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EMERSON B. BAGONGAHASA vs. G.R. No. 179844 March 23, 2011 Before this Court is a Consolidated Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Decision2 dated May 31, 2007 and its Amended Decision (Partial)3 dated September 25, 2007. The facts, as summarized by the Department of Agrarian Reform Adjudication Board (DARAB) and as quoted by the CA, are as follows: It appears that Complainants Johanna L. Romualdez; Dietmar L. Romualdez; Sps. Daniel and [Ana] Romualdez and Jacquelin[e] C. (sic) Romualdez are absolute and lawful owners of separate parcels of lands, each parcel with an area of 36,670 square meters, 47,187.50 square meters and 55,453 square meters, respectively, all situated [in] Sitio Papatahan, Paete, Laguna. Johanna and Dietmar purchased their properties from Roberto Manalo on January 6, 1994; while Sps. Daniel and [Ana], as well as Jacqueline bought their landholdings from Leonisa A. Zarraga on August 5, 1998. They allege that the said properties are planted [with] different fruit-bearing trees. They and their predecessors-in-interest have been paying realty taxes due on the properties up to the present. However, sometime in 1994 and 1995, the then Secretary of Agrarian Reform declared the property to be part of the public domain, awarded the same to the Defendants and forthwith issued Certificates of Land Ownership Award (CLOAs) to the respective defendants as follows: CLOA NO. BENEFICIARIES Date of Registration

In Registry of Deeds of Laguna 1. 00155653 2. 00155652 3. 00119810 Emerson Bagongahasa, Cesar Caguin, et al. Sotela Adea, et al. April 10, 1995 et al. April 10, 1995 June 30, 1994

It was only in 1998 when the complainants learned of the issuance of said CLOAs by the Register of Deeds of Siniloan, Laguna. The Complainants pointed out that while the Defendants respective CLOAs describe a property purportedly located in Sitio Lamao, San Antonio, Municipality of Kalayaan, Province of Laguna, each of the Complainants tax declaration describes a property located [in] Sitio Papatahan, Municipality of Paete, Province of Laguna. Inspite of the discrepancy in the municipality and sitio of the respective documents, the lots described in the CLOAs and in the Tax Declarations are almost identical, except that the property described in Defendants title covers a larger area, but the title and the tax declaration refer to the sam e lot; that they and their predecessors-in-interest have been in possession of the properties for more than thirty years; that the Defendants have never been in possession of the same; that they have not paid any real estate taxes and have not caused the issuance of a tax declaration over the property in their names; that there is no basis for the award of certificates of land ownership to the Defendants by the Secretary of Agrarian Reform, for the lands have already become private properties by virtue of the open, continuous, exclusive and notorious possession of the property by the Complainants and/or their predecessors-ininterest which possession was in the concept of an owner. As absolute and lawful owners thereof, the complainants also maintain that they have not been notified of any intended coverage thereof by the DAR; that to the best of their knowledge, there is no valuation being conducted by the Land Bank of the Philippines and the DAR involving the property; that there was no compensation paid and that the DAR-CENRO Certification shows that the landholdings have 24-32% slopes and therefore exempt from CARP coverage. The complainants[,] thus, pray for the reconveyance of their respective landholdings; cancellation of the CLOAs and payment of litigation fee. On the other hand, the Defendants specifically denied the allegations of the Plaintiff, maintaining in their Affirmative Defenses that they are farmer beneficiaries of the subject properties, covered by Proclamation No. 2280 (sic) which reclassifies certain portion of the public domain as agricultural land and declares the same alienable and disposable for agricultural and resettlement purposes of the Kilusang Kabuhayan at Kaunlaran Land Resource Management Program of the KKK, Ministry of Human Settlements and the area covered is Barangay Papatahan, Paete; that the Plaintiffs act of questioning the issuance of title is an exercise in futility because Defendants were already in possession of the properties prior to said Proclamation; that

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upon the issuance of the CLOAs, they became the owners of the landholdings and that the complainants claim for damages has no basis. On the part of public Respondent PARO, he invoked the doctrine of regularity in the performance of their official functions and their adherence in pursuing the implementation of CARP. He claims that DAR received from the National Livelihood Support Fund (NLSF) portions of the public domain covered by Presidential Proclamation No. 2282, Series of 1983 and has been mandated to implement the agrarian reform laws by distributing alienable and disposable portions of the public domain, to which the subject lands fall; that actual investigation, proper screening of applicants-beneficiaries, survey and proper evaluation were conducted, warranting the generation of the CLOAs and that the registration of the CLOAs with the Registry of Deed brought the same under the coverage of the Torrens System of land registration and have already become indefeasible or uncontestable.4 On December 28, 2000, the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna rendered his decision, 5finding that the Department of Agrarian Reform (DAR) Secretary committed a mistake in placing the subject properties under the Comprehensive Agrarian Reform Program (CARP). Moreover, the PARAD found that no notice of coverage was sent to respondents and that they were also not paid any just compensation. The dispositive portion of the said decision reads: WHEREFORE, premises considered, judgment is hereby rendered: 1. Ordering the cancellation of Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and 00119810 issued to herein private respondents; [and] 2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of the Certificate of Land Ownership Award (CLOA) to herein named defendants. SO ORDERED.6 Aggrieved, petitioners appealed to the DARAB. In its decision7 dated May 3, 2005, the DARAB held that the complaints filed were virtual protests against the CARP coverage, to which it has no jurisdiction. The DARAB further held that, while it has jurisdiction to cancel the Certificate of Land Ownership Awards (CLOAs), which had been registered with the Register of Deeds (RD) of Laguna, it cannot pass upon matters exclusively vested in the DAR Secretary. Moreover, the DARAB ruled that the assailed CLOAs having been registered in 1994 and 1995 became incontestable and indefeasible. Thus: WHEREFORE, premises considered, the appealed decision is hereby REVERSED and/or SET ASIDE. A new judgment is hereby entered: 1. Sustaining the validity of the subject Certificates of Land Ownership Award (CLOAs) Nos. 00155653, 00155652 and 00119810 issued to the herein Defendants-Appellants: and 2. Dismissing the instant complaints for lack of merit. No costs. SO ORDERED.8 Respondents filed a Motion for Reconsideration, which the DARAB, however, denied for lack of merit.9 Thus, respondents sought recourse from the CA. On May 31, 2007, the CA, invoking Section 1 (1.6), Rule II of the 2003 DARAB Rules of Procedure,10 held that the DARAB has the exclusive original jurisdiction to determine and adjudicate cases involving correction, partition, and cancellation of Emancipation Patents and CLOAs which are registered with the Land Registration Authority (LRA), as in this case. The CA ratiocinated that other than the registration of the assailed CLOAs, the RD already issued Original Certificate of Title No. OCL-

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474 in favor of respondents. Moreover, the CA relied on the PARADs finding that respondents were deprived of due process when no notice of coverage was ever furnished and no just compensation was paid to them. The CA disposed of the case in this wise: WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision dated May 3, 2005 and the Resolution dated October 10, 2006 are hereby REVERSED and SET ASIDE. The Joint Decision of the Provincial Adjudicator dated December 28, 2000 is hereby REINSTATED with MODIFICATION as follows: "WHEREFORE, premises considered, judgment is hereby rendered: 1. Ordering the cancellation of the Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and 00119810 issued to herein private respondents [petitioners in the instant case]; 2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-474 to herein named private respondents [petitioners in the instant case]. SO ORDERED." SO ORDERED.11 Both parties filed their respective Motions for Reconsideration. The CA held, to wit: Finding petitioners arguments meritorious, We PARTIALLY AMEND our previous decision in this case by ordering the Register of Deeds of Siniloan, Laguna to cancel OCT No. OCL-475 and OCT No. OCL-395 and to issue new certificates of title deducting the area of 47,187.50 square meters claimed by petitioner Dietmar L. Romualdez and 55,453.50 square meters claimed by Spouses Daniel and Ana Romualdez and Jacqueline [L.] Romualdez, respectively. WHEREFORE, premises considered, private respondents Motion for Reconsideration is hereby DENIED. Petitioners Motion for Partial Reconsideration is hereby GRANTED. The Decision dated May 31, 2007 is hereby PARTIALLY AMENDED to read as follows: "WHEREFORE, premises considered, judgment is hereby rendered: 1. Ordering the cancellation of the Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and 00119810 issued to herein private respondents. 2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-474 to herein named private respondents. 3. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-475 and to issue a new one deducting the area of 47,187.50 square meters claimed by petitioner Dietmar L. Romualdez. 4. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-395 and to issue a new one deducting the area of 55,453.50 square meters claimed by petitioners Spouses Daniel and Ana Romualdez and Jacqueline L. Romualdez. SO ORDERED." SO ORDERED.12 Hence, this Petition, assigning the following as errors: I.

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The Honorable Court of Appeals has no basis in REVERSING the DECISION of the Department of Agrarian Reform Adjudication Board in upholding the validity of Certificate of Land Ownership Award Nos. 00155653, 00155652 and 00119810 issued to herein petitioners; [and] II. The Honorable Court of Appeals erred in undermining [the] ISSUE OF JURISDICTION as this is cognizable by the Regional Director and not by the PARAD and/or the DARAB.13 Petitioners Cesar Caguin, Cleofas Vitor, Teresita Vitor, Jose Levitico Dalay, Marcelo Dalay, Esperanza Mario, Celestina Cosico, Ma. Ruth Pacurib, and Raquel San Juan, through the Legal Assistance Division of the DAR, claim that findings of fact of the DARAB should have been respected by the CA; that the CLOAs covering the subject properties were registered in 1994 and 1995 but respondents only assailed the validity of the same in 2000; and that the said CLOAs are already incontestable and indefeasible. Moreover, petitioners highlight the fact that the parties in this case are not partners to any tenancy venture. Invoking this Courts ruling in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz,14 petitioners submit that the DAR Secretary has jurisdiction in this case, not the DARAB.15 On the other hand, respondents prefatorily manifest that out of the 44 respondents before the CA, only 9 signed the petition filed before this Court, and that petitioners counsel failed to indicate the full names of petitioners in the petiti on. Respondents argue that the errors assigned by petitioners are matters not pertaining to questions of law but rather to the CAs factual finding s. Respondents rely on the CAs findings that their constitutional right to due process was violated because no notice of coverage was sent to them and that they were deprived of payment of just compensation. Moreover, respondents claim that they are not barred by prescription and petitioners cannot raise this issue for the first time on appeal; that they have been paying the real property taxes and are actually in possession of the subject properties; and that documents, which petitioners failed to refute, show that the said properties are private lands owned by respondents and their predecessors-in-interest. Respondents stress that the action initially filed before the PARAD was not a protest considered as an Agrarian Law Implementation (ALI) case, but for quieting and cancellation of title, reconveyance, and damages; that the 2003 DARAB Rules of Procedure clearly states that the DARAB has jurisdiction to cancel CLOAs registered with the LRA; and that the assailed CLOAs were already registered with the RD of Laguna.16 The petition is impressed with merit. Verily, our ruling in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz17 is instructive: The Court agrees with the petitioners contention that, under Section 2(f), Rule II of the DARAB Rules of Procedure, the DARAB has jurisdiction over cases involving the issuance, correction and cancellation of CLOAs which were registered with the LRA. However, for the DARAB to have jurisdiction in such cases, they must relate to an agrarian dispute between landowner and tenants to whom CLOAs have been issued by the DAR Secretary. The cases involving the issuance, correction and cancellation of the CLOAs by the DAR in the administrative implementation of agrarian reform laws, rules and regulations to parties who are not agricultural tenants or lessees are within the jurisdiction of the DAR and not of the DARAB.18 It is established and uncontroverted that the parties herein do not have any tenancy relationship. In one case, this Court held that even if the parties therein did not have tenancy relations, the DARAB still has jurisdiction. However, the said case must be viewed with particularity because, based on the material allegations of the complaint therein, the incident involved the implementation of the CARP, as it was founded on the question of who was the actual tenant and eventual beneficiary of the subject land. Hence, this Court held therein that jurisdiction should remain with the DARAB and not with the regular courts. 19 However, this case is different. Respondents complaint was bereft of any allegation of tenancy and/or any matter that would place it within the ambit of DARABs jurisdiction. While it is true that the PARAD and the DARAB lack jurisdiction in this case due to the absence of any tenancy relations between the parties, lingering essential issues are yet to be resolved as to the alleged lack of notice of coverage to respondents as landowners and their deprivation of just compensation. Let it be stressed that while these issues were discussed by the PARAD in his decision, the latter was precisely bereft of any jurisdiction to rule particularly in the absence of any notice of coverage for

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being an ALI case.20 Let it also be stressed that these issues were not met head-on by petitioners. At this juncture, the issues should not be left hanging at the expense and to the prejudice of respondents. However, this Court refuses to rule on the validity of the CARP coverage of the subject properties and the issuance of the assailed CLOAs. The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction was initially lodged with an administrative body of special competence.21 The doctrine of primary jurisdiction does not allow a court to arrogate unto itself authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence.22 The Office of the DAR Secretary is in a better position to resolve the particular issue of nonissuance of a notice of coverage an ALI case being primarily the agency possessing the necessary expertise on the matter.23 The power to determine such issue lies with the DAR, not with this Court. A final note. It must be borne in mind that this Court is not merely a Court of law but of equity as well.1avvphil Justice dictates that the DAR Secretary must determine with deliberate dispatch whether indeed no notice of coverage was furnished to respondents and payment of just compensation was unduly withheld from them despite the fact that the assailed CLOAs were already registered, on the premise that respondents were unaware of the CARP coverage of their properties; hence, their right to protest the same under the law was defeated. Respondents right to due process must be equally respected. Apropos is our ruling in Heir of Nicolas Jugalbot v. Court of Appeals:24 [I]t may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed against them. As the court of last resort, our bounden duty to protect the less privileged should not be carried out to such an extent as to deny justice to landowners whenever truth and justice happen to be on their side. For in the eyes of the Constitution and the statutes, EQUAL JUSTICE UNDER THE LAW remains the bedrock principle by which our Republic abides. WHEREFORE, the instant petition is GRANTED. The assailed Decision dated May 31, 2007 and Amended Decision (Partial) dated September 25, 2007 of the Court of Appeals in CA-G.R. SP No. 97768 are herebyREVERSED and SET ASIDE. The case is DISMISSED for lack of jurisdiction of the Department of Agrarian Reform Adjudication Board. This decision is without prejudice to the rights of respondents Johanna L. Romualdez, Dietmar L. Romualdez, Jacqueline L. Romualdez, and Spouses Daniel and Ana Romualdez to seek recourse from the Office of the Department of Agrarian Reform Secretary. No costs. NESTLE PHILIPPINES, INC. vs. UNIWIDE SALES, INC G.R. No. 174674 October 20, 2010 The Case This is a petition for review1 of the 10 January 2006 Decision2 and the 13 September 2006 Resolution3 of the Court of Appeals in CA-G.R. SP No. 82184. The 10 January 2006 Decision denied for lack of merit the petition for review filed by petitioners. The 13 September 2006 Resolution denied petitioners' motion for reconsideration and referred to the Securities and Exchange Commission petitioners' supplemental motion for reconsideration. The Facts The petitioners in this case are Nestle Philippines, Inc. and Nestle Waters Philippines, Inc., formerly Hidden Springs & Perrier Inc. The respondents are Uniwide Sales, Inc., Uniwide Holdings, Inc., Naic Resources and Development Corporation, Uniwide Sales Realty and Resources Club, Inc., First Paragon Corporation, and Uniwide Sales Warehouse Club, Inc. On 25 June 1999, respondents filed in the Securities and Exchange Commission (SEC) a petition for declaration of suspension of payment, formation and appointment of rehabilitation receiver, and approval of rehabilitation plan. The petition was docketed as SEC Case No. 06-99-6340.4 The SEC approved the petition on 29 June 1999.

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On 18 October 1999, the newly appointed Interim Receivership Committee filed a rehabilitation plan in the SEC. The plan was anchored on return to core business of retailing; debt reduction via cash settlement and dacion en pago; loan restructuring; waiver of penalties and charges; freezing of interest payments; and restructuring of credit of suppliers, contractors, and private lenders. On 14 February 2000, the Interim Receivership Committee filed in the SEC an Amended Rehabilitation Plan (ARP). The ARP took into account the planned entry of Casino Guichard Perrachon, envisioned to infuse P3.57 billion in fresh capital. On 11 April 2001, the SEC approved the ARP. On 11 October 2001, the Interim Receivership Committee filed in the SEC a Second Amendment to the Rehabilitation Plan (SARP) in view of Casino Guichard Perrachon's withdrawal. In its Order dated 23 December 2002, the SEC approved the SARP. Petitioners, as unsecured creditors of respondents, appealed to the SEC praying that the 23 December 2002 Order approving the SARP be set aside and a new one be issued directing the Interim Receivership Committee, in consultation with all the unsecured creditors, to improve the terms and conditions of the SARP. The Ruling of the SEC In its 13 January 2004 Order, the SEC denied petitioners' appeal for lack of merit. Petitioners then filed in the Court of Appeals a petition for review of the 13 January 2004 Order of the SEC. The Ruling of the Court of Appeals In its assailed 10 January 2006 Decision, the Court of Appeals denied for lack of merit the petition for review filed by petitioners, thus: In reviewing administrative decisions, the findings of fact made therein must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant; that it is not for the reviewing court to weigh the conflicting evidence, determine the credibility of the witnesses, or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of the evidence; that the administrative decision in matters within the executive jurisdiction can only be set aside on proof of grave abuse of discretion, fraud, or error of law. WHEREFORE, the petition for review is DENIED for lack of merit. SO ORDERED.5 Petitioners moved for reconsideration. They also filed a supplemental motion for reconsideration alleging that they received a letter on 25 January 2006, from the president of the Uniwide Sales Group of Companies, informing them of the decision to transfer, by way of full concession, the operation of respondents' supermarkets to Suy Sing Commercial Corporation starting 1 March 2006. In its questioned 13 September 2006 Resolution, the Court of Appeals denied for lack of merit petitioners' motion for reconsideration and referred to the SEC petitioners' supplemental motion for reconsideration. Dissatisfied, petitioners filed in this Court on 3 November 2006 the present petition for review. The Issue Before us, petitioners raise the issue of whether the SARP should be revoked and the rehabilitation proceedings terminated.1avvphi1 The Court's Ruling The petition lacks merit.

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Petitioners contend that the transfer of respondents' supermarket operations to Suy Sing Commercial Corporation has made the SARP incapable of implementation. Petitioners point out that since the SARP may no longer be implemented, the rehabilitation case should be terminated pursuant to Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate Recovery. Petitioners claim that the terms and conditions of the SARP are unreasonable, biased in favor of respondents, prejudicial to the interests of petitioners, and incapable of a determination of feasibility. Respondents maintain that the SARP is feasible and that the SEC Hearing Panel did not violate any rule or law in approving it. Respondents stress that the lack of majority objection to the SARP bolsters the SEC's findings that the SARP is feasible. Respondents insist that the terms and conditions of the SARP are in accord with the Constitution and the law. The Court takes judicial notice of the fact that from the time of the filing in this Court of the instant petition, supervening events have unfolded substantially changing the factual backdrop of this rehabilitation case. As found by the SEC, several factors prevented the realization of the desired goals of the SARP, to wit: (1) unexpected refusal of some creditors to comply with all the terms of the SARP; (2) unexpected closure of Uniwide EDSA due to the renovation of EDSA Central Mall; (3) closure of Uniwide Cabuyao and Uniwide Baclaran; (4) lack of supplier support for supermarket operations; and (5) increased expenses.6 On 11 July 2007, the rehabilitation receiver filed in the SEC a Third Amendment to the Rehabilitation Plan (TARP). But before the SEC could act on the TARP, the rehabilitation receiver filed on 29 September 2008 a Revised Third Amendment to the Rehabilitation Plan (revised TARP). A majority of the secured creditors strongly opposed the revised TARP, which focused on the immediate settlement of all the obligations accruing to the unsecured creditors through a dacion of part of respondents' Metro Mall property.7 Since some creditors claimed that the value of the Metro Mall property had gone down since 1999, the Hearing Panel issued its 30 July 2009 Order directing the reappraisal of the Metro Mall property.8 In its 17 September 2009 Order, the Hearing Panel directed respondents to show cause why the rehabilitation case should not be terminated considering that the rehabilitation plan had undergone several revisions. The Hearing Panel also directed the creditors to manifest whether they still wanted the rehabilitation proceedings to continue. Respondents moved for reconsideration of the 30 July 2009 and the 17 September 2009 Orders. The Hearing Panel, in its 6 November 2009 Order, denied the motion for reconsideration for being a prohibited pleading. Respondents then filed in the SEC a petition for certiorari assailing the 30 July 2009, the 17 September 2009, and the 6 November 2009 Orders of the Hearing Panel. The petition was docketed as SEC En Banc Case No. 12-09-183. Meanwhile, in its 13 January 2010 Resolution, the Hearing Panel disapproved the revised TARP and terminated the rehabilitation case as a consequence. The dispositive portion of the Resolution reads: WHEREFORE, premises considered: 1. Petitioners' Motion to Approve Revised Third Amendment to the Group Rehabilitation Plan (Revised TARP) is DENIED. 2. The motions to declare petitioners' rehabilitation plan "not feasible" are GRANTED. Consequently, the instant rehabilitation case is TERMINATED and the stay order is lifted and dissolved. This case is deemed finally disposed of pursuant to Section 5.2 of Republic Act No. 8799.9 On 22 January 2010, respondents filed another petition appealing the Hearing Panel's 13 January 2010 Resolution. The petition was docketed as SEC En Banc Case No. 01-10-193. In order to preserve the parties' rights during the pendency of the appeal, the SEC en banc in its Order dated 18 March 2010 directed the parties to observe the status quo prevailing before the issuance of the 13 January 2010 Resolution of the Hearing Panel.

