte, and possessing the necessary rule-making power to
foregoing amounts, pertains only to applications filed under implement its objectives,6 is in the best position to interpret its
Executive Order No. 109 (E.O. No. 109) and not to applications own rules, regulations and guidelines. The Court has
voluntarily filed. In its Manifestation in support of the motion for consistently yielded and accorded great respect to the
partial reconsideration, respondent attached a letter from interpretation by administrative agencies of their own rules
Deputy Commissioner and Officer-in-Charge (OIC), Kathleen G. unless there is an error of law, abuse of power, lack of
Heceta, of the National Telecommunications Commission jurisdiction or grave abuse of discretion clearly conflicting with
(NTC), stating thus: the letter and spirit of the law.7

xxx In City Government of Makati vs. Civil Service Commission,8 the

Court cited cases where the interpretation of a particular
Please be informed that the escrow deposit and performance administrative agency of a certain rule was adhered to, viz.:
bond were required to public telecommunications entities to
ensure that the mandated installation of local exchange lines are As properly noted, CSC was only interpreting its own rules on
installed within three (3) years pursuant to EO 109 and RA 7925. leave of absence and not a statutory provision in coming up with
Since your company has already complied with its obligation by this uniform rule. Undoubtedly, the CSC like any other
the installation of more than 300,000 lines in Quezon City, agency has the power to interpret its own rules and any
Malabon City and Valenzuela City in the National Capital Region phrase contained in them with its interpretation
and Region V in early 1997, the escrow deposit and significantly becoming part of the rules themselves. As
performance bond were not required in your subsequent observed in West Texas Compress & Warehouse Co. v.
authorizations.2 Panhandle & S.F. Railing Co. –

In a Resolution dated October 4, 2004, the Court required xxx

petitioners and the NTC to file their respective comments on the
This principle is not new to us. In Geukeko v. Araneta this Court
upheld the interpretation of the Department of Agriculture and
Subsequently, in its Manifestation/Comment filed on January 11, Commerce of its own rules of procedure in suspending the
2005, the Office of the Solicitor General (OSG), in behalf of the period of appeal even if such action was nowhere stated therein.
NTC, likewise referred to the same letter of OIC Heceta and We said -
declared that it fully agrees with respondent that the escrow
deposit and performance bond are not required in subsequent
authorizations for additional/new areas outside its original roll- x x x It must be remembered that Lands Administrative Order
out obligation under the Service Area Scheme of E.O. No. 109. No. 6 is in the nature of procedural rules promulgated by the

Secretary of Agriculture and Natural Resources pursuant to the SO ORDERED.
power bestowed on said administrative agency to promulgate
rules and regulations necessary for the proper discharge and
management of the functions imposed by law upon said office. G.R. No. 173590 December 9, 2013
x x x x Recognizing the existence of such rule-making authority,
what is the weight of an interpretation given by an administrative PHILIPPINE POSTAL CORPORATION, Petitioner,
agency to its own rules or regulations? Authorities sustain the vs.
doctrine that the interpretation given to a rule or regulation COURT OF APPEALS and CRISANTO G. DE
by those charged with its execution is entitled to the GUZMAN, Respondents.
greatest weight by the Court construing such rule or
regulation, and such interpretation will be followed unless DECISION
it appears to be clearly unreasonable or arbitrary (42 Am.
Jur. 431). It has also been said that:
Assailed in this petition for review on certiorari 1 are the
Decision2 dated April 4, 2006 July 19, 2006 of the Court of
The same precept was enunciated in Bagatsing v. Committee Appeals (CA) in CA-G.R. SP No. 88891 which reversed and set
on Privatization where we upheld the action of the Commission aside the Resolutions dated November 23, 20044and January 6,
on Audit (COA) in validating the sale of Petron Corporation to 20055 of petitioner Philippine Postal Corporation (PPC), through
Aramco Overseas Corporation on the basis of COA's its then Postmaster General and Chief Executive Officer (CEO)
interpretation of its own circular that set bidding and audit Dario C. Rama (PG Rama), finding that the latter gravely abused
guidelines on the disposal of government assets – its discretion when it revived the administrative charges against
respondent Crisanto G. De Guzman (De Guzman) despite their
The COA itself, the agency that adopted the rules on bidding previous dismissal.
procedure to be followed by government offices and
corporations, had upheld the validity and legality of the The Facts
questioned bidding. The interpretation of an agency of its
own rules should be given more weight than the Sometime in 1988, De Guzman, then a Postal Inspector at the
interpretation by that agency of the law it is merely tasked Postal Services Office,6 was investigated by Regional Postal
to administer (underscoring supplied). Inspector Atty. Raul Q. Buensalida (Atty. Buensalida) in view of
an anonymous complaint charging him of dishonesty and
Given the greater weight accorded to an agency's interpretation conduct grossly prejudicial to the best interest of the service.7 As
of its own rules than to its understanding of the statute it seeks a result thereof, Atty. Buensalid are commended8 that De
to implement, we simply cannot set aside the former on the Guzman be formally charged with twelve (12) counts of the
same grounds as we would overturn the latter. More specifically, same offenses and eventually be relieved from his post to
in cases where the dispute concerns the interpretation by an protect the employees and witnesses from harassment.
agency of its own rules, we should apply only these standards:
Since the Postal Services Office was then a line-agency of the
"Whether the delegation of power was valid; whether the
Department of Transportation and Communication(DOTC), Atty.
regulation was within that delegation; and if so, whether it was a
Buensalida’s investigation report was forwarded to the said
reasonable regulation under a due process test." An affirmative
department’s Investigation Security and Law Enforcement Staff
answer in each of these questions should caution us from
(ISLES) for further evaluation and approval. Contrary to the
discarding the agency's interpretation of its own rules.
findings of Atty. Buensalida, however, the ISLES, through a
(Emphasis supplied)
Memorandum9dated February 26, 1990prepared by Director
Thus, the Court holds that the interpretation of the NTC that Antonio V. Reyes (Dir. Reyes), recommended that De Guzman
Section 27 of NTC MC No. 11-9-93 regarding the escrow deposit be exonerated from the charges against him due to lack of merit.
and performance bond shall pertain only to a local exchange The said recommendation was later approved by DOTC
operator’s original roll-out obligation under E.O. No. 109, and not Assistant Secretary Tagumpay R. Jardiniano (Asec. Jardiniano)
to roll-out obligations made under subsequent or voluntary in a Memorandum10 dated May 15, 1990.
applications outside E.O. No. 109, should be sustained.
On February 6, 1992, Republic Act No. (RA)7354, 11 otherwise
IN VIEW THEREOF, respondent’s Motion for Partial known as the ― ”Postal Service Act of 1992,” was passed.
Reconsideration is GRANTED. The Court’s Decision dated July Pursuant to this law, the Postal Services Office under the DOTC
23, 2004 is AMENDED, the dispositive portion of which should was abolished, and all its powers, duties, and rights were
read as follows: transferred to the PPC.12 Likewise, officials and employees of
the Postal Services Office were absorbed by the PPC.13
WHEREFORE, the petition for review on certiorari is DENIED.
The Order of the National Telecommunications Commission Subsequently, or on July 16, 1993, De Guzman, who had by
dated November 10, 1997 in NTC Case No. 96-195 is then become Chief Postal Service Officer, was formally
AFFIRMED. charged14 by the PPC, through Postmaster General Eduardo P.
Pilapil(PG Pilapil), for the same acts of ―dishonesty, gross
thereby deleting the order requiring respondent to make a 20% violation of regulations, and conduct grossly prejudicial to the
escrow deposit and to post a 10% performance bond.

best interest of the service, and the Anti-graft law, committed as dormant for more than five (5)years, it may not be revived
follows”: without filing another formal charge. The motion was, however,
denied in a Resolution19 dated May 14, 2003, pointing out that
Investigation disclosed that while you were designated as Acting De Guzman failed to produce a copy of the alleged recall order
District Postal Inspector with assignment at South Cotabato even if he had been directed to do so.
District, Postal Region XI, Davao City, you personally made
unauthorized deductions and/or cuttings from the ten (10%) Undaunted, De Guzman filed a second motion for
percent salary differential for the months of January-March, reconsideration, which was resolved20 on June 2, 2003 in his
1988,when you paid each of the employees of the post office at favor in that: (a) the Resolution dated May 14, 2003 denying De
Surallah, South Cotabato, on the last week of April 1988, and Guzman’s first motion for Reconsideration was recalled; and (b)
you intentionally failed to give to Postmaster Juanito D. Dimaup, a formal hearing of the case was ordered to be conducted as
of the said post office his differential amounting to ₱453.91, soon as possible. After due hearing, the PPC, through PG
Philippine currency; that you demanded and required Letter Rama, issued a Resolution21 dated November 23, 2004, finding
Carrier Benjamin Salero, of the aforestated post office to give De Guzman guilty of the charges against him and consequently
fifty (₱50.00) pesos out of the aforesaid differential; that you dismissing him from the service. It was emphasized therein that
personally demanded, take away and encashed the salary when De Guzman was formally charged on July 16, 1993, the
differential check No. 008695317 in the total amount of complainant was the PPC, which had its own charter and was
₱1,585.67, Philippine currency, of Postmaster Benjamin C. no longer under the DOTC. Thus, the ISLES Memorandum
Charlon, of the post office at Lake Cebu, South Cotabato, for dated February 26, 1990 prepared by Dir. Reyes which
your own personal gain and benefit to the damage and prejudice endorsed the exoneration of De Guzman and the dismissal of
of the said postmaster; that you personally demanded, required the complaints against him was merely recommendatory. As
and received from Postmaster Peniculita B. Ledesma, of the such, the filing of the formal charge on July 16, 1993 was an
post office of Sto. Niño, South Cotabato, the amount of ₱300.00, obvious rejection of said recommendation.22
₱200.00 and ₱100.00 for hazard pay, COLA differential and
contribution to the affair "Araw ng Kartero and Christmas Party," De Guzman’s motion for reconsideration was denied initially in
respectively; that you personally demanded and required Letter a Resolution23 dated January 6, 2005, but the motion was, at the
Carrier Feliciano Bayubay, of the post office at General Santos same time, considered as an appeal to the PPC Board of
City to give money in the amount of ₱1,000.00, Philippine Directors (Board).24 The Board, however, required PG Rama to
Currency, as a condition precedent for his employment in this rule on the motion. Thus, in a Resolution25 dated May 10, 2005,
Corporation, and you again demanded and personally received PG Rama pointed out that, being the third motion for
from the said letter carrier the amount of ₱300.00 Philippine reconsideration filed by De Guzman, the same was in gross
currency, as gift to the employees of the Civil Service violation of the rules of procedure recognized by the PPC, as
Commission, Davao City to facilitate the release of Bayubay’s well as of the Civil Service Commission (CSC), which both
appointment; that you demanded and forced Postmaster Felipe allowed only one (1) such motion to be entertained. 26 It was
Collamar, Jr.,of the post office at Maitum, South Cotabato to further held that res judicata was unavailing as the decision
contribute and/or produce one (1) whole Bariles fish for shesami exonerating De Guzman was ―”only a ruling after a fact-finding
(sic), and you also required and received from the aforesaid investigation.” Hence, the same could not be considered as a
postmaster the amount of ₱500.00 Philippine currency; that you dismissal on the merits but rather, a dismissal made by an
demanded and required Postmaster Diosdado B. Delfin to give investigative body which was not clothed with judicial or quasi-
imported wine and/or ₱700.00, Philippine currency, for gift to the judicial power.27
outgoing Regional Director Escalada; and that you failed to
Meanwhile, before the issuance of the Resolution dated May 10,
liquidate and return the substantial amount of excess
2005, De Guzman elevated his case on March 12, 2005 28 to the
contributionson April, 1987, June, 1987 and December, 1987,for
CA via a special civil action
Postal Convention at MSU, arrival of Postmaster General
for certiorari and mandamus,29 docketed as CA-G.R. SP No.
Banayo and Araw ng Kartero and Christmas Party, respectively,
88891, imputing grave abuse of discretion amounting to lack or
for your own personal gain and benefit to the damage and
excess of jurisdiction in that: (a) the case against him was a
prejudice of all the employees assigned at the aforementioned
mere rehash of the previous complaint already dismissed by the
DOTC, and therefore, a clear violation of the rule on res judicata;
In a Decision15dated August 15, 1994, De Guzman was found (b) the assailed PPC Resolutions did not consider the evidences
guilty as charged and was dismissed from the service. submitted by De Guzman; (c) the uncorroborated,
Pertinently, its dispositive reads that ―”[i]n the interest of the unsubstantiated and contradictory statements contained in the
service, it is directed that this decision be implemented affidavits presented became the bases of the assailed
immediately.”16 Resolutions; (d) the Resolution dated November 23, 2004
affirmed a non-existent decision; (e) Atty. Buensalida was not a
It appears, however, that the a fore-stated decision was not credible witness and his testimony bore no probative value;
implemented until five (5) years later when Regional Director and(f) the motion for reconsideration filed by De Guzman of the
Mama S. Lalanto (Dir. Lalanto) issued a Memorandum 17 dated Resolution dated November 23, 2004 is not the third motion for
August 17, 1999 for this purpose. De Guzman lost no time in reconsideration filed by him.
filing a motion for reconsideration,18 claiming that: (a) the
decision sought to be implemented was recalled on August 29, On June 10, 2005, De Guzman appealed30 the Resolution
1994 by PG Pilapil himself; and (b)since the decision had been dated May 10, 2005 before the PPC Board, which resolution was

