ADMINISTRATIVE LAW CASE DIGESTS 1
Atty. Vic Alabastro
1.) CEBU UNITED ENTERPRISES vs.
JOSE GALLOFIN, Collector of Customs, Cebu Port,
(G.R. No. L-12859; Nov. 18, 1959)
FACTS:
The Cebu United Enterprises imported
newspapers from the United States. It was
covered by five bills of lading covering two
shipments dated December 17, 1953, or one day
before the expiration of the import license.
However, this license expired on Dec. 16, or one
day before the date of the importation of the
items.
Jose Gallofin, the Collector of Customs, refused to
deliver to the Cebu United Enterprises the
shipments, premised on his contention that while
the five bills of lading covering the two shipments
were all dated December 17, 1953 or one day
before the expiration of the import license since it
arrived on January the following year it was made
without a valid import license.
ISSUE:
W/N duly executed acts of a governmental agency
can have valid effects even beyond the life span of
said agency.
HELD: YES.
The authority of the appellee to import was
contained in the Import Control Commission
License No. 17225, the same had a six-
month period of validity counted from the
said date June 18, 1953. This license states,
among other conditions, that
Commodities covered by this license
must be shipped from the country of origin
before the expiry date of the license, and are
subject to Sec. 13 of Republic Act. No. 650.
Although RA 650 creating the Import Control
Commission (ICC) expired on July 31, it is to be
conceded that its duly executed acts can have
valid effects even beyond the life span of said
government agency. The ICC who issued the
license was abolished yet, the LICENSE was
extended, the latter has still its valid effects.
2.) ISABELO T. CRISOSTOMO vs.
CA and the PEOPLE OF THE PHILIPPINES
(G.R. No. 106296; July 5, 1996)
FACTS:
Crisostomo was appointed the President of the
Philippine College of Commerce (PCC) by the
President of the Philippines. During his
incumbency, two administrative charges were filed
against him for illegal use of government vehicles,
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misappropriation of construction materials,
oppression and harassment, grave misconduct,
nepotism and dishonesty before the Office of the
President. Likewise, he was also charged with
violation of Anti-Grant and Corrupt Practices Act
with the Tanodbayan. As such, he was preventively
suspended and Dr. Mateo was designated as the
officer-in-charge in his place.
On April 1, 1978, P.D. No. 1341 was issued by then
President Ferdinand E. Marcos, CONVERTING THE
PHILIPPINE COLLEGE OF COMMERCE INTO A
POLYTECHNIC UNIVERSITY, DEFINING ITS
OBJECTIVES, ORGANIZATIONAL STRUCTURE AND
FUNCTIONS, AND EXPANDING ITS CURRICULAR
OFFERINGS.
Mateo continued as the head of the new
University. Crisostomo was later acquitted and his
administrative charges were dismissed.
On February 12, 1992, petitioner filed a motion for
execution of the judgment, particularly the part
ordering his reinstatement to the position of
president of the PUP and the payment of his
salaries and other benefits during the period of
suspension.
This led the People of the Philippines to file a
petition for certiorari and prohibition (CA G.R. No.
27931), assailing the orders and the writs of
execution issued by the trial court. It also asked
for a temporary restraining order against
petitioner.
On June 25, 1992, CA issued a TRO, enjoining
petitioner to cease and desist from acting as
president of the PUP pursuant to the
reinstatement orders of the trial court.
On July 15, 1992, the CA rendered a decision,
which set aside the orders and writ of
reinstatement issued by the trial court. The
payment of salaries and benefits to petitioner
accruing after the conversion of the PCC to the
PUP was disallowed. Recovery of salaries and
benefits was limited to those accruing from the
time of petitioner's suspension until the
conversion of the PCC to the PUP. The case was
remanded to the trial court for a determination of
the amounts due and payable to petitioner.
Hence this petition. Petitioner argues that P.D. No.
1341, which converted the PCC into the PUP, did
not abolish the PCC. He contends that if the law
had intended the PCC to lose its existence, it
would have specified that the PCC was being
"abolished" rather than "converted" and that if
the PUP was intended to be a new institution, the
law would have said it was being "created."
Petitioner claims that the PUP is merely a
continuation of the existence of the PCC, and,

hence, he could be reinstated to his former
position as president.
ISSUE:
WON petitioner Crisostomo may be reinstated.
HELD: NO
In part the contention is well taken, but, as will
presently be explained, reinstatement is no longer
possible because of the promulgation of P.D. No.
1437 by the President of the aPhilippines on June
10, 1978.
P.D. No. 1341 did not abolish, but only changed,
the former Philippine College of Commerce into
what is now the Polytechnic University of the
Philippines, in the same way that earlier in 1952,
R.A. No. 778 had converted what was then the
Philippine School of Commerce into the Philippine
College of Commerce. What took place was a
change in academic status of the educational
institution, not in its corporate life. Hence the
change in its name, the expansion of its curricular
offerings, and the changes in its structure and
organization.
As petitioner correctly points out, when the
purpose is to abolish a department or an office or
an organization and to replace it with another
one, the lawmaking authority says so.
The appellate court ruled, however, that the PUP
and the PCC are not "one and the same
institution" but "two different entities" and that
since petitioner Crisostomo's term was
coterminous with the legal existence of the PCC,
petitioner's term expired upon the abolition of the
PCC.
But these are hardly indicia of an intent to abolish
an existing institution and to create a new one.
New course offerings can be added to the
curriculum of a school without affecting its legal
existence. Nor will changes in its existing structure
and organization bring about its abolition and the
creation of a new one. Only an express declaration
to that effect by the lawmaking authority will.
Nevertheless, the reinstatement of petitioner to
the position of president of the PUP could not be
ordered by the trial court because on June 10,
1978, P.D. No. 1437 had been promulgated fixing
the term of office of presidents of state
universities and colleges at six (6) years,
renewable for another term of six (6) years, and
authorizing the President of the Philippines to
terminate the terms of incumbents who were not
reappointed.
In this case, Dr. Pablo T. Mateo Jr., who had been
acting president of the university since April 3,
ADMINISTRATIVE LAW CASE DIGESTS 1
Atty. Vic Alabastro
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1979, was appointed president of PUP for a term
of six (6) years on March 28, 1980, with the result
that petitioner's term was cut short. In accordance
with of the law, therefore, petitioner became
entitled only to retirement benefits or the
payment of separation pay.
3.) CESAR G. VIOLA, Chairman, Brgy. 167, Zone
15, District II, Manila vs.
HON. RAFAEL M. ALUNAN III, Secretary DILG,
ALEX L. DAVID, President/Secretary General,
National Liga ng mga Barangay, LEONARDO L.
ANGAT, President, City of Manila, Liga ng mga
Barangay
(G.R. No. 115844; August 15, 1997)
FACTS:
Viola, as a barangay chairman, filed a petition for
prohibition challenging the validity of the Art III,
Sec.1-2 of the Revised Implementing Rules and
Guidelines for the General Elections of the Liga ng
mga Barangay Officers insofar as they provide for
the election of first, second, and third vice
presidents and for auditors for the National Liga
ng mga Barangay and its chapters.
He contended that the questioned positions are in
excess of those provided in the LGC Sec.493 which
mentions as elective positions only those of the
president, vice president, and five members of the
board of directors in each chapter at the
municipal, city, provincial, metropolitan political
subdivision, and national levels and thus the
implementing rules expand the numbers in the
LGC in violation of the principle that implementing
rules and regulations cannot add or detract from
the provisions of the law they are designed to
implement.
ISSUE:
Whether or not Sec 1-2 of the Implementing Rules
are valid.
HELD: Yes.
The creation of additional positions is authorized
by Sec. 493 of the LGC which in fact requires and
not merely authorizes the board of directors to
create such other positions as it may deem
necessary for the management of the chapter. To
begin with, the creation of these positions was
actually made in the Constitution and By-laws of
the Liga ng mga barangay which was adopted by
the First Barangay National Assembly.
There is no undue delegation of power by
Congress in this case. SC decisions have upheld
the validity of reorganization statutes authorizing
the President of the Philippines to create, abolish,
or merge offices in the executive management.

While the board of directors of a local chapter can
create additional positions to provide for the
needs of the chapter, the board of directors of the
National Liga must be deemed to have the power
to create additional positions not only for its
management but also for that of all the chapters
at the municipal, city, provincial and metropolitan
political subdivision levels. Otherwise the
National Liga would be no different from the local
chapters. The fact is that Sec. 493 grants the
power to create positions not only to the boards
of the local chapters but to the board of the Liga
at the national level as well.
NOTE:
LGC, Sec. 493. Organization The liga at the
municipal, city, provincial, metropolitan political
subdivision, and national levels directly elect a
president, a vice-president, and five (5) members
of the board of directors. The board shall appoint
its secretary and treasurer and create such other
positions as it may deem necessary for the
management of the chapter. A secretary-general
shall be elected from among the members of the
national liga and shall be charged with the overall
operation of the liga on the national level. The
board shall coordinate the activities of the
chapters of the liga.
4.) AQUILINO T. LARIN vs.
THE EXECUTIVE SECRETARY, SECRETARY OF
FINANCE, COMMISSIONER OF THE BUREAU OF
INTERNAL REVENUE AND THE COMMITTEE
CREATED TO INVESTIGATE THE ADMINISTRATIVE
COMPLAINT AGAINST AQUILINO T. LARIN,
COMPOSED OF FRUMENCIO A. LAGUSTAN, JOSE
B. ALEJANDRINO AND JAIME M. MAZA
(G.R. No. 112745; October 16, 1997)
FACTS:
Larin, a Revenue Specific Tax Officer under the
Assistant Commissioner of the BIR, is convicted of
crimes of violation of sec. 268 (4) NIRC and sec. 3
(e) RA 3019 (grave misconduct). Acting by
authority of the president, Sr. Deputy Executive
Secretary Quisumbing issued a memorandum
order, creating an Executive Committee to
investigate Larins administrative charge. While the
investigation was going on, the President issued
E.O. 132, streamlining the BIR and abolishing the
office of the Specific Tax Service. Afterwards, Larin
was found guilty and was subsequently dismissed.
However, in the appealed case, SC set aside the
conviction of Larin
ISSUES:
W/N Larin was unlawfully removed from office.
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(1) Does the President have the power to
dismiss him? Reorganize the BIR?
(2) Was reorganization valid, considering that
there was no law enacted by Congress
authorizing reorganization by the Executive
HELD: YES
SC held that removal as a result of reorganization
was done in bad faith.
Does the President have the power to dismiss
him?
Larin is a presidential appointee. As such, he
comes under the direct disciplining authority of
the President for the power to remove is
inherent in the power to appoint. However, Larin
is a career service officer, therefore, he enjoys
security of tenure. Under the Civil Service Decree,
career service officers and employees who enjoy
security of tenure may be removed only for any of
the causes enumerated in said law. In other
words, the fact that the petitioner is a presidential
appointee does not give the appointing authority
the license to remove him at will or at his pleasure
for it is an admitted fact that he is likewise a
career service officer who under the law is the
recipient of tenurial protection, thus, may only be
removed for a cause and in accordance with
procedural due process.
Was the removal for a legal cause under a valid
proceeding?
SC held that the removal complied with the
requirements for procedural due process but that
the dismissal was not for a valid cause. The basis
used in Larins removal is the criminal conviction
against him, but this conviction was later set aside
by the Supreme Court upon appeal. Where the
very basis of the administrative case against
petitioner is his conviction in the criminal action
which was later on set aside by this court upon a
categorical and clear findings that the acts for
which he was administratively held liable are not
unlawful and irregular, the acquittal of the
petitioner in the criminal case necessarily entails
the dismissal of the administrative action against
him, because in sch a case, there is no basis nor
justifiable reason to maintain the administrative
suit.
Does the President have the power to reorganize
the BIR?
Yes, under sec. 48 and 62 of RA 7645, sec. 20, Bk.
III of EO 292 (Residual Powers), and PD 1772
which amended PD 1416. But while the
Presidents power to reorganize can not be
denied, this does not mean however that the
reorganization itself is properly made in

