PubCorp: Viola vs.
Alunan III There is no undue delegation of power by
G.R. No. 115844. August 15, 1997
FACTS:
Viola, as a barangay chairman, filed a
petition for prohibition challenging the
validity of the Art III, Sec.1-2 of the
Revised Implementing Rules and
Guidelines for the General Elections of the
Liga ng mga Barangay Officers insofar as
they provide for the election of first,
second, and third vice presidents and for
auditors for the National Liga ng mga
Barangay and its chapters.
He contended that the questioned
positions are in excess of those provided
in the LGC Sec.493 which mentions as
elective positions only those of the
president, vice president, and five
members of the board of directors in each
chapter at the municipal, city, provincial,
metropolitan political subdivision, and
national levels and thus the implementing
rules expand the numbers in the LGC in
violation of the principle that
implementing rules and regulations cannot
add or detract from the provisions of the
law they are designed to implement.
ISSUE:
Whether or not Sec 1-2 of the
Implementing Rules are valid.
RULING:
Yes. The creation of additional positions is
authorized by Sec. 493 of the LGC which
in fact requires and not merely
authorizes the board of directors to
create such other positions as it may
deem necessary for the management of
the chapter. To begin with, the creation of
these positions was actually made in the
Constitution and By-laws of the Liga ng
mga barangay which was adopted by the
First Barangay National Assembly.
Congress in this case. SC decisions have
upheld the validity of reorganization
statutes authorizing the President of the
Philippines to create, abolish, or merge
offices in the executive management.
While the board of directors of a local
chapter can create additional positions to
provide for the needs of the chapter, the
board of directors of the National Liga
must be deemed to have the power to
create additional positions not only for its
management but also for that of all the
chapters at the municipal, city, provincial
and metropolitan political subdivision
levels. Otherwise the National Liga would
be no different from the local
chapters. The fact is that Sec. 493 grants
the power to create positions not only to
the boards of the local chapters but to the
board of the Liga at the national level as
well.
Petition dismissed.
NOTE:
LGC, Sec. 493. Organization The liga at
the municipal, city, provincial,
metropolitan political subdivision, and
national levels directly elect a president, a
vice-president, and five (5) members of
the board of directors. The board shall
appoint its secretary and treasurer and
create such other positions as it may
deem necessary for the management of
the chapter. A secretary-general shall be
elected from among the members of the
national liga and shall be charged with the
overall operation of the liga on the
national level. The board shall coordinate
the activities of the chapters of the liga.
LARIN VS EXECUTIVE SECRETARY
 Law on Public Officers Career Service
Appointees Must Be Removed for Valid
Reasons
Aquilino Larin was an Assistant
Commissioner in the Bureau of Internal
Revenue (BIR). He was in charge of the
office of the Excise Tax Service. In 1992,
the Sandiganbayan convicted Larin for
grave misconduct. His conviction was
reported to the Office of the President, at
the same time, an administrative
complaint was filed with the same office.
The President then, based on the
Sandiganbayan conviction, created a
committee to investigate Larin.
Eventually, Larins removal was
recommended. The President dismissed
Larin.
ISSUE: Whether or not Larin was removed
from office properly.
HELD: No. Larin is a presidential
appointee who belongs to the career
service of the Civil Service. Although it is a
general rule that the power to remove is
inherent in the power to appoint, such
power to remove I with limitations. In the
case at bar, the limitation can be found in
the fact that Larin is a career service
officer and under the Administrative Code
of 1987, such officers who fall under
career service are characterized by the
existence of security of tenure, as contra-
distinguished from non-career service
whose tenure is co-terminus with that of
the appointing authority or subject to his
pleasure, or limited to a period specified
by law or to the duration of a particular
project for which purpose the employment
was made. As a career service officer,
Larin enjoys the right to security of tenure.
He can only be removed from his office on
grounds enumerated in the Administrative
Code of 1987. In the case at bar, the basis
for his removal was his conviction in the
Sandiganbayan this is not one of those
grounds enumerated in the Administrative
Code. Further, the Supreme Court notes
that when Larins conviction was appealed
to the Supreme Court, the Supreme Court
actually absolved Larin.
BANDA VS. ERMITA
FACTS:
The present controversy arose from a
Petition forCertiorari and prohibition
challenging the constitutionality of
Executive Order No. 378 dated October
25, 2004, issued by President Gloria
Macapagal Arroyo (President Arroyo).
Petitioners characterize their action as a
class suit filed on their own behalf and on
behalf of all their co-employees at the
National Printing Office (NPO).
The NPO was formed on July 25, 1987,
during the term of former President
Corazon C. Aquino (President Aquino), by
virtue of Executive Order No. 285which
provided, among others, the creation of
the NPO from the merger of the
Government Printing Office and the
relevant printing units of the Philippine
Information Agency (PIA). Section 6 of
Executive Order No. 285 reads:
SECTION 6. Creation of the National
Printing Office. There is hereby created a
National Printing Office out of the merger
of the Government Printing Office and the
relevant printing units of the Philippine
Information Agency. The Office shall have
exclusive printing jurisdiction over the
following:
a. Printing, binding and distribution of all
standard and accountable forms of
national, provincial, city and municipal
governments, including government
corporations;
 Perceiving Executive Order No. 378 as a
b. Printing of officials ballots; threat to their security of tenure as
employees of the NPO, petitioners now
c. Printing of public documents such as the challenge its constitutionality, contending
Official Gazette, General Appropriations that: (1) it is beyond the executive powers
Act, Philippine Reports, and development of President Arroyo to amend or repeal
information materials of the Philippine Executive Order No. 285 issued by former
Information Agency. President Aquino when the latter still
exercised legislative powers; and (2)
The Office may also accept other Executive Order No. 378 violates
government printing jobs, including petitioners security of tenure, because it
government publications, aside from those paves the way for the gradual abolition of
enumerated above, but not in an exclusive the NPO.
basis.
ISSUE: Whether the E.O no. 378 is
The details of the organization, powers, Constitutional.
functions, authorities, and related
management aspects of the Office shall be HELD: Yes. It is constitutional
provided in the implementing details
which shall be prepared and promulgated POLITICAL LAW: reorganization
in accordance with Section II of this
Executive Order. In the present case, involving neither an
abolition nor transfer of offices,the
The Office shall be attached to the assailed action is a mere reorganization
Philippine Information Agency. under the general provisions of the law
consisting mainly of streamlining the NTA
On October 25, 2004, President Arroyo in the interest of simplicity, economy and
issued the herein assailed Executive Order efficiency. It is an act well within the
No. 378, amending Section 6 of Executive authority of the President motivated and
Order No. 285 by, inter alia, removing the carried out, according to the findings of
exclusive jurisdiction of the NPO over the the appellate court, in good faith, a factual
printing services requirements of assessment that this Court could only but
government agencies and accept.
instrumentalities.
In the more recent case of Tondo Medical
Pursuant to Executive Order No. 378, Center Employees Association v. Court of
government agencies and Appeals 527 SCRA 746which involved a
instrumentalities are allowed to source structural and functional reorganization of
their printing services from the private the Department of Health under an
sector through competitive bidding, executive order, we reiterated the
subject to the condition that the services principle that the power of the President to
offered by the private supplier be of reorganize agencies under the executive
superior quality and lower in cost department by executive or administrative
compared to what was offered by the NPO. order is constitutionally and statutorily
Executive Order No. 378 also limited NPOs recognized. We held in that case:
appropriation in the General
Appropriations Act to its income. This Court has already ruled in a number
of cases that the President may, by
executive or administrative order, direct
the reorganization of government entities
under the Executive Department. This is
also sanctioned under the Constitution, as
well as other statutes.
Section 17, Article VII of the 1987
Constitution, clearly states: "[T]he
president shall have control of all
executive departments, bureaus and
offices." Section 31, Book III, Chapter 10 of
Executive Order No. 292, also known as
the Administrative Code of 1987 reads:
SEC. 31. Continuing Authority of the
President to Reorganize his Office - The
President, subject to the policy in the
Executive Office and in order to achieve
simplicity, economy and efficiency, shall
have continuing authority to reorganize
the administrative structure of the Office
of the President.:
The Administrative Code provides that the
Office of the President consists of the
Office of the President Proper and the
agencies under it. The agencies under the
Office of the President are identified in
Section 23, Chapter 8, Title II of the
Administrative Code:
Sec. 23. The Agencies under the Office of
the President.The agencies under the
Office of the President refer to those
offices placed under the chairmanship of
the President, those under the supervision
and control of the President, those under
the administrative supervision of the
Office of the President, those attached to
it for policy and program coordination, and
those that are not placed by law or order
creating them under any specific
department.
The power of the President to reorganize
the executive department is likewise
recognized in general appropriations laws.
Clearly, Executive Order No. 102 is well
within the constitutional power of the
President to issue. The President did not
usurp any legislative prerogative in issuing
Executive Order No. 102. It is an exercise
of the Presidents constitutional power of
control over the executive department,
supported by the provisions of the
Administrative Code, recognized by other
statutes, and consistently affirmed by this
Court.
In establishing an executive department,
bureau or office, the legislature
necessarily ordains an executive agencys
position in the scheme of administrative
structure. Such determination is primary,
but subject to the Presidents continuing
authority to reorganize the administrative
structure. As far as bureaus, agencies or
offices in the executive department are
concerned, the power of control may
justify the President to deactivate the
functions of a particular office. Or a law
may expressly grant the President the
broad authority to carry out reorganization
measures. The Administrative Code of
1987 is one such law.
The issuance of Executive Order No. 378
by President Arroyo is an exercise of a
delegated legislative power granted by
the aforementioned Section 31, Chapter
10, Title III, Book III of the Administrative
Code of 1987, which provides for the
continuing authority of the President to
reorganize the Office of the President, "in
order to achieve simplicity, economy and
efficiency." This is a matter already well-
entrenched in jurisprudence. The
reorganization of such an office through
executive or administrative order is also
recognized in the Administrative Code of
1987.
The Petition is denied.
 Spouses Augusto G. Dacudao and
Ofelia R. Dacudao, Petitioners, vs.
Secretary of Justice Raul M. Gonzales
of the Department of
Justice, Respondent
G.R. No. 188056; January 8, 2013
Facts: The petitioners filed a case of
syndicated estafa against Celso Delos
Angeles and his associates after the
petitioners were defrauded in a business
venture. Thereafter, the DOJ Secretary
issued Department Order 182 which
directs all prosecutors in the country to
forward all cases already filed against
Celso Delos Angeles, Jr. and his associates
to the secretariat of DOJ in Manila for
appropriate action. However, in a separate
order which is Memorandum dated March
2009, it was said that cases already filed
against Celso Delos Angeles et. al of the
Legacy Group of Companies in Cagayan
De Oro City need not be sent anymore to
the Secretariat of DOJ in Manila. Because
of such DOJ orders, the complaint of
petitioners was forwarded to the
secretariat of the Special Panel of the DOJ
in Manila. Aggrieved, Spouses Dacudao
filed this petition for certiorari, prohibition
and mandamus assailing to the
respondent Secretary of justice grave
abuse of discretion in issuing the
department Order and the Memorandum,
which according to the violated their right
to due process, right to equal protection of
the law and right to speedy disposition of
the cases. The petitioners opined that
orders were unconstitutional or exempting
from coverage cases already filed and
pending at the Prosecutors Office of
Cagayan De Oro City. They contended that
the assailed issuances should cover only
future cases against Delos Angeles, Jr., et
al, not those already being investigated.
They maintained that DO 182 was issued
in violation of the prohibition against
passing laws with retroactive effect.
Issue: Whether or not the assailed
issuances can be given retroactive effect.
Ruling: Yes. As a general rule, laws
shall have no retroactive effect. However,
exceptions exist, and one such exception
concerns a law that is procedural in
nature. The reason is that a remedial
statute or a statute relating to remedies or
modes of procedure does not create new
rights or take away vested rights but
operates only in furtherance of the
remedy or the confirmation already
existing rights. The retroactive application
is not violative of any right of a person
who may feel adversely affected, for, no
vested right generally attaches to or
arises from procedural law.
Padua vs Ranada
FACTS
Toll Regulatory Board (TRB) issued
Resolution No. 2001-89 authorizing
provisional toll rate adjustments on Metro
Manila Skyway. It was thereafter published
in newspapers of general circulation for
three (3) consecutive weeks. However,
there was no hearing conducted for the
matter. Deliberations were not even
attended by Board Members except TRB
Executive Director Jaime Dumlao, Jr.
Petitioners assail the validity of the
resolution.
ISSUES
Whether or not Resolution No. 2001-89 is
invalid on the ground that:
(a) it was in violation of due
process;
(b) the provisional toll rate
adjustments are exorbitant, oppressive,
onerous and unconscionable; and,
(c) TRB Executive Director Jaime
Dumlao, Jr. alone authorized the
provisional increase.
RULING
(a) No. TRB clearly complied with the
publication requirements. Also, the TRB
may grant and issue ex-parte to any
petitioner, without need of notice,
publication or hearing, provisional
authority to collect, pending hearing and
decision on the merits of the petition, the
increase in rates prayed for or such lesser
amount as the TRB may in its discretion
provisionally grant.
(b) No. This is obviously a question of fact
requiring knowledge of the formula used
and the factors considered in determining
the assailed rates. Definitely, this task is
within the province of the TRB. The SC
takes cognizance of the wealth of
jurisprudence on the doctrine of primary
administrative jurisdiction and exhaustion
of administrative remedies. In this era of
clogged court dockets, the need for
specialized administrative boards or
commissions with the special knowledge,
experience and capability to hear and
determine promptly disputes on technical
matters or intricate questions of facts,
subject to judicial review in case of grave
abuse of discretion, is
indispensable. Between the power lodged
in an administrative body and a court, the
unmistakable trend is to refer it to the
former.
(c) No. It is not true that it was TRB
Executive Director Dumlao, Jr. alone who
issued Resolution No. 2001-89. The
Resolution itself contains the signature of
the four TRB Directors. Petitioner Padua
would argue that while these Directors
signed the Resolution, none of them
personally attended the hearing. This
argument is misplaced. Under our
jurisprudence, an administrative agency
may employ other persons, such as a
hearing officer, examiner or investigator,
to receive evidence, conduct hearing and
make reports, on the basis of which the
agency shall render its decision. Such a
procedure is a practical necessity.
Corollarily, in a catena of cases, the
Supreme Court laid down the cardinal
requirements of due process in
administrative proceedings, one of which
is that the tribunal or body or any of its
judges must act on its or his own
independent consideration of the law and
facts of the controversy, and not simply
accept the views of a subordinate. Thus,
it is logical to say that this mandate was
rendered precisely to ensure that in cases
where the hearing or reception of
evidence is assigned to a subordinate, the
body or agency shall not merely rely on
his recommendation but instead shall
personally weigh and assess the evidence
which the said subordinate has gathered.
Aida Eugenio Vs. Civil Service
280 SCRA 713 Law on Public Officers
Creation and Abolition of a Public Office is
Essentially Legislative
In 1993, Aida Eugenio passed the Career
Executive Service Eligibility (CES). She was
then recommended to be appointed as a
Civil Service Officer Rank IV. But her
appointment to said rank was impeded
when in the same year, the Civil Service
