SECOND DIVISION JOSE LUIS ROS, ANDONI F. ABOITIZ, XAVIER ABOITIZ, ROBERTO E. ABOITIZ, ENRIQUE ABOITIZ, MATTHIAS G.

MENDEZONA, CEBU INDUSTRIAL PARK DEVELOPERS, INC. and FBM ABOITIZ MARINE, INC., P e t i t i o n e r s, G.R. No. 132477

T-590.[5] In an order[6] dated 12 August 1996, the RTC, ruling that it is the DAR which has jurisdiction, dismissed the Complaint for lack of jurisdiction.[7] It justified the dismissal in this wise:

Promulgated: A perusal of Section 20 of the Local Government Code expressly provides that the Municipalities through an Ordinance by the Sanggunian may authorize the reclassification of the agricultural land within their area into non-agricultural. Paragraph (e) of the aforesaid Section, provides further: that nothing in this Section shall be construed as repealing or modifying in any manner the provision of Republic Act 6657. In an opinion of the Secretary of Justice, quoted: With respect of (sic) conversion of agricultural land to non-agricultural uses the authority of the DAR to approve the same may be exercise (sic) only from the date of the effectivity of the Agrarian Reform Law on June 15, 1988. It appears that the petitioners had applied for conversion on June 13, 1995 and therefore the petitioner (sic) are estopped from questioning the authority and jurisdiction of the Department of Agrarian Reform. The application having been filed after June 15, 1988, the reclassification by the Municipal Council of Balamban was just a step in the conversion of the aforestated lands according to its purpose. Executive Order No. 129-A, Section 5, The Department shall be responsible for implementing Comprehensive Agrarian Reform and for such purpose it is authorized to (J) approve or disapprove the conversion, restructuring or readjustment of agricultural land into non-agricultural uses. Said Executive Order amended Section 36 of Republic Act No. 3644 which clearly mandates that the DAR Secretary (sic) approve or disapprove conversion are not impliedly repealed. In fact, under Section 75 of Republic Act 6657 the above laws and other laws not inconsistent of (sic) this act shall have suppletory effect. Further, Section 68 of Republic Act 6657 provides: No injunction, restraining order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform, DENR and Department of Justice in their implementation of the program. With this provision, it is therefore clear (sic) when there is conflict of laws determining whether the Department of Agrarian Reform has been exclusively empowered by law to approve land conversion after June 15, 1988 and (sic) the final ruling falls only with the Supreme Court or Office of the President. WHEREFORE, in view of the foregoing, the Application for Restraining Order is hereby ordered DENIED and the main case is DISMISSED, this Court having no jurisdiction over the same.[8]

August 31, 2005 - versus -

DEPARTMENT OF AGRARIAN REFORM, HON. ERNESTO GARILAO, in his capacity as DAR Secretary, and DIR. JOSE LLAMES, in his capacity as Director of DAR-Regional 7, R e s p o n d e n t s. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Petitioners are the owners/developers of several parcels of land located in Arpili, Balamban, Cebu. By virtue of Municipal Ordinance No. 101 passed by the Municipal Council of Balamban, Cebu, these lands were reclassified as industrial lands. [1] On 03 April 1995, the Provincial Board of Cebu approved Balambans land use plan and adopted en toto Balambans Municipal Ordinance No. 101 with the passage of Resolution No. 836-95 and Provincial Ordinance No. 95-8, respectively.[2] As part of their preparation for the development of the subject lands as an industrial park, petitioners secured all the necessary permits and appropriate government certifications.[3]

In an order dated 18 September 1996, the trial court denied the motion for reconsideration filed by the petitioners. [9] Petitioners filed before this Court a Petition for Review on Certiorari with application for Temporary Restraining Order and Writ

Despite these permits and certifications, petitioner Matthias Mendezona received a letter from Mr. Jose Llames, Director of the Department of Agrarian Reform (DAR) Regional Office for Region 7, informing him that the DAR was disallowing the conversion of the subject lands for industrial use and directed him to cease and desist from further developments on the land to avoid the incurrence of civil and criminal liabilities.[4]

of Preliminary Injunction.[10] In a resolution[11] dated 11 November 1996, this Court referred the petition to the Court of Appeals.[12] Petitioners moved for a reconsideration of the said resolution but the same was denied in a resolution dated 27 January 1997.[13]

At the Court of Appeals, the public respondents were ordered[14] to file their Comments on the petition. Two sets of Petitioners were thus constrained to file with the Regional Trial Court (RTC) of Toledo City a Complaint dated 29 July 1996 for Injunction with Application for Temporary Restraining Order and a Writ of Preliminary Injunction, docketed as Civil Case No. comments from the public respondents, one from the Department of Agrarian Reform Provincial Office [15] and another from the Office of the Solicitor General,[16] were submitted, to which petitioners filed their Consolidated Reply.[17]

On 02 December 1997, the Court of Appeals rendered a decision[18] affirming the Order of Dismissal issued by the RTC.[19] A motion for reconsideration filed by the petitioners was denied in a resolution dated 30 January 1998.[20] The petition lacks merit.

Hence, this petition.

After the passage of Republic Act No. 6657, otherwise known as Comprehensive Agrarian Reform Program, agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR.

The following issues[21] are raised by the petitioners for resolution:

However, agricultural lands already reclassified before the effectivity of Rep. Act No. 6657 are exempted from conversion.

(a) Whether or not the reclassification of the subject lands to industrial use by the Municipality of Balamban, Cebu pursuant to its authority under Section 20(a) of Republic Act No. 7160 or the Local Government Code of 1991 (the LGC) has the effect of taking such lands out of the coverage of the CARL and beyond the jurisdiction of the DAR; (b) Whether or not the Complaint for Injunction may be dismissed under the doctrine of primary jurisdiction; (c) Whether or not the Complaint for Injunction is an appropriate remedy against the order of the DAR enjoining development works on the subject lands; (d) Whether or not the Regional Trial Court of Toledo City had authority to issue a writ of injunction against the DAR.

Department of Justice Opinion No. 44, Series of 1990, provides:

. . . True, the DARs express power over land use conversion is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes. But to suggest that these are the only instances when the DAR can require conversion clearances would open a loophole in R.A. No. 6657, which every landowner may use to evade compliance with the agrarian reform program. Hence, it should logically follow from the said departments express duty and function to execute and enforce the said statute that any reclassification of a private land as a residential, commercial or industrial property should first be cleared by the DAR.

In sum, petitioners are of the view that local governments have the power to reclassify portions of their agricultural lands, subject to the conditions set forth in Section 20[22][23]of the Local Government Code. According to them, if the agricultural land sought to be reclassified by the local government is one which has already been brought under the coverage of the Comprehensive Agrarian Reform Law (CARL) and/or which has been distributed to agrarian reform beneficiaries, then such reclassification must be confirmed by the DAR pursuant to its authority under Section 6522 of the CARL, in order for the reclassification to become effective. If, however, the land sought to be reclassified is not covered by the CARL and not distributed to agrarian reform beneficiaries, then no confirmation from the DAR is necessary in order for the reclassification to become effective as such case would not fall within the DARs conversion authority. Stated otherwise, Section 65 of the CARL does not, in all cases, grant the DAR absolute, sweeping and all-encompassing power to approve or disapprove reclassifications or conversions of all agricultural lands. Said section only grants the DAR exclusive authority to approve or disapprove conversions of agricultural lands which have already been brought under the coverage of the CARL and which have already been distributed to farmer beneficiaries.