accordance with law. Well-settled is the rule that
reorganization is regarded as valid provided it is
pursued in good faith.
When is there reorganization made in good faith?
The general rule is that a reorganization is carried
out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient.
In that event no dismissal or separation actually
occurs because the position itself ceases to exist.
And in that case the security of tenure would not
be a Chinese Wall. Be that as it may, if the
abolition which is nothing else but a separation or
removal, is done for political reasons or purposely
to defeat security of tenure, or otherwise not in
good faith, no valid abolition takes place and
whatever abolition is done is void ab initio.
What are the marks of bad faith in removal as a
result of reorganization?
Sec. 2, RA 6656 enumerates the circumstances
evidencing bad faith in the removal of employees
as a result of reorganization:
(1) Where there is a significant increase in the
number of positions in the new staffing pattern of
the department or agency concerned;
(2) Where an office is abolished and another
performing substantially the same functions is
created;
(3) Where incumbents are replaced by those less
qualified in terms of status of appointment,
performance and merit;
(4) Where there is a reclassification of offices in
the department or agency concerned and the
reclassified offices perform substantially the same
functions as the original offices;
(5) Where the removal violates the order of
separation provided in sec. 3 hereof.
5.) CESAR Z. DARIO vs.
HON. SALVADOR M. MISON, HON. VICENTE
JAYME and HON. CATALINO MACARAIG, JR., in
their respective capacities as Commissioner of
Customs, Secretary of Finance, and Executive
Secretary
(G.R. No. 81954; August 8, 1989)
FACTS:
Cory Aquino promulgated Proclamation No. 3,
"DECLARING A NATIONAL POLICY TO IMPLEMENT
THE REFORMS MANDATED BY THE PEOPLE..., the
mandate of the people to Completely reorganize
the government.
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Atty. Vic Alabastro
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In January 1987, she promulgated EO 127,
"REORGANIZING THE MINISTRY OF FINANCE".
Among other offices, Executive Order No. 127
provided for the reorganization of the Bureau of
Customs and prescribed a new staffing pattern
therefor. In February 1987, a brand new
constitution was adopted.
On January 1988, incumbent Commissioner of
Customs Salvador Mison issued a Memorandum,
in the nature of "Guidelines on the
Implementation of Reorganization Executive
Orders," prescribing the procedure in personnel
placement. It also provided that by February 1988,
all employees covered by EO 127 and the grace
period extended to the Bureau of Customs by the
President on reorganization shall be: a) informed
of their re-appointment, or b) offered another
position in the same department or agency, or c)
informed of their termination.
A total of 394 officials and employees of the
Bureau of Customs were given individual notices
of separation. They filed appeals with the CSC. CSC
promulgated its ruling for reinstatement of the
279 employees. Mison, filed a motion for
reconsideration, which was denied. Commissioner
Mison instituted certiorari proceedings.
ISSUE:
WON Section 16 of Article XVIII of the 1987
Constitution is a grant of a license upon the
Government to remove career public officials it
could have validly done under an "automatic"-
vacancy-authority and to remove them without
rhyme or reason.
HELD: NO
The provision benefits career civil service
employees separated from the service. And the
separation contemplated must be due to or the
result of (1) the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986, (2) the
reorganization from February 2, 1987, and (3) the
resignations of career officers tendered in line
with the existing policy and which resignations
have been accepted. The phrase "not for cause" is
clearly and primarily exclusionary, to exclude
those career civil service employees separated
"for cause." In other words, in order to be entitled
to the benefits granted under Section 16 of Article
XVIII of the Constitution of 1987, two requisites,
one negative and the other positive, must concur,
to wit:
1. The separation must not be for cause, and
2. The separation must be due to any of the
three situations mentioned above.
By its terms, the authority to remove public
officials under the Provisional Constitution ended

on February 25, 1987, advanced by jurisprudence
to February 2, 1987. It can only mean, then, that
whatever reorganization is taking place is upon
the authority of the present Charter, and
necessarily, upon the mantle of its provisions and
safeguards. Hence, it cannot be legitimately stated
that we are merely continuing what the
revolutionary Constitution of the Revolutionary
Government had started. We are through with
reorganization under the Freedom Constitution -
the first stage. We are on the second stage - that
inferred from the provisions of Section 16 of
Article XVIII of the permanent basic document.
What must be understood, however, is that
notwithstanding her immense revolutionary
powers, the President was, nevertheless,
magnanimous in her rule. This is apparent from
Executive Order No. 17, which established
safeguards against the strong arm and ruthless
propensity that accompanies reorganizations
-notwithstanding the fact that removals arising
therefrom were "not for cause," and in spite of the
fact that such removals would have been valid and
unquestionable.
Noteworthy is the injunction embodied in the
Executive Order that dismissals should be made
on the basis of findings of inefficiency, graft, and
unfitness to render public service. Assuming, then,
that this reorganization allows removals "not for
cause" in a manner that would have been
permissible in a revolutionary setting as
Commissioner Mison so purports, it would seem
that the
Commissioner would have been powerless, in any
event, to order dismissals at the Customs Bureau
left and right. Lastly, reorganizations must be
carried out in good faith. In this case, Mison failed
to prove that the reorganization was indeed made
in good faith because he hired more people to
replace those that he fired and no legitimate
structural changes have been made.
To sum up, the President could have validly
removed officials before the effectivity of the 1987
Constitution even without cause because it was a
revolutionary government. However, from the
effectivity of the 1987 Constitution, the State did
not lose its right to reorganize resulting to
removals but such reorganization must be made in
good faith.
6.) TONDO MEDICAL CENTER EMPLOYEES vs. CA
(G.R. No. 167324; July 17, 2007)
FACTS:
President Estrada issued EO 102, which provided
for the changes in the roles, functions, and
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Atty. Vic Alabastro
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organizational processes of the DOH. EO 102 was
enacted pursuant to Section 17 of the Local
Government Code which provided for the
devolution to the LGUs of the basic services and
facilities, as well as specific health-related
functions and responsibilities.
ISSUE:
Whether or not the HSRA and EO NO. 102 violates
the constitution?
HELD: NO
Reorganization of DOH under EO 102 is not a
usurpation of legislative power. EO 292 also
known as the Administrative Code of 1987, gives
continuing authority to the President to reorganize
the administrative structure of the Office of the
President.
The validity of Executive Order No. 102 would,
nevertheless, remain unaffected. Settled is the
rule that courts are not at liberty to declare
statutes invalid, although they may be abused or
disabused, and may afford an opportunity for
abuse in the manner of application. The validity of
a statute or ordinance is to be determined from its
general purpose and its efficiency to accomplish
the end desired, not from its effects in a particular
case. Section 17, Article VII of the 1987
Constitution, clearly states: [T]he president shall
have control of all executive departments, bureaus
and offices. Section 31, Book III, Chapter 10 of
Executive Order No. 292, also known as the
Administrative Code of 1987. It is an exercise of
the Presidents constitutional power of control
over the executive department, supported by the
provisions of the Administrative Code, recognized
by other statutes, and consistently affirmed by this
Court.
7.) ATTY. SYLVIA BANDA, et.al. vs. EDUARDO R.
ERMITA, in his capacity as Executive Secretary,
The Director General of the Philippine
Information Agency and The National Treasurer
(G.R. No. 166620; April 20, 2010)
FACTS:
The NPO was formed on July 25, 1987, during the
term of former President Corazon C. Aquino
(President Aquino), by virtue of Executive Order
No. 285 which provided, among others, the
creation of the NPO from the merger of the
Government Printing Office and the relevant
printing units of the Philippine Information Agency
(PIA).
On October 25, 2004, President Arroyo issued the
herein assailed Executive Order No. 378,
amending Section 6 of Executive Order No. 285 by,

inter alia, removing the exclusive jurisdiction of
the NPO over the printing services requirements
of government agencies and instrumentalities.
Pursuant to Executive Order No. 378, government
agencies and instrumentalities are allowed to
source their printing services from the private
sector through competitive bidding, subject to the
condition that the services offered by the private
supplier be of superior quality and lower in cost
compared to what was offered by the NPO.
Executive Order No. 378 also limited NPOs
appropriation in the General Appropriations Act to
its income.
Perceiving Executive Order No. 378 as a threat to
their security of tenure as employees of the NPO,
petitioners now challenge its constitutionality,
contending that: (1) it is beyond the executive
powers of President Arroyo to amend or repeal
Executive Order No. 285 issued by former
President Aquino when the latter still exercised
legislative powers; and (2) Executive Order No.
378 violates petitioners security of tenure,
because it paves the way for the gradual abolition
of the NPO.
ISSUE:
Whether the E.O no. 378 is Constitutional.
HELD: YES
In the present case, involving neither an abolition
nor transfer of offices, the assailed action is a
mere reorganization under the general provisions
of the law consisting mainly of streamlining the
NTA in the interest of simplicity, economy and
efficiency. It is an act well within the authority of
the President motivated and carried out,
according to the findings of the appellate court, in
good faith, a factual assessment that this Court
could only but accept.
This Court has already ruled in a number of cases
that the President may, by executive or
administrative order, direct the reorganization of
government entities under the Executive
Department. This is also sanctioned under the
Constitution, as well as other statutes.
Section 17, Article VII of the 1987 Constitution,
clearly states: "[T]he president shall have control
of all executive departments, bureaus and offices."
Section 31, Book III, Chapter 10 of Executive Order
No. 292, also known as the Administrative Code of
1987 reads:
SEC. 31. Continuing Authority of the
President to Reorganize his Office - The
President, subject to the policy in the
Executive Office and in order to achieve
simplicity, economy and efficiency, shall
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have continuing authority to reorganize
the administrative structure of the Office
of the President.
The Administrative Code provides that the Office
of the President consists of the Office of the
President Proper and the agencies under it. The
agencies under the Office of the President are
identified in Section 23, Chapter 8, Title II of the
Administrative Code:
Sec. 23. The Agencies under the Office of
the President. The agencies under the
Office of the President refer to those
offices placed under the chairmanship of
the President, those under the
supervision and control of the President,
those under the administrative
supervision of the Office of the
President, those attached to it for policy
and program coordination, and those
that are not placed by law or order
creating them under any specific
department.
The power of the President to reorganize the
executive department is likewise recognized in
general appropriations laws.
Clearly, Executive Order No. 102 is well within the
constitutional power of the President to issue. The
President did not usurp any legislative prerogative
in issuing Executive Order No. 102. It is an exercise
of the Presidents constitutional power of control
over the executive department, supported by the
provisions of the Administrative Code, recognized
by other statutes, and consistently affirmed by this
Court.
In establishing an executive department, bureau
or office, the legislature necessarily ordains an
executive agencys position in the scheme of
administrative structure. Such determination is
primary, but subject to the Presidents continuing
authority to reorganize the administrative
structure. As far as bureaus, agencies or offices in
the executive department are concerned, the
power of control may justify the President to
deactivate the functions of a particular office. Or a
law may expressly grant the President the broad
authority to carry out reorganization measures.
The Administrative Code of 1987 is one such law.
8.) SPOUSES AUGUSTO DACUDAO & OFELIA
DACUDAO vs. RAUL GONZALES, Secretary of
Justice
(G.R. No. 188056; JANUARY 08, 2013)
FACTS:

The petitioners filed a case of syndicated estafa
against Celso Delos Angeles and his associates
after the petitioners were defrauded in a business
venture.
Thereafter, the DOJ Secretary issued Department
Order 182 which directs all prosecutors in the
country to forward all cases already filed against
Celso Delos Angeles, Jr. and his associates to the
secretariat of DOJ in Manila for appropriate
action.
Because of such DOJ orders, the complaint of
petitioners was forwarded to the secretariat of the
Special Panel of the DOJ in Manila. Aggrieved,
Spouses Dacudao filed this petition for certiorari,
prohibition and mandamus assailing to the
respondent Secretary of justice grave abuse of
discretion in issuing the department Order and
the Memorandum, which according to the
violated their right to due process, right to equal
protection of the law and right to speedy
disposition of the cases.
The petitioners opined that orders were
unconstitutional or exempting from coverage
cases already filed and pending at the Prosecutors
Office of Cagayan De Oro City. They maintained
that DO 182 was issued in violation of the
prohibition against passing laws with retroactive
effect.
ISSUE:
WON respondent Secretary of Justice commit
grave abuse of discretion in issuing DO No. 182.
HELD: NO
DO No. 182 enjoyed a strong presumption of its
validity. In ABAKADA Guro Party List v. Purisima,
the Court has extended the presumption of
validity to legislative issuances as well as to rules
and regulations issued by administrative agencies,
saying:
Administrative regulations enacted by
administrative agencies to implement
and interpret the law which they are
entrusted to enforce have the force of
law and are entitled to respect. Such
rules and regulations partake of the
nature of a statute and are just as
binding as if they have been written in
the statute itself. As such, they have the
force and effect of law and enjoy the
presumption of constitutionality and
legality until they are set aside with
finality in an appropriate case by a
competent court.
DO No. 182 was issued pursuant to Department
Order No. 84 that the Secretary of Justice had
promulgated to govern the performance of the
mandate of the DOJ to "administer the criminal
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justice system in accordance with the accepted
processes thereof"as expressed in Republic Act
No. 10071 (Prosecution Service Act of 2010) and
Section 3, Chapter I, Title III and Section 1, Chapter
I, Title III of Book IV of Executive Order 292
(Administrative Code of 1987).
To overcome this strong presumption of validity of
the questioned issuances, it became incumbent
upon petitioners to prove their unconstitutionality
and invalidity, either by showing that the
Administrative Code of 1987 did not authorize the
Secretary of Justice to issue DO No. 182, or by
demonstrating that DO No. 182 exceeded the
bounds of the Administrative Code of 1987 and
other pertinent laws. They did not do so. They
must further show that the performance of the
DOJs functions under the Administrative Code of
1987 and other pertinent laws did not call for the
impositions laid down by the assailed issuances.
That was not true here, for DO No 182 did not
deprive petitioners in any degree of their right to
seek redress for the alleged wrong done against
them by the Legacy Group. Instead, the issuances
were designed to assist petitioners and others like
them expedite the prosecution, if warranted
under the law, of all those responsible for the
wrong through the creation of the special panel of
state prosecutors and prosecution attorneys in
order to conduct a nationwide and comprehensive
preliminary investigation and prosecution of the
cases. Thereby, the Secretary of Justice did not act
arbitrarily or oppressively against petitioners.
9.) SPOUSES BERNYL BALANGAUAN &
KATHERENE BALANGAUAN vs. CA and THE
HONGKONG AND SHANGHAI BANKING
CORPORATION, LTD.
(G. R. No. 174350; August 13, 2008)
FACTS:
This is a Petition for Certiorari assailing the 28
April 2006 Decision and 29 June 2006 Resolution
of the Court of Appeals in CA-G.R. CEB-SP No.
00068, which annulled and set aside the 6 April
2004 and 30 August 2004 Resolutions of the
Department of Justice (DOJ) in I.S. No. 02-9230-I,
entitled The Hongkong and Shanghai Banking
Corporation v. Katherine Balangauan, et al.
The twin resolutions of the DOJ affirmed, in
essence, the Resolution of the Office of the City
Prosecutor, Cebu City, which dismissed for lack of
probable cause the criminal complaint for Estafa
and/or Qualified Estafa, filed against petitioner-
Spouses Bernyl Balangauan (Bernyl) and
Katherene Balangauan (Katherene) by respondent
Hong Kong and Shanghai Banking Corporation,
Ltd. (HSBC).

