Administrative Law

1. United Residents of Dominican Hill, Inc. vs Commission on the Settlement of Land Problems
353 SCRA 782

Adjudicatory Powers

FACTS: The property being fought over by the parties is a 10.36-hectare property in Baguio City
called Dominican Hills, formerly registered in the name of Diplomat Hills, Inc. It appeared that
the property was mortgaged to the United Coconut Planters Bank which eventually foreclosed
the mortgage thereon and acquired the same as highest bidder. On April 11, 1983, it was
donated to the Republic of the Philippines by UCPB through its President, Eduardo Cojuangco.
The deed of donation stipulated that Dominican Hills would be utilized for the “priority
programs, projects, activities in human settlements and economic development and
governmental purposes” of the Ministry of Human Settlements.

On December 12, 1986, the then President Corazon C. Aquino issued Executive Order No. 85
abolishing the Office of Media Affairs and the Ministry of Human Settlements. All agencies
under the latter’s supervision as well as all its assets, programs and projects, were transferred to
the Presidential Management Staff.

On October 18, 1988, the PMS received an application from petitioner UNITED RESIDENTS OF
DOMINICAN HILL, INC. (UNITED, for brevity), a community housing association composed of
non-real property owning residents of Baguio City, to acquire a portion of the Dominican Hills
property. On February 2, 1990, PMS Secretary Elfren Cruz referred the application to the HOME
INSURANCE GUARANTY CORPORATION (HIGC). HIGC consented to act as originator for UNITED.
Accordingly, on May 9, 1990, a Memorandum of Agreement was signed by and among the PMS,
the HIGC, and UNITED. The Memorandum of Agreement called for the PMS to sell the
Dominican Hills property to HIGC which would, in turn, sell the same to UNITED. The parties
agreed on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of
conditional sale provided that ten (10) per cent of the purchase price would be paid upon
signing, with the balance to be amortized within one year from its date of execution. After
UNITED made its final payment on January 31, 1992, HIGC executed a Deed of Absolute Sale
dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills
property allocated to UNITED and constructed houses thereon. Petitioner was able to secure a
demolition order from the city mayor.

Unable to stop the razing of their houses, private respondents, under the name DOMINICAN
HILL BAGUIO RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action for
injunction docketed as Civil Case No. 3316-R, in the Regional Trial Court of Baguio City. Private
respondents were able to obtain a temporary restraining order but their prayer for a writ of
preliminary injunction was later denied in an Order dated March 18, 1996.

The ASSOCIATION filed a separate civil case for damages, injunction and annulment of the said
Memorandum of Agreement between UNITED and HIGC. It was later on dismissed upon
motion of UNITED. The said Order of dismissal is currently on appeal with the Court of Appeals.

The demolition order was subsequently implemented by the Office of the City Mayor and the
City Engineer's Office of Baguio City. However, petitioner avers that private respondents
returned and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed a petition
for annulment of contracts with prayer for a temporary restraining order before the Commission
on the Settlement of Land Problems (COSLAP) against petitioner, HIGC, PMS, the City Engineer's
Office, the City Mayor, as well as the Register of Deeds of Baguio City. On the very same day,
public respondent COSLAP issued the contested order requiring the parties to maintain the
status quo. Without filing a motion for reconsideration from the aforesaid status quo order,
petitioner filed the instant petition questioning the jurisdiction of the COSLAP.

ISSUE: Whether or not COSLAP is empowered to hear and try a petition for annulment of
contracts with prayer for a TRO and to issue a status quo order and conduct a hearing thereof

RULING:

No. The COSLAP is not justified in assuming jurisdiction over the controversy.

Executive Order 561 patently indicates that the COSLAP’s dispositions are binding on
administrative or executive agencies. The history of the COSLAP itself bolsters this view. Prior
enactments enumerated its member agencies among which it was to exercise a coordinating
function.

The COSLAP discharges quasi-judicial functions:

"Quasi-judicial function” is a term which applies to the actions, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts, or ascertain the
existence of facts, hold hearings, and draw conclusions from them, as a basis for their official
action and to exercise discretion of a judicial nature.