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Meanwhile, on 27 April 2010, the SEC en banc issued an Order directing the rehabilitation receiver, Atty. Julio C. Elamparo, to submit a comprehensive report on the progress of the implementation of the SARP. Finally, in its 30 September 2010 Order, the SEC consolidated SEC En Banc Case No. 01-10-193 with SEC En Banc Case No. 1209-183, the parties being identical and the issues in both petitions being in reference to the same rehabilitation case. Considering the pendency of SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193, recently filed in the SEC, involving the very same rehabilitation case subject of this petition, the present petition has been rendered premature. SEC En Banc Case No. 12-09-183 deals with the Order of the Hearing Panel directing respondents to show cause why the rehabilitation case should not be terminated and the creditors to manifest whether they still want the rehabilitation proceedings to continue. On the other hand, SEC En Banc Case No. 01-10-193 is an appeal of the Hearing Panel's Resolution disapproving the revised TARP and terminating the rehabilitation proceedings. In light of supervening events that have emerged from the time the SEC approved the SARP on 23 December 2002 and from the time the present petition was filed on 3 November 2006, any determination by this Court as to whether the SARP should be revoked and the rehabilitation proceedings terminated, would be premature. Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no longer capable of implementation and whether the rehabilitation case should be terminated as a consequence. Under the doctrine of primary administrative jurisdiction, courts 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.10 In other words, 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 court is had even if the matter may well be within the latter's proper jurisdiction.11 The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.12 It is not for this Court to intrude, at this stage of the rehabilitation proceedings, into the primary administrative jurisdiction of the SEC on a matter requiring its technical expertise. Pending a decision of the SEC on SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193, which both seek to resolve the issue of whether the rehabilitation proceedings in this case should be terminated, we are constrained to dismiss this petition for prematurity. WHEREFORE, we DISMISS the instant petition for having been rendered premature pending a decision of the Securities and Exchange Commission (SEC) in SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193.

GOVERNMENT SERVICE INSURANCE SYSTEM vs. COMMISSION ON AUDIT G.R. No. 138381 April 16, 2002 At the core of these two consolidated petitions is the determination of whether the Commission on Audit (COA) properly disallowed on post-audit, certain allowances and/or fringe benefits granted to employees of the Government Service Insurance System (GSIS), after the effectivity of Republic Act No. 6758, otherwise known as the Salary Standardization Law on July 1, 1989. I. G.R. No. 138381

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In this special civil action for certiorari under Rule 65 in relation to Rule 64 of the 1997 Rules of Civil Procedure, petitioner GSIS seeks the annulment of COA Decision No. 98-337 dated August 25, 1998, which affirmed the Resident Auditor's disallowance of monetary benefits granted to or paid by GSIS in behalf of its employees. After the effectivity of R.A. No. 6758 on July 1, 1989, petitioner GSIS increased the following benefits of its personnel: a) longevity pay; b) children's allowance; c) housing allowance for its branch and assistant branch managers; and d) employer's share in the GSIS Provident Fund from 20% to 45% of basic salary for incumbent employees as of June 30, 1989. The GSIS also remitted employer's share to the GSIS Provident Fund for new employees hired after June 30, 1989, continued the payment of premiums for group personnel accident insurance and granted loyalty cash award to its employees in addition to a service cash award. Upon post-audit and examination, the GSIS Corporate Auditor disallowed the aforementioned allowances and benefits, citing Section 12 of R.A. No. 6758 in relation to sub-paragraphs 5.4 and 5.5 of its implementing rules, DBM Corporate Compensation Circular No. 10 (CCC No. 10). The first paragraph of Section 12, R.A. No. 6758 reads: SEC. 12. Consolidation of Allowances and Compensation.- All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed.Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989, not integrated into the standardized salary rates shall continue to be authorized. x x x Sub-paragraphs 5.4 and 5.5 of CCC No. 10,1 meanwhile, supplemented Section 12 above by enumerating the additional compensation authorized to be continued for incumbent employees as of July 1, 1989. According to the Corporate Auditor, R.A. No. 6758 authorized the continued grant of allowances/fringe benefits not integrated into the standardized salary for incumbents as of June 30, 1989. However, these non-integrated benefits may not be increased after effectivity of the statute, without prior approval of the DBM or Office of the President or in the absence of legislative authorization in accordance with CCC No. 10. Explaining this position, the Corporate Auditor invoked COA Memorandum No. 90-653 dated June 4, 1990, which states: x x x While it is true that R.A. 6758 and Corporate Compensation Circular (CCC) No. 10 are silent with respect to the increase of allowances/fringe benefits not integrated into the basic salary and allowed to be continued only for incumbents as of June 30, 1989, it would be inconsistent to allow further increase in said allowances and fringe benefits after July 1, 1989 since continuance thereof for incumbents is merely being tolerated until they vacate their present positions for which they have been authorized to receive allowances/fringe benefits.2 The Corporate Auditor also did not allow in audit the remittance of employer's share to the GSIS Provident Fund for new-hires because the continuation of said benefit was only in favor of incumbents, as explicitly stated in the law. The payment of group insurance premiums covering all employees was likewise disallowed, for the reason that under sub-paragraph 5.6 of CCC No. 10,3 all fringe benefits granted on top of basic salary not otherwise enumerated under sub-paragraphs 5.4 and 5.5 thereof were already discontinued effective November 1, 1989. As for the loyalty cash award and the service cash award, the Corporate Auditor opined that only one of the two monetary incentives may be availed of by GSIS personnel. On February 26, 1993, Mr. Julio Navarrete, Vice-President of the GSIS Human Resources Group, wrote to respondent COA appealing, in behalf of GSIS, the afore-stated disallowances by the Corporate Auditor. Mr. Navarrete averred that although it may be conceded that the Salary Standardization Law did not extend the subject benefits to new-hires after the law's effectivity, the increase thereof should nonetheless be allowed for incumbents since these benefits have been enjoyed by said employees even prior to the passage of said law.4 In the case of Philippine Ports Authority v. Commission on Audit,5 which involved a similar increase, after the enactment of R.A. No. 6758, in the representation and transportation allowance (RATA) of Philippine Ports Authority (PPA) employees, it was held that:

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x x x the date July 1, 1989 does not serve as a cut-off date with respect to the amount of RATA. The date July 1, 1989 becomes crucial only to determine that as of said date, the officer was an incumbent and wasreceiving the RATA, for purposes of entitling him to its continued grant. This given date should not be interpreted as fixing the maximum amount of RATA to be received by the official.6 It was further alleged that contrary to the Corporate Auditor's contention, the GSIS Board of Trustees retained its power to fix and determine the compensation package for GSIS employees despite the passage of the Salary Standardization Law, pursuant to Section 36 of Presidential Decree No. 1146, as amended by Presidential Decree No. 1981, to wit: Sec. 36. x x x The Board of Trustees has the following powers and functions, among others: xxx xxx xxx

(d) Upon the recommendation of the President and General Manager, to approve the System's organizational and administrative structure and staffing pattern, and "to establish, fix, review, revise and adjust the appropriate compensation package for the officers and employees of the System, with reasonable allowances, incentives, bonuses, privileges and other benefits as may be necessary or proper for the effective management, operation and administration of the System." For the purpose of this and the preceding subsection, the System shall be exempt from the rules and requirements of the Office of the Budget and Management and the Office of the Compensation and Position Classification; xxx xxx xxx

Pursuant thereto, the GSIS Board of Trustees may validly increase and grant the subject benefits, even without securing the imprimatur of the DBM, Office of the President or Congress. On August 25, 1998, the COA affirmed the disallowances made by the Corporate Auditor and held that Section 36 of P.D. No. 1146, as amended, was already repealed by Section 16 of R.A. No. 6758.7 The COA similarly concluded that the GSIS Board of Trustees may not unilaterally augment or grant benefits to its personnel, without the necessary authorization required under CCC No. 10.8 GSIS filed a motion for reconsideration of the COA decision, invoking the ruling in De Jesus, et al. v. COA and Jamoralin.9 Corporate Compensation Circular No. 10 (CCC No. 10) was declared to be of no legal force or effect due to its nonpublication in the Official Gazette or a newspaper of general circulation. In view of this development, GSIS posited that the questioned disallowances no longer had any leg to stand on and that COA should consequently lift the disallowances premised on CCC No. 10. On March 23, 1999, the COA denied the motion for reconsideration stating: Although CCC No. 10 has been declared ineffective due to its non-publication as provided for in Article 2 of the Civil Code of the Philippines, the disallowances on the increased rates of the allowances/fringe benefits can still be sustained because as ruled earlier, the power of the governing boards of corporations to fix compensation and allowances of personnel, including the authority to increase the rates, pursuant to their specific charters had already been repealed by Sec. 3 of P.D. 1597 and Section 16 of R.A. 6758. The other reasons or grounds relied upon by the petitioner upon which the Motion is predicated have already been judiciously passed upon by this Commission when it rendered the subject COA Decision No. 98-337. Accordingly, there being no new, sufficient and material evidence adduced as would warrant a reversal or modification of the decision herein sought to be reconsidered, this Commission denies with finality the instant motion for reconsideration for utter lack of merit.10 Hence, this petition, challenging the above decision and resolution of the COA on the following grounds:

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A.)RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT THE POWER SPECIFICALLY GRANTED BY PRESIDENTIAL DECREE NO. 1146, AS AMENDED, TO THE GSIS BOARD OF TRUSTEES, TO ESTABLISH AND FIX THE APPROPRIATE COMPENSATION PACKAGE FOR GSIS OFFICERS AND EMPLOYEES HAS ALREADY BEEN REPEALED BY REPUBLIC ACT NO. 6758. B.)RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING PETITONER'S MOTION FOR RECONSIDERATION DESPITE THE DECLARATION BY THIS HONORABLE COURT IN THE CASE OF RODOLFO S. DE JESUS et al. vs. COMMISSION ON AUDIT and LEONARDO L. JAMORALIN, THAT CCC NO. 10 - THE MAIN BASIS OF THE QUESTIONED DISALLOWANCE - IS INVALID AND INEFFECTIVE FOR LACK OF THE REQUIRED PUBLICATION.11 II. G.R. No. 141625 This petition for review on certiorari under Rule 45 of the Rules of Court was precipitated by the factual antecedents of G.R. No. 138381. While GSIS was appealing the disallowances made by the Corporate Auditor above, some of its employees retired and submitted the requisite papers for the processing of their retirement benefits. Since the retired employees received allowances and benefits which had been disallowed by the Corporate Auditor, GSIS required them to execute deeds of consent that would authorize GSIS to deduct from their retirement benefits the previously paid allowances, in case these were finally adjudged to be improper. Some of the retired employees agreed to sign the deed, while others did not. Nonetheless, GSIS went ahead with the deductions. On April 16, 1998, a number of these retired GSIS employees12 (hereafter referred to as "retirees") brought Case No. 001-98 before the GSIS Board of Trustees (hereafter referred to as "GSIS Board") questioning the legality of the deductions. They claimed that COA disallowances can not be deducted from retirement benefits, considering that these were explicitly exempted from such deductions under the last paragraph of Section 39, Republic Act No. 8291, which states: SEC. 39. Exemption from Tax, Legal Process and Lien. - x x x xxx xxx xxx

The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favor of the GSIS . The GSIS Board subsequently referred the case for hearing to its Corporate Secretary, Atty. Alicia Albert. Thereafter, the retirees and GSIS, through its Legal Services Group (LSG), entered into a stipulation of facts and agreed on a focal issue, namely: whether the COA disallowances may be legally deducted from the retirement benefits, on the premise that the same are monetary liabilities of the retirees in favor of GSIS under Section 39 above. GSIS also insisted that since the deductions were anchored on the disallowances made by the COA, the retirees' remedy was to ventilate the issue before said Commission and not the GSIS Board. Meanwhile, the De Jesus case mentioned in G.R. No. 138381 was promulgated, rendering CCC No. 10 legally ineffective. This prompted the hearing officer to suggest that the parties enter into an agreement as to what allowances and benefits are covered by CCC No. 10, so that a partial decision can be rendered thereon. The retirees thus filed a motion for partial decision, submitting that there no longer existed any obstacle to the increase in allowances and benefits covered by CCC No. 10. These allegedly include: a) GSIS management's share in the Provident Fund; b) initial payment of the productivity bonus; c) acceleration implementation of the new salary schedule effective August 1, 1995; d) increase in clothing allowance, rice allowance, meal subsidy, children's allowance and longevity pay; e) loyalty award; f) 1995 mid-year financial assistance; and g) other allowances as may be suggested by the Vice-President of the GSIS Human Resources Group.13

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On November 25, 1998, GSIS filed an opposition to the retiree's motion for partial decision, 14 asserting that De Jesus had no bearing on the principal issue which, as agreed upon, was the interpretation of Section 39 of RA No. 8291. GSIS also filed on even date, a motion to dismiss,15 alleging that the nullity of CCC No. 10 rendered the petition moot and academic and paved the way for the payment of the controverted allowances earlier deducted from the retirement benefits. Replying to the two pleadings filed by GSIS, the retirees countered that a motion to dismiss was a prohibited pleading under Section 14.13, Rule XIV of the GSIS Implementing Rules and Regulations.16 Moreover, the retirees maintained that a motion to dismiss may be filed in proceedings before the GSIS Board only prior to the filing of an answer which GSIS had already done. Also, the LSG had previously agreed to a partial decision based on the De Jesus case; it could thus no longer take a contradictory stand by opposing the retiree's motion for partial decision.17 On January 14, 1999, the retirees filed a motion for summary judgment18 claiming that there were no factual issues involved and that the question raised in the petition was purely legal in nature. The matter was directly submitted to the GSIS Board for its consideration and resolution. On March 3, 1999, the GSIS Board issued Resolution No. 72, 19 dismissing the petition. A motion for reconsideration filed by the retirees was also denied by the Board in its Resolution No. 16120 dated May 18, 1999. The matter was then elevated to the Court of Appeals, which rendered a decision on September 30, 1999, disposing as follows: IN THE LIGHT OF ALL THE FOREGOING, the Petition is GRANTED. Resolution No. 72, Annex "A" of the Petition and Resolution No. 161 Annex "C" of the Petition are hereby SET ASIDE and NULLIFIED. The Hearing Officer of the Board of Trustees of the Respondent is directed to proceed, with dispatch, with the proceedings of Case No. 001-98, as provided for in the Rules and regulations implementing Republic Act 8291 (IRR). SO ORDERED.21 The appellate court held that the motion to dismiss filed by the LSG before the GSIS Board is a prohibited pleading under applicable GSIS rules. The GSIS also had jurisdiction over the retirees' petition, as it pertained to the interpretation and application of Section 39 of R.A. No. 8291, a law exclusively administered by the GSIS Board. Contrary to the LSG's submissions, the Court of Appeals ruled that there was no identity in subject matter between the retiree's petition and the appeal from the auditor's disallowances filed by GSIS with the COA. Thus, the GSIS Board may take cognizance of the retirees' petition independently from the COA proceedings. Hence, this second petition, assigning the following as errors: I THE COURT OF APPEALS ERRED IN RULING THAT THE BOARD OF TRUSTEES OF GSIS HAS JURISDICTION OVER THE CASE. II THE COURT OF APPEALS ERRED IN RULING THAT THE CASE PENDING BEFORE THE SUPREME COURT IS DIFFERENT FROM THE PRESENT CASE.22 On August 20, 2001, the two petitions were consolidated. During the pendency of these petitions, GSIS Board Resolution No. 79,23 which authorized the Provident Fund rate increase for incumbent employees, was approved retroactively from March 1, 1994 by then President Joseph Estrada.24 Thus, there no longer appears to be any basis for disallowing the rate increase in management contribution to the Provident Fund from 20% to 45% of the basic salary received by petitioner's incumbent employees. The presidential approval cured the lack of authorization cited by respondent COA for disallowing this particular increase in benefit.

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We now proceed to the resolution of the twin petitions. Petitioner GSIS insists that the GSIS Board retained its power to increase the subject benefits under Section 36 of P.D. 1146, as amended (or the Revised GSIS Charter), despite the passage of R.A. No. 6758, particularly Section 16 thereof. The latter, which is a general law, can not repeal or take precedence over the former because the Revised GSIS Charter is a special law that specifically exempts GSIS from Office of the Compensation and Position Classification coverage. We need not delve lengthily into this submission as this was earlier laid to rest by the Court in Philippine International Trading Corporation (PITC) v. COA,25 where we held that "the repeal by Section 16 of RA 6758 of 'all corporate charters that exempt agencies from the coverage of the system' was clear and expressed necessarily to achieve the purposes for which the law was enacted, that is, the standardization of salaries of all employees in government owned and/or controlled corporations to achieve 'equal pay for substantially equal work'."26 As things now stand, GSIS is already exempt from salary standardization by express provision of R.A. 829127 a subsequent enactment approved on May 30, 1997 which amended the Revised GSIS Charter. But since GSIS was still governed by the latter at the time the increase in benefits were disallowed in audit, GSIS was then yet covered by the Salary Standardization Law, thereby making our ruling in PITC presently relevant and applicable. We now come to the legal propriety of the COA disallowances. For purposes of clarity, a distinction must initially be made between those allowances which are deemed consolidated into the standardized salary and those which are not under the terms of R.A. No. 6758. As correctly pointed out by petitioner GSIS, the housing allowance, longevity pay and children's allowance are non-integratedbenefits, expressly made so by subparagraphs 5.4 and 5.5 of CCC No. 10 in relation to the last sentence of Section 12 (par. 1), R.A. No. 6758. On the other hand, the payment of group personnel accident insurance premiums, loyalty cash award and service cash award are not excluded from the standardized salary by the same provisions of CCC No. 10 or R.A. No. 6758. These latter allowances are thus considered integrated into the basic salary and are treated differently under the same law. A. NON-INTEGRATED BENEFITS AND ALLOWANCES a. Longevity Pay and Children's Allowance As regards the increase in longevity pay and children's allowance, we find applicable our pronouncement inPhilippine Ports Authority (PPA) v. COA.28 This case involved an adjustment in the representation and transportation allowance (RATA) of incumbent PPA employees after the effectivity of R.A. No. 6758 on July 1, 1989. The RATA therein is similar to the longevity pay and children's allowance subject of the instant petition, in the sense that: a) it is also a non-integrated allowance authorized to be continued for incumbents under Section 12, R.A. No. 6758; and b) the rate thereof did not consist of a definite amount but was subject to certain factors and/or stipulations that were nonetheless fixed before R.A. 6758 took effect. In the PPA case, the adjustment was brought about by a corresponding increase in the employees' basic salary upon which the 40% RATA was based. Respondent Commission disallowed the payment of RATA differentials arguing, as in this petition, that the RATA should be fixed at the prevailing rate prior to July 1, 1989, regardless of the increase in basic salary. It was postulated therein that consistent with the second sentence of said Section 12 (par. 1), the RATA should no longer be based on 40% of basic standardized salary but on the highest amount of RATA received by the incumbent as of July 1, 1989. We rejected respondent COA's interpretation of Section 12 and held that the date July 1, 1989 should not be construed as a cutoff date for setting the amount of allowances authorized to be continued under said provision. The date July 1, 1989 is important only for determining whether an employee is an incumbent and receiving the allowance prior to the law's effectivity in order to ascertain if such employee is qualified to its continued grant. It is not, however, to be interpreted as fixing the maximum amount of allowance that an incumbent employee is authorized to receive, but is only a qualifying date imposed by the statute. Accordingly, the specific amount of longevity pay and children's allowance being received by an incumbent GSIS employee as of July 1, 1989 is not to be considered as the highest amount authorized under the law. It is thus evident that in adjusting the amount of allowances mentioned above, petitioner GSIS was merely complying with the policy of non-diminution of pay and benefits enunciated in R.A. No. 6758.29 This policy does not only pertain specifically to the amount being received by the incumbent as of July 1, 1989, but also to the terms and conditions attached to these benefits prior