allegedly received by De Guzman on May 26, 2005. Almost a Sec.21.Powers and Functions of the Postmaster General. — as
year later, the Board issued a Resolution 31 dated May 25, the Chief Executive Officer, the Postmaster General shall have
2006,denying the appeal and affirming with finality the Decision the following powers and functions:
dated August 15, 1994and the Resolution dated May 14, 2003.
The motion for reconsideration subsequently filed by De xxxx
Guzman was likewise denied in aResolution 32 dated June 29,
(d) to appoint, promote, assign, reassign, transfer and remove
2006. On April 4, 2006, the CA rendered a Decision33 in CA-
personnel below the ranks of Assistant Postmaster General:
G.R. SP No. 88891, reversing the PPC Resolutions
Provided, That in the case of removal of officials and employees,
dated November 23, 2004 and January 6, 2005, respectively.
the same may be appealed to the Board;
It held that the revival of the case against De Guzman
constituted grave abuse of discretion considering the clear and xxxx
unequivocal content of the Memorandum dated May 15,
1990 duly signed by Asec. Jardiniano that the complaint against This remedy of appeal to the Board is reiterated in Section 2(a),
De Guzman was already dismissed. Rule II of the Disciplinary Rules and Procedures of the PPC,
which providesfurther that the decision of the Board is, in turn,
Aggrieved, PPC moved for reconsideration which was, however, appeal able to the CSC, viz.:
denied in a Resolution34 dated July 19, 2006, hence, the instant
petition. Section2. DISCIPLINARY JURISDICTION. – (a) The Board of
Directors shall decide upon appeal the decision of the
Meanwhile, on July 26, 2006, De Guzman filed an appeal of the Postmaster General removing officials and employees from the
PPC Board’s Resolutions dated May 25, 2006 and June 29, service. (R.A. 7354, Sec. 21 (d)). The decision of the Board of
2006 with the CSC35 which was, however, dismissedin Directors is appeal able to the Civil Service Commission. It is
Resolution No. 08081536 dated May 6, 2008. The CSC equally well-established that the CSC has jurisdiction over all
denied De Guzman’s motion for reconsideration there from in employees of government branches, subdivisions,
Resolution No. 09007737 dated January 14, 2009. instrumentalities, and agencies, including government-owned or
controlled corporations with original charters, and, as such, is
The Issues Before the Court
the sole arbiter of controversies relating to the civil
The essential issues for the Court’s resolution are whether: (a) service.40 The PPC, created under RA7354, is a government-
De Guzman unjustifiably failed to exhaust the administrative owned and controlled corporation with an original charter. Thus,
remedies available to him; (b) De Guzman engaged inforum- being an employee of the PPC, De Guzman should have, after
shopping; and (c) the investigation conducted by the DOTC, availing of the remedy of appeal before the PPC Board, sought
through the ISLES, bars the filing of the subsequent charges by further recourse before the CSC. Records, however, disclose
PPC. that while De Guzman filed on June 10, 2005 a notice of
appeal41 to the PPC Board and subsequently appealed the
The Court’s Ruling latter’s ruling to the CSC on July 26, 2006, the sewere all after
he challenged the PPC Resolution dated November 23, 2004
The petition is meritorious. (wherein he was adjudged guilty of the charges against him and
consequently dismissed from the service) in a petition
A. Exhaustion of administrative remedies.
for certiorari and mandamus before the CA(docketed as CA-
The thrust of the rule on exhaustion of administrative remedies G.R. SP No. 88891). That the subject of De Guzman’s appeal to
is that the courts must allow the administrative agencies to carry the Board was not the Resolution dated November 23, 2004 but
out their functions and discharge their responsibilities within the the Resolution dated May 10, 2005 denying the motion for
specialized areas of their respective competence. It is presumed reconsideration of the first - mentioned resolution is of no
that an administrative agency, if afforded an opportunity to pass moment. In Alma Jose v. Javellana,42 the Court ruled that an
upon a matter, will decide the same correctly, or correct any appeal from an order denying a motion for reconsideration of a
previous error committed in its forum. Furthermore, reasons of final order or judgment is effectively an appeal from the final
law, comity and convenience prevent the courts from order or judgment itself.43 Thus, finding no cogent explanation
entertaining cases proper for determination by administrative on DeGuzman’s endor any justifiable reason for his premature
agencies. Hence, premature resort to the courts necessarily resort to a petition for certiorari and mandamus before the CA,
becomes fatal to the cause of action of the petitioner.38PPC the Court holds that he failed to adhere to the rule on exhaustion
claims that De Guzman failed to subscribe to the rule on of administrative remedies which should have warranted the
exhaustion of administrative remedies since he opted to file a dismissal of said petition.
premature certiorari case before the CA instead of filing an
B. Forum-shopping.
appeal with the PPC Board, or of an appeal to the CSC, which
are adequate remedies under the law.39 PPC further submits that De Guzman violated the rule on forum-
shopping since he still appealed the order of his dismissal before
The Court agrees with PPC’s submission.
the PPC Board, notwithstanding the pendency of his petition for
Under Section 21(d) of RA7354, the removal by the Postmaster certiorari before the CA identically contesting the same.44
General of PPC officials and employees below the rank of
The Court also concurs with PPC on this point.
Assistant Postmaster General may be appealed to the Board of
the PPC, viz.:
Aside from violating the rule on exhaustion of administrative to be avoided by the rule against forum shopping is the rendition
remedies, De Guzman was also guilty of forum-shopping by by two competent tribunals of two separate and contradictory
pursuing two (2) separate remedies –petition for certiorari and decisions. Unscrupulous party litigants, taking advantage of a
appeal –that have long been held to be mutually exclusive, and variety of competent tribunals, may repeatedly try their luck in
not alternative or cumulative remedies.45 Evidently, the several different fora until a favorable result is reached. To avoid
ultimate reliefsought by said remedies whichDe the resultant confusion, the Court adheres strictly to the rules
Guzmanfiled only within a few months from each other46 is against forum shopping, and any violation of these rules results
one and the same – the setting aside of the resolution in the dismissal of the case.
dismissing him from the service. As illumined in the case
of Sps. Zosa v. Judge Estrella,47 where in several precedents Thus, the CA correctly dismissed the petition for certiorari and
have been cited on the subject matter:48 the petition for review (G.R. No. 157745) filed with this Court
must be denied for lack of merit.
The petitions are denied. The present controversy is on all fours
with Young v. Sy, in which we ruled that the successive filing of We also made the same ruling in Candido v. Camacho, when
a notice of appeal and a petition for certiorari both to assail the the respondent therein assailed identical court orders through
trial court’s dismissal order for non-suit constitutes forum both an appeal and a petition for an extraordinary writ.
shopping. Thus,
Here, petitioners questioned the June 26, 2000 Order, the
Forum shopping consists of filing multiple suits involving the August 21, 2000 Clarificatory Order, and the November 23, 2000
same parties for the same cause of action, either simultaneously Omnibus Order of the RTC via ordinary appeal (CA-G.R. CV No.
or successively, for the purpose of obtaining a favorable 69892) and through a petition for certiorari(CA-G.R. SP No.
judgment. 62915) in different divisions of the same court. The actions were
filed with a month’s interval from each one. Certainly, petitioners
There is forum shopping where there exist: (a) identity of parties, were seeking to obtain the same relief in two different divisions
or at least suchparties as represent the same interests in both with the end in view of endorsing which ever proceeding would
actions; (b) identity of rights asserted and relief prayed for, the yield favorable consequences. Thus, following settled
relief being founded on the same facts; and (c) the identity of the jurisprudence, both the appeal and the certiorari petitions
two preceding particulars is such that any judgment rendered in should be dismissed.(Emphases supplied; citations omitted)
the pending case, regardless of which party is successful would
amount to res judicata. Similar thereto, the very evil that the prohibition on forum-
shopping was seeking to prevent – conflicting decisions
Ineluctably, the petitioner, by filing an ordinary appeal and a rendered by two (2) different tribunals–resulted from De
petition for certiorari with the CA, engaged in forum shopping. Guzman’s abuse of the processes. Since De Guzman’s appeal
When the petitioner commenced the appeal, only four months before the PPC Board was denied in its Resolutions49dated
had elapsed prior to her filing with the CA the Petition May 25, 2006 and June 29, 2006, De Guzmans ought the review
for Certiorari under Rule 65 and which eventually came up to of said resolutions before the CSC where he raised yet again
this Court by way of the instant Petition (re: Non-Suit). The the defense of res judicata. Nonetheless, the CSC, in its
elements of lit is pendentia are present between the two suits. Resolution No. 08081550 dated May 6, 2008, affirmed De
As the CA, through its Thirteenth Division, correctly noted, both Guzman’s dismissal, affirming "the Resolutions of the PPC
suits are founded on exactly the same facts and refer to the Board of Directors dismissing De Guzman from the service for
same subject matter – the RTC Orders which dismissed Civil Dishonesty, Gross Violation of Regulations, and Conduct
Case No. SP-5703 (2000) for failure to prosecute. In both cases, Grossly Prejudicial to the Best Interest of the Service."51
the petitioner is seeking the reversal of the RTC orders. The
parties, the rights asserted, the issues professed, and the reliefs De Guzman’s motion for reconsideration of the aforesaid
prayed for, are all the same. It is evident that the judgment of Resolution was similarly denied by the CSC in its Resolution No.
one forum may amount to res judicata in the other. 09007752 dated January 14, 2009. On the other hand, the
petition for certiorari, which contained De Guzman’s prayer for
xxxx the reversal of Resolutions dated November 23, 2004 and
January 6, 2005 dismissing him from the service, was granted
The remedies of appeal and certiorari under Rule 65 are by the CA much earlier on April 4, 2006. It should be pointed out
mutually exclusive and not alternative or cumulative. This is a that De Guzman was bound by his certification53 with the CA that
firm judicial policy. The petitioner cannot hedge her case by if he ―should thereafter learn that a similar action or proceeding
wagering two or more appeals, and, in the event that the has been filed or is pending before the Supreme Court, the Court
ordinary appeal lags significantly behind the others, she cannot of Appeals, or any other tribunal or agency,” he ―undertake[s]to
post facto validate this circumstance as a demonstration that the report that fact within five (5) days therefrom to [the]Honorable
ordinary appeal had not been speedy or adequate enough, in Court.”54 Nothing, however, appears on record that De Guzman
order to justify the recourse to Rule 65. This practice, if adopted, had informed the CA of his subsequent filing of a notice of
would sanction the filing of multiple suits in multiple fora, where appeal before the PPC from the Resolution dated May 10, 2005.
each one, as the petitioner couches it, becomes a By failing to do so, De Guzman committed a violation of his
―precautionary measure” for the rest, thereby increasing the certification against forum-shopping with the CA, which has
chances of a favorable decision. This is the very evil that the been held to be a ground for dismissal of an action distinct from
proscription on forum shopping seeks to put right. In Guaranteed forum-shopping itself.55
Hotels, Inc. v. Baltao, the Court stated that the grave evil sought
Moreover, De Guzman’s contention56 that the filing of the notice To elucidate, on February 24, 2005, before De Guzman filed the
of appeal from the said Resolution was only "taken as a matter petition for certiorari dated March 12, 2005, the PPC Board had
of precaution"57 cannot extricate him from the effects of forum- passed Board Resolution66 No. 2005-14 adopting a "Corporate
shopping. He was fully aware when he filed CA-G.R. SP No. Policy that henceforth the decision of the Postmaster General in
88891 that PG Ramahad forwarded the records of the case to administrative cases when the penalty is removal or dismissal,
the PPC Board for purposes of appeal.58 Yet, he decided to the same shall not be final and executory pending appeal to
bypass the administrative machinery. And this was not the first the Office of the Board of Directors." Shortly thereafter, or on
time he did so. In his Comment to the instant petition, De March 8, 2005, PG Rama issued Philpost Administrative
Guzman claimed59 that in response to the Memorandum60 dated Order67 No. 05-05 pursuant to the aforementioned Board
August 17, 1999 issued by Dir. Lalanto implementing his Resolution, the pertinent portions of which are quoted
dismissal from service, he not only filed a motion for hereunder:
reconsideration but he likewise challenged the actions of the
PPC before the Regional Trial Court of Manila through a petition 1. Decisions of the Postmaster General in administrative cases
for mandamus docketed as Case No. 99-95442. Even when CA- where the penalty imposed is removal/dismissal from the service
G.R. SP No. 88891 was decided in De Guzman’s favor on April shall not be final and executory pending appeal to the Office of
4, 2006, and PPC’s motion for reconsideration was denied on the PPC Board of Directors x x x
July 19, 2006, De Guzman nonetheless filed on July 26, 2006
2. Decisions of the Postmaster General in administrative cases
an appeal before the CSC from the denial by the PPC Board of
where the penalty imposed is removal/dismissal from the service
his Notice of Appeal dated June 7, 2005 as pointed out in CSC
shall be executory pending appeal to the Civil Service
Resolution No. 090077.61 While De Guzman did inform the CSC
that he previously filed a petition for certiorari with the CA,
he failed to disclose the fact that the CA had already 3. Respondents who have pending appealed administrative
rendered a decision thereon resolving the issue of res cases to the PPC Board of Directors are entitled to report back
judicata,62 which was the very same issue before the CSC. to office and receive their respective salary and benefits
beginning at the time they reported back to work. No back wages
Verily, unscrupulous party litigants who, taking advantage of a
shall be allowed by virtue of the PPC Board Resolution No.
variety of competent tribunals, repeatedly try their luck in several
different for a until a favorable result is reached 63 cannot be
allowed to profit from their wrongdoing. The Court emphasizes 4. Following the Civil Service Rules and Regulations, back
strict adherence to the rules against forum-shopping, and this wages can only be recovered in case the respondent is
case is no exception. Based on the foregoing, the CA should exonerated of the administrative charges on appeal; and
have then dismissed the petition for certiorari filed by De
Guzman not only for being violative of the rule on exhaustion of 5. PPC Board Resolution No. 2005-14 took effect on 24
administrative remedies but also due to forum-shopping. February 2005. x x x