Petitioners Bernyl and Katherene filed the present
petition on the argument that the Court of
Appeals committed grave abuse of discretion in
reversing and setting aside the resolutions of the
DOJ when: (1) [i]t reversed the resolution of the
Secretary of Justice, Manila dated August 30, 2004
and correspondingly, gave due course to the
Petition for Certiorari filed by HSBC on April 28,
2006 despite want of probable cause to warrant
the filing of an information against the herein
petitioners; (2) [i]t appreciated the dubious
evidence adduced by HSBC albeit the absence of
legal standing or personality of the latter; (3) [i]t
denied the motions for reconsideration on June
29, 2006 notwithstanding the glaring evidence
proving the innocence of the petitioners; (4) [i]t
rebuffed the evidence of the herein petitioners in
spite of the fact that, examining such evidence
alone would establish that the money in question
was already withdrawn by Mr. Roger Dwayne York;
and (5) [i]t failed to dismiss outright the petition
by HSBC considering that the required affidavit of
service was not made part or attached in the said
petition pursuant to Section 13, Rule 13 in relation
to Section 3, Rule 46, and Section 2, Rule 56 of the
Rules of Court.
ISSUE:
WON CA acted with grave abuse of discretion in
reversing and setting aside the resolutions of the
DOJ.
HELD: NO
In reversing and setting aside the resolutions of
the DOJ, petitioners Bernyl and Katherene contend
that the Court of Appeals acted with grave abuse
of discretion amounting to lack or excess of
jurisdiction.
The Court of Appeals, when it resolved to grant
the petition in CA-G.R. CEB. SP No. 00068, did so
on two grounds, i.e., 1) that the public respondent
(DOJ) gravely abused his discretion in finding that
there was no reversible error on the part of the
Cebu City Prosecutor dismissing the case against
the private respondent without stating the facts
and the law upon which this conclusion was
made; and 2) that the public respondent (DOJ)
made reference to the facts and circumstances of
the case leading to his finding that no probable
cause exists, x x x (the) very facts and
circumstances (which) show that there exists a
probable cause to believe that indeed the private
respondents committed the crimes x x x charged
against them.
The Court of Appeals found fault in the DOJs
failure to identify and discuss the issues raised by
the respondent HSBC in its Petition for Review
filed therewith. And, in support thereof,
respondent HSBC maintains that it is incorrect to
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argue that it was not necessary for the Secretary
of Justice to have his resolution recite the facts
and the law on which it was based, because courts
and quasi-judicial bodies should faithfully comply
with Section 14, Article VIII of the Constitution
requiring that decisions rendered by them should
state clearly and distinctly the facts of the case
and the law on which the decision is based.
Petitioners Bernyl and Katherene, joined by the
Office of the Solicitor General, on the other hand,
defends the DOJ and assert that the questioned
resolution was complete in that it stated the legal
basis for denying respondent HSBCs petition for
review that (after) an examination (of) the petition
and its attachment [it] found no reversible error
that would justify a reversal of the assailed
resolution which is in accord with the law and
evidence on the matter.
It must be remembered that a preliminary
investigation is not a quasi-judicial proceeding,
and that the DOJ is not a quasi-judicial agency
exercising a quasi-judicial function when it reviews
the findings of a public prosecutor regarding the
presence of probable cause.
Though some cases describe the public
prosecutors power to conduct a preliminary
investigation as quasi-judicial in nature, this is true
only to the extent that, like quasi-judicial bodies,
the prosecutor is an officer of the executive
department exercising powers akin to those of a
court, and the similarity ends at this point. A
quasi-judicial body is an organ of government
other than a court and other than a legislature
which affects the rights of private parties through
either adjudication or rule-making. A quasi-judicial
agency performs adjudicatory functions such that
its awards, determine the rights of parties, and
their decisions have the same effect as judgments
of a court. Such is not the case when a public
prosecutor conducts a preliminary investigation to
determine probable cause to file an Information
against a person charged with a criminal offense,
or when the Secretary of Justice is reviewing the
formers order or resolutions. In this case, since
the DOJ is not a quasi-judicial body, Section 14,
Article VIII of the Constitution finds no application.
Be that as it may, the DOJ rectified the shortness
of its first resolution by issuing a lengthier one
when it resolved respondent HSBCs motion for
reconsideration.
10.) EDUARDO B. OLAGUER AND CONRADO S.
REYES in their official capacity as Fiscal Agents of
The Presidential Commission On Good
Government, vs. THE REGIONAL TRIAL COURT
(G.R. No. 81385; February 21, 1989)

FACTS:
On December 17, 1987, private respondents filed
a complaint for injunction and damages, with a
prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order, in
the Regional Trial Court (RTC) of Manila against
petitioners and Winston Marbella, Gaston Ortigas,
Robeto Federis, Manuel C. Villa-Real, Emanuel
Soriano, Jack Arroyo and Benjamin Tulio.
The complaint alleges, among others, that private
respondents are the only stockholders with the
right to vote of the Philippine Journalists, Inc. (PJI)
Publisher of several daily periodicals such as
Manila Journal, People's Journal, etc. Sometime in
1977, PJI obtained from the Development Bank of
the Philippines (DBP) certain financing
accommodations and as security thereof executed
a first mortgage in favor of DBP on its acts
enumerated in a list attached to the mortgage.
The PJI stockholders assigned to DBP the voting
rights over 67% of the total subscribed and
outstanding voting shares of stock of the company
held by them. Due to some financial difficulty on
its part, PJI requested for a restructuring of its loan
obligation with certain conditions. Due to the
default on the part of the PJI the DBP cancelled
the proxies in favor of the assigning stockholders
on September 30, 1986 and designated as its
proxies petitioner Eduardo Olaguer, Jose Mari
Velez and Manuel de Leon.
The complaint also alleges that although Olaguer
was elected chairman of the board and chief
executive officer of PJI he failed to comply with his
commitment and that this gave private
respondents a reason to cancel the assignment.
Olaguer also committed certain illegal acts which
gave rise to the filing of several complaints against
him. However, before these cases could be
resolved, Olaguer's appointment as member of
the board of directors of DBP was terminated by
President Corazon C. Aquino effective September
9, 1987. He was informed about his termination
through two letters dated August 27 and October
12, 1987.
Private respondents also alleged that despite such
notice, petitioner and his associates continued to
sit in the board and that Olaguer took over the
complete management of the corporation and
even caused the appointment of other members
of the board and/or corporate officers even if such
appointees do not own PJI shares of stock in their
own right. It is likewise alleged that the petitioner
and his associates should be enjoined from
committing further acts of usurpation and that
they should be held liable for all unlawful
disbursements they have made. It is further
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alleged that some of the private respondents had
been unlawfully dismissed and/or retired one
after another thereby depriving them of all
benefits they are entitled to and subjecting them
to great mental anguish, sleepless nights, deep
humiliation and great anxiety for which they must
be paid damages in an amount left to the sound
discretion of the court.
Hence, private respondents filed a complaint for
injunction and damages, with a prayer for the
issuance of a writ of preliminary injunction and/or
temporary restraining order against petitioners.
On January 4, 1988, a motion to dismiss was filed
by the petitioners on the ground that the court
has no jurisdiction over the persons of petitioners;
that they were not served summons and that the
subject matter of the action involves controversies
arising out of intra-corporate relations between
and among stockholders which are covered by the
provisions of Section 5 of Presidential Decree No.
902-A so that the matter is within the original and
exclusive jurisdiction of the Securities and
Exchange Commission (SEC); that the venue for a
petition seeking injunctive relief should be the
Sandiganbayan where aforesaid PCGG Case No.
0035 against Benjamin Romualdez, Rosario
Olivares, et al. is pending, pursuant to Executive
Order No. 14 defining the jurisdiction over cases
involving the alleged ill-gotten wealth of Former
President Marcos, et al.
ISSUE:
WON the trial court has jurisdiction over the
subject matter of the action.
HELD: NO
The petition is impressed with merit. There is no
dispute that the PJI is now under sequestration by
the PCGG and that Civil Case No. 0035 was filed in
the Sandiganbayan wherein the PJI is listed as
among the corporations involved in the
unexplained wealth case against former President
Marcos, Romualdez and many others. The records
likewise show that petitioner Olaguer, among
others, is a fiscal agent of the PCGG and that as
Chairman of the Board of Directors of the PJI he
was acting for and in behalf of the PCGG. Under
Section 2 of Executive Order No. 14, the
Sandiganbayan has exclusive and original
jurisdiction over all cases regarding "the funds,
moneys, assets and properties illegally acquired by
Former President Ferdinand E. Marcos, Mrs.
Imelda Romualdez Marcos, their close relatives,
subordinates, business associates, dummies,
agents, or nominees," 3 civil or criminal, including
incidents arising from such cases. The Decision of
the Sandiganbayan is subject to review on
certiorari exclusively by the Supreme Court. 4

In the exercise of its functions, the PCGG is a co-
equal body with the regional trial courts and co-
equal bodies have no power to control the other. 5
The regional trial courts and the Court of Appeals
have no jurisdiction over the PCGG in the exercise
of its powers under the applicable Executive
Orders and Section 26, Article XVIII of the 1987
Constitution and, therefore, may not interfere
with and restrain or set aside the orders and
actions of the PCGG. 6 By the same token, the
regional trial courts have no jurisdiction over the
acts of fiscal agents of the PCGG acting for and in
behalf of said commission.
Petitioners, as fiscal agents of the PCGG, cannot
be sued in such capacity before the ordinary
courts. The tribunal for such purpose is the
Sandiganbayan.
It necessarily follows that the issues raised by the
private respondents before the respondent judge
to the effect that petitioners are usurpers and
have no right to sit in the board of directors or act
as corporate officers of the PJI are issues which
should be addressed to the Sandiganbayan.
11.) CEFERINO PADUA vs. HON. SANTIAGO
RANADA, PHILIPPINE NATIONAL CONSTRUCTION
CORP., TOLL REGULATORY BOARD, DEPARTMENT
OF PUBLIC WORKS AND HIGHWAYS, and
REPUBLIC OF THE PHILIPPINES
(G.R. No. 141949. October 14, 2002)
FACTS:
The Toll Regulatory Board (TRB) issued a
resolution authorizing provisional toll rate
adjustments at the Metro Manila Skyway. It was
thereafter published in newspapers of general
circulation for three (3) consecutive weeks.
However, there was no hearing conducted for the
matter. Deliberations were not even attended by
Board Members except TRB Executive Director
Jaime Dumlao, Jr. Petitioners assail the validity of
the resolution.
ISSUE:
WON the TRB Executive Director Jaime Dumlao, Jr.
alone can authorized the provisional increase.
HELD:
It is not true that it was TRB Executive Director
Dumlao, Jr. alone who issued Resolution No. 2001-
89. The Resolution itself contains the signature of
the four TRB Directors. Petitioner Padua would
argue that while these Directors signed the
Resolution, none of them personally attended the
hearing. This argument is misplaced.
Under our jurisprudence, an administrative agency
may employ other persons, such as a hearing
officer, examiner or investigator, to receive
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evidence, conduct hearing and make reports, on
the basis of which the agency shall render its
decision. Such a procedure is a practical necessity.
Corollarily, in a catena of cases, the Supreme Court
laid down the cardinal requirements of due
process in administrative proceedings, one of
which is that the tribunal or body or any of its
judges must act on its or his own independent
consideration of the law and facts of the
controversy, and not simply accept the views of a
subordinate. Thus, it is logical to say that this
mandate was rendered precisely to ensure that in
cases where the hearing or reception of evidence
is assigned to a subordinate, the body or agency
shall not merely rely on his recommendation but
instead shall personally weigh and assess the
evidence which the said subordinate has
gathered.
The TRB may grant and issue ex-parte to any
petitioner, without need of notice, publication or
hearing, provisional authority to collect the
increase in rates.
An administrative agency may be empowered to
approve provisionally, when demanded by urgent
public need, rates of public utilities without a
hearing. Provisional rates are by their nature
temporary and subject to adjustment in
conformity with the definitive rates approved after
final hearing.
The remedy of the petitioner is file a petition for
review of the adjusted toll rates. Under PD 1112,
the decision of TRB is appealable to the Office of
the President within 10 days from date of
promulgation of such order granting this
provisional toll rates.
12.) AIDA EUGENIO vs. CIVIL SERVICE
COMMISSION, HON. TEOFISTO T. GUINGONA, JR.
& HON. SALVADOR ENRIQUEZ, JR.
(G.R. No. 115863; March 31, 1995)
FACTS:
In 1993, Aida Eugenio passed the Career Executive
Service Eligibility (CES). She was then
recommended to be appointed as a Civil Service
Officer Rank IV. But her appointment to said rank
was impeded when in the same year, the Civil
Service Commission (CSC) abolished the Career
Executive Service Board (CESB). CESB is the office
tasked with promulgating rules, standards, and
procedures on the selection, classification and
compensation of the members of the Career
Executive Service.
Eugenio then assailed the resolution which
abolished CESB. She averred that the CSC does not
have the power to abolish CESB because the same
was created by law (P.D. 1). CSC on the other hand