Commission (CSC) abolished the Career
Executive Service Board (CESB). CESB is
the office tasked with promulgating rules,
standards, and procedures on the
selection, classification and compensation
of the members of the Career Executive
Service.
Eugenio then assailed the resolution which
abolished CESB. She averred that the CSC
does not have the power to abolish CESB
because the same was created by law
(P.D. 1). CSC on the other hand argued
that it has the power to do so pursuant to
the Administrative Code of 1987 which
granted the CSC the right to reorganize
the CSC.
ISSUE: Whether or not the Civil Service
Commission may validly abolish the
Career Executive Service Board.
HELD: No. The CESB is created by law. It
can only be abolished by the legislature.
The creation and abolition of public offices
is primarily a legislative function, except
for Constitutional offices. The power to
restructure granted to the CSC is limited
to offices under it. The law that created
the CESB intended said office to be an
autonomous entity although it is
administratively attached to the CSC.
HIJO PLANTATION INC., DAVAO FRUITS
CORPORATION, TWIN RIVERS PLANTATION,
INC. and MARSMAN & CO., INC., for
themselves and in behalf of other persons
and entities similarly situated vs.
CENTRAL BANK OF THE PHILIPPINES
09 August 1988
Petition for Certiorari and Prohibition
Paras, J.
Doctrine: in case of discrepancy between
the basic law and a rule or regulation
issued to implement said law, the basic
law prevails because said rule or
regulation cannot go beyond the terms
and provisions of the basic law
Facts:
Petitioners are domestic corporations
engaged in the production and exportation
of bananas in and from Mindanao.
Owing to the difficulty of determining the
exchange rate of the peso to the dollar
because of the floating rate and the
promulgation of CB Circular No. 289 which
imposes an 80% retention scheme on all
dollar earners, Congress passed RA 6125
(an act imposing STABILIZATION TAX ON
CONSIGNMENTS ABROAD TO ACCELERATE
THE ECONOMIC DEVELOPMENT OF THE
PHILIPPINES AND FOR OTHER PURPOSES)
approved and made effective on May
1, 1970, to eliminate the necessity for
said circular and to stabilize the peso. The
last paragraph of Sec. 1 thereof provides,
Any export product the aggregate
annual F.O.B. value of which shall
exceed five million United States
dollars in any one calendar year
during the effectivity of this Act
shall likewise be subject to the
rates of tax in force during the
fiscal years following its reaching
the said aggregate value.
During the first 9 months of calendar year
1971, the total banana export amounted
to an annual aggregate F.O.B. value of
P8,949,000.00, thus exceeding the
aggregate F.O.B. value of five million
United States Dollar, bringing it within the
ambit of RA 6125.
Petitioners sought the authoritative
pronouncement of the CB regarding when
the stabilization tax was to become due
and collectible from it and under what
schedule of Section 1 (b)1 of RA 6125
should said tax be collected.
Pet: the stabilization tax does not become
due and collectible from the petitioners
until July 1, 1972 at the rate of 4% of the
F.O.B. peso proceeds of the exports
shipped from July 1, 1972 to June 30,1973.
1 b.) In the case of molasses, coconut oil, dessicated
coconut, iron ore and concentrates, chromite ore and
concentrates, copra meal or cake, unmanufactured abaca,
unmanufactured tobacco, veneer core and sheets, plywood
(including plywood panels faced with plastics), lumber,
canned pineapples, and bunker fuel oil;
Eight per centum of the F.O.B. peso
proceeds of exports shipped on or after
the date of effectivity of this Act to June
thirty, nineteen hundred seventy-one;
Six per centum of the F.O.B. peso
proceeds of exports shipped from July
first, nineteen hundred seventy one to
June thirty nineteen hundred seventy-
two;
Four per centum of the F.O.B. peso
proceeds of exports shipped from July
first, nineteen hundred seventy-two to
June thirty nineteen hundred seventy-
three; and
Two per centum of the F.O.B. peso
proceeds of exports shipped from July
first, nineteen hundred seventy three to
June thirty nineteen hundred seventy-
four
Resp: Monetary Board Resolution No.
19952 (dated December 3, 1971) applies.
Issues/Held:
WON the Monetary Board acted beyond its
authority in promulgating Board
Resolution No. 1995 (to carry into effect
the provisions of RA 6125) YES
Ratio:
There is here no dispute that the banana
industry is liable to pay the stabilization
tax prescribed under RA. 6125 (last
paragraph of Sec.1).
Pet: respondent gave retroactive effect to
the law (RA 6125) by ruling in Monetary
Board Resolution No. 1995, that the export
stabilization tax on banana industry would
start to accrue on January 1, 1972 at the
rate of 6% of the F.O.B. peso proceeds of
export shipped from July 1, 1971 to June
30, 1972
Resp: RA 6125 merely prescribes the rates
that may be imposed but does not provide
2 Monetary Board Resolution No. 1995 provides for the ff
rates: 1) For exports of bananas shipped during the
period from January 1, 1972 to June 30, 1972; the
stabilization tax shall be at the rate of 6%;
2) For exports of bananas shipped during the period from
July 1, 1972 to June 30, 1973, the stabilization tax shall
be at the rate of 4%; and
3) For exports of bananas shipped during the period from
July 1, 1973, to June 30, 1974, the stabilization tax
shall be at the rate of 2%.
when the tax shall be collected and makes
no reference to any definite fixed period
when the tax shall begin to be collected
In the very nature of things, in many cases
it becomes impracticable for the
legislature to provide general regulations
for the various and varying details for the
management of a particular department of
the Government. It therefore becomes
convenient for the legislative department
of the government, by law, in a most
general way, to provide for the conduct,
control, and management of the work of
the particular department of the
government; to authorize certain persons,
in charge of the management and control
of such department.
Such is the case in RA 6125, which
provided in its Section 6, as follows:
All rules and regulations for
the purpose of carrying out
the provisions of the act
shall be promulgated by the
Central Bank of the
Philippines and shall take
effect fifteen days after
publication in three
newspapers of general
circulation throughout the
Philippines, one of which
shall be in the national
language.
Such regulations have uniformly been held
to have the force of law, whenever they
are found to be in consonance and in
harmony with the general purposes and
objects of the law. Such regulations once
established and found to be in conformity
with the general purposes of the law, are
just as binding upon all the parties, as if
the regulation had been written in the
original law itself. Upon the other hand,
should the regulation conflict with the law,
the validity of the regulation cannot be
sustained.
Pursuant to the aforecited provision, the
Monetary Board issued Resolution No.
1179 which contained the rules and
regulations for the implementation of said
provision which Board resolution was
subsequently embodied in Central Bank
Circular No. 309, dated August 10, 1970,
Section 3 of which, "provides that the
stabilization tax shall begin to apply on
January first following the calendar year
during which such export products shall
have reached the aggregate annual F.O.B.
value of more than $5 million and the
applicable tax rates shall be the rates
prescribed in schedule (b) of Section 1 of
RA No. 6125 for the fiscal year following
the reaching of the said aggregate value."
Central Bank Circular No. 309 was
subsequently reaffirmed in Monetary
Board Resolution No. 1995 herein assailed
by petitioners for being null and void.
Since the Banana Exports reached the
aggregate annual F.O.B. value of US $5
million in August 1971, the stabilization
tax on banana should be imposed only on
July 1, 1972, the fiscal year following the
calendar year during which the industry
attained the $5 million mark. This
conclusion finds support in the very
language of the law and upon
congressional record where a clarification
on the applicability of the law was
categorically made by the then Senator
Aytona who stated that the tax shall be
applicable only after the $5 million
aggregate value is reached, making such
tax prospective in application and for a
period of one year- referring to the fiscal
year.
Respondent bank through the Monetary
Board clearly overstepped RA 6125 which
empowered it to promulgate rules and
regulations for the purpose of carrying out
the provisions of said act, because while
Section 1 of the law authorizes it to levy a
stabilization tax on petitioners only in the
fiscal year following their reaching the
aggregate annual F.O.B. value of US $5
million, that is, the fiscal year July 1, 1972
to June 30, 1973, at a tax rate of 4% of the
F.O.B. peso proceeds, respondent in gross
violation of the law, instead issued
Resolution No. 1995 which impose a 6%
stabilization tax for the calendar year
January 1, 1972 to June 30, 1972, which
obviously is in excess of its jurisdiction.
While Monetary Board Resolution No. 1995
cannot be said to be the product of grave
abuse of discretion but rather the result of
respondent's overzealous desire to carry
into effect the provisions of RA 6125, it is
evident that the Board acted beyond its
authority under the law and the
Constitution. Hence, the petition for
certiorari and prohibition in the case at
bar, is proper.
Moreover, there is no dispute that in case
of discrepancy between the basic law and
a rule or regulation issued to implement
said law, the basic law prevails because
said rule or regulation cannot go beyond
the terms and provisions of the basic law.
Rules that subvert the statute cannot be
sanctioned. Department zeal may not be
permitted to outrun the authority
conferred by statute.
Disposition: petition GRANTED.
Votes: Melencio-Herrera (Chairperson),
Padilla and Sarmiento JJ., concur
Radio Communications of the
Philippines, Inc. vs Santiago
Posted on March 5, 2013
58 SCRA 493
1974
The Public Service Commission (PSC)
imposed a fine on a radio company for
failure to render service expected of a
radio operator.
FACTS
The PSC, acting on complaints by
dissatisfied RCPI customers, penalized it
with a fine. RCPI alleged that the
Commission was devoid of such
competence since the Public Service Act
(C.A. No. 146) expressly exempted radio
companies from the jurisdiction,
supervision, and control of such body over
their franchises, equipment, and other
properties (Sec. 13[a] thereof) except with
respect to the fixing of rates. (Sec. 14
thereof)
The first paragraph of Sec.21 of the Act
reads:
Every public service violating or
failing to comply with the terms and
conditions of any certificate or any
orders, decisions or regulations of
the Commission shall be subject to a
fine of not exceeding P200 per day
for every day during which such
default or violation continues; and
the Commission is hereby authorized
and empowered to impose such fine,
after due notice and hearing.
ISSUE
Is there anything in Sec.21 of the Act
which empowers the PSC to impose a fine?
HELD
None. The power is neither expressly nor
impliedly granted.
In the face of the provision itself, it is
rather apparent that the Public Service
Commission lacked the required power to
proceed against petitioner.x x x a public
official must locate in the statute relied
upon a grant of power before he can
exercise it. It need not be express. It may
be implied from the wording of the law.
Absent such requisite, however, no
warrant exists for the assumption of
authority. The act performed, if properly
challenged, cannot meet the test of
validity. It must be set aside.
Tayug Rural Bank vs. Central Bank of the
Phils. (G.R. No. L-46158, Nov. 28, 1986)
FACTS: Tayug Rural is a bank in
Pangasinan which took out 13 loans from
Central Bank in 1962 and
1963, all covered by promissory notes,
amounting to 813k. In late 1964, Central
Bank released a
circular; Memorandum Circular No. DLC-8
thru the Director of Loans and Credit. This
circular all
informed all rural banks that an additional
10% per annum penalty interest would be
assessed on all past
due loans beginning 1965. This was
enforced beginning July 1965.
In 1969, the outstanding balance of Tayug
was at 444k. Tayug Rural filed a case in
CFI Manila to
recover the 10% penalty it paid up to
1968, amounting to about 16k, and to
restrain Central bank from
further imposing the penalty. Central Bank
filed a counterclaim for the outstanding
balance including the
10% penalty, stating that it was legally
imposed under the Rules and Regulations
Governing Rural
Banks promulgated by the Monetary Board
on 1958, under RA 720.
Tayugs defense was that the counterclaim
should be dismissed since the unpaid
obligation of Tayug was
due to Central Banks flexible and double
standard policy of its rediscounting
privileges to Tayug Rural
and its subsequent arbitrary and illegal
imposition of the 10% penalty. Tayug Rural
contends that no
such 10% penalty starting from 1965 was
included in the promissory notes covering
the loans.
A judgment was rendered by CFI Manila in
favor of Central Bank ordering Tayug Rural
Bank to pay
10% penalty in the amount of around 19k
pesos for loans up to July 1969, and to pay
nothing for the
next remaining loans.
Tayugs claim in the case was however
successful, and so Tayug was also ordered
to pay 444k, with
interest to the Central Bank for the
overdue accounts with respect to the
promissory notes. Central
Bank appealed to the CA, but also lost on
the ground that only a legal question had
been raised in the
pleadings. The case was then raised to the
SC, with each party arguing in the
following manner:
CFI rules that the circulars retroactive
effect on past due loans impairs the
obligation of contracts and
deprives Tayug Rural of property without
due process of law.
Central Bank reasons that Tayug Rural,
despite the loans, should have known that
rules and regulations
authorize the Central Bank to impose
additional reasonable penalties.
ISSUE: WON The Central Bank can validly
impose the 10% penalty via Memorandum
Circular
No. DLC-8
HELD: NO. A reading of the circular and
pertinent provisions, including that of RA
720, shows that
nowhere therein is the authority given to
the Monetary Board to mete out additional
penalties to the
rural banks on past due accounts with the
Central Bank. As said by the CFI, while the
Monetary
Board possesses broad supervisory
powers, nonetheless, the retroactive
imposition of
administrative penalties cannot be taken
as a measure SUPERVISORY in character.
Administrative rules have the force and
effect of law. There are, however,
limitations in the rulemaking
power of administrative agencies. All that
is required of administrative rules and
regulations is to
implement given legislation by not
contradicting it and conform to the
standards prescribed by law.
Rules and regulations cannot go beyond
the basic law. Since compliance therewith
can be enforced by a
penal sanction, an administrative agency
cannot implement a penalty not provided
in the law authorizing
it, much less one that is applied
retroactively.
The new clause imposing an additional
penalty was not part of the promissory
notes when Tayug Rural
took out its loans. The law cannot be given
retroactive effect. More to the point, the
Monetary Board
revoked the additional penalty later in
1970, which clearly shows an admission
that it had no power to
impose the same. The Central bank hoped
to rectify the defect by revising the DLC
Form later.
However, Tayug Rural must pay the
additional 10% in case of suit, since
in the promissory notes, 10% should be
paid in attorneys fees and costs
of suit and collection. Judgment AFFIRMED
with modification.
Globe Wireless Ltd. vs. Public Service
Commission
Private respondent Antonio Arnaiz sent a
message to Maria Diaz in Spain through
the telegraph office of the Bureau of
Telecommunications in Dumagete and was
transmitted to Manila. The message,
however, was not delivered to the
addressee. After being informed of said
fact, Arnaiz sent a complaint to the Public
Service Commissioner a letter-complaint.
In its answer, petitioner denied liability but
questioned PSCs jurisdiction over the
subject matter. After hearing, the PSC
found petitioner responsible for the
unsatisfactory service complained of and
ordered it to pay a fine.
ISSUE: W/N PSC has jurisdiction to
discipline and impose fine upon petitioner
HELD: NO. The Public Service Act vested in
the PSC jurisdiction, supervision and
control over all public services and their
franchises, equipment and other
properties. However, Section 5 of RA 4630,
the legislative franchise under which
petitioner was operating, limited
respondent Commissions jurisdiction over
petitioner only to the rate which petitioner
may charge the public. The negligence
imputed to public respondent had nothing
whatsoever to do with the subject matter
of very limited jurisdiction of the
Commission over petitioner.
EN BANC
G.R. No. 140563 July 14,
2000
DANTE M. POLLOSO, petitioner,
vs.
HON. CELSO D. GANGAN, Chairman,
COMMISSION ON AUDIT, HON. RAUL C.
FLORES, COMMISSIONER,
COMMISSION ON AUDIT, HON.
EMMANUEL M. DALMAN,
COMMISSIONER, COMMISSION ON
AUDIT.
Facts: The facts of the case are
undisputed.
In 1994, the National Power Corporation
(NPC), represented by its President Dr.
Francisco L. Viray entered into a service
contract with Atty. Benemerito A. Satorre.
Under said contract, Satorre was to
perform the following services for the
Leyte-Cebu and Leyte-Luzon
Interconnection Projects of the NPC:
On 12 January 1995, Unit
Auditor Alexander A. Tan, NPC-VRC, Cebu
City issued Notice of Disallowance No. 95-
0001-135-94 for the payment of the
services rendered by Atty. Satorre for the
period covering March to December 1995
in the total amount of P283,763.39. The
following reasons were cited for said
disallowance:
1)....The contract for services did
not have the written conformity and
acquiescence of the Solicitor General or
the Corporate Counsel and concurrence of
the Commission on Audit as required Posted: August 4, 2010 in Case Digests
under COA Circular No. 86-255 dated April Tags: case, constitution, digest, land, l
2, 1986. aw, nha, Philippines, territory