However, it does not depart from its basic nature as an administrative agency, albeit one that
exercises quasi-judicial functions. Still, administrative agencies are not considered courts; they
are neither part of the judicial system nor are they deemed judicial tribunals. The doctrine of
separation of powers observed in our system of government reposes the three (3) great powers
into its three (3) branches – the legislative, the executive, and the judiciary – each department
being co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive
department may not, by its own fiat, impose the judgment of one of its own agencies, upon the
judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered “to
determine whether or not there has been grave abuse of discretion amounting to lack of or
excess of jurisdiction on the part of any branch or instrumentality of the Government.”

RATIO: "Quasi-judicial function” is a term which applies to the actions, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts, or ascertain the
existence of facts, hold hearings, and draw conclusions from them, as a basis for their official
action and to exercise discretion of a judicial nature.

2. Malaga vs Penachos Jr.

Chartered Institution and GOCC, defined.

FACTS:

The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications, Bids and Awards Committee
(PBAC) caused the publication in the November 25, 26 and 28, 1988 issues of the Western Visayas Daily
an Invitation to Bid for the construction of a Micro Laboratory Building at ISCOF. The notice announced
that the last day for the submission of pre-qualification requirements was on December 2, 1988, and
that the bids would be received and opened on December 12, 198 8 at 3 o'clock in the afternoon.
Petitioners Malaga and Najarro, doing business under the name of BE Construction and Best Built
Construction, respectively, submitted their pre-qualification documents at two o'clock in the afternoon
of December 2, 1988. Petitioner Occeana submitted his own PRE-C1 on December 5, 1988. All three of
them were not allow ed to participate in the bidding as their documents were considered late. On
December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the officers of PBAC for
their refusal without just cause to accept them res ulting to their non-inclusion in the list of pre-qualified
bidders. They sought to the resetting of the December 12, 1988 bidding and the acceptance of their d
ocuments. They also asked that if the bidding had already been conducted, the d efendants be directed
not to award the project pending resolution of their compl aint. On the same date, Judge Lebaquin
issued a restraining order prohibiting PBAC fro m conducting the bidding and award the project. The
defendants filed a motion to lift the restraining order on the ground that the court is prohibited from issu
ing such order, preliminary injunction and preliminary mandatory injunction in g overnment
infrastructure project under Sec. 1 of P.D. 1818. They also contended that the preliminary injunction had
become moot and academic as it was served a fter the bidding had been awarded and closed. On
January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary
injunction. It declared that the building sought to be constructed at the ISCOF was an infrastructure
project of the government fallin g within the coverage of the subject law.

ISSUE:

Whether or not ISCOF is a government instrumentality subject to the provisions of PD 1818?

RULING:

No. The 1987 Administrative Code defines a government instrumentality as fol lows: Instrumentality
refers to any agency of the National Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually through a charter. This term
includes regulatory agencies, chartered institutions, and government-owned or controlled corporations.
(Sec. 2 (5) Introductory Provisions). The same Code describes a chartered institution thus: Chartered
institution - refers to any agency organized or operating under a special charter, and vested by law with
functions relating to specific constitutional policies or objectives. This term includes the state universities
and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear
from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was created
in pursuance of the integrated fisheries development policy of the State, a priority program of the
government to effect the socio-e conomic life of the nation. Second, the Treasurer of the Republic of the
Philippines shall also be the ex-officio Treasurer of the state college with its accounts and expenses to be
audited by the Commission on Audit or its duly authorized representative. Third, heads of bureaus and
offices of the National Government a re authorized to loan or transfer to it, upon request of the
president of the state college, such apparatus, equipment, or supplies and even the services of suc h
employees as can be spared without serious detriment to public service. Lastly , an additional amount of
P1.5M had been appropriated out of the funds of the Na tional Treasury and it was also decreed in its
charter that the funds and mainte nance of the state college would henceforth be included in the
General Appropria tions Law. Nevertheless, it does not automatically follow that ISCOF is covered by the
proh ibition in the said decree as there are irregularities present surrounding the t ransaction that
justified the injunction issued as regards to the bidding and th e award of the project (citing the case of
Datiles vs. Sucaldito).
3. Beja Sr. vs CA GR No. 97149 31 March 1995

FACTS:
The instant petition for certiorari  questions the jurisdiction of the Secretary of the Department of
Transportation and Communications (DOTC) and/or its Administrative Action Board (AAB) over
administrative cases involving personnel below the rank of Assistant General Manager of the Philippine
Ports Authority (PPA), an agency attached to the said Department.