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to the passage of the statute. Relative to this, it should be noted that respondent COA did not dispute the fact that these benefits, including the terms and conditions thereof, are part of a compensation package granted by the GSIS Board to incumbents even before R.A. 6758 took effect. In turn, this compensation package was incorporated in the 1978 GSIS Revised Compensation System approved by the President, upon recommendation of the Department of Budget and Management (DBM). Thus, to peg the amount of these non-integrated allowances at the figure being received by the incumbent as of July 1, 1989 would vary the terms of the benefits to which the incumbents are entitled. This could not have been the intendment of the statute, because such interpretation would effectively impair the incumbents' rights to these allowances, which have already accrued prior to July 1, 1989. In other words, before R.A. No. 6758 was enacted, incumbent GSIS employees had a fixed right to these allowances under the terms and conditions then obtaining.30They could not therefore be excluded from its enjoyment under the same terms and conditions without violating basic precepts of fairness and due process. b. Housing Allowance In contrast to the two preceding non-integrated benefits, it appears that the housing allowance given to petitioner's incumbent branch and assistant branch managers before the passage of R.A. No. 6758 consisted of a fixed amount of P500.00 and P300.00 respectively. Said amounts were subsequently increased to P2,000.00 and P3,000.00 by virtue of GSIS Board Resolution No. 29431 dated July 26, 1991. As stated earlier, the power of the GSIS Board to "establish, fix, review, revise and adjust" the allowances, privileges and other benefits of its employees under Section 36 of the Revised GSIS Charter has been repealed by R.A. No. 6758.32 As a consequence, the GSIS Board may no longer grant any increase in housing allowance on its own volition after June 30, 1989. Further, unlike the two preceding non-integrated benefits, it cannot be said that the affected branch and assistant branch managers acquired a vested right to any amount of housing allowance in excess of that granted to them before the passage of R.A. No. 6758. They could not have been entitled to any amount other than that which was already determined before the law took effect, because the terms of this allowance did not admit of any adjustment. Otherwise stated, since the amount of said housing allowance was fixed, the disallowance by the COA of increases therein would not result in any diminution of benefits for these incumbent managers. Neither can the GSIS Board unilaterally grant said increases by board resolution because it no longer had any power to do so when it issued Resolution No. 294. It appears that respondent COA did not totally disallow the increase in housing allowance, but merely approved a lesser amount. Respondent COA allowed a 100% increase of P1,000.00 and P600.00 respectively, in accordance with the amount authorized by the DBM.33 In fact, the DBM permitted the increase in express recognition of the fact that this has been the practice in GSIS before the advent of R.A. No. 6758. Consequently, it is only to the extent of the approved amount that the housing allowance should be allowed in audit. B. INTEGRATED BENEFITS AND ALLOWANCES a. Group Personnel Accident Insurance Premiums As stated earlier, the payment of premiums for group personnel accident insurance in favor of incumbent GSIS employees was not listed as an exception to the standardized salary under Section 12, R.A. No. 6758 and sub-paragraphs 5.4 and 5.5 of CCC No. 10. As such, it is considered as a fringe benefit granted on top of basic salary which, according to sub-paragraph 5.6 of CCC No. 10, must be discontinued as of November 1, 1989. However, as pointed out by petitioner GSIS, CCC No. 10 was declared to be of no legal force and effect in De Jesus v. COA.34 It can not thus be utilized as a justification for depriving incumbent employees of integrated benefits which they were receiving prior to R.A. No. 6758. As held in De Jesus: x x x it is decisively clear that DBM CCC No. 10, which completely disallows payment of allowances and other additional compensation to government officials and employees, starting November 1, 1989, is not a mere interpretative and internal regulation. It is something more than that. And why not, when it tends to deprive government workers of their allowances and additional compensation sorely needed to keep body and soul together. At the very least, before said circular under attack may be permitted to substantially reduce their income, the government officials and employees

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concerned should be apprised and alerted by the publication of subject circular in the Official Gazette or in a newspaper of general circulation in the Philippines-to the end that they may be given amplest opportunity to voice out whatever opposition they may have, and to ventilate their stance on the matter. This approach is more in keeping with democratic precepts and rudiments of fairness and transparency.35 Conformably, since the disallowance of the premium payments was founded upon CCC No. 10, the consequent outcome of the latter's nullification is to remove any obstacle to the aforesaid benefit. The subsequent publication of CCC No. 10 in the Official Gazette on March 1, 1999,36 neither cured the defect nor retroact to the time that the aforesaid items were disallowed in audit. Again, in PITC v. COA,37 we ruled that from the time the COA disallowed the benefit up to the filing of the instant petition, CCC No. 10 remained in legal limbo due to its lack of publication. And because publication is a condition precedent to the effectivity of CCC No. 10, it must first be complied with before affecting individual rights; otherwise, "such omission would offend due process insofar as it would deny the public, knowledge of the laws that are supposed to govern it."38 b. Loyalty and Service Cash Award We have carefully examined the records of the case and find that the disallowance of the simultaneous grant of these two integrated benefits was not so much founded on CCC No. 10, but upon a ruling made by the Civil Service Commission (CSC). Notably, with respect to the loyalty and service cash award, respondent COA held: As regards the payment of loyalty cash award under Sec. 7 (e), Rule X, of the CSC Omnibus rules Implementing Book V of E.O. No. 292 and service cash award, this Commission holds that only one can be availed of by GSIS employees in the light of the clear ruling of the Civil Service Commission embodied in a letter dated May 12, 1993 that since both benefits have the same rationale, which is to reward long and dedicated service, "availment of the award can be made only under either system, whichever is more advantageous to the employees."39 The foregoing conclusion was apparently based on the position taken by Corporate Auditor Fe R. Munoz, who expounded thereon in a second indorsement40 dated December 14, 1993 as follows: Service Cash Award is an incentive granted exclusively to any officer or employee of the GSIS who has rendered at least fifteen (15) years continuous and dedicated service to the GSIS. It entitles them to receive amounts ranging from P500.00 to P15,000.00 according to the number of years of service, pursuant to the provisions of the Collective Bargaining Agreement (CBA), which payments are deducted by this Office from payment of Loyalty (Cash) Award. On the other hand, this should not be confused with the amount of Loyalty (Cash) Award in graduated amounts of P1,200.00, P1,300.00, P1,400.00 and P1,500.00 for every year of service of GSIS executives and employees who have completed at least ten (10) years of continuous service as authorized under Board Resolution No. 333 dated October 29, 1992 (Annex 7), using as legal basis Section 7 (e), Rule X of the Omnibus Civil Service Law and Rules, Implementing Book V of Executive Order No. 292, providing for the cash bonus of not less than One Hundred Pesos (P100.00) per year of service, chargeable against Agency's savings. It seems that the foregoing provision allows for a minimum but not for a maximum amount to be given, thereby giving the agencies enough flexibility to fix their own maximum amounts depending on the agency's savings. It is worthy to note in this connection that when the Civil Service Commission issued Memorandum Circular No. 42, series 1992, amending Section 7 (e), Rule X of the Omnibus Civil Service Law and Rules, providing that the amount of cash bonus to be given should not be more than P100.00 per year of service, the GSIS returned to the old computation as authorized under Board Resolutions No. 192 and 187 dated May 16, 1989 and May 29, 1992 respectively (Annexes 8 and 9). Hence, the matter was referred to the Civil Service Commission for clarification. The Commission ruled in a letter dated May 12, 1993 (Annex 10) addressed to PGM Cesar N. Sarino, that the availment of the award can be made only under either system, whichever is more advantageous to the employees. Petitioner GSIS did not squarely address the above finding of respondent COA or the Corporate Auditor. Instead, it based its arguments on the general assumption that all the benefits and allowances subject of this petition were disallowed on the basis of Section 12, R.A. No. 6758 and its implementing rules. This is beside the point, however, as it can readily be seen that respondent COA's ruling on the loyalty and service cash award is actually based on a purported CSC declaration relative thereto. As a result, there has been no real joinder of issues as far as these benefits are concerned.

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Coming now to G.R. No. 141625, the Court of Appeals did not commit any reversible error when it held that the petition filed before the GSIS Board questioning the legality of the deductions could proceed independently from the appeal brought by petitioner GSIS from the COA disallowances. No error could be attributed to the appellate court's finding that there was no identity of subject matter or issue between the COA proceedings and the retirees' claim before the GSIS Board. However, considering that it has already been resolved in G.R. No. 138381, we no longer find it necessary to discuss whether GSIS can deduct the COA disallowances from the respondents/retirees' retirement benefits. Having settled G. R. No. 138381, it is now incumbent upon petitioner GSIS to reimburse the proper amounts to respondents/retirees. Necessarily, the amount of said refund should be in accord with our ruling in G.R. No. 138381. WHEREFORE, in view of the foregoing, G.R. No. 138381 is PARTLY GRANTED. The disallowance of the adjustment in longevity pay and children's allowance and the payment of group personnel accident insurance premiums in favor of incumbent GSIS employees is SET ASIDE. The disallowance of the increase in housing allowance and the simultaneous grant of loyalty and service cash award are AFFIRMED. Petitioner GSIS is further ordered to REFUND the amounts deducted from the retirement benefits in G.R. No. 141625, corresponding to the amount of benefits allowed in G.R. No. 138381. GREGORIO R. VIGILAR vs. ARNULFO D. AQUINO G.R. No. 180388 January 18, 2011 Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the Decision2 of the Court of Appeals in C.A.-G.R. CV No. 82268, dated 25 September 2006. The antecedent facts are as follows: On 19 June 1992, petitioner Angelito M. Twao, then Officer-in-Charge (OIC)-District Engineer of the Department of Public Works and Highways (DPWH) 2nd Engineering District of Pampanga sent an Invitation to Bid to respondent Arnulfo D. Aquino, the owner of A.D. Aquino Construction and Supplies. The bidding was for the construction of a dike by bulldozing a part of the Porac River at Barangay Ascomo-Pulungmasle, Guagua, Pampanga. Subsequently, on 7 July 1992, the project was awarded to respondent, and a "Contract of Agreement" was thereafter executed between him and concerned petitioners for the amount of PhP1,873,790.69, to cover the project cost. By 9 July 1992, the project was duly completed by respondent, who was then issued a Certificate of Project Completion dated 16 July 1992. The certificate was signed by Romeo M. Yumul, the Project Engineer; as well as petitioner Romeo N. Supan, Chief of the Construction Section, and by petitioner Twao. Respondent Aquino, however, claimed that PhP1,262,696.20 was still due him, but petitioners refused to pay the amount. He thus filed a Complaint3 for the collection of sum of money with damages before the Regional Trial Court of Guagua, Pampanga. The complaint was docketed as Civil Case No. 3137. Petitioners, for their part, set up the defense4 that the Complaint was a suit against the state; that respondent failed to exhaust administrative remedies; and that the "Contract of Agreement" covering the project was void for violating Presidential Decree No. 1445, absent the proper appropriation and the Certificate of Availability of Funds.5 On 28 November 2003, the lower court ruled in favor of respondent, to wit: WHEREFORE, premises considered, defendant Department of Public Works and Highways is hereby ordered to pay the plaintiff Arnulfo D. Aquino the following: 1. PhP1,873,790.69, Philippine Currency, representing actual amount for the completion of the project done by the plaintiff; 2. PhP50,000.00 as attorneys fee and 3. Cost of this suit.

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It is to be noted that respondent was only asking for PhP1,262,696.20; the award in paragraph 1 above, however, conforms to the entire contract amount. On appeal, the Court of Appeals reversed and set aside the Decision of the lower court and disposed as follows: WHEREFORE, premises considered, the appeal is GRANTED. The "CONTRACT AGREEMENT" entered into between the plaintiff-appellees construction company, which he represented, and the government, through the Department of Public Works and Highway (DPWH) Pampanga 2nd Engineering District, is declared null and void ab initio. The assailed decision of the court a quo is hereby REVERSED AND SET ASIDE. In line with the pronouncement in Department of Health vs. C.V. Canchela & Associates, Architects, 7 the Commission on Audit (COA) is hereby ordered to determine and ascertain with dispatch, on a quantum meruit basis, the total obligation due to the plaintiff-appellee for his undertaking in implementing the subject contract of public works, and to allow payment thereof, subject to COA Rules and Regulations, upon the completion of the said determination. No pronouncement as to costs. SO ORDERED.8 Dissatisfied with the Decision of the Court of Appeals, petitioners are now before this Court, seeking a reversal of the appellate courts Decision and a dismissal of the Complaint in Civil Case No. G-3137. The Petition raises the following issues: 1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE DOCTRINE OF NON-SUABILITY OF THE STATE HAS NO APPLICATION IN THIS CASE. 2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING THE COMPLAINT FOR FAILURE OF RESPONDENT TO EXHAUST ALL ADMINISTRATIVE REMEDIES. 3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN ORDERING THE COA TO ALLOW PAYMENT TO RESPONDENT ON A QUANTUM MERUIT BASIS DESPITE THE LATTERS FAILURE TO COMPLY WITH THE REQUIREMENTS OF PRESIDENTIAL DECREE NO. 1445. After a judicious review of the case, the Court finds the Petition to be without merit. Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the Commission on Audit (COA) before going to the courts. However, it has been established that the doctrine of exhaustion of administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap,9 this Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l) in quo warranto proceedings. In the present case, conditions (c) and (e) are present. The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings by remanding the case to the relevant government office or agency will definitely prejudice respondent. More importantly, the issues in the present case involve the validity and the enforceability of the "Contract of Agreement" entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH. In Lacap, this Court said:

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... It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done. The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law. (Emphasis supplied.) Secondly, in ordering the payment of the obligation due respondent on a quantum meruit basis, the Court of Appeals correctly relied on Royal Trust Corporation v. COA,10 Eslao v. COA,11 Melchor v. COA,12 EPG Construction Company v. Vigilar,13 and Department of Health v. C.V. Canchela & Associates, Architects.14 All these cases involved government projects undertaken in violation of the relevant laws, rules and regulations covering public bidding, budget appropriations, and release of funds for the projects. Consistently in these cases, this Court has held that the contracts were void for failing to meet the requirements mandated by law; public interest and equity, however, dictate that the contractor should be compensated for services rendered and work done. Specifically, C.V. Canchela & Associates is similar to the case at bar, in that the contracts involved in both cases failed to comply with the relevant provisions of Presidential Decree No. 1445 and the Revised Administrative Code of 1987. Nevertheless, "(t)he illegality of the subject Agreements proceeds, it bears emphasis, from an express declaration or prohibition by law, not from any intrinsic illegality. As such, the Agreements are not illegal per se, and the party claiming thereunder may recover what had been paid or delivered."15 The government project involved in this case, the construction of a dike, was completed way back on 9 July 1992. For almost two decades, the public and the government benefitted from the work done by respondent. Thus, the Court of Appeals was correct in applying Eslao to the present case. In Eslao, this Court stated: ...the Court finds that the contractor should be duly compensated for services rendered, which were for the benefit of the general public. To deny the payment to the contractor of the two buildings which are almost fully completed and presently occupied by the university would be to allow the government to unjustly enrich itself at the expense of another. Justice and equity demand compensation on the basis of quantum meruit. (Emphasis supplied.) Neither can petitioners escape the obligation to compensate respondent for services rendered and work done by invoking the states immunity from suit. This Court has long established in Ministerio v. CFI of Cebu,16 and recently reiterated in Heirs of Pidacan v. ATO,17 that the doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice to a citizen. As this Court enunciated in EPG Construction:181avvphi1 To our mind, it would be the apex of injustice and highly inequitable to defeat respondents right to be duly compensated for actual work performed and services rendered, where both the government and the public have for years received and accepted benefits from the project and reaped the fruits of respondents honest toil and labor. xxx xxx xxx

Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute for it does not say that the state may not be sued under any circumstance. xxx xxx xxx

Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity from suit vis a vis the payment of just compensation for expropriated property, this Court nonetheless finds the doctrine enunciated in the aforementioned cases applicable to the instant controversy, considering that the ends of justice would be subverted if we were to uphold, in this particular instance, the State's immunity from suit. To be sure, this Court as the staunch guardian of the citizens' rights and welfare cannot sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration thereof. Justice and

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equity sternly demand that the State's cloak of invincibility against suit be shred in this particular instance, and that petitioners-contractors be duly compensated on the basis of quantum meruit for construction done on the public works housing project. (Emphasis supplied.) WHEREFORE, in view of the foregoing, the Petition is DENIED for lack of merit. The assailed Decision of the Court of Appeals in CA-G.R. No. 82268 dated 25 September 2006 is AFFIRMED. GERALDINE GAW GUY vs. THE BOARD OF COMMISSIONERS OF THE BUREAU OF IMMIGRATION G.R. No. 167824 July 2, 2010 This is a petition for review on certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure seeking, among others, to annul and set aside the Decisions dated January 6, 20052 and April 20, 20053 and Resolutions dated March 10, 20054 and June 29, 20055 rendered by the Court of Appeals (CA), reversing and setting aside the Writ of Preliminary Injunction issued by the Regional Trial Court6 (RTC), Branch 37, Manila. The antecedent facts follow. The father of petitioners Geraldine Gaw Guy and Grace Guy Cheu became a naturalized 7 Filipino citizen sometime in 1959. The said petitioners, being minors at that time, were also recognized8 as Filipino citizens. Respondent Atty. Alvin Agustin T. Ignacio, filed a Complaint9 dated March 5, 2004 for blacklisting and deportation against petitioners Geraldine and Grace before the Bureau of Immigration (BI) on the basis that the latter two are Canadian citizens who are illegally working in the Philippines, petitioners having been issued Canadian passports. Acting upon the Complaint, respondent Maricel U. Salcedo, Special Prosecutor, Special Task Force of the BI Commissioner, directed the petitioners, through the issuance of a subpoenae,10 to appear before her and to bring pertinent documents relative to their current immigration status, to which the petitioners objected by filing with the Special Task Force of the BI Commissioner a Comment/Opposition with Motion Ad Cautelam to Quash Re: Subpoena11 dated 30 April 2004 (Duces Tecum/Ad Testificandum), which was eventually denied by respondent Salcedo in an Order12 dated May 14, 2004. Respondent Board of Commissioners (BOC) filed a Charge Sheet13 dated June 1, 2004 for Violation of Sections 37 (a) 7, 45 (e) and 45-A of the Philippine Immigration Act of 1940, as amended, which reads as follows: The undersigned Special Prosecutor charges GRACE GUY CHEU and GERALDINE GAW GUY, both Canadian citizens, for working without permit, for fraudulently representing themselves as Philippine citizens in order to evade immigration laws and for failure to comply with the subpoena duces tecum/ad testificandum, in violation of the Philippine Immigration Act of 1940, as amended, committed as follows: That respondents GRACE GUY CHEU and GERALDINE GAW GUY, knowingly, willfully and unlawfully engage in gainful activities in the Philippines without appropriate permit by working as the Vice-President for Finance & Treasurer and General Manager, respectively, of Northern Islands Company, Inc., with office address at No. 3 Mercury Avenue, Libis, Quezon City; That both respondents, knowingly, willfully and fraudulently misrepresent themselves as Philippine citizens as reflected in the general Information Sheet of Northern Islands Company, Inc., for 2004, in order to evade any requirement of the Philippine Immigration Laws; That both respondents, duly served with subpoenas duces tecum/ad testificandum, dated April 20, 2004, knowingly, willfully and unlawfully failed to comply with requirements thereof.1avvphi1 CONTRARY TO LAW. As a remedy, petitioners filed a Petition for Certiorari with Damages and a Prayer for Issuance of a Temporary Restraining Order and Preliminary Injunction14 dated May 31, 2004 before the RTC of Manila, Branch 37.15

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The trial court, after hearing petitioner's application for issuance of a temporary restraining order (TRO) and writ of preliminary injunction, issued an Order16 dated June 28, 2004, the dispositive portion of which reads: WHEREFORE, premises considered, the application for temporary restraining order is hereby GRANTED. The respondents and all persons acting in their behalf and those under their instructions are directed to cease and desist from continuing with the deportation proceedings involving the petitioners. In the meantime set the case for hearing on preliminary injunction on July 5 and 6, 2004, both at 2:00 o'clock in the afternoon and the respondents are directed to show cause why writ of preliminary injunction should not issue. SO ORDERED. On July 5, 2004, public respondents filed their Answer17 and on July 13, 2004, filed a Supplement (To the Special and Affirmative Defenses/Opposition to the Issuance of a Writ of Preliminary Injunction).18 The parties were then directed to file their respective memoranda as to the application for issuance of a writ of preliminary injunction and public respondents' special and affirmative defenses. On July 16, 2004, public respondents as well as the petitioners,19 filed their respective Memoranda.20 On the same day, respondent Atty. Ignacio filed his Answer21 to the petition. In an Order22 dated July 19, 2004, the trial court granted the application for preliminary injunction enjoining public respondents from further continuing with the deportation proceedings. The Order reads, in part: In view of the foregoing, the Court finds that, indeed, there exists a pressing reason to issue a writ of preliminary injunction to protect the rights of the petitioners pending hearing of the main case on the merits and unless this Court issues a writ, grave irreparable injury would be caused against the petitioners. WHEREFORE, premises considered, the application for the Writ of Preliminary Injunction is hereby GRANTED. The respondents and all persons acting on their behalf and those under their instructions are directed to cease and desist from continuing with the deportation proceedings involving the petitioners during the pendency of the instant case. The petitioners are directed to post a bond in the amount of P50,000.00 to answer for whatever damages that may be sustained by the respondent should the court finally resolve that the petitioners are not entitled thereto. SO ORDERED. As a consequence, public respondents, on September 10, 2004, filed a Petition for Certiorari with Prayer for Issuance of Temporary Restraining Order and Writ of Preliminary Injunction23 before the CA24 and, on September 17, 2004, respondent Atty. Ignacio filed a Petition for Certiorari,25 also with the CA.26 Both petitions prayed for the nullification of the Orders dated June 28, 2004 and July 19, 2004 issued by the RTC in Civil Case No. 04-110179 and for the dismissal of the petition therein. Later on, petitioner Geraldine filed a Motion to Consolidate both petitions. On January 6, 2005, the Ninth Division of the CA granted the petition filed by respondent Atty. Ignacio and annulled the writ of preliminary injunction issued by the trial court, the dispositive portion of the Decision27 reads: WHEREFORE, the instant petition is GRANTED and the Order of the Regional Trial Court, Branch 37, Manila, dated July 19, 2004, is hereby ANNULLED and SET ASIDE. SO ORDERED. On January 21, 2005, petitioners filed a Motion for Reconsideration.28 On March 1, 2005, petitioners reiterated29 their prayer for the consolidation of the petitions in the Eighth and Ninth Divisions. In its Resolution30 dated March 10, 2005, the CA Ninth Division denied petitioners' Motion for Reconsideration. Hence, petitioners filed before this Court a Petition for Review on Certiorari31 dated March 31, 2005 praying for the reversal of the Decision rendered by the CA's Ninth Division, which is now docketed as G.R. No. 167824.