2)....The contract was not supported with 2

Certificate of Availability of Funds as
required under Sec. 86 of P.D. 1445.
G.R. No. 164527

3)....The contract was not submitted to the 15 August 2007

Civil Service Commission for final review
and was not forwarded to the
Compensation and Position Confirmation Ponente: VELASCO, JR., J.
and Classification Bureau, DBM for
appropriate action as required in CSC MC
FACTS:
# 5 Series of 1985.3

Issue : Whether or not that the On August 5, 2004, former Solicitor

circular requiring the approval of
the SOLICITOR General Francisco Chavez, filed an instant
GENERAL was UNCONSTITUTIONAL be petition raising constitutional issues on the
cause it restricted to practice LAW.
JVA entered by National Housing Authority
Ruling: The circular was merely
and R-II Builders, Inc.
a safeguard to prevent irregular,
unnecessary, excessive, and
extravagant or unconscionable On March 1, 1988, then-President Cory
expenditures.We cannot grant the
prayer of the petitioner that Atty. Satorre Aquino issued Memorandum order No.
should be compensated based on the (MO) 161 approving and directing
principle of quantum meruit, on the
ground that the government will be implementation of the Comprehensive and
unjustly enriched at the expense of
Integrated Metropolitan Manila Waste
another. We do not deny that Atty. Satorre
has indeed rendered legal services to the Management Plan. During this time,
government. However to allow the
disbursement of public funds to pay for his Smokey Mountain, a wasteland in Tondo,
services, despite the absence of requisite
Manila, are being made residence of many
consent to his hiring from the OSG or
OGCC would precisely allow circumvention Filipinos living in a subhuman state.
of COA Circular No. 86-255.