In addition, it may not be amiss to state that De Guzman’s PPC further claimed that instead of reporting for work while his
petition for certiorari was equally dismissible since one of the motion for reconsideration and, subsequently, his appeal were
requirements for the availment thereof is precisely that there pending, "[De Guzman] voluntarily elected to absent himself."
should be no appeal. It is well-settled that the remedy to obtain Much later, however, De Guzman "finally reported back [to]work
reversal or modification of the judgment on the merits is to and thereby received his salary and benefits in full for the
appeal. This is true even if the error, or one of the errors, covered period."68 De Guzman failed to sufficiently rebut these
ascribed to the tribunal rendering the judgment is its lack of claims, except to say that he was never given any copy of the
jurisdiction over the subject matter, or the exercise of power in aforementioned board resolution and administrative
excess thereof, or grave abuse of discretion in the findings of order.69 Therefore, considering that his dismissal was not to be
fact or of law set out in the decision.64 In fact, under Section 30, executed by PPC immediately (if he had appealed the same),
Rule III (C) of the Disciplinary Rules and Procedures of the PPC, De Guzman’s contention that an appeal would not be a speedy
among the grounds for appeal to the PPC Board from an order and adequate remedysimilarly deserves no merit.
or decision of dismissal are: (a) grave abuse of discretion on the
C. Res judicata.
part of the Postmaster General; and (b) errors in the finding of
facts or conclusions of law which, if not corrected, would cause De Guzman likewise failed to convince the Court of the
grave and irreparable damage or injury to the appellant. Clearly, applicability of the doctrine of res judicata for having been
therefore, with the remedy of appeal to the PPC Board and charged of the same set of acts for which he had been
thereafter to the CSC available to De Guzman, certiorari to the exculpated by the ISLES of the DOTC whose recommendation
CA should not have been permitted. for the dismissal of the complaint against De Guzman was
subsequently approved by then DOTC Asec. Jardiniano.
In this relation, it bears noting that PPC has sufficiently
addressed De Guzman’s argument that an appeal would not be The Court agrees with PPC’s argument that there was no
a speedy and adequate remedy considering that the resolution formal charge filed by the DOTC against De Guzman and, as
dismissing him from service was to be "implemented such, the dismissal of the complaint against him by Asec.
immediately."65 Jardiniano, upon the recommendation of the ISLES, did not
amount to a dismissal on the merits that would bar the filing of
another case.
While the CA correctly pointed out that it was the DOTC, through on the disclosed facts, irrespective of formal, technical or dilatory
its Department Head, that had disciplinary jurisdiction over objections; or when the judgment is rendered after a
employees of the then Bureau of Posts, including De Guzman, determination of which party is right, as distinguished from a
it however proceeded upon the presumption that De Guzman judgment rendered upon some preliminary or formal or merely
had been formally charged. But he was not. technical point.72

Pertinent is Section 16 of the Uniform Rules on Administrative In this case, there was no "judgment on the merits" in
Cases in the Civil Service which reads as follows: contemplation of the above-stated definition.1âwphi1 The
dismissal of the complaint against De Guzman in the
Section 16. Formal Charge. – After a finding of a prima Memorandum73 dated May 15, 1990 of Asec. Jardiniano was a
facie case, the disciplining authority shall formally charge result of a fact-finding investigation only for purposes of
the person complained of. The formal charge shall contain a determining whether a prima facie case exists and a formal
specification of charge(s), a brief statement of material or charge for administrative offenses should be filed. This
relevant facts, accompanied by certified true copies of the being the case, no rights and liabilities of the parties were
documentary evidence, if any, sworn statements covering the determined therein with finality. In fact, the CA, conceding that
testimony of witnesses, a directive to answer the charge(s) in the ISLES was "a mere fact-finding body," pointed out that the
writing under oath in not less than seventy-two (72) hours from Memorandum74 dated February 26, 1990 issued by Dir. Reyes
receipt thereof, an advice for the respondent to indicate in his recommending the dismissal of the complaint against De
answer whether or not he elects a formal investigation of the Guzman "did not make any adjudication regarding the rights of
charge(s), and a notice that he is entitled to be assisted by a the parties."75
counsel of his choice. (Emphasis supplied)
Hence, for the reasons above-discussed, the Court holds that
The requisite finding of a prima facie case before the disciplining PPC did not gravely abuse its discretion when it revived the case
authority shall formally charge the person complained of is against De Guzman despite the previous dismissal thereof by
reiterated in Section 9, Rule III (B) of the Disciplinary Rules and Asec. Jardiniano. Since said dismissal was not a judgment on
Procedures of the PPC, to wit: the merits, the doctrine of res judicata does not apply.
Section 9. FORMAL CHARGE. – When the Postmaster In fine, due to the errors of the CA as herein detailed, the Court
General finds the existence of a prima facie case, the hereby grants the present petition and accordingly reverses and
respondent shall be formally charged. He shall be furnished sets aside the farmer's dispositions. The Resolutions dated
copies of the complaint, sworn statements and other documents November 23, 2004 and January 6, 2005 of the PPC ordering
submitted by the complainant, unless he had already received De Guzman's dismissal from the service are thus reinstated.
the same during the preliminary investigation. The respondent
shall be given at least seventy-two (72) hours from receipt of WHEREFORE, the petition is GRANTED. The Decision dated
said formal charge to submit his answer under oath, together April 4, 2006 and the Resolution dated July 19, 2006 of the Court
with the affidavits of his witnesses and other evidences, and a of Appeals in CA-G.R. SP No. 88891 are REVERSED and SET
statement indicating whether or not he elects a formal ASIDE, and the Resolutions dated November 23, 2004 and
investigation. He shall also be informed of his right to the January 6, 2005 of petitioner Philippine Postal Corporation are
assistance of a counsel of his choice. If the respondent already hereby REINSTATED. SO ORDERED.
submitted his comment and counter-affidavits during the
preliminary investigation, he shall be given the opportunity to
submit additional evidence. (Emphasis supplied)
G.R. No. 172700 July 23, 2010
The investigation conducted by the ISLES, which "provides,
performs, and coordinates security, intelligence, fact-finding,
and investigatory functions for the Secretary, the Department, ROLSON RODRIGUEZ, Respondent.
and Department-wide official undertakings,"70was intended
precisely for the purpose of determining whether or not a prima DECISION
facie case against De Guzman existed. Due to insufficiency of
evidence, however, no formal charge was filed against De CARPIO, J.:
Guzman and the complaint against him was dismissed by Asst.
The Case
Secretary Jardiniano.
This is a petition for review1 of the 8 May 2006 Decision2 of the
In order that res judicata may bar the institution of a subsequent
Court of Appeals in CA-G.R. SP No. 00528 setting aside for lack
action, the following requisites must concur: (a) the former
of jurisdiction the 21 September 2004 Decision 3 of the
judgment must be final; (b) it must have been rendered by a
Ombudsman (Visayas) in OMB-V-A-03-0511-H.
court having jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and (d) there must be The Antecedent Facts
between the first and the second actions (i) identity of parties,
(ii) identity of subject matter, and (iii) identity of cause of action. 71 On 26 August 2003, the Ombudsman in Visayas received a
complaint4 for abuse of authority, dishonesty, oppression,
A judgment may be considered as one rendered on the merits misconduct in office, and neglect of duty against Rolson
when it determines the rights and liabilities of the parties based Rodriguez, punong barangay in Brgy. Sto. Rosario, Binalbagan,
Negros Occidental. On 1 September 2003, the sangguniang In its 21 September 2004 Decision,21 the Ombudsman found
bayan of Binalbagan, Negros Occidental, through vice-mayor Rodriguez guilty of dishonesty and oppression. It imposed on
Jose G. Yulo, received a similar complaint 5 against Rodriguez Rodriguez the penalty of dismissal from the service with
for abuse of authority, dishonesty, oppression, misconduct in forfeiture of all benefits, disqualification to hold public office, and
office, and neglect of duty. forfeiture of civil service eligibilities. Rodriguez filed a motion for
reconsideration.22 In its 12 January 2005 Order,23 the
In its 8 September 2003 notice,6 the municipal vice-mayor Ombudsman denied the motion for reconsideration. In its 8
required Rodriguez to submit his answer within 15 days from March 2005 Order,24 the Ombudsman directed the mayor of
receipt of the notice. On 23 September 2003, Rodriguez filed a Binalbagan, Negros Occidental to implement the penalty of
motion to dismiss7 the case filed in the sangguniang bayan on dismissal against Rodriguez.
the ground that the allegations in the complaint were without
factual basis and did not constitute any violation of law. In a Rodriguez filed in the Court of Appeals a petition for review with
compliance8 dated 22 October 2003, Rodriguez alleged prayer for the issuance of a temporary restraining order.
complainants violated the rule against forum shopping.
The Ruling of the Court of Appeals
Meanwhile, in its 10 September 2003 order, 9 the Ombudsman
required Rodriguez to file his answer. Rodriguez filed on 24 In its 8 May 2006 Decision,25 the Court of Appeals set aside for
October 2003 a motion to dismiss10 the case filed in the lack of jurisdiction the Decision of the Ombudsman and directed
Ombudsman on the grounds of litis pendentia and forum the sangguniang bayan to proceed with the hearing on the
shopping. He alleged that the sangguniang bayan had already administrative case. The appellate court reasoned that
acquired jurisdiction over his person as early as 8 September the sangguniang bayan had acquired primary jurisdiction over
2003. the person of Rodriguez to the exclusion of the Ombudsman.
The Court of Appeals relied on Section 4, Rule 46 of the Rules
The municipal vice-mayor set the case for hearing on 3 October of Court, to wit:
2003.11 Since complainants had no counsel, the hearing was
reset to a later date. When the case was called again for hearing, Sec. 4. Jurisdiction over person of respondent, how acquired. –
complainants’ counsel manifested that complainants would like The court shall acquire jurisdiction over the person of the
to withdraw the administrative complaint filed in respondent by the service on him of its order or resolution
the sangguniang bayan. On 29 October 2003, complainants indicating its initial action on the petition or by his voluntary
filed a motion12 to withdraw the complaint lodged in submission to such jurisdiction.
the sangguniang bayan on theground that they wanted to
The appellate court noted that the sangguniang bayan served
prioritize the complaint filed in the Ombudsman. Rodriguez filed
on Rodriguez a notice, requiring the latter to file an answer, on
a comment13 praying that the complaint be dismissed on the
8 September 2003 while the Ombudsman did so two days later
ground of forum shopping, not on the ground complainants
or on 10 September 2003.
stated. In their opposition,14 complainants admitted they violated
the rule against forum shopping and claimed they filed the Petitioner Ombudsman contends that upon the filing of a
complaint in the sangguniang bayan without the assistance of complaint before a body vested with jurisdiction, that body has
counsel. In his 4 November 2003 Resolution,15 the municipal taken cognizance of the complaint. Petitioner cites Black’s Law
vice-mayor dismissed the case filed in the sangguniang bayan. Dictionary in defining what "to take cognizance" means to wit,
"to acknowledge or exercise jurisdiction." Petitioner points out it
In its 29 January 2004 order,16 the Ombudsman directed both
had taken cognizance of the complaint against Rodriguez before
parties to file their respective verified position papers. Rodriguez
a similar complaint was filed in the sangguniang bayan against
moved for reconsideration of the order citing the pendency of his
the same respondent. Petitioner maintains summons or notices
motion to dismiss.17 In its 11 March 2004 order,18 the
do not operate to vest in the disciplining body jurisdiction over
Ombudsman stated that a motion to dismiss was a prohibited
the person of the respondent in an administrative case.
pleading under Section 5 (g) Rule III of Administrative Order No.
Petitioner concludes that consistent with the rule on concurrent
17. The Ombudsman reiterated its order for Rodriguez to file his
jurisdiction, the Ombudsman’s exercise of jurisdiction should be
position paper.
to the exclusion of the sangguniang bayan.
In his position paper, Rodriguez insisted that the sangguniang
Private respondent Rolson Rodriguez counters that when a
bayan still continued to exercise jurisdiction over the complaint
competent body has acquired jurisdiction over a complaint and
filed against him. He claimed he had not received any resolution
the person of the respondent, other bodies are excluded from
or decision dismissing the complaint filed in the sangguniang
exercising jurisdiction over the same complaint. He cites Article
bayan. In reply,19 complainants maintained there was no more
124 of the Implementing Rules and Regulations of Republic Act
complaint pending in the sangguniang bayan since the latter
No. 7160,26 which provides that an elective official may be
had granted their motion to withdraw the complaint. In a
removed from office by order of the proper court or the
rejoinder,20 Rodriguez averred that the sangguniang
disciplining authority whichever first acquires jurisdiction to the
bayan resolution dismissing the case filed against him was not
exclusion of the other. Private respondent insists
valid because only the vice-mayor signed it.
the sangguniang bayanfirst acquired jurisdiction over the
The Ruling of the Ombudsman complaint and his person. He argues jurisdiction over the person
of a respondent in an administrative complaint is acquired by the
service of summons or other compulsory processes. Private

respondent stresses complainants violated the rule against SEC. 61. Form and Filing of Administrative Complaints. – A
forum shopping when they filed identical complaints in two verified complaint against any erring elective official shall be
disciplining authorities exercising concurrent jurisdiction. prepared as follows:

The Issues xxxx

The issues submitted for resolution are (1) whether (c) A complaint against any elective barangay official shall be
complainants violated the rule against forum shopping when filed before the sangguniang panlungsod or sangguniang
they filed in the Ombudsman and the sangguniang bayan concerned whose decision shall be final and executory.
bayan identical complaints against Rodriguez; and (2) whether
it was the sangguniang bayan or the Ombudsman that first Clearly, the Ombudsman has concurrent jurisdiction with
acquired jurisdiction. the sangguniang bayan over administrative cases against
elective barangay officials occupying positions below salary
The Court’s Ruling grade 27, such as private respondent in this case.