The requirement that agricultural lands must go through the process of conversion despite having undergone reclassification was underscored in the case of Alarcon v. Court of Appeals,[24] where it was held that reclassification of land does not suffice:

In the case at bar, there is no final order of conversion. The subject landholding was merely reclassified. Conversion is different from reclassification. Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved by the Department of Agrarian Reform. Reclassification, on the other hand, is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan, subject to the requirements and procedure for land use conversion. Accordingly, a mere reclassification of agricultural land does not automatically allow a landowner to change its use and thus cause the ejectment of the tenants. He has to undergo the process of conversion before he is permitted to use the agricultural land for other purposes.

Rep. Act No. 6657 took effect on 15 June 1988. Municipal Ordinance No. 101 of Balamban, Cebu, which reclassified the subject lands, was passed on 25 March 1992, and Provincial Ordinance No. 95-8 of the Provincial Board of Cebu, which

adopted Municipal Ordinance No. 101, was passed on 03 April 1995, long after Rep. Act No. 6657 has taken effect. Section 4 of Rep. Act No. 6657 provides:

C.

Section 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise empowers the DAR to authorize under certain conditions, the reclassification or conversion of agricultural lands. Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that action on applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units concerned, together with the National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A.

D. SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. ... (d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. III.

DEFINITION OF TERMS A. Agricultural land refers to land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land (Section 3[c], R.A. No. 6657). Conversion is the act of changing the current use of a piece of agricultural land into some other use. Reclassification of agricultural lands is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan. It also includes the reversion of non-agricultural lands to agricultural use.

To further clarify any doubt on its authority, the DAR issued Administrative Order No. 12 dated October 1994 which reads: B. Administrative Order No. 12 Series of 1994 SUBJECT: CONSOLIDATED AND REVISED RULES AND PROCEDURES GOVERNING CONVERSION OF ARICULTURAL LANDS TO NON-AGRICULTURAL USES I. PREFATORY STATEMENT The guiding principles on land use conversion is to preserve prime agricultural lands. On the other hand, conversion of agricultural lands, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to promote social justice, industrialization, and the optimum use of land as a national resource for public welfare, shall be pursued in a speedy and judicious manner. To rationalize these principles, and by virtue of Republic Act (R.A.) No. 3844, as amended, Presidential Decree (P.D.) No. 27, P.D. No. 946, Executive Order (E.O.) No. 129-A and R.A. No. 6657, the Department of Agrarian Reform (DAR) has issued several policy guidelines to regulate land use conversion. This Administrative Order consolidates and revises all existing implementing guidelines issued by the DAR, taking into consideration, other Presidential issuances and national policies related to land use conversion. V. ...

C.

COVERAGE These rules shall cover all private agricultural lands as defined herein regardless of tenurial arrangement and commodity produced. It shall also include agricultural lands reclassified by LGUs into non-agricultural uses, after June 15, 1988, pursuant to Memorandum Circular (M.C.) No. 54, Series of 1993 of the Office of the President and those proposed to be used for livestock, poultry and swine raising as provided in DAR Administrative Order No. 9, Series of 1993.

In the case of Advincula-Velasquez v. Court of Appeals,[25] we held: Our ruling in the Natalia case was reiterated in National Housing Authority v. Allarde (318 SCRA 22 [1999]). II. LEGAL MANDATE A. The Department of Agrarian Reform (DAR) is mandated to approve or disapprove applications for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses, pursuant to Section 4(i) of Executive Order No. 129-A, Series of 1987. Section 5(i) of E.O. No. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and other land uses. The Court of Appeals reliance on DOJ Opinion No. 44, Series of 1990, is in order. In the said opinion, the Secretary of Justice declared, viz: Based on the foregoing premises, we reiterate the view that with respect to conversions of agricultural lands covered by R.A. No. 6657 to non-agricultural uses, the authority of DAR to approve such conversions may be exercised from the date of the laws effectivity on June 15, 1988. This conclusion is based on a liberal interpretation of R.A. No. 6657 in the light of DARs mandate and extensive coverage of the agrarian reform program.

B.

Following the DOJ opinion, the DAR issued Administrative Order No. 6, Series of 1994, stating that lands already classified as non-agricultural before the enactment of Rep. Act No. 6657 no longer needed any conversion clearance:

Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination of every action or proceeding before it. . . .

I.

Prefatory Statement

In order to streamline the issuance of exemption clearances, based on DOJ Opinion No. 44, the following guidelines are being issued for the guidance of the DAR and the public in general. II. Legal Basis

Sec. 3(c) of RA 6657 states that agricultural lands refers to the land devoted to agricultural activity as defined in this act and not classified as mineral, forest, residential, commercial or industrial land. Finally, the third and fourth issues which may be summed up into whether or not an injunction is the appropriate remedy Department of Justice Opinion No. 44, series of 1990 has ruled that, with respect to the conversion of agricultural lands covered by RA No. 6657 to non-agricultural uses, the authority of DAR to approve such conversion may be exercised from the date of its effectivity, on June 15, 1988. Thus, all lands that are already classified as commercial, industrial, or residential before 15 June 1988 no longer need any conversion clearance. against the order of the DAR enjoining petitioners in developing the subject land, we rule in the negative. Section 68 of Rep. Act No. 6657 provides:

The authority of the DAR to approve conversions of agricultural lands covered by Rep. Act No. 6657 to non-agricultural uses has not been pierced by the passage of the Local Government Code. The Code explicitly provides[26] that nothing in this section shall be construed as repealing or modifying in any manner the provisions of Rep. Act No. 6657.

SEC. 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. SP No. 42666 dated 02 December 1997 affirming the order dated 12 August 1996 of the Regional Trial Court of It being settled that jurisdiction over conversion of land is vested in the DAR, the complaint for injunction was correctly Toledo City, Branch 29, in Civil Case No. T-590 is AFFIRMED. Costs against petitioners. dismissed by the trial and appellate courts under the doctrine of primary jurisdiction. This Court, in Bautista v. Mag-isa Vda. De Villena,[27] found occasion to reiterate the doctrine of primary jurisdiction SO ORDERED.

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction has initially been lodged with an administrative body of special competence. For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. This law divested the regional trial courts of their general jurisdiction to try agrarian reform matters. Under Republic Act 6657, the DAR retains jurisdiction over all agrarian reform matters. The pertinent provision reads:

Republic of the Philippines SUPREME COURT Manila

Mora, Hilario Festejo, Bryn Bongbong and Maxima Salvino, respectively. The Board, in the same Resolution, designated respondent Valentino Sevilla as Officer-in-Charge.[4] SECOND DIVISION Pained by his termination, petitioner filed a petition for mandamus[5] with prayer for preliminary injunction with

NILO PALOMA, P e t i t i o n e r,

G.R. No. 157783 damages before the RTC on 11 January 1996 to contest his dismissal with the prayer to be restored to the position of General Manager.[6] Promulgated: Petitioner obdurately argued in his petition that the passage of Resolution No. 8-95 resulting in his dismissal was a September 23, 2005 'capricious and arbitrary act on the part of the Board of Directors, constituting a travesty of justice and a fatal denial of

- versus -

DANILO MORA, HILARIO FESTEJO, MAXIMA SALVINO, BRYN BONGBONGand VALENTINO SEVILLA, R e s p o n d e n t s. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

his constitutional right to due process for the grounds relied upon therein to terminate him were never made a subject of a complaint nor was he notified and made to explain the acts he was said to be guilty of. 'Fundamental is the rule and also provided for in the Civil Service Rules and Regulations that no officer or employee in the Civil Service shall be suspended, separated or dismissed except for cause and after due process, so stressed petitioner.[7]

DECISION On 25 January 1996, respondents filed a Motion to Dismiss the petition for lack of jurisdiction and want of cause of action.[8]

CHICO-NAZARIO, J.: In this petition for review on certiorari, petitioner NILO PALOMA is in quest of the reversal of theDecision[1] and the Resolution,[2] dated 15 November 2002 and 01 April 2003, respectively, of the Court of Appeals in CA-G.R. SP No. 42553, affirming in toto the Orders dated 12 March 1996 and 28 June 1996 of the Regional Trial Court (RTC), Branch 17, Palompon, Leyte, in Civil Case No. PN-0016, dismissing his complaint for mandamus for being prematurely filed.

