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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
January 23, 1918
G.R. No. 13283
CASIMIRO BAYANI, petitioner-appellant,
vs.
THE INSULAR COLLECTOR OF CUSTOMS, respondent-appellee.
Chas. E. Tenney for appellant.
Acting Attorney-General Paredes for appellee.
JOHNSON, J.:
It appears from the record that the appellant arrived at Manila, on the 21st day of August, 1917,
on the steamship Loongsang and requested permission to enter the Philippine Islands upon the
ground that he was a citizen thereof, having been born in said Islands, His right to enter was
inquired into by a board of special inquiry. At the conclusion of said inquiry his request to enter
was denied. An appeal was taken to the Collector of Customs and the decision of the board of
inquiry was taken by him confirmed. Thereupon a writ of habeas corpus was petitioned for in
the Court of First Instance of Manila. At the conclusion of the hearing on said petition the writ
was denied and the present appeal was perfected.
The appellant now alleges that he has not been given a full, free, and fair hearing before the
board of special inquiry, and that the order denying him the right to enter the Philippine Islands
should be set aside and that he should be granted a new trial on the merits. The appellant now
alleges that the record of the proceedings before the board of special inquiry shows that the
said board had abused its authority in not giving him full, free, and fair hearing; that it appears
from the record that the said hearing was in great part made up of leading and misleading
questions and untrue statements, calculated to confuse the witnesses and not adapted to
discover the real merits of the petitioner's rights; that the board failed to present questions and
refused to the attorney for the appellant to present questions which would bring to light the real,
material, and important facts justifying his right to enter the Philippine Islands; that the Court of
first Instance failed to find from the record that the board of special inquiry had abused its
authority, power and discretion in refusing the appellant permission to land in the Philippine
Islands, and that the decision of said board was arbitrary, frivolous and capricious and was not
sustained by the evidence.
In reply to said alleged errors the Attorney-General Quintin Paredes, admits that appellant has
not been accorded a free, full, and fair hearing and recommended that he be given a new trial.
The Attorney-General in his brief said:
The issue raised by this appeal is whether the record shows abuse of discretion and authority
on the part of the board of special inquiry which heard this case. Counsel for appellant directs
attention to some very illadvised action on the part of members of the board in their examination
of the witnesses in this case. The misstatement of material facts to witnesses (rec., pp. 10 and
12) and the barring of a witness before she had concluded her testimony (rec., p. 12)
unquestionably are serious irregularities. And in the opinion of the undersigned, this petitioner
was not accorded such a hearing as the law contemplates and assured immigrants. It is
recommended that the record be remanded to the immigration officials with instructions to grant
this applicant a new hearing.
Respectfully submitted.