The petition has merit. The facts in the present case are analogous to those in Laxina,
Sr. v. Ombudsman,29 which likewise involved identical
Paragraph 1, Section 13 of Article XI of the Constitution administrative complaints filed in both the Ombudsman and the
provides: sangguniang panlungsod against a punong barangay for grave
misconduct. The Court held therein that the rule against forum
Sec. 13. The Ombudsman shall have the following powers,
shopping applied only to judicial cases or proceedings, not to
functions, and duties:
administrative cases.30 Thus, even if complainants filed in the
(1) Investigate on its own, or on complaint by any person, any Ombudsman and the sangguniang bayan identical complaints
act or omission of any public official, employee, office, or against private respondent, they did not violate the rule against
agency, when such act or omission appears to be illegal, unjust, forum shopping because their complaint was in the nature of an
improper, or inefficient. administrative case.1avvphi1

Section 15 of Republic Act No. 6770, otherwise known as the In administrative cases involving the concurrent jurisdiction of
Ombudsman Act of 1989, states: two or more disciplining authorities, the body in which the
complaint is filed first, and which opts to take cognizance of the
Sec. 15. Powers, Functions, and Duties. – The Ombudsman case, acquires jurisdiction to the exclusion of other tribunals
shall have the following powers, functions, and duties: exercising concurrent jurisdiction.31 In this case, since the
complaint was filed first in the Ombudsman, and the
(1) Investigate and prosecute on its own or on complaint by any
Ombudsman opted to assume jurisdiction over the complaint,
person, any act or omission of any public officer or employee,
the Ombudsman’s exercise of jurisdiction is to the exclusion of
office or agency, when such act or omission appears to be the sangguniang bayan exercising concurrent jurisdiction.
illegal, unjust, improper, or inefficient. It has primary jurisdiction
over cases cognizable by the Sandiganbayan and, in the It is a hornbook rule that jurisdiction is a matter of law.
exercise of this primary jurisdiction, it may take over, at any Jurisdiction, once acquired, is not lost upon the instance of the
stage, from any investigatory agency of Government, the parties but continues until the case is terminated.32 When herein
investigations of such cases. complainants first filed the complaint in the Ombudsman,
jurisdiction was already vested on the latter. Jurisdiction could
The primary jurisdiction of the Ombudsman to investigate any
no longer be transferred to the sangguniang bayan by virtue of
act or omission of a public officer or employee applies only in
a subsequent complaint filed by the same complainants.
cases cognizable by the Sandiganbayan. In cases cognizable
by regular courts, the Ombudsman has concurrent jurisdiction As a final note, under Section 60 of the Local Government Code,
with other investigative agencies of government.27 Republic Act the sangguniang bayan has no power to remove an
No. 8249, otherwise known as An Act Further Defining the elective barangay official. Apart from the Ombudsman, only a
Jurisdiction of the Sandiganbayan, limits the cases that are proper court may do so.33 Unlike the sangguniang bayan, the
cognizable by the Sandiganbayan to public officials occupying powers of the Ombudsman are not merely recommendatory.
positions corresponding to salary grade 27 and higher. The Ombudsman is clothed with authority to directly
The Sandiganbayan has no jurisdiction over private respondent remove34 an erring public official other than members of
who, as punong barangay, is occupying a position Congress and the Judiciary who may be removed only by
corresponding to salary grade 14 under Republic Act No. 6758, impeachment.35
otherwise known as the Compensation and Position
Classification Act of 1989.28 WHEREFORE, we GRANT the petition. We SET ASIDE the 8
May 2006 Decision of the Court of Appeals in CA-G.R. SP No.
Under Republic Act No. 7160, otherwise known as the Local 00528. We AFFIRM the 21 September 2004 Decision of the
Government Code, the sangguniang Ombudsman (Visayas) in OMB-V-A-03-0511-H.
panlungsod or sangguniang bayan has disciplinary authority
over any elective barangay official, to wit: No pronouncement as to costs. SO ORDERED.

[G.R. No. 139360. September 23, 2003] ALEXANDER VILLARBA, DANILO WONG, MANUEL
CORPORATION AND HENRY LOPEZ CHUA, petitioners, vs. Regional Trial Court, Branch 19, Digos, Davao del
Assailed in the instant petition for certiorari under Rule 65[1] of
the Rules of Court is the March 15, 1999 order[2] of the Regional
Trial Court of Davao del Sur, Branch 19, denying the motion to
dismiss of petitioners HLC Construction and Development
Corporation and Henry Lopez Chua, on the ground of lack of
jurisdiction and a defective certification against non-forum
CANO, NOEL CAPINPIN, ANNIE CAMPOREDONDO, Respondents Emily Homes Subdivision Homeowners
REBECCA CARBELLIDO, SHIRLEY CARTALABA, Association (EHSHA) and the 150 individual members thereof
BRIGGITTE CARVAJAL, ANNIE CENTINA, SILVERIO filed on October 21, 1998 a civil action for breach of contract,
CHUAN, JOSEPHINE CONOMAN, VICTOR CORRAL, REZIE damages and attorneys fees with the Regional Trial Court of
CRISPINO, OFELIA CUSTODIO, ALEJANDRO DERECHO, Davao del Sur, Branch 19, against petitioners, the developers of
MERLYN DIAZ, PAQUITO DOMINGO, EFREN DURANO, low-cost housing units like Emily Homes
FELECIDAD ESCALARIS, VIOLETA ESPIJA, EUGENE Subdivision. Respondents alleged that petitioners used
FERNANDEZ, DOMINADOR FLORENTINO, GALILEO substandard materials in the construction of their houses, like
FLORES, HERMINIGILDO FLORES, PETE FLORES, GLORIA coco lumber and termite-infested door jambs. Petitioners
FONTILLA, WILLIAM GALIDO, RENE ELPIDIO GALILIA, furthermore allegedly did not adhere to the house plan
RENATO GAZO, CESAR GEGARE JR., ANGELI GELIA, specifications because the ceiling lines were sagging and there
MONINA GENTICA, PEDRO GERSALIA, ARACELI GIMAY, were deviations from the plumb line of the mullions, door jams
ARTHUR GOC-ONG, RICARDO GONZAGA, WILMA (sic) and concrete columns.[3] Respondents asked petitioners to
GONZALES, ALSON GRANADA, MERLIE GUILLERMO, repair their defective housing units but petitioners failed to do
GABRIEL HERNANDEZ JR., ANTONIO IBIS, HOMER so. Respondents had to repair their defective housing units
IMPERIAL, ROMEO JANOTO, EDGAR JERA, ROMEO LITO using their own funds. Hence, they prayed for actual and moral
JESURO, RODRIGO JUMALIN, FURTONATO JUSON, damages arising from petitioners breach of the contract plus
ARLYN LABOR, LETICIA LAGUNSAY, HAZEL MARIE exemplary damages and attorneys fees.
LINAO, VICENTA MIGUELITA LLOREN, MYRNA On December 11, 1998, petitioners filed a motion to dismiss the
LOFRANCO, ESTELA LOVITOS, LORNA MACATUAL, complaint, claiming that it was the Housing and Land Use
NELIA MADELO, MARIO MAGHANOY, GILBERT Regulatory Board (HLURB) and not the trial court which had
MAGHANOY, MARY ANN MANALO, ROGER MANAPOL, jurisdiction over the case. They also cited the defective
QUIRICO MARI, EMELITA MARTINEZ, MIRRIAM MASUELA, certification on non-forum shopping which was signed only by
MILAGROS MEDINA, SUSAN MELCHOR, AMELIA the president of EHSHA and not by all its members; such defect
MONDEJAR, PABLO MORENO JR., LAZARO NAMOCO, allegedly warranted the dismissal of the complaint. The trial
DARWIN NARAGA, FEDERICO NARAGA, GRACE NECOR, court denied petitioners motion to dismiss on the ground that the
MARY JEAN JAURIGUE NONOL, DANILO NOVERO SR., case fell within its jurisdiction, not with the HLURB, and that
BERNARDO NUEZ JR., RICARDO OBTINARIO, JOJO respondents certificate of non-forum shopping substantially
CAESAR OCAMPO, THELMA OLAC, JENNIFER OLARTE, complied with Rule 7, Section 5 of the 1997 Rules of Civil
ANTONIO PACE JR., RODRIGO PACHORO, NOLI Procedure. It also denied petitioners motion for reconsideration.
Aggrieved, petitioners filed the instant petition for certiorari,
IRENE PIAMONTE, GEORGE POPA, MARINA QUIONEZ, alleging that the trial court committed grave abuse of discretion
JOSEPHINE QUITAYEN, CERINA RABOR, HAIDE RAMOS, amounting to lack or in excess of jurisdiction in holding (1) that
SABAS RELACION III, ERICSON RELATADO, VICTORINO the case between petitioners and respondents fell within the
RELATORRES, RAQUEL RELLON, EDUARDO REVILLIEZA, jurisdiction of the civil courts and (2) that respondents had
RONNIE RIOJA, LUNESTO ROJAS, TEODORA DEL substantially complied with the rules on forum shopping despite
ROSARIO, LILIA ROSIL, FLORECITA SALERA, CARLITO the fact that only one of the 150 respondents had signed the
certificate therefor.
GLADYS JOY SEGISMUNDO, RENATO SELMA, NORMA Petitioners are correct that the case between them and
SULTAN, PRESCILLA TABAR, ANDRES TAC-AN JR., respondents fell within the jurisdiction of the HLURB, not the trial
RODOLFO TAJONERA JR., ELVIRA TALON, ALBERTO court. However, we cannot sustain petitioners contention that
TAMBA, LILIA TAMBA, SOLITA TAPANG, TERESA VALDEZ, respondents certificate of non-forum shopping was defective,

thus allegedly warranting the outright dismissal thereof by the shopping and thus, their complaint before it should not be
trial court. dismissed, we find that the trial court should have nonetheless
dismissed the complaint for a more important reason it had no
The general rule is that the certificate of non-forum shopping jurisdiction over it. It is the HLURB, not the trial court, which had
must be signed by all the plaintiffs in a case and the signature of jurisdiction over respondents complaint. The HLURB[8] is the
only one of them is insufficient.[4] However, the Court has also government agency empowered to regulate the real estate trade
stressed that the rules on forum shopping were designed to and business, having exclusive jurisdiction to hear and decide
promote and facilitate the orderly administration of justice and cases involving:
thus should not be interpreted with such absolute literalness as
to subvert its own ultimate and legitimate objective.[5] The strict (a) unsound real estate business practices;
compliance with the provisions regarding the certificate of non-
forum shopping merely underscores its mandatory nature in that (b) claims involving refunds and any other claims
the certification cannot be altogether dispensed with or its filed by subdivision lot or condominium unit buyers against the
requirements completely disregarded. It does not thereby project owner, developer, dealer, broker or salesman;
prohibit substantial compliance with its provisions under
(c) and cases involving specific performance of
justifiable circumstances.[6]
contractual and statutory obligations filed by buyers of
Thus in the recent case of Cavile, et al. vs. Heirs of Clarita subdivision lots or condominium units against the owner,
Cavile, et al.,[7] we ruled: developer, dealer, broker or salesman.[9]

[T]he execution by Thomas George Cavile, Sr., in behalf of all In this case, respondents complaint was for the reimbursement
the other petitioners of the certificate of non-forum shopping of expenses incurred in repairing their defective housing units
constitute substantial compliance with the Rules. All the constructed by petitioners. Clearly, the HLURB had jurisdiction
petitioners, being relatives and co-owners of the properties in to hear it. In the case of Arranza vs. B.F Homes, Inc.,[10] this
dispute, share a common interest thereon. They also share a Court ruled that:
common defense in the complaint for partition filed by
xxx the HLURB has jurisdiction over complaints arising from
respondents. Thus, when they filed the instant petition, they filed
contracts between the subdivision developer and the lot buyer
it as a collective, raising only one argument to defend their rights
or those aimed at compelling the subdivision developer to
over the properties in question. There is sufficient basis,
comply with its contractual and statutory obligations to make the
therefore, for Thomas George Cavile, Sr. to speak for and in
subdivision a better place to live in.[11]
behalf of his co-petitioners that they have not filed any action or
claim involving the same issues in another court or tribunal, nor The fact that the subject matter of the complaint involved
is there other pending action or claim in another court or tribunal defective housing units did not remove the complaint from the
involving the same issues. Moreover, it has been held that the HLURBs jurisdiction. The delivery of habitable houses was
merits of the substantive aspects of the case may be deemed petitioners responsibility under their contract with
as special circumstances for the Court to take cognizance of a respondents. The trial court should have granted the motion to
petition for review although the certification against forum dismiss filed by petitioners so that the issues therein could be
shopping was executed and signed by only one of the expeditiously heard and resolved by the HLURB.
WHEREFORE, the petition is hereby GRANTED. The March 15,
The above ruling is squarely applicable to the present 1999 order of the Regional Trial Court of Davao del Sur, Branch
case. Respondents (who were plaintiffs in the trial court) filed the 19, denying the petitioners motion to dismiss, is ANNULLED and
complaint against petitioners as a group, represented by their Civil Case No. 3731 before it (trial court) is hereby DISMISSED
homeowners association president who was likewise one of the for lack of jurisdiction. This is without prejudice to the re-filing of
plaintiffs, Mr. Samaon M. Buat. Respondents raised one cause the respondents complaint in the HLURB.
of action which was the breach of contractual obligations and
payment of damages. They shared a common interest in the SO ORDERED.
subject matter of the case, being the aggrieved residents of the
poorly constructed and developed Emily Homes
Subdivision. Due to the collective nature of the case, there was G.R. No. 164250 September 30, 2005
no doubt that Mr. Samaon M. Buat could validly sign the
certificate of non-forum shopping in behalf of all his co- OFFICE OF THE OMBUDSMAN and DENNIS M. VILLA-
plaintiffs. In cases therefore where it is highly impractical to IGNACIO, in his capacity as Special Prosecutor, Office of
require all the plaintiffs to sign the certificate of non-forum the Ombudsman, Petitioners,
shopping, it is sufficient, in order not to defeat the ends of justice, vs.
for one of plaintiffs, acting as representative, to sign the ATTY. GIL A. VALERA and COURT OF APPEALS* (Special
certificate provided that, as in Cavile et al., the plaintiffs share a First Division), Respondent.
common interest in the subject matter of the case or filed the
case as a collective, raising only one common cause of action DECISION
or defense.
In any case, even if it was correct for the trial court to rule that
respondents had substantially complied with the rules on forum
Before the Court is the petition for review on certiorari filed by connection with which, he intervenes or takes part in his official
the Office of the Ombudsman and Dennis M. Villa-Ignacio, in his capacity by way of causing the employment of his brother-in-law,
capacity as the Special Prosecutor, Office of the Ombudsman, Ariel Manongdo, thus, violating Section 3(h) of RA 3019 and RA
seeking the reversal of 6713 and Section 4, RA 3019 as against Ariel Manongdo.