argued that it has the power to do so pursuant to
the Administrative Code of 1987 which granted
the CSC the right to reorganize the CSC.
ISSUE:
W/N CSC usurped legislative function of Congress
by abolishing the CESB.
HELD: NO
CESB was created by PD 1. It cannot be disputed,
therefore, that as CESB was created by law, it can
only be abolished by the legislature. While CSC
has the power to reorganize under Sec. 17, Chap.
3, Subtitle A, Title I, Bk. V. of the Administrative
Code of 1987, this must be read with sec. 16,
which enumerates the offices under the control of
the CSC. CESB is not one of such offices.
CESB was intended to be an autonomous entity,
albeit administratively attached to CSC. This
essential autonomous character of the CESB is not
negated by its attachment to respondent
Commission. By said attachment, CESB was not
made to fall within the control of respondent
Commission. Under the Administrative Code of
1987, the purpose of attaching one functionally
inter-related government agency to another is to
attain policy and program coordination.
13.) HIJO PLANTATION INC., DAVAO FRUITS
CORPORATION, TWIN RIVERS PLANTATION, INC.
and MARSMAN & CO., INC., for themselves and
in behalf of other persons and entities similarly
situated, petitioners, vs.
CENTRAL BANK OF THE PHILIPPINES, respondent.
FACTS:
Hijo Plantation, Inc., Davao Fruits Corporation,
Twin Rivers Plantation, Inc. and Marsman
Plantation(Petitioners) are engaged in the
production and exportation of bananas.
Owing to the difficulty of determining the
exchange rate of the peso to the dollar because of
the floating rate and the promulgation of Central
Bank Circular No. 289 which imposes an 80%
retention scheme on all dollar earners, Congress
passed Republic Act No. 6125 entitled "an act
imposing STABILIZATION TAX ON CONSIGNMENTS
ABROAD TO ACCELERATE THE ECONOMIC
DEVELOPMENT OF THE PHILIPPINES AND FOR
OTHER PURPOSES," approved and made effective
on May 1, 1970), to eliminate the necessity for
said circular and to stabilize the peso. Among
others, it provides as follows:
Sec. 1(b)
Any export product the aggregate annual
F.O.B. value of which shall exceed five million
United States dollars in any one calendar year
during the effectivity of this Act shall likewise
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be subject to the rates of tax in force during
the fiscal years following its reaching the said
aggregate value.
During the first nine (9) months of calendar year
1971, the total banana export amounted to an
annual aggregate F.O.B. value of P8,949,000.00
thus exceeding the aggregate F.O.B. value of five
million United States Dollar, bringing it within the
ambit of Republic Act No. 6125. Consequently, the
banana industry was in a dilemma as to when the
stabilization tax was to become due and collectible
from it and under what schedule of Section 1 (b)
of Republic Act 6125 should said tax be collected.
The Central Bank called attention to Monetary
Board Resolution No. 1995 dated December 3,
1971 which clarified that:
ISSUE:
Whether or not respondent acted with grave
abuse of discretion amounting to lack of
jurisdiction when it issued Monetary Board
Resolution No. 1995, series of 1971 which in effect
reaffirmed Central Bank Circular No. 309, enacted
pursuant to Monetary Board Resolution No. 1179.
RULING:
Yes. The crux of the controversy, however, is the
manner of implementation of Republic Act No.
6125.
It therefore becomes convenient for the legislative
department of the government, by law, in a most
general way, to provide for the conduct, control,
and management of the work of the particular
department of the government; to authorize
certain persons, in charge of the management and
control of such department.
Such regulations have uniformly been held to have
the force of law, whenever they are found to be in
consonance and in harmony with the general
purposes and objects of the law. Such regulations
once established and found to be in conformity
with the general purposes of the law, are just as
binding upon all the parties, as if the regulation
had been written in the original law itself. Upon
the other hand, should the regulation conflict with
the law, the validity of the regulation cannot be
sustained. Respondent in gross violation of the
law, instead issued Resolution No. 1995 which
impose a 6% stabilization tax for the calendar year
January 1, 1972 to June 30, 1972, which obviously
is in excess of its jurisdiction. It was further argued
that in directing its agent bank to collect the
stabilization tax in accordance with Monetary
Board Resolution No. 1995, it acted whimsically
and capriciously.
It will be observed that while Monetary Board
Resolution No. 1995 cannot be said to be the

product of grave abuse of discretion but rather the
result of respondent's overzealous desire to carry
into effect the provisions of RA 6125, it is evident
that the Board acted beyond its authority under
the law and the Constitution. Moreover, there is
no dispute that in case of discrepancy between
the basic law and a rule or regulation issued to
implement said law, the basic law prevails because
said rule or regulation cannot go beyond the
terms and provisions of the basic law.
14.) RADIO COMMUNICATIONS OF THE
PHILIPPINES, INC., petitioner, vs.
FRANCISCO SANTIAGO and ENRIQUE MEDINA, as
Commissioner, Public Service Commission,
respondents.
G.R. No. L-29247 August 21, 1974
RADIO COMMUNICATIONS OF THE PHILIPPINES,
INC., petitioner, vs.
CONSTANCIO JAUGAN and ENRIQUE MEDINA,
Commissioner, Public Service Commission,
respondents.
FACTS:
It is admitted by petitioner Radio Communication
of the Philippines, Inc. (RCPI) that a telegram was
filed with respondent-company and the amount of
P1.50 was paid for the transmission of said
telegram. The telegram, however, was never
transmitted until now. The Petitioner not only did
not give any valid explanation, but did not present
any evidence to explain why the said telegram was
not forwarded to the addressee. This is, therefore,
a clear case where the petitioner, taking
advantage of the rates fixed by this Commission
collected the sum of P1.50 and promised to
render a service to the complainant. Upon the
complaints of respondents Santiago, Juagan, and
Medina, the Public service commission imposed a
fine as penalty against RCPI.
ISSUE:
Whether the Public Service Commission had the
jurisdiction to act on complaints by dissatisfied
customers of RCPI and penalize with fine.
RULING:
No. There can be no justification then for the
Public Service Commission imposing the fines. The
law cannot be any clearer. The only power it
possessed over radio companies, as noted was the
fix rates. It could not take to task a radio company
for any negligence or misfeasance. It was bereft of
such competence. It was not vested with such
authority. What it did then in these two petitions
lacked the impress of validity.
Except for constitutional officials who can trace
their competence to act to the fundamental law
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itself, a public official must locate in the statute
relied upon a grant of power before he can
exercise it. It need not be express. It may be
implied from the wording of the law. Absent such
a requisite, however, no warrant exists for the
assumption of authority. The act performed, if
properly challenged, cannot meet the test of
validity. It must be set aside. So it must be in these
two petitions. That is to defer to a principle
reiterated by this Court time and time again.
15.) TAYUG RURAL BANK, plaintiff-appellee, vs.
CENTRAL BANK OF THE PHILIPPINES, defendant-
appellant.
FACTS:
Plaintiff-Appellee, Tayug Rural Bank, Inc., is a
banking corporation in Pangasinan. Plaintiff
obtained thirteen (13) loans from Defendant-
Appellant, Central Bank of the Philippines, by way
of rediscounting. The outstanding balance was P
444,809.45 as of July 15, 1969. Appellant, issued
Memorandum Circular No. DLC-8, informing all
rural banks that an additional penalty interest rate
of ten per cent (10%) per annum would be
assessed on all past due loans beginning January
4, 1965.
Appellee Rural Bank sued Appellant in the Court of
First Instance of Manila, Branch III, to recover the
10% penalty imposed by Appellant amounting to
P16,874.97 and to restrain Appellant from
continuing the imposition of the penalty.
Appellant justified the imposition of the penalty
by way of affirmative and special defenses, stating
that it was legally imposed under the provisions of
Section 147 and 148 of the Rules and Regulations
Governing Rural Banks promulgated by the
Monetary Board on September 5, 1958, under
authority of Section 3 of Republic Act No. 720, as
amended.
ISSUE:
Whether the Monetary Board had authority to
authorize Appellant Central Bank to impose a
penalty rate of 10% per annum on past due loans
of rural banks which had failed to pay their
accounts on time.
RULING:
No. The supervising authority of the Monetary
Board of the Central Bank over Rural Banks, is
spelled-out under Section 10 of R.A. 720, as
follows:
SEC. 10. The power to supervise the operation of
any Rural Bank by the Monetary Board of the
Central Bank as herein indicated, shall consist in
placing limits to the maximum credit allowed
any individual borrower; in prescribing the

interest rate; in determining the loan period and
loan procedure; in indicating the manner in
which technical assistance shall be extended to
Rural Banks; in imposing a uniform accounting
system and manner of keeping the accounts and
records of the Rural Banks; in undertaking
regular credit examination of the Rural Banks: in
instituting periodic surveys of loan and lending
procedures, audits, test check of cash and other
transactions of the Rural Banks; in conducting
training courses for personnel of Rural Banks;
and, in general in supervising the business
operation of the Rural Banks.
Nowhere in any of the above-quoted pertinent
provisions of R.A. 720 nor in any other provision of
R.A. 720 for that matter, is the monetary Board
authorized to mete out on rural banks an
additional penalty rate on their past due accounts
with Appellant. As correctly stated by the trial
court, while the Monetary Board possesses broad
supervisory powers, nonetheless, the retroactive
imposition of administrative penalties cannot be
taken as a measure supervisory in character.
There are, however, limitations to the rule-making
power of administrative agencies. A rule shaped
out by jurisprudence is that when Congress
authorizes promulgation of administrative rules
and regulations to implement given legislation, all
that is required is that the regulation be not in
contradiction with it, but conform to the standards
that the law prescribes. A rule is binding on the
courts so long as the procedure fixed for its
promulgation is followed and its scope is within
the statute granted by the legislature, even if the
courts are not in agreement with the policy stated
therein or its innate wisdom. On the other hand,
administrative interpretation of the law is at best
merely advisory, for it is the courts that finally
determine what the law means. Hence an
administrative agency cannot impose a penalty
not so provided in the law authorizing the
promulgation of the rules and regulations, much
less one that is applied retroactively.
16.) GLOBE WIRELESS LTD., petitioner, vs.
PUBLIC SERVICE COMMISSION and ANTONIO B.
ARNAIZ, respondents.
FACTS:
A message addressed to Maria Diaz, Madrid,
Spain, filed by private respondent Antonio B.
Arnaiz with the telegraph office of the Bureau of
Telecommunications was transmitted to the
Bureau of Telecommunications in Manila. It was
forwarded to petitioner Globe Wireless Ltd. for
transmission to Madrid. Petitioner sent the
message to the American Cable and Radio
Corporation in New York, which, in turn,
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transmitted the same to the Empresa Nacional de
Telecommunicaciones in Madrid. The latter,
however, mislaid said message, resulting in its
non-delivery to the addressee.
After being informed of said fact, private
respondent Arnaiz, sent to then Public Service
Commissioner Enrique Medina an unverified
letter-complaint relating the incident. Petitioner
questioned PSC's jurisdiction over the subject
matter of the letter-complaint, even as it denied
liability for the non-delivery of the message to the
addressee. PSC issued an order finding petitioner
"responsible for the inadequate and unsatisfactory
service complained of, in violation of the Public
Service Act" and ordering it "to pay a fine of TWO
HUNDRED [P200.00] PESOS under Sec. 21 of Com.
Act 146, as amended."
ISSUE:
Whether respondent PSC had the jurisdiction to
act on complaints and impose fine upon failure of
petitioner to deliver the letter.
RULING:
No. Section 5 of Republic Act No. 4630, the
legislative franchise under which petitioner was
operating, limited respondent Commission's
jurisdiction over petitioner only to the rate which
petitioner may charge the Public. Thus,
Sec. 5. The Public Service Commission is hereby
given jurisdiction over the grantee only with
respect to the rates which the grantee may
charge the public subject to international
commitments made or adhered to by the
Republic of the Philippines.
The act complained of consisted in petitioner
having allegedly failed to deliver the telegraphic
message of private respondent to the addressee in
Madrid, Spain. Obviously, such imputed
negligence had nothing whatsoever to do with the
subject matter of the very limited jurisdiction of
the Commission over petitioner
Too basic in administrative law to need citation of
jurisprudence is the rule that the jurisdiction and
powers of administrative agencies, like respondent
Commission, are limited to those expressly
granted or necessarily implied from those granted
in the legislation creating such body; and any
order without or beyond such jurisdiction is void
and ineffective. The order under consideration
belonged to this category.
17.) DANTE M. POLLOSO, petitioner, vs.
HON. CELSO D. GANGAN, Chairman,
COMMISSION ON AUDIT, HON. RAUL C. FLORES,