While the hearings before the board of special inquiry are summary in that no special pleadings,
etc., are required, they are, nevertheless, judicial in character, and the persons tried by such a
board are entitled to a full, free, and fair hearing just as in any other cases where the rights of
individuals are being inquired into. Such individuals have the right to be represented by an
attorney, if they so desire. They have a right to present witnesses to support their request to
enter. Their attorney has a right to present whatever pertinent questions he may desire to such
witnesses, as will demonstrate or will tend to show the right of the immigrant to enter the
country. (Edwards vs. McCoy, 22 Phil. Rep., 598; Ang Eng Chong vs. Collector of Customs, 23
Phil. Rep., 614; Go Kiam vs. Collector of Customs, R. G. No. 7099; [[1]] Loo Bun Hian vs.
Collector of Customs, R. G. No. 7074;[[1]]Lim Yiong vs. Collector of Customs, 36 Phil. Rep.,
424; Ex parte Lam Pui, 217 Fed. Rep., 456; Jouras vs. Allen, 222 Fed. Rep., 756; U. S. vs.
Ruiz, 23 Fed. Rep., 431 [?]; Ex parte Petkos, 212 Fed. Rep., 275; Ex parte Ung King Ieng, 213
Fed. Rep., 119; Lim Ching vs. Collector of Customs, 33 Phil. Rep., 186; Ex parte Gregory, 210
Fed. Rep., 680; Louie Dai vs. U. S., 238 Fed. Rep., 68, 74; Ex parte Lee Dung Moo, 230 Fed.
rep., 746; Ex parte Tom Toy Tin, 230 Fed. Rep., 747;Ex parte Chin Loy You, 223 Fed. Rep.,
883; Ex parte Wong Foo, 230 Fed. Rep., 534.)
The decisions of the customs administrative officers are final in cases like the present, unless
there has been an abuse of the power and discretion vested in them. The courts, however, do
not hesitate to review the decision of such administrative officers whenever it is alleged and
shown that they have grossly abused the power and discretion conferred upon them, or where
they acted in open violation of the law. (Ko Poco vs. Mccoy, 10 Phil. Rep., 442; Chin Yow vs. U.
S., 208 U. S. 8, 11; U. S. vs. Ju Toy, 198 U. S., 253; Ex parte Lung Foot, 174 Fed. Rep.,
70; Lorenzo vs. McCoy, 15 Phil. Rep., 559;Lim Yiong vs. Collector of Customs, 36 Phil. Rep.,
424.)
An alien seeking to enter territory of the United States, even though the hearing is summary, is
entitled to a free, full, and fair hearing before he is denied the right to enter. The right to a
hearing includes the right to have the evidence considered by the board. He is not only entitled
to have the evidence which he presents considered, but he is entitled to present all of the
evidence which he has and which is germane to the question of his right to enter. While the
board of special inquiry is not technically a judicial body and the procedure is not technically
judicial, nor are the proceedings defined by any particular rules or statutes, nevertheless, the
board is required, under the procedure which it adopts, to give the immigrant or the alien an
opportunity to show by proof that his request should be granted. (Edwards vs. McCoy, 22 Phil.
Rep., 598.)
It appears from the record that all of the witnesses presented by the appellant were people of
humble origin and very ignorant. They were not accustomed, perhaps, to scenes of judicial
proceedings. They were therefore, naturally, under the strain born of timidity and known
ignorance. For that reason they were easily excited and intimidated. The board should have
allayed their fears and put them, as far as possible, at their ease, at least to the point of
indicating to them that they were under the protection, so long as they obey the law, of judicial
authority. This the board did not do. Upon the contrary board, with the evident intent to confuse
and to unduly excite the witnesses, made statements to them which were positively untrue and
unsupported by any part of the record. And not only that, but the board actually intimidated one
important witness, apparently without reason, by informing her that she could give no further
testimony in that case and that she was therefore barred from testifying before it. The entire
examination by the record from the beginning to the end, of all of the witnesses, was made in a
spirit of hostility. For that reason the board was rendered incapacitated to properly and judicially
weigh and consider the evidence impartially. Where the record itself discloses the fact that the
evidence is weighed in the spirit of hostility there cannot be that impartial, free, full and fair
hearing contemplated by the law. (Ex parte Tom Toy Tin, 230 Fed. Rep., 747; Jouras vs. Allen,
222 Fed. Rep., 756.)

It is the duty of the board to make an effort to arrive at the truth by hearing all of the witnesses
and to permit them, without intimidation, to state all of the facts and to answer all of the pertinent
questions put to them either by their attorney or by the board. (Ex parte Chin Loy You, 223 Fed.
Rep., 833.)
The essential thing in investigations like the present as well as all other judicial or quasi-judicial
proceedings is that there shall have been an honest effort to arrive at the truth by methods
sufficiently fair and reasonable to amount to due process of law.
The burden of proving his right to enter the territory of the United States is upon the immigrant
who seeks that privilege. To sustain that burden he has a right to call and present witnesses. To
that end either he or his attorney should be permitted to ask such pertinent and material
questions as will tend to support his contention. A denial of any of these rights is not authorized
in law and amounts to an unfair and unjust hearing. If witnesses are presented by the board to
dispute or to overcome the proof adduced by the immigrant then, of course, the latter, either by
himself or by his attorney, has a perfect right to test the credibility of such witnesses by a proper
cross-examination. (Ex parte Ung king Ieng, 213 Fed. Rep., 119.)
After a careful examination of the record we are persuaded that the recommendation of the
Attorney-General should be adopted. It is, therefore, hereby ordered and decreed that the
record be returned to the court whence it came with directions that the judgment appealed from
be reversed and that an order be issued directing and commanding the board of special inquiry
to give to the appellant a rehearing as speedily as the facts and circumstances will permit, and
without any findings as to costs. So ordered.
Arellano, C.J., Torres, Carson, Araullo, Street, and Avancea, JJ., concur.
Separate Opinion
MALCOLM, J., concurring:
I agree with counsel for appellant and with the Attorney-General that petitioner was not
accorded such a hearing by the board of special inquiry as the law contemplates and assures
immigrants. Abuse of discretion is, therefore, disclosed. This is sufficient for the resolution of the
case. As to the rights of attorneys before boards of special inquiry, especially the attorney's right
of cross-examination, I withhold my opinion until the point is considered and decided by the
court in an appeal now pending (Dee See Choon vs. Collector of Customs, 16 Off. Gaz., 931).
No assignment of error on this point is made or discussed by appellant in the instant case.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 88550 April 18, 1990
INDUSTRIAL ENTERPRISES, INC., petitioner,
vs.
THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL CORPORATION,
THE HON. GERONIMO VELASCO in his capacity as Minister of Energy and PHILIPPINE
NATIONAL BANK, respondents.
Manuel M. Antonio and Dante Cortez for petitioner.
Pelaez, Adriano & Gregorio for respondent MMIC.
The Chief Legal Counsel for respondent PNB.