Fidencio Beja Sr. an employee of Philippine ports authority, was hired as Arrastre supervisor in 1975, and
later on appointed as terminal supervisor in 1988. On October 21, 1988, the General Manager, Rogelio
A. Dayan filed an administrative case against Beja Sr. and Villaluz for grave dishonesty. Grave
misconduct willful violation of reasonable office rules and regulations and conduct prejudicial to the best
interest of the service. Consequently they were preventively suspended for the charges. After preliminary
investigation conducted by the district attorney for region X, administrative case no. 11-04-88 was
considered closed for lack of merit. On December 13, 1988 another administrative case was filed against
Beja by the PPA manager also for dishonesty grave misconduct violation of office rules and regulations,
conduct prejudicial to the best interest of the service and for being notoriously undesirable. Beja was also
placed under preventive suspension pursuant to sec. 412 of PD No. 807. The case was redocketed as
administrative case no. PPA-AAB-1-049-89 and thereafter, the PPA indorsed it to the AAB for appropriate
action. The AAB proceeded to hear the case and gave Beja an opportunity to present evidence.
However, on February 20, 1989, Beja filed a petition for certiorari with preliminary injunction before the
Regional Trial Court of Misamis Oriental. Two days later, he filed with the ABB a manifestation and motion
to suspend the hearing of administrative case no. PPA-AAB-1-049-89 on account of the pendency of the
certiorari proceeding before the court. AAB denied the motion and continued with the hearing of the
administrative case. Thereafter, Beja moved for the dismissal of the certiorari case and proceeded to file
before the Court for a petition for certiorari with preliminary injunction and/or temporary restraining order.

Petitioner anchors his contention that the PPA general manager cannot subject him to a preventive
suspension on the following provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the
PPA:
(d) the General Manager shall, subject to the approval of the Board, appoint and remove personnel below
the rank of Assistant General Manager. (Emphasis supplied.)

Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General
Manager is the "proper disciplining authority. 

ISSUE:
Whether the DOTC Secretary and/or the AAB has jurisdiction to initiate and hear the administrative cases
against PPA personnel below the rank of Assistant General Manager

HELD:
THE COURT QUALIFIEDLY RULES NO.

The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of
the PPA were vested in a governing Board of Directors known as the Philippine Port Authority Council.
Sec. 5(i) of the same decree gave the Council the power "to appoint, discipline and remove, and
determine the composition of the technical staff of the Authority and other personnel."
On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the
Philippine Ports Authority which would be "attached" to the then Department of Public Works,
Transportation and Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing
the Ministry of Transportation and Communications was issued, the PPA retained its "attached" status.
Even Executive Order No. 292 or the Administrative Code of 1987 classified the PPA as an agency
"attached" to the Department of Transportation and Communications (DOTC). Sec. 24 of Book IV, Title
XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to
operate and function in accordance with the respective charters or laws creating them, except when they
conflict with this Code."
Attachment of an agency to a Department is one of the three administrative relationships mentioned in
Book IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and
administrative supervision. "Attachment" is defined in Sec. 38 thereof as follows:
(3) Attachment. —  (a) This refers to the lateral relationship between the Department or its equivalent and
the attached agency or corporation for purposes of policy and program coordination. The coordination
shall be accomplished by having the department represented in the governing board of the attached
agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted
by the charter; having the attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the department or its equivalent
provide general policies through its representative in the board, which shall serve as the framework for
the internal policies of the attached corporation or agency;

An attached agency has a larger measure of independence from the Department to which it is attached
than one which is under departmental supervision and control or administrative supervision. This is borne
out by the "lateral relationship" between the Department and the attached agency. The attachment is
merely for "policy and program coordination." With respect to administrative matters, the independence of
an attached agency from Departmental control and supervision is further reinforced by the fact that even
an agency under a Department's administrative supervision is free from Departmental interference with
respect to appointments and other personnel actions "in accordance with the decentralization of
personnel functions" under the Administrative Code of 1987. 11 Moreover, the Administrative Code
explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered
institutions attached to a Department. 