On 12 March 1996, the trial court issued the assailed order dismissing the petition, with the fallo:

The undisputed facts, as summarized by the Court of Appeals and as unraveled from the records, follow: Petitioner Nilo Paloma was appointed General Manager of the Palompon, Leyte Water District by its Board of Directors in 1993. His services were subsequently terminated by virtue of Resolution No. 8-95[3] dated 29 December 1995, which was passed by respondents as Chairman and members of the Board of the Palompon, Leyte Water District, namely: Danilo

WHEREFORE, all foregoing considered, the complaint thus filed for mandamus with a Prayer for a Writ for Preliminary Injunction with Damages is hereby DISMISSED for being a premature cause of action. Without pronouncement as to costs.[9]

Petitioner's motion for reconsideration likewise failed to sway the trial court by Order dated 28 June 1996.[10]

Meanwhile, petitioner filed a Complaint on 29 March 1996 with the Civil Service Commission (CSC) against same respondents herein, for alleged Violation of Civil Service Law and Rules and for Illegal Dismissal.[11]

overlooked the fact that as an aggrieved party, he need not exhaust administrative remedies and may resort to court action for relief as due process was clearly violated.[18] Espousing a contrary view, respondents posit that petitioner breached the rule against forum shopping as he filed another complaint for illegal dismissal against them with the CSC after obtaining an unfavorable ruling in his Petition for Mandamus filed before the RTC.[19] Not only is petitioner guilty of forum shopping; he, too, is guilty of submitting a false certificate against forum shopping as the certification he appended with the present petition omitted the fact that he had

On 06 November 1996, the CSC issued its Decision[12] exonerating respondents from the charge of violating the Civil Service Law when they voted for the termination of petitioner's services as General Manager of the Palompon, Leyte Water District. Thus, the CSC dismissed[13] the complaint filed by petitioner before it, to wit:

In view of the foregoing, the instant complaint of Mr. Nilo Paloma former General Manager of Palompon Water District against Messrs. Danilo Mora, Hilario Festejo, Bryn Bongbong and Ms. Maxima Salvino for Violation of Civil Service Law and Rules and Illegal Dismissal is hereby DISMISSED, for lack of prima facie case.[14]

previously filed a similar case with the CSC, so respondents say.[20] Respondents theorize, as well, that the instant case has already been rendered moot by the dissolution of the Palompon, Leyte Water District and its subsequent absorption by the municipal government of Palompon effective 1 June 1999.[21] Finally, it is respondents' resolute stance that it was fitting for

In its Decision[15] dated 15 November 2002, the Court of Appeals yielded to the decision of the trial court and dismissed the appeal filed by petitioner, viz:

the Court of Appeals to affirm the trial court's ruling dismissing the petition filed by petitioner inasmuch as Section 23 of Presidential Decree (P.D.) No. 128 indeed clearly states that the General Manager shall serve at the pleasure of the Board.[22] We are not won over by petitioner's avowals. The petition ought to be denied.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. Accordingly, the assailed Orders of the Regional Trial Court dated 12 March 1996 and 28 June 1996 in Civil Case No. PN-0016, are AFFIRMED in toto.[16]

Section 3, Rule 65 of the Rules of Court provides-

Equally unavailing was petitioner's motion for reconsideration, which was denied by the Court of Appeals on 01 April 2003.

Affronted by the ruling, petitioner elevated the matter to us via the instant petition, contending that:

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT OF PALOMPON, LEYTE, BRANCH 17.[17] The central inquiry raised in this petition is whether or not the Court of Appeals committed any reversible error in its challenged decision. Concretely, we are tasked to resolve: (1) whether or notmandamus will lie to compel the Board of Directors of the Palompon, Leyte Water District to reinstate the General Manager thereof, and (2) whether or not the CSC has primary jurisdiction over the case for illegal dismissal of petitioner.

Sec. 3. Petition for mandamus. ' When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent.

Mandamus lies to compel the performance, when refused, of a ministerial duty, but not to compel the performance of a discretionary duty.[23] Mandamus will not issue to control or review the exercise of discretion of a public officer where the law imposes upon said public officer the right and duty to exercise his judgment in reference to any matter in which he is required

Petitioner, in his brief, is emphatic that the Court of Appeals overlooked the fact that mandamusmay lie to compel the performance of a discretionary duty in case of non-observance of due process. He enthuses that the Court of Appeals

to act. It is his judgment that is to be exercised and not that of the court.[24]

In the case at bar, P.D. No. 198,[25] otherwise known as THE PROVINCIAL WATER UTILITIES ACT OF 1973, which was promulgated on 25 May 1973, categorically provides that the general manager shall serve at the pleasure of the board of directors, viz:

in Feliciano v. Commission On Audit[28]to be the special enabling charter of Local Water Districts, categorically provides that the General Manager shall serve 'at the pleasure of the board.

Correlatively, the nature of appointment of General Managers of Water Districts under Section 23 of P.D. No. 198 falls under Section 23. Additional Officers. - At the first meeting of the board, or as soon thereafter as practicable, the board shall appoint, by a majority vote, a general manager, an auditor, and an attorney, and shall define their duties and fix their compensation. Said officers shall serve at the pleasure of the board. Section 23 of P.D. No. 198 was later amended by P.D. No. 768 on 15 August 1975 to read: Sec. 14. An appointment may also be co-terminous which shall be issued to a person whose entrance and continuity in the service is based on the trust and confidence of the appointing authority or that which is subject to his pleasure, or co-existent with his tenure, or limited by the duration of project or subject to the availability of funds. The co-terminous status may thus be classified as follows: (1) Co-terminous with the project - when the appointment is co-existent with the duration of a particular project for which purpose employment was made or subject to the availability of funds for the same; (2) Co-terminous with the appointing authority - when appointment is co-existent with the tenure of the appointing authority or at his pleasure; (3) Co-terminous with the incumbent - when the appointment is co-existent with the appointee, in that after the resignation, separation or termination of the services of the incumbent the position shall be deemed automatically abolished; and (4) Co-terminous with a specific period - appointment is for a specific period and upon expiration thereof, the position is deemed abolished; . . . (Underscoring supplied.) Section 14 of the Omnibus Rules Implementing Book V of Executive Order No. 292, otherwise known as the Administrative Code of 1987, which provides:

SEC. 23. The General Manager. - At the first meeting of the board, or as soon thereafter as practicable, the board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation. Said officer shall serve at the pleasure of the board. (Emphasis supplied) Mandamus does not lie to compel the Board of Directors of the Palompon, Leyte Water District to reinstate petitioner because the Board has the discretionary power to remove him under Section 23 of P.D. No. 198, as amended by P.D. No. 768.