MELENCIO-HERRERA, J.:
This petition seeks the review and reversal of the Decision of respondent Court of Appeals in
CA-G.R. CV No. 12660, 1 which ruled adversely against petitioner herein.
Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the
Government through the Bureau of Energy Development (BED) for the exploration of two coal
blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry of Energy for
another coal operating contract for the exploration of three additional coal blocks which,
together with the original two blocks, comprised the so-called "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's over-all coal
supply-demand balance . . . the logical coal operator in the area should be the Marinduque
Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in
another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to
MMIC (Rollo, p. 37). Thus, IEI and MMIC executed a Memorandum of Agreement whereby IEI
assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the
subject of IEI's coal operating contract.
Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with
damages against MMIC and the then Minister of Energy Geronimo Velasco before the Regional
Trial Court of Makati, Branch 150, 2alleging that MMIC took possession of the subject coal
blocks even before the Memorandum of Agreement was finalized and approved by the BED;
that MMIC discontinued work thereon; that MMIC failed to apply for a coal operating contract for
the adjacent coal blocks; and that MMIC failed and refused to pay the reimbursements agreed
upon and to assume IEI's loan obligation as provided in the Memorandum of Agreement (Rollo,
p. 38). IEI also prayed that the Energy Minister be ordered to approve the return of the coal
operating contract from MMIC to petitioner, with a written confirmation that said contract is valid
and effective, and, in due course, to convert said contract from an exploration agreement to a
development/production or exploitation contract in IEI's favor.
Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in an
Amended Complaint when the latter with the Development Bank of the Philippines effected

extra-judicial foreclosures on certain mortgages, particularly the Mortgage Trust Agreement,


dated 13 July 1981, constituted in its favor by MMIC after the latter defaulted in its obligation
totalling around P22 million as of 15 July 1984. The Court of Appeals eventually dismissed the
case against the PNB (Resolution, 21 September 1989).
Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.
In a summary judgment, the Trial Court ordered the rescission of the Memorandum of
Agreement, declared the continued efficacy of the coal operating contract in favor of IEI;
ordered the reversion of the two coal blocks covered by the coal operating contract; ordered
BED to issue its written affirmation of the coal operating contract and to expeditiously cause the
conversion thereof from exploration to development in favor of IEI; directed BED to give due
course to IEI's application for a coal operating contract; directed BED to give due course to IEI's
application for three more coal blocks; and ordered the payment of damages and rehabilitation
expenses (Rollo, pp. 9-10).
In reversing the Trial Court, the Court of Appeals held that the rendition of the summary
judgment was not proper since there were genuine issues in controversy between the parties,
and more importantly, that the Trial Court had no jurisdiction over the action considering that,
under Presidential Decree No. 1206, it is the BED that has the power to decide controversies
relative to the exploration, exploitation and development of coal blocks (Rollo, pp. 43-44).
Hence, this petition, to which we resolved to give due course and to decide.
Incidentally, the records disclose that during the pendency of the appeal before the Appellate
Court, the suit against the then Minister of Energy was dismissed and that, in the meantime, IEI
had applied with the BED for the development of certain coal blocks.
The decisive issue in this case is whether or not the civil court has jurisdiction to hear and
decide the suit for rescission of the Memorandum of Agreement concerning a coal operating
contract over coal blocks. A corollary question is whether or not respondent Court of Appeals
erred in holding that it is the Bureau of Energy Development (BED) which has jurisdiction over
said action and not the civil court.
While the action filed by IEI sought the rescission of what appears to be an ordinary civil
contract cognizable by a civil court, the fact is that the Memorandum of Agreement sought to be
rescinded is derived from a coal-operating contract and is inextricably tied up with the right to
develop coal-bearing lands and the determination of whether or not the reversion of the coal
operating contract over the subject coal blocks to IEI would be in line with the integrated
national program for coal-development and with the objective of rationalizing the country's overall coal-supply-demand balance, IEI's cause of action was not merely the rescission of a
contract but the reversion or return to it of the operation of the coal blocks. Thus it was that in its
Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared the
continued efficacy of the coal-operating contract in IEI's favor and directed the BED to give due
course to IEI's application for three (3) IEI more coal blocks. These are matters properly falling
within the domain of the BED.
For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D.
No. 1206, dated 6 October 1977) is tasked with the function of establishing a comprehensive
and integrated national program for the exploration, exploitation, and development and
extraction of fossil fuels, such as the country's coal resources; adopting a coal development
program; regulating all activities relative thereto; and undertaking by itself or through service
contracts such exploitation and development, all in the interest of an effective and coordinated
development of extracted resources.