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Thereafter, the CA's Eighth Division rendered its own Decision32 dated April 29, 2005 granting the petition therein and nullifying the Orders dated June 28 and July 19, 2004 in Civil Case No. 04-110179, the dispositive portion of which reads as follows: WHEREFORE, finding the instant petition impressed with merit and in accordance with our decision in CA-G.R. SP No. 86432, the same is GIVEN DUE COURSE and is GRANTED. The assailed Orders of the respondent court dated 28 June and 19 July 2004 are hereby NULLIFIED and SET ASIDE. SO ORDERED. Petitioners filed their Motion for Reconsideration33 from the said Decision, which the CA denied in its Resolution34dated June 21, 2005. Thus, petitioners filed before this Court a Petition for Review on Certiorari35 dated July 12, 2005 seeking to reverse and set aside the said Decision and Resolution rendered by the Eighth Division of the CA and is now docketed as G.R. No. 168622. In its Resolution36 dated August 10, 2005, the Court dismissed the said petition and said dismissal, despite petitioners' motion for reconsideration,37 was affirmed in a Resolution38 dated October 17, 2005. This Court, however, upon another motion for reconsideration39 filed by the petitioners, reinstated the petition and ordered its consolidation with G.R. No. 167824.40 On September 7, 2007, a Manifestation41 was filed informing this Court that petitioner Grace Guy Cheu died intestate on August 12, 2007 in the United States of America. Petitioners raised the following grounds in their Consolidated Memorandum42 dated March 27, 2007: I. THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND ERRED IN HOLDING THAT THE LOWER COURT HAS NO JURISDICTION OVER CIVIL CASE NO. 04-110179 AND ISSUE A WRIT OF PRELIMINARY INJUNCTION THEREIN CONSIDERING THAT THE INSTANT CASE IS AN EXCEPTION TO THE RULE ON PRIMARY JURISDICTION DOCTRINE AND WARRANTS PETITIONERS' IMMEDIATE RESORT TO JUDICIAL INTERVENTION. A. CONSIDERING THAT PROOF OF PETITIONERS' PHILIPPINE CITIZENSHIP IS SUBSTANTIAL, PETITIONERS ARE ALLOWED UNDER THIS HONORABLE COURT'S RULING IN BID V. DELA ROSA, SUPRA, TO SEEK INJUNCTIVE RELIEF FROM THE REGIONAL TRIAL COURT TO ENJOIN THE DEPORTATION PROCEEDINGS CONDUCTED AGAINST THEM. B. LIKEWISE, CONSIDERING THAT PETITIONERS STAND TO SUFFER GRAVE AND IRREPARABLE INJURIES SHOULD THE DEPORTATION PROCEEDINGS AGAINST THEM BE ALLOWED TO CONTINUE, PETITIONERS ARE ALLOWED UNDER TE LAW TO IMMEDIATELY SEEK JUDICIAL RELIEF DESPITE THE PENDENCY OF THE ADMINISTRATIVE PROCEEDINGS. II. FURTHER, IT IS RESPECTFULLY SUBMITTED THAT THE RULING OF THIS HONORABLE COURT IN DWIKARNA V. DOMINGO, 433 SCRA 748 (2004) DID NOT STRIP THE LOWER COURT OF ITS AUTHORITY TO ENTERTAIN THE PETITION IN CIVIL CASE NO. 04-110179 AND TO ISSUE A WRIT OF PRELIMINARY INJUNCTION IN THE AFORESAID CASE. III.

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EVEN IF THE RULING OF THIS HONORABLE COURT IN DWIKARNA V. DOMINGO, SUPRA, DID STRIP THE LOWER COURT OF ITS JURISDICTION IN BID V. DELA ROSA, SUPRA, TO ENJOIN DEPORTATION PROCEEDINGS, THE RULING CAN ONLY HAVE PROSPECTIVE EFFECT. Basically, petitioners argue that the doctrine of primary jurisdiction, relied upon by the CA in its decision, does not apply in the present case because it falls under an exception. Citing Board of Commissioners (CID) v. Dela Rosa,43 petitioners assert that immediate judicial intervention in deportation proceedings is allowed where the claim of citizenship is so substantial that there are reasonable grounds to believe that the claim is correct. In connection therewith, petitioners assail the applicability of Dwikarna v. Domingo in the present case, which the CA relied upon in ruling against the same petitioners. After a careful study of the arguments presented by the parties, this Court finds the petition meritorious. Petitioners rely on Board of Commissioners (CID) v. Dela Rosa,44 wherein this Court ruled that when the claim of citizenship is so substantial as to reasonably believe it to be true, a respondent in a deportation proceeding can seek judicial relief to enjoin respondent BOC from proceeding with the deportation case. In particular, petitioners cited the following portions in this Court's decision: True, it is beyond cavil that the Bureau of Immigration has the exclusive authority and jurisdiction to try and hear cases against an alleged alien, and in the process, determine also their citizenship (Lao vs. Court of Appeals, 180 SCRA 756 [1089]. And a mere claim of citizenship cannot operate to divest the Board of Commissioners of its jurisdiction in deportation proceedings (Miranda vs. Deportation Board, 94 Phil. 531 [1951]). However, the rule enunciated in the above-cases admits of an exception, at least insofar as deportation proceedings are concerned. Thus, what if the claim to citizenship of the alleged deportee is satisfactory? Should the deportation proceedings be allowed to continue or should the question of citizenship be ventilated in a judicial proceeding? In Chua Hiong vs. Deportation Board (96 Phil. 665 [1955]), this Court answered the question in the affirmative, and We quote: When the evidence submitted by a respondent is conclusive of his citizenship, the right to immediate review should also be recognized and the courts should promptly enjoin the deportation proceedings. A citizen is entitled to live in peace, without molestation from any official or authority, and if he is disturbed by a deportation proceeding, he has the unquestionable right to resort to the courts for his protection, either by a writ of habeas corpus or of prohibition, on the legal ground that the Board lacks jurisdiction. If he is a citizen and evidence thereof is satisfactory, there is no sense nor justice in allowing the deportation proceedings to continue, granting him the remedy only after the Board has finished its investigation of his undesirability. x x x And if the right (to peace) is precious and valuable at all, it must also be protected on time, to prevent undue harassment at the hands of ill-meaning or misinformed administrative officials. Of what use is this much boasted right to peace and liberty if it can be availed of only after the Deportation Board has unjustly trampled upon it, besmirching the citizen's name before the bar of public opinion? The doctrine of primary jurisdiction of petitioners Board of Commissioners over deportation proceedings is, therefore, not without exception (Calayday vs. Vivo, 33 SCRA 413 [1970]; Vivo vs. Montesa, 24 SCRA 155 [1967]). Judicial intervention, however, should be granted in cases where the claim of citizenship is so substantial that there are reasonable grounds to believe that the claim is correct. In other words, the remedy should be allowed only on sound discretion of a competent court in a proper proceeding ( Chua Hiong v. Deportation Board, supra; Co vs. Deportation Board, 78 SCRA 107 [1977]). It appearing from the records that respondent's claim of citizenship is substantial, as We shall show later, judicial intervention should be allowed. 45 The present case, as correctly pointed out by petitioners and wrongfully found by the CA, falls within the above-cited exception considering that proof of their Philippine citizenship had been adduced, such as, the identification numbers 46 issued by the Bureau of Immigration confirming their Philippine citizenship, they have duly exercised and enjoyed all the rights and privileges exclusively accorded to Filipino citizens, i.e., their Philippine passports47issued by the Department of Foreign Affairs. In BOC v. Dela Rosa, it is required that before judicial intervention is sought, the claim of citizenship of a respondent in a deportation proceeding must be so substantial that there are reasonable grounds to believe that such claim is correct. In the said

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case, the proof adduced by the respondent therein was so substantial and conclusive as to his citizenship that it warranted a judicial intervention. In the present case, there is a substantial or conclusive evidence that petitioners are Filipino citizens. Without necessarily judging the case on its merits, as to whether petitioners had lost their Filipino citizenship by having a Canadian passport, the fact still remains, through the evidence adduced and undisputed by the respondents, that they are naturalized Filipinos, unless proven otherwise. However, this Court cannot pass upon the issue of petitioners' citizenship as this was not raised as an issue. The issue in this petition is on the matter of jurisdiction, and as discussed above, the trial court has jurisdiction to pass upon the issue whether petitioners have abandoned their Filipino citizenship or have acquired dual citizenship within the confines of the law. In this regard, it must be remembered though that this Court's ruling in Dwikarna v. Domingo did not abandon the doctrine laid down in BOC v. Dela Rosa. The exception remains. Dwikarna merely reiterated the doctrine of primary jurisdiction when this Court ruled that if the petitioner is dissatisfied with the decision of the Board of Commissioners of the Bureau of Immigration, he can move for its reconsideration and if his motion is denied, then he can elevate his case by way of a petition for review before the Court of Appeals, pursuant to Section 1, Rule 43 of the Rules of Civil Procedure. However, utmost caution must be exercised in availing of the exception laid down in BOC v. Dela Rosa in order to avoid trampling on the time-honored doctrine of primary jurisdiction. The court cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to resolving the same, where the question demands the exercise of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact.48 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.49 Above all else, this Court still upholds the doctrine of primary jurisdiction. As enunciated in Republic v. Lacap:50 The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes.51 The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.52 Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, 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.53 Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;54 (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot;55 (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings. x x x56 WHEREFORE, the petition is GRANTED. Consequently, the Decisions dated January 6, 2005 and April 20, 2005, and the Resolutions dated March 10, 2005 and June 29, 2005 of the Court of Appeals, nullifying and setting aside the Writ of Preliminary Injunction issued by the Regional Trial Court (RTC), Branch 37, Manila, are herebyNULLIFIED and SET ASIDE. The case is hereby remanded to the trial court for further proceedings, with dispatch. NEW SUN VALLEY HOMEOWNERS' ASSOCIATION, INC vs. SANGGUNIANG BARANGAY G.R. No. 156686 July 27, 2011

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This is a petition for review on certiorari under Rule 45 of the Rules of Court against the Decision 1 dated October 16, 2002 in CAG.R. CV No. 65559 and the Resolution2 dated January 17, 2003, both of the Court of Appeals. The facts are as follows: The Sangguniang Barangay of Barangay Sun Valley (the "BSV Sangguniang Barangay") issued BSV Resolution No. 98-0963 on October 13, 1998, entitled "Directing the New Sun Valley Homeowners Association to Open Rosemallow and Aster Streets to Vehicular and Pedestrian Traffic," the pertinent portions of which read as follows: NOW, THEREFORE, be it resolved as it is hereby resolved by the Sangguniang Barangay in session assembled that 1. Pursuant to its power and authority under the Local Government Code of 1991 (Rep. Act No. 7160), the New Sun Valley Homeowners Association (NSVHA) is hereby directed to open Rosemallow and Aster Sts. to vehicular (private cars only) and pedestrian traffic at all hours daily except from 11 p.m. to 5 a.m. at which time the said streets may be closed for the sake of the security of the residents therein. 2. The Barangay government take steps to address the security concerns of the residents of the area concerned, including the possible assignment of a barangay tanod or traffic enforcer therein, within the limits of the authority and financial capability of the Barangay. 3. This Resolution shall become executory within 72 hours upon receipt hereof by the Association or any of its members.4 The New Sun Valley Homeowners Association, Inc. (NSVHAI), represented by its President, Marita Cortez, filed a Petition5 for a "Writ of Preliminary Injunction/Permanent Injunction with prayer for issuance of TRO" with the Regional Trial Court (RTC) of Paraaque City. This was docketed as Civil Case No. 98-0420. NSVHAI claimed therein that the implementation of BSV Resolution No. 98-096 would "cause grave injustice and irreparable injury" as "[the] affected homeowners acquired their properties for strictly residential purposes";6 that the subdivision is a place that the homeowners envisioned would provide them privacy and "a peaceful neighborhood, free from the hassles of public places";7 and that the passage of the Resolution would destroy the character of the subdivision. NSVHAI averred that contrary to what was stated in the BSV Resolution, the opening of the gates of the subdivision would not in any manner ease the traffic congestion in the area, and that there were alternative routes available. According to NSVHAI, the opening of the proposed route to all kinds of vehicles would result in contributing to the traffic build-up on Doa Soledad Avenue, and that instead of easing the traffic flow, it would generate a heavier volume of vehicles in an already congested choke point. NSVHAI went on to state that a deterioration of the peace and order condition inside the subdivision would be inevitable; that the maintenance of peace and order in the residential area was one of the reasons why entry and exit to the subdivision was regulated by the Association and why the passing through of vehicles was controlled and limited; and that criminal elements would take advantage of the opening to public use of the roads in question.8 NSVHAI further contested the BSV Resolution by submitting the following arguments to the RTC: 12. The road network inside the subdivision and drainage system is not designed to withstand the entry of a heavy volume of vehicles especially delivery vans and trucks. Thus, destruction of the roads and drainage system will result. The safety, health and well-being of the residents will face continuous danger to their detriment and prejudice; 13. When the residents bought their residential properties, they also paid proportionately for the roads and the park in then subdivision. They have therefore an existing equity on these roads. To open the roads to public use is a violation of the rights and interests to a secure, peaceful and healthful environment; 14. Aside from the availability of a better route to be opened, there are other ways to ease traffic flow. The continuous presence of traffic enforcers on all identified traffic choke points will prevent snarls which impede smooth travel. The strict enforcement of traffic rules and regulations should be done;

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15. There are a lot of undisciplined drivers of tricycles, jeepneys, trucks and delivery [vans], which contribute to the traffic congestion. The barangay should require these drivers to observe road courtesy and obedience to traffic rules[.] 9 Executive Judge Helen Bautista-Ricafort of the RTC issued a Temporary Restraining Order10 (TRO) in Civil Case No. 98-0420 on October 30, 1998. Said Order provides: Acting on the Application for Writ of Preliminary Injunction/ Permanent Injunction with Prayer for Issuance of a Temporary Restraining Order, filed by plaintiff and considering that there is extreme urgency, such that unless the same is issued, plaintiff would suffer grave injustice and/or irreparable injury, let a Temporary Restraining Order issue directing the Sangguniang Barangay as represented by Punong Barangay Roberto Guevarra to cease and desist from the implementation of Resolution No. 98-096 or otherwise maintain the status quo until further Orders of this Court. This Temporary Restraining Order shall be effective for seventy two (72) hours from issuance hereof, unless extended by another Order of this Court. Let this case be set for special raffle and conference on November 3, 1998 at 10:30 in the morning. On November 3, 1998, the RTC issued another Order11 stating that, by agreement of the parties, the status quo shall be maintained for seventeen (17) more days, and that the case was set for hearing on the prayer for the issuance of a writ of preliminary injunction on November 20, 1998 at 8:30 a.m. NSVHAI submitted an Amended Petition12 on November 13, 1998, at about 11:10 a.m., wherein it claimed that the BSV Sangguniang Barangay had no jurisdiction over the opening of Rosemallow and Aster Streets (the "subject roads"). NSVHAI likewise attached to its Amended Petition its Position Paper13 dated July 21, 1998, which set forth its objection to the opening of the subject roads for public use and argued that a Barangay Resolution cannot validly cause the opening of the subject roads because under the law, an ordinance is required to effect such an act.14 The BSV Sangguniang Barangay filed its Motion to Dismiss15 likewise on November 13, 1998. The copy provided by petitioner to the Court indicates the time of receipt by NSVHAI as 11:00 a.m.16 The RTC heard the case on November 20, 1998, as scheduled, and thereafter submitted the matter for decision.17 On the same date, the RTC issued the following Order18: Acting on the prayer for the issuance of a writ of preliminary injunction filed by petitioner, it appearing that petitioner may suffer grave injustice or irreparable injury, let a writ of preliminary injunction issue prohibiting the Sangguniang Barangay represented by Punong Barangay Roberto Guevarra from implementing Resolution no. 98-096 until further orders from this Court. Petitioner is directed to file a bond in the amount of ONE HUNDRED THOUSAND (P100,000.00) PESOS (sic) to answer for damages to defendants in the event the Court finds petitioner is not entitled to said injunction. The BSV Sangguniang Barangay filed on December 4, 1998 a Motion for Reconsideration and to Dissolve Preliminary Injunction (with Memorandum of Authorities).19 NSVHAI then filed an Urgent Ex-Parte Motion to Expunge on December 10, 1998, moving to declare the above motion of the BSV Sangguniang Barangay as a mere scrap of paper for being filed out of time and for failure to serve a copy thereof to the counsel of petitioner. The RTC subsequently dismissed the case in an Order20 dated August 17, 1999, stating as follows: Defendant Barangay Sun Valley moves to dismiss the instant case on the grounds that the complaint states no cause of action and the court has no jurisdiction over the subject matter. In summary, defendant alleges that the subject streets Aster and Rosemallow inside Sun Valley Subdivision are owned by the local government. Such streets have long been part of the public domain and beyond the commerce of man. In support of this, defendant cited the case of White Plains Association, Inc. vs. Legaspi, 193 SCRA 765 wherein it was held that road lots of subdivisions constitute a part of the mandatory open space reserved

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for public use; ownership of which is automatically vested in the Republic of the Philippines although it is still registered in the name of the developer/owner, its donation to the government is a mere formality." The power or authority to close or open the said streets is vested in the local government units and not on homeowners associations, pursuant to Section 21 of the local Government Code (RA 7160) quoted as follows: "Section 21. Closure and Opening of Roads. (a) A local government unit may, pursuant to an ordinance, permanently or temporarily close or open any local road, alley, park, or square falling within its jurisdiction x x x." In view thereof, Resolution No. 98-096 was passed by the Sangguniang Barangay. Hence there is no right whatsoever on the part of Plaintiff NSVHA entitled to the protection of the law. Further, defendant contends that petitioner failed to exhaust administrative remedies as ordained in Sections 32 and 57 of the Local Government Code giving the city mayor the supervisory power, and the power of review by the Sangguniang Panlungsod, respectively. No opposition to the motion to dismiss was filed by the Plaintiff. Same defendant seeks to reconsider the order granting the issuance of the writ of preliminary injunction alleging that there is a pending motion to dismiss and Plaintiff has not been able to establish an actually existing right. Plaintiff has not filed an opposition thereto, instead it filed an urgent ex-parte motion to expunge the motion for reconsideration on the ground that its counsel has not been furnished with a copy of the motion for reconsideration, but the record shows that Maria Cortez (plaintiffs representative) has received a copy of said motion. After considering the arguments of the parties in their respective pleadings, this court hereby resolves as follows: 1. The "Motion for Reconsideration" and the "Urgent Ex-parte Motion to Expunge (motion for reconsideration)" are Denied being devoid of merit; and 2. The "Motion to Dismiss" is hereby Granted for failure of the plaintiff to exhaust the administrative remedies under Sections 32 and 57 of the Local Government Code. WHEREFORE, let this case be as it is hereby ordered Dismissed. The writ of preliminary injunction is hereby lifted.21 NSVHAI filed a Motion for Reconsideration22 of the above-quoted Order but this was denied by the RTC for lack of merit in an Order23 dated September 21, 1999. NSVHAI raised the matter to the Court of Appeals and the case was docketed as CA-G.R. CV No. 65559. NSVHAI alleged that "despite the lack of the required hearing" 24 and without any order requiring it to submit its Comment/Opposition to the BSV Sangguniang Barangays Motion to Dismiss or that of submitting said Motion for resolution, Judge Bautista -Ricafort issued an Order which, to NSVHAIs complete surprise, granted the Motion. NSVHAI argued that the RTC gravely erred in taking cognizance of, and thereafter ruling on, said Motion and refusing to exercise jurisdiction over the subject matter of Civil Case No. 98-0420. Petitioner likewise argued that the RTC committed serious errors which, if not corrected, would cause grave or irreparable injury to petitioner and cause a violation of law.25 The BSV Sangguniang Barangay, Roberto Guevarra in his capacity as Punong Barangay, and members of the Sangguniang Barangay (hereinafter, "respondents"), in their Appellees Brief, argued as follows: I THE TRIAL COURT DID NOT ERR IN GRANTING DEFENDANTS-APPELLEES MOTION TO DISMISS DUE TO LACK OF CAUSE OF ACTION AND JURISPRUDENCE OVER THE SUBJECT MATTER AND APPELLANTS FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. AS NOTED BY THE COURT, NO OPPOSITION TO THE MOTION TO DISMISS WAS EVER FILED BY APPELLANT. II THE TRIAL COURTS DISMISSAL OF THE ACTION ASSAILING ITS SUBJECT-MATTER, BARANGAY RESOLUTION NO. 98-096, CONSISTING OF A DIRECTIVE OF AN LGU TO A DEFIANT PRIVATE ORGANIZATION