COMMISSIONER, COMMISSION ON AUDIT, HON.
EMMANUEL M. DALMAN, COMMISSIONER,
COMMISSION ON AUDIT.respondents.
FACTS:
The National Power Corporation (NPC),
represented by its President Dr. Francisco L. Viray
entered into a service contract with Atty.
Benemerito A. Satorre.
Unit Auditor Alexander A. Tan, NPC-VRC, Cebu City
issued Notice of Disallowance for the payment of
the services rendered by Atty. Satorre in the total
amount of P283,763.39. The following reasons
were cited for said disallowance:
1)The contract for services did not have the
written conformity and acquiescence of the
Solicitor General or the Corporate Counsel and
concurrence of the Commission on Audit as
required under COA Circular No. 86-255 dated
April 2, 1986.
2) The contract was not supported with
Certificate of Availability of Funds as required
under Sec. 86 of P.D. 1445.
3)The contract was not submitted to the Civil
Service Commission for final review and was
not forwarded to the Compensation and
Position Confirmation and Classification
Bureau, DBM for appropriate action as
required in CSC MC # 5 Series of 1985.
Petitioner argues that the phrase handling of
legal cases should be construed to mean as
conduct of cases or handling of court cases or
litigation and not to other legal matters such as
right of way matters.
ISSUE:
Whether COA Circular No. 86-255 applies to the
nature of hiring Atty. Sattore who handled only
right of way matters and did not handle court
cases.
RULING:
Yes. What can be gleaned from a reading of the
above circular is that government agencies and
instrumentalities are restricted in their hiring of
private lawyers to render legal services or handle
their cases. No public funds will be disbursed for
the payment to private lawyers unless prior to the
hiring of said lawyer, there is a written conformity
and acquiescence from the Solicitor General or
the Government Corporate Counsel.
On the claim that COA Circular 86-255 is not
applicable in this case because the inhibition
provided for in said Circular relates to the handling
of legal cases of a government agency and that
the contractor was not hired in that capacity but
to handle legal matters involving right-of-way, it is
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maintained that the contracted service falls within
the scope of the inhibition which clearly includes
"the hiring or employing private lawyers or law
practitioners to render legal services for them
and/or to handle their legal cases.
Moreover, it is important to mention that the
intention of said Circular is to curb the observed
and persistent violation of existing laws and
regulations, including CSC MC # 5 series of 1985
pertaining to the employment of private lawyers
on a contractual basis in government agencies
which involves the disbursement of public funds
by subjecting the same to the conformity and
concurrence requirements of said Circular. Being
so, the manner of agreed payment or
consideration, whether termed as a fixed retainer
basis or a fixed contract price patterned after
existing salary scale of existing and comparable
positions in NPC-VRC is immaterial as both still
involve the outlay of public funds and also the
contractual employment/hiring of a private
lawyer.
19.) MAKATI STOCK EXCHANGE, INC.,
petitioner, vs. SECURITIES AND EXCHANGE
COMMISSION and MANILA STOCK EXCHANGE,
respondents.
FACTS:
This is an issue on resolution of the Securities and
Exchange Commission which would deny the
Makati Stock Exchange, Inc., permission to
operate a stock exchange unless it agreed not to
list for trading on its board, securities already
listed in the Manila Stock Exchange.
Petitioner contended that the permission
provided by law amounted to prohibition, and
that the commission has no power to impose it.
ISSUE:
Whether the SEC has the authority to promulgate
the rule in question.
RULING:
No. It is fundamental that an administrative
officer has only such powers as are expressly
granted to him by the statute, and those
necessarily implied in the exercise thereof.
The commission cites no provision of law expressly
supporting its rule against double listing. It
suggests that the power is necessary for the
execution of the functions vested in it. It argues
that said rule was approved by the department
head before the War and it is not in conflict with
the provisions of securities and exchange act. The
approval of the department, by itself, adds no
weight on judicial litigation. The commission
possesses no power to impose the condition of

the rule which result in discrimination and
violation of constitutional rights.
20.) RUPERTO TAULE, petitioner, vs.
SECRETARY LUIS T. SANTOS and GOVERNOR
LEANDRO VERCELES, respondents.
FACTS:
The Federation of Associations of Barangay
Councils (FABC) convened in Virac, Catanduanes
with six members in attendance for the purpose of
holding the election of its officers. When the
group decided to hold the election despite the
absence of five (5) of its members, the Provincial
Treasurer and the Provincial Election Supervisor
walked out. The election nevertheless proceeded
with PGOO Alberto P. Molina, Jr. as presiding
officer. Chosen as members of the Board of
Directors were Taule, Aquino, Avila, Jacob and
Sales.
Respondent Leandro I. Verceles, Governor of
Catanduanes, sent a letter to respondent Luis T.
Santos, the Secretary of Local
Government, protesting the election of the
officers of the FABC and seeking its nullification.
Respondent Secretary issued a resolution
nullifying the election of the officers of the FABC in
Catanduanes ordering a new one to be conducted
as early as possible to be presided by the Regional
Director of Region V of the Department of Local
Government.
ISSUE:
Whether or not the respondent Secretary has
jurisdiction to entertain an election protest
involving the election of the officers of the
Federation of Association of Barangay Councils.
RULING:
No. The Secretary of Local Government is not
vested with jurisdiction to entertain any protest
involving the election of officers of the FABC.
The respondent Secretary has the power to
"establish and prescribe rules, regulations and
other issuances and implementing laws on the
general supervision of local government units and
on the promotion of local autonomy and monitor
compliance thereof by said units."
Also, the respondent Secretary's rule making
power is provided in See. 7, Chapter II, Book IV of
the Administrative Code, to wit:
(3) Promulgate rules and regulations necessary
to carry out department objectives, policies,
functions, plans, programs and projects;
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Thus, DLG Circular No. 89-09 was issued by
respondent Secretary in pursuance of his rule-
making power conferred by law and which now
has the force and effect of law.
However, it is a well-settled principle of
administrative law that unless expressly
empowered, administrative agencies are bereft of
quasi- judicial powers. The jurisdiction of
administrative authorities is dependent entirely
upon the provisions of the statutes reposing
power in them; they cannot confer it upon
themselves. Such jurisdiction is essential to give
validity to their determinations.
There is neither a statutory nor constitutional
provision expressly or even by necessary
implication conferring upon the Secretary of Local
Government the power to assume jurisdiction
over an election protect involving officers of
the katipunan ng mga barangay. An
understanding of the extent of authority of the
Secretary over local governments is therefore
necessary.
21.) RADIO COMMUNICATIONS OF THE
PHILIPPINES, INC. (RCPI), petitioner, vs.
NATIONAL TELECOMMUNICATIONS COMMISSION
(NTC) and JUAN A. ALEGRE, respondents.
FACTS:
Private respondent Juan A. Alegre's wife, Dr.
Jimena Alegre, sent two (2) RUSH telegrams
through petitioner RCPI's facilities to his sister and
brother-in-law in Valencia, Bohol and another
sister-in-law in Espiritu, Ilocos Norte. Both
telegrams did not reach their destinations on the
expected dates. Private respondent filed a letter-
complaint against the RCPI with the National
Telecommunications Commission (NTC) for poor
service, with a request for the imposition of the
appropriate punitive sanction against the
company.
Commission finds respondent administratively
liable for deficient and inadequate service defined
under Section 19(a) of C.A. 146 and hereby
imposes the penalty of FINE.
ISSUE:
Whether the NTC had the jurisdiction and impose
fine against petitioner for failure to deliver the
letters to the addressee.
RULING:
No. NTC has no jurisdiction to impose a
fine. Globe Wireless Ltd. vs. Public Service
Commission (G. R. No. L-27250, 21 January 1987,
147 SCRA 269) says so categorically.

Verily, Section 13 of Commonwealth Act No.
146, as amended, otherwise known as the
Public Service Act, vested in the Public Service
Commission jurisdiction, supervision and control
over all public services and their franchises,
equipment and other properties.
No substantial change has been brought about by
Executive Order No. 546 invoked by the Solicitor
General's Office to bolster NTC's jurisdiction. The
Executive Order is not an explicit grant of power to
impose administrative fines on public service
utilities, including telegraphic agencies, which
have failed to render adequate service to
consumers. Neither has it expanded the coverage
of the supervisory and regulatory power of the
agency. There appears to be no alternative but to
reiterate the settled doctrine in administrative law
that:
Too basic in administrative law to need citation
of jurisprudence is the rule that jurisdiction and
powers of administrative agencies, like
respondent Commission, are limited to those
expressly granted or necessarily implied from
those granted in the legislation creating such
body; and any order without or beyond such
jurisdiction is void and ineffective.
22.) SOLID HOMES, INC., petitioner, vs.
TERESITA PAYAWAL and COURT OF
APPEALS, respondents.
FACTS:
The complaint was filed by Teresita Payawal
against Solid Homes, Inc. The plaintiff alleged that
the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the
agreed price of P 28,080.00, and that by
September 10, 1981, she had already paid the
defendant the total amount of P 38,949.87 in
monthly installments and interests. Solid Homes
subsequently executed a deed of sale over the
land but failed to deliver the corresponding
certificate of title despite her repeated demands
because, as it appeared later, the defendant had
mortgaged the property in bad faith to a financing
company.
Solid Homes moved to dismiss the complaint on
the ground that the court had no jurisdiction, this
being vested in the National Housing Authority
under PD No. 957.
ISSUE:
Whether the NHA had the jurisdiction over cases
involving claims, refund and any other claims filed
by the subdivision lot or condominium unit buyer.
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RULING:
Yes. The applicable law is PD No. 957, as amended
by PD No. 1344, entitled "Empowering the
National Housing Authority to Issue Writs of
Execution in the Enforcement of Its Decisions
Under Presidential Decree No. 957." Section 1 of
the latter decree provides as follows:
SECTION 1. In the exercise of its function to
regulate the real estate trade and business and
in addition to its powers provided for in
Presidential Decree No. 957, the National
Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other
claims filed by subdivision lot or condominium
unit buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of
contractuala statutory obligations filed by
buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or
salesman.
The language of this section, especially the
italicized portions, leaves no room for doubt that
"exclusive jurisdiction" over the case between the
petitioner and the private respondent is vested
not in the Regional Trial Court but in the National
Housing Authority.
23.) ANTIPOLO REALTY CORPORATION,
petitioner, vs. THE NATIONAL HOUSING
AUTHORITY, HON. G.V. TOBIAS, in his capacity as
General Manager of the National Housing
Authority, THE HON. JACOBO C. CLAVE, in his
capacity as Presidential Executive Assistant and
VIRGILIO A. YUSON, respondents.
FACTS:
By virtue of a Contract to Sell, Jose Hernando
acquired prospective and beneficial ownership
over Lot of the Ponderosa Heights Subdivision
from the petitioner Antipolo Realty Corporation.
Hernando transferred his rights over subject lot to
private respondent Virgilio Yuson. The transfer
was embodied in a Deed of Assignment and
Substitution of Obligor executed with the consent
of Antipolo Realty, in which Mr. Yuson assumed
the performance of the vendee's obligations
under the original contract, including payment of
his predecessor's installments in arrears. However,
for failure of Antipolo Realty to develop the
subdivision project in accordance with its
undertaking under Clause 17 of the Contract to
Sell, Mr. Yuson paid only the arrearages pertaining
to the period up to, and including, the month of

August 1972 and stopped all monthly installment
payments falling due thereafter Clause 17 reads:
Failure by the SELLER shall permit the BUYER to
suspend his monthly installments without any
penalties or interest charges until such time that
such improvements shall have been completed
Antipolo Realty rescinded the Contract to Sell, and
claiming the forfeiture of all installment payments
previously made by Mr. Yuson. Aggrieved by the
rescission of the Contract to Sell, Mr. Yuson
brought his dispute with Antipolo Realty before
public respondent NHA.
Antipolo Realty contende that the jurisdiction to
hear and decide Mr. Yuson's complaint was lodged
in the regular courts, not in the NHA, since that
complaint involved the interpretation and
application of the Contract to Sell.
ISSUE:
Whether the regular court has jurisdiction over
the present controversy.
RULING:
No. It is by now commonplace learning that many
administrative agencies exercise and perform
adjudicatory powers and functions, though to a
limited extent only. Limited delegation of judicial
or quasi-judicial authority to administrative
agencies is well recognized in our
jurisdiction, basically because the need for special
competence and experience has been recognized
as essential in the resolution of questions of
complex or specialized character and because of a
companion recognition that the dockets of our
regular courts have remained crowded and
clogged. Presidential Decree No. 1344 clarified
and spelled out the quasi-judicial dimensions of
the grant of regulatory authority to the NHA in the
following quite specific terms:
SECTION 1. In the exercise of its functions to
regulate the real estate trade and business and
in addition to its powers provided for in
Presidential Decree No. 957, the National
Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims
filed by sub- division lot or condominium unit
buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of
contractual and statutory obligations filed by
buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or
salesman.
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The substantive provisions being applied and
enforced by the NHA in the instant case are found
in Section 23 of Presidential Decree No. 957 which
reads:
Sec. 23. Non-Forfeiture of Payments. No
installment payment made by a buyer in a
subdivision or condominium project for the lot
or unit he contracted to buy shall be forfeited in
favor of the owner or developer when the buyer,
after due notice to the owner or developer,
desists from further payment due to the failure
of the owner or developer to develop the
subdivision or condominium project according
to the approved plans and within the time limit
for complying with the same. Such buyer may, at
his option, be reimbursed the total amount paid
including amortization and interests but
excluding delinquency interests, with interest
thereon at the legal rate.
Having failed to comply with its contractual
obligation to complete certain specified
improvements in the subdivision within the
specified period of two years from the date of the
execution of the Contract to Sell, petitioner was
not entitled to exercise its options under Clause 7
of the Contract. Hence, petitioner could neither
rescind the Contract to Sell nor treat the
installment payments made by the private
respondent as forfeited in its favor.
24.) LAGUNA LAKE DEVELOPMENT
AUTHORITY, petitioner, vs. COURT OF APPEALS,
HON. MANUEL JN. SERAPIO, Presiding Judge RTC,
Branch 127, Caloocan City, HON. MACARIO A.
ASISTIO, JR., City Mayor of Caloocan and/or THE
CITY GOVERNMENT OF CALOOCAN,respondents.
FACTS:
The instant case stemmed from the filing of the
letter-complaint of Task Force Camarin Dumpsite
with the Laguna Lake Development Authority
seeking to stop the operation of the 8.6-hectare
open garbage dumpsite in Tala Estate, Barangay
Camarin, Caloocan City due to its harmful effects
on the health of the residents and the possibility
of pollution of the water content of the
surrounding area. Laguna Lake Development
Authority (LLDA) issue a cease and desist order
enjoining the dumping of garbage in Barangay
Camarin, Tala Estate, Caloocan City.
ISSUE:
Whether the LLDA have the power and authority
to issue a "cease and desist" order under Republic
Act No. 4850 and its amendatory laws.
RULING:

Yes. The cease and desist order issued by the LLDA
requiring the City Government of Caloocan to stop
dumping its garbage in the Camarin open
dumpsite found by the LLDA to have been done in
violation of Republic Act No. 4850, as amended,
and other relevant environment laws, cannot be
stamped as an unauthorized exercise by the LLDA
of injunctive powers. By its express terms,
Republic Act No. 4850, as amended by P.D. No.
813 and Executive Order No. 927, series of 1983,
authorizes the LLDA to "make, alter or modify
order requiring the discontinuance or pollution."
Section 4, par. (d) explicitly authorizes the LLDA
to make whatever order may be necessary in the
exercise of its jurisdiction.
Assuming arguendo that the authority to issue a
"cease and desist order" were not expressly
conferred by law, there is jurisprudence enough to
the effect that the rule granting such authority
need not necessarily be express. While it is a
fundamental rule that an administrative agency
has only such powers as are expressly granted to it
by law, it is likewise a settled rule that an
administrative agency has also such powers as are
necessarily implied in the exercise of its express
powers. 26 In the exercise, therefore, of its express
powers under its charter as a regulatory and
quasi-judicial body with respect to pollution cases
in the Laguna Lake region, the authority of the
LLDA to issue a "cease and desist order" is,
perforce, implied. Otherwise, it may well be
reduced to a "toothless" paper agency.
The issuance, therefore, of the cease and desist
order by the LLDA, as a practical matter of
procedure under the circumstances of the case, is
a proper exercise of its power and authority under
its charter and its amendatory laws. Had the cease
and desist order issued by the LLDA been
complied with by the City Government of
Caloocan as it did in the first instance, no further
legal steps would have been necessary.
25.) DRA. BRIGIDA S. BUENASEDA, Lt. Col.
ISABELO BANEZ, JR., ENGR. CONRADO REY
MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N.
LOPEZ, petitioners, vs.
SECRETARY JUAN FLAVIER, Ombudsman
CONRADO M. VASQUEZ, and NCMH NURSES
ASSOCIATION, represented by RAOULITO
GAYUTIN, respondents.
FACTS:
Principally, the petition seeks to nullify the Order
of the Ombudsman directing the preventive
suspension of petitioners.
The questioned order was issued in connection
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with the administrative complaint filed with the
Ombudsman (OBM-ADM-0-91-0151) by the
private respondents against the petitioners for
violation of the Anti-Graft and Corrupt Practices
Act.
The Solicitor General, commenting on the Petition
stated that (a) "The authority of the Ombudsman
is only to recommend suspension and he has no
direct power to suspend;" and (b) "Assuming the
Ombudsman has the power to directly suspend a
government official or employee, there are
conditions required by law for the exercise of such
powers; and said conditions have not been met in
the instant case".
Petitioners adopted the position of the Solicitor
General that the Ombudsman can only suspend
government officials or employees connected with
his office.
ISSUE:
Whether the Ombudsman has the power to
suspend government officials and employees
working in offices other than the Office of the
Ombudsman, pending the investigation of the
administrative complaints filed against said
officials and employees.
RULING:
Yes. In upholding the power of the Ombudsman to
preventively suspend petitioners, respondents
invoke Section 24 of R.A. No. 6770, which
provides:
Sec. 24. Preventive Suspension. The
Ombudsman or his Deputy may preventively
suspend any officer or employee under his
authority pending an investigation, if in his
judgment the evidence of guilt is strong, and (a)
the charge against such officer or employee
involves dishonesty, oppression or grave
misconduct or neglect in the performance of
duty; (b) the charge would warrant removal
from the service; or (c) the respondent's
continued stay in office may prejudice the case
filed against him.
The preventive suspension shall continue until
the case is terminated by the Office of
Ombudsman but not more than six months,
without pay, except when the delay in the
disposition of the case by the Office of the
Ombudsman is due to the fault, negligence or
petition of the respondent, in which case the
period of such delay shall not be counted in
computing the period of suspension herein
provided.
When the constitution vested on the Ombudsman
the power "to recommend the suspension" of a

public official or employees (Sec. 13 [3]), it
referred to "suspension," as a punitive measure.
All the words associated with the word
"suspension" in said provision referred to
penalties in administrative cases. Section 24 of
R.A. No. 6770, which grants the Ombudsman the
power to preventively suspend public officials and
employees facing administrative charges before
him, is a procedural, not a penal statute. The
preventive suspension is imposed after
compliance with the requisites therein set forth,
as an aid in the investigation of the administrative
charges.
Under the Constitution, the Ombudsman is
expressly authorized to recommend to the
appropriate official the discipline or prosecution of
erring public officials or employees. In order to
make an intelligent determination whether to
recommend such actions, the Ombudsman has to
conduct an investigation. In turn, in order for him
to conduct such investigation in an expeditious
and efficient manner, he may need to suspend the
respondent.
The purpose of R.A. No. 6770 is to give the
Ombudsman such powers as he may need to
perform efficiently the task committed to him by
the Constitution. Such being the case, said statute,
particularly its provisions dealing with procedure,
should be given such interpretation that will
effectuate the purposes and objectives of the
Constitution. Any interpretation that will hamper
the work of the Ombudsman should be avoided.
The Administrative Code of 1987 also empowered
the proper disciplining authority to "preventively
suspend any subordinate officer or employee
under his authority pending an investigation
26.) ALFREDO L. AZARCON, petitioner, vs.
SANDIGANBAYAN, PEOPLE OF THE PHILIPPINES
and JOSE C. BATAUSA, respondents.
FACTS:
Petitioner Alfredo Azarcon owned and operated
an earth-moving business, hauling dirt and ore.
His services were contracted by the Paper
Industries Corporation of the Philippines (PICOP)
at its concession in Mangagoy, Surigao del Sur.
Occasionally, he engaged the services of sub-
contractors like Jaime Ancla whose trucks were
left at the formers premises.
On May 25, 1983, a Warrant of Distraint of
Personal Property was issued by the Main Office
of the BIR addressed to the Regional Director (Jose
Batausa) or his authorized representative of
Revenue Region 10, Butuan City commanding the
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latter to distraint the goods, chattels or effects and
other personal property of Jaime Ancla, a sub-
contractor of Azarcon and, a delinquent taxpayer.
The Warrant of Garnishment was issued to
Azarcon ordering him to transfer, surrender,
transmit and/or remit to BIR the property in his
possession owned by taxpayer Ancla.
Petitioner Azarcon, in signing the Receipt for
Goods, Articles, and Things Seized Under
Authority of the National Internal Revenue,
assumed the undertakings specified in the receipt
and left in his possession pending investigation is 1
blue Isuzu dump truck.
Subsequently, Azarcon wrote a letter to the BIRs
Regional Director for Revenue Region 10 stating
that Mr. Jaime Ancla intends to cease his
operations with him, and that this is evidenced by
the fact that sometime in August, 1985 he
surreptitiously withdrew his equipment from his
custody. He therefore expressed his desire to
relinquish whatever responsibilities he has over
the property, and that this cancellation shall take
effect immediately.
Incidentally, Azarcon reported the taking of the
truck to the security manager of PICOP, Mr. Delfin
Panelo, and requested him to prevent this truck
from being taken out of the PICOP concession. By
the time the order to bar the trucks exit was given,
however, it was too late.
Regional Director Batausa responded in a letter,
stating that Azarcon voluntarily assumed the
liabilities of safekeeping and preserving the unit in
behalf of the BIR and his failure to observe said
provisions does not relieve Azarcon from
responsibility.
Thereafter, the Sandiganbayan found that On 11
June 1986, Calo, a Revenue Document Processor,
sent a progress report to the Chief of the
Collection Branch of the surreptitious taking of the
dump truck and that Ancla was renting out the
truck to a certain contractor by the name of Oscar
Cueva at PICOP.
She also suggested that if the report were true, a
warrant of garnishment be reissued against Cueva
for whatever amount of rental is due from Ancla
until such time as the latters tax liabilities shall be
deemed satisfied. However, instead of doing so,
Director Batausa filed a letter-complaint against
Azarcon and Ancla.
Provincial Fiscal Montenegro forwarded the
records of the complaint to the Office of the
Tanodbayan. He was deputized Tanodbayan

prosecutor and granted authority to conduct
preliminary investigation.
Along with his co-accused Jaime Ancla, Azarcon
was charged before the Sandiganbayan with the
crime of malversation of public funds or property
under Article 217 in relation to Article 222 of the
RPC. (Allegedly, as the dumptruck became public
property and the value thereof as public fund, he
unlawfully and feloniously misappropriate,
misapply and convert to his personal use and
benefit the aforementioned motor vehicle, and
allowing accused Jaime C. Ancla to retrieve the
dump truck to the damage and prejudice of the
government in the amount of P80,831.59 in a
form of unsatisfied tax liability)
Azarcon filed a motion for reinvestigation before
the Sandiganbayan alleging that:
1. the petitioner never appeared in the
preliminary investigation; and
2. the petitioner was not a public officer, hence
a doubt exists as to why he was being
charged with malversation under Article 217
of the Revised Penal Code.
The Sandiganbayan rendered a Decision against
Azarcon and found him guilty beyond reasonable
doubt as principal of Malversation of Public Funds
defined and penalized under Article 217 in relation
to Article 222 of the Revised Penal Code.
ISSUES:
1. Whether or not the Sandiganbayan had
jurisdiction over the subject matter of the
controversy; and
2. Whether or not Azarcon can be considered a
public officer by reason of his designation by
the Bureau of Internal Revenue as a
depositary of distrained property.
HELD:
1. No, the Sandiganbayan does not have
jurisdiction over the controversy.
Section 4 of P.D. No. 1606 provided that:
SEC. 4. Jurisdiction. -- The Sandiganbayan shall
exercise:
(a) Exclusive original jurisdiction in all cases
involving:
(1) Violations of Republic Act No. 3019, as
amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and
Chapter II, Section 2, Title VII of the Revised Penal
Code;
(2) Other offenses or felonies committed by public
officers and employees in relation to their office,
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including those employed in government-owned
or controlled corporations, whether simple or
complexed with other crimes, where the penalty
prescribed by law is higher than prision
correccional or imprisonment for six (6) years, or a
fine of P6,000.00: PROVIDED, HOWEVER, that
offenses or felonies mentioned in this paragraph
where the penalty prescribed by law does not
exceed prision correccional or imprisonment for
six (6) years or a fine of P6,000.00 shall be tried by
the proper Regional Trial Court, Metropolitan Trial
Court, Municipal Trial Court and Municipal Circuit
Trial Court.
In case private individuals are charged as co-
principals, accomplices or accessories with the
public officers or employees, including those
employed in government-owned or controlled
corporations, they shall be tried jointly with said
public officers and employees.
The foregoing provisions unequivocally specify the
only instances when the Sandiganbayan will have
jurisdiction over a private individual, i.e. when the
complaint charges the private individual either as
a co-principal, accomplice or accessory of a public
officer or employee who has been charged with a
crime within its jurisdiction.
The Information does not charge petitioner
Azarcon of being a co-principal, accomplice or
accessory to a public officer committing an offense
under the Sandiganbayans jurisdiction. Thus,
unless petitioner be proven a public officer, the
Sandiganbayan will have no jurisdiction over the
crime charged.
Article 203 of the RPC determines who are public
officers:
Who are public officers. -- For the purpose of
applying the provisions of this and the preceding
titles of the book, any person who, by direct
provision of the law, popular election, popular
election or appointment by competent authority,
shall take part in the performance of public
functions in the Government of the Philippine
Islands, or shall perform in said Government or in
any of its branches public duties as an employee,
agent, or subordinate official, of any rank or
classes, shall be deemed to be a public officer.
Thus, to be a public officer, one must be --
(1) Taking part in the performance of public
functions in the government, or performing in said
Government or any of its branches public duties as
an employee, agent, or subordinate official, of any
rank or class; and