__________________ Finally, investigation also disclosed that on April 21, 2002 Atty.
Gil A. Valera traveled to Hongkong with his family without proper
* No part. authority from the Office of the President in violation of Executive
Order No. 298 (foreign travel of government personnel) dated
the Decision1 dated June 25, 2004 of the Court of Appeals (CA)
May 19, 1995, thus, he committed an administrative offense of
in CA-G.R. SP No. 83091. The assailed decision set aside the
Grave Misconduct.6
Order dated March 17, 2004 issued by petitioner Special
Prosecutor Villa-Ignacio in OMB-C-A-03-0379-J placing The sworn complaint prayed that:
respondent Atty. Gil A. Valera, Deputy Commissioner, Office of
the Revenue Collection Monitoring Group, Bureau of Customs, 1) Appropriate preliminary investigation be conducted with the
under preventive suspension for a period of six months without end-in-view of filing the necessary information before the
pay. Sandiganbayan;

Factual and Procedural Antecedents 2) Pending investigation, Atty. Gil A. Valera be indefinitely
suspended from public office in order to prevent him from further
Respondent Valera was appointed Deputy Commissioner of the committing acts of irregularity in public office;
Bureau of Customs by President Gloria Macapagal-Arroyo on
July 13, 2001. He took his oath of office on August 3, 2001 and 3) This Group be furnished a copy of the Resolution of this (sic)
assumed his post on August 7, 2001. He is in charge of the cases.7
Revenue Collection Monitoring Group.
At about the same time as the filing of the complaint against
On August 20, 2003, the Office of the Ombudsman received the respondent Valera, Director Matillano also filed charges against
Sworn Complaint dated July 28, 2003 filed by then Director other officials of the Department of Public Works and Highways
Eduardo S. Matillano of the Philippine National Police Criminal (DPWH) and Bureau of Customs. The Philippine Daily Inquirer
Investigation and Detection Group (PNP-CIDG). In the said featured a news article on them with the title "More gov’t execs
sworn complaint, Director Matillano charged respondent Valera flunk lifestyle check."8
with criminal offenses involving violation of various provisions of
Republic Act (R.A.) No. 3019,2 the Tariff and Customs Code of Prior to Director Matillano’s sworn complaint, criminal and
the Philippines (TCCP), Executive Order No. 38,3 Executive administrative charges were also filed with the Office of the
Order No. 2984 and R.A. No. 67135 as well as administrative Ombudsman by Atty. Adolfo Casareño against respondent
offenses of Grave Misconduct and Serious Irregularity in the Valera. The complaint of Atty. Casareño contained similar
Performance of Duty. Likewise subject of the same sworn allegations as those in the complaint of Director Matillano in that
complaint was respondent Valera’s brother-in-law Ariel respondent Valera, without being duly authorized by the
Manongdo for violation of Section 4 of R.A. No. 3019. Commissioner of Customs, entered into a compromise
agreement with Steel Asia Manufacturing Corp. in Civil Case No.
The sworn complaint alleged that: 01-102504 to the prejudice of the government.

On January 30, 2002, while in the performance of his official The cases against respondent Valera before the Ombudsman
functions, Atty. Gil A. Valera had compromised the case against were docketed as follows:
the Steel Asia Manufacturing Corporation in Civil Case No. 01-
102504 before Branch 39, RTC, Manila without proper authority OMB-C-C-02-0568-I (For: Violation of Sec. 3(e), R.A. 3019, as
from the Commissioner of the Bureau of Customs in violation of amended, and Section 3604 of the Tariff and Customs Code)
Section 2316 TCCP (Authority of Commission to make entitled Alfredo Casareño v. Gil A. Valera and Antonio M.
Compromise) and without the approval of the President, in Lorenzana
violation of Executive Order No. 156 and Executive Order No.
OMB-C-C-03-0547-J (For: Violation of Sec. 3(e), (g) and (h) of
38. Such illegal acts of Atty. Gil A. Valera, indeed, caused undue
R.A. 3019, as amended) entitled PNP-CIDG v. Gil A. Valera and
injury to the government by having deprived the government of
Ariel N. Manongdo
its right to collect the legal interest, surcharges, litigation
expenses and damages and gave the Steel Asia unwarranted OMB-C-A-0379-J (For: Grave Misconduct and Serious
benefits in the total uncollected amount of FOURTEEN Irregularity in the Performance of Duty) entitled PNP-CIDG v. Gil
CENTAVOS (₱14,762,467.70), which is violative of Sections On November 12, 2003, Ombudsman Simeon V. Marcelo issued
3(e) and (g) respectively of RA 3019. a Memorandum9 inhibiting himself from the foregoing criminal
cases as well as the related administrative case and directing
Further investigation disclosed that Atty. Gil A. Valera while petitioner Special Prosecutor Villa-Ignacio to act in his (the
being a Bureau of Customs official directly and indirectly had Ombudsman’s) stead and place. The said memorandum reads:
financial or pecuniary interest in the CACTUS CARGOES
SYSTEMS a brokerage whose line of business or transaction, in MEMORANDUM
TO : HON. DENNIS M. VILLA-IGNACIO Misconduct and/or Dishonesty which may warrant his removal
from the service, it is hereby declared that the requirements
Special Prosecutor under Section 24 of R.A. No. 6770, in relation to Sec. 9, Rule III
of Administrative Order No. 7, on the Rules of Procedure of the
Office of the Special Prosecutor
Office of the Ombudsman, as amended, are present, and
SUBJECT : OMB-C-C-02-0568-I entitled "Alfredo Casareño placing respondent Deputy Commissioner Valera under
preventive suspension pending administrative investigation on
vs. Gil Valera, et al.," CPL No. C-03-1829 entitled the matter for a period of six (6) months without pay is clearly
"PNP-CIDG vs. Atty. Gil Valera and Ariel Manongdo" and OMB-
C-A-0379-J entitled "PNP-CIDG vs. Atty. Gil Valera" The decretal portion of the March 17, 2004 Order reads:
DATE : November 12, 2003 WHEREFORE, pursuant to Sec. 24 of R.A. No. 6770, otherwise
known as the Ombudsman Act of 1989, in relation to Sec. 9,
Rule III of Administrative Order No. 7, respondent ATTY. GIL A.
VALERA, Deputy Commissioner, Office of the Collection and
The undersigned is inhibiting himself in the above-captioned Monitoring Group, Bureau of Customs, is hereby placed under
cases. Please act in his stead and place. preventive suspension for SIX (6) MONTHS WITHOUT PAY.

(Sgd.) SIMEON V. MARCELO Pursuant to Sec. 27(1) of R.A. No. 6770, this Order of Preventive
Suspension is deemed immediately effective and executory.
The Honorable Commissioner Antonio M. Bernard, Bureau of
(Ombudsman) Customs, is hereby directed to implement the Order immediately
upon receipt hereof and to promptly inform this Office of
On March 17, 2004, pursuant to the above memorandum, compliance herewith.
petitioner Special Prosecutor Villa-Ignacio, in the administrative
case OMB-C-A-0379-J, issued the Order placing respondent Respondent Atty. Gil A. Valera, Deputy Commissioner, Office of
Valera under preventive suspension for six months without pay. the Collection and Monitoring Group, Bureau of Customs, is
In the said order, petitioner Special Prosecutor Villa-Ignacio hereby ordered to file his counter-affidavit and other
found that respondent Valera entered into the compromise controverting evidence to the complaint, copy of which together
agreement with Steel Asia Manufacturing Corp. in Civil Case No. with the annexes, is hereto attached, within ten (10) days from
01-102504 without being duly authorized to do so by the receipt hereof in three (3) legible copies addressed to the
Commissioner of Customs and without the approval of the Central Records Division, Office of the Ombudsman,
Secretary of Finance in violation of Section 231610 of the TCCP. Ombudsman Building, Agham Road, Government Center, North
Triangle, Diliman, Quezon City, furnishing the complainant with
As earlier mentioned, Civil Case No. 01-102504 was a collection a copy of said counter-affidavit.
suit filed by the Republic of the Philippines represented by the
Bureau of Customs against Steel Asia Manufacturing Corp. for Further, respondent is also ordered to submit proof of service of
payment of duties and taxes amounting to ₱37,195,859.00. The his counter-affidavit to the complaint, who may file its reply
said amount was allegedly paid by Steel Asia Manufacturing thereto within a period of ten (10) days from receipt of the same.
Corp. with spurious tax credit certificates. In addition to the
principal amount, the government likewise demanded payment Failure to comply as herein directed within the period prescribed
of penalty charges (25% thereof), legal interest from date of by the rules shall be deemed as a waiver of the right to submit
demand, litigation expenses and exemplary damages. the party’s counter-affidavit or reply, nonetheless, despite said
non-filing, the investigation shall proceed pursuant to existing
Petitioner Special Prosecutor Villa-Ignacio made the finding that rules.
by entering into the said compromise agreement whereby Steel
Asia Manufacturing Corp. shall pay the overdue taxes and duties This Order is being issued by the undersigned in view of the
in thirty (30) monthly installments of ₱1,239,862 from January inhibition of the Honorable Tanodbayan Simeon Marcelo from
2002 to June 2004, respondent Valera may have made his case as contained in a Memorandum dated 12 November
concessions that may be deemed highly prejudicial to the 2003.
government, i.e., waiver of the legal interest from the amount
demanded, penalty charges imposed by law, litigation expenses
and exemplary damages. Further, by the terms of the Respondent Valera sought reconsideration of the said Order
compromise agreement, respondent Valera had virtually claiming denial of due process. He averred that he had already
exonerated Steel Asia Manufacturing Corp. of its fraudulent acts submitted his counter-affidavit refuting the charges leveled
of using spurious tax credit certificates. against him by the PNP-CIDG way back on November 6, 2003.
He pointed out that Director Matillano’s sworn complaint was
Petitioner Special Prosecutor Villa-Ignacio concluded the Order
filed on August 20, 2003 and it was only two months later or on
dated March 17, 2004 by stating that "[c]onsidering the strong
October 22, 2003 that the Ombudsman found enough basis to
evidence of guilt of respondent Deputy Commissioner Valera
proceed with the administrative investigation of the case by
and the fact that the charges against him consist of Grave
requiring respondent Valera to file his counter-affidavit. He did
so on November 6, 2003. During the said period of two months, which vests on the "Ombudsman and his Deputy" the power to
the Preliminary Investigation and Administrative Adjudication preventively suspend any government officer or employee under
Bureau-A (PIAB-A) of the Office of the Ombudsman did not find the Ombudsman’s authority pending investigation subject to
enough bases to preventively suspend him. According to certain conditions. In relation thereto, Section 5, Article XI of the
respondent Valera, he was at a loss as to why it was only then Constitution was also cited as it states that the Office of the
(March 17, 2004) that he was being placed under preventive Ombudsman is "composed of the Ombudsman to be known as
suspension. the Tanodbayan, one overall Deputy, and at least one Deputy
each for Luzon, Visayas and Mindanao. A separate Deputy for
Acting on respondent Valera’s motion for reconsideration, the military establishment may likewise be appointed."
petitioner Special Prosecutor Villa-Ignacio issued the Order
dated April 5, 2004 explaining that the delay in the issuance of Relying on these two provisions of law, the CA declared that
the preventive suspension order was due to the inhibition of the petitioner Special Prosecutor Villa-Ignacio has no authority to
Ombudsman from the case and for which reason, he (petitioner issue a preventive suspension order since he is neither the
Special Prosecutor Villa-Ignacio), by virtue of the Memorandum Ombudsman nor one of the Deputy Ombudsmen.
dated November 12, 2003, had to act in his place and stead.
Petitioner Special Prosecutor Villa-Ignacio averred that contrary The CA was not persuaded by petitioner Special Prosecutor
to respondent Valera’s assertion, his counter-affidavit would not Villa-Ignacio’s contention that his authority to issue the March
justify the reversal of the March 17, 2004 Order since he failed 17, 2004 Order of preventive suspension could be found in
to show that he had the requisite authority from the Section 11(4)(c) of R.A. No. 6770 which provides that the Office
Commissioner of Customs to enter into the said compromise of the Special Prosecutor shall, in addition to those powers
agreement with respect to the Steel Asia Manufacturing Corp. expressly enumerated in the said provision, "perform such other
case. It was not shown under what authority and on what basis duties assigned to it by the Ombudsman." The CA held that the
respondent Valera entered into the said compromise grant of such power to the Office of the Special Prosecutor is
agreement. subject to the condition that it shall be "under the supervision
and control and upon the authority of the Ombudsman."
In light of the foregoing ratiocination, petitioner Special
Prosecutor Villa-Ignacio denied respondent Valera’s motion for However, according to the CA, by virtue of the Memorandum
reconsideration. The decretal portion of his Order dated April 5, dated November 12, 2003 of Ombudsman Marcelo where he
2004 reads: stated that he was inhibiting himself and directing petitioner
Special Prosecutor Villa-Ignacio to act in his place and stead,
WHEREFORE, the undersigned finds no cogent reason to the latter (petitioner Special Prosecutor) officially stepped into
reconsider the suspension order previously issued dated 17 the position of the Ombudsman insofar as the subject case is
March 2004 but considers the Counter-Affidavit received by the concerned. In effect, petitioner Special Prosecutor Villa-Ignacio
Office of the Ombudsman 06 November 2003 as sufficient would act as the Ombudsman. The CA opined that this is not the
compliance to the portion of the assailed Order directing him to kind of duties contemplated under Section 11(4)(c) of R.A. No.
file his counter-affidavit. Consequently, the Order insofar as it 6770.
requires him to file counter-affidavit contained in the 17 March
200[4] Order is SET ASIDE.13 Ombudsman Marcelo’s Memorandum dated November 12,
2003 was declared null and void by the appellate court for the
Even before his motion for reconsideration was acted upon, following reasons:
however, respondent Valera already filed with the Court of
Appeals a special civil 1. The issuance of that kind of a memorandum effectively
action for certiorari and prohibition as he sought to nullify the stretched (or over-stretched) the limited powers of the special
March 17, 2004 Order of preventive suspension issued by prosecutor under R.A. No. 6770 and the Constitution;
petitioner Special Prosecutor Villa-Ignacio and to enjoin
2. The issuance of that kind of a memorandum has effectively
Commissioner of Customs Antonio M. Bernardo from
placed the special prosecutor over and above all of the five (5)
implementing the said Order.
deputies of the Ombudsman in terms of hierarchy with respect
On April 16, 2004, the appellate court heard the parties on oral to administrative adjudication;
arguments on the prayer for injunction. On even date, it issued
3. To put it lightly, the Ombudsman, in issuing that kind of a
a temporary restraining order against the implementation of the
memorandum, has, wittingly or unwittingly, permitted the Office
preventive suspension order.
of the Special Prosecutor to perform the administrative
On June 25, 2004, the appellate court rendered the assailed adjudicative powers of the Ombudsman not only to issue
Decision setting aside the March 17, 2004 Order of preventive preventive suspension but to perform, without qualification, any
suspension and directing petitioner Special Prosecutor Villa- and all other administrative adjudicative powers, duties functions
Ignacio to desist from taking any further action in OMB-C-A-03- and responsibilities pertaining to the former as provided under
0379-J. R.A. No. 6770 and the Constitution.14