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WITHIN ITS JURISDICTION, IS JUDICIAL RECOGNITION OF THE SOLE COMPETENCE AND WISE DISCRETION OF THE BARANGAY OVER A LOCAL TRAFFIC PROBLEM. III THE TRIAL COURT DID NOT COMMIT ANY SERIOUS ERROR, PROCEDURAL OR SUBSTANTIVE, AS FOUND BY THE COURT A QUO. IT IS APPELLANT THAT HAS COMMITTED THE ERROR OF NOT EXHAUSTING ADMINISTRATIVE REMEDIES. HENCE, NO GRAVE OR IRREPARABLE INJURY CAN BE CAUSED TO APPELLANT FOR IT HAS NO RIGHT TO PROTECT.26 Respondents claimed that Barangay Resolution No. 98-096 was simply a directive to petitioner, "a private aggrupation of some self-seeking homeowners,"27 and was just a measure of internal policy among residents; that the opening of roads for traffic reasons was "within the sole competence of the barangay to determine";28 and the Mayor could have chosen, as it was within his power to do so, to cause the demolition of the gates, which were illegally built by petitioner and therefore were obstructions on the road, even without a Barangay resolution. Respondents likewise claimed that the BSVs action could be considered a politi cal question, which should be essentially withdrawn from judicial cognizance, and constitutional law doctrine provides that the courts would not interfere with political issues unless grave abuse of discretion is shown, of which there was none on the part of the Barangay. Respondents argued that petitioner did not have any actual legal right entitled to the protection of the law. 29 Respondents attached to their Appellees Brief six documents, labeled as Annexes "2" to "7," all stamped "Certified True Copy" by a certain Roman E. Loreto, Legal Officer II of Legal Department.30 The detailed information contained in each of the documents that comprise respondents Annexes "2" to "7" is copied below: 1. 1st Indorsement31 from the Office of the Mayor of Paraaque dated May 20, 1988, signed by Luzviminda A. Concepcion, Administrative Officer II, stating as follows: Respectfully indorsed to Atty. Antonio G. Cruz, Municipal Attorney, of this municipality the herein attached "Original Copies of Transfer Certificate of Title for Sun Valley Open Space and Road Lots" with TCT Nos. 133552, 119836, and 122443 for your appropriate actions. 2. Letter32 dated December 27, 1990 from Francisco B. Jose, Jr., Municipal Attorney of Paraaque, addressed to the Municipal Council Secretary, which reads: This has reference to your request dated December 18, 1990 relative to the letter of inquiry of the Barangay Captain of Barangay Sun Valley dated December 13, 1990. We wish to inform you that based on the available records of our office the open space and road lots of Sun Valley Subdivision is already owned by the Municipal Government of Paraaque as evidenced by TCT NOS. 133552, 119836, and 122443. Copies of which are hereto attached for your ready reference. Considering that the Municipality of Paraaque is the registered owner of the road lots of Sun Valley Subdivision, we are of the opinion that the roads become public in use and ownership, and therefore, use of the roads by persons other than residents of the Subdivision can no longer be curtailed. However, should the Municipal Government decides to delegate its right to regulate the use of the said roads to the Sun Valley Homeowners Association or Sun Valley Barangay Council, such right may be exercise[d] by said association or council. 3. Certification33 dated October 8, 1990 issued by Francisco B. Jose, Jr. under the letterhead of the Office of the Municipal Attorney of Paraaque, which reads: This is to certify that based on the available records of this Office, the open space and road lots of Sun Valley Subdivision has been donated and now owned by the Municipality of Paranaque, as evidenced by TCT Nos. 133552, 119836, and 122443 copies of which are hereto attached. This certification is being issued upon the request of Mr. Mario Cortez, President of Sun Valley Homeowners Association.

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4. Certification34 dated June 13, 1994, again signed by Francisco B. Jose, Jr., of the Office of the Municipal Attorney, providing as follows: This is to certify that based on the available records of this Office, the only road lots in Sun Valley Subdivision titled in the name of the Municipality of Paraaque are those covered by Transfer Certificates of Title Nos. 133552 and 122443. This certification is being issued upon the request of Coun. Manuel T. De Guia. 5. Certification35 dated March 2, 1995 issued by Rodolfo O. Alora, OIC, Asst. Municipal Legal Officer, which reads: This is to certify that based on the available records of this Office, the open space within Sun Valley Subdivision has already been donated to the Municipality as evidenced by Transfer Certificate of Title No. 119836, copy of which is hereto attached. This certification is being issued upon the request of Atty. Rex G. Rico. 6. Certification36 dated October 26, 1998 issued by Ma. Riza Pureza Manalese, Legal Researcher, Office of the Municipal Attorney, Paraaque City, which reads: This is to certify that based on the available records of this Office, road lots of Sun Valley Subdivision have already been donated to the Municipality of Paranaque as evidenced by TCT NO. 133552, 119836, and 122443. This certification is being issued upon the request of MR. WILLIAM UY. The Court of Appeals issued a Decision dated October 16, 2002 denying the appeal and affirming the Orders of the RTC dated August 17, 1999 and September 21, 1999. The Court of Appeals likewise denied NSVHAIs Motion for Partial Reconsideration in its Resolution promulgated on January 17, 2003, stating that after a thorough study of the Motion for Reconsideration, it found no sufficient reason to deviate from its findings and conclusion reached in its decision. Thus, NSVHAI (hereinafter, "petitioner") went to this Court. Arguments of Petitioner Petitioner alleges that the decision of the Court of Appeals was based on "facts that [were] outside of the original Petition and Amended Petition and on supposed findings of facts that are not even evidence offered before the court a quo." 37 Petitioner likewise alleges that the facts used by the Court of Appeals in dismissing the case were contrary to the records of Civil Case No. 98-0420. Petitioner lists the following as its Questions of Law: A In sustaining the dismissal of Civil Case No. 98-0420, the Honorable Court of Appeals sanctioned the departure of the Regional Trial Court from the accepted and usual course of judicial proceedings B Whether or not the issuance of the Resolution promulgated January 17, 2003 and the Decision promulgated October 16, 2002 by the Former 4th Division and the 4th Division of the Court of Appeals sustaining the validity of dismissal of Civil Case No. 980420 is not in accord with law or with the applicable decisions of this Honorable Supreme Court C Whether or not the Honorable Court of Appeals, with due respect, departed from the accepted and usual course of judicial proceedings by making findings of fact not supported by evidence of record38

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Petitioner avers that the hearing for the respondents Motion to Dismiss was set on November 20, 1998, without indication as to time and that during the hearing on such date, counsel for respondents moved that their Motion to Dismiss be heard over the objection of counsel for petitioner, who explained that there was an urgency in ruling on the prayer for the issuance of a writ of preliminary injunction in view of the expiration of the temporary restraining order (TRO).39 Petitioner quotes the transcript of stenographic notes (TSN) from the November 20, 1998 hearing before the RTC in the following manner: Atty. Herrera: Then, Your Honor, I files [sic] a motion petitioning to dismiss this instant case, which should be resolved first before hearing this case. Atty. Nuez: Your Honor, please, with due respect to the opposing counsel, the hearing today is supposed to be on the presentation of petitioners evidence in support of its prayer for preliminary injunction. In connection with the amended complaint, I guess it is a matter of right to amend its pleading. What happened here, the amended petition was filed before this Honorable Court on November 13 at 11:10 a.m. but I think the motion to dismiss was filed by the respondent on November 13 at 11:20 a.m.. Therefore, it is the right of the petitioner insofar as the case is concerned. And therefore, this Court should proceed with the hearing on the preliminary injunction instead of entertaining this matter. The temporary restraining order will expire today and we have the right to be heard. Court: We will proceed first with the hearing (referring to the scheduled hearing of the prayer for the issuance of the writ of preliminary injunction). (Transcript of Stenographic Notes, November 20, 1998) (Underscoring and explanation petitioners.) 40 Petitioner claims that the RTC proceeded to hear the prayer for the issuance of a preliminary injunction and no hearing was conducted on the Motion to Dismiss. Petitioner reiterates its earlier claim that it did not receive an order requiring it to submit its Comment/Opposition to the Motion to Dismiss or informing it that said Motion had been submitted for resolution.41 Petitioner alleges that the dismissal of Civil Case No. 98-0420 arose from the grant of respondents Motion to Dismiss. Petitioner claims that it filed its Amended Petition on November 13, 1998 at 11:10 a.m., or before respondents served any responsive pleading, or before they had filed their Motion to Dismiss on the same date at about 11:20 a.m.42 Petitioner avers that the filing of said Amended Petition was a matter of right under Section 2, Rule 10 of the 1997 Rules of Civil Procedure, and had the effect of superseding the original petition dated October 28, 1998. Petitioner concludes that the Motion to Dismiss was therefore directed against a non-existing Petition.43 Petitioner argues that the RTCs ruling on the Motion to Dismiss is contrary to procedural law because no hearing was conduct ed on said Motion to Dismiss; that said motion violated Section 5, Rule 10 of the 1997 Rules of Civil Procedure for failing to set the time of hearing thereof; and that instead of being resolved, said motion should have been declared as a mere scrap of worthless paper.44 Petitioner claims that during the proceedings before the RTC on November 20, 1998, both parties manifested that the Motion to Dismiss was never set for hearing, and that when Judge Bautista-Ricafort said, "We will proceed first with the hearing,"45 she was referring to the scheduled hearing of the prayer for the issuance of the writ of preliminary injunction. Petitioner claims that it is crystal clear that it was deprived due process when a ruling was had on the Motion to Dismiss despite the clear absence of a hearing. Petitioner concludes that the Court of Appeals was manifestly mistaken when it ruled that due process was observed in the issuance of the assailed Orders of Judge Bautista-Ricafort, despite the lack of opportunity to submit a comment or opposition to the Motion to Dismiss and the lack of issuance of an order submitting said motion for resolution. Petitioner alleges that the Court of Appeals sanctioned the ruling of the RTC that violated both substantial and procedural law. 46

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Moreover, petitioner avers that contrary to the ruling of the Court of Appeals, the RTC had jurisdiction to hear and decide the Amended Petition, and the doctrine of exhaustion of administrative remedies was not applicable. This is because, according to petitioner, such doctrine "requires that were a remedy before an administrative agency is provided, relief must first be sought from the administrative agencies prior to bringing an action before courts of justice."47 Petitioner claims that when it filed Civil Case No. 98-08420, it did not have the luxury of time to elevate the matter to the higher authorities under Sections 32 and 57 of the Local Government Code. Petitioner alleges that the tenor of BSV Resolution No. 98-096 necessitated the immediate filing of the injunction case on October 29, 1998, to forestall the prejudicial effect of said resolution that was to take effect two days later. Thus, petitioner claims that it had no other plain, speedy, and adequate remedy except to file the case. 48 Anent the question of whether the Sangguniang Barangay should have passed an ordinance instead of a resolution to open the subject roads, petitioner alleges that the Court of Appeals should not have relied on respondents claim of ownership, as this led to the erroneous conclusion that there was no need to pass an ordinance. Petitioner insists that the supposed titles to the subject roads were never submitted to the RTC, and the respondents merely attached certifications that the ownership of the subject roads was already vested in the City Government of Paraaque City as Annexes to their Appellees Brief before the Court of Appeals. Those annexes, according to petitioner, were not formally offered as evidence.49 Petitioner avers that the records of Civil Case No. 98-0420 clearly show that there was no proof or evidence on record to support the findings of the Court of Appeals. This is because, allegedly, the dismissal of said case was due to the grant of a motion to dismiss, and the case did not go to trial to receive evidence.50 Petitioner avers that a motion to dismiss hypothetically admits the truth of the facts alleged in the complaint.51 In adopting the annexes as basis for its findings of fact, the Court of Appeals allegedly disregarded the rules on Evidence. Petitioner raises the following grounds for the issuance by this Court of a temporary restraining order and/or writ of preliminary injunction: Sangguniang Barangay Resolution No. 98-096 is repugnant to the proprietary rights of the affected homeowners who are members of petitioner NSVHAI, such rights undoubtedly protected by the Constitution. As there is no proof otherwise (except the baseless findings of fact by the Honorable Court of Appeals) that the streets encompassed by the concerned subdivision, Sun Valley Subdivision, are all private properties. As such, the residents of Sun Valley Subdivision have all the right to regulate the roads and open spaces within their territorial jurisdiction. This Honorable Supreme Court can take judicial knowledge that criminal activities such as robbery and kidnappings are becoming daily fares in Philippine society. Residents have invested their lifetimes savings in private subdivision since subdivision living afford them privacy, exclusivity and foremost of all, safety. Living in a subdivision has a premium and such premium translates into a comparatively more expensive lot because of the safety, among others, that subdivision lifestyle offers. But, with the enactment and intended implementation of Sangguniang Barangay Resolution No. 98-096 to open Rosemallow and Aster Streets for public use, it is indubitable that, instead of promoting the safety of resident of Sun Valley Subdivision, respondents are endangering the life and property of the residents of the said subdivision as they will now be exposed to criminal and lawless elements. It is respectfully submitted that Sangguniang Barangay Resolution No. 98-096 has a place only in an authoritarian government where proprietary rights and privacy are alien concepts. Lest it be forgotten, ours is a democratic society and therefore, it should not be ruled in a manner befitting of a despotic government. Petitioner NSVHAI, in protection of the rights and interest of the residents of Sun Valley Subdivision and in order to ensure that public officials will not abuse governmental powers and use them in an oppressive and arbitrary manner, invokes the judicial power of this Honorable Supreme Court and pray that a writ of preliminary injunction be issued and, after hearing, be declared permanent. 52 A perusal of the documents attached by petitioner as Annexes revealed to the Court the following, which were not discussed in the body of the petition:

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1. A letter53 dated January 25, 2003 signed by Sonia G. Sison, President of NSVHAI, to Mayor Joey P. Marquez, the pertinent portions of which provide: We admit that we erred in not going to you directly because at that time, the NSVHA received the letter-order of Brgy. Capt. Guevara two days before the effectivity of the order. Aside from this, there was a long holiday (long weekend prior to November 1). Thus, the Board of Governors had no other recourse but to seek a TRO and thereafter a permanent injunction. We now would like to seek your assistance concerning this urgent problem. For your information there are already two (2) gates in and out of Sun Valley Subdivision. Under P.D. 957, the Homeowners Association is mandated to protect the interest of the homeowners and residents especially in so far as it affects the security, comfort and the general welfare of the homeowners. Thank you and because of the urgency of the matter, we anticipate your prompt and favorable action. (Emphasis ours.) 2. A letter54 signed by Paraaque City Mayor Joey Marquez dated January 27, 2003, addressed to Mr. Roberto Guevara, Office of the Barangay Captain, Barangay Sun Valley, which reads in part: This refers to your intended implementation of Barangay Sun Valley Resolution No. 98-096 entitled, "A RESOLUTION DIRECTING THE NEW SUN VALLEY HOMEOWNERS ASSOCIATION TO OPEN ROSEMALLOW AND ASTER STREETS TO VEHICULAR AND PEDESTRIAN TRAFFIC." In this regard and pursuant to the provisions of Sec. 32 of the Local Government Code of 1991 which vests upon the city mayor the right to exercise general supervision over component barangays, to ensure that said barangays act within the scope of their prescribed powers and functions, you are hereby directed to defer your implementation of the subject ordinance based on the following grounds: 1. The roads subject of your resolution is a municipal road and not a barangay road; 2. The opening or closure of any local road may be undertaken by a local government unit pursuant to an ordinance and not through a mere resolution as provided under Sec. 21 of the Local Government Code of 1991; 3. There is no more need to order the opening of the aforementioned roads in view of the fact that Gelia and State Ave., have already been opened by the subdivision to the general public to accommodate vehicular and pedestrian traffic in the area; 4. There is a need to conduct public hearings, as in fact we shall be conducting public hearings, on the matter to enable us to arrive at an intelligent resolution of the issues involved. 3. A letter55 dated January 31, 2003 addressed to Mayor Joey Marquez, signed by counsel for respondents, wherein the latter wrote: We regret to observe that all the reasons that you have cited in your letter as grounds for your order of non-implementation of the Barangay Resolution have been passed upon and decided by the Court of Appeals, which lately denied the NSVHA Motion for Reconsideration x x x. xxxx The Decision of the Court of Appeals is now the subject of an appeal taken by the NSVHA to the Supreme Court. In deference to the high Court, you would do well to reconsider your order to the Barangay and not pre-empt the high Court on its decision. x x x. Arguments of Respondents

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Respondents filed their Comment56 on July 17, 2003. They manifest that the petition is substantially a reproduction of petitioners brief filed with the Court of Appeals, and consists of almost identical issues which have already been ventilated and decided upon by the said court. Respondents claim that the hearing held on November 20, 1998, as found by the Court of Appeals, covered both the injunction and dismissal incidents, and that the motion to dismiss on issues of jurisdiction was a prejudicial matter. Respondents confirm that the RTC said it will proceed first with the hearing, but the lower court did not specify if the hearing was going to take up the prayer for the issuance of preliminary injunction or the motion to dismiss. Respondents further claim that by the end of the hearing, after Atty. Florencio R. Herreras manifestation on the donated public roads, counsels for both pa rties were asked by the court if they were submitting, and both of them answered in the affirmative. 57 Respondents aver that petitioners reply to its charge of misleading the Court was an admission that counsel had tampered without authority with the TSN, and that the phrase "referring to the scheduled hearing of the prayer for the issuance of the writ of preliminary injunction" 58 was said counsels own mere footnote. Respondents allege that the issuance of the titles in favor of Paraaque over all the roads in Sun Valley Subdivision was an official act by the land registration office of the City of Paraaque, and was perfectly within the judicial notice of the Courts, pursuant to Rule 129, Section 1 of the Rules of Court.59 Respondents likewise allege that the gates were earlier built illegally on the roads by the Association, and while petitioner may lend a helping hand to the barangay, it cannot control the latters discretion as to the wisdom of its traffic policies within the barangay. They maintain that petitioner had no business putting up road blocks in the first place; that this matter is purely a local government determination; and that it is even doubtful if courts would encroach upon this autonomous determination for local constituents of the Barangay in deference to the doctrine of separation of powers. Respondents claim that since the subject matter of the case is a directive of the Barangay to the petitioner, the requirement for an ordinance would not be necessary, as there was no legislative determination in the Barangay resolution regarding what class of roads to open or what to close by way of general policy. 60 Respondents contend that the Barangay Resolution was internal and temporary, passed to solve a traffic problem. They propose a reason why petitioner allegedly wants to control the subject roads, as follows: The directive of the Barangay is certainly a declaration of an intention expressed by resolution on complaints of residents for a convenient outlet of cars and pedestrians during certain hours of the [day] or night. This need not be the subject of an ordinance. It is addressed to a special group of residents, and not to the general community. It refers to particular roads and at certain hours only, not to all the roads and at all hours. Hence, the Barangay Resolutions (sic) is but temporary in character, being a solution to a momentary traffic problem then visualized by the Barangay and encouraged by the MMDA. There is no legal question involved that is of any concern to the NSVHA. The prevailing reason why the NSVHA desires to control the roads is the monetary consideration it gains by its unilateral requirement of car stickers and of substantial fees exacted from delivery vans and trucks for bringing in cargo into the subdivision. And yet, the residents who, never gave their consent to this activities (sic), are busy people and have merely tolerated this for a long time now. This tolerance did not of course give legality to the illegal act. x x x.61 As regards petitioners argument that the BSV Sangguniang Barangay should have passed an ordinance instead of a resolution, respondents present their counter-argument as follows: Hence, even assuming for the sake of argument that a legal question exists on whether it be a resolution or ordinance that should contain the Barangay directive, such an issue is of no moment as plaintiff-appellant failed to exhaust the necessary administrative remedies before resorting to court action, as found by the trial court and the Court of Appeals. Section 32, R.A. 7160 (Local Government Code of 1991) provides for a remedy from Barangay actions to the Mayor under the latters power of general supervision.62 With regard to the Mayors involvement in this case, respondents have this to say:

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The Mayors act of interfering in Barangay Sun Valley affairs stemmed out of a long -standing political feud of the Mayor with the Punong Barangay. Its general supervision did not extend to pure Barangay matters, which the Barangay would be x x x in a better position to determine. Furthermore, the general supervision of the Mayor is limited to the overseeing authority that the Barangays act within the scope of their prescribed powers and functions. Sadly, there is nothing in this Mayors letter x x x that would as much as show a deviation by the Barangay Sun Valley from any prescribed powers or function. The Mayors directive to the Barangay is of doubtful legality. It was mainly the mounting traffic problem progressively experienced through the years that prompted the Barangay to resolve to open Rosemallow and Aster Streets in accordance with its power under Section 21 of R.A. 7160 to "temporarily open or close any local road falling within its jurisdiction". This Resolution x x x was decided upon after the Barangay Council made the necessary investigation and conducted hearings in consultation with affected residents. In order to maintain some kind of cordial relationship with the NSVHA, the Barangay by its resolution, opted to give the NSVHA the chance to open the roads, which it earlier closed by means of arbitrarily putting up steel gates without any apparent authority. 63 Furthermore, respondents aver that the trial court and the appellate court have ruled that only a local government unit (LGU), in this case the Barangay, can open or close roads, whether they be public or private, in accordance with Section 21 of the Local Government Code. Respondents contend that Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc.,64 wherein the Court discussed the power of LGUs to open and close roads, is substantially in point.65 After the submission of the parties respective memoranda,66 this case was submitted for decision. The issues before us are: 1. Whether or not petitioner has a right to the protection of the law that would entitle it to injunctive relief against the implementation of BSV Resolution No. 98-096; and 2. Whether or not petitioner failed to exhaust administrative remedies. The Ruling of the Court The Court of Appeals passed upon petitioners claims as to the validity of the dismissal in this wise: We do not agree. Although the Motion to Dismiss was filed on the same day, but after, the Amended Petition was filed, the same cannot be considered as directed merely against the original petition which Appellant already considers as non-existing. The records will show that Appellants Amended Petition contained no material amendments to the original petition. Both allege the same factual circumstances or events that constitute the Appellants cause of action anent the Appellees alleged violation o f Appellants propriety rights over the subdivision roads in question. Corollarily, the allegations in Appellees Motion to Dismiss, as well as the grounds therefore predicated on lack of cause of action and jurisdiction, could very well be considered as likewise addressed to Appellants Amended Petition. xxxx It bears stressing that due process simply means giving every contending party the opportunity to be heard and the court to consider every piece of evidence presented in their favor (Batangas Laguna Tayabas Bus Company versus Benjamin Bitanga, G.R. Nos. 137934 & 137936[)]. In the instant case, Appellant cannot be said to have been denied of due process. As borne by the records, while Appellees Motion to Dismiss did not set the time for the hearing of the motion, the day set therefore was the same date set for the hearing of Appellants prayer for the issuance of a writ of preliminary injunction that is, November 20, 1998, with the precise purpose of presenting evidence in support of the motion to dismiss on the same said scheduled hearing date and time when Appellant and its counsel would be present. Moreover, Appellants predication of lack of due hearing is belied by t he fact that the hearing held on November 20, 1999 took up not only the matter of whether or not to grant the injunction, but also tackled the jurisdictional issue raised in Appellees Motion to Dismiss, which issues were intertwined in both incidents. 67

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We see no reason to depart from these findings by the Court of Appeals. Petitioners recourse in questioning BSV Resolution No. 98-096 should have been with the Mayor of Paraaque City, as clearly stated in Section 32 of the Local Government Code, which provides: Section 32. City and Municipal Supervision over Their Respective Barangays. - The city or municipality, through the city or municipal mayor concerned, shall exercise general supervision over component barangays to ensure that said barangays act within the scope of their prescribed powers and functions. We do not see how petitioners act could qualify as an exception to the doctrine of exhaustion of administrative remedies. We have emphasized the importance of applying this doctrine in a recent case, wherein we held: The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.68 It is the Mayor who can best review the Sangguniang Barangays actions to see if it acted within the scope of its prescribed powers and functions. Indeed, this is a local problem to be resolved within the local government. Thus, the Court of Appeals correctly found that the trial court committed no reversible error in dismissing the case for petitioners failure to exhaust administrative remedies, as the requirement under the Local Government Code that the closure and opening of roads be made pursuant to an ordinance, instead of a resolution, is not applicable in this case because the subject roads belong to the City Government of Paraaque. Moreover, being the party asking for injunctive relief, the burden of proof was on petitioner to show ownership over the subject roads. This, petitioner failed to do. In civil cases, it is a basic rule that the party making allegations has the burden of proving them by a preponderance of evidence. Parties must rely on the strength of their own evidence and not upon the weakness of the defense offered by their opponent. 69 Petitioner dared to question the barangays ownership over the subject roads when it should have been the one to adduce evidence to support its broad claims of exclusivity and privacy. Petitioner did not submit an iota of proof to support its acts of ownership, which, as pointed out by respondents, consisted of closing the subject roads that belonged to the then Municipality of Paraaque and were already being used by the public, limiting their use exclusively to the subdivisions homeowners, and collecting fees from delivery vans that would pass through the gates that they themselves had built. It is petitioners autho rity to put up the road blocks in the first place that becomes highly questionable absent any proof of ownership. On the other hand, the local government units power to close and open roads within its jurisdiction is clear under the Local Government Code, Section 21 of which provides: Section 21. Closure and Opening of Roads. (a) A local government unit may, pursuant to an ordinance,permanently or temporarily close or open any local road, alley, park, or square falling within its jurisdiction: Provided, however, That in case of permanent closure, such ordinance must be approved by at least two-thirds (2/3) of all the members of the sanggunian, and when necessary, an adequate substitute for the public facility that is subject to closure is provided. We quote with approval the ruling of the Court of Appeals in this regard, as follows: Contrary, however, to Appellants position, the above-quoted provision, which requires the passage of an ordinance by a local government unit to effect the opening of a local road, can have no applicability to the instant case since the subdivision road lots sought to be opened to decongest traffic in the area - namely Rosemallow and Aster Streets have already been donated by the Sun Valley Subdivision to, and the titles thereto already issued in the name of, the City Government of Paraaque since the year 1964 (Annexes "2" to "7" of Appellees Brief). This fact has not even been denied by the Appellant in the proceedings below nor in the present recourse. Having been already donated or turned over to the City Government of Paraaque, the road lots in question have since then taken the nature of public roads which are withdrawn from the commerce of man, and hence placed beyond the private rights or claims of herein Appellant. Accordingly, the Appellant was not in the lawful exercise of its

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predicated rights when it built obstructing structures closing the road lots in question to vehicular traffic for the use of the general Public. Consequently, Appellees act of passing the disputed barangay resolution, the implementation of which is sought to be restrained by Appellant, had for its purpose not the opening of a private road but may be considered merely as a directive or reminder to the Appellant to cause the opening of a public road which should rightfully be open for use to the general public.70 Petitioner wants this Court to recognize the rights and interests of the residents of Sun Valley Subdivision but it miserably failed to establish the legal basis, such as its ownership of the subject roads, which entitles petitioner to the remedy prayed for. It even wants this Court to take "judicial knowledge that criminal activities such as robbery and kidnappings are becoming daily fares in Philippine society."71 This is absurd. The Rules of Court provide which matters constitute judicial notice, to wit: Rule 129 WHAT NEED NOT BE PROVED SECTION 1. Judicial notice, when mandatory.A court shall take judicial notice, without the introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions.(1a)1avvphi1 The activities claimed by petitioner to be part of judicial knowledge are not found in the rule quoted above and do not support its petition for injunctive relief in any way. As petitioner has failed to establish that it has any right entitled to the protection of the law, and it also failed to exhaust administrative remedies by applying for injunctive relief instead of going to the Mayor as provided by the Local Government Code, the petition must be denied. WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals DECISION dated October 16, 2002 and its RESOLUTION dated January 17, 2003 in CA-G.R. CV No. 65559 are both AFFIRMED. ARLIN B. OBIASCA vs. JEANE O. BASALLOTE G.R. No. 176707 February 17, 2010 When the law is clear, there is no other recourse but to apply it regardless of its perceived harshness. Dura lex sed lex. Nonetheless, the law should never be applied or interpreted to oppress one in order to favor another. As a court of law and of justice, this Court has the duty to adjudicate conflicting claims based not only on the cold provision of the law but also according to the higher principles of right and justice. The facts of this case are undisputed. On May 26, 2003, City Schools Division Superintendent Nelly B. Beloso appointed respondent Jeane O. Basallote to the position of Administrative Officer II, Item No. OSEC-DECSB-ADO2-390030-1998, of the Department of Education (DepEd), Tabaco National High School in Albay.2 Subsequently, in a letter dated June 4, 2003,3 the new City Schools Division Superintendent, Ma. Amy O. Oyardo, advised School Principal Dr. Leticia B. Gonzales that the papers of the applicants for the position of Administrative Officer II of the school, including those of respondent, were being returned and that a school ranking should be accomplished and submitted to her office for review. In addition, Gonzales was advised that only qualified applicants should be endorsed. Respondent assumed the office of Administrative Officer II on June 19, 2003. Thereafter, however, she received a letter from Ma. Teresa U. Diaz, Human Resource Management Officer I of the City Schools Division of Tabaco City, Albay, informing her that her appointment could not be forwarded to the Civil Service Commission (CSC) because of her failure to submit the position description form (PDF) duly signed by Gonzales.

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Respondent tried to obtain Gozales signature but the latter refused despite repeated requests. When respondent informed Oyardo of the situation, she was instead advised to return to her former teaching position of Teacher I. Respondent followed the advice. Meanwhile, on August 25, 2003, Oyardo appointed petitioner Arlin B. Obiasca to the same position of Administrative Officer II. The appointment was sent to and was properly attested by the CSC.4 Upon learning this, respondent filed a complaint with the Office of the Deputy Ombudsman for Luzon against Oyardo, Gonzales and Diaz. In its decision, the Ombudsman found Oyardo and Gonzales administratively liable for withholding information from respondent on the status of her appointment, and suspended them from the service for three months. Diaz was absolved of any wrongdoing.5 Respondent also filed a protest with CSC Regional Office V. But the protest was dismissed on the ground that it should first be submitted to the Grievance Committee of the DepEd for appropriate action.6 On motion for reconsideration, the protest was reinstated but was eventually dismissed for lack of merit. 7Respondent appealed the dismissal of her protest to the CSC Regional Office which, however, dismissed the appeal for failure to show that her appointment had been received and attested by the CSC.8 Respondent elevated the matter to the CSC. In its November 29, 2005 resolution, the CSC granted the appeal, approved respondents appointment and recalled the approval of petitioners appointment.9 Aggrieved, petitioner filed a petition for certiorari in the Court of Appeals (CA) claiming that the CSC acted without factual and legal bases in recalling his appointment. He also prayed for the issuance of a temporary restraining order and a writ of preliminary injunction. In its September 26, 2006 decision,10 the CA denied the petition and upheld respondents appointment which was deemed effective immediately upon its issuance by the appointing authority on May 26, 2003. This was because respondent had accepted the appointment upon her assumption of the duties and responsibilities of the position. The CA found that respondent possessed all the qualifications and none of the disqualifications for the position of Administrative Officer II; that due to the respondents valid appointment, no other appointment to the same position could be made without the position being first vacated; that the petitioners appointment to the position was thus void; and that, contrary to the argument of petitioner that he had been deprived of his right to due process when he was not allowed to participate in the proceedings in the CSC, it was petitioner who failed to exercise his right by failing to submit a single pleading despite being furnished with copies of the pleadings in the proceedings in the CSC. The CA opined that Diaz unreasonably refused to affix her signature on respondents PDF and to submit respondents appointment to the CSC on the ground of non-submission of respondents PDF. The CA ruled that the PDF was not even required to be submitted and forwarded to the CSC. Petitioner filed a motion for reconsideration but his motion was denied on February 8, 2007.11 Hence, this petition.12 Petitioner maintains that respondent was not validly appointed to the position of Administrative Officer II because her appointment was never attested by the CSC. According to petitioner, without the CSC attestation, respondents appointment as Administrative Officer II was never completed and never vested her a permanent title. As such, respondents appointment could still be recalled or withdrawn by the appointing authority. Petitioner further argues that, under the Omnibus Rules Implementing Book V of Executive Order (EO) No. 292,13 every appointment is required to be submitted to the CSC within 30 days from the date of issuance; otherwise, the appointment becomes ineffective.14 Thus, respondents appointment issued on May 23, 2003 should have been transmitted to the CSC not later than June 22, 2003 for proper attestation. However, because respondents appointment was not sent to the CSC within the proper period, her appointment ceased to be effective and the position of Administrative Officer II was already vacant when petitioner was appointed to it.

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In her comment,15 respondent points out that her appointment was wrongfully not submitted by the proper persons to the CSC for attestation. The reason given by Oyardo for the non-submission of respondents appointment papers to the CSC the alleged failure of respondent to have her PDF duly signed by Gonzales was not a valid reason because the PDF was not even required for the attestation of respondents appointment by the CSC. After due consideration of the respective arguments of the parties, we deny the petition. The law on the matter is clear. The problem is petitioners insistence that the law be applied in a manner that is unjust and unreasonable. Petitioner relies on an overly restrictive reading of Section 9(h) of PD 80716 which states, in part, that an appointment must be submitted by the appointing authority to the CSC within 30 days from issuance, otherwise, the appointment becomes ineffective: Sec. 9. Powers and Functions of the Commission. The [CSC] shall administer the Civil Service and shall have the following powers and functions: xxx xxx xxx

(h) Approve all appointments, whether original or promotional, to positions in the civil service, except those of presidential appointees, members of the Armed Forces of the Philippines, police forces, firemen and jailguards, and disapprove those where the appointees do not possess the appropriate eligibility or required qualifications. An appointment shall take effect immediately upon issue by the appointing authority if the appointee assumes his duties immediately and shall remain effective until it is disapproved by the [CSC], if this should take place, without prejudice to the liability of the appointing authority for appointments issued in violation of existing laws or rules: Provided, finally, That the [CSC] shall keep a record of appointments of all officers and employees in the civil service. All appointments requiring the approval of the [CSC] as herein provided, shall be submitted to it by the appointing authority within thirty days from issuance, otherwise the appointment becomes ineffective thirty days thereafter. (Emphasis supplied) This provision is implemented in Section 11, Rule V of the Omnibus Rules Implementing Book V of EO 292 (Omnibus Rules): Section 11. An appointment not submitted to the [CSC] within thirty (30) days from the date of issuance which shall be the date appearing on the fact of the appointment, shall be ineffective. xxx Based on the foregoing provisions, petitioner argues that respondents appointment became effective on the day of her appointment but it subsequently ceased to be so when the appointing authority did not submit her appointment to the CSC for attestation within 30 days. Petitioner is wrong. The real issue in this case is whether the deliberate failure of the appointing authority (or other responsible officials) to submit respondents appointment paper to the CSC within 30 days from its issuance made her appointment ineffective and incomplete. Substantial reasons dictate that it did not. Before discussing this issue, however, it must be brought to mind that CSC resolution dated November 29, 2005 recalling petitioners appointment and approving that of respondent has long become final and executory. Remedy to Assail CSC Decision or Resolution Sections 16 and 18, Rule VI of the Omnibus Rules provide the proper remedy to assail a CSC decision or resolution: Section 16. An employee who is still not satisfied with the decision of the [Merit System Protection Board] may appeal to the [CSC] within fifteen days from receipt of the decision.

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The decision of the [CSC] is final and executory if no petition for reconsideration is filed within fifteen days from receipt thereof. xxx xxx xxx

Section 18. Failure to file a protest, appeal, petition for reconsideration or petition for review within the prescribed period shall be deemed a waiver of such right and shall render the subject action/decision final and executory. (Emphasis supplied) In this case, petitioner did not file a petition for reconsideration of the CSC resolution dated November 29, 2005 before filing a petition for review in the CA. Such fatal procedural lapse on petitioners part allowed the CSC resolution dated November 29, 2005 to become final and executory.17 Hence, for all intents and purposes, the CSC resolution dated November 29, 2005 has become immutable and can no longer be amended or modified.18 A final and definitive judgment can no longer be changed, revised, amended or reversed.19 Thus, in praying for the reversal of the assailed Court of Appeals decision which affirmed the final and executory CSC resolution dated November 29, 2005, petitioner would want the Court to reverse a final and executory judgment and disregard the doctrine of immutability of final judgments. True, a dissatisfied employee of the civil service is not preempted from availing of remedies other than those provided in Section 18 of the Omnibus Rules. This is precisely the purpose of Rule 43 of the Rules of Court, which provides for the filing of a petition for review as a remedy to challenge the decisions of the CSC. While Section 18 of the Omnibus Rules does not supplant the mode of appeal under Rule 43, we cannot disregard Section 16 of the Omnibus Rules, which requires that a petition for reconsideration should be filed, otherwise, the CSC decision will become final and executory, viz.: The decision of the [CSC] is final and executory if no petition for reconsideration is filed within fifteen days from receipt thereof. 1avvphi1 Note that the foregoing provision is a specific remedy as against CSC decisions involving its administrativefunction, that is, on matters involving "appointments, whether original or promotional, to positions in the civil service,"20 as opposed to its quasijudicial function where it adjudicates the rights of persons before it, in accordance with the standards laid down by the law.21 The doctrine of exhaustion of administrative remedies requires that, for reasons of law, comity and convenience, where the enabling statute indicates a procedure for administrative review and provides a system of administrative appeal or reconsideration, the courts will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum.22 In Orosa v. Roa,23 the Court ruled that if an appeal or remedy obtains or is available within the administrative machinery, this should be resorted to before resort can be made to the courts.24 While the doctrine of exhaustion of administrative remedies is subject to certain exceptions,25 these are not present in this case. Thus, absent any definitive ruling that the second paragraph of Section 16 is not mandatory and the filing of a petition for reconsideration may be dispensed with, then the Court must adhere to the dictates of Section 16 of the Omnibus Rules. Moreover, even in its substantive aspect, the petition is bereft of merit. Section 9(h) of PD 807 Already Amended by Section 12 Book V of EO 292 It is incorrect to interpret Section 9(h) of Presidential Decree (PD) 807 as requiring that an appointment must be submitted by the appointing authority to the CSC within 30 days from issuance, otherwise, the appointment would become ineffective. Such interpretation fails to appreciate the relevant part of Section 9(h) which states that " an appointment shall take effect immediately upon issue by the appointing authority if the appointee assumes his duties immediately and shall remain effective until it is disapproved by the [CSC]." This provision is reinforced by Section 1, Rule IV of the Revised Omnibus Rules on Appointments and Other Personnel Actions, which reads:

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Section 1. An appointment issued in accordance with pertinent laws and rules shall take effect immediately upon its issuance by the appointing authority, and if the appointee has assumed the duties of the position, he shall be entitled to receive his salary at once without awaiting the approval of his appointment by the Commission. The appointment shall remain effective until disapproved by the Commission. x x x (Emphasis supplied) More importantly, Section 12, Book V of EO 292 amended Section 9(h) of PD 807 by deleting the requirement that all appointments subject to CSC approval be submitted to it within 30 days. Section 12 of EO 292 provides: Sec. 12. Powers and Functions. - The Commission shall have the following powers and functions: xxx xxx xxx

(14) Take appropriate action on all appointments and other personnel matters in the Civil Service, including extension of Service beyond retirement age; (15) Inspect and audit the personnel actions and programs of the departments, agencies, bureaus, offices, local government units and other instrumentalities of the government including government -owned or controlled corporations; conduct periodic review of the decisions and actions of offices or officials to whom authority has been delegated by the Commission as well as the conduct of the officials and the employees in these offices and apply appropriate sanctions whenever necessary. As a rule, an amendment by the deletion of certain words or phrases indicates an intention to change its meaning.26 It is presumed that the deletion would not have been made had there been no intention to effect a change in the meaning of the law or rule.27 The word, phrase or sentence excised should accordingly be considered inoperative.28 The dissent refuses to recognize the amendment of Section 9(h) of PD 807 by EO 292 but rather finds the requirement of submission of appointments within 30 days not inconsistent with the authority of the CSC to take appropriate action on all appointments and other personnel matters. However, the intention to amend by deletion is unmistakable not only in the operational meaning of EO 292 but in its legislative history as well. PD 807 and EO 292 are not inconsistent insofar as they require CSC action on appointments to the civil service. This is evident from the recognition accorded by EO 292, specifically under Section 12 (14) and (15) thereof, to the involvement of the CSC in all personnel actions and programs of the government. However, while a restrictive period of 30 days within which appointments must be submitted to the CSC is imposed under the last sentence of Section 9(h) of PD 807, none was adopted by Section 12 (14) and (15) of EO 292. Rather, provisions subsequent to Section 12 merely state that the CSC (and its liaison staff in various departments and agencies) shallperiodically monitor, inspect and audit personnel actions.29 Moreover, under Section 9(h) of PD 807, appointments not submitted within 30 days to the CSC become ineffective, no such specific adverse effect is contemplated under Section 12 (14) and (15) of EO 292. Certainly, the two provisions are materially inconsistent with each other. And to insist on reconciling them by restoring the restrictive period and punitive effect of Section 9(h) of PD 807, which EO 292 deliberately discarded, would be to rewrite the law by mere judicial interpretation.30 Not even the historical development of civil service laws can justify the retention of such restrictive provisions. Public Law No. 5,31 the law formally establishing a civil service system, merely directed that all heads of offices notify the Philippine Civil Service Board "in writing without delay of all appointments x x x made in the classified service."32 The Revised Administrative Code of 1917 was even less stringent as approval by the Director of the Civil Service of appointments of temporary and emergency employees was required only when practicable. Finally, Republic Act (RA) 226033 imposed no period within which appointments were attested to by local government treasurers to whom the CSC delegated its authority to act on personnel actions but provided that if within 180 days after receipt of said appointments, the CSC shall not have made any correction or revision, then such appointments shall be deemed to have been properly made. Consequently, it was only under PD 807 that submission of appointments for approval by the CSC was subjected to a 30-day period. That, however, has been lifted and abandoned by EO 292. There being no requirement in EO 292 that appointments should be submitted to the CSC for attestation within 30 days from issuance, it is doubtful by what authority the CSC imposed such condition under Section 11, Rule V of the Omnibus Rules. It certainly cannot restore what EO 292 itself already and deliberately removed. At the very least, that requirement cannot be used as basis to unjustly prejudice respondent.