(2) That his authority to take part in the
performance of public functions or to perform
public duties must be --
a. by direct provision of the law, or
b. by popular election, or
c. by appointment by competent authority.[28]
Granting arguendo that the petitioner, in signing
the receipt for the truck constructively distrained
by the BIR, commenced to take part in an activity
constituting public functions, he obviously may
not be deemed authorized by popular election.
2. No, petitioners designation by the BIR as a
custodian of distrained property does not qualify
as appointment by direct provision of law, or by
competent authority.
The Solicitor General contends that the BIR, in
effecting constructive distraint over the truck
allegedly owned by Jaime Ancla, and in requiring
the petitioner Alfredo Azarcon who was in
possession thereof to sign a pro forma receipt for
it, effectively designated petitioner a depositary
and, hence, a public officer. This is based on the
theory that the power to designate a private
person who has actual possession of a distrained
property as a depository of distrained property is
necessarily implied in the BIRs power to place the
property of a delinquent tax payer (sic) in distraint
as provided for under Sections 206, 207 and 208
(formerly Sections 303, 304 and 305) of the
National Internal Revenue Code, (NIRC) x x x.
It is axiomatic in our constitutional framework,
which mandates a limited government, that its
branches and administrative agencies exercise
only that power delegated to them as defined
either in the Constitution or in legislation or in
both.
Thus, although the appointing power is the
exclusive prerogative of the President, the
quantum of powers possessed by an
administrative agency forming part of the
executive branch will still be limited to that
conferred expressly or by necessary or fair
implication in its enabling act. Hence, an
administrative officer has only such powers as are
expressly granted to him and those necessarily
implied in the exercise thereof.
Implied powers are those which are necessarily
included in, and are therefore of lesser degree
than the power granted. It cannot extend to other
matters not embraced therein, nor are not
incidental thereto. For to so extend the statutory
grant of power would be an encroachment on
powers expressly lodged in Congress by our
Constitution.
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It is true that Sec. 206 of the NIRC, as pointed out
by the prosecution, authorizes the BIR to effect a
constructive distraint by requiring any person to
preserve a distrained property.
However, we find no provision in the NIRC
constituting such person a public officer by reason
of such requirement. The BIRs power authorizing a
private individual to act as a depositary cannot be
stretched to include the power to appoint him as a
public officer.
The prosecution argues that Article 222 of the
Revised Penal Code defines the individuals
covered by the term officers under Article 217 of
the same Code. And accordingly, since Azarcon
became a depository of the truck seized by the BIR
he also became a public officer who can be
prosecuted under Article 217.
The Court is not persuaded. Article 222 of the RPC
reads:
Officers included in the preceding provisions. --
The provisions of this chapter shall apply to
private individuals who, in any capacity whatever,
have charge of any insular, provincial or municipal
funds, revenues, or property and to any
administrator or depository of funds or property
attached, seized or deposited by public authority,
even if such property belongs to a private
individual.
The language of the foregoing provision is clear. A
private individual who has in his charge any of the
public funds or property enumerated therein and
commits any of the acts defined in any of the
provisions of Chapter Four, Title Seven of the RPC,
should likewise be penalized with the same
penalty meted to erring public officers. Nowhere
in this provision is it expressed or implied that a
private individual falling under said Article 222 is
to be deemed a public officer.
The Court thus finds petitioner Alfredo Azarcon
and his co-accused Jaime Ancla to be both private
individuals erroneously charged before and
convicted by Respondent Sandiganbayan which
had no jurisdiction over them.
It is evident that the petitioner did not cease to be
a private individual when he agreed to act as
depositary of the garnished dump truck.
Therefore, when the information charged him and
Jaime Ancla before the Sandiganbayan for
malversation of public funds or property, the
prosecution was in fact charging two private
individuals without any public officer being
similarly charged as a co-conspirator.
Consequently, the Sandiganbayan had no
jurisdiction over the controversy and therefore all

the proceedings taken below as well as the
Decision rendered by Respondent Sandiganbayan,
are null and void for lack of jurisdiction.
27.) BENJAMIN MASANGCAY, petitioner, vs. THE
COMMISSION ON ELECTIONS, respondent.
FACTS: Masangcay was then the provincial
treasurer of Aklan designated by the Commission
to take charge of the receipt and custody of the
official ballots, election forms and supplies, as well
as of their distribution, among the different
municipalities of the province.
Masangcay, with several others, was charged
before the Commission on Elections with
contempt for having opened three boxes
containing official and sample ballots for the
municipalities of the province of Aklan, in violation
of the instructions of said Commission embodied
in its resolution.
Commission rendered its decision finding
Masangcay and his co-respondent Molo guilty as
charged.
It is contended that, even if petitioner can be held
guilty of the act of contempt charged, the decision
is null and void for lack of valid power on the part
of the Commission to impose such disciplinary
penalty under the principle of separation of
powers.
ISSUE: Whether or not the Commission on
Elections lacks power to impose the disciplinary
penalty meted out to Masangcay.
HELD: Yes. There is merit in the contention that
the Commission on Elections lacks power to
impose the disciplinary penalty meted out to
petitioner in the decision subject of review.
We had occasion to stress in the case of Guevara v.
The Commission on Elections that under the law
and the constitution, the Commission on Elections
has only the duty to enforce and administer all
laws to the conduct of elections, but also the
power to try, hear and decide any controversy that
may be submitted to it in connection with the
elections.
In this sense, said, the Commission, although it
cannot be classified a court of justice within the
meaning of the Constitution (Section 30, Article
VIII), for it is merely an administrative body, may
however exercise quasi-judicial functions insofar
as controversies that by express provision law
come under its jurisdiction. The difficulty lies in
drawing the demarcation line between the duty
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Atty. Vic Alabastro
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which inherently is administrative in character and
a function which calls for the exercise of the quasi-
judicial function of the Commission.
In the same case, we also expressed the view that
when the Commission exercises a ministerial
function it cannot exercise the power to punish
contempt because such power is inherently
judicial in nature, as can be clearly gleaned from
the following doctrine we laid down therein:
. . . As this Court has aptly said: 'The power to
punish for contempt is inherent in all courts; its
existence is essential to the preservation of order
in judicial proceedings, and to the enforcement of
judgments, orders and mandates courts, and,
consequently, in the administration of justice
(Slade Perkins v. Director of Prisons, 58 Phil., 271;
U.S. v. Lee Hoc, 36 Phil., 867; In Re Sotto, 46 O.G.,
2570; In Re Kelly, Phil., 944). The exercise of this
power has always been regarded as a necessary
incident and attribute of courts (Slade Perkins v.
Director of Prisons, Ibid.).
In the instant case, the resolutions which the
Commission tried to enforce and for whose
violation the charge for contempt was filed against
petitioner Masangcay merely call for the exercise
of an administrative or ministerial function for
they merely concern the procedure to be followed
in the distribution of ballots and other election
paraphernalia among the different municipalities.
In fact, Masangcay, who as provincial treasurer of
Aklan was the one designated to take charge of
the receipt, custody and distribution of election
supplies in that province, was charged with having
opened three boxes containing official ballots for
distribution among several municipalities in
violation of the instructions of the Commission.
And because of such violation he was dealt as for
contempt of the Commission and was sentenced
accordingly. In this sense, the Commission has
exceeded its jurisdiction in punishing him for
contempt, and so its decision is null and void.
28.) FREEMAN, INC., FREEMAN MANAGEMENT &
DEVELOPMENT CORP., CHIAO LIAN, LECHU S. LIM,
PERLITA S. DYOGI, OLIVIA S. SANTOS, CARMEN S.
SAW and RUBEN CHUA, petitioners, vs.
THE SECURITIES AND EXCHANGE COMMISSION,
SAW MUI, RUBEN SAW, DIONISIO SAW, LINA S.
CHUA, LUCILA S. RUSTE and EVELYN SAW,
respondents.
FACTS: Freeman, Inc. (FREEMAN), was granted a
loan by Equitable Banking Corporation
(EQUITABLE) as evidenced by 2 promissory notes:
P1,700,000.00 payable December 1987, and

P6,000,000.00 payable April 1988. Saw Chiao Lian,
President of Freeman, Inc., signed as co-maker in
both promissory notes.
When FREEMAN failed to pay its obligations,
EQUITABLE instituted collection suit against
FREEMAN and Saw Chiao Lian. EQUITABLE also
prayed for preliminary attachment.
The collection case was terminated when the
parties entered into a compromise agreement.
However, FREEMAN and Saw Chiao Lian failed to
comply with the judgment.
A writ of execution was issued, and 2 parcels of
land belonging to FREEMAN were levied upon and
sold at public auction. The highest bidder was one
of the petitioners, Freeman Management and
Development Corporation (FREEMAN
MANAGEMENT), which thereafter registered its
certificates of sale with the Register of Deeds.
Before FREEMAN MANAGEMENT could
consolidate its title over the properties purchased
at the auction sale, private respondents filed a
petition with the Securities and Exchange
Commission (SEC) seeking the dissolution of
FREEMAN, accounting and reconveyance of the
properties.
Private respondent filed a similar complaint
against petitioners with the RTC. The complaint
sought to annul the compromise agreement
between EQUITABLE on one hand and defendants
FREEMAN and Saw Chiao Lian on the other, as well
as the promissory notes executed by Saw Chiao
Lian, the auction sale, and the sheriff's certificate
of sale of the lots.
SEC Hearing Officer Juanito B. Almosa, Jr., issued a
writ of preliminary injunction to prevent the
consolidation of ownership of petitioner
FREEMAN MANAGEMENT over the properties it
acquired in the auction sale, the redemption
period having expired.
Petitioners filed the present petition alleging that
the SEC committed grave abuse of discretion and
acted in excess of jurisdiction in sustaining the
order of its Hearing Officer granting the writ of
injunction enjoining consolidation of ownership in
FREEMAN MANAGEMENT and that the SEC has
jurisdiction to take cognizance of and determine
the rights of petitioners and private respondents
as against each other.
Petitioners also argue that the SEC, being a
coordinate body with the Regional Trial Court,
could not interfere in the proceedings held
therein, and neither could it review the issues
passed upon by the said court.
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Private respondents contend the jurisdiction of
the SEC has been resolved by this Court in Saw v.
Court of Appeals when it held that "even with the
denial of petitioners' motion to intervene, nothing
is really lost to them. The denial did not
necessarily prejudice them as their rights are
being litigated in the case (SEC Case No. 3577)
now before the Securities and Exchange
Commission and may be fully asserted and
protected in that separate proceeding.
In its comment, the Office of the Solicitor General
agrees with petitioners' contention that the SEC,
as a co-equal body with the Regional Trial Court,
cannot modify, reverse or pass upon the decision
of said court.
ISSUE: Whether or not the SEC, being a coordinate
body with the Regional Trial Court, may interfere
in the proceedings held therein and review the
issues passed upon by the said court.
RULING: No. Our ruling in Saw v. Court of Appeals
should be understood in the light of 2 basic legal
principles.
First, that administrative agencies like the SEC are
tribunals of limited jurisdiction and as such can
exercise only those powers which are specifically
granted to them by their enabling statutes.
Section 5 of P.D. No. 902-A, as amended, provides
the cases over which the SEC has original and
exclusive jurisdiction to hear and decide. These
include controversies arising out of intra-corporate
or partnership relations between and among
stockholders, members or associates; between
any or all of them and the corporation,
partnership or association of which they are
stockholders, members or associates, respectively;
and, between such corporation, partnership or
association and the state insofar as it concerns
their individual franchise or right to exist as such
entity. Section 6 of the same decree empowers
the SEC to issue preliminary or permanent
injunction, whether prohibitory or mandatory, in
all cases in which it has jurisdiction.
The action for dissolution of FREEMAN filed by its
minority stockholders is well within the
jurisdiction of the SEC to resolve in accordance
with P.D. No. 902-A. However, the inclusion in the
SEC case of FREEMAN MANAGEMENT of which
private respondents are not stockholders for the
purpose of compelling it to reconvey to FREEMAN
the properties originally owned by the latter but
were levied upon and sold to FREEMAN
MANAGEMENT in a public auction is a matter
outside of the limited jurisdiction of the SEC.