In so ruling, the CA held mainly that petitioner Special In addition, the CA refuted the finding of petitioner Special
Prosecutor Villa-Ignacio is not authorized by law to sign and Prosecutor Villa-Ignacio that the evidence of guilt against
issue preventive suspension orders. It cited Section 24 of R.A. respondent Valera is strong to warrant his preventive
No. 6770, otherwise known as "The Ombudsman Act of 1989," suspension. The CA proffered the following circumstances as

negating the said finding of petitioner Special Prosecutor Villa- PROSECUTOR THE SPECIFIC FUNCTION OF ACTING IN
Ignacio: (1) Unlike the other four government officials who were HIS (OMBUDSMAN’S) PLACE AND STEAD IN OMB-C-A-
simultaneously charged with him, respondent Valera was not 030379-J, AND THIS DELEGATION OF AUTHORITY
immediately placed under preventive suspension; hence, SUFFERS FROM NO VICE OR DEFECT AND, ON THE
indicating that there was no strong evidence against him; (2) CONTRARY, HAS THE FULL MANDATE OF THE LAW.
Petitioner Special Prosecutor Villa-Ignacio’s comment filed with
the appellate court did not make any reference to respondent II
Valera’s supposed foreign travel violation which was alleged in
the sworn complaint of Director Matillano; and (3) The admission
of petitioner Special Prosecutor Villa-Ignacio’s counsel during
the oral arguments on the preliminary injunction that the PIAB-A
recommended against placing respondent Valera under
preventive suspension.
Finally, the CA strongly denounced petitioner Special
Prosecutor Villa-Ignacio for issuing the preventive suspension PRIVATE RESPONDENT’S PETITION FILED BEFORE THE
order without even considering respondent Valera’s counter- COURT A QUO SHOULD HAVE BEEN DISMISSED FOR
affidavit and, worse, not knowing that he had already filed it as VIOLATION OF THE RULE ON FORUM SHOPPING.17
early as November 5, 2003. The CA opined that had petitioner
Special Prosecutor Villa-Ignacio duly considered the said The petitioners vigorously maintain that no grave abuse of
counter-affidavit, he would have reached a different discretion attended the issuance by petitioner Special
conclusion, i.e., there is no strong evidence against respondent Prosecutor Villa-Ignacio of the March 17, 2004 Order placing
Valera. Further, that the latter, in entering into the compromise respondent Valera under preventive
agreement with Steel Asia Manufacturing Corp., is authorized to suspension because the Ombudsman, in directing petitioner
do so under Section 240115 of the TCCP and Section 2316 Special Prosecutor Villa-Ignacio to act in his place and stead
thereof, cited by petitioner Special Prosecutor Villa-Ignacio, is insofar as OMB-C-A-03-0379-J was concerned, fully clothed the
inapplicable. The CA concluded that petitioner Special latter with delegated authority to act thereon. Since under
Prosecutor Villa-Ignacio acted with grave abuse of discretion in Section 24 of R.A. No. 6770, the Ombudsman may preventively
issuing the March 17, 2004 placing respondent Valera under suspend respondent Valera in the subject administrative case, it
preventive suspension for six months without pay in connection follows that with the delegation of his authority to petitioner
with the administrative case OMB-C-A-03-0379-J. Special Prosecutor Villa-Ignacio, he had full authority to
preventively suspend respondent Valera. Petitioner Special
The decretal portion of the decision of the appellate court reads: Prosecutor Villa-Ignacio, upon finding that all the elements for
preventive suspension in Section 24 of R.A. No. 6770 are
WHEREFORE, the petition is hereby GRANTED, and the
present, accordingly placed respondent Valera under preventive
assailed order of March 17, 2004, issued by respondent Dennis
suspension for six months without pay in connection with the
Villa-Ignacio in OMB-C-A-03-0379-J is SET ASIDE.
subject administrative case.
Respondent Special Prosecutor is DIRECTED to desist from
The petitioners defend the validity of the Ombudsman’s
taking any further action in OMB-C-A-03-0379-J.
delegation of his authority to petitioner Special Prosecutor Villa-
SO ORDERED.16 Ignacio with respect to the administrative case OMB-C-A-03-
0379-J contending that: "a) the authority to preventively suspend
Hence, the recourse to this Court by petitioners Special is not insusceptible to delegation to an alter ego of the
Prosecutor Villa-Ignacio and the Office of the Ombudsman. Ombudsman; b) the petitioner Special Prosecutor possessed
the necessary qualifications and competence to exercise the
The Petitioners’ Case delegated functions; c) no law or rule was violated with the said
They submit the following as grounds for the allowance of their
petition: Nothing in Section 24 of R.A. No. 6770 allegedly prohibits the
delegation by the Ombudsman of his authority to preventively
suspend to his alter ego. The petitioners point out that under
R.A. No. 6770, the Special
Prosecutor, like the Deputy Ombudsmen, heads a major office
in the Office of the Ombudsman;19 he is appointed in the same
manner as the Deputy Ombudsmen;20 he shares the same
qualifications21 and enjoys the same rank and privilege as the
latter.22 As such, the Special Prosecutor, like any of the other
I Deputy Ombudsmen, has the competence and capability to
preventively suspend any officer or employee under the

The petitioners invoke, in particular, Section 11(4)(c) of R.A. No. Villa-Ignacio to study the recommendation of the PIAB-A and the
6770: divergent recommendation of the Assistant Ombudsman for
Preliminary Investigation, Adjudication and Monitoring Office
Sec. 11. Structural Organization. – (PAMO).
… Moreover, even if the PIAB-A recommended against placing
respondent Valera under preventive suspension, petitioner
(4) The Office of the Special Prosecutor shall, under the
Special Prosecutor Villa-Ignacio was not bound to adopt the
supervision and control and upon the authority of the
same. With respect to respondent Valera’s counter-affidavit, the
Ombudsman, have the following powers:
petitioners insist that the same failed to rebut the strong
… evidence against him; hence, justifying his preventive
(c) To perform such other duties assigned to it by the
Ombudsman. Finally, the petitioners fault the appellate court for not dismissing
outright respondent Valera’s petition for certiorari. They charge
By this provision, the Ombudsman may allegedly validly him with violation of the rule on non-forum shopping as he filed
delegate to the Special Prosecutor such other functions that he his petition for certiorari with the CA even when his motion for
cannot, otherwise, perform by himself and that he (the reconsideration had yet to be acted upon by petitioner Special
Ombudsman) is not obliged to always make such delegation to Prosecutor Villa-Ignacio.
the Overall Deputy Ombudsman. In the exercise of quasi-judicial
functions, there is no law which mandates that the Ombudsman The Respondent’s Counter-Arguments
can only inhibit himself in favor of the Deputy Ombudsmen.
Respondent Valera mainly argues that petitioner Special
The petitioners assert that the evidence of respondent Valera’s Prosecutor Villa-Ignacio has no authority to issue the March 17,
guilt for serious administrative infractions is strong. According to 2004 Order placing him under preventive suspension. While
them, the facts that have so far been established show that Section 11(4)(c) of R.A. No. 6770 grants the Office of the Special
respondent Valera entered into the compromise agreement with Prosecutor the power to "perform such other duties assigned to
Steel Manufacturing Asia Corp. to unduly shield and promote its it by the Ombudsman," the performance of such other duties
interests and to the prejudice of the government. It is allegedly should still be "under the supervision and control and upon the
suspicious that he (respondent Valera) simply allowed the said authority of the Ombudsman." Respondent Valera echoes the
company to redeem the spurious tax credit certificates with a 30- ratiocination of the CA that the Memorandum dated November
month staggered payment when sufficient properties of the said 12, 2003 issued by Ombudsman Marcelo directing petitioner
company had already been attached to satisfy not only the ₱37 Special Prosecutor Villa-Ignacio to act in his place and stead in
million principal amount of taxes owed by the said company but OMB-C-A-03-0379-J produced the effect of making him
the penalty charges and damages as well. He further (petitioner Special Prosecutor) step into the position of the
unjustifiably exonerated the said company’s officers of any Ombudsman. This is not the kind of assignment of duties
criminal wrongdoing when they are conclusively liable for the contemplated by Section 11(4)(c) of R.A. No. 6770 because, in
procurement of these spurious tax credit certificates. Further, such a case, the Ombudsman’s power of supervision and
respondent Valera was never authorized by the Customs control over the Special Prosecutor is undermined.
Commissioner to enter into such compromise agreement nor
Respondent Valera submits that the Ombudsman’s
was it approved by the Secretary of Finance as required by
memorandum designating petitioner Special Prosecutor Villa-
Section 2316 of the TCCP. Neither was it approved by the
Ignacio to act in his place and stead has destroyed the hierarchy
President of the Philippines as further required by E.O. No. 38.
of command within the Office of the Ombudsman because it put
Respondent Valera thus committed an act of misrepresentation
the Special Prosecutor over and above the Office of the Overall
when he signed the compromise agreement under the clause
Deputy Ombudsman. Such designation infringes on Section
"By authority of the Commissioner."
11(2) of R.A. No. 6770 which provides that the Overall Deputy
The petitioners posit that conclusively at the given stage Ombudsman "shall oversee and administer the operations of the
respondent Valera appeared to have committed Grave different offices under the Office of the Ombudsman." The
Misconduct and Dishonesty to warrant his preventive Overall Deputy Ombudsman is next in line to the Ombudsman
suspension. They also aver that the evidence strongly show that as shown by the fact that he assumes as Acting Ombudsman in
respondent Valera obtained employment for his brother-in-law, case of vacancy in the Office of the Ombudsman due to death,
Ariel Manongdo, with Cactus Cargo Systems, Inc., a customs resignation, removal or permanent disability of the incumbent
brokerage firm whose business principally involves dealing on a Ombudsman.
regular basis with the Bureau of Customs, in contravention of
Respondent Valera stresses that the power to preventively
R.A. No. 6713 and R.A. No. 3019.
suspend any officer or employee under the authority of the
To refute the appellate court’s statement that there was Ombudsman pending investigation is exclusively vested on the
inordinate delay in the issuance of the March 17, 2004 Order of Ombudsman or his Deputy pursuant to Section 24 of R.A. No.
preventive suspension, the petitioners explain that the same 6770. Since the Special Prosecutor is not named therein as
was due to, among others, the inhibition of the Ombudsman vested with the said power, then petitioner Special Prosecutor
from the case, the delay in the transmittal of the case records Villa-Ignacio has no authority to issue a preventive suspension.
and the amount of time that it took petitioner Special Prosecutor
In relation thereto, the Special Prosecutor’s powers is allegedly The basic issue for the Court’s resolution is whether petitioner
limited to the conduct of preliminary investigation and Special Prosecutor Villa-Ignacio has the authority to place
prosecution of criminal cases within the jurisdiction of the respondent Valera under preventive suspension in connection
Sandiganbayan. Respondent Valera cites the enumeration of with the administrative case OMB-C-A-03-0379-J pending
the Special Prosecutor’s powers in Section 11(4) of R.A. No. before the Office of the Ombudsman.
The Court’s Ruling
Sec. 11. Structural Organization. –
The Court holds that the Special Prosecutor has no such
… authority.