Thus, the pertinent sections of P.D. No. 1206 provide:


Sec. 6. Bureau of Energy Development. There is created in the Department a
Bureau of Energy Development, hereinafter referred to in this Section as the
Bureau, which shall have the following powers and functions, among others:
a. Administer a national program for the encouragement, guidance, and
whenever necessary, regulation of such business activity relative to
the exploration, exploitation, development, and extraction of fossil fuels such as
petroleum, coal, . . .
The decisions, orders, resolutions or actions of the Bureau may be appealed to
the Secretary whose decisions are final and executory unless appealed to the
President. (Emphasis supplied.)
That law further provides that the powers and functions of the defunct Energy Development
Board relative to the implementation of P.D. No. 972 on coal exploration and development have
been transferred to the BED, provided that coal operating contracts including the transfer or
assignment of interest in said contracts, shall require the approval of the Secretary (Minister) of
Energy (Sec. 12, P.D. No. 1206).
Sec. 12. . . . the powers and functions transferred to the Bureau of Energy
Development are:
xxx xxx xxx
ii. The following powers and functions of the Energy Development Board under
PD No. 910 . . .
(1) Undertake by itself or through other arrangements, such as service contracts,
the active exploration, exploitation, development, and extraction of energy
resources . . .
(2) Regulate all activities relative to the exploration, exploitation, development,
and extraction of fossil and nuclear fuels . . .
(P.D. No. 1206) (Emphasis supplied.)
P.D. No. 972 also provides:
Sec. 8. Each coal operating contract herein authorized shall . . . be executed by
the Energy Development Board.
Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance,
to pass upon any question involving the Memorandum of Agreement between IEI and MMIC,
revolving as its does around a coal operating contract, should be sustained.
In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction
in many cases involving matters that demand the special competence of administrative
agencies. It may occur that the Court has jurisdiction to take cognizance of a particular case,
which means that the matter involved is also judicial in character. However, if the case is such
that its determination requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions of facts are involved, then
relief must first be obtained in an administrative proceeding before a remedy will be supplied by
the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine

of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes
into play whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence of an administrative body,
in such case the judicial process is suspended pending referral of such issues to the
administrative body for its view" (United States v. Western Pacific Railroad Co., 352 U.S. 59,
Emphasis supplied).
Clearly, the doctrine of primary jurisdiction finds application in this case since the question of
what coal areas should be exploited and developed and which entity should be granted coal
operating contracts over said areas involves a technical determination by the BED as the
administrative agency in possession of the specialized expertise to act on the matter. The Trial
Court does not have the competence to decide matters concerning activities relative to the
exploration, exploitation, development and extraction of mineral resources like coal. These
issues preclude an initial judicial determination. It behooves the courts to stand aside even
when apparently they have statutory power to proceed in recognition of the primary jurisdiction
of an administrative agency.
One thrust of the multiplication of administrative agencies is that the
interpretation of contracts and the determination of private rights thereunder is no
longer a uniquely judicial function, exercisable only by our regular courts
(Antipolo Realty Corp. vs. National Housing Authority, 153 SCRA 399, at 407).
The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of
the case below. It need only be suspended until after the matters within the competence of the
BED are threshed out and determined. Thereby, the principal purpose behind the doctrine of
primary jurisdiction is salutarily served.
Uniformity and consistency in the regulation of business entrusted to an
administrative agency are secured, and the limited function of review by the
judiciary are more rationally exercised, by preliminary resort, for ascertaining and
interpreting the circumstances underlying legal issues, to agencies that are better
equipped than courts by specialization, by insight gained through experience,
and by more flexible procedure (Far East Conference v. United States, 342 U.S.
570).
With the foregoing conclusion arrived at, the question as to the propriety of the summary
judgment rendered by the Trial Court becomes unnecessary to resolve.
WHEREFORE, the Court Resolved to DENY the petition. No costs.
SO ORDERED.
Paras, Padilla, Sarmiento and Regalado, JJ., concur.

Footnotes
1 Penned by Justice Nicolas P. Lapena, Jr. and concurred in by Justices
Emeterio C. Cui and Justo P. Torres.
2 Judge Benigno M. Puno, Presiding.

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