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Under the facts obtaining in this case, respondent promptly assumed her duties as Administrative Officer II when her appointment was issued by the appointing authority. Thus, her appointment took effect immediately and remained effective until disapproved by the CSC.34 Respondents appointment was never disapproved by the CSC. In fact, the CSC was deprived of the opportunity to act promptly as it was wrongly prevented from doing so. More importantly, the CSC subsequently approved respondents appointment and recalled that of petitioner, which recall has already become final and immutable. Second, it is undisputed that respondents appointment was not submitted to the CSC, not through her own fault but because of Human Resource Management Officer I Ma. Teresa U. Diazs unjustified refusal to sign it on the feigned and fallacious ground that respondents position description form had not been duly signed by School Principal Dr. Leticia B. Gonzales.35 Indeed, the CSC even sanctioned Diaz for her failure to act in the required manner.36 Similarly, the Ombudsman found both City Schools Division Superintendent Ma. Amy O. Oyardo and Gonzales administratively liable and suspended them for three months for willfully withholding information from respondent on the status of her appointment. xxx xxx xxx

All along, [respondent] was made to believe that her appointment was in order. During the same period, respondent Gonzales, with respondent Oyardos knowledge, indifferently allowed [respondent] to plea for the signing of her [position description form], when they could have easily apprised [respondent] about the revocation/withdrawal of her appointment. Worse, when [respondent] informed Oyardo on 25 June 2003 about her assumption of office as [Administrative Officer II], the latter directed [respondent] to go back to her post as Teacher I on the ground that [respondent] had not been issued an attested appointment as [Administrative Officer II], even when [Oyardo] knew very well that [respondents] appointment could not be processed with th e CSC because of her order to re-evaluate the applicants. This act by [Oyardo] is a mockery of the trust reposed upon her by [respondent], who, then in the state of quandary, specifically sought [Oyardos] advice on what to do with her appointment, in the belief that her superior could enlighten her on the matter. It was only on 02 July 2003 when [Gonzales], in her letter, first made reference to a re-ranking of the applicants when [respondent] learned about the recall by [Oyardo] of her appointment. At that time, the thirty-day period within which to submit her appointment to the CSC has lapsed. [Oyardos] and Gonzales act of withholding information about the real status of [respondents] appointment unjustly deprived her of pursuing whatever legal remedies available to her at that time to protect her interest.37 Considering these willful and deliberate acts of the co-conspirators Diaz, Oyardo and Gonzales that caused undue prejudice to respondent, the Court cannot look the other way and make respondent suffer the malicious consequences of Gonzaless and Oyardos malfeasance. Otherwise, the Court would be recognizing a result that is unconscionable and unjust by effectively validating the following inequities: respondent, who was vigilantly following up her appointment paper, was left to hang and dry; to add insult to injury, not long after Oyardo advised her to return to her teaching position, she (Oyardo) appointed petitioner in respondents stead. The obvious misgiving that comes to mind is why Gonzales and Oyardo were able to promptly process petitioners appointment and transmit the same to the CSC for attestation when they could not do so for respondent. There is no doubt that office politics was moving behind the scenes. In effect, Gonzales and Oyardos scheming and plotting unduly deprived respondent of the professional advancement she deserved. While public office is not property to which one may acquire a vested right, it is nevertheless a protected right.38 It cannot be overemphasized that respondents appointment became effective upon its issuance by the appointing authority and it remained effective until disapproved by the CSC (if at all it ever was). Disregarding this rule and putting undue importance on the provision requiring the submission of the appointment to the CSC within 30 days will reward wrongdoing in the appointment process of public officials and employees. It will open the door for scheming officials to block the completion and implementation of an appointment and render it ineffective by the simple expedient of not submitting the appointment paper to the CSC. As indubitably shown in this case, even respondents vigilance could not guard against the malice and grave abuse of discretion of her superiors. There is no dispute that the approval of the CSC is a legal requirement to complete the appointment. Under settled jurisprudence, the appointee acquires a vested legal right to the position or office pursuant to this completed appointment.39 Respondents appointment was in fact already approved by the CSC with finality.

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The purpose of the requirement to submit the appointment to the CSC is for the latter to approve or disapprove such appointment depending on whether the appointee possesses the appropriate eligibility or required qualifications and whether the laws and rules pertinent to the process of appointment have been followed.40 With this in mind, respondents appointment should all the more be deemed valid. Respondents papers were in order. What was sought from her (the position description form duly signed by Gonzales) was not even a prerequisite before her appointment papers could be forwarded to the CSC. More significantly, respondent was qualified for the position. Thus, as stated by the CA: The evidence also reveals compliance with the procedures that should be observed in the selection process for the vacant position of Administrative Officer II and the issuance of the appointment to the respondent: the vacancy for the said position was published on February 28, 2003; the Personnel Selection Board of Dep-Ed Division of Tabaco City conducted a screening of the applicants, which included the respondent and the petitioner; the respondents qualifications met the minimum qualifications for the position of Administrative Officer II provided by the CSC. She therefore qualified for permanent appointment.41 There is no doubt that, had the appointing authority only submitted respondents appointment to the CSC within the said 30 days from its issuance, the CSC would (and could ) have approved it. In fact, when the CSC was later apprised of respondents prior appointment when she protested petitioners subsequent appointment, it was respondents appointment which the CSC approved. Petitioners appointment was recalled. These points were never rebutted as petitioner gave undue emphasis to the non-attestation by the CSC of respondents appointment, without any regard for the fact that the CSC actually approved respondents appointment. Third, the Court is urged to overlook the injustice done to respondent by citing Favis v. Rupisan42 and Tomali v. Civil Service Commission.43 However, reliance on Favis is misplaced. In Favis, the issue pertains to the necessity of the CSC approval, not the submission of the appointment to the CSC within 30 days from issuance. Moreover, unlike Favis where there was an apparent lack of effort to procure the approval of the CSC, respondent in this case was resolute in following up her appointment papers. Thus, despite Favis having assumed the responsibilities of PVTA Assistant General Manager for almost two years, the Court affirmed her removal, ruling that: The tolerance, acquiescence or mistake of the proper officials, resulting in the non-observance of the pertinent rules on the matter does not render the legal requirement, on the necessity of approval by the Commissioner of Civil Service of appointments, ineffective and unenforceable.44 (Emphasis supplied) Taken in its entirety, this case shows that the lack of CSC approval was not due to any negligence on respondents part. Neither was it due to the "tolerance, acquiescence or mistake of the proper officials." Rather, the underhanded machinations of Gonzales and Oyardo, as well as the gullibility of Diaz, were the major reasons why respondents appointment was not even forwarded to the CSC. Tomali, likewise, is not applicable. The facts are completely different. In Tomali, petitioner Tomalis appointment was not approved by the CSC due to the belated transmittal thereof to the latter. The Court, citing Favis, ruled that the appointees failure to secure the CSCs approval within the 30-day period rendered her appointment ineffective. It quoted the Merit Systems Protection Boards finding that "there is no showing that the non-submission was motivated by bad faith, spite, malice or at least attributed to the fault of the newly installed [Office of Muslim Affairs] Executive Director." The Court observed: Petitioner herself would not appear to be all that blameless. She assumed the position four months after her appointment was issued or months after that appointment had already lapsed or had become ineffective by operation of law. Petitioner's appointment was issued on 01 July 1990, but it was only on 31 May 1991 that it was submitted to the CSC, a fact which she knew, should have known or should have at least verified considering the relatively long interval of time between the date of her appointment and the date of her assumption to office.45 The Court also found that "[t]here (was) nothing on record to convince us that the new OMA Director (had) unjustly favored private respondent nor (had) exercised his power of appointment in an arbitrary, whimsical or despotic manner."46

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The peculiar circumstances in Tomali are definitely not present here. As a matter of fact, the situation was exactly the opposite. As we have repeatedly stressed, respondent was not remiss in zealously following up the status of her appointment. It cannot be reasonably claimed that the failure to submit respondents appointment to the CSC was due to her own fault. The culpability lay in the manner the appointing officials exercised their power with arbitrariness, whim and despotism. The whole scheme was intended to favor another applicant. Therefore, the lack of CSC approval in Favis and Tomali should be taken only in that light and not overly stretched to cover any and all similar cases involving the 30-day rule. Certainly, the CSC approval cannot be done away with. However, an innocent appointee like the respondent should not be penalized if her papers (which were in the custody and control of others who, it turned out, were all scheming against her) did not reach the CSC on time. After all, her appointment was subsequently approved by the CSC anyway. Under Article 1186 of the Civil Code, "[t]he condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment." Applying this to the appointment process in the civil service, unless the appointee himself is negligent in following up the submission of his appointment to the CSC for approval, he should not be prejudiced by any willful act done in bad faith by the appointing authority to prevent the timely submission of his appointment to the CSC. While it may be argued that the submission of respondents appointment to the CSC within 30 days was one of the conditions for the approval of respondents appointment, however, deliberately and with bad faith, the officials responsible for the submission of respondents appointment to the CSC prevented the fulfillment of the said condition. Thus, the said condition should be deemed fulfilled. The Court has already had the occasion to rule that an appointment remains valid in certain instances despite non-compliance of the proper officials with the pertinent CSC rules. In Civil Service Commission v. Joson, Jr.,47 the CSC challenged the validity of the appointment of Ong on the ground that, among others, it was not reported in the July 1995 Report of Personnel Action (ROPA), thus making such appointment ineffective. The subject rule provided that an "appointment issued within the month but not listed in the ROPA for the said month shall become ineffective thirty days from issuance." Rejecting the CSCs contention , the Court held that there was a legitimate justification for such delayed observance of the rule: We find the respondent's justification for the failure of the POEA to include Ong's appointment in its ROPA for July 1995 as required by CSC Memorandum Circular No. 27, Series of 1994 to be in order. The records show that the [Philippine Overseas Employment Administration (POEA)] did not include the contractual appointment of Ong in its July ROPA because its request for exemption from the educational requisite for confidential staff members provided in [Memorandum Circular] No. 38 had yet been resolved by the CSC. The resolution of the petitioner granting such request was received only in November, 1995. The POEA, thereafter, reported the appointment in its November, 1995 ROPA.48 The Court reached the same conclusion in the recent case of Chavez v. Ronidel49 where there was a similar inaction from the responsible officials which resulted in non-compliance with the requirement: Lastly, we agree with the appellate court that respondent's appointment could not be invalidated solely because of [Presidential Commission for the Urban Poors (PCUPs)] failure to submit two copies of the ROPA as required by CSC Resolution No. 97368. xxxx xxx xxx xxx

We quote with approval the appellate court's ratiocination in this wise: To our minds, however, the invalidation of the [respondent's] appointment based on this sole technical ground is unwarranted, if not harsh and arbitrary, considering the factual milieu of this case . For one, it is not the [respondent's] duty to comply with the requirement of the submission of the ROPA and the certified true copies of her appointment to [the Civil Service Commission Field Office or] CSCFO within the period stated in the aforequoted CSC Resolution. The said resolution categorically provides that it is the PCUP, and not the appointee as in the case of the [respondent] here, which is required to comply with the said reportorial requirements. Moreover, it bears pointing out that only a few days after the [petitioner] assumed his new post as PCUP Chairman, he directed the PCUP to hold the processing of [respondent's] appointment papers in abeyance, until such time that an assessment thereto is officially released from his office. Unfortunately, up to this very day, the [respondent] is still defending her right to enjoy her

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promotional appointment as DMO V. Naturally, her appointment failed to comply with the PCUP's reportorial requirements under CSC Resolution No. 97-3685precisely because of the [petitioner's] inaction to the same . We believe that the factual circumstances of this case calls for the application of equity. To our minds, the invalidation of the [respondent's] appointment due to a procedural lapse which is undoubtedly beyond her control, and certainly not of her own making but that of the [petitioner], justifies the relaxation of the provisions of CSC Board Resolution No. 97-3685, pars. 6,7 and 8. Hence, her appointment must be upheld based on equitable considerations, and that the non-submission of the ROPA and the certified true copies of her appointment to the CSCFO within the period stated in the aforequoted CSC Resolution should not work to her damage and prejudice. Besides, the [respondent] could not at all be faulted for negligence as she exerted all the necessary vigilance and efforts to reap the blessings of a work promotion. Thus, We cannot simply ignore her plight. She has fought hard enough to claim what is rightfully hers and, as a matter of simple justice, good conscience, and equity, We should not allow Ourselves to prolong her agony. All told, We hold that the [respondent's] appointment is valid, notwithstanding the aforecited procedural lapse on the part of PCUP which obviously was the own making of herein [petitioner]. (Emphasis supplied) Respondent deserves the same sympathy from the Court because there was also a telling reason behind the non-submission of her appointment paper within the 30-day period. The relevance of Joson and Chavez to this case cannot be simply glossed over. While the agencies concerned in those cases were accredited agencies of the CSC which could take final action on the appointments, that is not the case here. Thus, any such differentiation is unnecessary. It did not even factor in the Courts disposition of the issue in Joson and Chavez. What is crucial is that, in those cases, the Court upheld the appointment despite the non-compliance with a CSC rule because (1) there were valid justifications for the lapse; (2) the non-compliance was beyond the control of the appointee and (3) the appointee was not negligent. All these reasons are present in this case, thus, there is no basis in saying that the afore-cited cases are not applicable here. Similar things merit similar treatment.1avvphi1 Fourth, in appointing petitioner, the appointing authority effectively revoked the previous appointment of respondent and usurped the power of the CSC to withdraw or revoke an appointment that had already been accepted by the appointee. It is the CSC, not the appointing authority, which has this power.50 This is clearly provided in Section 9, Rule V of the Omnibus Rules: Section 9. An appointment accepted by the appointee cannot be withdrawn or revoked by the appointing authority and shall remain in force and effect until disapproved by the [CSC] . xxxx (Emphasis supplied) Thus, the Court ruled in De Rama v. Court of Appeals51 that it is the CSC which is authorized to recall an appointment initially approved when such appointment and approval are proven to be in disregard of applicable provisions of the civil service law and regulations. Petitioner seeks to inflexibly impose the condition of submission of the appointment to the CSC by the appointing authority within 30 days from issuance, that is, regardless of the negligence/diligence of the appointee and the bad faith/good faith of the appointing authority to ensure compliance with the condition. However, such stance would place the appointee at the mercy and whim of the appointing authority even after a valid appointment has been made. For although the appointing authority may not recall an appointment accepted by the appointee, he or she can still achieve the same result through underhanded machinations that impedes or prevents the transmittal of the appointment to the CSC. In other words, the insistence on a strict application of the condition regarding the submission of the appointment to the CSC within 30 days, would give the appointing authority the power to do indirectly what he or she cannot do directly. An administrative rule that is of doubtful basis will not only produce unjust consequences but also corrupt the appointment process. Obviously, such undesirable end result could not have been the intention of the law. The power to revoke an earlier appointment through the appointment of another may not be conceded to the appointing authority. Such position is not only contrary to Section 9, Rule V and Section 1, Rule IV of the Omnibus Rules. It is also a dangerous reading of the law because it unduly expands the discretion given to the appointing authority and removes the checks and balances that will rein in any abuse that may take place. The Court cannot countenance such erroneous and perilous interpretation of the law.

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Accordingly, petitioners subsequent appointment was void. There can be no appointment to a non -vacant position. The incumbent must first be legally removed, or her appointment validly terminated, before another can be appointed to succeed her.52 In sum, the appointment of petitioner was inconsistent with the law and well-established jurisprudence. It not only disregarded the doctrine of immutability of final judgments but also unduly concentrated on a narrow portion of the provision of law, overlooking the greater part of the provision and other related rules and using a legal doctrine rigidly and out of context. Its effect was to perpetuate an injustice. WHEREFORE, the petition is hereby DENIED.

REPUBLIC OF THE PHILIPPINES vs. CARLITO LACAP G.R. No. 158253 March 2, 2007 Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court assailing the Decision 1 dated April 28, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 56345 which affirmed with modification the Decision2 of the Regional Trial Court, Branch 41, San Fernando, Pampanga (RTC) in Civil Case No. 10538, granting the complaint for Specific Performance and Damages filed by Carlito Lacap (respondent) against the Republic of the Philippines (petitioner). The factual background of the case is as follows: The District Engineer of Pampanga issued and duly published an "Invitation To Bid" dated January 27, 1992. Respondent, doing business under the name and style Carwin Construction and Construction Supply (Carwin Construction), was pre-qualified together with two other contractors. Since respondent submitted the lowest bid, he was awarded the contract for the concreting of Sitio 5 Bahay Pare.3 On November 4, 1992, a Contract Agreement was executed by respondent and petitioner. 4 On September 25, 1992, District Engineer Rafael S. Ponio issued a Notice to Proceed with the concreting of Sitio 5 Bahay Pare.5 Accordingly, respondent undertook the works, made advances for the purchase of the materials and payment for labor costs. 6 On October 29, 1992, personnel of the Office of the District Engineer of San Fernando, Pampanga conducted a final inspection of the project and found it 100% completed in accordance with the approved plans and specifications. Accordingly, the Office of the District Engineer issued Certificates of Final Inspection and Final Acceptance.7 Thereafter, respondent sought to collect payment for the completed project.8 The DPWH prepared the Disbursement Voucher in favor of petitioner.9 However, the DPWH withheld payment from respondent after the District Auditor of the Commission on Audit (COA) disapproved the final release of funds on the ground that the contractors license of respondent had expired at t he time of the execution of the contract. The District Engineer sought the opinion of the DPWH Legal Department on whether the contracts of Carwin Construction for various Mount Pinatubo rehabilitation projects were valid and effective although its contractors license had already expired when the projects were contracted.10 In a Letter-Reply dated September 1, 1993, Cesar D. Mejia, Director III of the DPWH Legal Department opined that since Republic Act No. 4566 (R.A. No. 4566), otherwise known as the Contractors License Law, does not provide that a contract entered into after the license has expired is void and there is no law which expressly prohibits or declares void such contract, the contract is enforceable and payment may be paid, without prejudice to any appropriate administrative liability action that may be imposed on the contractor and the government officials or employees concerned.11 In a Letter dated July 4, 1994, the District Engineer requested clarification from the DPWH Legal Department on whether Carwin Construction should be paid for works accomplished despite an expired contractors license at the time the contracts were executed.12 In a First Indorsement dated July 20, 1994, Cesar D. Mejia, Director III of the Legal Department, recommended that payment should be made to Carwin Construction, reiterating his earlier legal opinion.13 Despite such recommendation for payment, no payment was made to respondent. Thus, on July 3, 1995, respondent filed the complaint for Specific Performance and Damages against petitioner before the RTC.14

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On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed a Motion to Dismiss the complaint on the grounds that the complaint states no cause of action and that the RTC had no jurisdiction over the nature of the action since respondent did not appeal to the COA the decision of the District Auditor to disapprove the claim.15 Following the submission of respondents Opposition to Motion to Dismiss,16 the RTC issued an Order dated March 11, 1996 denying the Motion to Dismiss.17 The OSG filed a Motion for Reconsideration18 but it was likewise denied by the RTC in its Order dated May 23, 1996.19 On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of administrative remedies and the doctrine of non-suability of the State.20 Following trial, the RTC rendered on February 19, 1997 its Decision, the dispositive portion of which reads as follows: WHEREFORE, in view of all the foregoing consideration, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter, thru its District Engineer at Sindalan, San Fernando, Pampanga, to pay the following: a) P457,000.00 representing the contract for the concreting project of Sitio 5 road, Bahay Pare, Candaba, Pampanga plus interest at 12% from demand until fully paid; and b) The costs of suit. SO ORDERED.21 The RTC held that petitioner must be required to pay the contract price since it has accepted the completed project and enjoyed the benefits thereof; to hold otherwise would be to overrun the long standing and consistent pronouncement against enriching oneself at the expense of another.22 Dissatisfied, petitioner filed an appeal with the CA.23 On April 28, 2003, the CA rendered its Decision sustaining the Decision of the RTC. It held that since the case involves the application of the principle of estoppel against the government which is a purely legal question, then the principle of exhaustion of administrative remedies does not apply; that by its actions the government is estopped from questioning the validity and binding effect of the Contract Agreement with the respondent; that denial of payment to respondent on purely technical grounds after successful completion of the project is not countenanced either by justice or equity. The CA rendered herein the assailed Decision dated April 28, 2003, the dispositive portion of which reads: WHEREFORE, the decision of the lower court is hereby AFFIRMED with modification in that the interest shall be six percent (6%) per annum computed from June 21, 1995. SO ORDERED.24 Hence, the present petition on the following ground: THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT HAS NO CAUSE OF ACTION AGAINST PETITIONER, CONSIDERING THAT: (a) RESPONDENT FAILED TO EXHAUST ADMINISTRATIVE REMEDIES; AND (b) IT IS THE COMMISSION ON AUDIT WHICH HAS THE PRIMARY JURISDICTION TO RESOLVE RESPONDENTS MONEY CLAIM AGAINST THE GOVERNMENT.25 Petitioner contends that respondents recourse to judicial action was premature since the proper remedy was to appeal the District Auditors disapproval of payment to the COA, pursuant to Section 48, Presidential Decree No. 1445 (P.D. No. 1445), otherwise known as the Government Auditing Code of the Philippines; that the COA has primary jurisdiction to resolve