(4) The Office of the Special Prosecutor shall, under the Preliminarily, it is noted that petitioner Special Prosecutor Villa-
supervision and control and upon the authority of the Ignacio anchors his authority to conduct the administrative
Ombudsman, have the following powers: investigation in OMB-C-A-03-0379-J on the Memorandum dated
November 12, 2003 issued by Ombudsman Marcelo inhibiting
(a) To conduct preliminary investigation and prosecute criminal himself therefrom and directing petitioner Special Prosecutor
cases within the jurisdiction of the Sandiganbayan; Villa-Ignacio to act in his place and stead.
(b) To enter into plea bargaining agreement; and Significantly, Ombudsman Marcelo did not state in the said
memorandum the reason for his inhibition. On this point, the rule
(c) To perform such other duties assigned to it by the
on voluntary inhibition of judges finds application to the
Ombudsman in the performance of his functions particularly in
Applying the rule of ejusdem generis, respondent Valera administrative proceedings like OMB-C-A-03-0379-J. Like
theorizes that since the first two powers relate to criminal judges, the decision on whether or not to inhibit is admittedly left
complaints and criminal cases, then the last power – "to perform to the Ombudsman’s sound discretion and
such other duties assigned to it by the Ombudsman" – can only conscience.23 However, again similar to judges, Ombudsman
refer to other duties related to criminal complaints and criminal Marcelo has no unfettered discretion to inhibit himself. The
cases and not to administrative complaints, investigation, inhibition must be for just and valid causes. 24 No such cause
adjudication and administrative preventive suspension. While he was proffered by Ombudsman Marcelo for his inhibition in OMB-
concedes that the Ombudsman may inhibit himself in certain C-A-03-0379-J.
cases, respondent Valera is of the view that when the
The Court shall now proceed to resolve the basic issue of the
Ombudsman does inhibit himself in an administrative
investigation pending before the Office of the Ombudsman, he
may not designate the Special Prosecutor to act in his place and The Ombudsman, pursuant to his power of
supervision and control over the Special
Respondent Valera also harps on petitioner Special Prosecutor
Villa-Ignacio’s alleged failure to consider his (respondent Prosecutor, may authorize the latter to
Valera’s) counter-affidavit before issuing the preventive
suspension order. This omission coupled with the delay in conduct administrative investigation
issuing the same allegedly renders the March 17, 2004 Order
The Office of the Ombudsman is vested by the Constitution with
null and void.
the following powers, functions and duties:
On the evidence against him, respondent Valera claims that the
(1) Investigate on its own, or on complaint by any person, any
same is not strong. He cites the delay in placing him under
act or omission of any public official, employee, office or agency,
preventive suspension as he alleges that the first complaint
when such act or omission appears to be illegal, unjust,
involving the Steel Manufacturing Asia Corp. case was filed
improper, or inefficient;
against him by Atty. Casareño as early as August 26, 2002.
However, it was only on March 17, 2004 that he was placed (2) Direct, upon complaint or at its own instance, any public
under preventive suspension by petitioner Special Prosecutor official or employee of the Government, or any subdivision,
Villa-Ignacio. The strength of the evidence against him is also agency or instrumentality thereof, as well as of any government-
belied by the fact that the PIAB-A recommended against placing owned and controlled corporation with original charter, to
him under preventive suspension. perform and expedite any act or duty required by law, or to stop,
prevent and correct any abuse or impropriety in the performance
On the procedural point, respondent Valera states that he filed
of duties;
the petition for certiorari with the CA without awaiting the
resolution of his motion for reconsideration because, at the time, (3) Direct the officer concerned to take appropriate action
petitioner Special Prosecutor Villa-Ignacio still had not resolved against a public official or employee at fault, and recommend his
the same despite the lapse of the period provided by the removal, suspension, demotion, fine, censure, or prosecution,
Ombudsman’s rules of procedure. and ensure compliance therewith;
Issue (4) Direct the officer concerned, in any appropriate case, and
subject to such limitations as may be provided by law to furnish

it with copies of documents relating to contracts or transactions lawmakers did not intend to confine the investigatory and
entered into by his office involving the disbursement or use of prosecutory power of the Ombudsman to these types of cases.
public funds or properties, and report any irregularity to the The Ombudsman is mandated by law to act on all complaints
Commission on Audit for appropriate action; against officers and employees of the government and to
enforce their administrative, civil and criminal liability in every
(5) Request any government agency for assistance an case where the evidence warrants. To carry out this duty, the
information necessary in the discharge of its responsibilities, and law allows him to utilize the personnel in his office and/or
to examine, if necessary, pertinent and records and documents; designate any fiscal, state prosecutor or lawyer in the
government service to act as special investigator or prosecutor
(6) Publicize matters covered by its investigation when
to assist in the investigation and prosecution of certain cases.
circumstances so warrant and with due prudence;
Those designated or deputized to assist him work under his
(7) Determine the causes of inefficiency, red tape, supervision and control. The law likewise allows him to direct the
mismanagement, fraud and corruption in the Government and Special Prosecutor to prosecute cases outside the
make recommendations for their elimination and the observance Sandiganbayan’s jurisdiction in accordance with Section 11(4c)
of high standards of ethics and efficiency; and of R.A. 6770.31

(8) Promulgate its rules of procedure and exercise such other The Court has consistently held that the Office of the Special
powers or perform such functions or duties as may be provided Prosecutor is merely a component of the Office of the
by law.25 Ombudsman and may only act under the supervision and control
and upon authority of the Ombudsman.32
R.A. No. 6770 was enacted to provide for the functional and
structural organization of the Office of the Ombudsman. It Section 38(1), Chapter 7, Book IV of the Administrative Code of
substantially reiterates the constitutional provisions relating to 1987 defines "supervision and control" thus:
the Office of the Ombudsman. In addition, R.A. No. 6770
(1) Supervision and Control. – Supervision and control shall
granted to the Office of the Ombudsman prosecutorial
include authority to act directly whenever a specific function is
functions26 and made the Office of the Special Prosecutor an
entrusted by law or regulation to a subordinate; direct the
organic component of the Office of the Ombudsman.27 As such,
performance of duty; restrain the commission of acts; review,
R.A. No. 6770 vests on the Office of the Special Prosecutor,
approve, reverse or modify acts and decisions of subordinate
under the supervision and control and upon the authority of the
officials or units; determine priorities in the execution of plans
Ombudsman, the following powers:
and programs; and prescribe standards, guidelines, plans and
(a) To conduct preliminary investigation and prosecute criminal programs. Unless a different meaning is explicitly provided in the
cases within the jurisdiction of the Sandiganbayan; specific law governing the relationship of particular agencies, the
word "control" shall encompass supervision and control as
(b) To enter into plea bargaining agreement; and defined in this paragraph.
(c) To perform such other duties assigned to it by the The power of supervision and control has been likewise
Ombudsman.28 explained as follows:
Based on the pertinent provisions of the Constitution and R.A. In administrative law, supervision means overseeing or the
No. 6770, the powers of the Ombudsman have generally been power or authority of an officer to see that subordinate officers
categorized into the following: investigatory power; prosecutory perform their duties. If the latter fail or neglect to fulfill them, the
power; public assistance functions; authority to inquire and former may take such action or step as prescribed by law to
obtain information; and function to adopt, institute and make them perform such duties. Control, on the other hand,
implement preventive measures.29The Ombudsman’s means the power of an officer to alter or modify or nullify or set
investigatory and prosecutory power has been characterized as aside what a subordinate officer had done in the performance of
plenary and unqualified: his duties and to substitute the judgment of the former for that of
the latter.33
The power to investigate and to prosecute granted by law to the
Ombudsman is plenary and unqualified. It pertains to any act or Pursuant to its power of supervision and control, the Office of
omission of any public officer or employee when such act or the Ombudsman is empowered under Section 15(10) of R.A.
omission appears to be illegal, unjust, improper or inefficient…30 No. 6770 to:
On the other hand, the authority of the Office of the Special (10) Delegate to the Deputies, or its investigators or
Prosecutor has been characterized as limited: representatives such authority or duty as shall ensure the
effective exercise or performance of the powers, functions, and
Moreover, the jurisdiction of the Office of the Ombudsman
duties herein or hereinafter provided;
should not be equated with the limited authority of the Special
Prosecutor under Section 11 of R.A. 6770. The Office of the …
Special Prosecutor is merely a component of the Office of the
Ombudsman and may act only under the supervision and control Complementary thereto, Section 11(4)(c) thereof requires the
and upon the authority of the Ombudsman. Its power to conduct latter to:
preliminary investigation and prosecute is limited to criminal
cases within the jurisdiction of the Sandiganbayan. Certainly, the
(c) [p]erform such other duties assigned to it by the Sec. 12. The Ombudsman and his Deputies, as protectors of the
Ombudsman. people, shall act promptly on complaints filed in any form or
manner against public officials or employees of the Government,
Hence, under the foregoing provisions, the Ombudsman may or any subdivision, agency, or instrumentality thereof, including
delegate his investigatory function, including the power to government-owned or controlled corporations, and shall, in
conduct administrative investigation, to the Special Prosecutor. appropriate cases, notify the complainants of the action taken
and the result thereof.42
Section 24 of R.A. No 6770, however, grants
While R.A. No. 6770 accords the Special Prosecutor the same
the power to preventively suspend only to the
rank as that of the Deputy Ombudsmen, Section 24 thereof
Ombudsman and the Deputy Ombudsmen expressly grants only to the Ombudsman and the Deputy
Ombudsmen the power to place under preventive suspension
Section 24 of R.A. No. 6770 reads: government officials and employees under their authority
pending an administrative investigation.43
Sec. 24. Preventive Suspension. – The Ombudsman and his
Deputy may preventively suspend any officer or employee under However, if the Ombudsman delegates his authority to conduct
his authority pending an investigation, if in his judgment the administrative investigation to the Special Prosecutor and the
evidence of guilt is strong, and (a) the charge against such latter finds that the preventive suspension of the public official or
officer or employee involves dishonesty, oppression or grave employee subject thereof is warranted, the Special Prosecutor
misconduct or neglect in the performance of duty; (b) the may recommend to the Ombudsman to place the said public
charges would warrant removal from the service; or (c) the officer or employee under preventive suspension.
respondent’s continued stay in office may prejudice the case
filed against him. Pertinently, the investigation of OMB-C-A-03-0379-J was initially
conducted by the PIAB-A, a panel composed of two Special
The preventive suspension shall continue until the case is Prosecution Officers III44 and Graft Investigation and
terminated by the Office of the Ombudsman but not more than Prosecution Officers II.45 The said investigating panel submitted
six months, without pay, except when the delay in the disposition to the Ombudsman the Memorandum dated November 5, 2003
of the case by the Office of the Ombudsman is due to the fault, which contained its initial findings stating in part thus:
negligence or petition of the respondent, in which case the
period of such delay shall not be counted in computing the After a careful evaluation of the complaint, it appears that the
period of suspension herein provided. evidence of guilt in the case under review, in the context of Sec.
24, R.A. 6770, are not strong enough to warrant the imposition
It is observed that R.A. No. 6770 has invariably mentioned the of preventive suspension of respondent Atty. Gil A. Valera. The
Special Prosecutor alongside the Ombudsman and/or the evidence on record fall short of the quantum of evidence
Deputy Ombudsmen with respect to the manner of necessary to establish the necessary weight to preventively
appointment,34 qualifications,35 term of office,36 suspend him. However, the Investigating Panel finds enough
grounds for removal from office,37 prohibitions and basis to proceed with the administrative investigation of this
disqualifications38 and disclosure of relationship case.46
requirement.39However, with respect to the grant of the power to
preventively suspend, Section 24 of R.A. No 6770 makes no It appears in the signatory page of the said memorandum that
mention of the Special Prosecutor. The obvious import of this the findings and recommendation therein were reviewed by the
exclusion is to withhold from the Special Prosecutor the power Director47 of the PIAB-A. Further, the memorandum was,
to preventively suspend. It is a basic precept of statutory likewise, reviewed by the Assistant Ombudsman, 48 Preliminary
construction that the express mention of one person, thing, act Investigation, Adjudication and Monitoring Office (PAMO) with
or consequence excludes all others as expressed in the familiar the notation "recommending disapproval." This demonstrates
maxim expressio unius est exclusio alterius.40 that in the conduct of administrative investigation, the PIAB-A
exercises merely recommendatory powers particularly with
The petitioners’ contention that since the Special Prosecutor is respect to whether to place the public official or employee
of the same rank as that of a Deputy Ombudsman, then the subject thereof under preventive suspension.
former can rightfully perform all the functions of the latter,
including the power to preventively suspend, is not persuasive. Ombudsman Marcelo designated the Special Prosecutor to
Under civil service laws, rank classification determines the conduct the administrative investigation. In the course thereof,
salary and status of government officials and petitioner Special Prosecutor Villa-Ignacio found that the
employees.41 Although there is substantial equality in the level preventive suspension of respondent Valera was warranted
of their respective functions, those occupying the same rank do under Section 24 of R.A. No. 6770. However, since under the
not necessarily have the same powers nor perform the same said provision only the Ombudsman or his Deputy may exercise
functions. the power of preventive suspension, petitioner Special
Prosecutor Villa-
The Ombudsman and the Deputy Ombudsmen, as they are Ignacio could only recommend to the Ombudsman or, in this
expressly named in Section 24 of R.A. No. 6770, have been case because of the latter’s inhibition, to the designated Deputy
granted the power to preventively suspend as the same inheres Ombudsman to place respondent Valera under preventive
in their mandate under the Constitution: suspension.