The case of Mita Pardo de Tavera v. Philippine Tuberculosis Society, Inc.[26] delineated the nature of an appointment held 'at the pleasure of the appointing power in this wise: An appointment held at the pleasure of the appointing power is in essence temporary in nature. It is co-extensive with the desire of the Board of Directors. Hence, when the Board opts to replace the incumbent, technically there is no removal but only an expiration of term and in an expiration of term, there is no need of prior notice, due hearing or sufficientgrounds before the incumbent can be separated from office. The protection afforded by Section 7.04 of the Code of By-Laws on Removal Of Officers and Employees, therefore, cannot be claimed by petitioner.[27] (Emphasis supplied) In fine, the appointment of petitioner and his consequent termination are clearly within the wide arena of discretion which the legislature has bestowed the appointing power, which in this case is the Board of Directors of the Palompon, Leyte Water District. Here, considering that the petitioner is at loggerheads with the Board, the former's services obviously ceased to be 'pleasurable to the latter. The Board of Directors of a Water District may abridge the term of the General Manager thereof the moment the latter's services cease to be convivial to the former. Put another way, he is at the mercy of the appointing powers since his appointment can be terminated at any time forany cause and following Orcullo there is no need of prior notice or due hearing before the incumbent can be separated from office. Hence, petitioner is treading on shaky grounds with his intransigent posture that he was removed sans cause and due process.

The Court has previously sustained the validity of dismissal of civil servants who serve at the pleasure of the appointing power and whose appointments are covered by Section 14 of the Omnibus Rules Implementing Book V of Executive Order No. 292 as cited above. Thus, in Orcullo, Jr. v. Civil Service Commission,[29] petitioner was hired as Project Manager IV by the Coordinating Council of the Philippine Assistance Program-BOT Center. In upholding the termination of his employment prior to the expiration of his contract, we held that petitioner serves at the pleasure of the appointing authority. This Court ruled in Orcullo '

Yes, as a general rule, no officer or employee of the civil service shall be removed or suspendedexcept for cause provided by law as provided in Section 2(3), Article IX-B of the 1987 Constitution. As exception to this, P.D. No. 198, which we held

A perusal of petitioner's employment contract will reveal that his employment with CCPAP is qualified by the phrase 'unless terminated sooner. Thus, while such employment is co-terminous with the PAPS project, petitioner nevertheless serves at the pleasure of the appointing authority as this is clearly stipulated in his employment contract. We agree with the appellate court's interpretation of the phrase 'unless terminated sooner to mean 'that his contractual job as Project Manager IV from March 11, 1996

to January 30, 2000 could end anytime before January 30, 2000 if terminated by the other contracting party-employer CCPAP. (Emphasis supplied)

against its retroactive effect.[32] Since the retroactive application of a law usually divests rights that have already become vested,[33] the rule in statutory construction is that all statutes are to be construed as having only a prospective operation

Neither is it the Court's business to intrude into the Congressional sphere on the matter of the wisdom of Section 23 of P.D. No. 198. One of the firmly entrenched principles in constitutional law is that the courts do not involve themselves with nor delve into the policy or wisdom of a statute. That is the exclusive concern of the legislative branch of the government. When the validity of a statute is challenged on constitutional grounds, the sole function of the court is to determine whether it transcends constitutional limitations or the limits of legislative power. No such transgression has been shown in this case.[30]

unless the purpose and intention of the legislature to give them a retrospective effect isexpressly declared or is necessarily implied from the language used.[34]

First, there is nothing in Rep. Act No. 9286 which provides that it should retroact to the date of effectivity of P.D. No. 198, the original law. Next, neither is it necessarily implied from Rep. Act No. 9286 that it or any of its provisions should apply retroactively. Third, Rep. Act No. 9286 is a substantive amendment of P.D. No. 198 inasmuch as it has changed the grounds for

Moreover, laws change depending on the evolving needs of society. In a related development, President Gloria MacapagalArroyo inked into law Republic Act No. 9286, which amended Section 23 of P.D. No. 198 providing that thereafter, the General Manager of Water Districts shall not be removed from office, except for cause and after due process. Rep. Act No. 9286 reads:

termination of the General Manager of Water Districts who, under the then Section 23 of P.D. No. 198, 'shall serve at the pleasure of the Board. Under the new law, however, said General Manager shall not be removed from office, except for cause and after due process. To apply Rep. Act No. 9286 retroactively to pending cases, such as the case at bar, will rob the respondents as members of the Board of the Palompon, Leyte Water District of the right vested to them by P.D. No. 198 to terminate petitioner at their pleasure or discretion. Stated otherwise, the new law can not be applied to make respondents accountable for actions which were valid under the law prevailing at the time the questioned act was committed.

Republic Act No. 9286 AN ACT FURTHER AMENDING PRESIDENTIAL DECREE NO. 198, OTHERWISE KNOWN AS "THE PROVINCIAL WATER UTILITIES ACT OF 1973", AS AMENDED Approved: April 2, 2004 ... Sec. 2. Section 23 of Presidential Decree No. 198, as amended, is hereby amended to read as follows:

Prescinding from the foregoing premises, at the time petitioner was terminated by the Board of Directors, the prevailing law Sec. 23. The General Manager. ' At the first meeting of the Board, or as soon thereafter as practicable, the Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation. Said officer shall not be removed from office, except for cause and after due process. (Emphasis supplied.) ... Sec. 5. Effectivity Clause. ' This Act shall take effect upon its approval.[31] was Section 23 of P.D. No. 198 prior to its amendment by Rep. Act No. 9286.

Petitioner, next, heaves censure on the Court of Appeals for subscribing to the trial court's view that the petition for mandamus was prematurely filed. We recall in Tanjay Water District v. Gabaton[35] that water districts are government instrumentalities and that their employees belong to the civil service. Thus, '[t]he hiring and firing of employees of government-owned or controlled corporations are governed by the Civil Service Law and Civil Service Rules and Regulations. Tanjaywas clear-cut on this matter:

Unfortunately for petitioner, Rep. Act No. 9286 is silent as to the retroactivity of the law to pending cases and must, therefore, be taken to be of prospective application. The general rule is that in an amendatory act, every case of doubt must be resolved

. . . Inasmuch as PD No. 198, as amended, is the original charter of the petitioner, Tanjay Water District, and respondent Tarlac Water District and all water districts in the country, they come under the coverage of the civil service law, rules and regulations. (Emphasis supplied)

SO ORDERED.

Underlying the rulings of the trial and appellate courts in the case at bar is the doctrine of primary jurisdiction; i.e., courts cannot and will not resolve a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.[36] InVillaflor v. Court of Appeals,[37] we revisited the import of the doctrine of primary jurisdiction, to wit:

In recent years, it has been the jurisprudential trend to apply this doctrine to cases involving matters that demand the special competence of administrative agencies even if the question involved is also judicial in character. . . In cases where the doctrine of primary jurisdiction is clearly applicable, the court cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence. InMachete vs. Court of Appeals, the Court upheld the primary jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB) in an agrarian dispute over the payment of back rentals under a leasehold contract. In Concerned Officials of the Metropolitan Waterworks and Sewerage System vs. Vasquez [240 SCRA 502],the Court recognized that the MWSS was in the best position to evaluate and to decide which bid for a waterworks project was compatible with its development plan. (Emphasis supplied)

In a surfeit of cases, this Court has held that quasi-judicial bodies like the CSC are better-equipped in handling cases involving the employment status of employees as those in the Civil Service since it is within the field of their expertise.[38] This is consistent with the powers and functions of the CSC, being the central personnel agency of the Government, to carry into effect the provisions of the Civil Service Law and other pertinent laws,[39] including, in this case, P.D. No. 198.

WHEREFORE, the present petition is hereby DENIED. Accordingly, the Decision and the Resolution dated 15 November 2002 and 01 April

2003, respectively, of the Court of Appeals in CA-G.R. SP No. 42553, are hereby AFFIRMED. Costs against petitioner.