WHEREFORE, the petition As presented in MO 161, NHA prepared

is hereby DENIED for lack of showing that feasibility studies to turn the dumpsite
the respondents committed a reversible
error. into low-cost housing project, thus,

Smokey Mountain Development and

Case Digest: Chavez v. National
Housing Authority Reclamation Project (SMDRP), came into
place. RA 6957 (Build-Operate-Transfer Smokey Mountain will be owned by RBI as

Law) was passed on July 1990 declaring enabling components. If the project is

the importance of private sectors as revoked or terminated by the Government

contractors in government projects. through no fault of RBI or by mutual

Thereafter, Aquino proclaimed MO 415 agreement, the Government shall

applying RA 6957 to SMDRP, among compensate RBI for its actual expenses

others. The same MO also established incurred in the Project plus a reasonable

EXECOM and TECHCOM in the execution rate of return not exceeding that stated in

and evaluation of the plan, respectively, to the feasibility study and in the contract as

be assisted by the Public Estates Authority of the date of such revocation,

(PEA). cancellation, or termination on a schedule

to be agreed upon by both parties.

To summarize, the SMDRP shall consist of

Notices of public bidding to become NHAs
Phase I and Phase II. Phase I of the project
venture partner for SMDRP were published
involves clearing, levelling-off the
in newspapers in 1992, from which R-II
dumpsite, and construction of temporary
Builders, Inc. (RBI) won the bidding
housing units for the current residents on
process. Then-President Ramos
the cleared and levelled site. Phase II
authorized NHA to enter into a Joint
involves the construction of a fenced
Venture Agreement with RBI.
incineration area for the on-site disposal of

the garbage at the dumpsite.