The petition for reconveyance of properties
against FREEMAN MANAGEMENT is not an intra-
corporate controversy since private respondents
have no shares or interests whatsoever in
FREEMAN MANAGEMENT, a corporation separate
and distinct from FREEMAN, which is undergoing
dissolution proceedings in the SEC.
The second basic principle is the doctrine of non-
interference which should be regarded as highly
important in judicial stability and in the
administration of justice whereby the judgment of
a court of competent jurisdiction may not be
opened, modified or vacated by any court or
tribunal of concurrent jurisdiction.
The SEC is at the very least co-equal with the
Regional Trial Court. As such, one would have no
power to control the other. Moreover, in the
instant case, judgment was rendered by the trial
court in Civil Case No. 88-44404 approving the
compromise agreement between EQUITABLE on
one hand, and FREEMAN and Saw Chiao Lian on
the other. A writ of execution was issued against
the defendants to enforce the judgment and 2
properties of FREEMAN were levied upon and sold
to FREEMAN MANAGEMENT as highest bidder in
the public auction.
Finally, the judgment was fully satisfied and a
certificate of sale was issued to FREEMAN
MANAGEMENT. It is axiomatic that after a
judgment has been fully satisfied, the case is
deemed terminated once and for all. It cannot be
modified or altered.
Hence, the properties sold to FREEMAN
MANAGEMENT are now considered excluded from
the corporate assets of FREEMAN and can no
longer be the subject of the proceedings in the
SEC for the dissolution of the latter. Therefore SEC
exceeded its jurisdiction when it issued a writ of
injunction enjoining FREEMAN MANAGEMENT
from consolidating its ownership over the 2
parcels of land it acquired as highest bidder in the
execution sale.
29.) THE CITY OF BAGUIO, MAURICIO DOMOGAN,
and ORLANDO GENOVE, Petitioners, vs.
FRANCISCO NIO, JOSEFINA NIO, EMMANUEL
NIO, and EURLIE OCAMPO, Respondents.
FACTS: The Bureau of Lands awarded on May 13,
1966 to Narcisa A. Placino a parcel of land
identified as Lot No. 10 (the lot) located at Saint
Anthony Road, Dominican-Mirador Barangay,
Baguio City.
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Francisco Nio, who has been occupying the lot,
contested the award by filing a Petition Protest
before the Bureau of Lands. The Director of Lands
dismissed the Petition Protest, and Nio appealed
the dismissal all the way to the Supreme Court but
he did not succeed.
The decision of the Director of Lands having
become final and executory, the then-Executive
Director of the Department of Environment and
Natural Resources-Cordillera Autonomous Region
(DENR-CAR), on petition of Narcisa, issued an
Order of Execution directing the Community
Environment and Natural Resources Office
(CENRO) Officer to enforce the decision "by
ordering Petitioner Nio and those acting in his
behalf to refrain from continuously occupying the
area and remove whatever improvements they
may have introduced thereto."
Attempts to enforce the Order of Execution failed,
prompting Narcisa to file a complaint for
ejectment before the Baguio City Municipal Trial
Court in Cities (MTCC).
Narcisas counsel, Atty. Edilberto Claravall, later
petitioned the DENR-CAR for the issuance of a
Special Order authorizing the City Sheriff of
Baguio, the City Police Station, and the Demolition
Team of the City Government to demolish or
remove the improvements on the lot introduced
by Nio. The DENR-CAR denied the petition, citing
lack of jurisdiction over the City Sheriff of Baguio,
the City Police Station, and the Demolition Team
of the City Government.
But on July 16, 1997, the Demolition Team of
Baguio City headed by Engineer Orlando Genove
and the Baguio City Police, on orders of then
Baguio City Police Officer-In-Charge (OIC) Donato
Bacquian, started demolishing the houses of Nio
and his herein co-respondents.
Nio and his wife Josefina Nio thereupon filed a
Petition for Certiorari and Prohibition with Prayer
for Temporary Restraining Order before the
Regional Trial Court (RTC) of Baguio City. The RTC
denied the petition. However the Court of Appeals
granted the petition on appeal.
Mayor Mauricio Domogan through the Demolition
Team and City Engineers Office are ordered to
cease and desist from enforcing the amended
order of execution issued by Oscar N. Hamada,
Regional Executive Director of the Department of
Environmental and Natural Resources, concerning
the demolition or removal of the structures made
by petitioners until private respondent applied for
a special order abovementioned with the proper
court.

ISSUE: Whether or not the enforcement of the
Amended Order of Execution needs a hearing and
court order which Sec. 10(d) of Rule 39 of the
Rules of Court requires despite the fact that an the
administrative agency which is clothed with quasi-
judicial functions issued the Amended Order of
Execution.
HELD: Yes. In general, the quantum of judicial or
quasi-judicial powers which an administrative
agency may exercise is defined in the enabling act
of such agency. In other words, the extent to
which an administrative entity may exercise such
powers depends largely, if not wholly, on the
provisions of the statute creating or empowering
such agency.
There is, however, no explicit provision granting
the Bureau of Lands (now the Land Management
Bureau) or the DENR (which exercises control over
the Land Management Bureau) the authority to
issue an order of demolition which the
Amended Order of Execution, in substance, is.
While the jurisdiction of the Bureau of Lands is
confined to the determination of the respective
rights of rival claimants to public lands or to cases
which involve the disposition of public lands, the
power to determine who has the actual, physical
possession or occupation or the better right of
possession over public lands remains with the
courts.
30.) RUFINO O. ESLAO, in his capacity as
President of Pangasinan State University,
petitioner, vs.
COMMISSION ON AUDIT, respondent.
FACTS: On 9 December 1988, PSU entered into a
Memorandum of Agreement (MOA) with the
Department of Environment and Natural
Resources (DENR) for the evaluation of 11
government reforestation operations in
Pangasinan.
A notice to proceed with the review and
evaluation of the 11 reforestation operations was
issued by the DENR to PSU. The latter complied
with this notice and did proceed.
PSU Vice President for Research and Extension
and Assistant Project Director Victorino P. Espero
requested the Office of the President of PSU, to
have the University's Board of Regents (BOR)
confirm the appointments or designations of
involved PSU personnel including the rates of
honoraria and per diems corresponding to their
specific roles and functions.
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The BOR approved the MOA and PSU issued a
voucher for payment of honoraria to PSU
personnel engaged in the project. Later, however,
the approved honoraria rates were found to be
higher than the rates provided for in the
guidelines of National Compensation Circular
(NCC) No. 53. Accordingly, adjustments were
made by deducting amounts from subsequent
disbursements of honoraria.
Bonifacio Icu, COA resident auditor at PSU, alleged
that there were excess payments of honoraria.
This was based on the premise that Compensation
Policy Guidelines (CPG) No. 80-4 issued by the
DBM which provided for lower rates than NCC No.
53 was the schedule for honoraria and per diems
applicable to work done under the MOA between
the PSU and the DENR.
A letter was sent by PSU to the Chairman of the
COA requesting reconsideration of the action of its
resident auditor. COA denied the reconsideration
and ruled that CPG. No. 80-4 is the applicable
guideline in respect of the honoraria as CPG No.
80-4 does not distinguish between projects locally
funded and projects funded or assisted with
monies of foreign-origin.
Subsequently, honoraria for the period from
January 1989 to January 1990 were disbursed in
accordance with NCC No. 53. A Certificate of
Settlement and Balances was then issued by the
COA resident auditor of PSU showing disallowance
of alleged excess payment of honoraria which
petitioner was being required to return.
The resolution of the dispute lies in the
determination of the circular or set of provisions
applicable in respect of the honoraria to be paid
to PSU personnel who took part in the evaluation
project, i.e., NCC No. 53 or CPG No. 80-4.
ISSUE: Whether or not the special project applies
to NCC 53 (foreign assisted), for CPG No. 80-4
applies only to "locally-funded projects.
HELD: NCC 53 should apply.
Sec. 2.1 of CPG No. 80-4 defines "special project"
as an inter-agency or inter-committee activity or
an undertaking by a composite group of
officials/employees from various agencies which
[activity or undertaking] is not among the regular
and primary functions of the agencies involved.
Examination of the definition in CPG No. 80-4 of a
"special project" reveals that definition has two (2)
components: firstly, there should be an inter-
agency or inter-committee activity or undertaking
by a group of officials or employees who are

drawn from various agencies; and secondly, the
activity or undertaking involved is not part of the
"regular or primary" functions of the participating
agencies.
Examination of the MOA and its annexes reveals
that two (2) groups were actually created. The first
group consisted of the coordinating committee,
the membership of which was drawn from officials
of the DENR and of the PSU; and the second, the
evaluation project team itself which was, in
contrast, composed exclusively of PSU personnel.
We believe that the first component of the CPU
No. 80-4's definition of "special project" is
applicable in respect of the group which is charged
with the actual carrying out of the project itself,
rather than to the body or group which
coordinates the task of the operating or
implementing group.
To construe the administrative definition of
"special project" otherwise would create a
situation, which we deem to be impractical and
possibly even absurd, under which any
undertaking entered into between the senior
officials of government agencies would have to be
considered an "inter-agency or inter-committee
activity," even though the actual undertaking or
operation would be carried out not by the
coordinating body but rather by an separate group
which might not (as in the present case) be drawn
from the agencies represented in the coordinating
group.
As already noted, in the case at hand, the project
team actually tasked with carrying out the
evaluation of the DENR reforestation activity is
composed exclusively of personnel from PSU; the
project team's responsibility and undertaking are
quite distinct from the responsibilities of the
coordinating [DENR and PSU] committee. Thus,
the project team is not a "composite group" as
required by the definition of CPG No. 80-4 of
"special projects." It follows that the evaluation
projects here involved do not fall within the ambit
of a "special project" as defined and regulated by
CPG No. 80-4.
We do not consider it necessary to rule on
whether the project at hand involved an
undertaking "which is not among the regular and
primary functions of the agencies involved" since
the reforestation activity evaluation group is not,
as pointed out above, a "special project" within
the meaning of CPG No. 80-4. In any case, this
particular issue was not raised by any of the
parties here involved.
Examination of the provisions of NCC No. 53
makes it crystal clear that the circular is applicable
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Atty. Vic Alabastro
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to foreign-assisted projects only. The explicit text
of NCC No. 53 states that it was issued to
prescribe/authorize the classification and
compensation rates of positions in foreign-assisted
projects (FAPs) including honoraria rates for
personnel detailed to FAPs and guidelines in the
implementation thereof pursuant to
Memorandum No. 173 dated 16 May 1988 and
which apply to all positions in foreign-assisted
projects only.
Clearly, NCC No. 53 amended the earlier CPG No.
80-4 by carving out from the subject matter
originally covered by CPG No. 80-4 all "foreign-
assisted [special] projects." CPG No. 80-4 was,
accordingly, modified so far as "foreign-assisted
[special] projects (FAPs)" are concerned. It is this
fact or consequence of NCC No. 53 that
respondent COA apparently failed to grasp.
Thus, CPG No. 80-4 does not control, nor even
relate to, the DENR evaluation project for at least
two (2) reasons: firstly, the evaluation project was
not a "special project" within the meaning of CPG
No. 80-4; secondly, that same evaluation project
was a Foreign-Assisted Project to which NCC No.
53 is specifically applicable.
Even in its Comment respondent COA submits that
the issue as to whether or not the project was
special already became moot in the face of the
opinion/ruling of the DBM that since it (the
project) is "foreign-assisted" NCC 53 should apply,
for CPG No. 80-4 applies only to "locally-funded
projects.
Under the Administration Code of 1987, the
Compensation and Position Classification Bureau
of the DBM "shall classify positions and determine
appropriate salaries for specific position classes
and review appropriate salaries for specific
position classes and review the compensation
benefits programs of agencies and shall design job
evaluation programs."
In Warren Manufacturing Workers Union
(WMWU) v. Bureau of Labor Relations, the Court
held that "administrative regulations and policies
enacted by administrative bodies to interpret the
law have the force of law and are entitled to great
respect." It is difficult for the Court to understand
why, despite these certifications, respondent COA
took such a rigid and uncompromising posture
that CPG No. 80-4 was the applicable criterion for
honoraria to be given members of the
reforestation evaluation project team of the PSU.
Respondent COA's contention that the DBM
clarification is unconstitutional as that ruling does
not fulfill the requisites of a valid classification is,
in the Court's perception, imaginative but
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Atty. Vic Alabastro
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nonetheless an after-thought and a futile attempt
to justify its action. As correctly pointed out by
petitioner, the constitutional arguments raised by
respondent COA here were never even
mentioned, much less discussed, in COA Decisions
Nos. 1547 (1990) and 2571 (1992) or in any of the
proceedings conducted before it.
COA is not authorized to substitute its own
judgment for any applicable law or administrative
regulation with the wisdom or propriety of which
it does not agree at least not before such law or
regulation is set aside by the authorized agency of
government as unconstitutional or illegal and void.
Mindful of the detailed provisions of the MOA and
Project Proposal governing project duration and
project financing as regulated by NCC No. 53, the
Court is not persuaded that petitioner can so
casually assume implicit consent on the part of
the DENR to an extension of the evaluation
project's duration.
is, under its constitutional mandate, authorized to
substitute its own judgment for any applicable law
or administrative regulation with the wisdom or
propriety of which, however, it does not agree, at
least not before such law or regulation is set aside
by the authorized agency of government i.e.,
the courts as unconstitutional or illegal and
void.
The COA, like all other government agencies, must
respect the presumption of legality and
constitutionality to which statutes and
administrative regulations are entitled 26 until
such statute or regulation is repealed or amended,
or until set aside in an appropriate case by a
competent court (and ultimately this Court).

From the clear and detailed provisions of the MOA

and Project Proposal in relation to NCC No. 53,
consent to any extension of the evaluation
project, in this instance, must be more concrete
than the alleged silence or lack of protest on the
part of the DENR. Although tacit acceptance is
recognized in our jurisdiction, 24 as a rule, silence
is not equivalent to consent since its ambiguity
lends itself to error. And although under the Civil
Code there are instances when silence amounts to
consent, 25 these circumstances are wanting in
the case at bar. Furthermore, as correctly pointed
out by the respondent COA, the date when the
DENR accepted the final project report is by no
means conclusive as to the terminal date of the
evaluation project.

Examination of the MOA reveals that the

submission of reports merely served to trigger the
phased releases of funds. There being no explicit
agreement between PSU and the DENR to extend
the duration of the evaluation project, the MOA's
"Budget Estimate" which, among others, provides
in detail the duration of service for each member
of the evaluation project as amended by the rates
provided by NCC No. 53 must be the basis of the
honoraria due to the evaluation team.

The other arguments of respondent COA appear

to us to be insubstantial and as, essentially,
afterthoughts. The COA apparently does not agree
with the policy basis of NCC No. 53 in relation to
CPG No. 80-4 since COA argues that loan proceeds
regardless of source eventually become public
funds for which the government is accountable.
The result would be that any provisions under any
[foreign] loan agreement should be considered
locally-funded. We do not consider that the COA