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respondents money claim against the government under Section 2(1),26 Article IX of the 1987 Constitution and Section 2627 of P.D. No. 1445; that non-observance of the doctrine of exhaustion of administrative remedies and the principle of primary jurisdiction results in a lack of cause of action. Respondent, on the other hand, in his Memorandum28 limited his discussion to Civil Code provisions relating to human relations. He submits that equity demands that he be paid for the work performed; otherwise, the mandate of the Civil Code provisions relating to human relations would be rendered nugatory if the State itself is allowed to ignore and circumvent the standard of behavior it sets for its inhabitants. The present petition is bereft of merit. The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes.29 The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.30 Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, 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.31 Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;32 (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot;33 (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings.34 Exceptions (c) and (e) are applicable to the present case. Notwithstanding the legal opinions of the DPWH Legal Department rendered in 1993 and 1994 that payment to a contractor with an expired contractors license is proper, respondent remained unpaid for the completed work despite repeated demands. Clearly, there was unreasonable delay and official inaction to the great prejudice of respondent. Furthermore, whether a contractor with an expired license at the time of the execution of its contract is entitled to be paid for completed projects, clearly is a pure question of law. It does not involve an examination of the probative value of the evidence presented by the parties. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts.35Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done.36 The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law. Thus, while it is undisputed that the District Auditor of the COA disapproved respondents claim against the Government, and, under Section 4837 of P.D. No. 1445, the administrative remedy available to respondent is an appeal of the denial of his claim by the District Auditor to the COA itself, the Court holds that, in view of exceptions (c) and (e) narrated above, the complaint for specific performance and damages was not prematurely filed and within the jurisdiction of the RTC to resolve, despite the failure to exhaust administrative remedies. As the Court aptly stated in Rocamora v. RTC-Cebu (Branch VIII):38 The plaintiffs were not supposed to hold their breath and wait until the Commission on Audit and the Ministry of Public Highways had acted on the claims for compensation for the lands appropriated by the government. The road had been completed; the Pope had come and gone; but the plaintiffs had yet to be paid for the properties taken from them. Given this official indifference, which apparently would continue indefinitely, the private respondents had to act to assert and protect their interests.39

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On the question of whether a contractor with an expired license is entitled to be paid for completed projects, Section 35 of R.A. No. 4566 explicitly provides: SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a supervisory capacity of a construction work within the purview of this Act, without first securing a license to engage in the business of contracting in this country; or who shall present or file the license certificate of another, give false evidence of any kind to the Board, or any member thereof in obtaining a certificate or license, impersonate another, or use an expired or revoked certificate or license, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos but not more than five thousand pesos. (Emphasis supplied) The "plain meaning rule" or verba legis in statutory construction is that if the statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation.40 This rule derived from the maxim Index animi sermo est (speech is the index of intention) rests on the valid presumption that the words employed by the legislature in a statute correctly express its intention or will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the words, to have used words advisedly, and to have expressed its intent by use of such words as are found in the statute.41 Verba legis non est recedendum, or from the words of a statute there should be no departure.42 The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts entered into by a contractor whose license had already expired. Nonetheless, such contractor is liable for payment of the fine prescribed therein. Thus, respondent should be paid for the projects he completed. Such payment, however, is without prejudice to the payment of the fine prescribed under the law. Besides, Article 22 of the Civil Code which embodies the maxim Nemo ex alterius incommode debet lecupletari (no man ought to be made rich out of anothers injury) states: Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. This article is part of the chapter of the Civil Code on Human Relations, the provisions of which were formulated as "basic principles to be observed for the rightful relationship between human beings and for the stability of the social order, x x x designed to indicate certain norms that spring from the fountain of good conscience, x x x guides human conduct [that] should run as golden threads through society to the end that law may approach its supreme ideal which is the sway and dominance of justice."43 The rules thereon apply equally well to the Government.44Since respondent had rendered services to the full satisfaction and acceptance by petitioner, then the former should be compensated for them. To allow petitioner to acquire the finished project at no cost would undoubtedly constitute unjust enrichment for the petitioner to the prejudice of respondent. Such unjust enrichment is not allowed by law. WHEREFORE, the present petition is DENIED for lack of merit. The assailed Decision of the Court of Appeals dated April 28, 2003 in CA-G.R. CV No. 56345 is AFFIRMED. No pronouncement as to costs. KHRISTINE REA M. REGINO vs. PANGASINAN COLLEGES OF SCIENCE AND TECHNOLOGY G.R. No. 156109 November 18, 2004 Upon enrolment, students and their school enter upon a reciprocal contract. The students agree to abide by the standards of academic performance and codes of conduct, issued usually in the form of manuals that are distributed to the enrollees at the start of the school term. Further, the school informs them of the itemized fees they are expected to pay. Consequently, it cannot, after the enrolment of a student, vary the terms of the contract. It cannot require fees other than those it specified upon enrolment. The Case Before the Court is a Petition for Review under Rule 45,1 seeking to nullify the July 12, 20022 and the November 22, 20023 Orders of the Regional Trial Court (RTC) of Urdaneta City, Pangasinan (Branch 48) in Civil Case No. U-7541. The decretal portion of the first assailed Order reads:

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"WHEREFORE, the Court GRANTS the instant motion to dismiss for lack of cause of action." 4 The second challenged Order denied petitioner's Motion for Reconsideration. The Facts Petitioner Khristine Rea M. Regino was a first year computer science student at Respondent Pangasinan Colleges of Science and Technology (PCST). Reared in a poor family, Regino went to college mainly through the financial support of her relatives. During the second semester of school year 2001-2002, she enrolled in logic and statistics subjects under Respondents Rachelle A. Gamurot and Elissa Baladad, respectively, as teachers. In February 2002, PCST held a fund raising campaign dubbed the "Rave Party and Dance Revolution," the proceeds of which were to go to the construction of the school's tennis and volleyball courts. Each student was required to pay for two tickets at the price of P100 each. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores; those who refused to pay were denied the opportunity to take the final examinations. Financially strapped and prohibited by her religion from attending dance parties and celebrations, Regino refused to pay for the tickets. On March 14 and March 15, 2002, the scheduled dates of the final examinations in logic and statistics, her teachers -Respondents Rachelle A. Gamurot and Elissa Baladad -- allegedly disallowed her from taking the tests. According to petitioner, Gamurot made her sit out her logic class while her classmates were taking their examinations. The next day, Baladad, after announcing to the entire class that she was not permitting petitioner and another student to take their statistics examinations for failing to pay for their tickets, allegedly ejected them from the classroom. Petitioner's pleas ostensibly went unheeded by Gamurot and Baladad, who unrelentingly defended their positions as compliance with PCST's policy. On April 25, 2002, petitioner filed, as a pauper litigant, a Complaint5 for damages against PCST, Gamurot and Baladad. In her Complaint, she prayed for P500,000 as nominal damages; P500,000 as moral damages; at least P1,000,000 as exemplary damages; P250,000 as actual damages; plus the costs of litigation and attorney's fees. On May 30, 2002, respondents filed a Motion to Dismiss6 on the ground of petitioner's failure to exhaust administrative remedies. According to respondents, the question raised involved the determination of the wisdom of an administrative policy of the PCST; hence, the case should have been initiated before the proper administrative body, the Commission of Higher Education (CHED). In her Comment to respondents' Motion, petitioner argued that prior exhaustion of administrative remedies was unnecessary, because her action was not administrative in nature, but one purely for damages arising from respondents' breach of the laws on human relations. As such, jurisdiction lay with the courts. On July 12, 2002, the RTC dismissed the Complaint for lack of cause of action. Ruling of the Regional Trial Court In granting respondents' Motion to Dismiss, the trial court noted that the instant controversy involved a higher institution of learning, two of its faculty members and one of its students. It added that Section 54 of the Education Act of 1982 vested in the Commission on Higher Education (CHED) the supervision and regulation of tertiary schools. Thus, it ruled that the CHED, not the courts, had jurisdiction over the controversy.7 In its dispositive portion, the assailed Order dismissed the Complaint for "lack of cause of action" without, however, explaining this ground. Aggrieved, petitioner filed the present Petition on pure questions of law.8 Issues In her Memorandum, petitioner raises the following issues for our consideration:

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"Whether or not the principle of exhaustion of administrative remedies applies in a civil action exclusively for damages based on violation of the human relation provisions of the Civil Code, filed by a student against her former school. "Whether or not there is a need for prior declaration of invalidity of a certain school administrative policy by the Commission on Higher Education (CHED) before a former student can successfully maintain an action exclusively for damages in regular courts. "Whether or not the Commission on Higher Education (CHED) has exclusive original jurisdiction over actions for damages based upon violation of the Civil Code provisions on human relations filed by a student against the school." 9 All of the foregoing point to one issue -- whether the doctrine of exhaustion of administrative remedies is applicable. The Court, however, sees a second issue which, though not expressly raised by petitioner, was impliedly contained in her Petition: whether the Complaint stated sufficient cause(s) of action. The Court's Ruling The Petition is meritorious. First Issue: Exhaustion of Administrative Remedies Respondents anchored their Motion to Dismiss on petitioner's alleged failure to exhaust administrative remedies before resorting to the RTC. According to them, the determination of the controversy hinge on the validity, the wisdom and the propriety of PCST's academic policy. Thus, the Complaint should have been lodged in the CHED, the administrative body tasked under Republic Act No. 7722 to implement the state policy to "protect, foster and promote the right of all citizens to affordable quality education at all levels and to take appropriate steps to ensure that education is accessible to all." 10 Petitioner counters that the doctrine finds no relevance to the present case since she is praying for damages, a remedy beyond the domain of the CHED and well within the jurisdiction of the courts.11 Petitioner is correct. First, the doctrine of exhaustion of administrative remedies has no bearing on the present case. In Factoran Jr. v. CA,12 the Court had occasion to elucidate on the rationale behind this doctrine: "The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity, and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given the appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. x x x.13" Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it to allow her to take her final examinations; she was already enrolled in another educational institution. A reversal of the acts complained of would not adequately redress her grievances; under the circumstances, the consequences of respondents' acts could no longer be undone or rectified. Second, exhaustion of administrative remedies is applicable when there is competence on the part of the administrative body to act upon the matter complained of.14 Administrative agencies are not courts; they are neither part of the judicial system, nor are they deemed judicial tribunals.15 Specifically, the CHED does not have the power to award damages.16 Hence, petitioner could not have commenced her case before the Commission. Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is purely legal and well within the jurisdiction of the trial court.17 Petitioner's action for damages inevitably calls for the application and the interpretation of the Civil Code, a function that falls within the jurisdiction of the courts.18 Second Issue:

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Sufficient Causes of Action Stated in the Allegations in the Complaint As a rule, every complaint must sufficiently allege a cause of action; failure to do so warrants its dismissal. 19 A complaint is said to assert a sufficient cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for. Assuming the facts that are alleged to be true, the court should be able to render a valid judgment in accordance with the prayer in the complaint.20 A motion to dismiss based on lack of cause of action hypothetically admits the truth of the alleged facts. In their Motion to Dismiss, respondents did not dispute any of petitioner's allegations, and they admitted that "x x x the crux of plaintiff's cause of action is the determination of whether or not the assessment of P100 per ticket is excessive or oppressive."21 They thereby premised their prayer for dismissal on the Complaint's alleged failure to state a cause of action. Thus, a reexamination of the Complaint is in order. The Complaint contains the following factual allegations: "10. In the second week of February 2002, defendant Rachelle A. Gamurot, in connivance with PCST, forced plaintiff and her classmates to buy or take two tickets each, x x x; "11. Plaintiff and many of her classmates objected to the forced distribution and selling of tickets to them but the said defendant warned them that if they refused [to] take or pay the price of the two tickets they would not be allowed at all to take the final examinations; "12. As if to add insult to injury, defendant Rachelle A. Gamurot bribed students with additional fifty points or so in their test score in her subject just to unjustly influence and compel them into taking the tickets; "13. Despite the students' refusal, they were forced to take the tickets because [of] defendant Rachelle A. Gamurot's coercion and act of intimidation, but still many of them including the plaintiff did not attend the dance party imposed upon them by defendants PCST and Rachelle A. Gamurot; "14. Plaintiff was not able to pay the price of her own two tickets because aside form the fact that she could not afford to pay them it is also against her religious practice as a member of a certain religious congregation to be attending dance parties and celebrations; "15. On March 14, 2002, before defendant Rachelle A. Gamurot gave her class its final examination in the subject 'Logic' she warned that students who had not paid the tickets would not be allowed to participate in the examination, for which threat and intimidation many students were eventually forced to make payments: "16. Because plaintiff could not afford to pay, defendant Rachelle A. Gamurot inhumanly made plaintiff sit out the class but the defendant did not allow her to take her final examination in 'Logic;' "17. On March 15, 2002 just before the giving of the final examination in the subject 'Statistics,' defendant Elissa Baladad, in connivance with defendants Rachelle A. Gamurot and PCST, announced in the classroom that she was not allowing plaintiff and another student to take the examination for their failure and refusal to pay the price of the tickets, and thenceforth she ejected plaintiff and the other student from the classroom; "18. Plaintiff pleaded for a chance to take the examination but all defendants could say was that the prohibition to give the examinations to non-paying students was an administrative decision; "19. Plaintiff has already paid her tuition fees and other obligations in the school; "20. That the above-cited incident was not a first since PCST also did another forced distribution of tickets to its students in the first semester of school year 2001-2002; x x x " 22

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The foregoing allegations show two causes of action; first, breach of contract; and second, liability for tort. Reciprocity of the School-Student Contract In Alcuaz v. PSBA,23 the Court characterized the relationship between the school and the student as a contract, in which "a student, once admitted by the school is considered enrolled for one semester."24 Two years later, in Non v. Dames II,25 the Court modified the "termination of contract theory" in Alcuaz by holding that the contractual relationship between the school and the student is not only semestral in duration, but for the entire period the latter are expected to complete it."26 Except for the variance in the period during which the contractual relationship is considered to subsist, both Alcuaz and Non were unanimous in characterizing the school-student relationship as contractual in nature. The school-student relationship is also reciprocal. Thus, it has consequences appurtenant to and inherent in all contracts of such kind -- it gives rise to bilateral or reciprocal rights and obligations. The school undertakes to provide students with education sufficient to enable them to pursue higher education or a profession. On the other hand, the students agree to abide by the academic requirements of the school and to observe its rules and regulations.27 The terms of the school-student contract are defined at the moment of its inception -- upon enrolment of the student. Standards of academic performance and the code of behavior and discipline are usually set forth in manuals distributed to new students at the start of every school year. Further, schools inform prospective enrollees the amount of fees and the terms of payment. In practice, students are normally required to make a down payment upon enrollment, with the balance to be paid before every preliminary, midterm and final examination. Their failure to pay their financial obligation is regarded as a valid ground for the school to deny them the opportunity to take these examinations. The foregoing practice does not merely ensure compliance with financial obligations; it also underlines the importance of major examinations. Failure to take a major examination is usually fatal to the students' promotion to the next grade or to graduation. Examination results form a significant basis for their final grades. These tests are usually a primary and an indispensable requisite to their elevation to the next educational level and, ultimately, to their completion of a course. Education is not a measurable commodity. It is not possible to determine who is "better educated" than another. Nevertheless, a student's grades are an accepted approximation of what would otherwise be an intangible product of countless hours of study. The importance of grades cannot be discounted in a setting where education is generally the gate pass to employment opportunities and better life; such grades are often the means by which a prospective employer measures whether a job applicant has acquired the necessary tools or skills for a particular profession or trade. Thus, students expect that upon their payment of tuition fees, satisfaction of the set academic standards, completion of academic requirements and observance of school rules and regulations, the school would reward them by recognizing their "completion" of the course enrolled in. The obligation on the part of the school has been established in Magtibay v. Garcia,28 Licup v. University of San Carlos29 and Ateneo de Manila University v. Garcia,30 in which the Court held that, barring any violation of the rules on the part of the students, an institution of higher learning has a contractual obligation to afford its students a fair opportunity to complete the course they seek to pursue. We recognize the need of a school to fund its facilities and to meet astronomical operating costs; this is a reality in running it. Crystal v. Cebu International School31 upheld the imposition by respondent school of a "land purchase deposit" in the amount of P50,000 per student to be used for the "purchase of a piece of land and for the construction of new buildings and other facilities x x x which the school would transfer [to] and occupy after the expiration of its lease contract over its present site." The amount was refundable after the student graduated or left the school. After noting that the imposition of the fee was made only after prior consultation and approval by the parents of the students, the Court held that the school committed no actionable wrong in refusing to admit the children of the petitioners therein for their failure to pay the "land purchase deposit" and the 2.5 percent monthly surcharge thereon.

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In the present case, PCST imposed the assailed revenue-raising measure belatedly, in the middle of the semester. It exacted the dance party fee as a condition for the students' taking the final examinations, and ultimately for its recognition of their ability to finish a course. The fee, however, was not part of the school-student contract entered into at the start of the school year. Hence, it could not be unilaterally imposed to the prejudice of the enrollees. Such contract is by no means an ordinary one. In Non, we stressed that the school-student contract "is imbued with public interest, considering the high priority given by the Constitution to education and the grant to the State of supervisory and regulatory powers over all educational institutions."32 Sections 5 (1) and (3) of Article XIV of the 1987 Constitution provide: "The State shall protect and promote the right of all citizens to quality education at all levels and shall take appropriate steps to make such declaration accessible to all. "Every student has a right to select a profession or course of study, subject to fair, reasonable and equitable admission and academic requirements." The same state policy resonates in Section 9(2) of BP 232, otherwise known as the Education Act of 1982: "Section 9. Rights of Students in School. In addition to other rights, and subject to the limitations prescribed by law and regulations, students and pupils in all schools shall enjoy the following rights: xxx xxx xxx

(2) The right to freely choose their field of study subject to existing curricula and to continue their course therein up to graduation, except in cases of academic deficiency, or violation of disciplinary regulations." Liability for Tort In her Complaint, petitioner also charged that private respondents "inhumanly punish students x x x by reason only of their poverty, religious practice or lowly station in life, which inculcated upon [petitioner] the feelings of guilt, disgrace and unworthiness;"33 as a result of such punishment, she was allegedly unable to finish any of her subjects for the second semester of that school year and had to lag behind in her studies by a full year. The acts of respondents supposedly caused her extreme humiliation, mental agony and "demoralization of unimaginable proportions" in violation of Articles 19, 21 and 26 of the Civil Code. These provisions of the law state thus: "Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith." "Article 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." "Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief: (1) Prying into the privacy of another's residence; (2) Meddling with or disturbing the private life or family relations of another; (3) Intriguing to cause another to be alienated from his friends; (4) Vexing or humiliating another on account of his beliefs, lowly station in life, place of birth, physical defect, or other personal condition."

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ADMINISTRATIVE LAW

JUDICIAL RECOURSE AND REVIEW

PUP-COLLEGE OF LAW

Generally, liability for tort arises only between parties not otherwise bound by a contract. An academic institution, however, may be held liable for tort even if it has an existing contract with its students, since the act that violated the contract may also be a tort. We ruled thus in PSBA vs. CA,34 from which we quote: "x x x A perusal of Article 2176 [of the Civil Code] shows that obligations arising from quasi-delicts or tort, also known as extra-contractual obligations, arise only between parties not otherwise bound by contract, whether express or implied. However, this impression has not prevented this Court from determining the existence of a tort even when there obtains a contract. In Air France v. Carrascoso (124 Phil. 722), the private respondent was awarded damages for his unwarranted expulsion from a first-class seat aboard the petitioner airline. It is noted, however, that the Court referred to the petitioner-airline's liability as one arising from tort, not one arising form a contract of carriage. In effect, Air France is authority for the view that liability from tort may exist even if there is a contract, for the act that breaks the contract may be also a tort. x x x This view was not all that revolutionary, for even as early as 1918, this Court was already of a similar mind. In Cangco v. Manila Railroad (38 Phil. 780), Mr. Justice Fisher elucidated thus: 'x x x. When such a contractual relation exists the obligor may break the contract under such conditions that the same act which constitutes a breach of the contract would have constituted the source of an extra-contractual obligation had no contract existed between the parties.' "Immediately what comes to mind is the chapter of the Civil Code on Human Relations, particularly Article 21 x x x." 35 Academic Freedom In their Memorandum, respondents harp on their right to "academic freedom." We are not impressed. According to present jurisprudence, academic freedom encompasses the independence of an academic institution to determine for itself (1) who may teach, (2) what may be taught, (3) how it shall teach, and (4) who may be admitted to study.36 In Garcia v. the Faculty Admission Committee, Loyola School of Theology,37 the Court upheld the respondent therein when it denied a female student's admission to theological studies in a seminary for prospective priests. The Court defined the freedom of an academic institution thus: "to decide for itself aims and objectives and how best to attain them x x x free from outside coercion or interference save possibly when overriding public welfare calls for some restraint."38 In Tangonan v. Pao,39 the Court upheld, in the name of academic freedom, the right of the school to refuse readmission of a nursing student who had been enrolled on probation, and who had failed her nursing subjects. These instances notwithstanding, the Court has emphasized that once a school has, in the name of academic freedom, set its standards, these should be meticulously observed and should not be used to discriminate against certain students.40 After accepting them upon enrollment, the school cannot renege on its contractual obligation on grounds other than those made known to, and accepted by, students at the start of the school year. In sum, the Court holds that the Complaint alleges sufficient causes of action against respondents, and that it should not have been summarily dismissed. Needless to say, the Court is not holding respondents liable for the acts complained of. That will have to be ruled upon in due course by the court a quo. WHEREFORE, the Petition is hereby GRANTED, and the assailed Orders REVERSED. The trial court is DIRECTED to reinstate the Complaint and, with all deliberate speed, to continue the proceedings in Civil Case No. U-7541. No costs.

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