GMA NETWORK, INC., Petitioner, - versus ABS-CBN BROADCASTING, CORPORATION, CENTRAL, CATV, INC., PILIPINO CABLE Promulgated: CORPORATION and PHILIPPINE, HOME CABLE HOLDINGS, INC., Respondents. September 23, 2005 G.R. No. 160703 x ---------------------------------------------------------------------------------------- x

GMA alleged that the re-channeling of its cable television broadcast resulted in damage to its business operations, thus:

17. Following their arbitrary act of re-channeling the cable position of plaintiff GMA from 'Channel 12 to 'Channel 14', the defendants SkyCable and Pilipino Cable (or 'Sun Cable') deliberately failed to transmit the signal of plaintiff GMA to their channels in clear audio transmission resulting in noticeable dropouts and spillover of extraneous sound and in clear visual transmission resulting in distorted and/or degraded visual presentation; 18. Soon thereafter, numerous complaints of distortions, degradations and disorders of GMA's shows on the cable channels were received by plaintiff GMA from subscribers of the defendant cable companies 'SkyCable', 'Home Cable and 'Sun Cable', such as 'snowy reception', 'no signal', and 'no audio. These complaints escalated to alarming proportions when plaintiff GMA made public the audio and visual distortions of its TV shows on the cable channels;

DECISION

YNARES-SANTIAGO, J.: Petitioner GMA Network, Inc. (GMA') filed on May 6, 2003 before the Regional Trial Court of Quezon City a complaint for damages[1] against respondents ABS-CBN Broadcasting Corporation (ABS-CBN'), Central CATV, Inc. (SkyCable'), Philippine Home Cable Holdings, Inc. (Home Cable') and Pilipino Cable Corporation (Sun Cable'), which was raffled to Branch 97[2] and docketed as Civil Case No. Q03-49500. In its complaint, GMA alleged that respondents engaged in unfair competition when the cable companies arbitrarily rechanneled petitioner's cable television broadcast on February 1, 2003, in order to arrest and destroy its upswing performance in the television industry. GMA argued that respondents were able to perpetrate such unfair business practice through a common ownership and interlocking businesses. SkyCable and Sun Cable are wholly-owned subsidiaries of Sky Vision Corporation (Sky Vision') which is allegedly controlled by Lopez, Inc. On the other hand, Home Cable is a wholly-owned subsidiary of Unilink Communications Corporation (Unilink'), which is owned by Mediaquest Holdings, Inc., a company controlled by the Pension Trust Fund of the PLDT Employees (PLDT Group'). Pursuant to a Master Consolidation Agreement, the ownership, rights and interests in Sky Vision and Unilink were purportedly placed under a holding company known as 'Beyond Cable', 66.5 % of which is owned by the Benpres Group, composed of Lopez Inc., Benpres Holdings and ABS-CBN, while 33.5% thereof is owned by the PLDT Group. As a result of this business combination, respondents have cornered at least 71% of the total cable television market in Mega Manila. They are thus able to dictate the signal transmission, channel position, and the airing of shows, programs, and broadcast of non-cable companies like ABS-CBN and GMA, which the law requires them to carry.

19. The audio disorder and the visual distortion and/or degradation of plaintiff GMA's signal transmission happened mostly during the showing of plaintiff GMA's top rating programs; 19.1. These distortions did not occur in the cable TV shows of defendant ABS-CBN on the channels of the co-defendant cable companies; 20. It is a matter of common knowledge, and defendants are fully aware, that the quality of signal and audio transmission and established channel position in cable TV of a non-cable television network, like plaintiff GMA, are crucial factors in arriving at the ratings of the network and its programs and which ratings are, in turn, determinative of the business judgment of commercial advertisers, producers and blocktimers to sign broadcast contracts with the network, which contracts are the lifeblood of TV networks and stations like plaintiff GMA; 20.1. Defendants are also aware that 50% of so-called 'people meter which is a device used by the ratings suppliers (AGB Philippines and AC Nielsen) to determine the ratings and audience shares of TV programs are placed in cable TV. 20.2. These unjust, high-handed and unlawful acts of the defendants adversely affected the viewership, quality of the programs, and ratings of plaintiff GMA for which defendants are liable; 22. As a result of defendants' acts of unfair competition, corporate combinations and manipulations as well as unjust, oppressive, high-handed and unlawful business practices, plaintiff suffered business interruptions and injury in its operations for which it should be compensated in the amount of P10Million by way of actual and compensatory damages[.][3] On July 15, 2003, SkyCable and Sun Cable moved for dismissal of the complaint on the grounds oflitis pendentia and forum-shopping since there was a similar case pending before the National Telecommunications Commission (NTC) entitled 'GMA Network, Inc. v. Central CATV, Inc., Philippine Home Cable Holdings, Inc., and Pilipino Cable Corporation. The case, docketed as NTC ADM Case No. 2003-085, allegedly involved the same cause of action and

the same parties, except for ABS-CBN. SkyCable and Sun Cable also asserted that it is the NTC that has primary jurisdiction over the issues raised in the complaint. Moreover, GMA had no cause of action against the two entities and failed to exhaust administrative remedies.[4] On July 17, 2003, Home Cable filed an Answer with Compulsory Counterclaims[5] pleading, as affirmative defenses, the same matters alleged in the motion to dismiss of SkyCable and Sun Cable. ABS-CBN also filed an Answer with Compulsory Counterclaims[6] contending that GMA had no cause of action against it and that the complaint failed to state any. GMA opposed the motion to dismiss[7] and filed a Reply to the answer of Home Cable[8] and ABS-CBN.[9] A preliminary hearing was held on the motion to dismiss as well as the affirmative defenses. In due course, the trial court issued the assailed resolution[10] dismissing the complaint. The trial court held that the resolution of the legal issues raised in the complaint required the determination of highly technical, factual issues over which the NTC had primary jurisdiction. Additionally, it held that GMA had no cause of action against ABS-CBN because:

unfair competition and/or unfair trade practices resulting to damages, jurisdiction over which lies with the regular courts and not the NTC. We disagree. GMA's complaint for damages is based on the alleged arbitrary re-channeling of its broadcast over the cable companies' television systems, thereby resulting in the distortion and degradation of its video and audio signals. The re-channeling was allegedly made possible through the common ownership and interlocking businesses of respondent corporations and was designed to thwart petitioner's upswing performance in the television ratings game. In other words, the wrongful acts complained of and upon which the damages prayed for are based, have to do with the operations and ownership of the cable companies. These factual matters undoubtedly pertain to the NTC and not the regular courts. That the matters complained of by GMA are within the NTC's exclusive domain can be discerned from the statutes governing the broadcasting and cable television industry. Section 15 of Executive Order No. 546,[13] by which the NTC was created, provides for its general functions as follows:

... It is evident that plaintiff's cause of action is against the cable companies and not against ABS-CBN since it does not establish that defendant ABS-CBN had a hand in the re-channeling of plaintiff's cable transmission because essentially defendant ABS-CBN is similarly situated as plaintiff. The mere fact that the people behind ABS-CBN is allegedly the same people who are at the helm of these cable companies, and thus were 'engaged in unfair competition and/or unfair trade practices' is a conclusion of law and does not satisfy the requirement that the plaintiff state 'ultimate facts' in asserting its cause of action. '[11] Hence, this petition filed by GMA under Section 2(c), Rule 41 in relation to Rule 45 of the Rules of Court, asserting that: A THE TRIAL COURT ERRED IN RULING THAT THE NTC HAS PRIMARY JURISDICTION OVER PETITIONER'S COMPLAINT FOR DAMAGES AND IN DISMISSING THE CASE FOR LACK OF JURISDICTION.

a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar public utilities; b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates; g. Promulgate such rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible[.]