Under the JVA, the project involves the

clearing of Smokey Mountain for eventual

Due to the recommendations done by the
development into a low cost housing
DENR after evaluations done, the JVA was
complex and industrial/commercial site.
amended and restated (now ARJVA) to
RBI is expected to fully finance the
accommodate the design changes and
development of Smokey Mountain and
additional work to be done to successfully
reclaim 40 hectares of the land at the
implement the project. The original 3,500
Manila Bay Area. The latter together with
units of temporary housing were
the commercial area to be built on
 decreased to 2,992. The reclaimed land
as enabling component was increased
from 40 hectares to 79 hectares, which
was supported by the issuance of
Proclamation No. 465 by President Ramos.
The revision also provided for the 119-
hectare land as an enabling component
for Phase II of the project.
Subsequently, the Clean Air Act was
passed by the legislature which made the
establishment of an incinerator illegal,
making the off-site dumpsite at Smokey
Mountain necessary. On August 1, 1998,
the project was suspended, to be later
reconstituted by President Estrada in MO
No. 33.
On August 27, 2003, the NHA and RBI
executed a Memorandum of Agreement
whereby both parties agreed to terminate
the JVA and subsequent agreements.
During this time, NHA reported that 34
temporary housing structures and 21
permanent housing structures had been
turned over by RBI.
ISSUES:
1. Whether respondents NHA and RBI
have been granted the power and
authority to reclaim lands of the public
domain as this power is vested
exclusively in PEA as claimed by
petitioner
2. Whether respondents NHA and RBI
were given the power and authority by
DENR to reclaim foreshore and
submerged lands
3. Whether respondent RBI can
acquire reclaimed foreshore and
submerged lands considered as alienable
and outside the commerce of man
4. Whether respondent RBI can
acquire reclaimed lands when there was
no declaration that said lands are no
longer needed for public use
5. Whether there is a law authorizing
sale of reclaimed lands
6. Whether the transfer of reclaimed
lands to RBI was done by public bidding
7. Whether RBI, being a private
corporation, is barred by the Constitution
to acquire lands of public domain
8. Whether respondents can be
compelled to disclose all information
related to the SMDRP
9. Whether the operative fact doctrine
applies to the instant position
HELD:
1. Executive Order 525 reads that the
PEA shall be primarily responsible for
integrating, directing, and coordinating
all reclamation projects for and on behalf
of the National Government. This does
not mean that it shall be responsible for
all. The requisites for a valid and legal
reclamation project are approval by the
President (which were provided for by
MOs), favourable recommendation of PEA
(which were seen as a part of its
recommendations to the EXECOM), and
undertaken either by PEA or entity under
contract of PEA or by the National
Government Agency (NHA is a
government agency whose authority to
reclaim lands under consultation with
PEA is derived under PD 727 and RA
7279).
2. Notwithstanding the need for DENR
permission, the DENR is deemed to have
granted the authority to reclaim in the
Smokey Mountain Project for the DENR is
one of the members of the EXECOM
which provides reviews for the project.
ECCs and Special Patent Orders were
given by the DENR which are exercises of
its power of supervision over the project.
Furthermore, it was the President via the
abovementioned MOs that originally
authorized the reclamation. It must be
noted that the reclamation of lands of
public domain is reposed first in the
Philippine President.
3. The reclaimed lands were classified
alienable and disposable via MO 415
issued by President Aquino and
Proclamation Nos. 39 and 465 by
President Ramos.
4. Despite not having an explicit
declaration, the lands have been deemed
to be no longer needed for public use as
stated in Proclamation No. 39 that these
are to be disposed to qualified
beneficiaries. Furthermore, these lands
have already been necessarily
reclassified as alienable and disposable
lands under the BOT law.
5. Letter I of Sec. 6 of PD 757 clearly
states that the NHA can acquire property
rights and interests and encumber or
otherwise dispose of them as it may
deem appropriate.
6. There is no doubt that respondent
NHA conducted a public bidding of the
right to become its joint venture partner
in the Smokey Mountain Project. It was
noted that notices were published in
national newspapers. The bidding proper
was done by the Bids and Awards
Committee on May 18, 1992.
7. RA 6957 as amended by RA 7718
explicitly states that a contractor can be
paid a portion as percentage of the
reclaimed land subject to the
constitutional requirement that only
Filipino citizens or corporation with at
least 60% Filipino equity can acquire the
same. In addition, when the lands were
transferred to the NHA, these were
considered Patrimonial lands of the state,
by which it has the power to sell the
same to any qualified person.
8. This relief must be granted. It is
the right of the Filipino people to
information on matters of public
concerned as stated in Article II, Sec. 28,
and Article III, Sec. 7 of the 1987
Constitution.
9. When the petitioner filed the case,
the JVA had already been terminated by
virtue of MOA between RBI and NHA.
The properties and rights in question
after the passage of around 10 years
from the start of the projects
implementation cannot be disturbed or
questioned. The petitioner, being the
Solicitor General at the time SMDRP was
formulated, had ample opportunity to
question the said project, but did not do
so. The moment to challenge has
passed.
About these ads
MAKATI STOCK EXCHANGE vs SECURITIES
AND EXCHANGE COMMISSION
G.R. No. L-23004
June 30, 1965
BENGZON, C.J.:
Facts :
The Securities and Exchange
Commission denied the Makati Stock
Exchange, Inc., permission to operate a
stock exchange unless it agreed not to list
for trading on its board, securities already
listed in the Manila Stock Exchange.
Issue :
Whether or not the SEC may in
the public interest validly impose such a
condition?
Held :
NO. It is fundamental that an
administrative officer has only such
powers as are expressly granted to him by
the statue, and those necessarily implied
in the exercise thereof. The SEC cites no
provision of law supporting its rule.
Neither did the Commission make any
explanation on how it could be necessary
in the performance of its functions. For all
practical purposes the SECs order would
make it impossible for MSEI to operate. So
its permission would really amount to a
prohibition.
The Legislature has specified the
conditions under which a stock exchange
may legally obtain a permit; it is not for
the SEC to impose others.
TAULE vs. SANTOS Case Digest
TAULE vs. SANTOS
200 SCRA 512, 1991
Facts: On June 18, 1989, the Federation of
Associations of Barangay Councils (FABC)
of Catanduanes, composed of eleven (11)
members convened in Virac, Catanduanes
with six members, including Taule, in
attendance for the purpose of holding the
election of its officers. The group decided
to hold the election despite the absence of
five (5) of its members. The Governor of
Catanduanes sent a letter to respondent
the Secretary of Local Government,
protesting the election of the officers of
the FABC and seeking its nullification due
to flagrant irregularities in the manner it
was conducted. The Secretary nullifed the
election of the officers of the FABC and
ordered a new one to be conducted to be
presided by the Regional Director of
Region V of the Department of Local
Government. Taule, contested the decision
contending that neither the constitution
nor the law grants jurisdiction upon the
respondent Secretary over election
contests involving the election of officers
of the FABC and that the Constitution
provides that it is the COMELEC which has
jurisdiction over all contests involving
elective barangay officials.
Issue: Whether or not the COMELEC has
jurisdiction to entertain an election protest
involving the election of the officers of the
Federation of Association of Barangay
Councils;
Held: The jurisdiction of the COMELEC
over contests involving elective barangay
officials is limited to appellate jurisdiction
from decisions of the trial courts. Under
the law, the sworn petition contesting the
election of a barangay officer shall be filed
with the proper Municipal or Metropolitan
Trial Court by any candidate who has duly
filed a certificate of candidacy and has
been voted for the same office within 10
days after the proclamation of the results.
The jurisdiction of the COMELEC does not
cover protests over the organizational set-
up of the katipunan ng mga barangay
composed of popularly elected punong
barangays as prescribed by law whose
officers are voted upon by their respective
members. The authority of the COMELEC
over the katipunan ng mga barangay is
limited by law to supervision of the
election of the representative of the
katipunan concerned to the sanggunian in
a particular level conducted by their own
respective organization.
Radio Communications v NTC G.R. No.
L-68729 May 29, 1987
J. Gutierrez Jr.
Facts:
RCPI operated a radio communications
system since 1957 under legislative
franchise granted by Republic Act No.
2036 (1957). The petitioner established a
radio telegraph service in Sorsogon,
Sorsogon (1968). in San Jose, Mindoro
(1971), and Catarman, Samar (1983).
Kayumanggi Radio, on the other hand,
was given the rights by the NTC to operate
radio networks in the same areas.
RCPI filed a complaint in the NTC and
sought to prohibit Kayumanggi Radio to
operate in the same areas. The NTC ruled
against the RTCs favor and commanded
RCPI to desist in the operation of radio
telegraphs in the three areas.
RTC filed a MFR in 1984. This was denied.
In the SC, Petitioner alleged that the
Public Service Law had sections that was
still in effect even if the Public Service
Commission was abolished and the NTC
was established.
These were S13- the Commission shall
have jurisdiction, supervision, and control
over all public services and their
franchises
S 14- Radio companies are exempt from
the commissions authority except with
respect to the fixing of rates
And S 15-no public service shall operate in
the Philippines without possessing a valid
and subsisting certificate from the Public
Service Commission, known as "certificate
of public convenience,"
Issue: Whether or not petitioner RCPI, a
grantee of a legislative franchise to
operate a radio company, is required to
secure a certificate of public convenience
and necessity before it can validly operate
its radio stations including radio telephone
services in the aforementioned areas
Held: Yes. Petition dismissed.
Ratio:
Presidential Decree No. 1- the Public
Service Commission was abolished and its
functions were transferred to three
specialized regulatory boards, as follows:
the Board of Transportation, the Board of
Communications and the Board of Power
and Waterworks. The functions so
transferred were still subject to the
limitations provided in sections 14 and 15
of the Public Service Law, as amended.
The succeeding Executive Order No. 546-
the Board of Communications and the
Telecommunications Control Bureau were
abolished and their functions were
transferred to the National
Telecommunications Commission
Section 15- b. Establish, prescribe and
regulate areas of operation of particular
operators of public service
communications; and determine and
prescribe charges or rates pertinent to the
operation of such public utility facilities
and services except in cases where
charges or rates are established by
international bodies or associations of
which the Philippines is a participating
member or by bodies recognized by the
Philippine Government as the proper
arbiter of such charges or rates;
c. Grant permits for the use of radio
frequencies for wireless telephone and
telegraph systems and
radio communication
systems including amateur radio stations
and radio and television broadcasting
systems;
The exemption enjoyed by radio
companies from the jurisdiction of the
Public Service Commission and the Board
of Communications no longer exists
because of the changes effected by the
Reorganization Law and implementing
executive orders.
The petitioner's claim that its franchise
cannot be affected by Executive Order No.
546 on the ground that it has long been in
operation since 1957 cannot be sustained.
Today, a franchise, being merely a
privilege emanating from the sovereign
power of the state and owing its existence
to a grant, is subject to regulation by the
state itself by virtue of its police power
through its administrative agencies.
Pangasinan transportation Co.- statutes
enacted for the regulation of public
utilities, being a proper exercise by the
State of its police power, are applicable
not only to those public utilities coming
into existence after its passage, but
likewise to those already established and
in operation .
Executive Order No. 546, being an
implementing measure of P.D. No. I insofar
as it amends the Public Service Law (CA
No. 146, as amended) is applicable to the
petitioner who must be bound by its
provisions.
The position of the petitioner that by the
mere grant of its franchise under RA No.
2036 it can operate a radio
communications system anywhere within
the Philippines is erroneous.
Sec. 4(a). This franchise shall not take
effect nor shall any powers thereunder be
exercised by the grantee until the
Secretary of Public works and
Communications shall have allotted to the
grantee the frequencies and wave lengths
to be used, and issued to the grantee a
license for such case.
Thus, in the words of R.A. No. 2036 itself,
approval of the then Secretary of Public
Works and Communications was a
precondition before the petitioner could
put up radio stations in areas where it
desires to operate.
The records of the case do not show any
grant of authority from the then Secretary
of Public Works and Communications
before the petitioner installed the
questioned radio telephone services in
San Jose, Mindoro in 1971. The same is
true as regards the radio telephone
services opened in Sorsogon, Sorsogon
and Catarman, Samar in 1983. No
certificate of public convenience and
necessity appears to have been secured
by the petitioner from the public
respondent when such certificate,was
required by the applicable public utility
regulations.
The Constitution mandates that a HELD YES, it has. As a matter of fact, Sec3
franchise cannot be exclusive in nature
nor can a franchise be granted except that
it must be subject to amendment,
alteration, or even repeal by the
legislature when the common good so
requires.
. ANTIPOLO REALTY v NHA
FACTS Jose Fernando executed a Contract
to Sell with petitioner Antipolo Realty
Corporation over a lot at Ponderosa
Heights Subdivision in Antipolo Rizal. He
transferred his rights over the lot to
private respondent Virgilio Yuson.
Thereafter, Yuson assumed the obligations
of the vendee under the original contract,
including payment of Fernandos
installments in arrears. However, due to
the failure of ARC to develop the
subdivision project as stipulated under
Clause 17 of the contract, Yuson paid only
the arrears for the month of August 1972
and stopped paying thereafter. Despite
the notice sent by ARC and its citing of an
NHA decision both claiming that it had
complied with its obligation to complete
the improvements, Yuson refused to pay
the Sept 1972-Oct 1976 monthly
installments, but agreed as to the post Oct
1976 installments. ARC reacted by
rescinding the contract, and claiming the
forfeiture of all installment payments
made by Yuson. Aggrieved, Yuson brought
the matter to the NHA. The latter ordered
the reinstatement of the contract. Motion
for reconsideration was denied. On
certiorari before the SC, petitioner cries
lack of jurisdiction on the part of NHA and
likewise, notice as to the schedule of the
hearing. A minute resolution was issued,
affirming NHA, but without prejudice to
pursuing an administrative remedy. ARC
then appealed the case to the Office of the
Presiden. Again, the contract was upheld.
Back to the SC, ARC now claims that the
NHA had not only acted on matter outside
its competence/jurisdiction, but had also,
in effect, assumed the performance of
judicial or quasi-judicial functions which it
wasnt authorized to perform.
ISSUE W/N the NHA has quasi-judicial
functions.
of PD No. 957, or The Subdivision and
Condominium Buyers Decree vests the
NHA with exclusive jurisdiction to regulate
real estate trade and business. In its 2nd
and 3rd preambular paragraphs, the
statute discussed the need and scope for
NHAs regulatory authority, that is, the rise
of cases where subdivision
owners/developers/sellers renege on their
obligations to lot buyers, and other
fraudulent means employed by the former
to the detriment of the latter. Most
importantly, PD No. 1344 provides that the
NHA has exclusive jurisdiction to hear and
decide cases of the following nature: (a)
unsound real estate business practices;
(b) claims involving refund and any other
claims filed by sub- division lot or