Stated differently, with respect to the conduct of administrative Antonio Bernas for alleged violations of Article 172 of the
investigation, the Special Prosecutor’s authority, insofar as Revised Penal Code and Code of professional Resposibility. In
preventive suspension is concerned, is akin to that of the PIAB- his complaint-affidavit [1] dated August 12, 1996, complainant
A, i.e., recommendatory in nature. It bears stressing that the alleged as follows:
power to place a public officer or employee under preventive
suspension pending an investigation is lodged only with the A.That on April 16, 1996, respondent Ramon B. Pascual, Jr.,
Ombudsman or the Deputy Ombudsmen. subscribe under oath before Marie Lourdes T. Sia Bernas, a
notary public in Makati City, wife of lawyer jose Antonio Bernas,
Consequently, petitioner Special Prosecutor Villa-Ignacio had a verification and certification of non-forum shopping which was
no authority to issue the March 17, 2004 Order placing appended to a complaint for reconveyance of property and
respondent Valera under preventive suspension for six months damages, denominated as Civil Case No. 65646, filed before the
without pay in connection with the administrative case OMB-C- Regional Trial Court in National Capital Region, RTC, which
A-03-0379-J. The appellate court thus correctly nullified and set case was raffled to RTC Branch 159 in Pasig City. A photocopy
aside the said assailed order. of said complaint is hereto attached and marked as Annexex
(sic) A, A-1, A-3, A-4, A-5 and A-6;
Considering the finding that petitioner Special Prosecutor Villa-
Ignacio had no authority to issue the March 17, 2004 preventive B.That as basis for the instant complaint for falsification of public
suspension order, the resolution of the issue of whether or not document, I am hereto quoting verbatim, the test (sic) of Annex
the evidence of respondent Valera’s guilt is strong to warrant his A-6, the verification and certification of non-forum shopping
preventive suspension need not be passed upon at this point. which states:
Anent respondent Valera’s alleged non-compliance with the rule
on non-forum shopping when he filed the petition for certiorari Ramon B. Pascual, Jr., under oath, depose and states:
with the appellate court, suffice it to state that the appellate court
He is the plaintiff in this case, and certify that he cause the
correctly overlooked this procedural lapse. The merits of
preparation of the foregoing pleading, the content of which are
respondent Valera’s case are special circumstances or
true to his personal knowledge and that he has not commenced
compelling reasons which justified the appellate court’s relaxing
any other action or proceeding involving the same issues in any
the rule requiring certification on non-forum shopping.49
court, including the Supreme Court, the Court of Appeals, or any
It is well to mention, at this point, that after the appellate court other tribunal or agency. If he should learn that a similar action
rendered its decision nullifying the March 17, 2004 Order of of (sic) proceeding has been filed or is pending before the
petitioner Special Prosecutor Villa-Ignacio and directing him to Supreme Court or any other Tribunal agency, he undertake to
desist from taking any further action in OMB-C-A-03-0379-J, the report to (sic) that the fact within Five (5) days from the notice to
said case was next assigned to the Office of the Deputy this notice (sic) to this Honorable Court. Underscoring supplied.
Ombudsman for the Military and Other Law Enforcement Offices
C.That the cause of action relied upon by the respondents in
(MOLEO), headed by Mr. Orlando C. Casimiro.50 The hearings
Civil Case No. 65646 is fraud, facilitated by forgery as gleaned
in OMB-C-A-03-0379-J were, thus, continued by the Deputy
from paragraph 15, 16, and 22;
Ombudsman for MOLEO. On August 30, 2004, a Decision was
rendered in the said administrative case finding petitioner Valera D.That contrary to the tenor, import and meanoing (sic) of the
guilty of grave misconduct and decreeing his dismissal from the allegation under 1-B of the instant complaint, respondent and his
service. On appeal, the Court of Appeals affirmed the decision counsel Jose Antonio Bernas caused the preparation and filing
of the Deputy Ombudsman for MOLEO. Petitioner Valera of a criminal complaint for falsification of a public document on
subsequently filed a petition for review with this Court assailing April 11, 1996, (three days before the filing of the aforecited Civil
the said decision of the appellate court. The said petition, Case) at the AOED of the National Bureau of Investigation if (sic)
docketed as G.R. No. 167278, is now pending with the Court. Taff (sic) Ave., a xerox copy of said complaint is hereto attached
and marked as Annex B.
WHEREFORE, the petition is DENIED. The Decision dated
June 25, 2004 of the Court of Appeals in CA-G.R. SP No. 83091, D-1.That as stated in Annex B, the gravaman of the affidavit
insofar as it set aside the March 17, 2004 Order issued by complaint of the respondent is forgery, the same legal issue in
petitioner Special Prosecutor Villa-Ignacio in OMB-C-A-03- Civil Case No. 65646;
D-2.That as early as August 14, 1995, respondent counsel, Jose
Antonio Bernas filed a written complaint at the NBI for the same
cause of action which was reiterated in another letter submitting
[A.C. No. 4634. September 24, 1997]
to the NBI standard specimen signitures dated October 1995,
JESUS CABARRUS, JR., complainant, vs. JOSE ANTONIO copies of said letter complaint are hereto attached and marked
BERNAS, respondents. as Annexes (sic) C.

DECISION E. That respondent Ramon B. Pascual, Jr., on the basis of

Annexes A, B, C, D, inclusive of submarkings knowingly
TORRES, JR., J.: subverted and perverted the truth when he falsify certified (sic)
and verified under oath in the verification and certification of non-
On August 30, 1996, Mr. Jesus Cabarrus, Jr. filed and forum shopping, that:
administrative complaint for disbarment against Atty. Jose
He has not commenced any other action or proceeding involving Rule 3.01 - A lawyer shall not use or permit the use of any false,
the same issues in any court, including the Supreme Court, the fraudulent, misleading, deceptive, undignified, self-laudatory or
Court of Appeals, or any other Tribunal or agency. Where unfair statement or claim regarding his qualified (sic) or legal
verification-certification was placed under oath and was services.
conveniently notarized by the wife of the counsel of respondent
in both cases at Branch 159 of the RTC in Pasig and at the NBI, CANON 10. A LAWYER OWES CANDOR, FAIRNESS AND
an agency within the ambis (sic) and purview of the circulus (sic) GOOD FAITH TO THE COURT.
of the Supreme Court prohibiting forum shopping.
In his Comment, [2] respondents Jose Antonio Bernas avers that
F. That Jose Antonio Bernas, the counsel on record of the he has not committed forum shopping because the criminal
respondents in Civil Case No. 65646 is the same lawyer who action is not an action that involves the same issue as those in
instigated a criminal complaint at the NBI for forgery and the civil action and both suits can exist without constituting forum
respondents themselves conspired and confabulated with each shopping so long as the civil aspect has not yet been prosecuted
other in facilitating and insuring the open, blatant and deliberate in the criminal case. He emphasized that forum shopping only
violation of Art. 172 of the Revised Penal Code which states: exist when identical reliefs are issued by the same parties in
multiple fora.
Art. 172. Falsification by private individual and use of falsified
documents.- The penalty of prison correctional in its medium In his Supplemental Comment,[3] respondent further contends
and maximum periods and a fine of not more than p 5,000 pesos that neither he or his client Pascual has commenced any
shall be imposed upon: criminal action. Pascual merely requested the NBI to assist in
the investigation or prosecution, and left it to the NBI to
1. Any private individual who shall commit any of the determine whether the filing of an endorsement to the
falsifications enumerated in the next preceding article in any prosecutor, who would determine probable caused, would be
public or official document or letter of exchange (sic) or any other appropriate. It was only upon request of the NBI the he assisted
kind of commercial documents; and Ramon Pascual in drafting an affidavit-complaint for falsification
of public documents against complainant.Likewise, respondent
2. Any person who, to the damage of the third party, or with the by counsel reiterates that the letter transmitted to the NBI cannot
intent to cause such damage, shall in any private document constitute an action or proceeding because the NBIs functions
commit any of the acts of falsification enumerated in the next are merely investigatory and informational in nature. NBI has no
preceding article. prosecutorial functions or quasi-judicial power and is incapable
of granting relief or remedy. The NBI cannot be an agency
Any person who shall knowingly introduce in evidence in any
contemplated by the circular.
judicial proceeding or the damage of another or who, with the
intent to cause such damage , shall use any of the false The core issue to be resolved here is whether respondent Atty.
documents embraced in the next preceding article, or any of the Bernas transgressed Circular No. 28-91, Revised Circular No.
foregoing subdivisions of this article, shall be punished by the 28-91, and administrative Circular No. 04-94 on forum shopping.
penalty next lower in degree.
After a careful scrutiny of the records, we find the administrative
G. That Atty. Jose Antonio Bernas should be disbarred for complaint bereft of merit and should be dismissed.
having instigated abetted and facilitated the perversion and
subversion of truth in the said verification and certification of There is forum-shopping whenever, as a result of an adverse
non-forum shopping. Contrary to Canon 1, Rule 1.01, 1.02, opinion in one forum, a party seeks a favorable opinion (other
Canon 3, 3.01, Canon 10 of the code of Professional than by appeal or certiorari) in another.Therefore, a party to a
responsibility for Lawyers, the pertinent provisions of which are case resort to forum shopping because by filling another petition
herein below quoted and a copy of said code is hereto attached involving the same essential facts and circumstances, xxx,
and marked as Annex E; respondents approached two different for a in order to increase
their chances of obtaining a favorable decision or action, [4] In
CANON 1. A. LAWYER SHALL UPHOLD THE this case, there is no forum shopping to speak of Atty. Bernas,
CONSTITUTION, OBEY THE LAWS OF THE LAND AND as counsel of Mr. Pascual, Jr., merely requested the assistance
PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES. of the NBI to investigate the the alleged fraud and forgery
committed by Mr. Jesus Cabarrus.[5] The filing of the civil case
Rule 1.01 - A lawyer shall not engage in lawful, dishonest,
for conveyance and damages before the Regional Trial Court of
immoral or deceitful (sic) conduct.
Pasig City does not preclude respondent to institute a criminal
Rule 1.02 - A lawyer shall not counsel or abet activities simed action. The rule allows the filing of a civil case independently
(sic) at defiance of the law or at lessening confidence in the legal with the criminal case without violating the circulars on forum
system. shopping. It is scarcely necessary to add that Circular No. 28-91
must be so interpreted and applied as to achieve the purposes
CANON 3 A. LAWYER IN MAKING KNOWN HIS LEGAL projected by the Supreme Court when it promulgated that
SERVICES SHALL USE ONLY TRUE, HONEST, FAIR, Circular No. 28-91 was designed to serve as an instrument to
DIGNIFIED AND OBJECTIVE INFORMATION OF (sic) promote and facilitate the orderly administration of justice and
STATEMENT OF FACTS. should not be interpreted with such absolute literalness as to
subvert and legitimate objective or the goal of all rules of

procedure-which is to achieve substantial justice as Circular that can entertain an action or proceeding, or even grant
expeditiously as possible.[6] any relief, declaratory or otherwise.

Adjunct to this, Act No. 157 [7], specifically section 1 hereof WHEREFORE, premises considered, the instant complaint is
provides, viz: hereby DISMISSED.

Section 1. There is hereby created a Bureau of Investigation SO ORDERED.

under the Department of Justice which shall have the following

(a) To undertake investigation of crimes and other offenses

against the laws of the Philippines, upon its initiative and as
public interest may require;

(b) To render assistance, whenever properly requested in the

investigation or detection of crimes and other offenses;

(c) To act as a national clearing house of criminal and other

infromations for the benefit and use of the prosecuting and law-
enforcement entities of the Philippines, identification records of
all person without criminal convictions, records of identifying
marks, characteristics, and ownership or possession of all
firearms as well as bullets fired therefrom;

(d) To give technical aid to all prosecuting and law-enforcement

officers and entities of the Government as well as the courts that
may request its services;

(e) To extend its services, whenever properly requested in the

investigation of cases of administrative or civil nature in which
the Government is interested;

(f) To undertake the instruction and training of representative

number of city and municipal peace officers at the request of
their respective superiors along effective methods of crime
investigation and detection in order to insure greater efficiency
in the discharge of their duties;

(g) To establish and maintain an up-to-date scientific crime

laboratory and to conduct researches inn furtherance of
scientific knowledge in criminal investigation;

(h) To perform such other related function as the secretary of

Justice may assign from time to time.

Explicitly, the function of the National Bureau of Investigations

are merely investigatory and informational in nature. It has no
judicial or quasi-judicial powers and is incapable of granting any
relief to a party. It cannot even determine probable cause. It is
an investigative agency whose findings are merely
recommendatory. It undertakes investigation of crimes upon its
own initiative and as public welfare may require. It renders
assistance when requested in the investigation or detection of
crimes which precisely what Atty. Bernas sought in order to
prosecute those person responsible for defrauding his client.

The courts, tribunal and agencies referred to under Circular No.

28-91, revised Circular No. 28-91 and Administrative Circular
No. 04-94 are those vested with judicial powers or quasi-judicial
powers and those who not only hear and determine
controversies between adverse parties, but to make binding
orders or judgments. As succinctly put it by R.A. 157, the NBI is
not performing judicial or quasi-judicial functions. The NBI
cannot therefore be among those forums contemplated by the