B THE TRIAL COURT ERRED IN RULING THAT PETITIONER'S COMPLAINT STATES NO CAUSE OF ACTION AGAINST RESPONDENT ABS-CBN.[12] GMA asserts that the resolution of the issues raised in the complaint does not entail highly technical matters requiring the expertise of the NTC. Petitioner insists that the subject matter of the complaint merely involves respondents' wrongful acts of

In 1987, Executive Order No. 205[14] was issued which empowers the NTC to grant certificates of authority for the operation of cable antenna television system subject to the limitation that the authority to operate shall not infringe on the television and broadcast markets. Executive Order No. 436[15] issued in 1997, specifically vests the NTC with the sole power of regulation and supervision over the cable television industry.

In Batangas CATV, Inc. v. Court of Appeals,[16] we held that the NTC's regulatory power over the broadcasting and cable television industry extends to matters which are peculiarly within its competence. These include the: (1) determination of rates, (2) issuance of certificates of authority, (3) establishment of areas of operation, (4) examination and assessment of the legal, technical and financial qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar matters.[17] With respect to the foregoing, therefore, the NTC exercises exclusive, original and primary jurisdiction to the exclusion of the regular courts. In the case at bar, before the trial court can resolve the issue of whether GMA is entitled to an award of damages, it would have to initially ascertain whether there was arbitrary re-channeling which distorted and downgraded GMA's signal. The ascertainment of these facts, which relate to the operations of the cable companies, would require the application of technical standards imposed by the NTC as well as determination of signal quality 'within the limitations imposed by the technical state of the art.[18] These factual questions would necessarily entail specialized knowledge in the fields of communications technology and engineering which the courts do not possess. It is the NTC which has the expertise and skills to deal with such matters. The regulation of ownership of television and cable television companies is likewise within the exclusive concern of the NTC, pursuant to its broader regulatory power of ensuring and promoting a 'larger and more effective use of communications, radio and television broadcasting facilities' in order that the public interest may well be served. The NTC is mandated to maintain effective competition among private entities engaged in the operation of public service communications. It is also the agency tasked to grant certificates of authority to cable television operators, provided that the same 'does not infringe on the television and broadcast markets. As such, GMA's allegations of unlawful business combination and unjust business practices also properly pertain to the NTC. It is in the best position to judge matters relating to the broadcasting industry as it is presumed to have an unparalleled understanding of its market and commercial conditions. Moreover, it is the NTC that has the information, statistics and data peculiar to the television broadcasting industry. It is thus the body that is ideally suited to act on petitioner's allegations of market control and manipulation. In Industrial Enterprises, Inc. v. Court of Appeals,[19] the Court held that: It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper

jurisdiction of a court. This is the doctrine of primary jurisdiction. It applies 'where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such case the judicial process is suspended pending referral of such issues to the administrative body for its view[.][20] Consequently, while it is true that the regular courts are possessed of general jurisdiction over actions for damages, it would nonetheless be proper for the courts to yield its jurisdiction in favor of an administrative body when the determination of underlying factual issues requires the special competence or knowledge of the latter. In this era of clogged court dockets, administrative boards or commissions with special knowledge, experience and capability to promptly hear and determine disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of discretion, are well nigh indispensable. Between the power lodged in an administrative body and a court, therefore, the unmistakable trend is to refer it to the former.[21] In this regard, we note that there is a pending case before the NTC in which the factual issues raised in petitioner's complaint have also been pleaded. Although petitioner prays in the NTC case for the administrative remedy of cancellation of the cable companies' certificates of authority, licenses and permits, it is inevitable that, in granting or denying this prayer, the NTC would have to pass upon the same factual issues posed in petitioner's complaint before the trial court. The latter was thus correct in applying the doctrine of primary jurisdiction if only to avoid conflicting factual findings between the court and the NTC. Finally, the complaint failed to state a cause of action against ABS-CBN and the other respondents, considering that the ultimate facts upon which the complaint for damages depends fall within the technical competence of an administrative body. Otherwise stated, pending determination by the NTC of the factual questions involved in the case, petitioner's complaint, which is founded upon such factual issues, would be premature. WHEREFORE, the petition is DENIED. The assailed resolution dated October 30, 2003 of the Regional Trial Court of Quezon City, Branch 97, is AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 148106 July 17, 2006

Finding the motion to be well-taken, the RTC issued on March 7, 2001 an order8 dismissing petitioners complaint without prejudice to the filing of the proper money claim with the COA. In a subsequent order dated May 16, 2001,9 the RTC denied petitioners motion for reconsideration. Hence, this petition. The resolution of this case turns on whether it is the COA or the RTC which has primary jurisdiction to pass upon petitioners money claim against the Province of Batangas. We rule that it is the COA which does. Therefore, we deny the petition. The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise, specialized training and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the courts is had even if the matter may well be within their proper jurisdiction.10 It applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be enforced may suspend the judicial process pending referral of such issues to the administrative body for its view11 or, if the parties would not be unfairly disadvantaged, dismiss the case without prejudice.12 This case is one over which the doctrine of primary jurisdiction clearly held sway for although petitioners collection suit for P487,662.80 was within the jurisdiction of the RTC,13 the circumstances surrounding petitioners claim brought it clearly within the ambit of the COAs jurisdiction. First, petitioner was seeking the enforcement of a claim for a certain amount of money against a local government unit. This brought the case within the COAs domain to pass upon money claims against the government or any subdivision thereof under Section 26 of the Government Auditing Code of the Philippines:14 The authority and powers of the Commission [on Audit] shall extend to and comprehend all matters relating to x x x x the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies, and instrumentalities. x x x x. The scope of the COAs authority to take cognizance of claims is circumscribed, however, by an unbroken line of cases holding statutes of similar import to mean only liquidated claims, or those determined or readily determinable from vouchers, invoices, and such other papers within reach of accounting officers.15 Petitioners claim was for a fixed amount and although respondent took issue with the accuracy of petitioners summation of its accountabilities, the amount thereof was readily determinable from the receipts, invoices and other documents. Thus, the claim was well within the COAs jurisdiction under the Government Auditing Code of the Philippines. Second, petitioners money claim was founded on a series of purchases for the medical supplies of respondents public hospitals. Both parties agreed that these transactions were governed by the Local Government Code provisions on supply and property management16 and their implementing rules and regulations promulgated by the COA17 pursuant to Section 383 of said Code.18 Petitioners claim therefore involved compliance with applicable auditing laws and rules on procurement. Such matters are not within the usual area of knowledge, experience and expertise of most judges but within the special competence of COA auditors and accountants. Thus, it was but proper, out of fidelity to the doctrine of primary jurisdiction, for the RTC to dismiss petitioners complaint. Petitioner argues, however, that respondent could no longer question the RTCs jurisdiction over the matter after it had filed its answer and participated in the subsequent proceedings. To this, we need only state that the court may raise the issue of primary jurisdiction sua sponteand its invocation cannot be waived by the failure of the parties to argue it as the doctrine exists for the proper distribution of power between judicial and administrative bodies and not for the convenience of the parties.19 WHEREFORE, the petition is hereby DENIED. The March 7, and May 16, 2001 orders of the Regional Trial Court of Batangas City are hereby AFFIRMED.