Hence, the inescapable conclusion is that with respect to the management of personnel, an attached
agency is, to a certain extent, free from Departmental interference and control. This is more explicitly
shown by P.D. No. 857, Sec. 8(b) and (d). By vesting the power to remove erring employees on the
General Manager, with the approval of the PPA Board of Directors, the law impliedly grants said officials
the power to investigate its personnel below the rank of Assistant Manager who may be charged with an
administrative offense. During such investigation, the PPA General Manager, as earlier stated, may
subject the employee concerned to preventive suspension. The investigation should be conducted in
accordance with the procedure set out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts
may the PPA General Manager impose the proper penalty in accordance with law. It is the latter action
which requires the approval of the PPA Board of Directors.
From an adverse decision of the PPA General Manager and the Board of Directors, the employee
concerned may elevate the matter to the Department Head or Secretary. Otherwise, he may appeal
directly to the Civil Service Commission.

It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was
premature. The PPA General Manager should have first conducted an investigation, made the proper
recommendation for the imposable penalty and sought its approval by the PPA Board of Directors. It was
discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes.
Only then could the AAB take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated
July 1, 1988, was designed to act, decide and recommend to him "all cases of administrative
malfeasance, irregularities, grafts and acts of corruption in the Department." Composed of a Chairman
and two (2) members, the AAB came into being pursuant to Administrative Order No. 25 issued by the
President on May 25, 1987. 15 Its special nature as a quasi-judicial administrative body notwithstanding,
the AAB is not exempt from the observance of due process in its proceedings. 

4. MIAA vs City of Pasay April 2, 2009

The Facts
MIAA received Final Notices of Real Property Tax Delinquency from the City of Pasay for the taxable years 1992 to
2001.

Thereafter, the City Mayor of Pasay threatened to sell at public auction the NAIA Pasay properties if the delinquent
real property taxes remain unpaid.

MIAA filed with the Court of Appeals a petition for prohibition and injunction with prayer for preliminary injunction or
temporary restraining order

Court of Appeals dismissed the petition and upheld the power of the City of Pasay to impose and collect realty taxes
on the NAIA Pasay properties. MIAA filed a motion for reconsideration, which the Court of Appeals denied. Hence,
this petition.

The Issue
The issue raised in this petition is whether the NAIA Pasay properties of MIAA are exempt from real property tax.

The Court’s Ruling

The petition is meritorious.

In ruling that MIAA is not exempt from paying real property tax, the Court of Appeals cited Sections 193 and 234 of
the Local Government Code.

The 2006 MIAA case and this case raised the same threshold issue: whether the local government can impose real
property tax on the airport lands, consisting mostly of the runways, as well as the airport buildings, of MIAA. In the
2006 MIAA case, this Court held:

To summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory
Provisions of the Administrative Code because it is not organized as a stock or non-stock corporation. Neither is
MIAA a government-owned or controlled corporation under Section 16, Article XII of the 1987 Constitution because
MIAA is not required to meet the test of economic viability. MIAA is a government instrumentality vested with
corporate powers and performing essential public services pursuant to Section 2(10) of the Introductory Provisions of
the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax by local governments
under Section 133(o) of the Local Government Code. The exception to the exemption in Section 234(a) does not
apply to MIAA because MIAA is not a taxable entity under the Local Government Code. Such exception applies only if
the beneficial use of real property owned by the Republic is given to a taxable entity. Finally, the Airport Lands and
Buildings of MIAA are properties devoted to public use and thus are properties of public dominion. Properties of
public dominion are owned by the State or the Republic.
A close scrutiny of the definition of "government-owned or controlled corporation" in Section 2(13) will show that MIAA
would not fall under such definition. MIAA is a government "instrumentality" that does not qualify as a
"government-owned or controlled corporation." As explained in the 2006 MIAA case:
A government-owned or controlled corporation must be "organized as a stock or non-stock corporation." MIAA is not
organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no capital stock divided
into shares. MIAA has no stockholders or voting shares. x x x
MIAA is also not a non-stock corporation because it has no members.
MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions.
MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers.

Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government
instrumentality exercising not only governmental but also corporate powers.

Furthermore, the airport lands and buildings of MIAA are properties of public dominion intended for public use, and as
such are exempt from real property tax under Section 234(a) of the Local Government Code. However, under the
same provision, if MIAA leases its real property to a taxable person, the specific property leased becomes subject to
real property tax.12 In this case, only those portions of the NAIA Pasay properties which are leased to taxable persons
like private parties are subject to real property tax by the City of Pasay.