condominium unit buyer against the
project owner, developer, dealer, broker or
salesma, and (c) Cases involving specific
performance of contractual and statutory
obligations filed by buyers of subdivision
lots or condominium units against the
owner, developer, dealer, broker or
salesman. NHAs ruling which reinstated
the contract is justified under the
provisions of Sec 23 of PD No. 957, which
provides that no installment payment shall
be forfeited in favor of the
owner/developer WHEN the buyer desists
from paying DUE TO the failure of
owner/developer to develop the
subdivision or condominium project
according to the approved plans and
within the time limit for complying with
the same. Having failed its obligation to
complete certain specified improvements
within the period of 2 years, petitioner is
NOT entitiled to exercise its options under
Clause 7 of the contract (rescind and treat
payments as forfeited in its favor).
Instead, in the light of ARCs breach with
Yuson, it is the latter who has the option
either to rescind and receive
reimbursement OR to suspend payment
until petitioner has complied. Thus, NHA
was correct in its ruling
Laguna Lake Development Authority vs CA
Natural Resources and Environmental
Laws; Statutory Construction
GR No. 120865-71; Dec. 7 1995
FACTS:
The Laguna Lake Development Authority
(LLDA) was created through Republic Act
No. 4850. It was granted, inter alia,
exclusive jurisdiction to issue permits for
the use of all surface water for any project
or activity in or affecting the said region
including navigation, construction, and
operation of fishpens, fish enclosures, fish
corrals and the like.
Then came RA 7160, the Local
Government Code of 1991. The
municipalities in the Laguna Lake region
interpreted its provisions to mean that the
newly passed law gave municipal
governments the exclusive jurisdiction to
issue fishing privileges within their
municipal waters.
ISSUE:
Who should exercise jurisdiction over the
Laguna Lake and its environs insofar as
the issuance of permits for fishing
privileges is concerned, the LLDA or the
towns and municipalities comprising the
region?
HELD:
LLDA has jurisdiction over such matters
because the charter of the LLDA prevails
over the Local Government Code of 1991.
The said charter constitutes a special law,
while the latter is a general law. It is basic
in statutory construction that the
enactment of a later legislation which is a
general law, cannot be construed to have
repealed a special law. The special law is
to be taken as an exception to the general
law in the absence of special
circumstances forcing a contrary
conclusion.
In addition, the charter of the LLDA
embodies a valid exercise of police power
for the purpose of protecting and
developing the Laguna Lake region, as
opposed to the Local Government Code,
which grants powers to municipalities to
issue fishing permits for revenue
purposes.
Thus it has to be concluded that the
charter of the LLDA should prevail over the
Local Government Code of 1991 on
matters affecting Laguna de Bay.
Buenaseda v. Flavier
Legal Ethics Legal Profession Motion
for Disbarment Improperly Filed
Administrative Law Power of the
Ombudsman Preventive Suspension
In 1992, the NCMH Nurses Association
(NCMH) filed a case of graft and corruption
against Dr. Brigida Buenaseda and several
other government officials of the
Department of Health (DOH). The
Ombudsman (then Conrado Vasquez),
ordered the suspension of Buenaseda et
al. The suspension was carried on by then
DOH Secretary Juan Flavier, being the
officer in charge over Buenaseda et al.
Buenaseda et al then filed with the
Supreme Court a petition for certiorari,
prohibition, and mandamus, questioning
the suspension order. NCMH submitted its
Comment on the Petition where they
attached a Motion for Disbarment against
the lawyers of Buenaseda et al.
Allegedly, the lawyers of Buenaseda et al
advised them not to obey the suspension
order, which is a lawful order from a duly
constituted authority. NCMH maintains
that such advice from the lawyers
constitute a violation against the Code of
Professional Responsibility.
The Solicitor General, commenting on the
case, agreed with Buenasedas lawyers as
he maintained that all the Ombudsman
can do is to recommend suspensions not
impose them. The Sol-Gen based his
argument on Section 13 (3) of the 1987
Constitution which provides that the Office
of the Ombudsman shall have inter
alia the power, function, and duty to:
Direct the officer concerned to take
appropriate action against a public official
or employee at fault, and recommend
his removal, suspension, demotion,
fine, censure or prosecution, and ensure
compliance therewith.
ISSUES: Whether or not the Ombudsman
has the power to suspend government
officials. Whether or not a Motion for
Disbarment may be filed in a special civil
action.
HELD: Yes, the Ombudsman may impose
suspension orders. The Supreme Court
clarifies that what the Ombudsman issued
is an order of preventive suspension
pending the resolution of the case or
investigation thereof. It is not imposing
suspension as a penalty (not punitive
suspension). What the Constitution
contemplates that the Ombudsman may
recommend are punitive suspensions.
Anent the issue of the Motion for
Disbarment filed with the Ombudsman,
the same is not proper. It cannot be filed
in this special civil action which is
confined to questions of jurisdiction or
abuse of discretion for the purpose of
relieving persons from the arbitrary acts of
judges and quasi-judicial officers. There is
a set of procedure for the discipline of
members of the bar separate and apart
from the present special civil action.
However, the lawyers of Buenaseda were
reminded not be carried away in
espousing their clients cause. The
language of a lawyer, both oral or written,
must be respectful and restrained in
keeping with the dignity of the legal
profession and with his behavioral attitude
toward his brethren in the profession.
Azarcon vs. Sandiganbayan
Facts: Petitioner Alfredo Azarcon owned
and operated an earth-moving business,
hauling dirt and ore. His services were
contracted by PICOP. Occasionally, he
engaged the services of sub-contractors
like Jaime Ancla whose trucks were left at
the formers premises.
On May 25, 1983, a Warrant of Distraint of
Personal Property was issued by BIR
commanding one of its Regional Directors
to distraint the goods, chattels or effects
and other personal property of
Jaime Ancla, a sub-contractor of accused
Azarcon and a delinquent taxpayer. A
Warrant of Garnishment was issued to and
subsequently signed by accused Azarcon
ordering him to transfer, surrender,
transmit and/or remit to BIR the property
in his possession owned by Ancla. Azarcon
then volunteered himself to act as
custodian of the truck owned by Ancla.
After some time, Azarcon wrote a letter to
the Reg. Dir of BIR stating that while he
had made representations to retain
possession of the property of Ancla, he
thereby relinquishes whatever
responsibility he had over the said
property since Ancla surreptitiously
withdrew his equipment from him. In his
reply, the BIR Reg. Dir. said that Azarcons
failure to comply with the provisions of the
warrant did not relieve him from his
responsibility.
Along with his co-accused, Azarcon was
charged before the Sandiganbayan with
the crime of malversation of public funds
or property. On March 8, 1994, the
Sandiganbayan rendered a Decision
sentencing the accused to suffer the
penalty of imprisonment ranging from 10
yrs and 1 day of prision mayor in its
maximum period to 17 yrs, 4 mos and 1
day of reclusion temporal. Petitioner filed
a motion for new trial which was
subsequently denied by Sandiganbayan.
Hence, this petition.
Issue: Whether or not Sandiganbayan has
jurisdiction over a private individual
designated by BIR as a custodian of
distrained property.
Held: SC held that the Sandiganbayans
decision was null and void for lack of
jurisdiction.
Sec. 4 of PD 1606 provides for the
jurisdiction of the Sandiganbayan. It was
specified therein that the only instances
when the Sandiganbayan will have
jurisdiction over a private individual is
when the complaint charges the private
individual either as a co-principal,
accomplice or accessory of a public officer
or employee who has been charged with a
crime within its jurisdiction.
The Information does no charge petitioner
Azarcon of becoming a co-principal,
accomplice or accessory to a public officer
committing an offense under the
Sandiganbayans jurisdiction. Thus, unless
the petitioner be proven a public officer,
Sandiganbayan will have no jurisdiction
over the crime charged.
Art. 203 of the RPC determines who public
officers are. Granting that the petitioner,
in signing the receipt for the truck
constructively distrained by the BIR,
commenced to take part in an activity
constituting public functions, he obviously
may not be deemed authorized by popular
election. Neither was he appointed by
direct provision of law nor by competent
authority. While BIR had authority to
require Azarcon to sign a receipt for the
distrained truck, the National Internal
Revenue Code did not grant it power to
appoint Azarcon a public officer. The BIRs
power authorizing a private individual
to act as a depositary cannot be stretched
to include the power to appoint him as a
public officer. Thus, Azarcon is not a public
officer.
RUFINO O. ESLAO, in his capacity as
President of Pangasinan State
University, petitioner,
vs.
COMMISSION ON AUDIT, respondent.
Mehol K. Sadain for petitioner.
FELICIANO, J.:
In this Petition for Certiorari, Rufino O.
Eslao in his capacity as President of the
Pangasinan State University ("PSU") asks
us to set aside Commission on Audit
("COA") Decisions Nos. 1547 (1990) and
2571 (1992) which
denied honoraria and per diems claimed
under National Compensation Circular No.
53 by certain PSU personnel including
petitioner.
On 9 December 1988, PSU entered into a
Memorandum of Agreement
1
("MOA") with the Department of
Environment and Natural Resources
("DENR") for the evaluation of eleven (11)
government reforestation operations in
Pangasinan. 2 The evaluation project was
part of the commitment of the Asian
Development Bank ("ADB") under the
ADB/OECF Forestry Sector Program Loan
to the Republic of the Philippines and was
one among identical project agreements
entered into by the DENR with sixteen (16)
other state universities.
On 9 December 1988, a notice to
proceed 3 with the review and evaluation
of the eleven (11) reforestation operations
was issued by the DENR to PSU. The latter
complied with this notice and did proceed.
On 16 January 1989, per advice of the PSU
Auditor-in-Charge with respect to the
payment of honoraria and per diems of
PSU personnel engaged in the review and
evaluation project, PSU Vice President for
Research and Extension and Assistant
Project Director Victorino P. Espero
requested the Office of the President, PSU,
to have the University's Board of Regents
("BOR") confirm the appointments or
designations of involved PSU personnel
including the rates of honoraria and per
diems corresponding to their specific roles
and functions. 4
The BOR approved the MOA on 30 January
1989 5 and on 1 February 1989, PSU
issued Voucher No. 8902007 6representing
the amount of P70,375.00 for payment
of honoraria to PSU personnel engaged in
the project. Later, however, the
approved honoraria rates were found to be
somewhat higher than the rates provided
for in the guidelines of National
Compensation Circular ("NCC") No. 53.
Accordingly, the amounts were adjusted
downwards to conform to NCC No. 53.
Adjustments were made by deducting
amounts from subsequent disbursements
of honoraria. By June 1989, NCC No. 53
was being complied with. 7
On 6 July 1989, Bonifacio Icu, COA resident
auditor at PSU, alleging that there were
excess payments of honoraria, issued a
"Notice of Disallowance" 8 disallowing
P64,925.00 from the amount of
P70,375.00 stated in Voucher No.
8902007, mentioned earlier. The resident
auditor based his action on the premise
that Compensation Policy Guidelines
("CPG") No. 80-4, dated 7 August 1980,
issued by the Department of Budget and
Management which provided for lower
rates than NCC No. 53 dated 21 June
1988, also issued by the Department of
Budget and Management, was the
schedule for honoraria and per
diems applicable to work done under the
MOA of 9 December 1988 between the
PSU and the DENR.
9
On 18 October 1989, a letter was sent by
PSU Vice President and Assistant Project
Director Espero to the Chairman of the
COA requesting reconsideration of the
action of its resident auditor. In the
meantime, the Department of Budget and
Management ("DBM"), upon request by
PSU, issued a letter 10 clarifying that the
basis for the
project's honoraria should notbe CPG No.
80-4 which pertains to locally funded
projects but rather NCC No. 53 which
pertains to foreign-assisted projects. A
copy of this clarification was sent to the
COA upon request by PSU.
On 18 September 1990, COA Decision No.
1547 11 was issued denying
reconsideration of the decision of its
resident auditor. The COA ruled that CPG.
No. 80-4 is the applicable guideline in
respect of the honoraria as CPG No. 80-4
does not distinguish between projects
locally funded and projects funded or
assisted with monies of foreign-origin.
PSU President Eslao sent a letter 12 dated
20 March 1991 requesting reconsideration
of COA Decision No. 1547 (1990) alleging
that (a) COA had erred in applying CPG No.
80-4 and not NCC No. 53 as the project
was foreign-assisted and (b) the decision
was discriminatory honoraria based on
NCC No. 53 having been approved and
granted by COA resident auditors in two
(2) other state universities engaged in the
same reforestation project. PSU then
submitted to the COA (a) a
certification 13 from the DENR to the effect
that the DENR evaluation project was
foreign- assisted and (b) the letter of the
DBM quoted in the margin supra.
On 16 November 1992, COA Decision No.
2571 (1992) 14 was issued denying
reconsideration.
In the meantime, in December 1990, the
DENR informed petitioner of its
acceptance of the PSU final reports on the
review and evaluation of the government
reforestation
projects. 15 Subsequently, honoraria for
the period from January 1989 to January
1990 were disbursed in accordance with
NCC No. 53. A Certificate of Settlement
and Balances (CSB No. 92-0005-184
[DENR]) 16 was then issued by the COA
resident auditor of PSU showing
disallowance of alleged excess payment
of honoraria which petitioner was being
required to return.
The instant Petition prays that (a) COA
Decision Nos. 1547 (1990) and 2571
(1992) be set aside; (b) the COA be
ordered to pass in audit the grant
of honoraria for the entire duration of the
project based on the provisions and rates
contained in NCC No. 53; and (c) the COA
be held liable for actual damages as well
as petitioner's legal expenses and
attorney's fees.
The resolution of the dispute lies in the
determination of the circular or set of
provisions applicable in respect of
the honoraria to be paid to PSU personnel
who took part in the evaluation project,
i.e., NCC No. 53 or CPG No. 80-4.
In asserting that NCC No. 53 supplies the
applicable guideline and that the COA
erred in applying CPG No. 80-4 as the
pertinent standard, petitioner contends
that:
(a) CPG No. 80-4 applies to "special
projects" the definition and scope of which
do not embrace the evaluation project
undertaken by petitioner for the DENR;
(b) NCC No. 53 applies to foreign-assisted
projects ("FAPs") while CPG No. 80-4
applies to locally-funded projects as no
reference to any foreign component
characterizing the projects under its
coverage is made;
(c) the DENR evaluation project is a
foreign-assisted project per certification
and clarification of the DENR and DBM
respectively as well as the implied
admission of the COA in its Comment; and
(d) the DBM's position on the matter
should be respected since the DBM is
vested with authority to (i) classify
positions and determine appropriate
salaries for specific position classes, (ii)
review the compensation benefits
programs of agencies and (iii) design job
evaluation programs.
The Office of the Solicitor General, in lieu
of a Comment on the Petition, filed a
Manifestation 17 stating that (a) since, per
certification of the DENR and
Letter/Opinion of the DBM that the project
undertaken by PSU is foreign-assisted,
NCC No. 53 should apply; and (b)
respondent COA's contention that CPG No.
80-4 does not distinguish between
projects which are foreign-funded from
locally-funded projects deserves no merit,
since NCC No. 53, a special guideline,
must be construed as an exception to CPG
No. 80-4, a general guideline. The Solicitor
General, in other words, agreed with the
position of petitioner.
Upon the other hand, respondent COA
filed its own comment, asserting that:
(a) while the DBM is vested with the
authority to issue rules and regulations
pertaining to compensation, this authority
is regulated by Sec. 2 (2) of Art. IX-D of
the 1987 Constitution which vests
respondent COA with the power to
"promulgate accounting and auditing rules
and regulations, including those for the
prevention and disallowance of irregular,