EURO-MED LABORATORIES, PHIL., INC., represented by LEONARDO H. TORIBIO, petitioner, vs. THE PROVINCE OF BATANGAS, represented by its Governor, HON. HERMILANDO I. MANDANAS, respondent. DECISION CORONA, J.: Before the Court is a petition for review on certiorari1 assailing, on pure questions of law, the March 7 and May 16, 2001 orders of the Regional Trial Court (RTC) of Batangas City2 in Civil Case No. 5300. Civil Case No. 5300 was a complaint for sum of money3 filed by petitioner Euro-Med Laboratories, Phil., Inc. against respondent Province of Batangas. The pertinent portions of the complaint read: 3. On several occasions, particularly from the period of 19 August 1992 to 11 August 1998, defendant [respondent here], thru its various authorized representatives of the government hospitals identified and listed below, purchased various Intravenous Fluids (IVF) products from the plaintiff [petitioner here], with an unpaid balance of Four Hundred Eighty Seven Thousand Six Hundred Sixty-Two Pesos and Eighty Centavos (P487,662.80), as of 28 February 1998, broken down as follows: x x x x which purchases were evidenced by invoices duly received and signed by defendants authorized representatives, upon delivery of the merchandise listed in said invoices. 4. Under the terms and conditions of the aforesaid invoices, defendant agreed and covenanted to pay plaintiff, without need of demand, its obligations in the above-enumerated invoices on various terms indicated therein. 5. Plaintiff made several demands for defendant to pay its accountabilities, including setting up several dialogues with plaintiffs representatives, but these proved fruitless. 6. Despite repeated demands by plaintiff for defendant to pay and settle its unpaid and outstanding accounts under the aforementioned invoices, said defendant has failed and still fails to comply therewith.4 In its answer,5 respondent admitted most of the allegations in the complaint, denying only those relating to the unpaid balance supposedly still due petitioner. Respondent alleged that some payments it had already made were not reflected in the computation set forth in the complaint and that it was continuously exerting genuine and earnest efforts "to find out the true and actual amount owed."6 Pre-trial and trial followed. At the conclusion of petitioners presentation of evidence, respondent filed a motion to dismiss7 the complaint on the ground that the primary jurisdiction over petitioners money claim was lodged with the Commission on Audit (COA). Respondent pointed out that petitioners claim, arising as it did from a series of procurement transactions with the province, was governed by the Local Government Code provisions and COA rules and regulations on supply and property management in local governments. Respondent argued that the case called for a determination of whether these provisions and rules were complied with, and that was within the exclusive domain of COA to make.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 171763 June 5, 2009

Aggrieved, the respondents questioned the dismissal of their complaint in a petition for certiorari and prohibition before the Court of Appeals. The Court of Appeals granted the petition in its Decision dated August 31, 2005, the dispositive portion of which reads: WHEREFORE, in view of all the foregoing, the petition is GRANTED and the assailed orders of the respondent trial court are declared NULL AND VOID, and SET ASIDE. Respondent RTC is hereby ordered to take jurisdiction of Civil Case No. CEB-29002. SO ORDERED.8 MLPAI filed a motion for reconsideration but it was denied by the Court of Appeals in its Resolution dated February 13, 2006. Hence, this petition raising the following issues: I. WHETHER THE HONORABLE COURT OF APPEALS HAS DISREGARDED LAWS AND WELL-SETTLED JURISPRUDENCE IN HOLDING THAT JURISDICTION OVER *THE+ DISPUTE BETWEEN HOMEOWNERS AND HOMEOWNERS ASSOCIATION LIES WITH THE REGULAR COURTS AND NOT WITH HLURB. II.

MARIA LUISA PARK ASSOCIATION, INC., Petitioner, vs. SAMANTHA MARIE T. ALMENDRAS and PIA ANGELA T. ALMENDRAS, Respondents. DECISION QUISUMBING, J.: This petition for review on certiorari assails the Decision1 dated August 31, 2005 and the Resolution2 dated February 13, 2006 of the Court of Appeals in CA-G.R. SP No. 81069. The facts, culled from the records, are as follows: On February 6, 2002, respondents Samantha Marie T. Almendras and Pia Angela T. Almendras purchased from MRO Development Corporation a residential lot located in Maria Luisa Estate Park, Banilad, Cebu City. After some time, respondents filed with petitioner Maria Luisa Park Association, Incorporated (MLPAI) an application to construct a residential house, which was approved in February 10, 2002. Thus, respondents commenced the construction of their house. Upon ocular inspection of the house, MLPAI found out that respondents violated the prohibition against multi-dwelling3 stated in MLPAIs Deed of Restriction. Consequently, on April 28, 2003, MLPAI sent a letter to the respondents, demanding that they rectify the structure; otherwise, it will be constrained to forfeit respondents construction bond and impose stiffer penalties. In a Letter4 dated April 29, 2003, respondents, as represented by their father Ruben D. Almendras denied having violated MLPAIs Deed of Restriction. On May 5, 2003, MLPAI, in its reply, pointed out respondents specific violations of the subdivision rules, to wit: (a) installation of a second water meter and tapping the subdivisions main water pipeline, and (b) construction of "two separate entrances that are mutually exclusive of each other." It likewise reiterated its warning that failure to comply with its demand will result in its exercise of more stringent measures. In view of these, respondents filed with the Regional Trial Court of Cebu City, Branch 7, a Complaint5 on June 2, 2003 for Injunction, Declaratory Relief, Annulment of Provisions of Articles and By-Laws with Prayer for Issuance of a Temporary Restraining Order (TRO)/Preliminary Injunction. MLPAI moved for the dismissal of the complaint on the ground of lack of jurisdiction and failure to comply with the arbitration clause6 provided for in MLPAIs by-laws. In an Order7 dated July 31, 2003, the trial court dismissed the complaint for lack of jurisdiction, holding that it was the Housing and Land Use Regulatory Board (HLURB) that has original and exclusive jurisdiction over the case. Respondents moved for reconsideration but their motion was denied.

WHETHER THERE IS NO OTHER RELIEF AND REMEDY AVAILABLE TO PETITIONER TO AVERT THE CONDUCT OF A VOID [PROCEEDING] THAN THE PRESENT RECOURSE.9 Simply stated, the issue is whether the appellate court erred in ruling that it was the trial court and not the HLURB that has jurisdiction over the case. Petitioner MLPAI contends that the HLURB10 has exclusive jurisdiction over the present controversy, it being a dispute between a subdivision lot owner and a subdivision association, where the latter aimed to compel respondents to comply with the MLPAIs Deed of Restriction, specifically the provision prohibiting multi-dwelling. Respondents, on the other hand, counter that the case they filed against MLPAI is one for declaratory relief and annulment of the provisions of the by-laws; hence, it is outside the competence of the HLURB to resolve. They likewise stated that MLPAIs rules and regulations are discriminatory and violative of their basic rights as members of the association. They also argued that MLPAIs acts are illegal, immoral and against public policy and that they did not commit any violation of the MLPAIs Deed of Restriction. We agree with the trial court that the instant controversy falls squarely within the exclusive and original jurisdiction of the Home Insurance and Guaranty Corporation (HIGC),11 now HLURB. Originally, administrative supervision over homeowners associations was vested by law with the Securities and Exchange Commission (SEC). However, pursuant to Executive Order No. 535,12 the HIGC assumed the regulatory and adjudicative functions of the SEC over homeowners associations. Section 2 of E.O. No. 535 provides: 2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall have among others, the following additional powers:

(a) . . . and exercise all the powers, authorities and responsibilities that are vested on the Securities and Exchange Commission with respect to homeowners associations, the provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding; (b) To regulate and supervise the activities and operations of all houseowners associations registered in accordance therewith; xxxx Moreover, by virtue of this amendatory law, the HIGC also assumed the SECs original and exclusive jurisdiction under Section 5 of Presidential Decree No. 902-A to hear and decide cases involving: b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any and/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;13 (Emphasis supplied.) xxxx Consequently, in Sta. Clara Homeowners Association v. Gaston and Metro Properties, Inc. v. Magallanes Village Association, Inc.,15 the Court recognized HIGCs "Revised Rules of Procedure in the Hearing of Home Owners Disputes," pertinent portions of which are reproduced below: RULE II Disputes Triable by HIGC/Nature of Proceedings Section 1. Types of Disputes The HIGC or any person, officer, body, board or committee duly designated or created by it shall have jurisdiction to hear and decide cases involving the following: xxxx (b) Controversies arising out of intra-corporate relations between and among members of the association, between any or all of them and the association of which they are members, and between such association and the state/general public or other entity in so far as it concerns its right to exist as a corporate entity.16 (Emphasis supplied.) xxxx Later on, the above-mentioned powers and responsibilities, which had been vested in the HIGC with respect to homeowners associations, were transferred to the HLURB pursuant to Republic Act No. 8763,17 entitled "Home Guaranty Corporation Act of 2000." In the present case, there is no question that respondents are members of MLPAI as they have even admitted it. 18Therefore, as correctly ruled by the trial court, the case involves a controversy between the homeowners association and some of its members. Thus, the exclusive and original jurisdiction lies with the HLURB. Indeed, in Sta. Clara Homeowners Association v. Gaston, we held:
14

. . . the HIGC exercises limited jurisdiction over homeowners' disputes. The law confines its authority to controversies that arise from any of the following intra-corporate relations: (1) between and among members of the association; (2) between any and/or all of them and the association of which they are members; and (3) between the association and the state insofar as the controversy concerns its right to exist as a corporate entity.19 (Emphasis supplied.) The extent to which the HLURB has been vested with quasi-judicial authority must also be determined by referring to Section 3 of P.D. No. 957,20 which provides: SEC. 3. National Housing Authority. The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. (Emphasis supplied.) The provisions of P.D. No. 957 were intended to encompass all questions regarding subdivisions and condominiums. The intention was aimed at providing for an appropriate government agency, the HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to said category of real estate may take recourse. The business of developing subdivisions and corporations being imbued with public interest and welfare, any question arising from the exercise of that prerogative should be brought to the HLURB which has the technical know-how on the matter.22 It is apparent that although the complaint was denominated as one for declaratory relief/annulment of contracts, the allegations therein reveal otherwise. It should be stressed that respondents neither asked for the interpretation of the questioned by-laws nor did they allege that the same is doubtful or ambiguous and require judicial construction. In fact, what respondents really seek to accomplish is to have a particular provision of the MLPAIs by-laws nullified and thereafter absolve them from any violations of the same.23 In Kawasaki Port Service Corporation v. Amores,24 the rule was stated: . . . where a declaratory judgment as to a disputed fact would be determinative of issues rather than a construction of definite stated rights, status and other relations, commonly expressed in written instrument, the case is not one for declaratory judgment.25 Contrary to the observation of the Court of Appeals, jurisdiction cannot be made to depend on the exclusive characterization of the case by one of the parties.26 While respondents are questioning the validity or legality of the MLPAIs articles of incorporation and its by-laws, they did not, however, raise any legal ground to support its nullification. The legality of the bylaws in its entirety was never an issue in the instant controversy but merely the provision prohibiting multi-dwelling which respondents assert they did not violate.27 So to speak, there is no justiciable controversy here that would warrant declaratory relief, or even an annulment of contracts. We reiterate that in jurisdictional issues, what determines the nature of an action for the purpose of ascertaining whether a court has jurisdiction over a case are the allegations in the complaint and the nature of the relief sought.28 Moreover, under the doctrine of primary administrative jurisdiction, courts cannot or will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact.29 In the instant case, the HLURB has the expertise to resolve the basic technical issue of whether the house built by the respondents violated the Deed of Restriction, specifically the prohibition against multi-dwelling.1avvphi1 As observed in C.T. Torres Enterprises, Inc. v. Hibionada:30 The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid

authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world.31 We also note that the parties failed to abide by the arbitration agreement in the MLPAI by-laws. Article XII of the MLPAI bylaws entered into by the parties provide: Mode of Dispute Resolution Mode of Dispute Resolution. Should any member of the Association have any grievance, dispute or claim against the Association or any of the officers and governors thereof in connection with their function and/or position in the Association, the parties shall endeavor to settle the same amicably. In the event that efforts at amicable settlement fail, such dispute, difference or disagreement shall be brought by the member to an arbitration panel composed of three (3) arbitrators for final settlement, to the exclusion of all other fora. Such arbitration may be initiated by giving notice to the other party, such notice designating one (1) independent arbitrator. Within thirty (30) from the receipt of said notice, the other party shall designate a second independent arbitrator by written notice to the first party. Both arbitrators shall within fifteen (15) days thereafter select a third independent arbitrator, who shall be the chairman of the Arbitration Tribunal. In the event that the two (2) arbitrators respectively nominated by the parties fail to select the third independent arbitrator within the fifteen-day period, the third arbitrator shall be jointly selected by the parties. In the event that the other party does not nominate an arbitrator, the Arbitration Tribunal shall be composed of one (1) arbitrator nominated by the party initiating the proceedings. The Arbitration Tribunal shall render its decision within forty-five (45) days from the selection of the third arbitrator, which decision shall be valid and binding between the parties unless repudiated within five (5) days from receipt thereof on grounds that the same was procured through fraud or violence, or that there are patent or gross errors in facts made basis of the decision. The award of the Tribunal shall be enforced by a court of competent jurisdiction. Venue of action covered by this Article shall be in the courts of justice of Cebu City only. Under the said provision of the by-laws, any dispute or claim against the Association or any of its officers and governors shall first be settled amicably. If amicable settlement fails, such dispute shall be brought by the member to an arbitration panel for final settlement. The arbitral award shall be valid and binding between the parties unless repudiated on grounds that the same was procured through fraud or violence, or that there are patent or gross errors in the tribunals findings of facts upon which the decision was based. The terms of Article XII of the MLPAI by-laws clearly express the intention of the parties to bring first to the arbitration process all disputes between them before a party can file the appropriate action. The agreement to submit all disputes to arbitration is a contract. As such, the arbitration agreement binds the parties thereto, as well as their assigns and heirs.32 Respondents, being members of MLPAI, are bound by its by-laws, and are expected to abide by it in good faith.33 In the instant case, we observed that while both parties exchanged correspondence pertaining to the alleged violation of the Deed of Restriction, they, however, made no earnest effort to resolve their differences in accordance with the arbitration clause provided for in their by-laws. Mere exchange of correspondence will not suffice much less satisfy the requirement of arbitration. Arbitration being the mode of settlement between the parties expressly provided for in their by-laws, the same should be respected. Unless an arbitration agreement is such as absolutely to close the doors of the courts against the parties, the courts should look with favor upon such amicable arrangements.34 Arbitration is one of the alternative methods of dispute resolution that is now rightfully vaunted as "the wave of the future" in international relations, and is recognized worldwide. To brush aside a contractual agreement calling for arbitration in case of disagreement between the parties would therefore be a step backward.35

WHEREFORE, the instant petition is GRANTED. The Decision dated August 31, 2005 and Resolution dated February 13, 2006 of the Court of Appeals in CA-G.R. SP No. 81069 are SET ASIDE. The Order dated July 31, 2003 of the Regional Trial Court of Cebu City, Branch 7, is hereby REINSTATED. SO ORDERED.