WHEREFORE, we GRANT the petition.

5. Republic of the Philippines vs Paranaque City 2012

FACTS

This is a petition for review on certiorari assailing the Order of the Regional
Trial Court, Branch 195, Paranaque City (RTC), which ruled that petitioner
Philippine Reclamation Authority (PRA) is a government-owned and controlled
corporation (GOCC), a taxable entity, and, therefore, not exempt from payment of
real property taxes.

 
The Public Estates Authority (PEA) is a government corporation created by
virtue of P.D. No. 1084 to provide a coordinated, economical and efficient
reclamation of lands, and the administration and operation of lands belonging to,
managed and/or operated by, the government with the object of maximizing their
utilization and hastening their development consistent with public interest. 
On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O.
No. 380 transforming PEA into PRA, which shall perform all the powers and
functions of the PEA relating to reclamation activities.
By virtue of its mandate, PRA reclaimed several portions of the foreshore
and offshore areas of Manila Bay, including those located in Parañaque City.
Parañaque City Treasurer issued Warrants of Levy on PRA’s reclaimed properties
based on the assessment for delinquent real property for tax years 2001 and 2002. 
 PRA claimed that it is not a GOCC under the Administrative Code, nor is it a
GOCC under Section 16, Article XII of the 1987 Constitution because it is not
required to meet the test of economic viability.
It is a government instrumentality vested with corporate powers and
performing an essential public service. It insists that it may not be classified as a
non-stock corporation because it has no members and it is not organized for
charitable, religious, educational, professional, cultural, recreational, fraternal,
literary, scientific, social, civil service, or similar purposes, like trade, industry,
agriculture and like chambers as provided in Section 88 of the Corporation Code.
Thus, PRA insists that, as an incorporated instrumentality of the National
Government, it is exempt from payment of real property tax except when the
beneficial use of the real property is granted to a taxable person. PRA claims that
based on Section 133(o) of the LGC, local governments cannot tax the national
government which delegate to local governments the power to tax.

ISSUE

Whether or not Philippine Reclamation Authority (PRA) is an incorporated

instrumentality of the national government and is, therefore, exempt from payment
of real property tax under sections 234(a) and 133(o) of Republic Act 7160

HELD

Yes it is a Government Instrumentality.

In the case at bench, PRA is not a GOCC because it is neither a stock nor a
non-stock corporation. It cannot be considered as a stock corporation because
although it has a capital stock divided into no par value shares as provided in
Section 74 of P.D. No. 1084, it is not authorized to distribute dividends, surplus
allotments or profits to stockholders. PRA is a government instrumentality vested
with corporate powers and performing an essential public service pursuant to
Section 2(10) of the Introductory Provisions of the Administrative Code. Being an
incorporated government instrumentality, it is exempt from payment of real
property tax.
Many government instrumentalities are vested with corporate powers but
they do not become stock or non-stock corporations, which is a necessary
condition before an agency or instrumentality is deemed a GOCC. The
fundamental provision above authorizes Congress to create GOCCs through
special charters on two conditions: 1) the GOCC must be established for the
common good; and 2) the GOCC must meet the test of economic viability. In this
case, PRA may have passed the first condition of common good but failed the
second one - economic viability. Undoubtedly, the purpose behind the creation of
PRA was not for economic or commercial activities.

Clearly, respondent has no valid or legal basis in taxing the subject

reclaimed lands managed by PRA. On the other hand, Section 234(a) of the LGC,
in relation to its Section 133(o), exempts PRA from paying realty taxes and
protects it from the taxing powers of local government units.

Section 234(a) of the Local Government Code states that real property
owned by the Republic of the Philippines (the Republic) is exempt from real
property tax unless the beneficial use thereof has been granted to a taxable person.

Section 133 of the Local Government Code states that "unless otherwise
provided" in the Code, local governments cannot tax national government
instrumentalities.
In this case, there is no proof that PRA granted the beneficial use of the
subject reclaimed lands to a taxable entity. There is no showing on record either
that PRA leased the subject reclaimed properties to a private taxable entity.

6. Boy Scouts of the Philippines vs NLRC April 22, 1991