unnecessary, excessive, extravagant or
unconscionable expenditures, or uses of
government funds and properties;
(b) the Organizational Arrangement and
Obligations of the Parties sections of the
MOA clearly show that the evaluation
project is an "inter-agency activity"
between the DENR and PSU and therefore
a "special project";
(c) the issue as to whether the evaluation
project is in fact a "special project" has
become moot in view of the DBM's
clarification/ruling that the evaluation
project is foreign-assisted and therefore
NCC No. 53, not CPG No. 80-4 which
applies only to locally-funded projects,
should apply;
(d) the DBM issuance notwithstanding, an inter-agency or inter-
respondent COA applied CPG No. 80-4 to committee activity or an undertaking by a
effectively rationalize the rates of composite group of officials/employees
additional compensation assigned to or from various agencies which [activity or
detailed in "special projects" as its undertaking] is not among the regular and
application is without distinction as to the primary functions of the agencies
source of funding and any payment involved. (Emphasis and brackets
therefore in excess of that provided by supplied)
CPG No. 80-4 is unnecessary, excessive
and disadvantageous to the government; Respondent COA maintains that the
sections of the MOA detailing the
(e) respondent COA's previous allowance "Organizational Arrangement and
of payment of honoraria based on NCC No. Obligations of the Parties" clearly show
53 or the fact that a full five years had that the evaluation project is an "inter-
already elapsed since NCC No. 53's agency activity." The pertinent sections of
issuance does not preclude COA from the MOA are as follows:
assailing the circular's validity as "it is the
responsibility of any public official to ORGANIZATIONAL ARRANGEMENTS
rectify every error he encounters in the
performance of his function" and "he is not A Coordinating Committee shall be
duty- bound to pursue the same mistake created which shall be responsible for the
for the simple reason that such mistake overall administration and coordination of
had been continuously committed in the the evaluation, to be chaired by a senior
past"; officer of the DENR. The Committee shall
[be] composed [of] the following:
(f) the DBM ruling classifying the
evaluation project as foreign-assisted does Chairman : Undersecretary for Planning,
not rest on solid ground since loan Policy and Project Management
proceeds, regardless of source, eventually [DENR]
become public funds for which the
government is accountable, hence, any Co-Chairman : Vice-President for Research
project under the loan agreement is to be and Development [PSU]
considered locally-funded;
Members : Director of FMB
(g) the DBM ruling constitutes an Dean, PSU Infanta Campus
unreasonable classification, highly Associate Dean, PSU Infanta
discriminatory and violative of the equal Campus
protection clause of the Constitution; and Chief, Reforestation
Division
(h) granting arguendo NCC No. 53 is the Project Director of the ADB
applicable criterion, petitioner Program Loan for Forestry
received honoraria in excess of what was Sector
provided in the MOA.
OBLIGATIONS OF THE PARTIES
We consider the Petition meritorious.
Obligations of DENR:
Sec. 2.1 of CPG No. 80-4 defines "special
project" as
The DENR shall have the following
obligations:
1. Provide the funds necessary for the
review and reevaluation of eleven (11)
reforestation projects.
xxx xxx xxx
2. Undertake the monitoring of the study
to ascertain its progress and the proper
utilization of funds in conformity with the
agreed work and financial plan.
3. Reserve the right to accept or reject the
final report and in the latter case, DENR
may request PSU to make some
revisions/modifications on the same.
Obligations of the PSU:
The PSU shall have the following
obligations:
1. Undertake the review and evaluation of
the eleven (11) DENR-funded reforestation
projects in accordance with the attached
TOR;
2. Submit regularly to DENR financial
status reports apart from the progress
report required to effect the second
release of funds;
3. Submit the final report to DENR fifteen
(15) days after the completion of the work.
The report should at least contain the
information which appears in Annex D;
4. Return to DENR whatever balance is left
of the funds after the completion of work.
Simply stated, respondent COA argues
that since the Coordinating Committee is
composed of personnel from the DENR
and PSU, the evaluation project is an
"inter-agency activity" within the purview
of the definition of a "special project".
We are unable to agree with respondent
COA.
Examination of the definition in CPG No.
80-4 of a "special project" reveals that
definition has two (2) components: firstly,
there should be an inter-agency or inter-
committee activity or undertaking by a
group of officials or employees who are
drawn from various agencies; and
secondly, the activity or undertaking
involved is not part of the "regular or
primary" functions of the participating
agencies. Examination of the MOA and its
annexes reveals that two (2) groups were
actually created. The first group consisted
of the coordinating committee, the
membership of which was drawn from
officials of the DENR and of the PSU; and
the second, the evaluation project
team itself which was, in
contrast, composed exclusively of PSU
personnel. 18 We believe that the first
component of the CPU No. 80-4's
definition of "special project" is applicable
in respect of the group which is charged
with the actual carrying out of the project
itself, rather than to the body or group
which coordinates the task of the
operating or implementing group. To
construe the administrative definition of
"special project" otherwise would create a
situation, which we deem to be impractical
and possibly even absurd, under which
any undertaking entered into between the
senior officials of government agencies
would have to be considered an "inter-
agency or inter-committee activity," even
though the actual undertaking or
operation would be carried out not by the
coordinating body but rather by an
separate group which might not (as in the
present case) be drawn from the agencies
represented in the coordinating group. In
other words, an "inter-agency or inter-
committee activity or . . . undertaking"
must be one which is actually carried out
by a composite group of officials and
employees from the two (2) or more
participating agencies.
As already noted, in the case at hand,
the project team actually tasked with
carrying out the evaluation of the DENR
reforestation activity is composed
exclusively of personnel from PSU; the
project team's responsibility and
undertaking are quite distinct from the
responsibilities of the coordinating [DENR
and PSU] committee. Thus, the project
team is not a "composite group" as
required by the definition of CPG No. 80-4
of "special projects." It follows that the
evaluation projects here involved do not
fall within the ambit of a "special project"
as defined and regulated by CPG No. 80-4.
We do not consider it necessary to rule on
whether the project at hand involved an
undertaking "which is not among the
regular and primary functions of the
agencies involved" since the reforestation
activity evaluation group is not, as pointed
out above, a "special project" within the
meaning of CPG No. 80-4. In any case, this
particular issue was not raised by any of
the parties here involved.
It is true, as respondent COA points out,
that the provisions of CPG No. 80-4 do not
distinguish between "a special project"
which is funded by monies of local or
Philippine origin and "a special project"
which is funded or assisted by monies
originating from international or foreign
agencies. As earlier noted, CPG No. 80-4
was issued by the Department of Budget
and Management back in 7 August 1980.
Upon the other hand, NCC No. 53 was
issued also by the Department of Budget
and Management more than eight (8)
years later, i.e., 9 December 1988.
Examination of the provisions of NCC No.
53 makes it crystal clear that the circular
is applicable to foreign-assisted projects
only. The explicit text of NCC No. 53 states
that it was issued to
prescribe/authorize the classification and
compensation rates of positions in foreign-
assisted projects(FAPs)
including honoraria rates for personnel
detailed to FAPs and guidelines in the
implementation thereof pursuant to
Memorandum No. 173 dated 16 May
1988 19 (Emphasis supplied)
and which apply to all positions in foreign-
assisted projects only. Clearly, NCC No. 53
amended the earlier CPG No. 80-4 by
carving out from the subject matter
originally covered by CPG No. 80-4 all
"foreign-assisted [special] projects." CPG
No. 80-4 was, accordingly, modified so far
as "foreign-assisted [special] projects
(FAPs)" are concerned. It is this fact or
consequence of NCC No. 53 that
respondent COA apparently failed to
grasp. Thus, CPG No. 80-4 does not
control, nor even relate to, the DENR
evaluation project for at least two (2)
reasons: firstly, the evaluation project was
not a "special project" within the meaning
of CPG No. 80-4; secondly, that same
evaluation project was a Foreign-Assisted
Project to which NCC No. 53 is specifically
applicable.
That the instant evaluation project is a
Foreign-Assisted Project is borne out by
the records: (a) the MOA states that the
project is "part of the commitment with
the Asian Development Bank (ADB) under
the Forestry Sector Program Loan"; (b) the
certification issued by the DENR certifies
that
. . . the review and evaluation of DENR
reforestation projects undertaken by State
Universities and Colleges, one of which is
Pangasinan State University, is one of the
components of the ADB/OECF Forestry
Sector Program Loan which is funded by
the loan. It is therefore a members of the reforestation evaluation
foreign-assisted project (Underscoring
supplied); and
(c) the clarification issued by the DBM
stating that
The honoraria rates of the detailed
personnel should not be based on
Compensation Policy Guidelines No. 80-4,
which pertains to locally funded projects.
Since the funding source for this activity
come from loan proceeds, National
Compensation Circular No. 53 should
apply.
Even in its Comment respondent COA
submits that
. . . the issue as to whether or not the
project was special already became moot
in the face of the opinion/ruling of the
DBM that since it (the project) is "foreign-
assisted" NCC 53 should apply, for CPG
No. 80-4 applies only to "locally-funded
projects. 20
Under the Administration Code of 1987,
the Compensation and Position
Classification Bureau of the DBM "shall
classify positions and determine
appropriate salaries for specific position
classes and review appropriate salaries for
specific position classes and review the
compensation benefits programs of
agencies and shall design job evaluation
programs." 21 In Warren Manufacturing
Workers Union (WMWU) v. Bureau of Labor
Relations, 22 the Court held that
"administrative regulations and policies
enacted by administrative bodies to
interpret the law have the force of law and
are entitled to great respect." It is difficult
for the Court to understand why, despite
these certifications, respondent COA took
such a rigid and uncompromising posture
that CPG No. 80-4 was the applicable
criterion for honoraria to be given
project team of the PSU.
Respondent COA's contention that the
DBM clarification is unconstitutional as
that ruling does not fulfill the requisites of
a valid classification 23 is, in the Court's
perception, imaginative but nonetheless
an after-thought and a futile attempt to
justify its action. As correctly pointed out
by petitioner, the constitutional arguments
raised by respondent COA here were never
even mentioned, much less discussed, in
COA Decisions Nos. 1547 (1990) and 2571
(1992) or in any of the proceedings
conducted before it.
Petitioner also argues that the project's
duration stipulated in the MOA was
implicitly extended by the parties. The
DENR's acceptance, without any comment
or objection, of PSU's (a) letter explaining
the delay in its submission of the final
project report and (b) the final project
report itself brought about, according to
petitioner, an implied agreement between
the parties to extend the project duration.
It is also contended that by the very
nature of an evaluation project, the
project's duration is difficult to fix and as
in the case at bar, the period fixed in the
MOA is merely an initial estimate subject
to extension. Lastly, petitioner argues that
whether the project was impliedly
extended is an inconsequential
consideration; the material consideration
being that the project stayed within its
budget. The project having been
extended, petitioner concludes that the
evaluation team should be
paid honoraria from the time it proceeded
with the project and up to the time the
DENR accepted its final report.
Mindful of the detailed provisions of the
MOA and Project Proposal governing
project duration and project financing as
regulated by NCC No. 53, the Court is not
persuaded that petitioner can so casually
assume implicit consent on the part of the
DENR to an extension of the evaluation
project's duration.
The "Duration of Work" clause of the MOA
provides that
PSU shall commence the work 10 days
from receipt of the Notice to Proceed
and shall be completed five months
thereafter. (Emphasis supplied)
On 9 December 1988, the DENR advised
PSU President Rufino Eslao that PSU "may
now proceed with the review and
reevaluation as stipulated" in the MOA.
The Notice to Proceed further stated that
Your institution is required to complete the
work within five months starting ten (10)
days upon receipt of this notice.
(Emphasis supplied)
In respect of the financial aspects of the
project, the MOA provides that
The DENR shall have the following
obligations:
1. Provide the funds necessary for the
review and reevaluation of the eleven (11)
reforestation projects . . . in the amount
not more than FIVE HUNDRED SIX
THOUSAND TWO HUNDRED TWENTY FOUR
PESOS (P506,224.00) which shall be spent
in accordance with the work and financial
plan which attached as Annex C. Fund
remittances shall be made on a staggered
basis with the following schedule:
a. FIRST RELEASE
Twenty percent (20%) of the total cost to
be remitted within fifteen (15) working
days upon submission of work plan;
b. SECOND RELEASE
Forty percent of the total cost upon
submission of a progress report of the
activities that were so far undertaken;
c. THIRD RELEASE
Thirty percent (30%) of the total
amount upon submission of the draft final
report;
d. FOURTH RELEASE
Ten percent of the total amount [upon
submission] of the final report.
(Underscoring supplied)
Annex "C" referred to in the MOA is the
Project Proposal. Per the Proposal's
"Budget Estimate," P175,000.00 and
P92,500.00 were allotted for "Expert
Services" and "Support Services"
respectively itemized as follows:
PERSONAL SERVICES
EXPERT SERVICES
Duration
Expert of Service Rate/ Total
(mo.) mo.
1. Ecologist 4 P5,000 P20,000
2. Silviculturist 3 -do- 15,000
3. Forestry Economist 4 -do- 20,000
4. Soils Expert 2 -do- 10,000
5. Social Forestry Expert 4 -do- 20,000
6. Management Expert 2 -do- 10,000
7. Horticulturist 2 -do- 10,000
8. Agricultural Engineer 2 -do- 10,000
9. Systems Analysts/Programer 2 -do-
10,000
10. Statistician 2 -do- 10,000
11. Shoreline Resources Expert 2 -do-
10,000
12. Animal Science Specialist 2 -do-
10,000
13. Policy/Administrative 4 -do- 20,000
Expert
T O T A L P175,000
Support Services
Research Associates (2) P8,000
Honorarium P1,000/mo. for 4 months
Special Disbursing Officer (1) 4,000
Honorarium P1,000/mo. for 4 months
Enumerators/Data Gatheres 36,000
360 mandays at P100/manday
including COLA
Coders/Encoders 30,000
300 mandays at P100/manday
including COLA
Cartographer/Illustrator 5,000
50 mandays at P100/manday
including COLA
Documentalist 4,500
45 mandays at P100/manday
including COLA
Typist 5,000
50 mandays at P100/manday
including COLA
T O T A L P92,500
In addition, the Proposal already provided
a list of identified experts:
EXPERTS
1. Dr. Victorino P. Espero Enviromental
Science
2. Dean Antonio Q. Repollo Silviculture
3. Prof. Artemio M. Rebugio Forestry
Economics
4. Ms. Naomenida Olermo Soils
5. Dr. Elvira R. Castillo Social Forestry
6. Dr. Alfredo F. Aquino Management
7. Dr. Lydio Calonge Horticulture
8. Engr. Manolito Bernabe Engineering
9. Dr. Elmer C. Vingua Animal Science
10. Prof. Rolando J. Andico Systems
Analysts
Programming
11. Dr. Eusebio Miclat, Jr. Statistics/
Instrumentation
12. Dr. Porferio Basilio Shoreline Resources
13. Dr. Rufino O. Eslao Policy
Administration
who, together with six (6) staff members
namely Henedina M. Tantoco, Alicia Angelo
Yolanda Z. Sotelo, Gregoria Q. Calela, Nora
A. Caburnay and Marlene S. Bernebe
composed the evaluation project team. At
this point, it should be pointed out that the
" Budget Estimate even provides a
duration for the participation of each and
every person whether rendering expert or Attachment II of NCC No. 53 prescribes the
support services. monthly rates allowed for
officials/employees on assignment to
foreign- assisted special projects:

On the other hand, NCC No. 53 provides: A. Position Level Project

Manager/Project
3.3.1 The approved 0rganization and Director
staffing shall be valid up to project
completion except for modifications Responsibility . . .
deemed necessary by the Project
Manager. The Project Manager shall be Parttime P2,000.00
given the flexibility to determine the
timing of hiring personnel provided the B. Position Level Assistant Project
approved man-years for a given position Director
for the duration of the project is not
exceeded. Responsibility . . .

xxx xxx xxx Parttime P1,500.00

3.6 A regular employee who may detailed C. Position Level Project Consultant
to any FAPs on a part-time basis shall be
entitled to receive honoraria in Responsibility . . .
accordance with the schedule shown in
Attachment II hereof. Parttime P1,000.00

xxx xxx xxx D. Position Level Supervisor/Senior Staff

Member
3.7 Payment of honoraria shall be made
out of project funds and in no case shall Responsibility . . .
payment thereof be made out of regular
agency fund. Parttime P1,000.00

xxx xxx xxx E. Position Level Staff Member

3.10 The total amount of compensation to Responsibility . . .

be paid shall not exceed the original
amount allocated for personal services of Parttime P700.00
the individual foreign-assisted
projects. Any disbursement in excess of Administrative and Clerical Support
the original amount allotted for personal
services of the individual projects shall be
A. Position Level Administrative
the personal liability and responsibility of
Assistant
the officials and employees authorizing or
making such payment. (Underscoring
Responsibility . . .
supplied)
Parttime P500.00
B. Position Level Administrative Support
Staff
Responsibility . . .
Parttime P400.00
From the clear and detailed provisions of
the MOA and Project Proposal in relation to
NCC No. 53, consent to any extension of
the evaluation project, in this instance,
must be more concrete than the alleged
silence or lack of protest on the part of the
DENR. Although tacit acceptance is
recognized in our jurisdiction, 24 as a rule,
silence is not equivalent to consent since
its ambiguity lends itself to error. And
although under the Civil Code there are
instances when silence amounts to
consent, 25 these circumstances are
wanting in the case at bar. Furthermore,
as correctly pointed out by the respondent
COA, the date when the DENR accepted
the final project report is by no means
conclusive as to the terminal date of the
evaluation project. Examination of the
MOA (quoted earlier on pages 19-20)
reveals that the submission of reports
merely served to trigger the phased
releases of funds. There being no explicit
agreement between PSU and the DENR to
extend the duration of the evaluation
project, the MOA's "Budget Estimate"
which, among others, provides in detail
the duration of service for each member of
the evaluation project as amended by the
rates provided by NCC No. 53 must be the
basis of the honoraria due to the
evaluation team.
The other arguments of respondent COA
appear to us to be insubstantial and as,
essentially, afterthoughts. The COA
apparently does not agree with the policy
basis of NCC No. 53 in relation to CPG No.
80-4 since COA argues that loan proceeds
regardless of source eventually become
public funds for which the government is
accountable. The result would be that any
provisions under any [foreign] loan
agreement should be considered locally-
funded. We do not consider that the COA
is, under its constitutional mandate,
authorized to substitute its own judgment
for any applicable law or administrative
regulation with the wisdom or propriety of
which, however, it does not agree, at least
not before such law or regulation is set
aside by the authorized agency of
government i.e., the courts as
unconstitutional or illegal and void. The
COA, like all other government agencies,
must respect the presumption of legality
and constitutionality to which statutes and
administrative regulations are
26
entitled until such statute or regulation
is repealed or amended, or until set aside
in an appropriate case by a competent
court (and ultimately this Court).
Finally, we turn to petitioner's claim for
moral damages and reimbursement of
legal expenses. We consider that this
claim cannot be granted as petitioner has
failed to present evidence of bad faith or
tortious intent warranting an award
thereof. The presumption of regularity in
the performance of duty must be accorded
to respondent COA; its action should be
seen as its effort to exercise (albeit
erroneously, in the case at bar) its
constitutional power and duty in respect of
uses of government funds and properties.
WHEREFORE, for all the foregoing, the
Petition for Certiorari is hereby GRANTED.
COA Decisions Nos. 1547 and 2571,
respectively dated 18 September 1990
and 16 November 1992, are hereby SET
ASIDE. The instant evaluation project
being a Foreign-Assisted Project, the
following PSU personnel involved in the
project shall be paid according to the
Budget Estimate schedule of the MOA as
aligned with NCC No. 53:
A. A. For Experts 41,000

Duration Rate/
Expert of month Total * Project Manager/ Project Director
Service (NCC ** Assistant Project Director
(mo.) No. 53) *** Project Consultants

1. Dr. Rufino O. Eslao Policy/Admi- 4 B. For Support Staff

P2,000 P8,000 nistrative
expert*- Duration Rate/
2. Dr. Victorino P. Espero Ecologist** 4 Expert of month Total
1,500 6,000 Service (NCC
3. Dean Antonio Q. Repollo Silvicul- 3 (mo.) No. 53)
1,000 3,000
turist*** 1 Henedina M. Tantoco Research 4 700
4. Prof. Artemio M. Rebugio Forestry 4 2,800
1,000 4,000 Associate**
Economist 2 Alicia Angelo Research 4 700 2,800
5. Ms. Naomenida Olermo Soils Expert 2 3 Yolanda Z. Sotelo Documentalist 2.04
1,000 2,000 700 1,428
6. Dr. Elvira R. Castillo Social 4 1,000 4 Gregoria Q. Calela Special 4 700 2,800
4,000 Disbursing
Forestry Officer
Expert 5 Nora A. Caburnay Typist 2.27 500 1,135
7. Dr. Alfredo F. Aquino Management 2 6 Marlene S. Bernebe Cashier 2.27 500
1,000 2,000 1,135
Expert
8. Dr. Lydio Calonge Horticul 2 1,000 2,000
turist 12,098
9. Engr. Manolito Bernabe Agricultural 2
1,000 2,000 * Per Attachment to DBM Clarification
Engineer dated 10
10. Prof. Rolando J. Andico Systems 2 November 1989, Rollo, p. 59.
1,000 2,000 ** Staff Member
Analysts/ *** Administrative Assistants.
Programmer
11. Dr. Eusebio Miclat, Jr. Statistician 2 No pronouncement as to costs.
1,000 2,000
12. Dr. Porferio Basilio Shoreline 2 1,000 SO ORDERED.
2,000
Resources
Expert
13. Dr. Elmer C. Vingua Animal 2 1,000
2,000
Science
Specialist